How to Read a Loss Run Report

The three numbers underwriters actually look at, and how to clean up yours before renewal.

At renewal time, your broker will request a loss run report from your current carrier. It's a ledger of every claim you've filed over the past three to five years. Underwriters read it before they quote. You should know how to read it too.

What a loss run shows

A standard loss run shows the date of each claim, a brief description, the amounts paid and reserved, and whether the claim is open or closed. That's it — but those four data points tell an underwriter a great deal about how your business operates.

The three numbers underwriters focus on

Frequency: How many claims have you had? One large claim reads very differently from six small ones. Frequency signals something about your operations, safety culture, or claims reporting habits. High frequency — even at low dollar amounts — is often more damaging to your renewal than a single large loss.

Severity: What did each claim cost? A single large claim from a freak accident reads differently from a pattern of mid-size claims that suggests ongoing exposure. Underwriters distinguish between shock losses and systemic problems.

Loss ratio: Your total incurred losses divided by your total premium. A loss ratio under 60% is generally considered acceptable. Above 100% means the carrier has paid out more than you've paid in — and they will price accordingly at renewal.

What "incurred" means and why it matters

Loss runs show incurred amounts — the amount paid plus whatever the carrier has reserved for future payments on open claims. Reserves can be conservative or aggressive depending on the carrier and adjuster. A claim showing a $200,000 reserve isn't necessarily going to cost $200,000 — but it's what underwriters see when they evaluate your account.

Before renewal, ask your broker to pull the loss run and review open reserves. If a reserve looks inflated relative to the facts of the claim, there may be room to push back — or at least to explain the narrative to underwriters proactively.

How to clean up before renewal

You can't change history, but you can shape the narrative. If you've had losses, document what changed: new safety procedures, equipment upgrades, personnel changes, a completed training program. Underwriters have discretion, and a credible story about what you've done since a bad loss period carries real weight.

Close open claims wherever possible before renewal. An open claim with a reserve hurts more than a closed claim at the same dollar amount, because open claims signal uncertainty. Work with your broker to push the carrier on resolution well ahead of your renewal date.

Have questions about your coverage?

Talk to a broker who knows the details — not a call center.