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What Can We Do To Lower Our E-Mod?


Lower Our E-Mod Or X-Mod

How can we lower our E-Mod? This is a question I received from one of the blog readers after I posted the Workers Comp E-Mod or X-Mod Factor formula earlier this week. This will fit well into the post that I was going to do on breaking down the E-Mod formula.

Graphic Of Bar Graph Lower Our E-Mod With Magnifying Glass

If you look at the Experience Modification Factor formula, you will notice that most of what is on the top of the fraction is also on the bottom of the fraction. The real difference is that E-Mods and X-Mods come down to the actual losses divided by the expected losses. There are many other values in the formula so it is not quite that simple. Reducing your actual losses or increasing your expected losses is important. Even more important is reducing the number of losses that reach $5,000.00. This is known are the Primary Loss portion of the claim.

The Actual Primary Losses are what costs your Workers Comp insurance program the most premiums due to an increase in the E-Mod. The Actual Excess Losses still cause a rise in the E-Mod, but not as significantly as the Actual Primary Losses. How does this happen the Excess Losses have a discount factor of sorts built into the E-mod equation. Whew!


Graphic Of Dollars Lower Our E-Mod Icon

Let’s get back to how to save Workers Comp $. The ways that you can reduce your Workers Comp E-Mod are:

  • A devout safety program – an accident that never happens saves you 100% of the $ compared to if the accident did happen.
  • Using the Four/Five Keys to Saving Workers Comp $ – you may search for those blog posts using the search box. Type in keys
  • Reviewing your claims loss run every time you receive it
  • Know when your Workers Comp reserves affect your E-Mod also known as the Unit Stat date.
  • Make sure your Workers Comp payroll figures are accurate. There is a big difference between actual payrolls and Workers Comp payrolls.
  • Make sure your Workers Comp classification codes are correct. The SIC or NAICS codes have very little to do with your Workers Compensation Class Codes.

The last two bullet points have more to do with adjusting your Expected Primary and Expected Excess losses.

Next Up – Do Not Be Fooled By A Small Claim Reserve

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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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