Loss Development and IBNR
What this clause says
Estimated ultimate losses are developed from reported incurred losses using selected loss development factors, with a provision for losses incurred but not reported as of the valuation date.
What this actually means
Loss development is how the incurred value of a policy year changes as claims mature. IBNR is the actuarial provision for claims that have happened but have not yet been reported. Together they turn what you have reported into what the year will ultimately cost.
What it means for an operator
Senior care is a long-tail class, which means a policy year that looks quiet at twelve months can look very different at forty-eight. Underwriters know that, so they price your development pattern rather than your current incurred total. If your closed years keep rising in value, an underwriter reads today reserves as understated too and loads for it; favorable development does the opposite and is worth real money. Above a certain size you move from class rating to loss rating, at which point development is not one input among several, it is the input. That makes claim management a pricing function rather than an administrative one, and the work starts paying before the renewal you need it for, which is an argument for starting now rather than ninety days out.
Why the Policy Checker does not score this
This term is worth understanding and cannot be checked from a declarations page. There is no single field that would answer it, and scoring it from an assumption would produce a confident wrong finding, which is the one thing a tool like this must never do. It is defined here and left out of the check.
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