How do insurers generally use the information in a loss run report?

Insurers typically utilize loss run reports as a crucial tool to assess risk and determine policy eligibility. A loss run report provides a detailed account of an insured party's claims history over a specified period, including the frequency and severity of past claims. By analyzing this information, insurers can evaluate the likelihood of future claims based on past performance and determine whether the applicant fits within their underwriting guidelines.

This evaluation process helps insurers set appropriate premiums, establish coverage limits, and decide on policy issuance. Insurers aim to identify potential risks associated with insuring an individual or business, which is vital for maintaining the financial health of the insurance portfolio. In contrast, investment returns, employee salary ranges, and reinsurance decisions rely on different data sets and analyses, making them unrelated to the specific insights gained from a loss run report.