This number is used in the calculation of an experience modification factor. It is the average losses in specific workers compensation classifications or class codes, compared to the payroll for that class code.
In other words, it is the expected losses per each workers compensation class code in the state your business operates. For example, if you perform residential carpentry work and are classed into code 5645, that class code has a projected expected loss ratio, the losses you would expect to statisticaly incurr.