According to the article, claims frequency is declining. Could that be at least partially due to the fact that there are fewer employees in the higher-rated construction and manufacturing classes?
wvagt, The NCCI has changed the factors making up emods which punish employers. I see it all the time. I was comparing one of my accounts who had one claim in their three year experience period. Two zero years and one with one claim and the mod rose 6 points with little difference in payroll for the years. The prior year had that same claim in it and the insured had a better mod. It is hard for an account to get reductions on the mod despite clean years, but very easy for the mod to rise with not much activity.
What they did was raise the amount of primary loss from $5,000 to $10,000. So instead of the first $5k, now the first $10k of any loss goes in the calculation as primary and the balance is discounted. The primary amount had been $5,000 for a couple of decades and they adjusted for inflation.
keep in mind that the escalation of the primary loss amount is expected to continue and will end with about a $13,500 – $15,000 in 2015. The frequency number that follows will then be pegged to an annual inflation amount for years following as determined by NCCI for participating states. Frequency will continue to be the main driver of mod changes. Other states with their own mods had addressed this earlier but NCCI was a little slower.
May 13, 2014 at 2:44 pm
Agent says:
Like or Dislike:
0
0
Wrong Libby. Perhaps in Pennsylvania, but not in Texas. The primary loss is still $5,000 in the formula on the mod worksheet for both years. The only variation was the small reduction of payroll in the incoming year. The insured got penalized 6 points for having a smaller payroll in the experience period. The loss was $4,800 so it went in at full value.
May 13, 2014 at 3:01 pm
Agent says:
Like or Dislike:
0
0
Good comment WC. We have always realized that frequency is a bigger driver of mod changes than severity. I had an industrial client that was growing rapidly and hired a number of new employees. Before they could be trained properly on protective gear, the insured had a number of first aid claims, mostly under $1,000 paid. The mod took a big jump when they hit the experience. We reviewed the losses with the insured and the Loss Control rep got with them, they cleaned up their act quickly. The problem is that claims are in there for 3 years so they have to suffer with a larger mod until they wash out.
May 14, 2014 at 9:07 am
Libby says:
Like or Dislike:
0
0
I’m not wrong, Agent. The amount of loss considered “primary” was increased from $5k to $10k.
Why do you try so hard to argue with me only to make yourself look like the fool you are??? Read it and apologize.
The split point changes to Work Comp that were instituted do impact (more severely) those customers who have claims. Those who do not have claims benefit more than they have in the past. This move was supposed to reduce claims by getting insureds to understand the impact claims have and therefore embrace risk management to reduce the incidence of claims. There are still many things that these insureds can do to reduce the impact of these claims. This is where our expertise is needed with the client.
The best discount on a policy is a great modifier on an account that practices safety in their operation. Many of our larger customers have a Safety Manager who evaluates and watches the work environment, makes sure employees use proper protective gear and enforces work rules. They have periodic safety meetings and new employees are shown safe work practices when they start. I have seen mods as low as the mid 50’s before, but it is getting more rare. Any insured that is between .70 & .90 on a modifier is doing pretty well.
And a claims manager is not an agent either. By the way, my NCCI worksheet still has the $5,000 Primary value on it for the past year and the current year.
Funny, I have an agents license. AND a brokers license. LOL!!! A super-intelligent brokers license. You’re just a lowly agent.
May 14, 2014 at 12:55 pm
Libby says:
Like or Dislike:
0
0
And the reason your worksheet still has the $5k primary value on it is because the change doesn’t take effect until the first state rating change after 1/1/13. Texas doesn’t change rates until 6/1, so your mod won’t change until after then.
You’re welcome, moron.
May 14, 2014 at 2:56 pm
Agent says:
Like or Dislike:
0
0
My mod has already changed super moron. I am talking about experience in the past two years with the same claim in it and it went up. You are talking about the future when it will be even more penal for the customer. Hey super intelligent, you never answered why your super agency does not do Personal Lines. Good luck surviving on Commercial only in the future.
Considering the agencies I worked for were in the top 10 of the WORLD, they don”t need your luck. Commercial only pays the bills just fine. Go ahead and chase your tail after that P/L business. You can have it.
You do know that expected loss rates change EVERY YEAR, don’t you Agent? If you expect your mod to remain the same every year, you are a bigger moron than I suspected.
Libby, did I ever say I expected the mod to stay the same year after year? They almost always change some due to payroll info going in to the experience period. By the way, both Commercial & Personal Lines pays more bills than Commercial only. It always helps to have a good mix. Ours is 60% Commercial, 40% Personal. Too bad you don’t have a fall back position when you lose a substantial Commercial account.
I see you’re talking out of your ass again, Agent. If your agency makes more than an alphabet house agency, I’ll eat my hat. They don’t want personal lines, moron. It costs too much to service.
If you have a $10M (commission in case you didn’t know) shop, losing one commercial account will not break you. But you’d better replace it fast. Most producers had annual goals of $100k to $250k COMMISSION per year. With numbers like that, you don’t waste your time on penny-ante personal lines or small commercial.
I would think that would make you happy. No competition for your bread and butter. Because believe me, if they wanted that kind of business you’d be OUT OF BUSINESS. LOL!!!
According to the article, claims frequency is declining. Could that be at least partially due to the fact that there are fewer employees in the higher-rated construction and manufacturing classes?
wvagt, The NCCI has changed the factors making up emods which punish employers. I see it all the time. I was comparing one of my accounts who had one claim in their three year experience period. Two zero years and one with one claim and the mod rose 6 points with little difference in payroll for the years. The prior year had that same claim in it and the insured had a better mod. It is hard for an account to get reductions on the mod despite clean years, but very easy for the mod to rise with not much activity.
Did you contact NCCI for an explanation?
What they did was raise the amount of primary loss from $5,000 to $10,000. So instead of the first $5k, now the first $10k of any loss goes in the calculation as primary and the balance is discounted. The primary amount had been $5,000 for a couple of decades and they adjusted for inflation.
keep in mind that the escalation of the primary loss amount is expected to continue and will end with about a $13,500 – $15,000 in 2015. The frequency number that follows will then be pegged to an annual inflation amount for years following as determined by NCCI for participating states. Frequency will continue to be the main driver of mod changes. Other states with their own mods had addressed this earlier but NCCI was a little slower.
Wrong Libby. Perhaps in Pennsylvania, but not in Texas. The primary loss is still $5,000 in the formula on the mod worksheet for both years. The only variation was the small reduction of payroll in the incoming year. The insured got penalized 6 points for having a smaller payroll in the experience period. The loss was $4,800 so it went in at full value.
Good comment WC. We have always realized that frequency is a bigger driver of mod changes than severity. I had an industrial client that was growing rapidly and hired a number of new employees. Before they could be trained properly on protective gear, the insured had a number of first aid claims, mostly under $1,000 paid. The mod took a big jump when they hit the experience. We reviewed the losses with the insured and the Loss Control rep got with them, they cleaned up their act quickly. The problem is that claims are in there for 3 years so they have to suffer with a larger mod until they wash out.
I’m not wrong, Agent. The amount of loss considered “primary” was increased from $5k to $10k.
Why do you try so hard to argue with me only to make yourself look like the fool you are??? Read it and apologize.
http://niasgroup.com/ncci-split-point-increase-debit-mod-formula.html
I wonder if a year or two of gains will again lead to ridiculous pricing and a soft market again. Here’s to hoping we have learned our lesson!
The split point changes to Work Comp that were instituted do impact (more severely) those customers who have claims. Those who do not have claims benefit more than they have in the past. This move was supposed to reduce claims by getting insureds to understand the impact claims have and therefore embrace risk management to reduce the incidence of claims. There are still many things that these insureds can do to reduce the impact of these claims. This is where our expertise is needed with the client.
The best discount on a policy is a great modifier on an account that practices safety in their operation. Many of our larger customers have a Safety Manager who evaluates and watches the work environment, makes sure employees use proper protective gear and enforces work rules. They have periodic safety meetings and new employees are shown safe work practices when they start. I have seen mods as low as the mid 50’s before, but it is getting more rare. Any insured that is between .70 & .90 on a modifier is doing pretty well.
Now you’re a Risk Manager??? LOL!!! Thanks for stating the obvious.
And a claims manager is not an agent either. By the way, my NCCI worksheet still has the $5,000 Primary value on it for the past year and the current year.
Funny, I have an agents license. AND a brokers license. LOL!!! A super-intelligent brokers license. You’re just a lowly agent.
And the reason your worksheet still has the $5k primary value on it is because the change doesn’t take effect until the first state rating change after 1/1/13. Texas doesn’t change rates until 6/1, so your mod won’t change until after then.
You’re welcome, moron.
My mod has already changed super moron. I am talking about experience in the past two years with the same claim in it and it went up. You are talking about the future when it will be even more penal for the customer. Hey super intelligent, you never answered why your super agency does not do Personal Lines. Good luck surviving on Commercial only in the future.
Considering the agencies I worked for were in the top 10 of the WORLD, they don”t need your luck. Commercial only pays the bills just fine. Go ahead and chase your tail after that P/L business. You can have it.
You do know that expected loss rates change EVERY YEAR, don’t you Agent? If you expect your mod to remain the same every year, you are a bigger moron than I suspected.
Libby, did I ever say I expected the mod to stay the same year after year? They almost always change some due to payroll info going in to the experience period. By the way, both Commercial & Personal Lines pays more bills than Commercial only. It always helps to have a good mix. Ours is 60% Commercial, 40% Personal. Too bad you don’t have a fall back position when you lose a substantial Commercial account.
I see you’re talking out of your ass again, Agent. If your agency makes more than an alphabet house agency, I’ll eat my hat. They don’t want personal lines, moron. It costs too much to service.
If you have a $10M (commission in case you didn’t know) shop, losing one commercial account will not break you. But you’d better replace it fast. Most producers had annual goals of $100k to $250k COMMISSION per year. With numbers like that, you don’t waste your time on penny-ante personal lines or small commercial.
I would think that would make you happy. No competition for your bread and butter. Because believe me, if they wanted that kind of business you’d be OUT OF BUSINESS. LOL!!!
Not hardly Libby. You should stick to what you know best and we will stick to what we know best. You know not what you speak CSR!