Loss Run
A report from a carrier detailing an insured's claim history including dates, descriptions, amounts paid, and reserves.
What It Is
A loss run is a detailed report produced by an insurance carrier that documents an insured's claim history over a specified period, typically five years. Each claim entry includes the date of loss, claim number, claimant name, type of loss, amounts paid to date for indemnity and expense, outstanding reserves, and claim status (open or closed). Loss runs are essential underwriting documents because they allow prospective carriers to evaluate the insured's historical loss experience.
Loss runs are requested from the current and prior carriers and are typically required for each line of business being quoted. Carriers use loss runs to calculate loss ratios, identify loss trends, and assess the quality of the insured's risk management practices. A five-year history is standard, though some carriers and excess markets require ten years for larger accounts or volatile lines like commercial auto and general liability.
Obtaining loss runs is often a bottleneck in the submission process. Current carriers have little incentive to expedite loss runs for accounts being marketed to competitors. Many states require carriers to provide loss runs within 10-30 days of request, but delays are common. Additionally, loss runs from different carriers use different formats, making comparison difficult without normalization.
Why It Matters for Brokers
Loss runs are the single most influential document in underwriting. An account with a clean loss history will receive the most competitive pricing, while adverse loss experience can result in declination or heavily surcharged pricing. Brokers must obtain complete loss runs early in the marketing process and be prepared to explain any adverse claims in context to help underwriters view the account fairly.
Real-World Example
A broker requests five-year loss runs for a trucking account's commercial auto program. The report shows 42 claims totaling $1.8M in paid losses against $3.2M in earned premium, yielding a 56% loss ratio. However, $1.1M is from a single catastrophic accident involving a driver who was subsequently terminated. The broker includes a narrative explaining the one-time nature of the large loss and the corrective actions taken (new hiring standards, dash cams, driver training program), enabling the underwriter to view the underlying loss ratio of 22% more favorably.
Common Mistakes
- 1Submitting to carriers without loss runs, forcing underwriters to quote blind or request the data later, delaying the entire process.
- 2Not reviewing loss runs for accuracy before submitting them, as carriers sometimes misattribute claims or carry incorrect reserve amounts.
- 3Failing to provide context or narrative for large losses, letting underwriters draw their own negative conclusions.
How brokerageaudit.com Handles This
brokerageaudit.com automatically parses uploaded loss run PDFs using AI extraction, normalizing data from different carrier formats into a standardized view. The system calculates loss ratios by year and line, identifies large-loss drivers, and generates a loss summary narrative that brokers can include with submissions. Loss run request tracking ensures follow-up reminders are sent before deadlines.