What is the purpose of a 'loss run report'?

The purpose of a 'loss run report' is to provide a detailed summary of a policyholder's claims history, which is essential for insurers during the underwriting process. This report typically includes information about all claims made, including the date each claim was filed, the amounts paid, and any outstanding claims. Insurers utilize this data to assess the risk associated with insuring a particular individual or business, which in turn helps them determine the terms and pricing of the insurance policy.

Claims history is a crucial indicator of future risk; a policyholder with a record of frequent or severe claims may be viewed as a higher risk, potentially leading to higher premiums or even difficulty obtaining coverage. Conversely, a clean claims history may reflect positively on the policyholder, often resulting in more favorable underwriting terms.

While other options touch on related topics, such as market conditions or potential fraud cases, they do not align with the specific function of the loss run report in the context of policy underwriting.