Zenith National Insurance Corp. reported sharply reduced second quarter earnings Tuesday as the workers’ compensation insurer was buffeted by increased industry competition.

The Woodland Hills-based company reported net income of $28.4 million ($0.76 per share) for the quarter ended June 30, compared to $65.3 million ($1.75) for the same period last year.

Net premiums earned for the quarter were off 17 percent to $154 million.

Zenith said its workers’ compensation premium dollars in California fell 20 percent in the first six months of 2008. The company said that workers’ compensation reforms enacted four years ago have reduced the cost of providing workers’ compensation insurance and therefore the amount that Zenith can charge its customers.

The release also cited the “impact of competition.” Several insurers have entered or re-entered the California market in the last few years as underwriting conditions improved following the 2004 reforms. These new entrants have helped push down premium costs, proving a bonanza for employers footing the bill but putting increased pressure on insurers.

Shares of Zenith closed down nearly 7 percent to $34.15 on the New York Stock Exchange.