What is the average eMod factor typically expressed as?

The average experience modification factor (eMod) is typically expressed as 1.0. The eMod is utilized in workers' compensation insurance to calculate a company's insurance premium based on its claim history compared to the industry average.

An eMod of 1.0 indicates that a company's claim history is average when compared to other businesses in the same classification. If a company's eMod is above 1.0, it suggests that the business has a higher claim history than average, which may lead to higher premiums. Conversely, an eMod below 1.0 indicates a better-than-average claims history, possibly resulting in lower premiums.

Understanding that the eMod reflects the relative risk of a business, the value of 1.0 serves as the benchmark against which individual businesses are measured, making this a critical figure for both risk assessment and cost calculations in workers' compensation insurance.