Zenith Announces Three-for-Two Stock Split and Quarterly Dividend

Woodland Hills, Calif.-based Zenith National Insurance Corp. announced that its Board of Directors has approved a 3-for-2 stock split to be paid in the form of a stock dividend. Each stockholder of record at the close of business on Sept. 19, 2005 will receive one additional share of common stock for every two shares of common stock that they owned as of such date. The additional shares will be distributed on Oct.11, 2005. A stockholder who would otherwise be entitled to receive a fractional share of common stock will receive in lieu thereof, cash in a proportional amount based on the closing price of the common stock on the New York Stock Exchange on the record date.

Commenting on the stock split, Stanley R. Zax, Chairman and President, said “This decision to declare a stock split was based on continuing financial success in our workers’ compensation business and a decision made today by our Board of Directors to exit the reinsurance business in order to reduce the volatility of our net income. We currently expect the net after tax loss in the third quarter from Hurricane Katrina to be about $21 million or $0.85 per share. This initial estimate is subject to substantial uncertainty and is based on preliminary information from some ceding companies and a preliminary review of our assumed reinsurance contracts. At this time, no workers’ compensation claims directly related to Hurricane Katrina have been reported to us.”

Zenith also today declared a regular quarterly cash dividend of $0.25 per share on its outstanding shares of common stock. The dividend is payable Nov. 15, 2005, to stockholders of record at the close of business on Oct. 31, 2005. After giving effect to the 3-for-2 stock split, the amount of this cash dividend is equivalent to $0.375 per share on a pre-split basis, which is an increase over the $0.33 per share regular quarterly cash dividend paid by Zenith on Aug. 12, 2005.