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Loss Run Analyzer

Analyze a multi-year loss run: loss ratio by year, 3- and 5-year loss ratios, frequency and severity.

How the loss run analyzer works

Underwriters read loss runs to see the pattern, not just the total. This analyzer turns a loss run into per-year loss ratios, multi-year averages and severity so you can tell the account’s story.

Formula

Year LR = Incurred ÷ Earned premium. N-year LR = Σ Incurred ÷ Σ Earned premium over the latest N years.

How to use it

  1. Enter each policy year, oldest first.
  2. Enter earned premium, incurred losses and claim count.
  3. Review the multi-year ratios and the worst year.

Worked example

Five years with $788K earned and $395K incurred give a 50.1% five-year loss ratio; 2022 is the worst year at 78%.

Frequently asked questions

Why use a multi-year loss ratio?

One large claim can distort a single year. Three to five years smooth that out.

How current should a loss run be?

Most underwriters want loss runs valued within the last 90 days.

Guides

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