Unico American Corp. (UNAM, Financial) filed Quarterly Report for the period ended 2010-06-30.
Unico American Corp. has a market cap of $47.7 million; its shares were traded at around $9 with a P/E ratio of 20.9 and P/S ratio of 1.2.
The Company had net income of $448,223 for the three months ended June 30, 2010, compared to net income of $684,066 for the three months ended June 30, 2009, a decrease of $235,843 (34%). For the six months ended June 30, 2010, the Company had net income of $947,416 compared to net income of $1,713,310 for the six months ended June 30, 2009, a decrease of $765,894 (45%). Total revenues decreased $1,266,209 (12%) to $9,387,035 for the three months and $1,956,823 (9%) to $19,284,848 for the six months ended June 30, 2010, compared to total revenues of $10,653,244 for the three months and $21,241,671 for the six months ended June 30, 2009, respectively.
Premium written (before reinsurance) is a non-GAAP financial measure which is defined, under statutory accounting, as the contractually determined amount charged by the Company to the policyholder for the effective period of the contract based on the expectation of risk, policy benefits, and expenses associated with the coverage provided by the terms of the policies. Premium written is a required statutory measure designed to determine written premium production levels. Premium earned, the most directly comparable GAAP measure, represents the portion of premiums written that is recognized as income in the financial statements for the period presented and earned on a pro-rata basis over the term of the policies. Direct written premium reported on the Company s statutory statement decreased $1,362,542 (14%) and $3,510,592 (17%), to $8,544,855 and $17,013,813 for the three and six months ended June 30, 2010, respectively, compared to $9,907,397 and $20,524,405 for the three and six months ended June 30, 2009, respectively. In addition to the increased competition in the property and casualty marketplace, the Company took action on two of its programs that it believed was necessary due to higher than expected losses. The corrective actions took place in April 2009 and included a rate increase on one of the programs and the termination of a number of brokers and the non-renewal of policies associated with those brokers on the other program. These two programs accounted for approximately 50% of the $3,510,592 decrease in written premium before reinsurance for the six months ended June 30, 2010, compared to the prior year period The Company believes that rate adequacy is more important than premium growth and that underwriting profit (net earned premium less losses and loss adjustment expenses and policy acquisition costs) is its primary goal.
Premium earned before reinsurance decreased $1,259,878 (12%) to $8,962,425 for the three months and $1,744,867 (9%) to $18,351,583 for the six months ended June 30, 2010, compared to $10,222,303 for the three months and $20,096,450 for the six months ended June 30, 2009, respectively. The Company writes annual policies and, therefore, earns written premium over the one-year policy term. The decrease in earned premium before reinsurance is a direct result of the decrease in written premium during the twelve-month period ended June 30, 2010, as compared to premium written during the twelve-month period ended June 30, 2009.
Earned ceded premium decreased $485,333 (21%) to $1,873,791 for the three months and $793,390 (17%) to $3,820,722 for the six months ended June 30, 2010, compared to ceded premium of $2,359,124 in the three months and $4,614,112 for the six months ended June 30, 2009, respectively. The decrease in earned ceded premium is primarily a result of a decrease in direct premium earned and changes in the rates charged by Crusader s reinsurers. The Company evaluates each of its ceded reinsurance contracts at their inception to determine if there is a sufficient risk transfer to allow the contract to be accounted for as reinsurance under current accounting literature. As of June 30, 2010, all such ceded contracts are accounted for as risk transfer reinsurance. Direct earned premium and earned ceded premium are as follows:
Investment income decreased $235,853 (21%) to $908,479 for the three months ended June 30, 2010, compared to investment income of $1,144,332 for the three months ended June 30, 2009. Investment income decreased $520,662 (22%) to $1,847,797 for the six months ended June 30, 2010, compared to investment income of $2,368,459 for the six months ended June 30, 2009. The Company had no realized gains or losses for the three and six months ended June 30, 2010. The decrease in investment income in the current periods as compared to the prior year periods is primarily a result of a decrease in invested assets and a decrease in the Company s annualized weighted average yield to 2.7% for the three months and six months ended June 30, 2010, respectively, from 3.2% for the three months and 3.3% for the six months ended June 30, 2009, respectively. The decrease in the annualized yield on average invested assets is a result of lower yields in the marketplace on both new and reinvested assets.
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Unico American Corp. has a market cap of $47.7 million; its shares were traded at around $9 with a P/E ratio of 20.9 and P/S ratio of 1.2.
Highlight of Business Operations:
Premium written before reinsurance decreased $1,362,542 (14%) to $8,544,855 for the three months ended June 30, 2010, compared to $9,907,397 for the three months ended June 30, 2009. Premium written before reinsurance decreased $3,510,592 (17%) to $17,013,813 for the six months ended June 30, 2010, compared to $20,524,405 for the six months ended June 30, 2009.The Company had net income of $448,223 for the three months ended June 30, 2010, compared to net income of $684,066 for the three months ended June 30, 2009, a decrease of $235,843 (34%). For the six months ended June 30, 2010, the Company had net income of $947,416 compared to net income of $1,713,310 for the six months ended June 30, 2009, a decrease of $765,894 (45%). Total revenues decreased $1,266,209 (12%) to $9,387,035 for the three months and $1,956,823 (9%) to $19,284,848 for the six months ended June 30, 2010, compared to total revenues of $10,653,244 for the three months and $21,241,671 for the six months ended June 30, 2009, respectively.
Premium written (before reinsurance) is a non-GAAP financial measure which is defined, under statutory accounting, as the contractually determined amount charged by the Company to the policyholder for the effective period of the contract based on the expectation of risk, policy benefits, and expenses associated with the coverage provided by the terms of the policies. Premium written is a required statutory measure designed to determine written premium production levels. Premium earned, the most directly comparable GAAP measure, represents the portion of premiums written that is recognized as income in the financial statements for the period presented and earned on a pro-rata basis over the term of the policies. Direct written premium reported on the Company s statutory statement decreased $1,362,542 (14%) and $3,510,592 (17%), to $8,544,855 and $17,013,813 for the three and six months ended June 30, 2010, respectively, compared to $9,907,397 and $20,524,405 for the three and six months ended June 30, 2009, respectively. In addition to the increased competition in the property and casualty marketplace, the Company took action on two of its programs that it believed was necessary due to higher than expected losses. The corrective actions took place in April 2009 and included a rate increase on one of the programs and the termination of a number of brokers and the non-renewal of policies associated with those brokers on the other program. These two programs accounted for approximately 50% of the $3,510,592 decrease in written premium before reinsurance for the six months ended June 30, 2010, compared to the prior year period The Company believes that rate adequacy is more important than premium growth and that underwriting profit (net earned premium less losses and loss adjustment expenses and policy acquisition costs) is its primary goal.
Premium earned before reinsurance decreased $1,259,878 (12%) to $8,962,425 for the three months and $1,744,867 (9%) to $18,351,583 for the six months ended June 30, 2010, compared to $10,222,303 for the three months and $20,096,450 for the six months ended June 30, 2009, respectively. The Company writes annual policies and, therefore, earns written premium over the one-year policy term. The decrease in earned premium before reinsurance is a direct result of the decrease in written premium during the twelve-month period ended June 30, 2010, as compared to premium written during the twelve-month period ended June 30, 2009.
Earned ceded premium decreased $485,333 (21%) to $1,873,791 for the three months and $793,390 (17%) to $3,820,722 for the six months ended June 30, 2010, compared to ceded premium of $2,359,124 in the three months and $4,614,112 for the six months ended June 30, 2009, respectively. The decrease in earned ceded premium is primarily a result of a decrease in direct premium earned and changes in the rates charged by Crusader s reinsurers. The Company evaluates each of its ceded reinsurance contracts at their inception to determine if there is a sufficient risk transfer to allow the contract to be accounted for as reinsurance under current accounting literature. As of June 30, 2010, all such ceded contracts are accounted for as risk transfer reinsurance. Direct earned premium and earned ceded premium are as follows:
Investment income decreased $235,853 (21%) to $908,479 for the three months ended June 30, 2010, compared to investment income of $1,144,332 for the three months ended June 30, 2009. Investment income decreased $520,662 (22%) to $1,847,797 for the six months ended June 30, 2010, compared to investment income of $2,368,459 for the six months ended June 30, 2009. The Company had no realized gains or losses for the three and six months ended June 30, 2010. The decrease in investment income in the current periods as compared to the prior year periods is primarily a result of a decrease in invested assets and a decrease in the Company s annualized weighted average yield to 2.7% for the three months and six months ended June 30, 2010, respectively, from 3.2% for the three months and 3.3% for the six months ended June 30, 2009, respectively. The decrease in the annualized yield on average invested assets is a result of lower yields in the marketplace on both new and reinvested assets.
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