In a previous post we discussed how changes in the way experience modifiers are calculated could affect your premium especially if you are an employer with several large losses in the past four years. If you fall into this category here are some techniques you can implement in order to minimize the impact of the changes.
The first thing you can do, if you haven’t already, is implement a safety program. There are several resources available to assist you:
The Occupational Safety and Health Administration
OSHA Approved Consultation Service
Your Insurance Carrier
As discussed previously, the experience modifier calculation still penalizes frequency versus severity. Therefore any steps you can take to demonstrate that you are being proactive about reducing workplace injuries will be beneficial
Beyond looking at workplace safety, take a moment to study your company’s experience modifier and make sure it is computed correctly. Since you know your loss history you have the ability to compute what your expected modifier should be. Have your agent assist you with this process. If the computed modifier is going to result in an increase in premium you can be prepared ahead of time.
When the final experience modifier is received it can be compared to the computed modifier to see if there are any discrepancies. If there are make sure that the correct information was reported by the insurance carrier in order to compute the modifier. Items that should be checked include:
-The reported losses are correct. Sometimes the carrier includes amounts reserved for losses on claims that have been closed
-Payroll amounts and classifications are correct
-Ratings have changed between the time the computed modifier was calculated and the final modifier was calculated
Contact you insurance agent if you have questions or need assistance. As always, one of the insurance professionals at Jerry Hay, Inc. will be happy to speak with you. Contact us today for more information.