Zenith National Insurance Reports $41.9 Million Q1 income

Woodland Hills, Calif.-based Zenith National Insurance Corp. (NYSE: ZNT) reported net income for the first quarter 2008 of $41.9 million, or $1.12 per share, compared to net income for the first quarter 2007 of $64.5 million, or $1.73 per share. Net income includes realized gains on investments after tax of $2.9 million, or $0.08 per share, in the first quarter 2008 compared to $3.9 million, or $0.10 per share, in the first quarter 2007. Underwriting income before tax from the workers’ compensation segment was $40 million for the first quarter 2008 compared to $61.4 million for the first quarter 2007.

According to company figures, total workers’ compensation net premiums earned decreased 18.1 percent in the first quarter 2008 compared to the first quarter 2007, with California workers’ compensation net premiums earned decreasing 22 percent for the comparable periods. These decreases reflect both the reduction in premium rates due to favorable loss cost trends from the California and Florida legislative reforms, as well as the impact of competition, the company stated. Insured payroll, the company’s best indicator of exposure, decreased less than 1 percent in the first quarter 2008 compared to Dec. 31, 2007 for both California and outside California. For the twelve months ended December 31, 2007, insured payroll decreased 14.5 percent in California and increased 1.1 percent outside California.

Commenting on the results, Stanley R. Zax, chairman and president, said: “Our combined ratio during the quarter is favorable due to a continuation of declining claim frequency trends. We are searching for attractive investment opportunities due to the percentage of our portfolio held in cash.”

Source: Zenith