Workers compensation
Loss runs for workers comp
Workers comp loss runs list every injury claim on the policy with medical and indemnity paid kept apart, reserves and status. Underwriters read them alongside the experience mod, which compares the employer's actual losses with expected losses for its payroll. Frequent small claims usually hurt the mod more than one large claim.
Medical-only and indemnity claims
The split between these two claim types is the first thing a workers comp underwriter looks at.
Medical-only claims
The employee received treatment but did not miss enough work to receive wage replacement. These claims are common and usually small. In states that use the NCCI experience rating adjustment, only 30 percent of medical-only losses count toward the experience mod, which rewards employers who report minor injuries early.
Indemnity, or lost time, claims
The employee lost time from work and received wage replacement benefits, in addition to medical care. These claims cost more, stay open longer and carry larger reserves. A rising share of lost time claims is a warning sign, even when the total count is flat.
On the carrier report, look for separate columns for medical paid, indemnity paid and expense paid, plus reserves for each. If the carrier only prints totals, ask for claim-level detail. The general column guide is on what is a loss run report.
Experience mod basics
The experience modification factor adjusts workers comp premium up or down based on the employer's own loss history compared with similar employers.
A mod of 1.00 is average. A mod of 0.85 means premium is reduced by about 15 percent, and 1.20 means it is increased by about 20 percent. The rating bureau, NCCI or an independent state bureau, calculates it from payroll and losses.
The calculation typically uses three completed policy years, excluding the most recent year. Loss data comes from the unit statistical reports carriers file with the bureau, not directly from the loss run, but the two should tell the same story.
Each claim is split into a primary portion, up to a split point set by the bureau, and an excess portion. Primary losses weigh much more. That is why ten small claims can raise a mod more than one large claim of the same total: frequency is treated as the better predictor.
Loss runs let you check the mod before it arrives. If a claim closed for less than its reserve, or a claim was coded to the wrong employer, the agency can raise it with the carrier while it still matters.
5-yr loss ratio
27.7%
Frequency
2.4 / yr
Open reserves
$61,500
What to request and how to present it
| Item | Why it matters for workers comp |
|---|---|
| Five years of currently valued loss runs | Covers the mod window plus the most recent years the mod does not yet include |
| Medical, indemnity and expense shown separately | Shows the medical-only versus lost time mix |
| Claim status and reserves | Open lost time claims can still develop |
| Experience rating worksheet | The current mod and the losses behind it |
| Payroll by state and class code | Needed for the ACORD 130 and to judge frequency per payroll |
| Safety and return-to-work program | The narrative underwriters look for after large claims |
LossRunReports keeps medical, indemnity and expense in separate columns for every carrier, flags valuations older than 90 days and builds a summary by policy year with frequency, lost time share and open reserves. Payroll by class code flows into the ACORD 130 extraction. See the full loss run analysis for how the summary reads.
Reading a workers comp loss run
Start with the claim count per year and the share of lost time claims. Then look at the largest claims and their status. An open lost time claim from two years ago with a large indemnity reserve is the figure most likely to move, and underwriters will ask about it.
Check the injury descriptions for patterns: repeated strains in the warehouse, cuts at one location, vehicle accidents among field staff. Patterns are where a safety program or a return-to-work program makes a visible difference, and they are what the narrative should address.
Finally, compare the reports with the experience rating worksheet. Claim amounts on the worksheet come from unit statistical reports and can differ from a newer loss run because of later development. Large unexplained differences are worth raising with the carrier.
Workers comp loss run questions
Are workers comp loss runs the same as the experience rating worksheet?
No. The loss run comes from the carrier and lists claims. The worksheet comes from the rating bureau and shows how payroll and losses produced the mod. Underwriters want both.
Why does my mod not include last year's claims?
The mod usually uses three completed years and skips the most recent one, because those claims are not yet reported to the bureau. They will show up in the next calculation.
Should we report small injuries as claims?
Prompt reporting of minor injuries generally keeps costs down, and in states using the experience rating adjustment, medical-only claims count at a reduced rate. Your carrier and agent can advise for your state.
Can LossRunReports calculate the experience mod?
No. The mod is calculated by the rating bureau. LossRunReports organizes the claims so you can check them against the worksheet and explain them to the underwriter.
How many years of workers comp loss runs should we request?
Five years plus the current term covers the mod window and the recent years underwriters also review.
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