An ongoing economic turnaround nationwide and an ongoing effort to improve workplace safety are responsible for continued improvement in the workers compensation market, according to analysts from A.M. Best Co. Inc.

Workers comp combined ratios fell to 96% during 2015, down 5.5 percentage points from 2014 and marking the fifth straight year of "solid underwriting performance," according to a report released last week by the Oldwick, New Jersey-based rating agency.

Meanwhile, workers comp net written premiums increased to $48.2 billion in 2015, up 2.9% from the prior year, the Best report said. That was compared with 1.1% net written premium growth for the overall commercial lines segment.

The Best report cited “continued premium growth, technological advancements, declining frequency trends and favorable levels of reserve development” for recent improvements in workers comp insurer performance.

 “The industry continued to generate additional written premium… that has been driven by continuing economic improvement,” said Gordon McLean, Oldwick-based senior financial analyst with A.M. Best, in an interview with Business Insurance. 

Mr. McLean said some of the comp industry’s improvement is “attributable to reform legislation in a number of states which have sought to limit some aspect of claim payments, which had gotten to be significantly longer than anticipated.” 

 “I think we are cautiously optimistic in the near term,” Mr. McLean said. “The economy continues to improve so we should see continuing improvement.” 

Connor Brach, an Oldwick-based associate analyst with Best, also pointed to a steady decline in workplace injuries and illnesses. Data from the Bureau of Labor Statistics showed an injury rate of 3.2 incidents per 100 workers in 2014, down from 8.4 incidents per 100 workers in 1994.

“People know they can control their comp costs if they can control their risks,” Mr. Brach told BI in an interview. 

Despite recent bright spots in workers comp performance, the Best report cautioned that “uncertainty” may be ahead for the line.

Despite “the improvement in operating performance, rates have declined every quarter since the start of 2015, with a 4.3% drop in the second quarter of 2016,” the report reads. “These quarterly rate declines create some uncertainty on how long the improved underwriting results can be sustained.”