Insurance premiums for businesses and households in the state are moving mostly lower with one notable exception – health care.
After Sept. 11, 2001, some insurers pulled back, reducing competition and causing rates to skyrocket in 2002 and 2003, especially for business coverages.
“Companies, after holding back so long, have opened up the gate and are looking to grow their (insurance) business,” said Kevin Krupka, president of Mountain Insurance Brokers in Wheat Ridge.
Jim Noon, chief executive of Centennial Container Inc., said the current trend is one he has seen before in 20 years of doing business.
Rates skyrocket after a crisis, they stabilize and then move lower – but never fall as much as they initially rose, he said.
“We are seeing some relief on the insurance side. But it is not a drastic amount,” said Noon, who employs a dozen workers.
His biggest savings have come in dividend checks from Pinnacol Assurance, the state’s largest provider of workers’ compensation insurance.
Denver-based Pinnacol has cut rates in four of the past five years, with a 7.1 percent cut in premiums this year, spokeswoman Margie McCarthy said.
Nationally, workers’ compensation premiums dropped by nearly 3.4 percent in the third quarter, while premiums for business liability and directors and officers coverage fell 1 percent, according to Advisen, a New York company that tracks insurance price trends.
Although state-specific numbers are not available, insurance brokers said insurance premiums in Colorado also are moving lower, aided by increased competition, improved investment returns and lower claims.
Disasters in coastal states and relative calm in Colorado have worked together to cap premium increases here.
“You see more competition in Colorado because we have lower risks,” said Carole Walker, executive director of the Rocky Mountain Insurance Information Association. “Insurers are pulling back on coverage in high hurricane- and earthquake-risk areas.”
Colorado had a moderate year for wildfires and a large-scale hailstorm hasn’t caused major damage in years.
Property and casualty insurers, once worried that another hurricane season like 2005 would cripple them, are on track to report a record underwriting profit of $15.1 billion in 2006, according to Advisen.
Reforms specific to Colorado in 2003 have sent auto insurance premiums down by 20 percent and more in the state the past three years, according to the RMIIA.
And consumers are also more careful about making claims.
“Consumers these days are more knowledgeable. They are less likely to make small claims. They are learning that insurance is not a maintenance policy,” said Chris Hudson, a spokesman with State Farm Insurance, the largest provider of insurance in the state.
Stronger stock market returns and longer life spans have helped life insurers, who are also dropping rates, Krupka said.
The most notable exception to the trend is health insurance.
Premiums in the state rose 10.8 percent in 2005, higher than the national average of 9.2 percent, according to Minnesota health care analyst Allan Baumgarten.
Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.
