Experience Modification Factor
NCCI-style experience rating: actual vs. expected losses split primary/excess, credibility, and off-balance.
Intermediate terms
| Term | Amount |
|---|---|
| Actual primary (Ap) | 85,000 |
| W × Actual excess (W·Ae) | 21,000 |
| (1−W) × Expected excess | 45,500 |
| Numerator (Ap + W·Ae + (1−W)·Ee + B) | 166,500 |
| Denominator (Ep + Ee + B) | 175,000 |
Experience modification factor
0.951
What-if: actual excess losses
60,000
Resulting mod: 0.951
Assumptions & limitations
- Follows the NCCI-style split-plan experience rating formula with primary/excess loss split and a credibility weight W applied only to excess losses.
- Ballast (B) stabilizes the mod for small risks by adding a constant to both numerator and denominator.
- W is typically a function of expected losses per published state/bureau tables; here it is a direct user input.