The first two main numbers involve knowing where your workers' compensation program is currently. If you do not know where you are, the task of knowing what to do to improve your numbers becomes extremely difficult.

1. 

   James Moore

   Experience modification factor. This number heavily relates to any employer that has a voluntary market policy. The X-mod is the same as a personal credit score. Like it or not, your whole workers' compensation program will often be judged by this one number. Knowing  your company’s last three X-mods will help you know where your workers' compensation program is going and where your program has been over the last five years.
2. For self-insureds, their main number that corresponds to No. 1 one above is the loss development factor, or LDF. The LDF covers a longer period than the experience modification factor. The LDF is an actuarial measurement that involves the ultimate loss values. The LDF can vary among actuaries and statisticians. The main concern with an LDF is that it is an opinion, not an exact number such as the experience modification factor.
3. Days away from work. If your company has had personnel on temporary total disability, knowing this number over the last three years will enable you to judge your return-to-work program. You can also benchmark those against the federal government statistics. 
4. Loss ratio. This number can be calculated by dividing the premiums paid by the amount of losses for any year. One should be very careful with the loss ratio, as it only looks at a very small window of time. However, it is a better indicator of your present loss situation versus the experience modification factor above.
5. Losses up to $15,000. This number can vary in each state. The rating bureaus refer to this number as the primary loss. The primary loss is the most expensive part of your claims history. When calculating your experience modification factor, a company has to be very careful when looking at a small claim as being less harmful to its X-mod. As the old saying goes, five $20,000 claims do not equal one $100,00 claim. The five $20,000 claims will likely cost 300% more than the $100,000 claim.   
6. Medical-only claims that have reached $5,000 in total. I copyrighted the term "claims festering" to describe this situation. Once a claim that is unmonitored by the staff because the employee is working reaches a point where further medical intervention may be needed, it is often too late, and the claims snowball will start rolling down the hill.
7. For self-insureds, allocated loss adjustment expenses, or ALAE, can be crucial to controlling your workers' compensation budget. For instance, in California, the amount to deliver $1 of benefits is, strikingly, 53 cents. ALAE is one of the truly hidden costs of being a self-insured employer.
8. Lag time. The insurance carrier or for self-insured's third-party administrator tracks this number very heavily. It is the time from knowing about the claim until the first report of injury is filed with the carrier or TPA. The claim staff sees this number constantly. Over the years, I have been provided with this number with almost any claims load that I handled or consulted on for any employer. One way to have your reserves increased is by being an employer with a high amount of lag time. This number is usually very controllable.
9. Outstanding reserves. This number has been discussed in this blog many times over the last 12 years. Online loss runs will allow those numbers to be at your fingertips. This number should be reviewed at least monthly if not more often. The adjuster will usually include an explanatory note with the reserve increases. Reading over those notes may answer many questions very quickly. If you are using paper loss runs, a suggestion would be to see about obtaining online access so that you have all your claims and reserve information up to the minute.
10. The names of the claims adjusters who are working on your files. Their contact info can be very helpful when trying to email an adjuster with a question. I always recommend emailing the adjuster with any questions. Emails create an easy way for the adjuster and you to document your files. If the adjusters' names keep changing on your files, this is a time to contact a claim supervisor to see why the adjusters keep switching so often. Having the same adjuster throughout a claim is priceless. One of the toughest assignments an adjuster can have is to pick up a file from a previous adjuster, review it and then make proper claims decisions.
11. Your policy or TPA agreement. This one is probably the most obvious. Having your workers' compensation policy at your fingertips, and possibly reading it before signing it, can eliminate a large number of problems or questions upfront. Finding out something about your policy or TPA agreement during the contract period can result in a very frustrating situation for all parties involved with your workers' compensation or any other type of policy The declarations page remains ever-important.
12. Your premium audit. Make sure that when you receive your premium audit bill, you have also received the premium auditor’s work papers along with the premium audit statement. Both of these will likely answer many questions that you may have with your premium audit and allow you to review how the premium auditor came to the numbers on your bill.

These 12 suggestions came from files that I have reviewed recently or in consulting with various employers. So many workers’ compensation statistics can be generated with today’s analytics. This list covers a small amount of the workers' compensation numbers and statistics available. 

Keep this list at your fingertips for future use.

This blog post is provided by James Moore, AIC, MBA, ChFC, ARM, and is republished with permission from J&L Risk Management Consultants. Visit the full website at www.cutcompcosts.com.