Experience Modification Calculation Software:
How we can help you lower your Mod score: Our risk management services can assist clients in creating a safer work environment and helping with employee safety initiatives, which will help reduce the associated costs of claims that affect their bottom line. Safer work settings have also been shown to boost employee morale and increase productivity, further assisting with company growth and efficiency. A proactive risk management effort, along with proper claims reporting and the other resources we have available, can significantly help you improve your experience modification rating.
What it is: An experience mod is a factor that is calculated for each employer who qualifies. The mod factor is a value that compares the claim profile of the employer to the claim profile that would be expected of an employer of similar size (payroll) in the same industry (class codes). A value of 1.00 is average, meaning the frequency and severity of actual losses equaled the expected losses. A mod factor greater than 1.00 means the employer experienced worse than expected losses during the rating period, and a mod of less than 1.00 indicates the employer’s losses were better than expected for the rating period.
How it’s used: An individual employer’s experience mod is calculated using claims data from the three most recently completed years. First, each claim’s incurred (paid, plus reserved) value is listed. Next, the frequency of claims is evaluated. Also, in some states, only a percentage of the ‘medical only’ claims are used in the formula, which puts more weight on the frequency of claims than the severity of claims. Finally, these adjusted claims are compared to the expected losses for the class and size of the organization, which ultimately determines the experience modification factor assigned to the individual employer. Credit mods (less than 1.00) reduce the premium, while debit mods (greater than 1.00) result in a premium surcharge. This allows us to project your future modification rate in order to determine next year’s premium rates. With an experience modification rate projection done in advance, we can provide you with multiple options to reduce your premium prior to next year’s policy renewal. Due to the fact that claims affect your experience mod for three full years, understanding the cost of those claims and how they will affect your rates is important.
If you are interested in finding out your score or need assistance with improving your current rating, contact our Risk Management Coordinator, Ryan Wilson at 802-295-3329 or [email protected]