What Are Insurance Loss Run Reports, and its Challenges?

Last updated: 18 Jan, 2024 By | 6 Minutes Read

insurance loss run report

Insurance loss run report refers to the claims history of the policyholder. Claims history plays an inevitable role in the underwriting process. It helps to calculate the risk, severity of each loss, and frequency with which they occurred. Insurers often factor premiums for policies based on loss-run reports of holders. However, it is quite challenging to generate loss-run reports.

Why?

Loss run reports are crucial when a policyholder plans to switch its carrier. It increases the pressure on the existing carrier and the next carrier’s underwriting team. Retrieving data of last five years that include name, policy number, policy term, loss report valuation date, date of claims, amount due or paid, and claim status—open or closed—all matters.

What are the Complexities Involved in Loss Run Reports Data Extraction?

Before we move ahead, we believe you know what loss run reports mean. To simply put, it is a credit score of insurers, emphasizing claims history.

Now, insurance carriers receive these reports in numerous structures and formats, especially PDFs. Underwriters perform risk analysis for received information. They manually extract, identify, and store the values of critical fields from these reports. Opening each document, searching for key values, and adding to the spreadsheet is time-consuming.

A manual process is always exhausting, hampering data accuracy in claims processing. Let’s take a closer look at the complexities of loss run reports when extracting data:

  • Massive amounts of data: Storing data in different formats and systems makes extracting and integrating the information hard. Moreover, some insurers may need to follow a standardized template for the reports. This again imposes a challenge when analyzing data to ensure accuracy.
  • Ensuring data quality: Data cleaning is crucial for analyzing risks. For instance, claim adjusters often fail to record all the details of claims and leave the report incomplete. Moreover, every adjuster has its own codes and terminology to define an incident, leading to inconsistency. Therefore, insurers should get the validation for reports to create a tailored policy.
  • Integrating data: Underwriters integrate the loss run data with other sources like financial data or market data to get the complete picture of risk. However, it poses challenges because of data availability in different formats.
  • Data analysis: Identifying the trends and patterns in data is the ultimate step of the process. However, analyzing data becomes challenging because of the volume of data.

How do Insurance BPO Services can help you Overcome Challenges?

When it comes to generating insurance loss run reports, hiring an in-house team might not be the most cost-effective or efficient solution. Not only does it increase operational costs, but it also necessitates expanding your workforce.

Instead, consider outsourcing this task to a reputable BPO service provider, allowing you to focus on what truly matters to your business. Let’s explore how these service providers can streamline your processes:

1. Automate Workflow

Efficiency is a top priority for insurers seeking success. However, the manual handling of loss run reports can introduce errors and potentially harm your reputation. This is precisely why insurers often delegate this back-office task to experts.

Third-party BPO firms excel at optimizing processes using industry-leading tools and best practices. They boast dedicated teams of professionals capable of generating these reports on your behalf, ensuring a seamless workflow. In essence, your processes are automated and handled by experts.

2. Reduce Overhead Costs

When you hire an in-house team for loss run reports, you’ll need to invest in expanding infrastructure and providing equipment. However, by outsourcing claims management services to a third-party firm, you can access a competent team at a minimal cost.

As an insurer, you can expect a 50% reduction in overall expenses. Furthermore, scaling resources up or down is hassle-free since the demand for reports can fluctuate.

3. Cut down Turnaround Time

Delaying the provision of loss-run reports can harm your reputation, causing policyholders to lose interest in your services and refrain from recommendations. Service providers in this field ensure a 15% reduction in turnaround time by providing a dedicated team.

Their team processes loss-run reports within the agreed timeframe, leveraging in-depth knowledge of international standards and best practices for increased efficiency.

4. Improve Quality

Reporting errors can lead to losses, as underwriters may overlook vital information. These service providers minimize the chances of mistakes by implementing multiple quality-check measures such as spot-checking and auditing processes. Their experts ensure that underwriters have complete confidence in the data’s accuracy.

Get a Quote from Insurance Support World

Insurance loss run reports are a critical component for various insurance lines. It helps to manage risk, set premiums, and settle claims effectively. This is where Insurance Support World, a leading insurance BPO services provider can help. Our dedicated experts have years of experience providing loss-run reports to insurers. We ensure 99.9% accuracy and enhance process efficiency for insurance businesses. To get a quote for our services, drop an email at [email protected] or call us at +1 646-688-2821.

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