How to Read Loss Runs Like an Underwriter

Reading a loss run report requires you to read three numbers for each claim, the number of dollars that have been paid, the estimated amount of dollars that remain to be paid (reserved), and the total (incurred) of both figures as of the same valuation date. The number representing paid represents monies the carrier has already paid out. The reserve represents the adjuster's estimate of what is left to resolve. The incurred number is the total of both previously mentioned numbers, and it is this total number that will ultimately affect premium pricing. Everything else on the report, claim numbers, status codes, descriptions, exists to explain how those numbers got there and whether they are still moving.

All commercial submissions include loss runs, and too many of them go out exactly as they arrived. This is an error in pricing. The Reserve (the amount of money set aside by the Adjuster on each claim that is not yet settled) prices exactly like a loss that actually happened if no one questions it.

What is a loss run report?

An applicant's loss run (or Loss Runs) is the carrier's official ledger of claims under a specific policy, which is generated from their claim systems based upon a particular date. Underwriters view an applicant's Loss Run reports similar to how lenders view a credit report. They are the applicant's past performance records, but from a provider the applicant has no control over. As such, Loss Reports exist in different lines of business, and for different terms, so obtaining complete accounting pictures requires gathering separate runs for General Liability, Auto, Workers Compensation, and Property Insurance at all carriers who have written the subject accounts within the look back period. Five years is the common look back period, consistent with the reporting timeframe for the ACORD 125 (Loss History). In cases where there were either no prior policies issued or no reported claims, an "no losses" letter will be prepared.

What does each column on a loss run mean?

Carrier formats may vary. However, the same core fields are used on nearly every report. Each field listed below represents:

Some carriers are breaking down paid and reserved amounts of money into the categories of Indemnity and Expenses, while Workers Compensation claims also have a Medical vs. Indemnity split plus the claimant's name or body part. The level of detail that can be provided on these types of expenses matters. Claims that have high levels of expenses and low levels of Indemnity usually indicate litigation as opposed to the degree of the claimant's injuries. Therefore, an Underwriter that cannot see this type of distinction will assume the worst case scenario.

Why do incurred losses change between reports?

Incurred total amounts fluctuate when reserves do, since reserves represent opinions. The initial reserve for a claim is set by the adjuster before all facts have been gathered, and then revised after receiving medical information, repair estimates, and legal developments, and each revision will update the incurred amount shown on the next printed report. Therefore, the incurred total can be lowered from a previous level (i.e., closed) below the original reserve established for the claim, which may lower the incurred total to "paid" levels. Alternatively, if a subrogation recovery lands between valuation dates, this can cut the net reported figures. Underwriting personnel demand current valuations on their reports. Therefore, they require valuation dates on reports submitted approximately within 90 days prior to submission. Old reports are incorrect in a predictable direction (i.e., overstated) due to old reserves associated with claims that were settled quietly at some point in time. As such, an old report does not accurately depict the loss experience of the account. Additionally, in workers compensation those same reserves feed the experience modification rate. This means that the client has a double negative effect from an inflated reserve. First, there is the adverse impact of the increased premium based upon the underwriter's evaluation. Second, there is a further increase in premiums due to the resulting mod increase.

How do underwriters read loss runs?

Underwriters look at pattern first and dollars second. The determining factor is whether the claim was caused by frequency (many small claims) or severity (one big claim). If there are multiple small claims then that signals something structural such as poor supervisory controls, lack of return to work programs etc. That will create a greater risk of future claims due to repeat behavior. On the other hand if you experience a single large claim in an otherwise clean history, underwriting would generally view this as bad luck unless the details suggest possible recurrence. A $150,000 total from one freak auto loss prices better than the same total spread across eighteen slip and falls.

Workers compensation rating hard-codes that preference. The experience mod formula counts the primary portion of every loss at full weight and heavily discounts the excess, so ten $10,000 claims move the mod much further than one $100,000 claim. Timing is important. Claims filed as part of a group in the latest year will have a greater effect on an account than the same number spread evenly across all years, because a recent cluster suggests deterioration. In addition, reported claims that ultimately close at zero actually help the account, since they show the insured is making prompt reports of incident events without turning them into dollar amounts. Indemnity and medical claim severity each increased 6% in accident year 2024, based upon data from NCCI's 2025 "State of the Line" report, so a reserve set today tracks losses that keep getting more expensive.^[1]

How do you request loss runs?

Request a loss run in writing from each insurance carrier. Have it signed by the insured or submitted on behalf of the insured by the broker of record. Request current values for five years. Your own agency portal provides instant run reports, while a prior carrier's loss run department generally takes between five and fifteen business days to complete. Some states put a time limit on this process. New York Insurance Law Section 3426(g) requires commercial insurers to mail or deliver loss information within ten (10) days after receiving a written request from the first named insured or its authorized broker.^[2]

Timing is what the broker can control. Runs should typically be ordered about 120 days before renewal, allowing for some reserve work and another print job before the shipment goes out. Prior carriers will usually not release runs to a broker that does not hold the account until there is an insured authorized signature on file. Therefore, obtain this authorization when you ask for it, not after the first denial by a carrier. File your requests before a potential AOR (Agency-Of-Record Change) occurs or if a client is leaving a carrier due to a disagreement. Afterward, things do not get better.

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 in order:

• Order currently valued runs early: pull five years from every carrier about 120 days out, and re-order anything that will be older than 90 days at submission.
• Reconcile against the client's records: flag claims they do not recognize, claims that belong to another insured on a shared policy, and incidents reported but never developed.
• Work the open claims list: Contact the claims adjuster for all open claims, question the reason the file is being held open, and verify that the amount of money reserved accurately reflects current information. The claims supervisor will need documentation from you when you push a stale reserve up to them for a reduction. Expect the first ask to be declined.
• Request re-valued runs after changes post: A closure or decrease in value only provides benefit if the underwriter is aware of these changes. Therefore, allow a few weeks after making these changes before ordering another print out. If an agreed upon decrease in value has not been posted within this timeframe, include this as a note in the loss narrative including the name of the adjuster and the agreed upon value.
• Write the loss narrative: Provide a summary of each major claim, changes made by the client subsequent to the claim, and how this change will prevent future claims from occurring.

Incurred totals affect carrier appetite. Therefore, a $60,000 reserve that should be a $9,000 closed claim can provide the difference between being placed in the standard market versus a 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.

The Bottom Line

A loss run is an insurance company's claims record. Therefore, it is only as reliable in terms of accuracy as the valuation date on that report. Review each of those three number lines (Paid, Reserved, Incurred), determine how much is still open in reserves, and work all your open reserve dollars down prior to shipping the file, because every stale reserve dollar prices like a real loss. Loss runs are typically ordered approximately 120 days out. You will need to challenge the large amounts, and present the underwriter with a new printout including the explanation for each.