For many employers, workers’ compensation is a set-it-and-forget-it type of insurance. Once the annual premium is paid, it often fades into the background until renewal time rolls around. But waiting until renewal to focus on controlling costs is a costly mistake—especially for a policy as loss-sensitive as workers’ comp.
Since claims can remain open and be paid out over decades, proactive and strategic management throughout the year is essential. A key strategy in keeping your workers’ comp costs in check is conducting quarterly claims reviews—especially in the critical early stages of your policy year.
Why Three Months In Matters
Three months after your policy starts is a pivotal milestone. This is the sweet spot for reviewing open claims and reserves before the data is submitted to your state’s rating bureau for the calculation of your Experience Modification Factor (X-Mod).
This submission happens six months after your policy anniversary and includes:
- Total claims paid
- Projected future costs (reserves)
For example, if your policy renewed on January 1, 2025, the X-Mod calculation will be based on loss experience from:
- 1/1/2021 to 12/31/2021
- 1/1/2022 to 12/31/2022
- 1/1/2023 to 12/31/2023
The most recent year (2024) is excluded because it’s too recent to provide reliable data.
By conducting a review at the three-month mark, you have a valuable window to resolve open claims, reduce reserves, and potentially lower your X-Mod—which directly impacts your premium costs.
Focus on Reserves: The Art Behind the Numbers
One of the most misunderstood—and impactful—components of workers’ comp pricing is claim reserves. These are not simply estimates; they represent what the insurer expects to spend to settle a claim, including medical costs, lost wages, and more.
However, reserve-setting is more art than science. If a claim’s reserve is set too high, it inflates your losses and can drive up your premium. This is why accurate, timely reviews are essential.
Encourage your adjusters to:
- Reassess medical status updates
- Account for return-to-work progress
- Adjust projections when conditions improve
Settling claims early, where appropriate, or bringing employees back on modified duty are powerful tools for managing costs.
Don’t Stop at Three Months
While the six-month “valuation date” is when your insurer reports losses to the rating bureau, proactive employers don’t stop there. Conducting another review at the nine-month mark gives you an opportunity to:
- Address any remaining issues
- Push for settlements on stagnant claims
- Make final adjustments before the next renewal cycle
This ongoing diligence helps avoid surprises and keeps your premium under control.
Partner with BGES Group for Smarter Workers’ Comp Strategies
At BGES Group, we specialize in helping businesses reduce their workers’ comp costs through hands-on claims management, strategic planning, and expert guidance. Our team monitors key policy milestones, collaborates with adjusters, and ensures your reserves and claims are reviewed accurately and proactively.
Let us help you take control of your workers’ comp insurance—not just at renewal, but all year round.
📞 Contact Us Today
Phone: (914) 806-5853 – Gary Wallach
Email: bgesgroup@gmail.com
Website: www.bgesgroup.com