A high workers’ compensation experience modifier can drive premiums to unsustainable levels. Or it can make getting coverage difficult.
Helping businesses with high experience modifiers is part of Gunnin’s core expertise. We give clients the risk management tools they need to bring experience modifiers under control, lowering costs and improving sustainability for the long term.
A few frequently asked questions about experience modifiers
What is a workers’ compensation experience modifier?
An employer’s experience modifier—or ex-mod for short—is calculated based on the employer’s claims history, or more specifically, the losses an insurer has incurred under the employer’s policy.
How does an experience modifier work?
The ex-mod is expressed as a fraction or a percentage of the employer’s industry average performance. The employer’s premium is adjusted, typically on an annual basis, using the ex-mod as a multiplier.
A perfectly average business will have an ex-mod of 1 (or 100%). When a business keeps insurer costs low, its ex-mod drops below 1. But when costs exceed industry averages, the ex-mod and premiums go up.
Who calculates the ex-mod?
Ex-mods are calculated by specialized organizations called ratings bureaus. Depending on the state where your business is located, its ex-mod may be calculated by the National Council on Compensation Insurance (NCCI) or by your state’s dedicated rating bureau. For example, in California ex-mods are calculated by the California Workers’ Compensation Insurance Rating Bureau (WCIRB). The ratings bureaus use insurer-provided information to make their calculations.
How does a business improve a high ex-mod?
Improving a high ex-mod takes dedication. An employer’s ex-mod is based on a three-year period of performance data. Over time, the oldest year in the analysis is dropped off. Bringing the ex-mod down begins by improving today’s safety results, so when the current year’s results are added to the analysis, they bring down the employer’s overall score.