Workers' Compensation Experience Rating

Workers' Compensation and Experience Rating: frequently asked questions
	What is experience rating?
	Experience rating attempts to adjust your manual premium (which is simply your payroll by class code multiplied by "manual" rates) to reflect your actual claims experience. Without this adjustment, all companies of the same size in the same industry would pay the same premium. The effect of experience rating is to adjust your manual premium up or down, since your claims experience is either "better" or "worse" than average.
	Where does this information come from?
	The data feeding the calculation comes from two sources: your audited payrolls and your actual claims experience. Claims experience is reported by your current or previous carrier each year for three years by way of "unit statistical data". This data is reported electronically to the appropriate rating organization (NCCI, if you have multi-state operations and/or individual state agencies such as the Workers' Compensation Rating & Inspection Bureau of Massachusetts).
	What can we do to reduce our experience modification factor?
	By investing in loss control programs and activities that serve to reduce your claims frequency, you'll have fewer claims. How much should you spend? Let us provide you with a cost/benefit analysis that will let you know what your return on investment should be.
	How can we predict our experience mod?
	Don't wait until you receive your renewal quote or, even worse, your renewal policy, to know what your mod will be. You know what payrolls you are reporting to the insurance company after your current policy expires. Be sure to retain a copy of your final payroll audit each year.
	How can Chartwell help us with this?
	As a Chartwell client, we retain a copy of your payroll audit results at the end of each policy year. And, we order loss runs with the appropriate valuation date. With this information in hand, we're able to calculate your experience mod more than five months in advance of your next policy anniversary. To examples of how much more useful our client reports are than standard "bureau" reports, click here.