Unico American Corp. (UNAM, Financial) filed Quarterly Report for the period ended 2010-09-30.
Unico American Corp. has a market cap of $49.76 million; its shares were traded at around $9.36 with a P/E ratio of 23.4 and P/S ratio of 1.2.
The Company had net income of $623,962 for the three months ended September 30, 2010, compared to net income of $617,680 for the three months ended September 30, 2009, an increase of $6,282 (1%). For the nine months ended September 30, 2010, the Company had net income of $1,571,378 compared to net income of $2,330,990 for the nine months ended September 30, 2009, a decrease of $759,612 (33%). Total revenues decreased $1,215,598 (12%) to $9,088,814 for the three months and $3,172,421 (10%) to $28,373,662 for the nine months ended September 30, 2010, compared to total revenues of $10,304,412 for the three months and $31,546,083 for the nine months ended September 30, 2009.
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 $1,234,847 (13%) and $4,745,439 (16%), to $8,115,684 and $25,129,498 for the three and nine months ended September 30, 2010, respectively, compared to $9,350,531 and $29,874,937 for the three and nine months ended September 30, 2009, respectively. In addition to the increased competition in the property and casualty marketplace, the Company took further corrective action in July 2010 on two of its problematic programs that were contributing to higher than expected losses by reducing the number of brokers authorized to write that particular program from 85 to 15. These two programs accounted for approximately 56% of the $4,745,439 decrease in written premium before reinsurance for the nine months ended September 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 $1,304,745 (13%) to $8,784,025 for the three months and $3,049,612 (10%) to $27,135,608 for the nine months ended September 30, 2010, compared to $10,088,770 for the three months and $30,185,220 for the nine months ended September 30, 2009. 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 September 30, 2010, as compared to premium written during the twelve-month period ended September 30, 2009.
Earned ceded premium decreased $499,564 (21%) to $1,836,956 for the three months and $1,292,954 (19%) to $5,657,678 for the nine months ended September 30, 2010, compared to ceded premium of $2,336,520 in the three months and $6,950,632 for the nine months ended September 30, 2009. 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 September 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 $171,728 (17%) to $840,155 for the three months ended September 30, 2010, compared to investment income of $1,011,883 for the three months ended September 30, 2009. Investment income decreased $692,390 (20%) to $2,687,952 for the nine months ended September 30, 2010, compared to investment income of $3,380,342 for the nine months ended September 30, 2009. The Company had no realized gains or losses for the three and nine months ended September 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 2.5% and 2.6% for the three months and nine months ended September 30, 2010, from 2.9% for the three months and 3.2% for the nine months ended September 30, 2009. 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 $49.76 million; its shares were traded at around $9.36 with a P/E ratio of 23.4 and P/S ratio of 1.2.
Highlight of Business Operations:
Premium written before reinsurance decreased $1,234,847 (13%) to $8,115,684 for the three months ended September 30, 2010, compared to $9,350,531 for the three months ended September 30, 2009. Premium written before reinsurance decreased $4,745,439 (16%) to $25,129,498 for the nine months ended September 30, 2010, compared to $29,874,937 for the nine months ended September 30, 2009.The Company had net income of $623,962 for the three months ended September 30, 2010, compared to net income of $617,680 for the three months ended September 30, 2009, an increase of $6,282 (1%). For the nine months ended September 30, 2010, the Company had net income of $1,571,378 compared to net income of $2,330,990 for the nine months ended September 30, 2009, a decrease of $759,612 (33%). Total revenues decreased $1,215,598 (12%) to $9,088,814 for the three months and $3,172,421 (10%) to $28,373,662 for the nine months ended September 30, 2010, compared to total revenues of $10,304,412 for the three months and $31,546,083 for the nine months ended September 30, 2009.
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 $1,234,847 (13%) and $4,745,439 (16%), to $8,115,684 and $25,129,498 for the three and nine months ended September 30, 2010, respectively, compared to $9,350,531 and $29,874,937 for the three and nine months ended September 30, 2009, respectively. In addition to the increased competition in the property and casualty marketplace, the Company took further corrective action in July 2010 on two of its problematic programs that were contributing to higher than expected losses by reducing the number of brokers authorized to write that particular program from 85 to 15. These two programs accounted for approximately 56% of the $4,745,439 decrease in written premium before reinsurance for the nine months ended September 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 $1,304,745 (13%) to $8,784,025 for the three months and $3,049,612 (10%) to $27,135,608 for the nine months ended September 30, 2010, compared to $10,088,770 for the three months and $30,185,220 for the nine months ended September 30, 2009. 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 September 30, 2010, as compared to premium written during the twelve-month period ended September 30, 2009.
Earned ceded premium decreased $499,564 (21%) to $1,836,956 for the three months and $1,292,954 (19%) to $5,657,678 for the nine months ended September 30, 2010, compared to ceded premium of $2,336,520 in the three months and $6,950,632 for the nine months ended September 30, 2009. 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 September 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 $171,728 (17%) to $840,155 for the three months ended September 30, 2010, compared to investment income of $1,011,883 for the three months ended September 30, 2009. Investment income decreased $692,390 (20%) to $2,687,952 for the nine months ended September 30, 2010, compared to investment income of $3,380,342 for the nine months ended September 30, 2009. The Company had no realized gains or losses for the three and nine months ended September 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 2.5% and 2.6% for the three months and nine months ended September 30, 2010, from 2.9% for the three months and 3.2% for the nine months ended September 30, 2009. 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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