How to Read a Commercial Loss Run Report

The short answer: A commercial loss run lists every claim reported under a policy, usually for three to five years, with the date of loss, claimant, cause, status, amounts paid and reserved, and total incurred as of a valuation date. Read it by checking the valuation date first, confirming every policy period is present, separating frequency from severity, reviewing each open and large claim, and looking for patterns by cause, location or claimant type. Brokers and carriers who handle loss runs at volume often use specialist loss run processing teams to standardize them before underwriting review.

The fields on a loss run and what they mean

Every carrier formats loss runs differently, but most show the same core fields. The policy number and period identify coverage; the claim number, date of loss and date reported identify each claim; the claimant and cause or description explain what happened; the status shows whether the claim is open, closed or reopened. Financial columns show amounts paid to date, outstanding reserves and total incurred, often split by indemnity, medical and expense.

Incurred equals paid plus reserves, and it is the figure underwriters focus on, because reserves are the carrier’s estimate of what remains to be paid. Some loss runs also show recoveries such as subrogation or salvage, which reduce net incurred. Knowing which columns include expense and recoveries is essential before comparing carriers.

Check the valuation date first

A loss run is a snapshot as of its valuation date. A loss run valued months ago may miss recent claims and reserve changes, and the most recent policy year is always immature: claims are still being reported and reserves are still developing. Underwriters generally want loss runs valued within the last few months, and they adjust immature years for expected development.

When submissions combine loss runs from several carriers, valuation dates often differ. Note each date, request updated runs where they are stale and avoid comparing a well-developed year with an immature one. See underwriting support for how submission teams collect and refresh these documents.

Frequency and severity tell different stories

Frequency is how many claims occur; severity is how large they are. A risk with many small claims may signal weak controls or operational problems that drive steady costs. A risk with few claims but one very large one may be fundamentally sound with bad luck, or may reveal an exposure that will recur. Underwriters read both, by year and by line.

Calculate claims per year and average incurred per claim, and compare them with exposure such as payroll, revenue, vehicles or locations. Rising frequency against stable exposure is a warning sign; a single shock loss needs its own explanation.

Read open and large claims individually

Open claims carry the most uncertainty, because reserves can rise or fall. Review each open claim’s age, reserve, cause and any notes. Old open claims with small reserves may be underreserved; recent large reserves may reflect early caution. Reopened claims deserve attention because they often signal disputes or late-developing injuries.

Large losses should be listed separately with descriptions and corrective actions taken by the insured, such as new safety programs or changed operations. Many underwriters expect a narrative from the broker explaining large losses and what has changed since. A clean summary with these explanations makes a submission more competitive.

Patterns worth flagging

Look for clusters by cause, location, vehicle, employee type or time of year. Repeated slip-and-fall claims at one site, recurring rear-end collisions in one fleet or seasonal spikes in workers compensation claims all point to controllable exposures. Litigation flags, attorney involvement and late reporting also matter, because they tend to increase severity.

Note what is missing as well. Gaps in policy periods, missing lines of coverage or loss runs that show “no losses” without a carrier signature need follow-up before the file goes to an underwriter. See premium audit support for the exposure data that often explains changes in frequency.

Requesting and chasing loss runs

Loss runs are requested from each prior carrier with the insured’s signed authorization, listing the policy numbers, lines and years required. Carriers respond through portals, email or mail, and response times vary widely, so requests should go out as soon as a renewal or new submission is planned, often 90 to 120 days ahead of the effective date. Many states require carriers to provide loss runs within a set number of days after a valid request, which is useful leverage when a carrier is slow.

Track every request in one log with the carrier, policy, years requested, date sent, follow-up dates and date received. Check each run on arrival for completeness before it goes into the file: every year present, every line covered, a recent valuation date and a carrier signature or system mark where required.

How underwriters use loss runs in pricing

Underwriters use loss history to judge whether a risk fits appetite and how to price it. For smaller accounts, the review is often qualitative: frequency, severity, open claims and explanations. For larger accounts, loss history feeds experience rating, where past losses are developed to ultimate values, trended for inflation and compared with expected losses for the class and exposure. Workers compensation uses formal experience modification factors calculated by rating bureaus in most states.

In every case, the quality of the underlying data decides the quality of the decision. Clean, standardized loss summaries with valuation dates, exposure figures and narratives let underwriters spend their time on judgment rather than on reformatting.

Common mistakes when reading loss runs

The common mistakes are comparing carriers on different bases, ignoring valuation dates, treating reserves as final, missing recoveries and summarizing totals without reading the claims. Another is relying on a broker’s summary without the source documents, which underwriters rarely accept for larger risks.

A standardized summary built from the source runs, with each figure traceable to its page, prevents most of these. Our loss run processing outsourcing page explains how vetted Philippine teams request, chase, extract and summarize loss runs, and how financial institutions split their outsourcing portfolio places this work in the wider BFSI cluster.