Aggregate Loss Sensitivity

        Understanding Your Modification Factor


Calculating the sensitivity of the mod to aggregate (total) changes in losses highlights the relationship between losses and your company’s mod. The aggregate loss sensitivity analysis yields a table showing how the mod would vary with increases and decreases in total losses. This analysis is generated by varying both the actual primary and excess losses and then computing the resulting mod. It will help you set a goal for a specific percentage decrease in losses and achieving the corresponding mod

A mod analysis can provide valuable insight into your business operations and workers’ compensation losses. If you have a basic understanding of how a mod is calculated, you can use a few simple equations to gain a deeper understanding of the factors contributing to your number.