Friday, July 9, 2010

The Power of the Ex Mod in Longshore

Experience modifiers and Longshore are a mystery to most.
Close to 2/3rds of the total Longshore payroll across the country is not reported to the rating authorities or counted in the experience mod. . . . How so? you ask.

The simplest example is California - WCRIB require the reporting of Longshore payroll and claims but DO NOT include it into the calculation of their mod. . . I have no idea why.

Also, look at the MUTUAL and SURPLUS LINES carriers that write LONGSHORE; best estimate is that between them they make up almost half the Longshore payroll (and claims) but do not report to NCCI.

It is absolutely worth the effort to correct this.

Filing the missing data with NCCI for a particular client recently dropped their mod from 1.10 to 0.75. They were insured by a carrier that does not report to NCCI for the LONGSHORE.

Not only did this save them some $50K or so on their state act premium this year, but it gave them a true mod to tell their customers. . . a very powerful message in today's competitive market. Last, but by no means least, the account suddenly becomes more attractive to new markets! Great effect for what was basically a bunch of paperwork.

Oh I forgot, the mod went down for 3 years, and save them well over $100K over the 3 years!

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