AM Best Downgrades Issuer Credit Rating of Crusader in California

February 3, 2020

AM Best has downgraded the Long-Term Issuer Credit Rating to “bbb” from “bbb+” and affirmed the Financial Strength Rating of B++ (Good) of Crusader Insurance Co.

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. The outlook of this Credit Rating (rating) has been revised to stable from negative.

All companies are headquartered in Calabasas, Calif.

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,” AM Best stated. “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 stable outlooks indicate that no positive or negative rating actions are expected to occur in the near term, according to AM Best.

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