Xmod Calculations Changing
in 2017
What does the new formula mean to you?

Brian Laney, Property & Casualty Broker-Producer and Principal at EPIC Insurance Brokers & Consultants

Brian is a seasoned insurance broker, trusted advisor, strategist, and problem solver. He works both as an insurance agent and as a broker.

Big Changes to the way Experience Mods are calculated in 2017 will mean higher Experience Mods & Workers Comp premiums in 2017.  Since the 1990’s the formula has remained the same with only small adjustments.  The new “variable split point formula” will soon change everything.  Because of this new formula contractors with only a few employees can see a benefit while contractors with 50+ employees are seeing average increases between 10-15%, and sometimes much more. 

• The new formula can benefit smaller employers since it reduces the volatility of a single large claim. 
• Larger employers will see even more sensitivity to claim frequency.

Example – Employer with a Primary Threshold of $11,000 has five $500 claims and one $25,000 claim would have an Ex-Mod of 119% compared to the current formula resulting in an Ex-Mod of 111% .

However, take the same employer with five $500 claims and one $150,000 claim and the Ex-Mod stays at 119% using the variable split formula compared to the current formula that would result in an Ex-Mod of 141%.

Everyone needs to know their new “primary threshold” using the new 2017 formula.  Attendees will understand exactly what goes into calculating their Ex Mod and exactly what the effects of the new formula will be. If you can, strongly urge anyone attending to bring their Experience Mod Worksheet to the seminar so they can follow along using your own data.