Your Experience Modification Rate (EMR) is still elevated—perhaps higher than last year. Re-marketing your insurance buys time, not relief. Because EMR adjusts workers’ comp pricing according to loss performance, the only durable fix is to address the underlying drivers. In short, stop chasing quotes and start managing the number.
What Is Your Experience Mod?
Your Experience Modification Rate (EMR) is a factor applied to your workers’ compensation premium based on how your recent loss history compares to similar employers. The mod reflects payroll by classification and actual losses over a prior experience period. The video below explains what your experience mod is and what is expected of your organization. (If the video does not play in your browser click here.)
Remember, an average experience mod is a 1.0, this is like receiving a “C” on your report card. Numbers above 1.00 increase premium; numbers below 1.00 reduce it.
Why it matters: sitting at 1.00 puts you at an average position, while competitors with lower mods carry less labor burden and more pricing flexibility—advantages that compound over time.
How To Find Your Experience Mod Rate
The NCCI (National Council on Compensation Insurance), is a group that calculates Experience Modification Factors for companies across the entire United States. Some states have their own rating bureaus due to their size and complexity. For example, New York and New Jersey have the NYCIRB & NJCRIB respectively. For a detailed explanation of what your Experience Modification Factor is and how it’s calculated visit this site. 
Why is Your Experience Mod High?
In most cases, the mod rises because recent loss performance is unfavorable: too many claims (frequency), one or two costly claims (severity), or open claims with reserves that haven’t come down. Until those claims close or reserves are reduced, the EMR will reflect that history.
How This Affects Your Organization
- Reduced resources for growth and operations
A higher EMR diverts cash into premiums, larger deductibles/retentions, collateral, etc. That translates into delayed hiring, smaller training and safety budgets, deferred equipment refresh, trimmed marketing and sales activity, and tighter working capital. In fixed-price or reimbursement-based agreements, the squeeze lands directly on margin—leaving fewer dollars to reinvest in people, process, and growth initiatives just when you need them most. - Higher operating costs
Because workers’ comp sits inside your labor burden, the modifier multiplies every hour you pay. Manufacturing, healthcare, logistics, retail—any labor-intensive operation feels it quickly. - Tougher insurance terms beyond workers’ comp
Underwriters view EMR as a signal of overall loss performance. A high number can harden terms across your program—General Liability, Auto, Umbrella—via higher base rates or minimum premiums, larger deductibles/retentions, added exclusions, etc. - Less leverage at renewal
Rating bureaus set the EMR months before your effective date, and carriers must apply it. Once set, the modifier functions like a surcharge that limits pricing flexibility and negotiation room. In practice, today’s EMR largely sets the starting line for tomorrow’s renewal.
What You Can Do To Lower Your Experience Mod:
- Track incidents (near misses) not just claims. Most claims can be avoided if you are meticulous about tracking all of the near misses that lead up to the eventual incident. Most claims could have been avoided in hindsight as the employee typically was taking shortcuts long before the ultimate injury occurred. Track these infractions and you will prevent at least one injury a year.
High Experience Mod
- Investigate accidents immediately and thoroughly; take corrective action to eliminate the hazard. If you sense fraud, get aggressive; don’t be an easy target. We suggest Why Analysis follow all incidents. That’s a whole other article that can be accessed HERE.
- Report all incidents to your insurance broker or Risk Advisor immediately. Studies show the longer it takes to report a claim, the more expensive it will be. A 4-week delay in reporting an injury drives the cost of that same injury by 48% according to a Hartford Insurance study of over 2 million claims.
- Alert your workers’ compensation claims adjuster to any serious, potentially serious or suspect claims. Frequently monitor the status of the claim, and communicate with the adjuster to resolve them as quickly as possible. Too busy to do that, have our Claims Advocates communicate with the adjuster on your behalf. Our Claims Advocates were insurance adjusters so they speak that language holding the carrier’s adjusters accountable.
- Every reported claim to your insurance carrier no matter the line of insurance should have an action plan attached to it to close out the claim. This is a big mistake most businesses make. They report it and then forget it until the policy comes up for renewal. At that point, they are shocked at the increase in the workers’ compensation insurance premium which is always driven by claims experience. Folks forget that workers’ compensation insurance is really a very expensive credit line to the business.
- Take an aggressive approach to providing light-duty or transitional to all injured employees upon their release from treatment. Return To Work programs are extremely powerful tools for lowering the cost of a workers’ compensation claim as they give leverage back to the employer, stopping the tail from wagging the dog. Supervise light duty employees to ensure their conformance with restrictions.
- In serious cases that involve lost time, communicate with the claims adjuster to demonstrate your interest in returning the injured employee back to gainful employment.
- Set safety performance goals for those with supervisory responsibility. Success in achieving safety goals should be used as one measure during performance appraisals. At Metropolitan Risk this is just one of the K.R.I’s (Key Risk Indicators) we emphasize to establish internal standards and accountability.
- Develop a written safety program, and train employees in their responsibilities for safety. OSHA rules dictate for every facility location or job site there must be a competent person. Incorporate a disciplinary policy into the program that holds employees accountable for breaking rules or rewards them for correctly following safety procedures. This should be tied into the employee handbook which each employee receives when they are on-boarded for your org.
- Frequently communicate with employees, both formally and informally, regarding the importance of safety keeping safety top of mind at all times.
- Make safety a priority – senior management must be visible in the safety effort and must support the initiative.
- Evaluate accident history and near-misses at least monthly. Look for trends in experience, and take corrective action on the worst problems first.
- Ensure your payroll and class codes are accurate. Over 65 % of workers’ compensation audits have errors. See COMP CHECK .
- Ensure the correctness of your mod calculation. Far too often there are errors here as well. See COMP CHECK
You can build all this out organically by yourself OR speak to a Risk Advisor about our COMP CARE PLATFORM. We have this all built. It’s turn-key and ready to be deployed in your organization if you are serious about reducing your workers’ compensation costs. There are no short cuts…
How Metropolitan Risk Can Help
Still looking for more info? Still have question? We have a team of Risk Management specialists who are here to help! Contact a Risk Advisor today for more information on how you can work towards lower workers comp costs by closing claims instead of shopping for insurance. Click here to book a 5-minute call with a Risk Advisor
