The First Three Steps of a Workers Comp Loss Run Claim Reserve Analysis

This post is a continuation of the last post.   I will break down the list of six into two groups of three.     

Obtaining online access or Workers Compensation loss runs. 

This area has been covered very often by me in previous posts.  Please use the Search box in the right margin.  Searching for online access or loss runs will give you the best results.       

Understanding which claims will affect your NCCI or State Rating Bureau Experience Mod (E-Mod/X-Mod).  

Any very old claims (more than 5 years old) will not affect your E-Mod or X-Mod in most cases.  However, if you are in a hybrid insurance arrangement or a long-tail Retro policy, the old claims can still affect your insurance premiums.  

Your company's most recent claims will likely not affect your next E-Mod/X-Mod.  However, the very new claims will affect your Mod eventually, so they should be examined along with the rest of the claims on the loss run.      

Understanding which claims will be examined when an insurance company provides a quote  

This may be a little confusing as the insurance companies that do a good job of underwriting will examine the older claims that will not affect your E-Mod.  The underwriter will still look at the old claims to make sure that your company did not have a very bad claims year that may not appear in the E-Mod calculations. 

We recently consulted with a trucking company that was trying to negotiate a switch from a regular commercial policy to a large deductible program.  Their E-Mod looked great. The insurance carriers that were willing to write them did not provide a great deal as was anticipated due to their low E-Mod. The underwriting departments were concerned the company had two very serious claim years 7 & 8 years ago.  The bottom line is that for the E-Mod the newest claims should be examined.  If your company is going to shop their Workers Comp insurance in the market or going to try to switch to an alternative insurance plan, all claims on the loss runs are then highly important. 

      

That covers the three out of the list of six. We will cover 4, 5 & 6 in the next post.  There is a Definitions tab in the right margin that will take you to a list of definitions if you have questions on any of the terms. Please email us if you have any questions.