THE CAREER PATH FROM THE ARMY TO THE INSURANCE INDUSTRY WAS NOT PLANNED, BUT IT HAS BEEN A BLESSING: Dustin was in the Army and ROTC throughout college and wanted to continue his military career. He was commissioned as an Army Officer and wanted to be a Foreign Army Officer. That plan did not work out, so he went into the National Guard instead of active duty. He had to pivot his career plans and started applying for various jobs at various companies. One job that piqued his interest was at an insurance company. He had a lot to learn about the industry, but looking back, he feels very fortunate that he fell into the insurance industry. He has been in the insurance industry for eighteen years. He is currently the Vice President of Underwriting at Berkley Industrial Comp.

WHAT IS UNDERWRITING? It is essentially pricing a business to cover its losses. For Worker’s Compensation losses, Underwriting will analyze the data. When an agent refers a business for insurance, Underwriting examines its five-year loss history, what type of losses they have, the severity of losses, experience mod, class codes, and payroll. They want to give a fair price to the customer, so it is very important to have all of the information and that it is accurate. Having previously worked as a claims adjuster for six years gives him an advantage in Underwriting because he understands reserving and claim analysis. In his experience, some of the best underwriters originally came from the claim side.

WHAT ARE EMODS, AND WHY ARE THEY IMPORTANT? An EMOD (Experience Modification) is a multiplier, and it is used to factor the cost of the premium. The most important number in EMODs is 1, which is considered the unity mod. If a customer’s EMOD is less than 1, they will get a credit. If a customer’s EMOD is more than 1, it is a debit. For example, if an EMOD is .75, the customer will pay 25% less for their worker’s compensation insurance. If an EMOD is 1.25, the customer will pay 25% more for their worker’s compensation insurance. The rating bureaus constructed these rates because their theory is the “better the safety program, the better the EMOD will be.”

HOW CAN EMPLOYERS IMPROVE THEIR EMODS?   There are several things that employers can do to lower their EMOD rating. The most important thing is to have a solid safety program and a commitment to safety. Employers should look at the near misses and what are the drivers of these injuries. It is not enough to have safety equipment; there must be enforcement of wearing it and utilizing it. It is also crucial to have a return-to-work program available when injuries do occur. Providing light-duty work to an injured employee with light-duty restrictions can change the trajectory of the claim. Providing light-duty work will also lower the indemnity reserves, impacting the EMOD score.

REPORT EVERY CLAIM:  Some claims may seem very minor, so an employer may think they do not need to report them. This is how things can go very sideways. For example, an injured worker cuts his leg; unbeknownst to the employer, he has diabetes. The claim wasn’t reported, and the injured worker ends up with an infection, and by the time it is reported to the carrier, the injured worker may need his leg amputated. Every claim that comes in is important and needs to be reviewed. The other issue with not reporting is that employers are busy with hundreds of things, and they get busy, and the injured worker may feel no one is helping him. One or two missed phone calls or not scheduling an injured employee for an appointment may cause the employee to seek an attorney. Once this occurs, a claim that may have cost about $1000, will likely cost about $25,000.00 or more. As our VP of Claims and Host of Adjusted Greg Hamlin always says, “once the toothpaste is out of the tube, it is hard to put it back into the tube.” Medical-only claims are discounted by 70%, and only 30% is attributed to the EMOD, so there isn’t any reason not to report.  

THE CARRIER YOU CHOOSE CAN AFFECT YOUR EMOD:  It is important to choose a carrier that partners with you. Cheaper is not always better and is not always cheaper in the long run. A cheaper carrier may seem like a great choice, but if an employer has any injuries, they will drastically increase their rates year after year. It will end up more expensive going to the cheaper carrier than the carrier who priced on point. One of the many things we offer our insureds is our risk management team (RAMP). Our RAMP Team partners with our insureds to assist them and provide safety training. We love helping our insureds and want to help them bring their EMOD down. But the most important thing we can do is help our insureds provide a strong safety culture for everyone and help prevent injuries. We know it takes hard work and effort, but it is what we are passionate about.