THE CHALLENGE: When it comes to workers’ compensation premiums, a company’s experience modification rate, or EMR, is everything. No one wants an e-mod higher than 1.00. An e-mod, as a refresher, is a ratio that expresses actual to expected losses that occur over a (typically) three-year period. In this case, our client – a taxicab company – was paying tens of thousands of dollars in higher premiums year after year because its e-mod was spinning out of control.
OUR SOLUTION: Getting your e-mod under control takes patience. It does not happen overnight. In fact, because it’s calculated based on several years of data, it can easily take two or more years to begin to see it drop. Our strategy was to begin quarterly meetings with our client to review all claims. We coached the client on the importance of prompt claims reporting. We also helped the client understand that it was in its best interest to be thorough in helping the insurer gather the facts on a claim. It had to become a partner in investigating claims with the insurer. We also helped the client establish a robust return-to-work program so that injured workers could get back to earning their pay – even if in a different role – sooner rather than later. We also made sure the company had a solid safety training program in place and that it paid close attention in its hiring practices, so that it recruited workers committed to work, rather than to collecting claims checks. Also, we made sure the company provided workers with a list of doctors who would deliver the best treatment possible while also helping them get back to work. Finally, we did a top-to-bottom analysis of our client’s policy, especially its deductible choices and made some big adjustments there.
THE OUTCOME: The numbers speak for themselves here. Our client’s experience modification rate today (2018) is 33.3 percent lower than it was in 2012. It saw a 12.5 percent decline just between 2017 and 2018. The drop, naturally, has translated into big savings in its premiums, amounting to 27 percent in just the past three years, or about $120,000 a year on a policy now costing it under $450,000 a year.
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