AM Best has upgraded the long-term issuer credit ratings (ICR) to “a+” (Excellent) from “a” (Excellent) and affirmed the financial strength rating of A (Excellent) of Zenith Insurance and ZNAT Insurance. The two companies are members of Zenith National Insurance Group (Zenith National) and are domiciled in Woodland Hills, California. The outlook of these credit ratings is stable. AM Best says the ratings reflect Zenith National’s balance sheet strength, which it assesses as “very strong”, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). The upgrade of the long-term ICR reflects Zenith National’s position as a member of the Fairfax Financial Holdings Limited (Fairfax). This includes the implicit support available from its affiliation with Fairfax. As part of the Fairfax group, the insurance operations benefit from financial flexibility and levels of cash and marketable securities held at the ultimate holding company level. Zenith National also benefits from shared resources including ERM, reinsurance, actuarial, talent and investment portfolio management services, among other less quantifiable benefits such as best practices and capital management. Zenith National continues to record solid operating profitability in the workers’ compensation market despite this segment’s challenging market conditions. Zenith National’s “very strong” balance sheet strength assessment is supported by its risk-adjusted capitalisation being consistently at the strongest level, as measured by AM Best’s capital adequacy ratio. The ratings company adds that “its steady track record of favourable loss reserve development has materially benefited its underwriting income.”
