Zenith National 2nd-qtr profit drops 57 percent

Zenith National Insurance Corp. said Tuesday its second-quarter profit dropped 57 percent, hurt by losses in its investment portfolio and a decline in net premiums earned.

For the three months ended June 30, the company reported net income of $28.4 million, or 76 cents per share, compared with $65.3 million, or $1.75 per share, in the year-ago period.

Results include net realized losses on investments after tax of $1.5 million, or 4 cents per share, compared with net realized gains on investments of $3.4 million, or 9 cents per share, in the 2007 quarter. The losses on investments include a writedown of $5.6 million, or 15 cents per share, on two securities, the company said.

Analysts, on average, expected earnings of $1.10 per share, according to a poll by Thomson Financial.

Total revenue fell 20 percent to $174.4 million from $219.1 million in the second quarter of last year.

Net premiums earned fell 17 percent to $154.4 million from $186.3 million. Net premiums written also declined, falling 16 percent to $152.4 million.

The company's combined ratio jumped to 82.8 percent from 61.7 percent. Combined ratios measure the amount of money insurers pay out in claims and expenses compared with how much they receive from writing new business. A ratio above 100 means the insurer pays out more in claims and expenses than it takes in from writing new premiums.

Shares dropped $1.89, or 5.2 percent, to $34.76 in afternoon trading. Shares have traded between $32.97 and $46.98 in the past 12 months.