The Mod Made Easier: Summit Helps Businesses Control Costs
Workers’ comp insurance costs are influenced by many factors, yet most of the strategies that truly make a dent share a common thread: they shape your experience modification factor (mod). The mod becomes the scoreboard for how well your safety, claims, and return‑to‑work efforts are delivering. And you don’t need a complex equation to explain how it works to clients. We’ve done it for you.
How to define a mod
A mod is a score that compares your company’s workers’ comp claim history to other businesses in your industry. A mod of 1.00 is average. If your mod is below 1.00, that means you’re outperforming many businesses in your industry and you may pay less for workers’ comp insurance. A lower mod can also strengthen a company’s competitive position. Businesses with low mods often find it easier to win contract bids and are generally viewed as strong in safety and operational discipline.
A higher-than-average mod, on the other hand, can raise workers’ comp costs and put your client at a disadvantage when competing for contracts.
“Prioritizing mods in workers’ comp isn’t just about insurance math—it’s about taking control of a business’s financial future. Every claim, every safety improvement, every employee training investment can help lower a business’s mod, and even small changes can translate into major savings year after year.”
-Phil Gonzalez, Summit Senior Business Developer
When injuries occur, a combination of efficient claims management and return to work controls costs
Summit is focused 100% on all facets of workers’ comp insurance. When an employee is hurt, our dedicated claims adjusters and nurses handle the complexity so employers can stay focused on running their business—and employees can put their energy into healing.
Summit’s emphasis on prompt, appropriate medical care—and transitional duty, when needed—helps the employee mend both physically and mentally and return to work as soon as possible, reducing indemnity costs. Our compassionate claims adjusters assist with transitional assignments, working with the employer, injured employee, and the doctor to help find a role that respects physical limitations.
How return-to-work affects the mod and premium
A solid return-to-work program doesn’t just help injured employees stay connected—it directly helps protect an employer’s bottom line.
Claim type and severity impacts workers’ comp costs
Most states have a short waiting period of about 3 to 7 days before a workers’ comp claim is classified as lost time. This waiting period must pass before indemnity benefits begin. For medical-only claims (no lost time wages paid), only 30% of the claim’s cost counts toward the mod (70% reduction). For lost-time claims, 100% of the cost counts toward the mod.
Even a few days of transitional duty can prevent a claim from escalating into extended lost time, which keeps the mod lower and prevents years of increased costs.
Example: positive impact of return-to-work on comp costs
Let’s compare one claim in two scenarios for the same employer: with a return‑to‑work program and without it. We’ll assume the following:
- Annual workers’ comp premium: $100,000
- Current experience mod: 1.00
- One new claim with $10,000 total incurred cost
Return-to-work program status
Claim type
How the claim enters the mod
Dollars counted in the mod
Approx. mod*
Approx. premium*
With RTW program
Medical only
30% of medical cost included
$3,000
1.03
$103,000
No RTW program
Lost time
100% of claim cost is included
$10,000
1.10
$110,000
Return-to-work program status
With RTW program
No RTW program
Claim type
Medical only
Lost time
How the claim enters the mod
30% of medical cost included
100% of claim cost is included
Dollars counted in the mod
$3,000
$10,000
Approx. mod*
1.03
1.10
Approx. premium*
$103,000
$110,000
*Reach out to your business developer to learn more about these calculations.
Three-year financial impact:
The claim is factored in as part of a three-year cycle. Without a return-to-work program, the employer now pays $7,000 more per year because of that single claim. If the mod remains elevated for three years, which is typical, the claim ends up costing $7,000 x 3, or an additional $21,000 in premium.
Safety helps drive the mod in your client’s favor
Implementing safety improvements doesn’t lower the mod overnight—it plants the seeds for consistent cost reduction. Because the mod is based on a rolling three-year window, improvements today show up gradually, but the payoff is substantial: fewer claims, lower costs, and a safer workplace.
The mod formula often penalizes frequent small claims more than occasional large claims. Frequent less severe claims likely signal patterns of unsafe habits, poor training, or processes—a high-risk scenario. Whereas a single severe claim often looks like bad luck or a rare, unfortunate event. Catastrophic injuries are less predictive of future losses, so the formula intentionally softens their impact.
Summit Senior Vice President of Actuarial and Underwriting Greg Talbot sums it up: “An employer’s goal should be to prevent all injuries. The theory behind the formula is if a business has an above average number of small claims, that’s actually a sign of good luck that none of them were serious—and it’s only a matter of time until they get the big one.”
Together, safety and claims management address both sides of the mod formula: frequency and severity. That’s why we emphasize both—injury prevention and return-to-work—as complementary strategies.
“When deciding whether to quote a policy, we don’t have a mod limitation. This is an advantage we have over other carriers. We like to find out why a business’s mod is high and determine if we can help. A lot of carriers have a line in the sand around mod thresholds and do not consider the potential for improvement.”
– Robyn Roberts, Summit Senior Underwriter
Let's look at a sample timeline
Year 1
Summit lays the groundwork for a lower mod
- Our safety consultants inspect your client’s worksite, identify safety hazards, and recommend corrective actions.
- Your client implements a return-to-work program to reduce indemnity costs.
Year 2
Early results
- Fewer claims reported: Safety practices reduce incident frequency.
- Lower claim costs: Injuries that do occur are less severe thanks to quick medical care and transitional duty.
- The previous year’s claims start entering the mod calculation.
Year 3
Sustained Improvement
- Safety culture takes hold: Employees actively participate in hazard reporting and prevention.
- Data analysis and adjustments: Summit reviews claim trends and fine-tunes safety consulting.
- Effect on mod: One year of improved claims history is now reflected. The mod begins trending downward.
Year 4 and beyond
Long-term gains
- Consistent low losses: With a strong safety culture, your client’s claims remain below the industry average.
- Premium savings: A lower mod can reduce workers’ comp premiums—often by tens of thousands annually for mid-sized companies.
- Competitive advantage: Lower costs free up capital, and a strong safety record can help win contracts (especially in construction and manufacturing).
Guaranteed Cost
Client Profile
Guaranteed Cost
Why it works:
– Fixed premium
– No surprises
business profile
Budget aware
Risk-tolerant
Proactive safety and claims mindset
Recommended Plan
Incurred Loss Retro
Why it works:
– Rewards low losses
– Capped risk
business profile
Prioritizes cash-flow
Financially strong; able to meet the financial security requirement
Proactive safety and claims mindset
Recommended Plan
Paid Loss Retro
Why it works:
– Lower monthly premium cost
– Pay-as-you-go claims costs
– Capped risk
business profile
Large
Risk-tolerant
Financially robust
Proactive safety and claims mindset
Recommended Plan
Large Deductible
Why it works:
– Maximum control
– Reduced premium
After five years of coverage with Summit, policyholders experience an average mod reduction of 8%.
We have a team of mod experts who research and explain the mathematics of mods, provide mod review, client analysis, and prospect analysis. We help you use the numbers to your advantage. When agents truly want to help a client take control of the mod, Summit stands out as the champion collaborator.