Press Releases
November 07, 2017

Pinnacol Will Decrease Workers’ Compensation Rates in 2018

Employees in a small manufacturing business in ColoradoThe insurer also plans to issue a general dividend to Colorado policyholders

DENVER, Nov. 7, 2017 — Pinnacol Assurance’s Board of Directors has approved a 2018 decrease in workers’ compensation rates that will average 7.4 percent for the insurer’s 57,000-plus Colorado policyholders. The decrease will become effective Jan. 1, 2018, and will be the third consecutive year Pinnacol has decreased rates. The board also announced its intent to issue a general dividend of approximately $50 million to policyholders in 2018, marking its third straight year of general dividends.

While the Colorado Division of Insurance (DOI) approved a 12.7 percent rate decrease for 2018, Pinnacol uses a longer historical experience period (nine years, as opposed to two) to evaluate trends and determine its rates. That longer period prevents Pinnacol from reacting to short-term volatility, and accounts for the difference between Pinnacol’s rate and that approved by the DOI. In the two prior years, Pinnacol reduced its rates in excess of the approved DOI rates.

“Our customers tell us they value predictability in their workers’ compensation costs,” said Phil Kalin, Pinnacol’s President and CEO. “Taking a long-term view minimizes rate swings. And Pinnacol has the added tool of dividends to return excess capital to policyholders when we have a strong year, as we have had in 2017.”

Pinnacol calculates its rates to be competitive for its customers, as well as sufficient to ensure the company’s ability to pay claims that may last for decades. The 2018 decrease is a result of steady improvement in Pinnacol’s financial performance, favorable claims trends and a strong Colorado economy.

The general dividend is a portion of Pinnacol’s surplus shared with policyholders. Barring a significant and unexpected financial loss in the fourth quarter of 2017, the dividend will match the $50 million Pinnacol distributed last year. This dividend is the equivalent of a further decrease of eight percent in policyholder premium costs over and above Pinnacol’s already competitive rates. The dividend will be issued by the end of April 2018. Since 2005 Pinnacol has returned more than $556 million in general dividends to policyholders.