OLDWICK, NJ - A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of "a" of Zenith National Insurance Group (Zenith) and its members, Zenith Insurance Company and its wholly owned subsidiary, ZNAT Insurance Company.
Concurrently, A.M. Best has affirmed the ICR of "bbb" of the group's parent, Zenith National Insurance Corp. (Zenith National) (Wilmington, DE) [NYSE:ZNT]. A.M. Best also has affirmed the debt rating of "bb+" on $58.4 million 8.55% capital securities, due 2028 of Zenith National Insurance Capital Trust I. The outlook for all ratings is stable. All companies are domiciled in Woodland Hills, CA, except where specified.
The ratings reflect Zenith's excellent risk-adjusted capitalization, historically strong operating performance and management's expertise and commitment to maintain underwriting discipline throughout market cycles. The group also benefits from the financial flexibility of Zenith National, which provides the group access to capital as needed.
Somewhat offsetting these positive rating factors are the recent reduction in the company's operating profitability, reflective of the competitive market conditions in California, as well as the state mandated rate reductions in Florida over the past five years. Additionally, the concentration of written premiums within these two states exposes Zenith to regulatory and legislative changes.
Despite these concerns, the outlook recognizes Zenith's strong capital position, historically strong underwriting performance and demonstrated experience in underwriting the workers' compensation line over the long term.
Source: A.M. Best Company, Inc.