DEAR VALUED PINNACOL STAKEHOLDERS,

They say the sun shines 300 days a year in Colorado, but it seemed like more than that in 2015. The state's economy continued to expand and diversify, creating nearly 70,000 new jobs and attracting record numbers of skilled people to staff them.

Like the state, Pinnacol had one of its best years ever in 2015. Our performance in key areas such as combined ratio, premium earned and surplus has surpassed even our most ambitious goals from a few years ago. We are also very proud that, after several years of rebuilding our finances, we were able to decrease rates by 3 percent and provide a $30 million general dividend to our policyholders. And, we earned an A- (Excellent) rating from A.M. Best.

THAT'S WHY WE'RE FOCUSING ON WHAT THE WORLD WILL LOOK LIKE THREE TO FIVE YEARS FROM NOW. WE ARE TRYING TO ANTICIPATE OUR CUSTOMERS' NEEDS AND ENHANCE THE PRODUCTS AND SERVICES WE OFFER SO THAT WE CAN REMAIN THE WORKERS' COMP PARTNER OF CHOICE FOR THEM.

This report highlights our impressive financials from 2015, along with some of the things that make Pinnacol different than other carriers in the nation and that contribute to Colorado's reputation as a great place to do business.

But a powerhouse economy and business success haven't made us complacent. In today's world, industry paradigms change in a heartbeat. We know that what we've done in the past won't necessarily bring success in the future.

That's why we're focusing on what the world will look like three to five years from now. We are trying to anticipate our customers' needs and enhance the products and services we offer so that we can remain the workers' comp partner of choice for them. What follows is an overview of our main focus areas.

Breaking down barriers between traditional healthcare and workers' compensation

We've long believed that workers' comp is about more than just paying claims. It's about reducing risk for our policyholders and their employees by keeping Colorado workers safe, well and healthy. That's why we were the first workers' comp carrier in the country to provide a free wellness program to our policyholders in order to decrease the health risks their employees face on the job and off.

And it's why we are integrating our safety, wellness and medical claims management with services our policyholders access through their health plans. We're partnering with health plans such as Aetna to create "warm handoffs" between our providers and theirs, and connecting our policyholders with community health resources such as the Colorado QuitLine. Partnerships like these expand our capabilities and can speed an injured worker's return to health and work.

Improving our customers' digital experience

We have only to look at Google, Uber, Amazon and others to see that people increasingly want a personalized, real-time digital experience when interacting with companies with which they work.

Pinnacol is deeply immersed in creating a customized, personal digital experience for all our stakeholders. We're moving quickly to create new online and mobile tools so that whenever and wherever a customer wants to do their business with Pinnacol, all their needs can be met digitally or in person … whatever works best for them.

Leveraging data

Pinnacol is in a prime position to leverage data to provide macro-level insights to employers that no one else can. We can tell a construction company what job site hazards to focus on based on the most common injury in that industry the previous month. Or we can help businesses stay safe and competitive by showing them how they are performing relative to other companies in their industry. Our customers can use these valuable insights to manage risk and thrive in their own increasingly competitive environments.

These are big ideas, and we can't achieve them alone. We need to tap into the cumulative brainpower of our 55,000 policyholders. They are on the front lines running businesses and managing people and risk, and their experience is critical.

Innovative efforts in the health, digital and data worlds — along with a continued focus on our core strengths — will ensure Pinnacol remains a vibrant and successful partner for Colorado businesses for years to come.

PHILIP B. KALIN
President and CEO





OUR FINANCIAL
PERFORMANCE

A laser focus on our performance and a booming Colorado economy made 2015 one of our best years ever. View the documents to the right for more detail.