Reasons To Understand Experience Mods

The experience rating system can be somewhat complex. But, through an understanding of the mod formula and the data that goes into the mod, you can better control your mod, reduce costs, and gain insight into your company’s operations. Workers’ compensation insurance costs can be several hundred dollars per employee. For a company that is able to lower its mod by twenty or thirty points (example: going from a mod of 1.20 to 0.90 would be a thirty point reduction), the cost savings are substantial. The first step to achieving a lower mod is to understand your company’s mod, how it is calculated, and what is necessary to lower the mod.

In addition to controlling and lowering your mod, it is possible to better understand your company’s operations through mod analysis. Changes in loss frequency or severity over time may indicate problems in your operation that have not been identified. Your experience worksheet may be the easiest way to “benchmark” your company against other companies with similar operations. There are certain numbers on the worksheet that can help you identify if your company is experiencing more workers’ compensation claims or more severe losses than average. The experience worksheet will actually tell you whether or not you’re beating the competition in this important cost area.

There are several types of mod analysis and the agents at FloridaWC would like to assist your business in working to reduce your experience mod. Please contact us for more details.