EMR helps insurers predict what?

• A. The dollar amount of expected losses due to work-related injuries and illnesses
• B. Market expansion opportunities
• C. Employee turnover rate
• D. Product liability exposure

Answer: (A)

Experience Modification Rating (EMR) is a measure used by workers’ compensation insurers to estimate how much a company is likely to pay in losses from work-related injuries and illnesses based on its past claims history. This rating adjusts the premium to reflect actual safety performance, so it helps insurers predict the dollar amount of expected losses and set appropriate coverage costs. EMR focuses on claims experience and safety, not on opportunities in markets, employee turnover, or product liability exposure, which lie outside workers’ comp risk profiles. A lower EMR generally signals better safety performance and lower expected losses, while a higher EMR indicates higher risk and higher potential losses.