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Experience Mod Equation Looks Complicated – Is it?


The Experience Mod Equation Revealed

The Experience Mod equation – does it look complicated? I  have been asked often how the Workers  Compensation E-Mod/X-Mod is calculated.  I am also usually asked why a certain company’s E-Mod increased so dramatically.   The E-Mod individualizes a company’s risk to that company.


The E-Mod is calculated figured from the following formula:

Actual Primary Losses+Ballast Value+Weighting Value
Actual Excess Losses
+(1 Minus Weighting Value)
Expected Excess Losses
=Total A
Expected Primary Losses
Ballast Value
Weighting Value
Expected Excess Losses
(1 Minus Weighting Value)
Expected Excess Losses
Total B

For the E-Mod, divide Total A by Total B.

einstein experience mod space time pictureThe Actual and Primary Losses are affected the least by the other rating factors.    The weighting value appears on the bottom left of the Experience Mod calculation page from the respective rating bureau (NCCI, WCIRB, etc.).  Most of the rating bureaus have now increased the Primary Loss maximum figure in the last few years.  NCCI has for instance increased its value to  15,000.

The simplest way to analyze the E-Mod formula is:

the losses that you had for the last three years divided by the losses that your company was expected to have over those same three years.

The simplest E-mod formula is your company’s losses / your company’s expected losses.    The expected losses come from similar company data in your state or states in which your company operated over the previous four years – leaving out the most recent policy year.

I will break down the formula later this week and what employers can do to lower their E-Mod.

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Experience Mod Predictions Accurate?

Experience Mod Predictions – Accuracy Depends on Who/Whom You Ask Most Experience Mod predictions can be a tedious process that has cofounded most people working

James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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