Zenith Files for Rate Increase

Zenith National Insurance Corp. said late Wednesday that a subsidiary has asked the California Department of Insurance to approve a 2.7 percent increase in its workers’ compensation base rates.

The new rates for Zenith Insurance Company would go into effect for policies starting or renewing Jan. 1. The company this summer already raised rates 4 percent for policies that started July 1.

Zenith did not state a reason for the rate increase, but profits of workers’ comp and other health insurance providers have been hurt by rising medical costs. Zenith’s third quarter net income was up more than 15 percent, exceeding Wall Street expectations, but that was only due to improved investment returns. It posted an $8.5 million workers’ compensation underwriting loss before taxes.

The base rate does not necessarily reflect a company’s final premium. The premium calculation also includes an employer’s past claims experience and its business type; rates are higher in industries with greater risks for injury, such as construction.

Zenith shares were down 29 cents, or 1 percent, to $28.70 in midday trading on the New York Stock Exchange.