Lower investment income and reduction in premiums earned led to the fall
Unico American Corp, an insurance holding company, has revealed its financial results for the second quarter ended June 30, 2009.
For the six months ended June 30, 2009, the company reported revenue of $21.2m and net income of $1.7m, as compared to revenue of $24.1m and net income of $1.7m for the six months ended June 30, 2008.
In the second quarter ended June 30, 2009, revenue was $10.7m and net income was $0.7m, as compared to revenues of $11.8m and net income of $0.8m for the quarter ended June 30, 2008.
The company claimed that the decrease in revenus was primarily the result of lower investment income and reduction in premiums earned, caused by the company’s selective risk underwriting stance during the quarter, in the face of what it perceived to be intense competition and inadequate rates in many niche markets.
Net premium earned was $7.9m or 74% of total revenues in the quarter ended June 30, 2009, compared to net premium earned of $8.6m or 73% of total revenues in the quarter ended June 30, 2008.
Net investment income for the quarter ended June 30, 2009, was $1.1m, compared to $1.5m in the quarter ended June 30, 2008. Annualised yield on average invested assets was 3.2% for the quarter ended June 30, 2009, compared to 4.1% in the quarter ended June 30, 2008.
Total expenses for the quarter ended June 30, 2009, were $9.7m compared to $10.7m for the quarter ended June 30, 2008.
As of June 30, 2009, the company had cash and investments (at amortised cost) of $142.6m. $127.3m, or 89% of these investments were fixed maturity investments, and 83% of those fixed maturity investments were US treasury securities.
Cary Cheldin, president of Unico, said: “We are pleased to continue our practice of writing business with long-term success in mind. Over the more than twenty four years that Crusader has been writing business, that has meant periods of slower growth, in times of greater competition, balanced by periods of more rapid expansion when competition lessens.
“In the current environment, we are pleased to have again been profitable. By continuing to invest our resources in marketing and product development as much as possible, given our prudent stance, we believe that we are ensuring a better future for our shareholders,” she added.
Unico American Corp, through its subsidiaries such as Crusader Insurance Company, offers property and casualty insurance products and services.