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20-Year Experience Mod – Cure or Another Problem?


What Would a 20-Year Experience Mod Look Like?

A 20-year Experience Mod at first glance seems like almost a joke.  Then, when one looks at a normal distribution of workers comp claims for a two-decade timespan, no one would be laughing that much, if at all.   Two concepts make me think that it would work except possibly for the amount of data storage – now most server-based data storage is just not a concern.

  1. Most LDFs cover a 10-year time span.  Think of an LDF as a Mod for self-insureds that spans 10 years.
  2. Most business cycles of successful businesses cover at least 20 years.   See this article on business cycles. 

A 20-year Experience Mod would very likely lessen the effect of one bad claims year even more than the present systems’ built-in safety nets.

What made me think about reprising a 2021 article (see preceding link) came from a recent article in the Carrier Chronicles on long-tail claim valuations.  I suggest that you read the article in this link-(worth your time).

I borrowed the graph from that article after trying to search for alternate graphs.  The more I searched, the more complicated the graphs. The Chronicles’s graph is below.  It is a simple explanation of long-tail claims in one graphic.

20-year experience mod graphic
(c) Carrier Chronicles- a Safety National publication

As one can see, the long-tail values level out over time.  Almost all the rating bureaus have covered this topic at one time or another.  With Workers ‘ Comp claims severity increasing while the number of claims has fallen over the last 30 years, the green part of the graphic used to be a rare occurrence.  Now, long-tail claims are a growing set of data. 

Overall, one could think of rating bureau data as the red part of the graphic and the orange part represents the LDF calculations.  This article was more of a “get the conversation started” than making any judgments on the current Mod system.   This quote from the article sums up why workers comp carriers and rating bureaus have different data sets.

“For example, carriers will have significantly more years of data for estimating outstanding liabilities, whereas bureaus collect data from members for the specific purposes they are authorized or permitted to provide by regulations or their membership.”

A 20-year Experience Mod may currently be out of the question, but where does an insured go for 30+ year claims analyses?



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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