To start a mod analysis, press the Online Tools button

You will immediately be prompted for a username and password. If you do not have a username and password, please send email to [email protected] and request a username and password for QuickMod.com.

After successfully entering your username and password, you will see a screen that prompts you to select your state. If your mod calculation involves more than one state, select Multi-state as your state selection. After you have made your selection, press Continue. You will then see the input screen for the QuickMod.com mod analysis tool.

This form is designed to correspond to the lettered boxes on your worksheet. Locate each value on your worksheet and enter it in the form. Use the tab key to move to each consecutive data entry box. Do not press Enter on your keyboard in an attempt to move to the next data field.

Chapter 5 Using QuickMod.com to Perform a Mod Analysis

Figure 5.2: QuickMod.com input screen with values entered from sample worksheet shown in Figure 2.9

Notice the values entered into this data entry form come directly from the XYZ Company worksheet provided with your kit. The estimated workers’ comp premium is the only value that was provided by XYZ Company that did not come from the worksheet.

Data fields A through I have been explained previously in this book and are easily located on your worksheet. However, please note that the “W” value is displayed on most worksheets without the decimal point. When you enter the “W” value in the QuickMod.com data form, please use the decimal point. In our example case, the “W” value is typically displayed as

“011”. This value is entered as 0.11 or .11 in the data form.

After entering items A through I, you can enter up to five losses to determine the mod impact of each loss.

NOTE: If you are in an ERA-approved state (these states are listed in the appendix) and you are entering a medical-only claim (IJ code 6), enter 70% of the loss amount shown on the worksheet.

For all other losses, enter the full-loss amount. Enter only itemized losses. Do not enter the group small-loss amounts that are identifiable by the “*” in the O/F column (Column 8).

Finally, enter an estimate of your workers’ comp premium prior to application of your mod.

This is called the unmodified or subject premium. If you are not aware of this value, contact your insurance advisor or accountant. Alternatively, you can use the subject premium for the most recent policy period on your worksheet as an estimate. This value is displayed next to the policy totals in parenthesis.

Press Continue to view the results of your QuickMod.com mod analysis.

There are five different screens that display the results of your analysis. They are shown below for the sample XYZ Company worksheet (see Figure 2.9). If you prefer to print the analysis, press your browser’s print button to automatically print all five pages.

Navigating from report to report can be done by pressing the next button, clicking on the link to the next report, or by scrolling down the page to the next report. In the following sections, clicking on the link to the next report is referenced. However, choose the navigation technique that best suits you.

The first screen shows the numbers you entered as they are utilized in the experience rating formula. The mod is also displayed. This mod will match the mod on your worksheet unless there is some state mod limitation that has reduced your mod. Note that each analysis can be printed by selecting the File Menu in the upper left hand corner of your browser and selecting Print from the menu list.

Chapter 5 Using QuickMod.com to Perform a Mod Analysis

Figure 5.3: Display of mod formula with sample values

Next, click on the link that says “Your Minimum Mod & Controllable Mod.” This will take you to the next analysis.

Figure 5.4: Your Minimum Mod & Controllable Mod

Previously, we discussed the importance of understanding the minimum mod and controllable mod. The unique numbers from your mod worksheet are utilized by QuickMod.com, and the estimate you provided for your basic workers’ comp premium, to perform this analysis.

For XYZ Company, we can see that the minimum mod is 0.79, which would yield a premium of $21,296.98. The average company with similar operations has a mod of 1.0 and a premium of $27,000. XYZ Company has a current mod of 1.43 and a premium of

$38,595.22. Obviously, XYZ Company has room for improvement.

This analysis also identifies that primary losses are contributing 0.60 to the mod of 1.43.

Primary losses are a measure of loss frequency. Loss frequency can be effectively reduced by loss-control services. With the “Your Minimum Mod & Controllable Mod” analysis in

Chapter 5 Using QuickMod.com to Perform a Mod Analysis

Figure 5.5: Analysis of Your Primary and Excess Losses

This analysis is a ratio of actual to expected losses (primary and excess). As you may recall from Chapter 2, primary losses are a measure of loss frequency and excess losses are a measure of loss severity. This analysis indicates the degree to which actual losses are greater than or less than expected. For XYZ Company, actual primary losses are 397.72% of expected (nearly four times the expected value!). Excess losses are actually less than expected at only 72.51%. This analysis provides a brief text description and analysis that is based on the percentages calculated. For XYZ Company, this analysis clearly illustrates the extent to which their primary losses are exceeding the industry average.

Next, click on the link, “Your Specific Loss Sensitivity.” This will take you to the next analysis.

Figure 5.6: Your Specific Loss Sensitivity

For the five losses entered for XYZ Company, QuickMod.com has computed the impact that each loss had on the mod, what the mod would have been without that loss, and an estimate of the cumulative one-, two-, and three-year premium costs of the loss. This is one of the most effective ways to highlight the true cost of a loss in terms of increased premiums. XYZ Company can use this analysis to quickly compute the savings, thus preventing similar losses in the future. With this information, a more informed decision can be made concerning changes in operations or loss prevention services necessary to prevent and reduce losses.

Next, click on the link, “Your Aggregate Loss Sensitivity.” This will take you to the next analysis.

Chapter 5 Using QuickMod.com to Perform a Mod Analysis

Figure 5.7: Your Aggregate Loss Sensitivity

This analysis demonstrates the sensitivity of the mod to changes in the aggregate loss level.

For XYZ Company, a decrease in losses of over 50% would be required to reach an average mod of 1.00. If XYZ Company continues to see a rise in losses, and losses increase by 50%, the mod would increase to 1.75. This analysis will help you quickly gauge the impact of aggregate changes in losses and will assist you in setting reasonable mod goals for your company.

Summary

The analysis produced by QuickMod.com will be unique for every company. The

calculations are driven by the unique characteristics of your company. This includes the job classifications, payroll levels, states of operation, and loss history. Each analysis will be interpreted differently depending on the unique results for your company. You may want to share the results of your analysis with your insurance advisor and discuss the appropriate steps necessary to Master Your Workers’ Comp Modifier!