OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” (Excellent) of Zenith Insurance Company and ZNAT Insurance Company, which are members of Zenith National Insurance Group (Zenith National) and are domiciled in Woodland Hills, CA. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Zenith National’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The rating affirmations reflect the group’s continued solid operating profitability in the workers’ compensation market despite challenging market conditions in this business line. Zenith’s very strong balance sheet assessment is supported by its consistently strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and track record of favorable loss reserve development, which has materially benefited underwriting income in recent years. Zenith National’s niche expertise and presence in the agricultural workers’ compensation market has provided inroads toward developing its ancillary property/casualty offerings to clients in that space. These products have been profitable, which has helped to mitigate partially the impact of softening market conditions in the workers’ compensation market over the past several years.
Zenith also benefits from the financial flexibility provided by Fairfax Financial Holdings Limited, the publicly traded ultimate parent, which maintains financial leverage that is in line with its current ratings, as well as additional liquidity sources given its access to capital markets and lines of credit.
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