How to Read Insurance Loss Runs

Start with claim count and frequency

Claim count shows how often losses are happening. A high claim count with low severity may point to process, safety, maintenance, or training issues. A low claim count with high severity tells a different story: fewer events, but more expensive ones.

Understand paid, reserve, and incurred

Paid is what has already been paid. Reserve is the amount still held for expected future claim cost. Incurred is usually paid plus reserve. Renewal discussions often focus on incurred because it captures both settled and still-developing claim cost.

Open claims need explanation

Open claims are not automatically bad, but they need context. If open reserves are large, underwriters may ask whether the claim is still developing, whether legal costs are expected, and whether the reserve is stable. A clean renewal story explains open claims before the market has to ask.

Large losses can distort the story

One large loss can make an account look worse than its normal frequency suggests. That does not mean the loss should be ignored. It means the narrative should separate attritional claims from large or unusual events and explain what changed after the loss.

Use loss ratio carefully

Loss ratio compares incurred claims with premium. A high loss ratio can pressure renewal pricing, but it is not the whole story. The line of business, claim maturity, deductible structure, reserve confidence, and market cycle all matter.

Use the free analyzer

The ToolDox Loss Run Analyzer calculates claim count, total incurred, paid, reserves, open claim rate, average severity, large losses, line-of-business summaries, and optional loss ratio in your browser.