Estimate your Workers' Compensation Mod Rate using the NCCI formula methodology.
Actual Losses (Your History)
Losses below the split point (e.g. < $18.5k)
Losses above the split point
Expected Losses (Industry Benchmarks)
Actuarial Factors
Between 0.00 and 1.00
Stabilizing factor
Adjusted Actual Losses:$0.00
Total Expected Losses (E):$0.00
Calculated Mod Score:
1.00 Average
Understanding Your Experience Modification Rate
The Experience Modification Rate (EMR), often simply called the "Mod Rate," is a multiplier used by insurance carriers to calculate your workers' compensation premium. It represents a comparison of your company's past claim history against the average claim history of other companies in your specific industry and size class.
How is the Mod Rate Calculated?
The calculator above utilizes the standard formula used by rating bureaus like the NCCI. The core logic involves comparing "Actual" losses to "Expected" losses, adjusted by weighting and ballast factors.
The simplified formula is: Mod = (Ap + W×Ae + (1-W)×Ee + B) / (E + B)
Ap (Actual Primary Losses): The costs of your claims up to a specific "split point" (often around $18,500, though this varies by state and year). Frequency of claims impacts this number heavily.
Ae (Actual Excess Losses): The remaining costs of claims that exceed the split point. This measures the severity of accidents.
E (Expected Losses): Statistical projections based on your payroll codes (class codes). This is what the insurance bureau predicts an average company of your size would lose.
W (Weighting Value): A factor between 0 and 1 that determines how much "Excess" loss counts. Smaller companies have a lower W, meaning severity impacts them less than frequency.
B (Ballast Value): A stabilizing number added to both the numerator and denominator to prevent extreme swings in the Mod Rate for smaller companies.
Interpreting Your Score
1.0: This is the industry average. Your losses are exactly what was expected for a company of your size. You pay the standard manual premium.
Less than 1.0 (Credit Mod): Your safety record is better than average. A score of 0.85 means you pay roughly 85% of the manual premium (a 15% discount).
Greater than 1.0 (Debit Mod): Your losses are higher than expected. A score of 1.25 means you pay roughly 125% of the manual premium (a 25% surcharge).
Why Frequency Matters More Than Severity
In Mod Rate calculations, Actual Primary Losses are taken at full value, while Actual Excess Losses are discounted by the Weighting Value. This means that many small claims (frequency) will hurt your Mod Rate significantly more than one large claim (severity). This actuarial bias exists because frequency is a better predictor of future risk than the random severity of a single accident.
function calculateModRate() {
// 1. Get Inputs
var ap = document.getElementById('actualPrimary').value;
var ae = document.getElementById('actualExcess').value;
var ep = document.getElementById('expectedPrimary').value;
var ee = document.getElementById('expectedExcess').value;
var w = document.getElementById('weightingValue').value;
var b = document.getElementById('ballastValue').value;
// 2. Validate Inputs
if (ap === "" || ae === "" || ep === "" || ee === "" || w === "" || b === "") {
alert("Please fill in all fields to calculate the Mod Rate.");
return;
}
ap = parseFloat(ap);
ae = parseFloat(ae);
ep = parseFloat(ep);
ee = parseFloat(ee);
w = parseFloat(w);
b = parseFloat(b);
if (isNaN(ap) || isNaN(ae) || isNaN(ep) || isNaN(ee) || isNaN(w) || isNaN(b)) {
alert("Please enter valid numeric values.");
return;
}
// 3. Calculation Logic (NCCI Formula Approximation)
// Numerator = Ap + (W * Ae) + ((1-W) * Ee) + B
// Denominator = Total Expected Losses (Ep + Ee) + B
var term1 = ap;
var term2 = w * ae;
var term3 = (1 – w) * ee;
var adjustedActualLosses = term1 + term2 + term3;
var numerator = adjustedActualLosses + b;
var totalExpectedLosses = ep + ee;
var denominator = totalExpectedLosses + b;
var modRate = 0;
if (denominator !== 0) {
modRate = numerator / denominator;
} else {
alert("Denominator calculated to zero. Please check inputs.");
return;
}
// 4. Update UI
var resultBox = document.getElementById('result');
var resAdjusted = document.getElementById('resAdjustedActual');
var resExpected = document.getElementById('resTotalExpected');
var resMod = document.getElementById('resModRate');
var resStatus = document.getElementById('resStatus');
resultBox.style.display = "block";
// Formatting currency
var currencyFormat = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
resAdjusted.innerHTML = currencyFormat.format(adjustedActualLosses);
resExpected.innerHTML = currencyFormat.format(totalExpectedLosses);
resMod.innerHTML = modRate.toFixed(2);
// Status Logic
resStatus.className = "status-badge"; // Reset class
if (modRate 1.05) {
resStatus.innerHTML = "Debit Mod (High Risk)";
resStatus.classList.add("status-bad");
} else {
resStatus.innerHTML = "Industry Average";
resStatus.classList.add("status-neutral");
}
}