“Workers’ comp is one of the most controllable costs our clients deal with,” said Mike Lane (pictured), commercial risk consultant at Reagan Companies. Yet many business owners still treat it as fixed.
“What I hear a lot from clients and prospective clients is the phrase, ‘it is what it is,’ and they’re parroting what they've heard from their retail broker,” he said. That resignation, he argued, comes from a fundamental misunderstanding of how experience ratings work – and how much influence employers can actually have.
“It's all knowable,” Lane said. “There is no secret sauce. Everything I do is based on the publicly available rules, either NCCI or state-specific, for how the experience rating is calculated.”
Lane’s client process starts with a retrospective audit – one that often catches missed premium recovery opportunities. “No different than H&R Block might look at your past tax returns,” he said. “If there’s not any money owed back to you, no harm, no foul. You don’t pay me for the review. And if there is money back, great, we’ll work on that, on a contingency.”
In many cases, even when refunds aren’t available, the findings still reveal mismanagement. “There was a lot of evidence of their experience rating being mismanaged,” he said. “I have to say, ‘Hey, I can’t get you that money back, but you did overpay... because of the reserving practices of your carrier.’”
That step often leads to more proactive support. Lane’s agency has automated much of the process to monitor experience ratings in real time. “We’ve implemented a process... to manage our clients’ experience ratings for them in a way that they don’t end up in that position of someone telling them three, four years down the road, ‘You overpaid by $25,000.’”
The third step is structural. For clients that can handle it, Lane recommends transitioning to loss-sensitive workers’ comp programs – like captives, retros, or large deductibles – that bypass experience rating entirely. “Once you get into a true loss-sensitive product... you pay for your claims as they happen,” he said.
The urgency behind this approach has only increased as rating formulas shift across states. “By design, that ballast has been decreased. The experience rating formula is more volatile,” said Lane. “It’s $2.75 in premium for every dollar in claim, $3 where it used to be under $2.”
The impact is especially stark in New York. Under Code Rule 59, any employer with a mod over 1.2 and $800,000+ in payroll must enroll in a state-run safety improvement program. Since the formula was changed, Lane said, “the size of that list has tripled.”
“No other data points have changed,” he said. “It’s just how they calculate the formula... That’s a 120% surcharge on your premium.”
Meanwhile, updates to the rating model have undercut Lane’s ability to secure premium reductions through subrogation recoveries. “The new formula has... eliminated my ability to do the recoveries,” he said. “If a claim is $150,000 paid and there’s a $75,000 subrogation recovery... there’s no revision available.”
Lane credits much of his traction to a less common career path. He began in claims adjusting before moving into brokerage. “I don’t think many people follow that path necessarily,” he said. “But I knew claims very well before I knew the experience rating.”
That technical fluency helped compensate for his lack of a personal network early on. “Most of the insurance transactions... are a man who owns a business who is 60 years or older, buying their insurance from someone who is also 60 years and older,” he said. “And I’m in my early 30s, trying to tell these two that they don’t know what they’re doing.”
Instead of leaning on relationships, Lane leaned into technical precision. “I need to be so much technically stronger than my competitors that I can overwhelm them with my lack of natural ability to get opportunities.”
The pitch? A no-risk lookback. “It won’t take any effort on your end... I’m not going to charge you if it doesn’t work.” With proven savings, referrals followed. “When they start working, you start getting referrals and you have some credible success stories... where the objection typically was, this seems too good to be true.”
Lane’s strategy is evolving as market pain shifts. “There’s property pain. There’s general liability and umbrella pain,” he said. “Is there a similar magic hook? I don’t know.”
