Colorado’s largest workers’ compensation insurer will cut average premium costs by 7.4 percent next year — a decrease greater than its rate reductions of the past two years combined but still lower than the Colorado Division of Insurance approved for all insurers in the category to make in 2018.

Pinnacol Assurance opted for a lower decrease than the state allowed because it uses a longer historical experience — 10 years instead of two — to determine rates for its roughly 57,000 policyholders, a group that makes up 58 percent of state businesses. The rate drop follows average premium decreases of 3.6 percent in 2016 and 3.2 percent in 2017 by the state-chartered company.

“Our customers tell us they value predictability in their workers’ compensation costs,” said Phil Kalin, Pinnacol president and CEO. “Taking a long-term view minimizes rate swings."

The lower rates are the result of favorable claims trends and the improving Colorado economy, among other things. Pinnacol also plans to issue a dividend of $50 million to policyholders in April, which is equivalent to another 8 percent decrease in rates.

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