We issued general dividends to Colorado companies
In 2020, Pinnacol distributed $70 million in dividends to more than 50,000 employers throughout the state. We’ve issued a dividend 11 times since 2005, returning more than $746 million in total dividends to Colorado businesses when they need it most. Learn more about general dividends.
We've reduced our rates over time
In 2019, we reduced our rates by 10%, building on several consecutive years of cost savings for our customers. This keeps more cash in their pockets and keeps their workers’ compensation premiums more stable over time. Learn more about our financial stewardship.
We've outperformed our peers and competitors
Our combined ratio shows our underwriting profitability compared with that of our peers and competitors, which has led to five years of rate decreases and dividends. A combined ratio below 100% indicates an underwriting profit. Learn more about our superior claims handling.
In 2019, Pinnacol gave
to employee health and safety, rehabilitative health, and economic vitality and workforce development.Learn more about how Pinnacol supports our community.
to 100 students across Colorado for the 2019-2020 academic yearLearn more about our Pinnacol scholars.
At Pinnacol, we “put care to work.” And 2020, even as it posed unprecedented challenges, gave us ample opportunities to live that mission. I could not be prouder of how our people met those challenges.
In my 2020 version of this letter, I noted that the company would undoubtedly be significantly affected by COVID. And indeed, we were – in both negative and positive ways.
For the first time in many years, our combined ratio exceeded 100, indicating a slight underwriting loss, though our net income remained strong. This was driven in part by lower premium revenue after we reduced rates for the fifth straight year in 2020 and also saw payrolls among our policyholders significantly lower than originally estimated because of pandemic-induced layoffs. Yet because of our disciplined approach and solid surplus, we were able to reduce rates again this year and issue our sixth straight general dividend.
Like most workers’ comp carriers, we saw a lower claims volume in 2020, as many employers laid off workers and others were able to enable employees to work from home, lessening their risk exposure. At the same time, though, we saw a significant volume of COVID claims, with the majority coming from long-term care facilities, followed by health care workers and first responders.
As we watched the impact of COVID on Colorado workers and businesses, we knew we had to meet their needs and those of our community at large in new and different ways. In the early days of the pandemic, we created a fund to cover wage replacement costs for first responders and health care workers unable to work while they awaited COVID test results. We forgave premiums for policyholders whose revenues evaporated. We gave more than $2 million to local and statewide relief efforts targeting small businesses.
I am perhaps proudest of the way our remarkable team members met the challenge of serving our customers while working fully remotely. Our policyholder Net Promoter Score (a measure of satisfaction) grew steadily over the past year from an already strong base to 61 so far in 2021 – compared with an industry benchmark in the mid-30s. The injured workers we serve rate us at 4.16 on a 5-point scale, and the workers whose COVID claims we handled rate us even higher, at an average of 4.3. No other carrier comes close to this level of injured worker satisfaction.
We’ve seen new challenges in 2021. Colorado’s workers’ comp market is more competitive than ever before. Companies with multistate operations and multiple lines are aggressively pursuing Pinnacol’s business, often offering rates we can’t match because they can offset workers’ comp losses here with gains in those other states and lines. Despite some of the best financial and customer satisfaction results in the industry, we have seen a small but steady decline in our market share over the past several years. Pinnacol remains trapped by an outmoded statute that limits our ability to evolve to meet the changing needs of Colorado businesses. While we continue to work toward an eventual loosening of those statutory shackles, we will continue to innovate within our constraints, with digital and business transformations that enable us to provide the superior customer service Colorado companies and employees expect and deserve.
President and CEO
In 2021, Pinnacol distributed $50 million in general dividends to almost 53,000 policyholders throughout Colorado, and at the height of the pandemic in 2020, we issued $70 million. We’ve distributed $320 million in dividends since 2016, which equals approximately 10% of premium revenue. Learn more about general dividends.