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What are Loss Runs & How are These Reports Vital for Insurance Businesses?
The word “Loss Run” or “Loss Run Report” is a very common term used in the insurance sector. Very frequently insurance firms are asked to provide the loss run reports when the client is about to switch their agent or there’s a renewal of their existing policy.
Typically, an insurance company will ask for the loss run report that includes up to 5 years of history or for how long coverage was provided. Rarely in some cases, insurance companies provide the loss run reports every year, the reason behind this is whether your previous claim is open or your policy will be an occurrence policy.
The significance of loss run reports in the insurance industry:
What exactly are loss run reports?
In simple words, loss run reports are the history of the applicant’s insurance claims activity throughout the duration of the policy. Insurance companies keep a track of each claim of the clients and how effectively those claims were settled down.
Loss run reports are just like credit card statements issued by banks and it is asked when the client is applying for a loan, similarly if an insurance agent asks a business owner to provide a loss run report on its previous insurance policy, that’ll be just for the purpose of understanding what sort of risk his business has undergone earlier and on that basis they offer the policies and set premiums.
Why Insurance Companies ask for loss report and what information is mentioned in the loss run report?
When there is a policy renewal or the user is applying for a new policy, for sure they will be asked for loss run reports. Before underwriting policy as per the requirement of the client, it is necessary to check the claims history of the client.
On the basis of the claims history, underwriting team frames the policy and sets the premium, that’s the reason agents ask for loss run report, just to help the underwriters and get approval from the client on the policy they framed as per their needs.
When the client wants to renew the existing policy, loss run report comes into the picture. Insurance companies track the history of claims and how effectively they were processed.
Now, what information is included in this loss run report? It includes the same details that the client has filled while initiating the policy such as:
- Your Name
- The dates of any losses you have claimed and the dates when you submitted your claims
- Information about the loss incident
- The date of the total amount of benefits paid to you
- The amount of reserve fund set aside for your claims account
- The status of your claim, whether it’s open or closed
Why do Insurance Companies need to Outsource their Loss run processing?
The insurance industry has various complexities and the underwriters are usually occupied with the excessive workload of policy management and claims handling. These loss run reports play a crucial role when it comes to renewal of a new policy or fresh insurance applications. If the agency or the underwriter fails to provide these losses run reports on time, it may harm the reputation of the agency or insurance company.
Instead of hiring an in-house team for loss run report processing, the best option for you is to outsource insurance loss runs a process to a reliable partner that can help you to save your time, cost and efforts and also help you in enhancing the reputation of your insurance company. Consider Cogneesol – a leading insurance BPO company having expert and experienced insurance professionals ready to serve you with the best. To know more about us, call at +1 646-688-2821 or email at email@example.com.
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