EMods or XMods – Safety Programs Have A Cumulative Effect
The EMods or XMods safety programs take time to decrease your premiums. E-Mods also known as X-Mods in California are basically the same as a credit score for an individual. The main difference is you can fix your personal credit score in a few weeks. Mods take a few years to correct or reduce even slightly. If one looks at any EMod (XMod) reduction program, the first recommendation will always be to create or enhance your safety program.
I presented this concept at the NC Mid State Safety Council Conference day before yesterday. A safety program takes approximately 18 – 24 months to start appearing in your company’s EMod and will not appear fully for up to four years.
I am very concerned that safety professionals or complete safety departments in various industries were actually terminated as the EMod actually did not move or increased at the time of the first policy renewal.
One of our old clients went through this situation. He was working for a trucking company in South Carolina. He had worked night and day to get his company’s E-Mod down. The EMod ticked up slightly due to factors when he was not even working for them. The next safety person in the job was lauded for their efforts even though he had only been on the job for six months as the Mod started ticking down.
The EMod or XMod will actually decrease after the safety professional or department had been reduced or eliminated. After a brief period of time, the Mod will then increase sharply. As I have said very often the Work Comp rating environment operates on a delayed basis. You can go back 57 months into the past to calculate a Mod in certain situations.
In this economy, it is hard for a company to have patience as a virtue. My company had been called into more than one instance where the safety department needed an outside source to prove to management that their efforts were working overall. One such company was an oil and gas company in Oklahoma. Upper management was astounded that the safety program was working but would not show in the E-Mod right away.
There are many factors that figure into the E-Mod such as changes in:
- Classification Codes
- Insurance carrier
- Claims staff
- Upcoming split point changes by NCCI
The bottom line is your safety program may be working for your company. You may just not see it in the numbers yet.
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