If you are using Excel(r) as your spreadsheet provider, you may download many statistical packages from Microsoft free of charge.  Most of the new Excel versions already have these loaded into the package.

I do not like to use the “red flag” terms when referring to loss runs.  There are no actual red flags as the loss runs may not have enough information to add this moniker to any of the claims listed.   The claim amounts that do not look right are the ones you should analyze further.

Without looking at the loss runs, there is really no generic statements that can aid you in your loss run analysis.

The one area that confuses many employers is the term Total Incurred.  This may not necessarily be a column on your loss runs.   There are so many versions of loss runs that you may see Total Incurred listed as:

• Total Reserves Incurred
• Total
• Total Reserves
• Incurred
• Paid + Unpaid

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The main way to decipher this (before emailing your adjuster) is to find the highest number on the claim when referring to reserves, paid, and incurred.  If the claim is still open, then the highest number will usually be the Total Incurred.

On closed claims, the total pad should equal the total incurred.   Strange things sometimes show up on loss runs.  If those numbers do not match on a closed claim, an inquiry email should be sent in most cases.

After checking out your closed claims, then you should move on to the open ones.   This is where things may become sticky – so to speak.   Claims professionals usually have to be trained very heavily and on the job for more than 5 years to be comfortable with reserving claims.

Reserving is an art more than a science.  The adjuster has to forecast the life of a claim at 60 – 90 days after an accident.  For instance, many years ago I was in a training class on WC reserving with 10 other adjusters.  

Given the same information on three different claims, the instructor asked the adjusters to set the reserves on a  claim.  The reserves ran the gamut on the numbers.    Everyone had different numbers on a minor claim, more serious claim, and then a very serious claim.

Online and sometimes paper-based loss runs will have a status on the claim.   If the status does not look right to you, it is the responsibility of  the employer to:

• Update the status to the adjuster as you may be talking to the employee weekly if not more often
• Provide the adjuster with all status updates, they should have everything that you have on the claim- concise information sharing is the key here.
• Scan and email everything to your adjuster.  Most carrier/TPA claims systems are set up where the adjuster can attach the documents to the claim for their later review.  The more info the adjuster has on file, the more accurate the reserving.
  

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• If you do not have a working relationship with your adjuster, then you definitely need to explore who is the adjuster on each of your claims.  Communication with the adjuster from the employer is beyond critical.  
• Do not just email your agent your loss run and ask for assistance.  There are a few agents which have hired adjusting staff to help clients.  This is an extreme rarity.

Whenever we have questioned an adjuster on a file, we often hear from them that they did not know certain aspects on a file that could have been easily supplied by the employer.

The person setting the reserves that will heavily affect your E-Mod or LDF (self insureds) should always have the most information possible from all parties involved in the claim.   The lack of information being provided to the adjuster can be very costly.