A HIGH workers compensation experience modification factor, typically referred to as an X-mod, can cost your clients a lot at renewal time. Midsize and large workers compensation accounts usually are experience-rated, with their past performance affecting current and future rates. The rates are increased or lowered by application of a modifier–the X-mod. An X-mod of 1.0 is neutral, while a smaller factor lowers rates and a higher factor increases them. If your clients think you haven't done everything in your power to keep their X-mods as low as possible, you could lose their business.

You may think there's nothing you can do about a high X-mod, once it is published by the National Council on Compensation Insurance or by a state-authorized agency like California's Workers Compensation Insurance Rating Bureau. It looks very official. And it is official. But just because it's official doesn't mean it's written in stone. There are many ways to reduce a published X-mod, but you need to have your facts straight and you need to be aware of the deadlines.

In an article that appeared in the September issue of American Agent & Broker (“How to Use Workers Comp Claim Reviews to Keep Your Clients”), I discussed the importance of using claim-review meetings as a client-retention tool. Such meetings give you the opportunity to persuade carriers to close claims and lower claim reserves, where justified, before they turn in their figures (in what's called a unit statistical report) to the rating bureaus. Used wisely, these meetings can give agents an excellent client-retention tool.