ZENITH REPORTING LOSSES SEPT. 11 ATTACKS CITED IN $7.3 MILLION HIT.Byline: Evan Pondel Staff Writer
WOODLAND HILLS - Zenith zenith, in astronomy, the point in the sky directly overhead; more precisely, it is the point at which the celestial sphere is intersected by an upward extension of a plumb line from the observer's location. National Insurance Corp. on Wednesday Wednesday: see week. said it lost $7.3 million in the fourth quarter, most of it attributed to the Sept. 11 terrorist attacks.
``We pray and hope that this is a one-time one-time
1. or one·time
a. Occurring or undertaken only once: a one-time winner in 1995.
b. occurrence,'' said Stanley Stanley, town (1991 pop. 1,557), capital of the Falkland Islands, S Atlantic Ocean, on East Falkland island. It is the main port and trading center of the islands. The name is sometimes written as Port Stanley. Zax zax
A tool similar to a hatchet, used for cutting and dressing roofing slates.
[Variant of sax, from Middle English, knife, from Old English seax; see sek- , chairman, president and chief executive officer of Woodland Hills- based Zenith.
The loss for the quarter that ended Dec. 31 equaled 41 cents a share. In the year-ago period, Zenith recorded a loss of $10.6 million, or 61 cents per share Cents per share
The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. .
Fourth-quarter revenues were $163.3 million, compared with $125.4 million a year ago. For the year, the insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual.
An insurer is frequently an insurance company and is also known as an underwriter. lost $23.8 million, or $1.35 a share, versus a loss of $46.8 million, or $2.72 per share, the same period last year.
Revenues for 2001 were $622 million, compared with $459.6 million.
The company said that claims from the attacks cost it $24.4 million after tax.
Analysts think the company is still in good shape.
``Looking long beyond these results, most of these guys (companies in the insurance sector) look pretty strong,'' said Aaron Westrate, analyst with Morningstar in Chicago. ``You need to think forward.''
Westrate's optimism stems from the ability of companies like Zenith to raise premiums in the wake of a major tragedy. Westrate said insurance companies are increasing their premiums across the board, which will invariably in·var·i·a·ble
Not changing or subject to change; constant.
in·vari·a·bil lead to greater profits.
After Sept. 11, Zenith's stock plunged $5 as investors became nervous about the losses insurance companies were likely to face, Westrate said. However, just as October set in, Zenith shares began rising again.
``These companies may have taken a huge dip post Sept. 11, but that reversed as investors caught onto the idea,'' he said. ``The longer term picture became clearer with most of these companies being able to increase their premiums.''
For Zax, the ability to raise premiums decreases the sting of Zenith's less-than-stellar results. He said tragedies like Sept. 11 are obviously catastrophic, but that's what keeps insurance companies in business.
``It's the purest form of insurance ... and the whole world is a buyer,'' he said. ``If events are horrible, premiums go up. Now that prices are rising, it's one of the few places the seller has some kind of pricing capability.''
As companies are able to raise their premiums with relative ease, some firms known as reinsurers are seeing an opportunity to enter the field. Westrate said reinsurers, who provide financial support for insurance companies, can enter the sector with little overhead.
``They have no history and can emerge in the field charging the same premiums as these larger insurance companies,'' he said.
While Zenith's reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. business isn't a vital source of income for the company, its pricing has increased. Zax said that barring major catastrophes, he's optimistic op·ti·mist
1. One who usually expects a favorable outcome.
2. A believer in philosophical optimism.
op about the company's future in this area.
Even so, one concern that may arise for Zenith and other insurance companies is the amount of reinsurers entering the field.
'`With more capital pouring into the field, it could restrain the length at which the players are raising their premiums,'' Westrate said.
Zenith shares declined 20 cents to $29.90 on Wednesday.