The U.S. workers compensation insurance industry experienced improved results for the fourth consecutive year in 2014 thanks to a solid underwriting performance, said rating agency A.M. Best Co. Inc.

Net written premiums last year rose to $46.8 billion, up from $43.6 billion in 2013, and the workers comp industry's combined ratio improved 2.2 percentage points to 101.5%, according to the report released Wednesday.

The industry in recent years has increased rates and seen payrolls grow amid improving conditions, partly offset by rising medical costs, Best said.

“While the industry's underwriting performance benefitted from an overall positive rate environment in 2014, competitive market conditions and persistent low investment yields continue to compress operating margins,” the Oldwick, New Jersey-based rating agency said in the report. “Improved fundamentals in recent years appear to indicate that further improvement in results may continue over the near term given growth in premiums from rate increases and favorable claims frequency relative to claims severity.”

The growth rate of net premiums written in the workers comp industry outpaced the commercial insurance segment's 2% rate, but fell short of 2012's 9.7% growth rate, Best said.

“While 2014 represents the fourth consecutive year of premium growth, competitive market conditions challenge companies' efforts to achieve a balance between the retention of profitable accounts and maintaining market share,” the firm stated in the report.

The 25 largest workers comp insurers reported 5.6% growth in net premiums written compared with 5.5% in 2013. But the five largest insurers reported a combined 6% reduction in net premiums written in 2014 compared with 2013, mainly due to Liberty Mutual Holding Co. Inc.'s focus on lines other than workers comp, according to the report.

Liberty Mutual dropped from No. 2 in market share, with 7% in 2013, to No. 5, with a 4.8% share in 2014.

The Travelers Cos. Inc. retained the No. 1 position last year with an 8.2% share of the market, while The Hartford Financial Services Group Inc. was No. 2 with 6.4%, according to the report.