Exhibit 10.1

                                                                    [LETTERHEAD]
PRESS RELEASE
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BUSINESS & FINANCIAL EDITORS                         FREDRICKA TAUBITZ
                                                     Executive Vice President
FOR IMMEDIATE RELEASE                                & Chief Financial Officer


              ZENITH ANNOUNCES ADDITIONAL RISCORP-RELATED RESERVES

WOODLAND HILLS, CA October 25, 1999...................As previously reported,
Zenith National Insurance Corp (NYSE: ZNT) recorded the fair values of certain
of the assets and liabilities acquired from RISCORP on April 1, 1998 consistent
with the values determined by the Neutral Auditor and the Neutral Actuary in the
dispute resolution process associated with the determination of the purchase
price for RISCORP. Zenith reported today that it has completed a review of the
liabilities for unpaid losses and loss adjustment expenses in its Southeast
Operations, which principally consists of the operations acquired from RISCORP.
The review was conducted with assistance from independent actuarial consultants
and took account of recent developments, including data through the third
quarter of 1999.

As a result of the review, Zenith will record, in the third quarter of 1999, an
increase in the estimated liabilities for unpaid losses and loss adjustment
expenses acquired from RISCORP and certain other related adjustments. The
increase results primarily from adjustments to the reserves for the years 1994
through 1997. As previously reported, Zenith purchased reinsurance protection
for adverse loss development in connection with the RISCORP Acquisition. The
provisions of SFAS 113 relating to accounting for retroactive reinsurance
transactions require a substantial amount of the benefit associated with such
reinsurance protection to be deferred and recognized in future periods. After
the benefit of such reinsurance and of a previously reported settlement received
in July, 1999 from RISCORP, these adjustments are expected to ultimately reduce
net income and stockholders' equity by approximately $16.0 million after tax, or
$0.93 per share, through approximately the year 2003. However, because of the
deferral of the




reinsurance benefit, the impact of these reserve adjustments on net income for
the third quarter of 1999 is estimated to be a decrease of approximately $32.5
million after tax, or $1.89 per share. When the deferred reinsurance benefit is
recognized over approximately the next four years, net income is expected to
increase by approximately $16.5 million after tax.

As a result of continuing adverse operating trends in its Workers' Compensation
business and its world-wide property catastrophe reinsurance business, Zenith
expects to report an operating loss for the third quarter, excluding the impact
of the foregoing RISCORP-related adjustments. The amount of such loss may be in
the range of the second quarter of 1999 loss, but Zenith is unable to estimate
it at this time. Zenith expects to report its results for the third quarter of
1999 on or about November 4, 1999.


The Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements if accompanied by meaningful cautionary statements
identifying important factors that could cause actual results to differ
materially from those discussed. Forward-looking statements include those
related to the plans and objectives of management for future operations, future
economic performance, or projections of revenues, income, earnings per share,
capital expenditures, dividends, capital structure, or other financial items.
Statements containing words such as EXPECT, ANTICIPATE, BELIEVE, or similar
words that are used in this release or in other written or oral information
conveyed by or on behalf of Zenith are intended to identify forward-looking
statements. Zenith undertakes no obligation to update such forward-looking
statements, which are subject to a number of risks and uncertainties that could
cause actual results to differ materially from those projected. These risks and
uncertainties include but are not limited to the following: (1) heightened
competition, particularly intense price competition; (2) adverse state and
federal legislation and regulation; (3) changes in interest rates causing a
reduction of investment income; (4) general economic and business conditions
which are less favorable than expected; (5) unanticipated changes in industry
trends; (6) adequacy of loss reserves; (7) catastrophic events; (8) ability to
timely and accurately complete the Year 2000 conversion process; (9) impact of
any failure of third parties with whom Zenith does business to be Year 2000
compliant; (10) uncertainties related to the RISCORP Acquisition, including (a)
the ability of Zenith to integrate on a profitable basis the business acquired
from RISCORP, (b) the value of transferred assets and transferred liabilities,
and (c) the resolution of RISCORP's claim set forth in the Settlement Agreement
that the Neutral Auditor and Neutral Actuary allegedly made an error in its
determinations with respect to the purchase price for the RISCORP Acquisition;
(11) the changing environment for controlling medical, legal and rehabilitation
costs, as well as fraud and abuse; and (12) other risks detailed from time to
time in Zenith's reports and filings with the Securities and Exchange
Commission.