The Mod Forecaster

Tutorial

The Mod Forecaster is a tool for making a quick estimate of the next policy year's mod. This is especially helpful when you anticipate that a high-cost year is about to roll out of the experience rating period. It is also useful when you anticipate significant changes - good or bad - in the year that is about to enter the experience rating period.

Keep in mind that this estimate will be only as good as the new period data you can provide. The new period estimates should come from the best information you have available, i.e. loss runs, company data, etc. You will have to make an educated guess concerning how these losses will split into primary and excess.

Also remember that the first $5,000 of each loss is primary. Scan the losses for the new period and estimate what the split will be. Or, if you think the pattern is similar to past years, utilize past relationships as a guide. Note that excess and expected losses are estimated as you enter primary loss and payroll information, but these values can be overridden.

Note that you can also change prior years' data for experimental purposes.

After entering your loss and payroll estimates on the line marked "New period estimates," click the link labeled "view the forecasted mod" to see your analysis results. Remember that your actual mod will vary depending on changes in loss, payroll and experience rating data.

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Mod Forecaster

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