Having Zero Claims For Current Policy Year = Instant Savings? Probably Not I came across this situation recently while reviewing a loss run with an agent. The question by the agent was if his insured client was having zero claims for their current policy, will that reduce premiums instantly? My
New York Workers Comp Experience Mods Now Independent – What That Means Combining many states into a single number is one of the great time-saving aspects of interstate workers comp experience mods. Correction – North Carolina is still in the NCCI Interstate Mod System. NCCI published a newsletter this morning.
WCIRB Over-reserving Correction – Rating Bureau Helps Out Employers – Wow! The Webinar Info Is at the bottom of this article California’s Workers’ Comp Insurance Rating Bureau provides a great assist to employers. The WCIRB over-reserving correction algorithm helps employers greatly. Kudos to them – read on to see how
Workers Comp Claim Development – Why The Six Month Delay? The Workers Comp claim development process has frustrated more than a few insureds or agents. Every time that I publish an article on how claims are reported and tabulated by the rating bureaus (NCCI, WCIRB, and others), the same question
Upset Reader Says Experience Mod Increases – Loss Run Had No Changes One noticeable complaint tread from our article and newsletter readers recently comes from Experience Mod increases while their company’s loss runs show no changes. Many of them have become clients to have J&L examine their loss runs compared
What Are Contingent Experience Mods? Last week, I wrote a somewhat controversial article questioning whether insurance carriers should be fined for reporting Mods late. I received a few emails and comments with one from the WCIRB directing me to an NCCI video on Contingent Experience Mods. I agree there exist
California WCIRB Webinar Discusses XMod Formula Update For 2019 California’s WCIRB presented a great webinar yesterday on the effects of the XMod formula update. Check out this article I wrote last year for more on the XMod formula update. Please note that the WCIRB has always been more than helpful
Stabilizing Value – Rating Bureaus Provide a Break of Sorts The Stabilizing Value in Workers Compensation Rating Bureau Experience Modification Factor Worksheets saves companies premiums every day. How does this boring-sounding number help employers save premium dollars? I am using the numbers from an EMod sheet that I have been
California’s New XMod Formula Looks Simple – But Is It Really? A new XMod formula was recently introduced by California’s Workers Compensation Rating Bureau (WCIRB). By the way, why is this important? As I have often mentioned in my articles, what happens in California may be coming to a Workers
The Experience Mod Calculation Shortcut – Back To Basics Lately, Experience Mod calculation questions have come into our offices at a very high rate compared to other subjects. The Experience Mod is also known as E-Mod, X-Mod, EMR, etc. Many factors exist that can change your Workers Comp premium. The
Experience Mod Of 1.01 Can Negate Large Private or Government Contracts An Experience Mod of 1.01 does not necessarily indicate that a company operates unsafely. We have received many questions over the last three to your years on this situation. Over the past 30 years, I have presented and
Experience Mod Question From Article Reader The Experience Mod system- while seemingly complicated and full of penalties – has a built in algorithm that keeps one very serious claim from ruining your insurance budget. In fact, your Mod for next year will not be affected whatsoever by the one big
Work Comp Wellness Plans – Should Employers Receive An Incentive? Should Work Comp wellness plans mimic the recent Obama Administration action on health wellness plans? Recently, the Obama Administration had issued a rule that employees can receive up to a 30% incentive of the lowest priced healthcare policy issued by
E-Mods LDFs Are Like Credit Scores Are E-Mods LDFs like credit scores from hell? Over the past few months, I have presented this material at various conferences. I thought I would attach the PowerPoint that I used at the NCPrima Conference last week. E-Mods and LDFs_NCPRIMA_presentation 2015 I have received
Bad Developments With Mod Increases To Over 1.0 When a company’s Mod increases to over 1.0, it can rarely have no other effect to a budget other than paying more for WC coverage. Please note that the term Mod also can mean E-Mod (EMod), X-Mod (XMod), EMR, Ex-Mod, Experience Modification
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
Mod Android App A good Mod Android App keeps the calculation simple and straightforward. Smart Mod ™ from EMC (Employers Mutual Casualty) is a one of a kind Experience Mod Android App. I found no other apps that tried to take on the E-Mod or X-Mod calculations. The app required
E-Mod X-Mod Reduction Is A Very Popular Question E-Mod X-Mod reduction is by far the most popular question we receive from phone calls, emails, and in-person at conferences. How do we reduce our E-Mod today or something along those lines is usually the question. There is no method for E-Mod
My EMod (XMod) – When Can You Obtain It? How do I obtain my Emod (Experience Modification Factor0? This question was emailed from a medium-sized company from Kansas. We receive this question regarding EMods often from employers that wish to budget for their upcoming Workers Comp policy year. A
Sharp E-Mod Increases – Five Reasons We have had many inquiries on employers’ E-Mod increases (X-Mod). Some have increased very significantly in just one year. Five reasons for the sharp E-Mod increases are: The E-Mod may have grown gradually without notice. Checking back to see the E-Mods (X-Mods) over
Discounted Experience Mod Likely A Rating Bureau Adjustment We received this email over the weekend concerning a discounted experience mod. The West Virginia company found the CutCompCosts blog on Google. Our agent informed us that our E-Mod (Experience Modification Factor) for next year was going to be 1.29. When we received
Cutting Workers Comp Costs Has New Key Added For Clarity The subject of cutting workers comp costs added an obvious 6th addition to the list. In 1989, I originally wrote and presented on what I thought were the Three Keys to Workers Compensation Savings. I wrote the three from
California’s Rating Bureau (WCIRB) The WCRIB – California’s Workers Compensation Rating Bureau (similar to NCCI) has written quite a few great plain-language documents on explaining how X-Mods (E-Mods, EMR’s, Mods,etc.) affect employers. One of those can be found by clicking here. Their X-Mod formula is slightly different from most of
WCIRB ‘s New Mod Formula – Small Employers Must Enact Safety Programs Now WCRIB’s new mod formula will heavy affect small employers with a less than stellar safety record. Last Friday, I briefly covered California’s WCIRB and the change in the X-Mod Calculation effective 1/1/2013. I thought I would
Claim Severity – Where One Claim Can Ruin Your Mod The Claim Severity vs. Frequency Effect can result from one claim. One severe claim cannot hurt your Mod as bad as a number of smaller claims. This is one of the misnomers that exists today in Worker Compensation insurance
Inverse Relationship One of the areas where we so much confusion on E-Mods and X-Mods is their inverse relationship with Class Codes. If an employer is not careful with their audit disputes the may end up paying substantially more than if everything was just left alone. The reasons are very
E-Mods X-Mods of 1.0 Needed To Bid On Government Contracts E-Mods X-Mods risk concerns have caused many governmental units to now require a Mod at a certain level as a minimum requirement to do business with them. One of the main calls and emails that we have received over
Late Reported Claims Info by Carrier Can Cause E-Mod Increase Increased Mod and Premium were due to Late Reported Claims Info from insurance carrier employer. We received this emailed in question over the weekend. The business owner was not very happy about receiving a policy amendment and bill during the
Fixes For Extremely High E-Mod Fixes for an Extremely High E-Mod are available if a company is patient. I received this question from a blog reader last week. Our E-Mod has been running over 1.4 since our company has been in existence. It is now in excess of 1.7.
Most Basic Mod Formula The most Basic Mod formula how is it calculated? We receive a large number of calls and emailed questions on how Mods (E-Mods or X-Mods) are promulgated by NCCI, WCIRB, or State Rating Bureau. One of the most common scenarios is when an employer’s Mod increases
Reinsurance Market No Longer Soft The reinsurance/excess Insurance Market has started to change from a commodity marketplace. The excess insurance market is usually the bellwether for the rest of the marketplaces. Reinsurance/Excess Insurance is basically defined as a risk management technique. The employer will purchase this type of insurance to
The Experience Modification Factor Basics A great Experience Modification Factor Factor email came in last week.. Our E-Mod has changed a large number of times over the last year. Why does our E-Mod keep changing? How many times can an E-Mod change in a policy year? I actually paraphrased the
California Employer Question A California employer emailed in this question last weekend. “We are a medium-sized employer (dry cleaner) in central California. Our Experience Modification Factor increased significantly over the last few years. The increase seems to have resulted in our Workers Comp premiums rising significantly. What is
Experience Mod Reduction Plans Can Be Preservation Plans The Experience Mod Reduction Plans – are they really worth it ? Yesterday, I was presented with two different employers’ loss runs and Experience Modification Factor Worksheets (Mod Sheets). One employer had a good E-Mod of .86. The other employer had an
Lack Of Technology – E-Mods and X-Mods All E-Mods and X-Mods are affected directly by technology. In my last post, one of the statistics that jumped off the page caused me to write this blog separately as there is a study that finally relates the lack of technology by Workers
Auditing Workers Comp EMods or XMods – Tricky Stuff By Auditing Workers Comp EMods or XMods, you may find premium savings or you could blow up your program. Workers Comp E-Mods (X-Mods in CA) can save your company a large amount of premiums if kept in check. Is trying to
Who Is The WCIRB ? What do they regulate and who is the WCIRB ? I received this question on the WCIRB last night from a California employer that had grown large enough to receive an X-Mod. Congratulations on your company’s growth in a tough economy. Sometimes, it is best
Presentation Highlights – Safety and EMods Are Very Related How Safety and EMods intermingle was the basis for most of the highlights from my presentation. The NC Mid State Safety Council was kind enough to ask me to do a presentation on how safety programs impact an employer’s bottom line from
Largest Workers Comp Concern Today Seen As Split Points The Split Points became the Largest Workers Comp concern presently. I am presenting at the North Carolina Mid State Safety Council conference tomorrow. A few weeks ago I was contemplating what would be the largest concern for safety, human resource,
The Large Loss Caps Effect On Premiums Capping the large losses incurred by an employer is one way for a State Rating Bureau or NCCI to help control Workers Comp costs. Large loss caps function as a stop gap measure to keep one claim from completely harming an employer’s EMod
How Is the E-Mod or X-Mod Calculated? My E-Mod or X-Mod how it is calculated? X-Mod / E-Mod questions are becoming the most popular questions that I receive in person or by email. The new E-Mod rules published by NCCI have quite a few companies concerned over whether they will
An Acceptable E-Mod (X-Mod) Usually 1.0 The question is what is an Acceptable E-Mod (X-Mod). The level of questions on XMods/EMods usually increases this time of year. The largest percentage of policies renew on January 1. The rating bureaus such as NCCI usually begin to promulgate and report the E-Mods
California’s WCIRB XMods Resemble NCCI E-Mods Now Are California’s WCIRB XMods changing to be more like NCCI‘s EMod system ? Will X-mods from CA’s WCIRB have a split-point increase similar to the NCCI’s E-mods? I received this question in my email over the weekend. The changes to the EMod system
2015 E-Mod Changes Makes Safety So Important In 2015 more E-Mod Changes were produced by the NCCI. A few weeks ago, I discussed the upcoming changes to the E-Mod calculation and gave an example. I then blogged on what will happen to the E-Mod calculation in 2014. Believe it or
Emod Changes – A Correction To One Figure The Emod Changes articles that I wrote last week had a slight error. The E-Mod/X-Mod changes that I posted over the last two weeks had an error in them. I rarely ever go back and correct or change a post. This time
Difficult to Bid On Contracts With A High X-Mod Should we still bid on contracts with a high X-Mod? I received this question two weeks ago and wanted to answer it. The rest of the question is – How do we reduce our X-Mod very quickly? We receive a large
More Changes Ahead – E-Mod Calculation Last week, I discussed the upcoming changes to the E-Mod calculation and gave an example. One area I wanted to clarify is that the new E-Mod calculation going into effect for any polices that commence AFTER January 1, 2013. For example, if a state publishes
NCCI Changes the Experience Mod Calculation In my last post, I discussed the upcoming changes to the E-Mod calculation. The NCCI changes may look simple, but the cost of operating an unsafe business will be substantial. Your Risk Manager and Safety Department will be 100% more valuable overnight. I thought
EMods XMods Are Available Much Earlier Than At Renewal The EMods XMods are Available earlier than the policy renewal date. There seems to be a secretive process on EMod publishing dates. Most companies wait until their agent, NCCI, or State Rating Bureau furnishes a copy. Quite often, the E-Mods (X-Mods
Experience Mods Decrease When NCCI Increases Primary Loss? The NCCI had reported Experience Mods will decrease for certain employers. One of the new twists to the Workers Comp Experience Modification Factor calculations is that NCCI is going to raise the Primary Loss part of the calculation for your E-Mods
WC Program – Top Five Ways To Gauge Success Below are the top five ways to assess the success of your Workers Comp program. In my last two posts, I covered how to tell if your Workers Comp program is in trouble. There are many successful programs in place among
10 Ways To Detect Workers Comp Program Failure Spiral Your WC program failure spiral usually cannot be reversed after a few years of spinning out of control. One of my favorite books on entrepreneurship is The E-Myth by Michael Gerber. I have borrowed one of the terms he invented concerning
Credit Scores And XMods EMods EMR In my last post, I covered the similarities between XMods EMods EMR and credit scores. This post is about the differences. Some of the differences can be painful. I covered some of the differences in this article. Differences One of the main differences between the
Similarities – E-Mods X-Mods EMR And Credit Score A few weeks ago, I posted on E-Mods X-Mods EMR. I received a large number of questions on E-Mods X-Mods, better known as Experience Modification Factors. The questions from the blog readers were the same type that I have seen over the last
Four Workers Compensation Measurements Of Success My last post had covered the four Workers Compensation measurements of success or failure. Instead of combining both voluntary market and self insureds into one post I thought it best to separate them into two posts. The four measurements of success for the voluntary
Workers Comp Success Bottom Line Measurements Workers Comp success (or failure) bottom line measurements are readily available for employers. I have read on a few blogs and received questions recently concerning how a Workers Compensation program can most easily measure its success or need for improvement. This is a very
Two Questions on EMR One of our readers had two good questions on EMR. I often see you write about the E-Mods or X-Mods in your blog. Is an EMR the same thing as the E-Mod? This was a good question from one of our newsletter readers. The Workers Compensation
Three Ways To Penalize Your Company’s Experience Mods Actually, E-Mods (X-Mod, Ex-Mods) do not actually directly penalize your company’s Workers Compensation premiums. However, there are a few situations where your company’s E-Mod can experience a very sharp increase. I thought I would list three. There are others. Having numerous claims
The Experience Mod System’s Hidden Good Side The Experience Mod system can actually silently help your company. The Workers Compensation Experience Modification Factor (E-Mod/X-Mod/Ex-Mod) system can seem complicated and cause very high premiums at times. Three times over the last few weeks, I have heard or read different inaccurate comments
E-Mod (Ex-Mod) Review Of Outstanding Reserves An E-Mod (Ex-Mod) review is something to leave to the experts. Usually, approximately one third of the Total Incurred value should be Outstanding Reserves. That is a very, very rough approximation. I received a few question on this figure.This is an overall estimation
Workers Comp File Reserves Important To Catch Up The Workers Comp file reserves important this time of year. I have posted over the last two weeks on the process of performing a Workers Compensation file reserve review as a way of reducing your E-Mods or X-Mods. I am using January
Reader Question On E-Mod X-Mod Ex-Mod California Yesterday I received a question on Workers Comp E-Mod X-Mod Ex-Mod in California. Recently, our California Ex Mod greatly increased due to a few open claims that are dragging on and on. My policy doesn’t expire until mid-year and I am being charged
Cutting Cost Of Workers Comp Policy Just Renewed Your workers comp policy just renewed recently. This is a critical time in the cost cutting. This can apply to all Workers Compensation policies. I am now mentioning it as most policies renew on January 1st. Now is the time to start
Term Of The Day – D Ratio A D Ratio is a variable used in a workers compensation experience rating plan. It is applied to the expected losses to determine what percentage of those expected losses are to be considered as primary losses within the rating formula. Once discovered, the
Experience Modification Factor E-ModCan Be Debit, Credit or Neutral There has been much discussion in the last week on the Experience Modification Factor (E-Mod or X-Mods). My definition is your company’s Workers Comp credit score. From NCCI – Experience modifier (mod) is a multiplier applied to the premium of a
Experience Modification Factor (EMod/X-Mod) Is Like A Credit Score The Experience Modification Factor can be thought of as a credit score. There have been many articles written recently on the upcoming credit law changes effective February 22nd. The articles made me think which is the hardest to improve or correct
E-Mod X-Mod Forecasting Errors Due To Unit Stat Date Workers Comp E-Mod X-Mod calculating errors.Recently, I had come across some work from two so called Workers Comp “experts” that had guaranteed the accuracy of their E-Mod/X-Mod predictions for their client employers. I had thought this was interesting and decided to
EMod XMod Changes Upcoming Will Change Premium Audits WC EMod XMod changes upcoming may cause a new type of review. As I had posted a few months ago, the NCCI(R) has invented a new way to promulgate (calculate) Experience Modification Factors (E-Mod/X-Mod). I just received notice that the rating bureau
How Are WC Premiums Calculated? How are your WC premiums calculated? Your premiums are calculated from a formula that has no less than 34 steps to it. Let’s first look at what is the driving force behind what you pay in Work Comp premiums. The reserves, better known as total
Lower Our E-Mod Or X-Mod How can we lower our E-Mod? This is a question I received from one of the blog readers after I posted the Workers Comp E-Mod or X-Mod Factor formula earlier this week. This will fit well into the post that I was going to do
The Experience Mod Equation Revealed The Experience Mod equation – does it look complicated? I have been asked often how the Workers Compensation E-Mod/X-Mod is calculated. I am also usually asked why a certain company’s E-Mod increased so dramatically. The E-Mod individualizes a company’s risk to that company.
Experience Modification Cap – Effect on Workers Comp Costs Does the Experience Modification Cap really help reduce employers’ Workers Comp premiums? The Ohio Bureau of Workers’ Compensation’s board of directors recently approved a cap on premium increases aimed at preventing unforeseen spikes in workers’ comp costs. This is a case,
E-Mod And X-Mod System I have posted very often about how your company’s E-Mod /X-Mod can make or break your Workers Compensation insurance budget. One of the most popular questions we receive is “Our E-Mod is low and we have had no accidents. How can our premium have increased so
Part IV – Experience Mod Calculation From A Small Claim A small claim value can end up costing your company dearly. From the last post, the Workers Comp adjuster closed the claim out after 4 years and spending out $1,000. The file was originally reserved at $10,000. The file was
A Small Claim Can Be Very Expensive Per Unit Please see my post from September 27th on small claim. This is part two of that post. In the 9/27/08 post, I had pointed out that the first $5,000 of the Total Incurred of a Workers Comp claim can cost up
NCCI Important Rule Change A Very Important Rule Change by the NCCI – As I started to cover in the last post, late in 2003, the NCCI made a rule change that benefited Workers Comp insurance carriers greatly and ended up costing employers millions every year. The old rule was
NCCI Rules On Calculating E-Mod One of the newer NCCI rules that applies to policy renewals and the way the E-Mod is calculated was a radical change. The change is the rule for how many times a Workers Comp policy can apply to an E-Mod went from three to an
Not All Workers Comp Accidents Affect MOD Immediately Did accidents affect MOD in my Workers Comp policy year? Is it true that what happened in my last Work Comp policy year will not affect the Experience Mod for my current policy year? I had a much better year with accidents
Employer’s E-Mod Spiked Over Two Years Our E-Mod has increased quite significantly from .8 to 1.29 over two years’ time. What could have caused this spike? Question – We are renewing our Workers Comp policy in October. Our agent has said that if our E-Mod increases much more, certain insurance
Experience Modification Factor Known By Many Names We have received quite a large number of questions regarding the Workers Comp Experience Modification Factor over the past few weeks. The Experience Modification Factor also goes by Experience Modification Rating, and Experience Modifier. The E-Mod has many acronyms such as: Ex-Mod (California)
California X-Mod Calculation Sheets A Question From One of Our Readers – In one of your old posts, you went through how Workers Comp E-Mods (Experience Modification Factors – also known as X-Mod Calculation sheets) are calculated. My company i s in California only. How do I go about obtaining
Correction To Your E-Mod Can Be Difficult and Delayed Your E-Mod can be corrected. The deck is stacked against you when you want to correct your company’s Workers Compensation Experience Mod. The reasons: You can correct what has happened with your credit experience far into the past. You cannot, and
Business Credit Score Part II What is The Secret Business Credit Score? It is your Experience Modification Factor (E-Mod, Mod, X-Mod, etc). During all of my Workers Comp presentations, I point this out. If it is a longer presentation, I usually go through how E-Mods are calculated. If you think about
North Carolina Mid State Safety Council I presented yesterday at the North Carolina Mid State Safety Council’s conference on Ways to Cut Workers Compensation Costs. When I brought up the subject of how $25,000 = $100,000, I received a few questions after the conference. I thought it would be good
Can One Claim Wreck – Completely Ruin Your Workers Comp Premium Just one claim does not wreck an E-Mod. My company has had a great Workers Comp safety record over the past eight years. We had one serious injury two years ago. I know that it will start to hit
Workers Comp Rates Go Down Slowly – Be Patient A reader poses a great question on Workers Comp rates. My business had three bad years and then we had a much better year with our Workers Comp accidents. Now that we have had a better year, will our Workers Comp
The Experience Mod Is Like A Credit Score But Worse The Experience Mod or E-Mod X-Mod can be compared to a credit report with nightmarish results in some cases. How does a credit report compare to the E-Mod or X-Mod? The main difference between a credit report and a Workers
Claims Affect Premiums For Multiple Years How do claims affect premiums for my company? This is a question we receive very often. The first thing to look at is the state laws and rules on how your E-Mod or X-Mod is calculated. That will have some bearing on the length
A Safety Person vs. The X-Mod or E-Mod Is there one number that a safety person should be the most concerned with in their job? I have asked this question often when presenting to Loss Prevention, Safety Engineers and similar positions. The answers that I often hear are: Number of
Most Workers Comp E-Mods And Loss Runs Misconceptions The Workers Comp E-Mods and Loss Runs misconceptions that we have seen are: Only the open claims make a difference on the E-Mod – any claims opened within certain policy periods affect the E-Mod no matter whether they are closed or open
Experience Modification Factor Calculations The Experience Modification Factor calculations consist of four main areas. As I mentioned in a prior post, your Workers Comp premium calculations include 34 steps. However, those are the steps just to calculate your Experience Modification factor, also referred to as an E-Mod or an X-Mod.To
Will A Workers Comp Funds Recovered Lower Our Mod Will a workers comp funds recovered lower our Mod this year? This question was emailed in from a blog reader from Virginia. The rest of the employer’s question pointed out that the file was six years old. The answer to the
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