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Managing your Worker Comp Experience Modification Factor

Our mission at ISU-The Olson Duncan Agency is to help companies minimize risk, protect their bottom line, and maximize their growth. We do this in a number of ways, including procuring the required insurance coverages. We also provide ongoing strategic risk management solutions, including Experience Modification Management for your Workers Compensation program. As your partner, we will find a Workers Compensation market for your operation, help contain costs, and keep premiums in line.

An Overview

The key to calculating Workers Compensation premium is what’s known as the experience modification factor, also known as your X-mod, for each business. Understanding your company’s X-mod and the data used to obtain it helps you identify ways to minimize your Workers Compensation premium.


In California, the Workers’ Compensation Insurance Rating Bureau (WCIRB) compares the performance of employers within the same industry classification, and applies an experience modification factor, which determines an employer’s premium. The formula to calculate your X-mod incorporates several factors, including your company size, unexpected large losses and the difference between loss frequency and loss severity.

The X-mod represents either a credit or debit that is applied to your Workers Compensation premium, based on how your company performed over a three-year period (excluding the most recently completed year) compared to others with the same size operation in the same industry. If you have an X-mod greater than 1.0, your losses are worse than expected and a surcharge will be added to your premium. If you have an X-mod less than 1.0, this means your losses were better than expected, resulting in a discounted premium.

Controlling Your X-mod

Our Workers Compensation insurance experts at ISU-The Olson Duncan Agency can assist you in managing and controlling your company X-mod in several ways:


  • Helping to ensure you have a robust accident prevention program in place to reduce the frequency of injuries.
  • Your X-mod is calculated based on data reported to the rating bureau by past insurers. Incorrect or incomplete data can cause incorrect mod factors. We’ll review loss and payroll data to ensure the calculation is complete and accurate.
  • As your losses remain in the experience rating formula for three years, your X-mod is influenced more by small, frequent losses than by large, infrequent ones. We’ll provide you with the resources to develop a sound safety program, return-to-work program and appropriate prevention procedures to reduce loss frequency.
  • Assisting you in implementing a self-inspection and accident investigation program, which are critical to managing claims frequency.
  • Providing an active claims management program to manage outstanding reserves and focus on efficiently resolving open claims.
  • Working with you to ensure that all claims are reported to your carrier immediately.
  • Helping you implement a return-to-work program that includes light duty work to all injured employees upon their release from treatment.
  • Offering resources to train employees on their responsibilities for safety, and enforce violations.

A 360-Degree Approach to Workers Comp Management

ISU-The Olson Duncan Agency is committed to helping clients manage their Workers Compensation costs by fostering a culture of safety, establishing or enhancing safety programs and injury and illness prevention plans, and implementing strong loss-control measures. What we do is so much more than sell insurance, we are here to help address claims, deal with claims adjusters, and get claims closed to keep costs down. We consider ourselves your business’s insurance arm and partner. To find out more about how we can help you, call us at (310) 373-6441.