A single line on an actuarial report.
$25,000 out of your company’s pockets.
That’s the kind of impact an experience modifier can have. In the first installment of this series, we examined how ex-mods could cause two seemingly identical organizations to pay two vastly different workers’ compensation insurance premiums.
To reiterate: Your ex-mod is how your insurer evaluates your level of environmental health and safety risk. The more accidents your workers experience, the higher your risk. The higher your risk, the higher your ex-mod. And the higher your ex-mod, the higher your premium.
It’s a relatively straightforward concept, even for those of us who don’t exactly have a natural enthusiasm for insurance. But your ex-mod is also a story about your facilities, EHS program, and safety culture. Within that basic formula are 3 years’ worth of losses—actual and expected—as well as the organizational controls, vulnerabilities, assumptions, decisions, and consequences associated with those losses.
As such, your ex-mod can be a key indicator of your organization’s overall health and performance. Consider what your ex-mod could be telling you about each of the following factors in your bottom line: