Denver, CO (WorkersCompensation.com) - Pinnacol Assurance's Board of Directors has approved a plan that will decrease workers' compensation rates in 2019 by an average of 10 percent for the insurer's 57,000-plus policyholders in Colorado. The decrease will go into effect on Jan. 1, 2019, and this will be the fourth consecutive year Pinnacol has decreased rates. Pinnacol's board also declared its intent to issue a general divided of approximately $70 million in 2019, marking its fourth straight year of issuing general dividends to its policyholders.
“We understand that to many of our policyholders, this capital infusion represents a powerful tool Colorado businesses can use to invest in and grow their businesses,” said Phil Kalin, president and CEO of Pinnacol Assurance.
2019 rate decrease The Colorado Division of Insurance (DOI) has approved a 16.7 percent average statewide loss cost decrease for the 2019 policy year, informed by recommendations put forth by the National Council on Compensation Insurance (NCCI). Pinnacol's rate change reflects longer-term underlying loss and expense trends to minimize short-term volatility and create marketplace stability for Colorado employers. Operating as a mutual insurance company, Pinnacol focuses on creating customer value by providing services enabling operations at the lowest possible cost for employers and maintaining long-term financial strength, ensuring the company's ability to pay injured worker benefits that may last for decades.
“Our customers tell us they value stable operating expenses, and taking a long-term view on rate-setting offers them greater stability in their workers' compensation costs,” said Mark Isakson, Pinnacol's Chief Customer Officer. “This approach helps to minimize rate swings for our policyholders. In addition, Pinnacol is able to use a general dividend as another tool to return capital to policyholders when we have a strong year, as we have had in 2018.”
The 2019 decrease is a result of Pinnacol's increased cost efficiency, favorable claims trends driven by safer workplaces and a strong Colorado economy that's driving wage increases.
Kalin continued, “The adequacy of our rates is crucial to Pinnacol's financial strength, our ability to compete and the stability of Colorado's workers' compensation marketplace.”
2019 general dividend The general dividend is a portion of Pinnacol's surplus returned to its customers that earn it through their commitment to workplace safety and to controlling their claims costs. The company expects to issue its fourth annual general dividend to its customers in 2019 of approximately $70 million, which equates to Pinnacol returning — on average — 11 percent of premium to its policyholders. The final amount of the general dividend will be set in February 2019, based on full-year 2018 financial results, and will be distributed to customers by April 2019. Over the past four years, Pinnacol has returned more than $200 million to its policyholders.
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