How Is the Mod Calcuated?
The process of calculating the experience modification factor is complex, but the underlying theory and purpose of the formula is straightforward. Your company’s actual losses are compared to its expected losses by industry type. The formula incorporates factors that account for company size, unexpectedly large losses, and the incidence of loss frequency and loss severity to achieve a balance between fairness and accountability.
How Does My Mod Affect My Premiums?
Most employers realize their mod affects premiums in some way, but they rarely connect the dots and realize what actions they can take to lower their mod and insurance costs. The mod factor represents either a credit or debit that is applied to your workers’ compensation premium. A mod factor greater than 1.0 is a debit mod, which means that your losses are worse than expected and a surcharge will be added to your premium. A mod factor less than 1.0 is a credit mod, which means losses are better than expected, resulting in a discounted premium.
How We Can Help Tell Your Story
With the help of analysis, your mod tells a story—about where your business has been and what it can do to improve.
With the power of our experience modifier software tool, we’ll analyze your mod and tell your story. Specifically, we can do the following:
- Calculate and project costs associated with the mod.
- Identify opportunities for improvement.
- Analyze cost of losses in terms of mod points and premium.
- Reveal cost drivers and the impact of the mod.
- Focus on problem areas, such as frequency or severity of injuries.
- Examine loss trends for types of injuries, departments and more.
- Create loss control and risk management strategies.