$50 Million Anyone?
The insurance business always gets a bad rap. Just mention the 'I-word' at a party and people will look at you like you just swore in church, but the truth is that not all insurance companies are created equal and different types of insurance have different rules they need to follow. In this case, Pinnacol Assurance -- a Colorado-only workers' compensation company -- decided that it's going to break the mold and pay $50 million in dividends to its policyholders.
It's estimated that 94 percent of the company's policyholders, or approximately 53,000 employers in here in Colorado, will receive an average dividend of $944. Of course, the bigger the policy the larger the dividend.
“Pinnacol is in a position to provide these dividends because of our careful stewardship of our policyholders’ premium dollars, as well as our policyholders’ commitment to their employees’ health and safety,” said Phil Kalin, president and CEO of Pinnacol.
An insurance company is actually paying its policyholders to encourage investment and expansion of their businesses? Sounds a bit gratuitous, doesn't it? It does, but unlike other insurance companies, Pinnacol is actually a quasi-government entity that operates only in Colorado.
Every business, by law, is required to pay into the state's workers' compensation fund, and that fund is managed by Pinnacol. The board of the company is actually appointed by the governor. So if Colorado businesses do better, Pinnacol does better.
“Pumping $50 million back to our policyholders will help them invest in the people, processes, and technology to keep up in Colorado’s fast-moving economy," added Kalin.
And it's not the first time policyholders have received a dividend. It has been a practice at the company since 2005, and since then, they've paid dividends 10 times -- equating to about $606 million back into Colorado businesses.
With all of Colorado's recent economic growth, companies are competing for worker's comp and we hope that this dividend spurs more businesses to open.
What are your thoughts? Have you shopped workers' comp for your business? We want to hear about it! Let us know how your experience was in the comments below!
