Over the past 20 years I have been involved with all aspects of construction insurance, including
Workers’ Compensation. One frequent question I receive from my clients is the question of why their
Experience Modification Rating (EMR) increased, yet they had not suffered any additional losses.
Usually if no additional losses come onto your EMR, but your EMR has increased some over last year
then most likely the expected losses used in the calculation of the EMR have decreased from the prior
EMR. Expected losses are calculated by a factor of the expected loss rate and your payroll for the
classification. If the Expected Losses in your current EMR are lower than in the previous EMR, then this
will tend to increase your EMR. On the flip side, higher Expected Losses will tend to decrease your EMR.
I would not expect changes in the Expected Losses to have a huge impact on the EMR from year to year
– may adjust the EMR by a point or two – unless there are significant differences in payroll and/or
expected loss rates.
However, there could be an error in the data that your insurance carrier reported to NCCI, which is the
entity responsible for calculating your EMR. So it is always a good idea to review your EMR and/or
review it with your insurance agent, or other person knowledgeable about the EMR calculation. If the
data is not correct, it can be changed. Knowing what and how information affects your EMR will assist
you in learning how to control your EMR. If you can control your EMR then you can control your
workers’ compensation premium.
Hope you find this info useful. If you want to learn more or for a free analysis of your Experience
Modification Rating check out my landing page – http://cthompson54.wix.com/app-landing- page or
contact me.
-Chuck Thompson, CRIS – CEO of Thompson & Smith, LLC.