How to Read Loss Runs Like an Underwriter

Reading a loss run means reading three numbers per claim, paid, reserved, and incurred, against one date, the valuation date. Paid is money out the door, reserved is the adjuster's estimate of what remains, and incurred is their sum, which is the figure underwriters actually price. Everything else on the report, claim numbers, status codes, descriptions, exists to explain how those numbers got there and whether they are still moving.

Every commercial submission carries loss runs, and most brokers pass them along without working them. That is a pricing mistake, because the report is negotiable in ways clients never suspect. This guide walks the report column by column, explains why incurred totals drift between printings, shows how underwriting desks actually score the history, and lays out the cleanup workflow that belongs in every pre-marketing file.

Loss Run

A loss run is a report issued by an insurance carrier listing every claim reported under a policy, with paid amounts, outstanding reserves, incurred totals, and claim status, all stated as of a single valuation date. It is the account's claim history in the carrier's own numbers.

What is a loss run report?

A loss run is the carrier's official ledger of claims under a specific policy, produced from its claim system for a stated period and valued as of a stated date. Underwriters treat it the way a lender treats a credit report, as the applicant's track record from a source the applicant does not control.

The report exists per line of business and per policy term, so a full account picture means gathering runs for general liability, auto, workers compensation, and property separately, from every carrier that wrote the account during the lookback. Five years is the standard convention, because most underwriting guidelines and rating worksheets are built around a five year window, and years with no coverage or no claims get papered with a no losses letter instead.

The report is a snapshot, not a promise. It shows what the carrier's adjusters believed on the valuation date, and open claims keep developing after the ink dries.

What does each column on a loss run mean?

Formats vary by carrier, but the same core fields appear on nearly every report. Here is what each column tells you:

Some carriers split paid and reserved into indemnity and expense components, and workers compensation runs often add medical versus indemnity splits plus the claimant's name or body part. The extra granularity helps. Expense-heavy claims with low indemnity often mean litigation rather than injury severity, and an underwriter who cannot tell the difference will assume the worse story.

Why do incurred losses change between reports?

Incurred totals move because reserves move, and reserves are opinions. An adjuster sets a reserve early in a claim's life with incomplete facts, then adjusts it as medical records, repair estimates, and legal developments arrive, and every adjustment rewrites the incurred figure on the next printing. A claim can also close below its reserve, taking the incurred number down to paid, or a subrogation recovery can arrive after one valuation date and before the next, cutting the net figures.

This is the reason underwriters insist on currently valued loss runs, meaning reports whose valuation date sits within roughly 90 days of the submission. A stale report is not merely old, it is wrong in a specific direction, because stale reserves on claims that quietly settled overstate the account's losses. For workers compensation the same reserve figures flow into unit statistical data and drive the experience modification rate, so an inflated reserve costs the client twice, once in the underwriter's judgment and again in the mod.

The practical habit is to read valuation dates before reading anything else. A run valued eight months ago tells you about the account as it stood eight months ago. Order fresh ones.

How do underwriters read loss runs?

An underwriter reads for pattern first and dollars second, and the controlling distinction is frequency versus severity. Frequency, meaning many small claims, signals something structural, weak supervision, poor housekeeping, no return to work program, and it predicts future losses because the underlying behavior repeats. Severity, one large claim in an otherwise clean history, reads as bad luck unless the description suggests it could recur. A $150,000 total from one freak auto loss prices better than the same total spread across eighteen slip and falls.

Desks also read the timing dimension. A cluster of claims in the most recent year outweighs the same count spread evenly, because it suggests deterioration, and liability lines carry reporting lag, so the latest year's runs are always incomplete and experienced underwriters mentally develop them upward. Reported but unpaid claims closing at zero actually help the account, since they show the insured reports promptly without turning incidents into dollars.

Finally, the desk squares the runs against the application. A claim count that contradicts the ACORD application's loss history question is a credibility problem bigger than the losses themselves.

How do you request loss runs?

Request them in writing from each carrier, signed by the insured or submitted by the broker of record, and ask for five years, currently valued. Agency portals produce runs for your own carriers instantly, while requests to a prior carrier's loss run department commonly take five to fifteen business days, and a number of states impose statutory deadlines on carriers to deliver loss information to the insured on request. The insured always has the right to a copy of its own loss history, and carriers treat these requests as routine, so there is no relationship cost to asking early.

Timing is the part brokers control. Order runs 120 days before renewal, which leaves room for the reports to arrive, for reserve disputes to resolve, and for a re-valued printing before the submission goes out. If an agency of record change is coming or the client is leaving a carrier in a dispute, get the request in first. The data does not get friendlier after the breakup.

How do you clean up loss runs before marketing an account?

Cleanup is the highest leverage work in the pre-marketing file, and it runs as a sequence:

1. Order currently valued runs early

   Pull five years from every carrier about 120 days before the target market date, and check each report's valuation date on arrival. Anything that will be older than 90 days at submission time needs a re-order built into the calendar.

2. Reconcile the runs against the client's records

   Walk the claim list with the client. Flag claims they do not recognize, claims that belong to another insured on a shared policy, and incidents that were reported but never developed into anything.

3. Work the open claims list

   Call the adjuster on every open claim, using the claim number from the run. Ask what is holding the file open, whether the claimant has been paid or gone silent, and whether the reserve reflects the current facts. Stale claims with no activity in six months are candidates to close, and reserves set before a settlement or a favorable medical report are candidates to reduce.

4. Request re-valued runs after changes post

   Reserve reductions and closures only help if they appear on the report the underwriter sees. Allow a few weeks for the carrier's system to reflect the changes, then order a fresh printing.

5. Write the loss narrative for the submission

   Summarize what happened on each significant claim, what the client changed afterward, and why the pattern will not repeat. An underwriter who gets the story with the numbers rates the account, one who gets numbers alone rates the worst interpretation of them.

The payoff is direct. Incurred totals gate carrier appetite, and a $60,000 reserve that should be a $9,000 closed claim can be the difference between the standard market and the surplus lines quote.

This guide is for educational purposes and summarizes standard ISO policy language. Your policy's specific terms, conditions, and endorsements control. Talk to a licensed broker about your actual exposures.