As we celebrate National Safety Month in June, CentiMark is particularly proud of our EMR - Experience Modification Rate. The EMR helps CentiMark save money on insurance premiums and ultimately saves money for our customers.
The EMR is a factor developed by measuring the difference between an insured’s (CentiMark) actual past experience and the expected or actual experience of the class (Roofing 5551). It is a number used by insurance companies to gauge both past cost of injuries and future chance of risk.
NCCI (National Council of Compensation Insurance) is the agency that coordinates the EMR ratings. They developed a complicated formula that considers the ratio between expected losses in your industry and what your actual company incurred, as well as both frequency of losses and severity of those losses over a three year period.
A company with one big loss is going to be penalized less severely than a company with smaller losses, because having many small losses is seen as a sign that you will face larger ones in the future. The losses in the experience period are compared to that expected for the average risk within that class. The result is an experience rating modification factor, which is either a reduction (credit) or increase (debit) in the premium charged to an insured. Essentially the EMR produces a premium that is more representative of the actual loss experience of an insured.
A low EMR is direct reflection of an effective company safety program that eliminates hazards and prevents injuries. Proper management of injuries and return-to-work programs help mitigate injury severity and keep costs down.
CentiMark’s EMR over past fiscal years: