Zenith Announces Fourth Quarter Results

February 1, 2005

Woodland Hills, Calif.-based Zenith National Insurance Corp. reported net income of $43.7 million, or $1.83 per share, for the fourth quarter of 2004 compared to net income of $20.8 million, or $0.92 per share, for the fourth quarter of 2003. Net income includes realized gains on investments after tax of $16.7 million, or $0.68 per share, in the fourth quarter of 2004 compared to $3.1 million, or $0.13 per share, in the fourth quarter of 2003.

Net income for the year ended Dec. 31, 2004 was $119.0 million, or $5.07 per share, compared to net income for the year ended Dec. 31, 2003 of $67.0 million, or $3.11 per share. Net income includes realized gains on investments after tax of $24.7 million, or $1.01 per share, in the year ended Dec. 31, 2004 compared to $12.6 million, or $0.55 per share, in the year ended Dec. 31, 2003.

Workers’ compensation net premiums earned increased approximately 20 percent and 27 percent in the fourth quarter and year ended Dec. 31, 2004, respectively, compared to the corresponding periods of 2003. In California, workers’ compensation net premiums earned increased approximately 22 percent and 36 percent in the fourth quarter and year ended Dec. 31, 2004, respectively, compared to the corresponding periods of 2003.

The combined ratio for the workers’ compensation segment for the year ended Dec. 31, 2004 was 88.5 percent compared to 95.9 percent for the year ended Dec. 31, 2003. The combined ratio for the reinsurance segment for the year ended Dec. 31, 2004 was 128.2 percent compared to 84.3 percent for the year ended Dec. 31, 2003.

Consolidated net cash flow from operating activities was $345.9 million for the year ended Dec. 31, 2004 compared to $283.8 million for the year ended Dec. 31, 2003. Consolidated stockholders’ equity per share at Dec. 31, 2004, Sept. 30, 2004, June 30, 2004, March 31, 2004 and Dec. 31, 2003 was $25.92, $23.82, $21.81, $22.05 and $20.27, respectively. Return on average equity in the year ended Dec. 31, 2004 was 27.2 percent compared to 18.8 percent in the corresponding period of 2003.

Commenting on the results, Stanley R. Zax, Chairman & President, said: “2004 net income reflects the continued growth and improved profitability in our workers’ compensation segment and substantial realized gains from investments offset, in part, by reinsurance losses due to the Florida hurricanes. We begin 2005 financially strong and optimistic about continuing to grow premiums and profitability.”

Was this article valuable?

Here are more articles you may enjoy.