The Richards Group is one of Vermont's and New England's top retirement and fiduciary advisors

How The Richards Group
Reduced Insurance Premium for a Manufacturing Client after a Concerning $50K Spike

Key Richards Group/Client Achievements:

  • Noticed significant spike in premium

  • Analyzed contributing mod factors

  • Worked with Client to implement solution

  • Reduced insurance premium



ABC Company is a metal fabrication company located in NH and a client of The Richards Group (TRG), a regional insurance broker. ABC’s service team at TRG, received a report from the National Council of Compensation Insurance (NCCI) and saw that the Workers Compensation experience modification factor (mod) at ABC Company had increased significantly.

ABC Company’s insurance carrier was initially reluctant to renew the insurance policy due to the frequency of losses that the client had experienced. If the insurance carrier did not renew the policy, the client would have ended up in the assigned risk pool. Generally speaking, brand new businesses or businesses with higher risk profiles are more difficult to place for brokers and end up in the assigned risk pool. Had this been the case, the client would have paid an estimated premium of $100,000 +25%.

After advocating for the client, TRG was able to convince the company to quote, due to the longstanding positive relationship enjoyed by ABC and its insurance carrier, as well as TRG’s promise to assist the client in implementing new safety measures. ABC’s previous insurance premium was $48,564, but its renewal was quoted at $98,342, an unacceptable $50,288 increase.  As a point of reference, a company of ABC’s exact risk profile and payroll, but with an industry average mod would expect a premium of $35,054.


To start, Corey Mears (ABC’s Account Executive) and Shannon Prescott (ABC’s Program Coordinator) began to analyze the claims and research potential solutions for ABC Company.  

One significant contributing factor of the company’s higher mod was the lack of a Return-to-Work program. Each time an employee was injured on the job, they stayed home from work, which resulted in the insurance payment counting 100% against the calculation of ABC Company’s mod. If a Return-to-Work policy had been in place, utilizing light or restricted duty, that contributing factor would have only counted 30%.

After further research they found that ABC’s claims were being misclassified, thereby distorting claim trends. The claims analysis also revealed the lack of safety programs actively in place as the majority of claims were identical and potentially avoidable. 

Corey and Shannon started compiling analysis tools for the client to assess their current safety measures. They also completed a Mod Analysis Report to show the client the effects the current lack of programs was having and what to expect in the future.


Soon after, Corey and Shannon met with the client in an effort to help them better understand the situation. They started by explaining to ABC exactly how workers' compensation is rated, i.e. differently from property, general liability, or auto insurance. There are a number of factors that could contribute to a rise in workers' compensation premium. These include additional payroll, a rise in an insured’s reportable incidents, a rate increase or a re-classification of employees to a riskier (i.e. more expensive) class code.  While TRG does not set workers' compensation rates, TRG does advocate for their client to the insurance carrier in order to obtain price credits, which in turn reduces the workers’ compensation premium. This is precisely what they achieved for ABC Company. Understanding and communicating the difference in these types of insurance was essential in helping the client understand why their premium increased so substantially.

The team presented ABC Company with its Mod Analysis Report and educated them on the contributing factors. After they discussed what steps needed to be taken to prevent further premium increases.  These steps would include demonstrating a proactive approach to managing risk within the company.

The Richards Group created a roadmap for implementing stronger safety and risk control measures, which will in turn lower ABC’s mod in future years.

To ensure the new programs would be implemented properly, ABC Company promoted a current employee with a loss control background to the new safety director role.


Fortunately, Corey and Shannon were able to convince the insurance company to renew ABC Company’s policy due to three key factors: ABC Company’s longstanding positive relationship with its insurance carrier; The installation of a designated safety director, a newly created role for the company; and their proactive response to working with TRG and implementing new safety policies and procedures, such as a Return to Work program.

In order to avoid being placed in the assigned risk pool, ABC Company agreed to work with TRG on these solutions. They have begun the process of creating a Return to Work Program, assessed their current safety program and have started fulfilling action items, mandated by their insurance carrier, with the assistance of their TRG Service Team. The Richards Group was able to negotiate additional credits by reclassifying some of ABC Company’s employees to the proper classification code and added a deductible to the workers' compensation program, which further lowered ABC Company’s premium.

Due to the resources, expertise and client advocacy of Corey and Shannon,
and the commitment to change by ABC, the client received $33,000 in credits this renewal cycle.