A.M. Best Revises Outlooks to Negative for Crusader Insurance Company

A.M. Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” of Crusader Insurance Company (Crusader). Additionally, A.M. Best has revised the outlook to negative from stable and affirmed the Long-Term ICR of “bbb-” of Crusader’s parent company, Unico American Corporation (Unico) (NASDAQ: UNAM). Both companies are headquartered in Calabasas, CA.

The negative outlooks capture A.M. Best’s concerns with Crusader’s recent declining underwriting performance, as well as the recently implemented management restructuring, as publicly disclosed by Unico, and the execution risk that comes with strategic operating changes.

The ratings reflect Crusader’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management. The Credit Rating (rating) affirmation is supported by company’s solid risk-adjusted capitalization, historically profitable underwriting and operating performance, its regional market presence and the financial flexibility of Unico.

Offsetting these positive rating factors are Crusader’s geographic concentration of risk in California and limited business profile, which subject Crusader to competitive market pressures and a challenging legislative and regulatory landscape. Furthermore, while Crusader’s policies exclude coverage for earthquakes, surplus is exposed to fire following an earthquake; however, Crusader’s reinsurance program reduces the company’s net exposure to a reasonable level.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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