Mr. Zax: Zenith National is a specialty writer of workers' compensation insurance, which also today is in the property catastrophe reinsurance business, and has a separate investment subsidiary that actually builds homes in Las Vegas, Nevada.
TWST: Is the workers' comp part of the business still by far the
biggest?
Mr. Zax: Workers' comp business is probably about 90% of the business.
TWST: When you look at that segment of the market, what do you see going
on? How big is it and how fast is it growing?
Mr. Zax: The workers' comp market in the country is about a $31 billion
market. During the last several years it's been in what one might call a
loss-leader mode, or price-cutting mode. The amount of money that's
being lost by the insurance industry is quite enormous. The combined
ratio on a national basis in the last year or two has been north of 125,
130. In California it's been running about 150. So it's a troubled
business at the present time. It looks like that's starting to change '
earlier this year there were price increases around the country, most
notably in California. But that's on the premium side of the business.
At the same time as there are increases in the rates that are being
charged, there also continues to be some substantial increases in the
cost.
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