Fitch assigned an “A-” insurer FSR to Zenith National Insurance Corp.’s (Zenith National) three insurance subsidiaries, Zenith Insurance Co. (Zenith Insurance), ZNAT Insurance Company and Zenith Star Insurance Co. Fitch also assigned a long-term issuer rating of “BBB-” to Zenith National as well as its general unsecured nine percent senior notes due 2002, and a “BB+” rating to Zenith National Insurance Capital Trust I securities. The rating outlook is stable.
Rating factors include Zenith National’s disciplined underwriting focus, historically low combined and operating ratios, strong capitalization and reasonable financial leverage, and overall conservative and liquid investment portfolio. Partially offsetting these positives are business line and geographical concentration risks, competitive conditions in the workers’ compensation market, and recent poor operating performance.
Zenith National historically reported favorable operating performance, but experienced sub-par underwriting results in 1999 and 2000 due in large part to industry-wide premium reductions in workers’ comp.
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