At a time of continued business uncertainty, Pinnacol remains a strong, steady presence in Colorado’s workers’ compensation market.
I joined Pinnacol in February, attracted by its strong sense of mission and superb policy and financial management. In the months since, that instinct has been borne out as I’ve witnessed this company’s operations firsthand.
As you’ll see in the attached financials, Pinnacol lowered rates and issued dividends to Colorado employers in 2021. And even though this report provides our audited financials for 2021, I’d be remiss if I didn’t note we did the same in 2022, decreasing rates by an average of 11% and issuing $50 million in dividends. That marked the 7th consecutive year of giving back to our policyholders in these ways.
Our combined ratio recovered in 2021, coming back below 100 and demonstrating the strength of our underwriting, even as we reduced rates and many policyholder payrolls remained low in the face of worker shortages.
As a result of our fiscal discipline, Pinnacol has been recognized as one of the Ward’s 50 for the fifth consecutive year. This places us in the top 2% of property and casualty insurers and in the company of industry giants such as Allstate, Travelers, The Hartford and Progressive Insurance Group. Companies on the list outperform the industry in financial stability, revenue growth, capital/surplus positions, underwriting results and financial returns.
At the same time, we outperform our competitors in agent, policyholder and injured worker satisfaction. Indeed, the heartfelt and unsolicited outreach our claims representatives receive from the injured workers they serve reinforces the sense of mission that drew me to Pinnacol.
It’s important to recognize, though, that our business faces headwinds. Workers’ compensation has been extremely competitive for many years now, and carriers are becoming ever more aggressive in their pricing and practices. Our policyholders and injured workers love us, but if we can’t provide the products Colorado companies want, the affection for our service will be a moot point for all but the highest-risk companies we are required by law to cover.
Pinnacol’s statutory limitations hamper our ability to serve customers’ needs because we cannot bundle workers’ comp with other lines or easily cover our policyholders’ non-Colorado operations. As a result, our share of Colorado policies has shrunk even as the number of businesses in the state has grown. In fact, over the last 20 years we’ve watched our portion of the market’s policies decline. We are at an inflection point in this decades-long erosion of our ability to support business’ evolving needs.
We embrace the essential role we play for Colorado businesses and workers. We will continue to pull every lever we can to innovate within our existing constraints while seeking opportunities to modify our statute in order to simultaneously fulfill our statutory mission and our business imperatives.
In 2022, Pinnacol distributed $50 million in general dividends to 51,000 policyholders throughout Colorado. Since 2016, we’ve distributed $370 million in dividends, equaling approximately 9% of premium revenue. Learn more about general dividends and how providing them supports healthy businesses.
For seven years running, we’ve reduced our rates. In 2022, our rate reductions equated to an average of 11% in cost savings for our customers. Learn more about financial stewardship.
Our combined ratio shows our underwriting profitability, and this chart shows how we performed compared with our peers and competitors. A combined ratio below 100% (lower is better) indicates that we are bringing in more revenue than we need to cover our claims costs and other expenses. Learn more about our caring claims handling.
Pinnacol policyholders consistently give us best-in-class satisfaction scores. Our latest Net Promoter Score (NPS, a measure of whether policyholders would recommend us to others) is 61. For comparison, the industry average NPS for insurance is 31, and 45 is considered a high score.
The injured workers we serve value our caring culture. In 2020 (most recent data available), we scored an average of 4.1 on a 5-point scale on the Colorado Division of Workers' Compensation's injured workers satisfaction survey; other carriers scored 3.4. And the scores from workers with claims were even higher, with an average score of 4.3. In these unpaid testimonials, watch workers describe what caring protection means to them.
Domenico / Professional Ballet Dancer
In 2021, we awarded $507,000 in grants to nonprofits that protect the health and safety of workers on the job, help injured Coloradans get back to work, and promote a robust business climate and a prepared workforce statewide. We place particular importance on supporting organizations that serve underrepresented groups. Responding to immediate needs, we also donated $100,000 to help victims of the Marshall Fire. And our employees voted to divert a portion of team-building budgets to support the Boulder King Soopers shooting victims and Food Bank of the Rockies, providing 16,000 meals to Colorado families in need. Learn more about how Pinnacol is a force for good in our state.
With a commitment to fighting systemic racism and expanding opportunities for all, our Diversity, Equity and Inclusion Advisory Council and our board of directors have made us accountable for achieving hiring, retention, compensation and advancement equity by year-end 2025. As charter members of Colorado Companies Uniting Against Racism, Colorado Inclusive Economy and Prosper Colorado, we publicly report our data on key hiring, promotion and supplier indicators. Learn more about our DEI strategy.
The Pinnacol Foundation scholarship program ensures that the children of workers who were seriously injured or killed on the job have the opportunity to pursue higher education. In 2021, the foundation’s 21st anniversary year, we awarded $347,150 to 75 students — taking our total to $6 million in scholarships to nearly 650 students since the foundation’s inception.
In 2021, Pinnacol was named a Top Employer by the Denver Post for the fifth consecutive year. It was our first year being named the Top Large Employer in the state as voted on by our employees. We’ve also taken the top prize among employers for work-life balance.
