Combining Hotels Saves Owner $823,000 and Lowers Experience
Mod
Insured
Five hotels, under a single ownership, with four located in
New York and one in Florida. The company employs more than 2,000
with premiums in excess of $1.8 million.
Situation
The company’s Experience Modification Factor and premiums
had climbed steadily and ownership was unaware as to why they
were seeing such high costs.
Assessment
Certified WorkComp Advisors (CWCAs) did an analysis and discovered
that the hotels were being issued independent Experience Modifications.
These varied, with some hotels having more favorable loss experiences
than others, as well as differing payrolls. The relationship
of ownership and experience ratings is one of the most complex
parts of the experience rating process, but the CWCAs were well-trained
and felt it would be beneficial to examine the possibility and
outcome of combining the ratings.
Solution
The CWCAs examined the Mod worksheets from various insurance
carriers and the hotel’s ownership information to take
a closer look at each hotel separately, to see which ones could
be combined. It turned out, after close scrutiny, they could
ALL be combined. The CWCAs then went on to work with the insurance
carriers and the NCCI to make all necessary corrections and
adjustments, retroactive back to 2003. They also established
annual checks and continued to work closely with the Ratings
Board to ensure the hotels’ Mod would continue to be issued
correctly.
Result
Because of the work by the CWCAs, the ownership of the five
hotels saw a return of $822,808 in premium, along with an Experience
Mod drop from 1.26 to .84.
