Loss Run Trend Calculator

Loss runs inform renewals. This calculator computes trend metrics.

Y1 claim count

Y1 avg severity

Y2 claim count

Y2 avg severity

Y3 claim count

Y3 avg severity

Annual premium

3-year loss ratio

77.25%

Frequency trend

INCREASING

Severity trend

INCREASING

How the math works

Total losses = Σ(count × severity). Loss ratio = losses ÷ (annual premium × 3).

Frequency and severity trends are independent signals. Decreasing frequency + increasing severity often indicates risk concentration (bigger claims fewer times) — potentially worse than stable frequency. Present both dimensions at renewal to control the narrative.

How to Use

Enter year 1 claims count and severity.
Enter year 2 claims count and severity.
Enter year 3 claims count and severity.
Enter premium paid.
Read trend metrics and loss ratio.

Frequently Asked Questions

What underwriters look at?

Frequency (claims per year). Severity (average claim size). Loss ratio (total losses ÷ premium). Cumulative loss. Year-over-year trend. All elevated metrics = renewal premium increases. Each flat/declining metric = discounts possible.

Benchmarks?

Property loss ratio: < 40% excellent, 40-60% acceptable, 60-80% concerning, >80% likely non-renewal. Liability: < 60% good. D&O: < 70%. Each metric varies by sector.

Presenting at renewal?

Bring your own trend analysis. Frame outliers (one large claim 3 years ago, now corrected). Highlight risk mitigation efforts. Request loss run credits for 3+ consecutive clean years. Brokers often overlook this leverage — prepare it yourself.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.