As unfavorable pricing continues, competitive market could weigh on workers’ comp

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According to Fitch Ratings, workers’ compensation saw a combined ratio of 92% for the previous year.

An immediate concern is the growing pressure from medical inflation, which had been somewhat tame in 2022. For the past year (ending Nov. 30, 2022), the medical consumer price index (CPI) was up over 4%, as compared to 1.7% during the same time frame in the previous year.

Workers’ compensation insurance is a critical component of employee safety. Recent years have seen workers comp claims frequency decline, thanks to an increased focus on risk management and safety in the workplace. However, Fitch Ratings, Inc. has warned that this trend could reverse due to unfavorable pricing trends, competition from other insurers, and other economic pressures.

Despite these risks, workers’ comp has remained a resilient insurance product. According to Fitch Ratings, the combined ratio for workers’ comp was 90% between 2017 and 2021. This suggests that the insurance industry is relatively healthy overall. However, Fitch Ratings has projected a modest change in this figure for 2022, estimating a combined ratio of 92% for the entire year.

The insurance industry’s direct loss ratio for workers’ comp has been strong in the first nine months of 2022. According to Fitch Ratings, this ratio stood at 47%, an 8.3% increase from previous years due to wage growth and payroll expansion. Additionally, flat or downward prices on workers’ comp insurance have made self-insuring less attractive, which could be a contributing factor in slowing policy count attrition. This is encouraging news for insurance providers and shows that there has been steady progress in the sector. With insurance companies continuing to innovate and expand their offerings, it looks like the insurance industry will remain a key player in the economy going forward.

However, the rating agency warned this premium growth is not likely to stand for a long time.

Fitch Ratings reports a 1% drop in workers comp renewal rates during the first three quarters of 2022 and are projecting this is going to happen for the first three quarters of 2023, driving prices to drop again.

But according to Fitch, the growing pressure from medical inflation is something everyone should be concerned about in 2023. This was not on our radar in 2022, now it is and we are here to assist. For the past 12 months (ending Nov. 30, 2022), the medical consumer price index (CPI) was up 4.2%. During the same time in 2021, the medical cost CPI was up 1.7%. We plan to provide the numbers for 2023, please follow us on social media for the latest updates.

Learn more about out workers compensation solutions and contact us today.


Reduce Your Experience Modification Factor

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There are three key factors that go into calculating a workers’ compensation (WC) premium:

  1. The rate assigned to each payroll classification in your business,
  2. The total amount of your payroll for each classification,
  3. Your experience modification factor.

From an employer perspective, only one of the three key factors can be managed and lowered without a reduction of your staffing needs: the experience modification factor, also known as the “mod.”

The National Council on Compensation Insurance (NCCI,) or your state department of insurance typically determines the amount of risk assigned to payroll for each classification. The amount of payroll is a variable in the premium calculations.

Employer tip: staff as needed as the Workers’ Comp premiums should not be a deciding factor when hiring someone.

As an employer, are you wondering: “How can we reduce our mod?”

First step is understanding the purpose of a mod. The mod is a numeric representation of your business claim history. It represents the last three years of claim payments that were submitted on your behalf. The mod assigned to your job classifications is a comparison of your claims record to that of all other employers in your state with the same job classification code(s).

If your claim history and claim payments are above average, your mod will be above average (1.00) and your work comp premium will be above average as well.

On the contrary, if your claim payments and claim history is below average, your mod will be lower than average and your work comp premium will be lower than average.

Here are some examples of how this works when your claims history for a job classification code is twenty percent better and when it is twenty percent worse than other employers in your state with the same job classification codes.

The wise employer will utilize one of several methods that have proven to lower the mod:

  • Create a return-to-work program
  • Implement and enforce an effective safety program
  • Refrain from using uninsured subcontractors
  • Review your job classifications to verify that every employee is properly classified
  • Register to be part of a group rating

Let’s discuss these ways of lowering your mod.

A Return-to-Work Program:

A properly designed return to work program will have a great impact on your workers’ compensation cost.

When an injured worker returns to light or modified work duty, the cost of the Workers’ Comp claim can be reduced by a great amount.

One example:  if an injured worker hurts their arm, and the employee’s direct report decides to deny the employee to return to work on light duty, and refuses to bring the employee back.

The injured worker’s pay is $500 per week

It will take up to 20 weeks for the employee to fully recover from the injury.

The employee’s supervisor makes the decision that they do not want to be bothered with having an employee on light duty and refuses to take the employee back on hiring terms.

The total amount of the claim will be included in the mod calculations for the next three years of premium.

If the Risk Manager has established a mandatory return to work program, the supervisor would:

Bring the employee back to work on light or modified duty during their rehabilitation period.

Save the company what would have been paid in indemnity or lost wage benefits.

And, while the injured employee may not be working at their full potential, the employee still provides value to the company and does not require training staff to cover their tasks. 

However, the biggest impacts of the return-to-work program are:

The claim history is lower

The lower claim payments will be utilized in the calculation of the mod for the next three premium years.

A Strong Safety Program:

A safe workplace is key to lowering your mod. An effective safety program will result in less accidents and less injuries.

With less injuries, the claim payment history will be lower.

The lower the claim payment history, the lower the mod and the lower the work comp insurance premium will be.

If your safety program could use some help, please contact us to request our safety kit. You can also hire safety consultants who are trained to identify safety hazards. Implement the recommended safety changes and require safety training for all employees.

Refrain From Using Uninsured Subcontractors:

Failure to confirm proper WC insurance coverage is a common mistake made by employers when hiring subcontractors, especially in the construction fields. The use of self-insured subcontractors with their own WC coverage is important to the control of your mod because:

Subcontractors will be covered by your WC insurance if they do not have their own coverage and are injured while working for you.

This will increase the premium your company will owe at the year-end premium audit.

It will increase your company’s mod for the next three policy years.

It is well worth the effort to document the WC coverage of every subcontractor your company hires.

Employer Tip: Review Your Job Classifications

The overall loss experience of your company compared to the claim history of field managers in general could result in a mod factor lower or higher than it should be.

Going through the steps of carefully reviewing each employee’s classification type may result in savings to your company (or an increase in your premiums, but you avoid that whole crime called committing fraud, which is always a plus).

Become a Part of a Group Rating:

A lot of insurers will offer group rate discounts to recognized parties. The effect of the group discounts on your mod is due to most rating groups not accepting your company if your loss experience is above average.

Normally new companies are not allowed into a group rating, because you need to claim three years of loss experience to calculate the mod, it is a requirement. Before joining a group for the benefit of the group mod, be sure the group mod is lower than the mod your business by itself.

Does every company have an experience modification?

Does every company have an experience modification?

Similar to everything else in workers comp, experienced modifications vary by state. If the employer is pure self-insurance with no excess carrier and no large deductible, there is no need for an experienced mod. But, many states impose premium tax on self-insureds just like they do on regular insurance companies so the self-insured still has to track and report their loss and loss ratio. If the employer is self-insured up to a high deductible, the excess carrier will still report the loss information to NCCI and an e-mod is calculated for the self-insured employer.


  • The only real way to lower your workers’ compensation premium in many states is to lower your experience modification factor.
  • The best ways to lower your mod include:
    • Create a return-to-work program
    • Implement and enforce an effective safety program
    • Refrain from using uninsured subcontractors
    • Review your job classifications to verify that every employee is properly classified
    • Register to be part of a group rating

Contact Simple Work Comp and let our dedicated experts help reduce your mod today.


Review before you renew!

Simple Work Comp policy reviews and renewals

70% of work comp policy reviews result in lower premiums for our clients.

Need help now?
Call us: 1-866-684-5684

The insurance industry is very competitive and despite what you may think, this competitiveness gives you an advantage that comes with options!

Running a business takes time, and I have yet to find a business client of ours who has too much time on their hands and has expressed joyously how excited they were to shop around for insurance. Especially workers’ comp insurance; and if the only option is getting comp coverage coverage from the state, then “forget about it”. You’ll have to jump though hoop after hoop for then minimum coverage just to stay in business.

On the other hand, I have heard satisfied clients of ours who were overjoyed to hear when we were able to lower their work comp premiums while also reducing their burdens of finding work’ comp insurance.

Work Comp Expiring?

If your work comp policy is expiring soon, then you owe it to yourself to get your policy reviewed before your renewal date. Loyalty is seldom rewarded in the insurance industry when it comes down to suffering claims and losses. It doesn’t matter how much you paid in the past, you will pay much more at renewal, and that’s if you’re not being dropped completely.

Know your Options

You should know what your renewal options are. Chances are your current insurance carrier won’t be supplying you with a competitive quote upon your renewal. It is what it is, and you’ll have to sign. Don’t get cornered with a last-minute renewal policy!

Simple Work Comp offers free work comp policy reviews as well as business insurance reviews for businesses of all sizes and every industry. (Request a review) Our insurance consultants are experts in insurance risk and the insurance risk marketplace.

We will review your coverage and find you an alternative quote against your current carrier.

About Insurance Carriers

All insurance carriers are not created equal. Different insurance carriers have different appetites. Which means, your business and your specific industry risk may not fit with what they are willing to insure; and if you do decide to go with their coverage (out of convenience), you may end up paying more.

We understand insurance carrier appetites and are on top of who’s insuring this risk vs that risks with a better rate.

Need help now?
Call and speak with an insurance consultant:

Explore your Options and WIN

Simple Work Comp can help you explore your insurance options win without endlessly wasting your time & breath speaking and explaining your life’s business to everyone.

With one phone call, we’ll handle it all.

It’s time to take control of your work comp insurance costs.

Did you know?

You can have work comp coverage?

  • Without paying large down payments.
  • Without having to suffer end of year audits with extra fees.
  • Without long-term contracts.
  • Only pay for what you use.
  • With pay-as-you-go weekly payments.

About Simple Work Comp

Simple Work Comp is part of an independent group of companies that broker and specializes in workers compensation insurance and employee related costs since 1999.

Request a quote review now or call us: 1-866-684-5684

Simple Work Comp Policy Reviews an Renewals
Simple Work Comp offers free work comp policy reviews as well as business insurance reviews for businesses of all sizes and every industry.




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Small Business Saturday: One Business Owner to Another

Simple Work Comp Simple Insurance Small Business Saturday

Small Business Saturday is November 30th and if you are a small business owner, you obviously know about your customers and all about running your business. Business owners are our customers and we know cutting the stressful things out of our customers daily operations gives them more time to focus on making their customers happy; and that makes us happy.

More businesses succeed when trusting to use a reputable partner to assist them with tasks and purchases that cost them the most time and money. Whether its finding adequate business insurance coverage, flawless payroll administration, or any other line of products associated with employee costs savings and tax liabilities, our business experts/agents do whatever it takes to be our customers’ difference maker.

We understand there are plenty of options to choose from when it comes to shopping for business insurance or payroll administration; and those by themselves can be confusing.

Our customers choose us because of our years of experience and unmeasured willingness to address all their questions and concerns before ever having to purchase anything.

Being independent from carriers and having exclusive agreements allow us to give our customers what suits them best at competitive and affordable rates.

So, if you are a business owner and would like to talk about the possibilities of seriously saving time & money on peace of mind business insurance as well as eliminating business administration headaches.

Then give us a call 1-866-684-5684 or contact us to schedule a convenient consultation with one of our business experts.

Cut the stressful things out of your daily business operations and get back to focusing on growing your business and making your customers happy.

Contact Simple Insurance / Payroll Consultants today.


Florida Workers’ Comp Rates to drop 7.5 percent

Effective January 1, 2020, Florida Workers’ Comp Rates for new and renewal policies for other than the “F” classifications, the statewide overall rate level change shall be -7.5% for the filing.

Florida worker's comp rates to drop 7.5 percent.


Contact us to have your Florida Workers’ Comp Rates verified.

Florida Workers Comp rate drop filing signed by David Altmaier, Commissioner Office of Insurance Regulation

OIR Orders Larger Workers’ Compensation Insurance Rate Decrease for 2020

Florida Insurance Commissioner David Altmaier issued an Order​ on Rate Filing on Thursday, October 24, 2018 to the National Council on Compensation Insurance (NCCI) requesting an amended filing to reduce workers’ compensation rates by 7.5 percent for 2020.

The Order notifies NCCI that the rate filing submitted for a 5.4% rate decrease has been disapproved and, if amended by November 4, 2019, will be approved with the larger workers’ compensation rate decrease.

Approval of a revised 7.5 rate decrease is contingent on the amended filing being submitted with changes as stipulated within the Order. If approved by the OIR, the revised rate decrease would become effective on January 1, 2020, for new and renewal business.

Source: Florida Office of Insurance Regulation

SimpleWorkComp helps business obtain affordable Florida Workers’ Compensation Rates.

Our team provides small business with the highest quality coverage at the most competitive rates in the industry.

Over the past 20 years, thousands of business owners have come to discover the best coverage, services, and rates that are only offered by SimpleWorkComp. With over 100 years of combined experience, our full service staff will analyze your business to find the most competitive provider for your specific situation. We are able to negotiate the absolute lowest rates even for difficult to place industries such as construction!

We are a leader in the workers’ compensation industry for two reasons, our service and experience! We provide everything the small business owner needs in one convenient location and treat each client like a VIP because to us you are! Beginning with the first phone call, you can expect complete satisfaction each and every step of the way.

Still not sure we can help?

Contact one of our expert staff completely free of charge at 1-866-684-5684! We are always here to help and happy to answer your questions about Workers’ Compensation Insurance.


Fix diminishing agent commissions with Simple Work Comp


Do your commissions diminish upon renewal? If so, how big a hit will you take when your comp clients renew? 10%? 20%? 50%?

As an agent you know all work comp carriers are not created equal. However, when it comes to agent commissions, some carriers are equally great at wanting you to believe that reduced commission percentages at renewal is the industry norm.

If this is happening to you or your agency, we can help.

Make diminishing commissions to your agency a thing of the past and fix them with our preferred alternative pay-as-you-go work comp markets.

We’ve been assisting agents, agencies, and brokers for over twenty years with commission percentages that never diminish upon renewal.

Please send us any upcoming renewals or accounts you’d like to improve, and our Simple Work Comp consultants will be happy to review them with our markets and get you a quick answer on coverage and commissions.


Placing your work comp clients with the state fund, is it worth it?

Getting work comp coverage with the state fund

Do the commissions justify the paper work? How to get more reward from your hard-to-place work comp clients.

Sometimes we all need to know when to cut our losses and move on. However, that’s easier said than done. As a work comp insurance agent, you occasionally deal with people who own or operate companies, with employees, with losses (shock losses), and sometimes choose to perform risks that normal underwriters just won’t even return your calls or emails on.

So, what do you do? You’re stuck, right? Wrong! If you’re a savvy insurance agent, then you know there’s always a way via your state insurance fund. Now I’m going to wager if you know about the state insurance fund, then you know you can also refer to it as a ton of paperwork.

The state fund requires you to get the answers to a million and one questions and after all the questions are answered they then come back to you with a huge inflated premium amount that your client either has to pay or risk going out of business, by losing business due to lack of proper work comp coverage. This on some levels is almost as close as you can get to feeling what its like working a deal with the mob.

Now, if you’ve been persistent or lucky enough to reach the point where your client can afford to pay the over inflated premium and you still have all your hair. You can then look forward to receiving a nice commission from the aforementioned premium. After all, you did all the wok and got the deal done. Right, wrong again!

The agents placing their high-risk clients with the state are lucky to see three percent in commissions for all their hard work.

Let’s put that into perspective. At 3%, a $30k premium would only net you $900. And if you must split that with your agency then you can do that math.

Simple Work Comp is an alternative wholesale broker that provides professional work comp quote services to agents and brokers across the country.

We help agents keep their clients out of the state fund by trying to secure the best rates. On average our agents can save their clients as much as 40% off of premium and still could earn more in commissions than if they had placed their client with the overpriced state fund.

Avoiding all the work and sparing their clients the proverbial hoops and hurdle jumping.

Simple Work Comp makes it easy for insurance agents to submit their risks and get answers on available work comp coverages for their clients.

If you’re an agent and have clients that are in the state fund or are unquotable for whatever reason, contact us for assistance.

Thousands of insurance agents have trusted us to help them secure standard and alternative pay-as-you-go workers’ compensation insurance solutions for over twenty years.

Overpriced state fund options with low low low commission percentages doesn’t have to be the norm and can be a thing of the past. Contact us today for a simple solution to your state fund woes.


Helping Agents Save Their Clients

Work Comp Agents, Hard to place work comp

We love opportunities to help insurance agents avoid unnecessary woes with workers’ comp shopping. No matter the size of the client.

Last week we spoke with an insurance agent who does not work in the work comp industry, but had a client who now needed coverage for comp.

His client had been with him for many years and because of this, the agent was a bit weary of having his client shop around by himself and being prospected for other aspects of his insurance at the same time.

His client is a small business. The kind of small business where no one stood to earn any real commission off of their policy. However our policy is to do our best to help all businesses no matter how big or small.

After a brief phone consultation with the agent, we got underway searching for the best policy that would fit his client’s needs.

A couple of calls, emails, and clicks later to our markets, we were able to find solution which worked out for his client.

At Simple Work Comp we value our relationships with our insurance agents, because without them and our good relationships, we would have no real business.

Our number on goal is to lend our experience to agents in need when needed. No strings attached. (Agent Protection)

So without any major headaches (for the agent or his client), Simple Work Comp was able to help his client find the best coverage possible.

If you are an insurance agent and could use help with clients needing comp or if you just have questions about workers’ comp insurance.

We are always happy to help.

We have over 80 years of combined workers’ comp experience and have pioneered the methods used today to save businesses on workers’ compensation insurance.

High-Risk, hard-to-place, new ventures, non-renewals, and more.

Learn more about our agent partnerships here:


California Experience Rating

The Insurance Commissioner recently adopted changes to California experience rating (X-Mod).

Under the new California Experience Rating Plan (2019) only the amount of each of your claims, up to your primary threshold, is used in the X-Mod computation.

California experience rating mod formula

These changes make it easier for employers to understand:

  • How reducing workplace injuries will reduce their premium cost
  • The importance of reporting all claims

The new formula excludes the first $250 of each claim from the X-Mod computation. This change removes any experience rating incentive to not report the cost of small or “first aid” type claims to your insurer. The new California experience rating simplified formula also places a clear and direct emphasis on reducing the occurrence and cost of workplace injuries as reflected in the actual primary losses.

Contact us regarding your California Workers’ Comp and Experience Rating

Definition of Terms

  • Actual primary losses
    Equal to the cost of losses incurred with each loss limited to a policyholder’s primary threshold
  • Expected excess losses
    Equal to the average losses expected for businesses of similar size and industry in excess of the primary threshold
  • Expected losses
    Equal the total losses expected for businesses of similar size and industry

Frequently Asked Questions

How does the $250 loss exclusion work?
Under California’s Experience Rating Plan only the amount of each of your claims, up to your primary threshold, is used in the X-Mod computation. With the $250 loss exclusion, that amount is reduced by $250. For example, if you have a $10,000 primary threshold and a single claim of $5,000, the amount used in the X-Mod computation is $4,750. If you have a single claim of $15,000, the amount used in the X-Mod is your primary threshold ($10,000) less $250, or $9,750.

Is the first $250 excluded from all claims?
Yes, any claim incurred against policies incepting during the experience period for your 2019 experience modification, which includes 2015, 2016 and 2017 policies, will be used in the X-Mod computation at $250 less than its reported value.

What if I file a claim that’s valued at $250 or less?
A claim with a reported cost of $250 or less will continue to be shown on the experience rating worksheet, but will not be used in any way in the X-Mod calculation.

If I only have one claim over $250 during the experience period, do claims valued at $250 or less affect the 25 point cap to my lossfree X-Mod?
Any claim of $250 or less will not be considered in the determination of whether the single claim cap of 25% applies. In other words, if you have two claims during the experience period and one is reported at $250 or less, the single claim X-Mod cap of 25% will still apply.

Does the simplification of the formula affect my X-Mod?
No. It does not change the X-Mod value.

Can I lower my X-Mod if it is too high?
Yes! Simple Work Comp has programs in place that (if accepted to the program) can lower your California Experience Rating.

Please contact us for inquiries regarding lowering your X-mod and getting discounts on your workers’s comp insurance and unemployment taxes.

Source: WCIRB

how to lower your mod, lower work comp, simple work comp,
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