What's the Purpose of a Loss Summary?
Staffing & Workers' Compensation
A basic loss summary provides an overview of your developed and undeveloped loss ratio for a specified period of time. Carriers typically look at the last five years of historical data, including the results from the current policy period.
Loss summaries show the total losses incurred and the total premiums for a policy period, or set of periods, in order to calculate the overall loss ratio. This ratio allows carriers to determine if the account is profitable and analyze claim trends from both a severity and frequency standpoint. Carriers typically favor an overall loss ratio of 40% or less. This is an integral factor to obtain competitive pricing and determine if the risk is eligible for the carrier’s workers’ compensation program.
A basic loss summary typically includes the following data fields for each policy period:
- Total Number of Claims
- Total Paid
- Total Reserved
- Total Incurred
- Date Valued
- Total Premium
Here's a chart to help:
- The Bare Bones of Loss Development Factors
- How to Read Your Loss History
- Claims Management Webcast
- Workers' Compensation E-Book
- Workers' Compensation Videos
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