AM Best Affirms Credit Ratings of Zenith National Insurance Group’s Members
OLDWICK, N.J., October 16, 2026--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 and 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 market have provided inroads toward developing its ancillary property/casualty offerings to clients in these lines of business.
Zenith continues to be focused on workers' compensation in California, and more recently has used this market as an anchor for growing geographical and line of business diversification across the United States.
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 workers' compensation marketplace, which has been negatively affected by the rise of cumulative trauma claims. 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; in 2025, rate increases were authorized in California, and AM Best expects to see their initial positive effect on Zenith's operating performance by the end of 2026. Zenith's operating performance remains supportive of the current assessment of adequate. AM Best will continue to monitor and assess workers' compensation industry trends and their effects on Zenith's operating performance.