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LCMs – The Hidden Part of the Workers Comp Insurance Process

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LCMs – Loss Cost Multipliers – An Important Example

LCMs (Loss Cost Multipliers) have many definitions.  The main one that I refer to when asked for a definition is:

LCMs are basically the insurance carrier’s deviation from the advisory loss costs that are published by NCCI or your state’s rating bureau.

picture of rubiks cube lcms
Wikimedia Public Use – Mike Gonzalez

I recently received a message from the North Carolina Rating Bureau that referred me to a list of the LCMs.  Let us look at what the list looks like for 2020 in North Carolina.

Even though North Carolina is an independent rating bureau, the concept is still the same.   Please note this is public information – nothing in the following list is behind a paywall.

The list is much too long to include all carriers in the spreadsheet.  Look at the heading and data that is in red.  Yes, those are live and effective LCMs.

COMPANY NAMECOMPANY EFFECTIVE DATELOSS COST MULTIPLIERAPPLICABLE TO ALL CLASS CODES
ACADIA INSURANCE COMPANY8/1/191.7100Yes
Accident Fund General Insurance Company4/1/201.9500Yes
ACCIDENT FUND INSURANCE COMPANY OF AMERICA4/1/201.3800Yes
Accident Fund National Insurance Company4/1/201.4700Yes
Accredited Surety & Casualty Company Inc4/15/201.4600Yes
ACE AMERICAN INSURANCE COMPANY4/1/201.2500Yes
ACE FIRE UNDERWRITERS INSURANCE COMPANY4/1/201.0630Yes
ACE PROPERTY AND CASUALTY INSURANCE COMPANY4/1/202.0900Yes
ACIG Insurance Company4/1/181.2700Yes
ADVANTAGE WORKERS COMPENSATION INSURANCE COMPANY5/1/161.5810No*
AIG ASSURANCE COMPANY4/1/201.1870Yes
AIG PROPERTY CASUALTY COMPANY4/1/201.7010Yes
AIMCO MUTUAL INSURANCE COMPANY3/1/061.3300Yes
AIU INSURANCE COMPANY4/1/201.0280Yes
Alea North America Insurance Company4/14/051.4900Yes
ALL AMERICA INSURANCE COMPANY4/1/091.6910Yes
Allianz Global Risks US Insurance Company3/1/971.3310Yes
ALLIED EASTERN INDEMNITY COMPANY4/1/202.0000Yes
ALLIED PROPERTY AND CASUALTY INSURANCE COMPANY4/1/202.5270Yes
ALLMERICA FINANCIAL ALLIANCE INSURANCE COMPANY4/1/20181.8500Yes
ALLMERICA FINANCIAL BENEFIT INSURANCE COMPANY4/1/20181.0500No*
AMCO INSURANCE COMPANY4/1/202.0460Yes
AMERICAN ALTERNATIVE INSURANCE CORPORATION4/1/101.5640Yes
American Automobile Insurance Company4/1/201.6470Yes
American Builders Insurance Company6/1/181.6000Yes
AMERICAN BUSINESS & MERCANTILE INSURANCE MUTUAL, INC.4/1/182.5010Yes
AMERICAN CASUALTY COMPANY OF READING, PENNSYLVANIA4/1/201.2750Yes
AMERICAN COMPENSATION INSURANCE COMPANY4/1/192.1500Yes
AMERICAN ECONOMY INSURANCE COMPANY8/1/171.6400Yes
AMERICAN FIRE AND CASUALTY COMPANY4/1/181.6790Yes
AMERICAN GUARANTEE AND LIABILITY INSURANCE COMPANY4/1/091.3290Yes
AMERICAN HOME ASSURANCE COMPANY4/1/201.4630Yes
American Interstate Insurance Company9/1/131.6000Yes
American Liberty Insurance Company4/1/201.4500Yes
AMERICAN MINING INSURANCE COMPANY4/1/151.4200Yes
American Property Insurance Company2/28/001.3000Yes
American Safety Casualty Insurance Company9/1/031.4800Yes
American Select Insurance Company10/18/202.3830No*
AMERICAN STATES INSURANCE COMPANY8/1/171.7120Yes
AMERICAN ZURICH INSURANCE COMPANY4/1/091.0950Yes
AMERISURE INSURANCE COMPANY4/1/201.6500Yes
AMERISURE MUTUAL  INSURANCE COMPANY (a stock company)4/1/202.2000Yes
AMERISURE PARTNERS INSURANCE COMPANY4/1/201.0500Yes
Amfed Casualty Insurance Company4/1/191.7500Yes
AmFed National Insurance Company5/1/181.3200Yes
AMGUARD INSURANCE COMPANY4/1/201.6600Yes
AMTRUST INSURANCE COMPANY OF KANSAS, INC.12/1/151.0500Yes
Ansur America Insurance Company4/1/201.3400Yes
ARCH INDEMNITY INSURANCE COMPANY5/15/181.1820Yes
ARCH INSURANCE COMPANY3/1/041.4240Yes
Arch Property Casualty Insurance Company4/1/201.7800Yes
ARGONAUT GREAT CENTRAL INSURANCE COMPANY5/19/101.4500Yes
ARGONAUT INSURANCE COMPANY5/19/101.7400Yes
ARGONAUT-MIDWEST INSURANCE COMPANY5/19/101.1600Yes
Arrowood Indemnity Company4/1/031.2600Yes
ASHMERE INSURANCE COMPANY2/1/171.4000Yes
Associated Indemnity Corporation4/1/161.9690Yes
Association Casualty Insurance Company6/1/070.9980Yes
ASSURANCE COMPANY OF AMERICA4/1/091.5640Yes
Atlanta International Insurance Company4/1/171.9500yes
Atlantic Specialty Insurance Company4/1/191.3460Yes
ATLANTIC STATES INSURANCE COMPANY9/1/191.4500Yes
Auto-Owners Insurance Company9/10/191.9500No*

 

As you can see, each company has its own LCM.  Please do not think of this as a list of which company charges the least.  Many more variables go into your Workers Comp policy such as discounts, Schedule Credits, etc.

The companies that have the No* in the last column will have LCMs for different Classification Codes.   Check here for more information on specific filing searches.

 

 

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt 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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