Medical professionals are being more restrained about ACC claims by their patients, says Accident Compensation Corporation Minister Nick Smith.
ACC is expected to make a $2 billion surplus this year, with an improvement in investment returns and a decrease in liabilities.
Dr Smith said ACC had become flabby, but there has been a 3% drop in the number of claims in the past year.
He said there's been a culture change among claim managers and medical professionals.
However, Labour's ACC spokesperson, David Parker, says ACC's improved fortunes undermines the case for privatising it.
Meanwhile, 100s of ACC employees around the country walked off the job on Friday afternoon after discussions to resolve pay and work conditions failed.
A union representing ACC workers, the Public Service Association, says the walkout is the first industrial action taken after a year of trying to negotiate better pay.
Association national secretary Richard Wagstaff says ACC refuses to put pay rates into a collective agreement.
Mr Wagstaff says union members will take more industrial action until ACC resumes negotiations.