A.M. Best Affirms Ratings of Zenith National Insurance Corp. and Its Subsidiaries

A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of Zenith National Insurance Group (Zenith) and its members, Zenith Insurance Company and its wholly owned subsidiary, ZNAT Insurance Company.

Concurrently, A.M. Best has affirmed the ICR of “bbb” of the group’s parent, Zenith National Insurance Corp. (Zenith National) (Wilmington, DE) [NYSE:ZNT]. A.M. Best also has affirmed the debt rating of “bb+” on $58.4 million 8.55% capital securities, due 2028 of Zenith National Insurance Capital Trust I. The outlook for all ratings is stable. All companies are domiciled in Woodland Hills, CA, except where specified.

The ratings reflect Zenith’s excellent risk-adjusted capitalization, historically strong operating performance and management’s expertise and commitment to maintain underwriting discipline throughout market cycles. The group also benefits from the financial flexibility of Zenith National, which provides the group access to capital as needed.

Somewhat offsetting these positive rating factors are the recent reduction in the company’s operating profitability, reflective of the competitive market conditions in California, as well as the state mandated rate reductions in Florida over the past five years. Additionally, the concentration of written premiums within these two states exposes Zenith to regulatory and legislative changes.

Despite these concerns, the outlook recognizes Zenith’s strong capital position, historically strong underwriting performance and demonstrated experience in underwriting the workers’ compensation line over the long term.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.