Best’s News & Research Service - October 10, 2025 08:51 AM (EDT)
AM Best Affirms Credit Ratings of Zenith National Insurance Group’s Members
- October 10, 2025 08:51 AM (EDT)
//BestWire// - 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. The outlook of these Credit Ratings (ratings) is stable. These companies comprise Zenith National Insurance Group (Zenith) and are domiciled in Woodland Hills, CA.
The ratings reflect Zenith’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 (ERM).
The ratings also consider Zenith’s position as a member of Fairfax Financial Holdings Limited (Fairfax) [TSE: FFH], which includes the implicit support available from its affiliation with Fairfax. As part of the Fairfax group, the insurance operations benefit from the favorable financial flexibility and significant levels of cash and marketable securities held at the ultimate holding company level. In addition, Zenith 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’s very strong balance sheet strength assessment is supported by its strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and its long, steady track record of favorable loss reserve development, which has benefited its underwriting income materially, albeit at a reduced level in recent years. Zenith’s niche expertise and presence in the agricultural workers’ compensation (WC) market has provided inroads toward developing its ancillary property/casualty offerings to clients in these lines of business.
Zenith continues to be focused on WC in California, and more recently has used this market as an anchor for geographical and line of business diversification across the country.
While Zenith has shown consistency in its long-term operating performance, recent indicators have shown less profitability, affected by the current environment in California’s WC marketplace. Besides the rate reductions observed for the past several years, the industry also has been pressured recently by increased medical costs that can be at least partially attributed to factors associated with social inflation. Nonetheless, Zenith’s operating performance remains supportive of the current assessment of adequate. AM Best will continue to monitor and assess WC industry trends and their effects on Zenith’s operating performance.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings (BCR), Best’s Performance Assessments (PA), Best’s Preliminary Credit Assessments (PCA) and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.