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A new way to sell with the mod

Wednesday, November 23, 2011
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Significant changes from NCCI mean significant opportunity to prove your value as a workers’ compensation consultant with ModMaster®. Due to a new calculation method in the experience rating formula, in 2013 many of your clients’ mods could change – in some cases, causing considerable variation in their workers’ compensation insurance premium. With the new ModMaster projection, seize this opportunity to connect, advise and provide important information your competitors may lack.

Prospect with split point news
Get your prospect’s attention with news of the change – they may not be aware: “Did you know that a major change in the way the mod is calculated in 2013 could affect your workers’ compensation premiums?” Illustrate that you have the tools to predict this change and help them find ways to isolate areas driving up the mod. Then ask for their mod worksheet.

When you present the results of your mod analysis at your next prospect meeting, be sure to highlight the specific financial impact the change could have – if it is significant, provide a concrete example of an equivalent cost (e.g., hiring a new employee) to evoke an emotional reaction. Then provide examples of how the resources you can provide (e.g., safety meeting materials, return to work programs, etc.) can lower the frequency of injuries and the mod – minimizing cost.

Deliver insight to protect your book
This change provides an excellent opportunity to reach out to clients and advise them about potential changes in workers’ compensation costs – strengthening exit barriers and giving you a strong, legitimate consultative voice. In almost all cases, the minimum mod will drop several points. This, in turn, will often drive up the controllable mod – a great way for you to showcase expertise and deliver resources that can make a difference.

Which clients will this message resonate with most? Prioritize to ensure the clients who value mod insight the most will.

  • Target clients in industries where small increases can eliminate a company’s eligibility to bid on work.
  • Prepare clients who are estimated to experience a significant increase in the mod, using the opportunity to help them recommit to loss control practices you may have discussed in the past.
  • If a risk has a pretty significant frequency issue now, and practically no severity, then they’re going to continue to have a frequency issue under the new split point, so that’s one scenario when the mod may not change a lot.
  • Those with high severity and low frequency may see more of a mod increase as losses shift to frequency with the new rules.

To help you explain changes to your clients and prospects, check out Broker Briefcase® document “Work Comp Insights: NCCI Changes Primary-Excess Split Point for 2013.” Where appropriate, follow your initial communication with a second communication at the beginning of the year when real rates are available.

For more technical insight on the implications of this calculation change and how to access the new ModMaster report, check out the WorkCompEdge Blog.

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