Zenith National Insurance Corp. Announces Q2 Results

Woodland Hills, Calif.-based Zenith National Insurance Corp. reported net income of $18.4 million, or $0.97 per share, for the second quarter of 2003 compared to net income of $6.5 million, or $0.34 per share, for the second quarter of 2002. Net income for the six months ended June 30, 2003 was $30.1 million, or $1.60 per share, compared to net income for the six months ended June 30, 2002 of $9.3 million, or $0.49 per share.

Gross workers’ compensation premiums written increased about 50 percent and 54 percent in the three and six months ended June 30, 2003, respectively, compared to the corresponding periods of 2002. In California, gross workers’ compensation premiums written increased about 73 percent and 81 percent in the three and six months ended June 30, 2003, respectively, compared to the corresponding periods of 2002.

The combined ratio for the property-casualty insurance operations was 96.5 percent for the six months ended June 30, 2003 compared to 103.1 percent for the six months ended June 30, 2002 and 106.5 percent for the year ended Dec. 31, 2002. The combined ratio for the workers’ compensation operations for the six months ended June 30, 2003 was 97.5 percent compared to 105.2 percent for the six months ended June 30, 2002 and 108.7 percent for the year ended Dec. 31, 2002.

Book values per share at June 30, 2003 and Dec. 31, 2002 were $19.10 and $16.89, respectively.

Commenting on the results, Stanley R. Zax, chairman & president, said, “Underwriting income and cash flow continued to improve primarily due to rate increases in our workers’ compensation business and an absence of catastrophes in our reinsurance business. Net income increased due to realized capital gains in our investment portfolio and the improved underwriting results. Book value per share increased due to the growth in net income and the increase in the market value of our investment portfolio.

“We are encouraged about future workers’ compensation underwriting results as rate increases already implemented will continue to flow through our quarterly financials in increasing amounts that outpace estimated loss cost trends.

“We support meaningful legislative solutions to the workers’ compensation affordability crisis in California. Unfortunately this issue is being deferred until the budget impasse is resolved, and even then it is not predictable what action, if any, will result. In Florida, our second largest state, meaningful workers’ compensation reform was recently enacted, effective October 1, 2003.”