The Stakes: An office furniture manufacturer with $32M in revenue watched their Experience Mod creep up year after year, hitting 1.22. Their incumbent agent told them it was just “market trends” and “bad luck” with claims.
The Investigation: The Advisor knew that “bad luck” is often just “bad data.” They performed a line-by-line review of the loss runs used to calculate the Mod.
The Breakthrough: They discovered that the reserves (money set aside for open claims) were set aggressively high and hadn’t been adjusted down as the claims neared settlement. The system simply hadn’t been updated with the latest medical prognoses.
The Result: The Advisor worked with the claims adjuster to update the reserve figures to reflect reality. The Mod dropped 22%, saving the client tens of thousands in premiums.