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Regression Analysis Strong Alternative Forecasting Tool


Term Of The Day – Regression Analysis

A long standing debate has been occurring between myself and actuaries over whether or not that Regression Analysis is the best predictor for setting future reserves. Actuaries will usually say Regression does not give enough credence to the recent development of claims. I say that history repeats itself even if over a long period of time. Most long term business cycles can extend up to 20 years.

Picture Of Woman Hand Illustrating Regression Analysis Concept

Regression (also called the Sum of Least Squares Method) uses a known independent variable such as an employer’s E-Mod to forecast a dependent variable such as future E-mods. I use Regression very often when predicting any insurance variable over the long term. Most spreadsheet software has regression analysis built into it such as Microsoft Excel(R).

If x is the independent variable, y is the dependent variable, m is the slope of the regression, and b is the y intercept – the basic equation is y=mx+b. There are many other types of regression such as stepwise, multiple, etc.

Excel(r) provides a number of regression analysis packages including my favorite the regression graphs for prediction.   You can quickly create a great regression analysis chart for presentations.  

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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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