Performance of the workers’ compensation line of insurance was “a major bright spot” among the U.S. commercial lines segment in the past two years, according to a new report from Fitch Ratings.

The ratings house says results look even better if the contribution of American International Group is excluded.

Contributing to the positive results for workers’ comp were employment growth, an improving economy and a relatively stable claims trend, according to the report released last week. Another possible contributor was the Affordable Care Act.

“Implementation of the Affordable Care Act and a corresponding shift of individual medical care delivery away from workers’ compensation to other markets may also be a factor that bears further study,” said the report authors, Fitch analysts James Auden and Gerald Glombicki.

The report notes that the workers’ comp line was profitable in 2015 and 2016, with combined ratios of 95.3% and 95.6%, respectively. Those numbers followed combined ratios of 110%, 103% and 102% in 2012, 2013 and 2014.

But without the contribution of AIG, the workers’ comp combined ratio for 2016 would have been 3.2 points lower, dipping to 92.4% and indicating greater profitability, according to Fitch.

For commercial lines overall, combined ratio rose by four points in 2016, to 99%. Excluding AIG from results would reduce the combined ratio by 2.3 points in 2015 and 3.4 points in 2016, Fitch said.

AIG saw performance deteriorate sharply in the last year. The company posted a $3.04 billion loss for the fourth quarter of 2016 and an $849 million loss for the full year. The fourth quarter included a $5.6 billion impact from prior-year adverse loss reserve development, including $1.8 billion in workers’ comp adverse development.

“These results represent a sharp outlier to other commercial insurer peers and has a significant effect on 2016 industry results, particularly in longer-tail commercial segments,” the authors said.

AIG has traditionally been among the largest U.S. commercial lines carriers and was the nation’s ninth largest workers’ comp carrier in terms of market share last year. The company is taking steps to turn around its results, including entering into a $20 billion reinsurance deal with Berkshire Hathaway’s National Indemnity Co. At the same time, the company has said it is decreasing its emphasis on U.S. commercial lines.

And AIG this week announced it has hired Brian Duperreault, the former head of Hamilton Insurance Group, as its new chief executive officer to replace outgoing CEO Peter Hancock.

The workers’ comp loss ratio of 73.2% last year was up from about 71% in 2014 and 2015, but down from 77.7% in 2012, according to the Fitch report.

“But recent years developed favorably from initial reports, and the 2016 year may exhibit similar experience as claims losses mature,” the authors said.

Although the Fitch report mentions the Affordable Care Act only briefly, the health care law is on the mind of others in the work comp industry.

Phil Kalin, president and chief executive officer of Colorado’s Pinnacol Assurance, said in an opinion piece published in the Greeley Tribune that repeal of the Affordable Care Act could end a trend of decreasing workers’ compensation medical costs.

Kalin said the association between expanded health care coverage under the ACA and declining workers' comp claims and costs is “undeniable.” Kalin said Pinnacol doesn’t have a position on the potential repeal of ACA, but it is an issue to watch.

Workers’ compensation direct written premiums grew by 1.9% last year, according to the Fitch report. But workers’ compensation pricing declined throughout 2015 and 2016, Fitch said, “and pricing trends are unlikely to change in the near term.”

A November report from A.M. Best showed that growth in workers’ comp direct written premiums has been slowing. That report, which compared the first nine months of last year with the same period of previous years, found a 1.9% increase in direct premiums written in 2016, compared to 6.2% in 2015, 6.9% in 2014 and 8.6% growth in 2013.

Direct premiums written for excess workers’ comp fell 10% in the first three quarters of 2016 compared to the prior-year period, according to A.M. Best.