Zenith National Lowered

Zenith National Insurance Corp. (ZNT), Zenith Capital Trust I, and the members
of the Zenith National Insurance Group Intercompany Pool had their ratings lowered by Standard & Poor’s. The outlook is negative.

ZNT is primarily an insurance holding company with ZNIG as its major operating unit. ZNIG mainly writes workers’ compensation insurance, as well as worldwide property catastrophe reinsurance.

ZNIG was able to post a modest profit in the first quarter of 2001 before taxes and policyholders’ dividends; however, competition in California could stay heavy enough to prevent a return to adequate earnings. If ZNT and ZNIG fail to post the break-even to modestly profitable results in 2001 that S&P expects, or if they fail to show significant improvement in 2002, S&Psmight lower the ratings further.