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VALLEY EARNINGS

Zenith National Insurance Shows First-Quarter Gain

May 13, 1986

Zenith National Insurance Corp. reported first-quarter earnings of $3.1 million, or 21 cents a share, versus a loss of $2.6 million, or 23 cents a share, for the same quarter a year ago. First-quarter revenue for 1986 was $90.5 million, up 140%.

The improvement came despite $2 million in losses Zenith suffered from severe February rainstorms and flooding.

The Encino-based firm attributed the improved results to diversification. Last year, workers compensation coverage accounted for all the company's net premiums written, but this year it contributed only 37.5%. Net premiums are the premiums from new and renewed policies.

The diversification was accomplished partly by Zenith's acquisition last June of Cal-Farm Insurance. Cal-Farm was seized by state regulators after suffering heavy losses in its surety bond business.

Zenith also diversified by starting a re-insurance division last year that produced $23.7 million in net premiums written in the first quarter of 1986. Automobile and other kinds of insurance produced $28.8 million in net premiums written.

Fredricka Taubitz, Zenith's chief financial officer, said the company posted a large loss in the first quarter a year ago because of changes in the law regarding workers compensation.

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