“There haven’t been any losses, so just quote based on that.” Every commercial broker has heard some version of this request, and every broker must deliver the same unwelcome answer: insurance does not work on assurance. Carriers price commercial accounts on evidence, and the central piece of evidence is the loss run — a carrier-issued report listing every claim made against a policy, its status, and the amounts paid and reserved. No document is more routine in underwriting, and few are less understood by the buyers whose premiums depend on it.
The loss run functions in insurance the way bank statements and tax returns function in lending. A mortgage company does not approve a loan because the applicant says the money is there; it verifies. A carrier does not price an account because the insured says the losses are clean; it reads the official record. The parallel is not merely rhetorical. Both exist because the party bearing the risk needs an independently maintained history rather than a self-report, and both create the same friction: the document must be requested from a third party, takes days or weeks to arrive, and is never quite in the format the next recipient wants.
For buyers, the practical implications run in two directions. The first is administrative: loss runs should be requested from the incumbent carrier well before renewal, not in the final week, because an account cannot be seriously marketed without them. Valued within ninety days of the quote date is the common underwriting standard. The second is strategic: the loss run is the account’s reputation in numeric form. Open reserves that will never be paid, claims misclassified by line, and old claims left open by clerical inertia all inflate the apparent loss picture and the premium that follows. Reviewing a loss run for accuracy — and pressing the carrier to correct it — is one of the few levers a buyer holds over its own pricing.
One policy idea deserves a serious hearing: a central clearinghouse for commercial loss runs, analogous to the CLUE database in personal lines. The inefficiency it would fix is real. Loss runs are produced by every carrier in proprietary formats, requested anew by every broker, and re-keyed by every underwriter. A standardized, shared claims history would reduce friction for everyone except, perhaps, incumbent carriers who benefit from the stickiness that paperwork creates. Whether or not the industry builds it, the buyer’s lesson is simpler: know what your loss runs say, because the market already believes them.
This article is adapted from Samuel’s original LinkedIn post, “‘There haven’t been any losses, so just quote based on that.’”, published May 5, 2025. Read the original post on LinkedIn →