Breaking down each year's data used

We now know three out of the last four years of data is used to calculate your current experience rating.

We now know which years impact your experience rating

01/01/2021 Rating period skips the 01/01/2020 data and uses the 01/01/2019, 01/01/2018, and 01/01/2017 data.

For this example, each year's data will be the same so to keep this simple.

Your expected losses are calculated using your class codes payrolls times an expected loss rate per $100 of payroll. (Each class code has its own expected loss rate.)

For this example, we will only use one class code and a fictional expected loss rate.

Class Code 5510 payroll $500,000 x's $5.00 ELR (expected loss rate) equals $2,500,000 divided by $100 equals $25,000 of expected losses for the policy period.

For this example, all three years 01/01/2019, 01/01/2018 and 01/01/2017 have the same payroll.

$25,000 x's the three years gives you $75,000 in expected losses for the 01/01/2021 policy period.

The actual mod calculation is much more complicated, there are other factors used to calculate your final experience mod. This is meant to understand the THEORY, a rough understanding of how the mod is created.