AM Best Downgrades Issuer Credit Rating of Crusader Insurance Company

AM Best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb” from “bbb+” and affirmed the Financial Strength Rating (FSR) of B++ (Good) of Crusader Insurance Company (Crusader). The outlook of the Long-Term ICR has been revised to stable from negative while the outlook of the FSR remains stable. Concurrently, AM Best has downgraded the Long-Term ICR to “bb” from “bb+” of Crusader’s parent company, Unico American Corporation (Unico) [NASDAQ: UNAM]. The outlook of this Credit Rating (rating) has been revised to stable from negative. All companies are headquartered in Calabasas, CA.

The ratings reflect Crusader’s balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management.

The downgrade of the Long-Term ICR reflects a revision in AM Best’s assessment of the company’s operating performance to marginal from adequate. The action considers a material decline in Crusader’s operating performance, resulting from sub-par underwriting results in a relatively compact time frame. The company’s adverse performance has been amplified by increased frequency and severity of apartment building insurance related claims. Multiple operating metrics trail the commercial casualty composite on a five-year and 10-year basis. The consequential business changes being implemented to address these conditions lead to significant execution risk in returning Crusader’s operational results to historical levels.

The ratings also capture company’s solid risk-adjusted capitalization, its regional market presence and the financial flexibility of Unico. The stable outlooks indicate that no positive or negative rating actions are expected to occur in the near term.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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