CarrierIQ: Building Rate Intelligence From NCCI Loss Costs and Carrier Filings

A PEO or MGA that quotes workers' comp without knowing what every carrier in the state would charge for the same class code is quoting blind. The information is public. NCCI publishes advisory loss costs by state and class. Carriers file their loss cost multipliers with each state's insurance department, and those filings are public through SERFF. Put the two together and you have every carrier's manual rate for every class code, before anyone picks up the phone.

Almost nobody does this systematically, because assembling it by hand is miserable. That is the gap CarrierIQ was built to close.

The arithmetic is simple; the data is not

In an NCCI state, the manual rate for a class code is the NCCI advisory loss cost for that class multiplied by the carrier's loss cost multiplier. The loss cost covers expected losses and loss adjustment expense. The LCM covers everything else the carrier needs: acquisition cost, general expense, taxes and assessments, profit and contingency. Two carriers quoting the same class code in the same state start from the same loss cost and differ only by their LCM, and then by schedule credits, dividends, and the experience mod applied on top.

That is one multiplication. The hard part is keeping the inputs current and correctly matched. Loss costs change on each state's filing cycle. Carriers file LCM changes whenever they want to move price, and a carrier group often files separate multipliers for each of its writing companies, so that the same group can offer a preferred rate through one paper and a standard rate through another. Some filings define tiers within a single company, keyed to the account's characteristics. Effective dates differ by state and by carrier. A multiplier that was right last quarter may not be right today.

California is the exception, as readers of this blog know. California is a WCIRB state with pure premium rates rather than NCCI loss costs, and carriers file their own rates against that benchmark. CarrierIQ handles California through the WCIRB pure premium rate and the carrier's filed rate relationship to it, and the rest of this post uses NCCI terminology for the simpler case.

Carrier discovery: knowing who writes what

Before rates, CarrierIQ answers a prior question: which carriers are actually writing workers' comp in this state, for this class, at this size? A carrier with a filed LCM in a state is not necessarily open for business in every class. Appetite shifts. A carrier that wrote roofing two years ago may have exited.

CarrierIQ maintains a carrier directory per state built from the filings themselves, since a carrier with a current LCM filing is a carrier with at least a license and an intent. Operators layer their own appetite notes on top: which carriers have declined what, which ones want a loss control visit, which ones will consider a PEO master program at all. For an MGA the directory is the list of markets the program can access; for a PEO it is the list of carriers worth sending a submission packet to through Distribution Hub.

Filing ingestion and the current-year-only rule

The rate filings come in through SERFF, the NAIC's filing system, where carriers submit their rate and form filings to state regulators and where approved filings are available to the public. CarrierIQ ingests the filing record, extracts the LCM or rate table and the effective date, and stores it against the carrier, writing company, and state.

One rule we enforce without exception: a rate is built only from a filing that is effective for the current period. A filing with an older effective date that has been superseded does not get used, even if the newer filing is missing from our records. A missing filing produces a gap, and a gap is flagged, not filled with a guess. The alternative, quietly using last year's multiplier, produces a manual rate that is wrong by exactly the amount the carrier moved its pricing, which is the single most important thing an operator wanted to know.

Loss costs follow the same discipline. The NCCI loss cost used for a class is the one effective on the policy effective date, and CarrierIQ tracks the filing it came from.

The rate sheet

The output is a rate sheet: for a given state and set of class codes, the manual rate for every carrier with a current filing, with the loss cost and the LCM shown side by side so the arithmetic is auditable. Where a carrier has multiple writing companies or tiers, each appears as its own row with its own rate.

Here is a hypothetical to make it concrete. Take a 90-employee precast concrete manufacturer in an NCCI state with payroll split across a manufacturing class, a clerical class, and an outside sales class. CarrierIQ shows, for each of the fifteen or so carriers with current filings in that state, what the manual premium would be before mod and before credits. The spread between the lowest and highest manual rate across carriers for the manufacturing class is often large enough to matter more than the schedule credit anyone is going to negotiate. An operator who can see that spread knows which three carriers to send the packet to, and knows what a competitive quote should look like when it comes back.

For a PEO pricing its own master program, the rate sheet is the market benchmark. If the PEO's internal WC rate for a class is above the manual rate the client could get on its own from a well-priced carrier, the proposal needs to make the case on service, claims management, and the mod, not on rate. If it is below, that is the headline. Either way the operator should know before the proposal is written, and PricingIQ pulls the CarrierIQ benchmark into the pricing step for exactly that reason.

Staleness flags

Every rate in CarrierIQ carries the effective date of the filing it came from and the date we last confirmed it against the source. When a filing passes its expected renewal window without a successor, or when the loss cost filing for the state has changed since the carrier rate was built, the rate is flagged stale and shown with a warning in every place it appears, including the pricing step and the proposal wizard.

A stale flag is not a failure. It is the system telling the operator that the number on the screen may have moved and should be checked before it is relied on. In our own PEO's experience, the rates that cause trouble are never the ones you know are old. They are the ones you assumed were current.

What the operator sees in context

CarrierIQ is not a standalone rate lookup. When a submission arrives through InboxIQ and the class codes and payroll are parsed from the ACORD 130, the rate sheet for that state and those classes is available in the client workspace without anyone re-keying a class code. When ModIQ produces a mod projection, the manual premium and the modified premium sit next to each other. When the operator assembles the carrier packet in Distribution Hub, the carriers on the list are the ones CarrierIQ shows with current filings and a matching appetite.

For an MGA running a program across several states, the same structure gives a state-by-state view of where the program's filed rate sits against the market, which is the conversation every MGA has with its carrier partner at renewal.

Why we built it this way

We built CarrierIQ because the rate intelligence a PEO needs exists entirely in public filings, and because assembling it was a quarterly project that was already out of date when it was finished. The ingestion is automated. The arithmetic is shown. The staleness is visible. The operator's judgment about which carriers to approach and how to price against them is still the operator's. We just made sure that judgment starts from the current numbers instead of last year's spreadsheet.