A Note About Primary and Excess Values

        Understanding Your Modification Factor


Since mod analysis often involves both primary and excess losses, it is noteworthy that the “split point” is currently undergoing a significant transition. In all NCCI states and some independent states, the split point has increased from $5,000 to $15,500 in graduated increments over a three-year period. The process of transitioning to the new split point began in 2013, with an increase in the split point from $5,000 to $10,000. During 2014, most states increased the split point to $13,500. In 2015, the split point increased to $15,500 and will also be adjusted for claim inflation. The split point changes should be factored in when making year-to-year comparisons of specific loss sensitivity. Related rate changes may also tend to make minimum mods decrease over time.

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.