NCCI Experience Modifier Explained
For the vast majority of employers in the United States, the premium they pay for workers’ compensation insurance is primarily determined by something called the NCCI (National Council on Compensation Insurance) Workers’ Compensation Experience Modifier.
This number is meant to be a “predictive indicator of future losses.” This figure measures the cost of an employer’s injuries relative to their peers and applies a formula to those results that is meant to predict what losses that employer will have in the future. The resulting ratio, typically ranging from about 0.6 to 3.5 with 1.0 meant to be the average, is the figure that most insurance carriers use to modify their standard rates to fit the employer in question.
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