How Does NCCI Calculate Mods – 33 Steps
How does NCCI calculate our Mod ? This is a blog/newsletter question that we receive almost weekly.
This reader originally performed a Google search to find us. We love the Google or Loogle (Hot Tub Time Machine).
The NCCI (National Council on Compensation Insurance) is located in Boca Raton Florida.
NCCI is not the only rating bureau. There are many independent state bureaus – the largest being the WCIRB (California). The formulas are quite similar.
The actual formal word is promulgation instead of calculation. The graphic at the top is not the Mod formula.
There are basically 33+ steps to calculating your E-Mod. I think we can actually break it down to a simple formula instead of an E-Mod (X-Mod) calculation that may cause your head to spin.
The E-Mod formula can be thought of as :
E-Mod = Your Company’s Actual Claims Incurred / Similar Company’s Expected Claims Incurred
The NCCI or your respective rating bureau has many more tweaks in promulgating your E-Mod. Almost all insurance (auto, home, life, etc.) is analyzed using this formula. >>>> Actual Results / Expected Results
There are many articles on this blog concerning Mods. I will not repeat them here.
Your company’s classification codes sometimes referred to as work comp codes are how your company is compared to another company in the same state(s) your company conducts business in respectively.
The best way to keep the actual results lower (top part of formula) is to have a full safety program or a safety consultant.
Mods have crept back into the insurance conversations recently. A large % of companies were paying attention to the new healthcare regulations while safety and WC were put on the back burner, so to speak.
I hope that I answered the – How Does The NCCI Calculate Our Mod – question with a simple, straightforward answer.
There are hundreds of techniques to lower your Mod – most of them covered in this blog. Search, find, and print whatever will help your company.
If it is not here, or you cannot find it, call or email me.
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