Author Topic: zenith  (Read 18494 times)

FFHWatcher

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Re: zenith
« Reply #60 on: February 21, 2010, 06:57:25 PM »
Isn't it almost comical that Google Ads is advertising at the top of this Message Board by asking,

      "Shareholder Alert - ZNT
      Unhappy with Zenith National Deal? Call 212.363.7500 or visit
      www.zlk.com"

(I apologize if it was already mentioned. I haven't read all the thread)


omagh

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Re: zenith
« Reply #61 on: February 22, 2010, 09:05:21 AM »
Surprise! S&P and AM Best have a different opinion on Zenith/Fairfax. 

http://www.insurancejournal.com/news/national/2010/02/22/107526.htm

Neither Standard & Poor's Ratings Services nor A.M. Best are currently expecting to change their ratings on Zenith National Insurance Corp or on Toronto-based Fairfax Financial Holdings, following the announcement on Thursday, Feb. 15, that it will buy all the shares of Zenith that it does not already own in a deal worth about $1.4 billion [See IJ web site - http://www.insurancejournal.com/news/national/2010/02/18/107455.htm ].

S&P affirmed its 'BBB-' counterparty credit rating on Zenith and its 'A-' counterparty credit and financial strength ratings on Zenith Insurance Co. and ZNAT Insurance Co., which are the members of the Zenith Insurance Group Intercompany Pool.

Best commented that the financial strength rating of 'A' (Superior) and issuer credit ratings (ICR) of a of the operating companies of Zenith National Insurance Corp. and the ICR of bbb of Zenith "remain unchanged" following the announcement of the Fairfax deal.

Both rating agencies also stated that the outlook on all of Zenith's ratings also remains stable.
Fitch isn't fully on board.  It's the usual knock on Fairfax by the rating companies.  Even with FFH's track record of investing since 1976, the rating companies prefer to have bond coupons matched to liabilities.

http://www.businessweek.com/ap/financialnews/D9DVHJT00.htm
  • Fitch Ratings on Friday said it has placed the ratings of Zenith National Insurance Corp. on watch for a possible downgrade because it expects the company that wants to buy Zenith to manage its investments more aggressively.
  • Fitch said it expects Fairfax to leave Zenith's management in place, so operations shouldn't change much. But Fairfax will take over management of Zenith's investments, which have been run conservatively in the past, Fitch wrote.  Fitch wrote that it put Zenith ratings on "watch negative" because of concerns about Fairfax's "more opportunistic investment philosophy, as Fitch expects a gradual migration toward a riskier investment profile for Zenith." Fitch wrote that Zenith's investments are just 3 percent equities, with 90 percent in investment-grade bonds.  Other Fairfax subsidiaries put more of their money in stock, "and while this could potentially bode well for long-term performance, it also introduces increased volatility and risk to the balance sheet," Fitch wrote.

Looks like somebody is back into zenith

twacowfca

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Re: zenith
« Reply #62 on: March 10, 2010, 12:02:15 PM »
Here are two articles about the long-tail risk from catastrophic Workers Comp claims.  One is about a small insurance company that failed.  The other profiles a family with large medical bills after a horrible accident.

The relevance for Fairfax:  Its good that Zenith has many decades of experience, reserving for long-tail Workers Comp claims.

http://www.ajc.com/business/insolvent-insurer-is-focus-319843.html

http://www.ajc.com/business/injured-workers-living-in-319824.html