Zenith National Warns of Cut in Net Income

Zenith National Insurance Corp., a workers’ compensation insurer based in Woodland Hills, said third-quarter net income will be cut $32.5 million by reserves needed to cover claims on policies sold by Riscorp Inc., a business Zenith bought a year and a half ago. Zenith National also warned of a third-quarter loss from operations because of price-cutting in the workers’ compensation business and because of mounting losses on reinsurance for hurricanes and other catastrophes. The insurer said the loss “may be in the range of its second-quarter” loss of $5 million. Including its $1.6 million of gains on investments, the insurer posted a net loss of $3.4 million, or 20 cents a share, in the second quarter. Zenith shares closed up 6 cents at $22.69 on the NYSE.