Experience modification. Experience rating. E-mod. MOD. EMR.
The e-mod goes by many names. What is it and how can you predict the impact business decisions will have on it?
Your e-mod is a factor that compares your company’s claims experience to that of other similar businesses. The average loss experience is expressed as 1.0. If your e-mod is lower than 1.0, it means your loss experience is better than average for your cohort of similar businesses. If it’s higher than 1.0, your company is expected to have a worse-than-average claims experience. For example, a company with a 1.1 e-mod pays 10% more than their direct competitor with an emod of 1.0.
Your workers’ compensation insurance carrier uses your e-mod to help determine your premium. Some large project owners and government contracts also consider your e-mod when you bid on a job. It’s one way to judge your company’s safety record.
Understanding your e-mod can be challenging, but it’s the first step to lowering your workers’ comp costs and winning larger projects.
How e-mod forecasting benefits your business
A variety of factors impact your e-mod, such as:
- Frequency of claims
- Severity of claims
- Size of payroll
- Industry classification
Changes to any of these factors could cause a fluctuation in your e-mod. Forecasting can help you estimate those fluctuations up to six months before your next renewal. Enabling the business to make an informed decision that considers both the current e-mod and the potential e-mod in the absence of any further claim activity.
E-mod forecasting with POWERS — What to expect
E-mod forecasting is one of our areas of expertise. We’ll review your claims history and payroll records to help you:
- Estimate the impact of potential claims on your workers’ comp premium
- Compare your e-mod to industry averages
- Identify improvement opportunities in your safety program
- Evaluate the impact of payroll or classification changes on your e-mod
Armed with these insights, we’ll work together to plan concrete steps you can take to lower your e-mod over time, reducing your insurance premium and empowering you to win bigger jobs.
E-mod forecasting in action
Here’s an example of how e-mod forecasting can benefit your business.
Sarah is the owner of Stellar Siding. Her business runs like a well-oiled machine. Recently, another business owner in the space approached her with a business opportunity: He is nearing retirement and asked if Sarah would consider buying his company and merging the two.
Sarah’s concern is that the other business’s niche and experience is with installations on commercial buildings often higher than three stories. Stellar has served a mostly residential market.
She’s interested in the opportunity, but wondering how combining work under these different classifications could impact her risk profile and insurance premiums.
Her POWERS risk advisor takes her through a detailed e-mod forecasting exercise to estimate these impacts in different scenarios. With this knowledge, Sarah feels confident in her business decision and moves forward with the acquisition.
Get started with forecasting today
With expert e-mod forecasting, you can control your workers’ comp costs and make more informed business decisions. When you partner with POWERS, we’re more than your insurance agency. We’re a true business partner invested in your success. Our philosophy combines:
We put programs in place to help you execute your business plans. It’s all about empowering you to mitigate risk and grow your business. That’s the POWERS Promise.