Zenith National Insurance (ZNT) 8-K/A Acquisition or disposition of assets

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Exhibit 99.3

Pro forma Financial Information of Zenith National Insurance Corp.

The following unauditedpro forma financial information of Zenith National Insurance Corp. ("Registrant"), together with related notes, are included:

1.

Pro forma condensed consolidated balance sheet for the six months ended June 30, 2002



2.

Pro forma condensed consolidated statement of operations for the six months ended June 30, 2002



3.

Pro forma condensed consolidated statement of operations for the year ended December 31, 2001

The unauditedpro forma condensed consolidated balance sheet of Registrant at June 30, 2002 gives effect to the purchase (the "Purchase") of approximately 19.2 million Ordinary Shares of Advent Capital (Holdings) PLC ("Advent Capital") as if the Purchase had been consummated on that date. The unauditedpro forma condensed consolidated statements of operations for the six months ended June 30, 2002 and for the year ended December 31, 2001 give effect to the Purchase as if it had occurred on January 1, 2001.

Thepro forma financial information as of and for the six months ended June 30, 2002 was prepared from (1) Registrant's unaudited historical Consolidated Financial Statements and notes thereto as of the end of and for such period and (2) Advent Capital's unaudited historical summary Group Financial Statements and notes thereto as of the end of and for such period. Thepro forma financial information for the year ended December 31, 2001 was prepared from (1) Registrant's audited historical Consolidated Financial Statements and notes thereto for such period and (2) Advent Capital's audited historical Group Financial Statements and notes thereto for such period. Advent Capital's financial statements are presented in accordance with accounting standards that differ from Generally Accepted Accounting Principles in the United States of America ("US GAAP"). Thepro forma consolidated financial information contains certain adjustments to amounts recorded in Advent Capital's financial statements in order to reflect US GAAP. Such adjustments were related, principally, to deferred income taxes; liabilities for pension obligations; and amounts recorded by Advent Capital in connection with purchase accounting. These adjustments, in the aggregate, decreased Advent Capital's net loss in 2001 by approximately $17.3 million and decreased the net loss in the six months ended June 30, 2002 by approximately $3.8 million.

Thepro forma consolidated financial information has been prepared on the basis of preliminary assumptions and estimates. The pro forma adjustments represent Registrant's preliminary determinations of these adjustments and are based on available information and certain assumptions Registrant considers reasonable under the circumstances. Thepro forma financial information is presented for illustrative purposes only and may not be indicative of the results of operations and financial position of Registrant, as it may be in the future or as it might have been had the transactions been consummated on the respective dates assumed. Thepro forma financial information presented herein also gives effect to the sale of Registrant's real estate assets and home building business and related transactions on October 8, 2002. See Registrant's Current Report on Form 8-K dated October 8, 2002 for thepro forma information that gives effect to only the sale and related transactions.

Thepro forma financial information should be read in conjunction with (1) Registrant's historical Consolidated Financial Statements and notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included (or incorporated by reference) in Registrant's 2001 Annual Report on Form 10-K and Registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2002 and (2) Advent Capital's historical Group Financial Statements and notes thereto.

ZENITH NATIONAL INSURANCE CORP.
PRO FORMA CONDENSED, CONSOLIDATED BALANCE SHEET (UNAUDITED)
As of June 30, 2002

					Pro Forma Adjustments
In thousands of Dollars		Historical (a)
					(b)			(c)			Pro Forma
Assets:
Investments:
Fixed maturities
	At amortized cost (fair value $64,331)	$	63,569								$	63,569
	At fair value (cost $603,559)		606,527					$	(50	)		606,477
Floating rate preferred stocks, at fair value (cost $6,799)			6,361									6,361
Convertible and non-redeemable preferred stocks, at fair value (cost $5,488)			6,039									6,039
Common stocks, at fair value (cost $33,247)			32,096									32,096
Short term investments (at cost, which approximates fair value)			159,275						(50	)		159,225
Other investment			63,538		$	11,446						74,984
	Total investments		937,405			11,446			(100	)		948,751
Cash			26,754			(14,607	)		60,968			73,115
Accrued investment income			11,147									11,147
Premiums receivable, less allowance for doubtful accounts of $6,776			86,557									86,557
Receivable from reinsurers and state trust funds for paid and unpaid losses			270,550									270,550
Deferred policy acquisition costs			13,220									13,220
Properties and equipment, less accumulated depreciation			48,941						(199	)		48,742
Deferred tax assets			33,868			1,106			1,728			36,702
Intangible assets			21,485									21,485
Other assets			83,536						(59,906	)		23,630
	Total Assets:	$	1,533,463		$	(2,055	)	$	2,491		$	1,533,899
Liabilities:
Policy liabilities and accruals
	Unpaid loss and loss adjustment expense	$	963,737								$	963,737
	Unearned premium		85,928									85,928
Policyholder's dividend accrued			3,638									3,638
Reserves on loss portfolio transfers			12,134									12,134
Payable to banks			12,308					$	(12,308	)		—
Current federal income tax payable			1,788						4,563			6,351
Other liabilities			77,305						3,282			80,587
	Total Liabilities:		1,156,838			—			(4,463	)		1,152,375
Redeemable Securities			65,694									65,694
Stockholders' Equity:
Preferred stock			—									—
Common stock			25,765									25,765
Additional paid-in capital			296,489									296,489
Retained earnings			119,563		$	(2,055	)		6,954			124,462
Accumulated other comprehensive income—net unrealized appreciation on investments, net of tax			1,256									1,256
			443,073			(2,055	)		6,954			447,972
Treasury stock at cost			(132,142	)								(132,142	)
Total Stockholders' Equity			310,931			(2,055	)		6,954			315,830
Total Liabilities, Redeemable Securities & Stockholders' Equity:		$	1,533,463		$	(2,055	)	$	2,491		$	1,533,899

(a)

Historical information is as previously published in Zenith's quarterly report on Form 10Q for the quarterly period ended June 30, 2002.

(b)

Adjustment to record the purchase of additional 19,207,747 ordinary shares of Advent Capital on August 23, 2002. Prior to August 23, 2002, Zenith owned approximately 6.3% of the outstanding shares of Advent Capital. This adjustment records the cumulative effect of the change to equity method accounting for the investment in Advent Capital by recording Zenith's equity in Advent Capital's prior period net losses attributable to Zenith's ownership percentage prior to the August 23, 2002 additional share acquisition.

(c)

Adjustment to record disposal of the previously consolidated real estate assets and liabilities and home building business of Perma Bilt; to record the receipt of the purchase price and repayment of the inter company loan between Zenith and Perma Bilt; and to record the applicable estimated expenses and taxes, and the estimated gain on the sale.

ZENITH NATIONAL INSURANCE CORP.
PRO FORMA CONDENSED, CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
For the six months ended June 30, 2002

					Pro Forma Adjustments
Dollars in Thousands, except per share amounts
		Historical (a)			(b)			(c)			Pro Forma
Revenues
	Premiums earned	$	248,804								$	248,804
	Net investment income		25,470									25,470
	Realized losses on investments		(854	)								(854	)
	Real estate sales		45,311					$	(45,311	)		—
	Total Revenues		318,731									273,420
Expenses
	Loss and loss adjustment expenses incurred		183,698									183,698
	Policy acquisition costs		44,980									44,980
	Other underwriting and operating expenses		28,721									28,721
	Policyholder's dividends and participation		1,417									1,417
	Real estate construction costs		42,370						(42,370	)		—
	Interest expense		3,185									3,185
	Total Expenses		304,371									262,001
Income before federal income tax expense and equity in net loss of investee			14,360						(2,941	)		11,419
Federal income tax expense			5,060						(1,029	)		4,031
Equity in net loss of investee, net of tax					$	(348	)					(348	)
Net Income		$	9,300		$	(348	)	$	(1,912	)	$	7,040
EARNINGS PER SHARE
	Basic	$	0.50								$	0.38
	Diluted		0.49									0.37
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
	Basic		18,647									18,647
	Diluted		18,913									18,913

(a)

Historical information is as previously published in Zenith's Quarterly Report on Form 10Q for the period ended June 30, 2002.

(b)

To record Zenith's equity in Advent Capital's net loss for 6 months ended June 30, 2002 net of tax, assuming 20.9% ownership as of January 1, 2001.

(c)

To record the disposal of the previously consolidated revenues and expenses of Zenith's real estate and home building business operated by Perma Bilt. The estimated gain on the sale has not been reflected in the pro forma adjustments since such gain on sale would be a non-recurring transaction. The pro forma adjustments do not reflect any investment income that would be earned on the cash received.

ZENITH NATIONAL INSURANCE CORP.
PRO FORMA CONDENSED, CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
For the year ended December 31, 2001

					Pro Forma Adjustments
Dollars in Thousands, except per share amounts
		Historical (a)			(b)			(c)			Pro Forma
Revenues
	Premiums earned	$	476,876								$	476,876
	Net investment income		51,178									51,178
	Realized gains on investments		9,169									9,169
	Real estate sales		84,823					$	(84,823	)		—
	Total Revenues		622,046									537,223
Expenses
	Loss and loss adjustment expenses incurred		432,290									432,290
	Policy acquisition costs		87,823									87,823
	Other underwriting and operating expenses		48,858									48,858
	Policyholder's dividends and participation		1,978									1,978
	Real estate construction costs		79,060						(79,060	)		—
	Interest expense		7,576									7,576
	Total Expenses		657,585									578,525
Income before federal income tax expense and equity in net loss of investee			(35,539	)					(5,763	)		(41,302	)
Federal income tax benefit			(11,739	)					(2,017	)		(13,756	)
Equity in net loss of investee, net of tax					$	(7,392	)					(7,392	)
Net Loss		$	(23,800	)	$	(7,392	)	$	(3,746	)	$	(34,938	)
EARNINGS PER SHARE
	Basic & Diluted	$	(1.35	)							$	(1.99	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
	Basic & Diluted		17,593									17,593

(a)

Historical information is as previously published in Zenith's Annual Report on Form 10-K for the year ended December 31, 2001.

(b)

To record Zenith's equity in Advent Capital's net loss for 2001 net of tax assuming 20.9% ownership as of January 1, 2001. Advent Capital's net loss in 2001 was attributable principally to losses sustained in connection with the terrorist attack on the World Trade Center on September 11, 2001.

(c)

To record the disposal of the previously consolidated revenues and expenses of Zenith's real estate and home building business operated by Perma Bilt. The estimated gain on the sale has not been reflected in the pro forma adjustments since such gain on sale would be a non-recurring transaction. The pro forma adjustments do not reflect any investment income that would be earned on the cash received.

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ZENITH NATIONAL INSURANCE CORP. PRO FORMA CONDENSED, CONSOLIDATED BALANCE SHEET (UNAUDITED) As of June 30, 2002
ZENITH NATIONAL INSURANCE CORP. PRO FORMA CONDENSED, CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) For the six months ended June 30, 2002
ZENITH NATIONAL INSURANCE CORP. PRO FORMA CONDENSED, CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) For the year ended December 31, 2001