Colorado Governor Jared Polis is pushing again to privatize Pinnacol Assurance, the state-affiliated workers’ compensation insurer, hoping to raise $400 million to help balance the state budget. This move reflects a trend among states to shift away from state-run insurance funds by mutualizing or privatizing them.
In his recent budget letter to lawmakers, Polis explained that privatizing Pinnacol would help the company expand its customer base and tap into larger, multistate risk pools. Right now, Pinnacol can only offer insurance to workers within Colorado, which limits options for businesses whose employees work remotely or across state lines. This restriction, Polis noted, makes it harder for Colorado companies to find affordable workers’ compensation coverage.
The idea of privatizing Pinnacol isn’t new; it has been discussed for decades. But the governor says now is the right time. Without the change, he warns, Pinnacol risks losing market share, which could lead to higher premiums and fewer benefits for workers.
The move also raises questions among industry experts. Carole Walker, executive director of the Rocky Mountain Insurance Information Association, emphasized the need to make sure Pinnacol competes fairly if it becomes a private, for-profit company. Currently, Pinnacol does not pay premium taxes, and Walker highlighted concerns over how that and contributions to the state’s guaranteed fund would be handled under privatization.
Pinnacol has a strong financial standing, holding an A- rating from A.M. Best. It remains the largest workers’ comp insurer in Colorado, with nearly half of the market share in 2024. The next biggest companies are Hartford Insurance Group, Zurich Insurance US, Travelers Group, and Chubb INA Group.
Governor Polis hopes that privatizing Pinnacol will allow it to adapt to the changing nature of work and remain competitive while providing better service to Colorado businesses. The discussion now turns to lawmakers, who will decide if and how this change moves forward.