CAAA SAYS WORKERS’ COMP PROFITS UP 25%-36%:

Fourth quarter and 2004 annual earnings statements from leading California workers’ comp insurance carriers are coming in, and profits are reportedly up by 25 to 36 percent over 2003–and 2003 was already the most profitable year on record, according to the California Applicant Attorneys Association. Zenith National, with California workers’ comp insurance representing almost two-thirds of its business, reported 2004 fourth quarter net income of $25.4 million, up 57 percent over the $16.1 million in 2003. AIG, the state’s largest private workers’ comp insurer, reported record profits of $11.05 billion for 2004, up 19 percent from 2003. This record profit came despite a 1300 percent increase in catastrophe losses from hurricanes, earthquakes and tsunamis. Zenith National reported 2004 fourth quarter after-tax net income of $43.7 million, more than double the $20.8 million profit in the fourth quarter of 2003. Profits for the entire year were up similarly, climbing from $67 million in 2003 to $119 million in 2004. Income (before taxes) from Zenith’s workers’ comp operations grew at an even faster rate in 2004, climbing more than 250 percent from $29.3 million in 2003 to $104 million in 2004. American Financial Group reported that “solid underwriting profits” from its California workers’ comp business contributed to the record profits reported for 2004. Earnings from insurance operations were up 43 percent in the fourth quarter of 2004. The company reported sharply improved results following the recent reforms enacted in California.

Topics California Profit Loss Workers' Compensation