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What Is A D-Ratio in Workers Compensation – How Is it Calculated?


D-Ratio Is Associated With Each Class Code

D-Ratio is also known as the discount ratio. NCCI or your State Rating Bureau uses the discount ratio to determine the portion of the losses that are expected to be primary losses ($15,000 or less).

Some D-Ratio example
Wikimedia Commons – Master.signal

A D-Ratio can vary by the rating state and the Workers Comp classification code.

The chart shows an example It is the ratio of the primary expected losses plus a discounted value of large losses divided by the total expected losses.

It will appear as a two decimal figure on an employer’s Experience Modification Rating Sheets. The ratio results from a series of actuarial calculations by NCCI or the State Rating Bureaus.

The ratio is located in the third column on all rating bureau sheets after the Classification Code and Expected Loss Ratio (ELR).  For every Classification code in each state for each year in the Experience Period, there is an associated D-Ratio.

I was examining a group of E-Mod Rating sheets today for a Personnel Agency.   Their D-Ratios varied from .26 to .51.   Most of them were in the .40 to .45 range.

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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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