The workers’ compensation industry has enjoyed profitability in the past few years; however a report out from investment firm Conning, Inc. says that these kinds of results are not likely to last.

The recently published “Record Profitability in Workers’ Compensation Insurance: Strategies for Continued Success” can be found here. It looks at current market conditions and includes a survey of workers’ compensation executives. Factoring in results and practices of national multiline insurers, work comp insurers, regional insurers and state funds, the report highlights their successes but also what challenges are ahead. In terms of success, the overall loss ratio of 68.4 percent and a combined ratio of 95.4 percent made 2015 one of the industry’s best years. But in 2016 that trend could start to decline.

After the recession the economy started to come back, and growing payrolls lead to higher premiums for the past few years. There has been a stronger focus on safety, injury prevention and return-to-work programs. But medical costs are rising which could offset the success the industry has seen in loss ratio. Beyond increased utilization this could be due to the use of specialty (and expensive) treatments for hepatitis C and other illnesses. Insurers are also growing increasingly worried about cyber attacks and are spending more on efforts to protect data.

The study also delves specifically into state fund successes and failures. They could be an important indicator of market trends and what kinds of strategies work well to maintain success even as several state funds have seen challenges to their system. State funds make up a quarter of the workers’ compensation market.

There are new factors in the workers’ compensation industry which could impact the success it has seen, and the authors of the study think that insurers who start to emphasize underwriting rather than continued growth will perform best in the long-term.