[November 13, 2017]

Unico American Corporation Reports Third Quarter 2017 Financial Results

Unico American Corporation (NASDAQ:UNAM) ("Unico" or the "Company") announced today its consolidated financial results for the three and nine months ended September 30, 2017. For the three months ended September 30, 2017, revenues were $9.3 million and net loss was $2.9 million ($0.55 diluted loss per share) compared with revenues of $9.0 million and net loss of $2.0 million ($0.37 diluted loss per share) for the three months ended September 30, 2016. For the nine months ended September 30, 2017, revenues were $27.5 million and net loss was $5.9 million ($1.12 diluted loss per share) compared with revenues of $26.3 million and net loss of $2.0 million ($0.38 diluted loss per share) for the nine months ended September 30, 2016.

Stockholders' equity was $63.0 million as of September 30, 2017, or $11.86 per common share including unrealized losses, net of deferred income tax, of $0.007 million, compared to stockholders' equity of $68.9 million as of December 31, 2016, or $12.98 per common share including unrealized investment gains, net of deferred income tax, of $0.008 million.

"We have identified and addressed the causes of recent quarterly losses, and we do not expect these kinds of losses to recur. For example, of the third quarter's $2.9 million net loss, $1.1 million can be attributed to adverse results on two claim files. Both of those claims involved assault and battery litigation that occurred at two different nightclubs insured by our subsidiary, Crusader Insurance Company, and both of those cases resulted in runaway jury awards at trial that were both unexpected and inconsistent with our experience over the prior 32 years of having handled hundreds of substantially similar cases with much more modest results," said Cary L. Cheldin, Unico's President and Chief Executive Officer. "Another $0.5 million of the net loss this quarter is attributed to three other assault and battery cases at nightclubs. These five cases, along with many other assault and battery cases that we resolved during the past 18 months reflect relatively recent social, legal and economic changes that have materially impacted the cost of insuring that type of risk in California. Consequently, we have decided to significantly curtail or entirely exclude coverage for the risk of assault and battery claims at nightclubs in California while continuing to service that group of our customers in other ways.

"In light of the adverse development on the nightclub business we underwrote, we increased our estimate of expected ultimate loss ratios used in our IBNR calculation for policies issued to nightclubs, resulting in a significant increase in our IBNR reserves. $0.9 million of this quarter's $2.9 million net loss is attributable to our strengthening of IBNR reserves associated with the exposures we have on those nightclubs.

"Costs related to our other restructuring initiatives executed during the quarter account for most of the remaining balance of this quarter's $2.9 million net loss.

"While adverse development and reserve strengthening on prior accident years reduced our earnings again, we remain strongly capitalized and we spent the quarter making positive changes. We improved our underwriting and marketing operations, completed the vendor selection phase for a new policy administration system, launched three new websites, and improved the yields on our investment portfolio. I remain extremely optimistic and confident about the future success of Unico's current team of employees, Unico's operations and Unico's profitability."

Headquartered in Calabasas, California, Unico is an insurance holding company that underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty and health insurance through its agency subsidiaries; and through its other subsidiaries provides insurance premium financing and membership association services. Unico has conducted the majority of its operations through its subsidiary Crusader Insurance Company since 1985. For more information concerning Crusader Insurance Company, please visit the Crusader's website at www.crusaderinsurance.com.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995 and the Company intends that such forward-looking statements are subject to the safe harbors created thereby. These statements, which may be identified by words or phrases such as "anticipate," "appear," "believe," "estimate," "expect," "intend," "plan," "predict," "will," "may," "likely," "future," "should," "could," and "would" and similar words, are intended to identify forward-looking statements. In addition, any statements that refer to projections of the Company's future financial performance, trends in its businesses, or other characterizations of future events or circumstances are forward-looking statements.

The forward-looking statements included herein are based on current expectations of the Company's management based on available information and involve certain risks and uncertainties, many of which are beyond the control of the Company. Such risks and uncertainties could cause actual results to differ materially from those anticipated by these forward-looking statements. Factors that could cause actual results to differ materially include, among others: failure to meet minimum capital and surplus requirements; vulnerability to significant catastrophic property loss; a change in accounting standards issued by the Financial Accounting Standards Board; required adoption of International Financial Reporting Standards; ability to adjust claims accurately; insufficiency of loss and loss adjustment expense reserves to cover future losses; ability to realize deferred tax assets; ability to accurately underwrite risks and charge adequate premium; ability to obtain reinsurance or collect from reinsurers; extensive regulation and legislative changes; reliance on subsidiaries to satisfy obligations; downgrade in financial strength rating by AM Best; intense competition; changes in interest rates; investments subject to credit, prepayment and other risks; geographic concentration; reliance on independent insurance agents and brokers; insufficient reserve for doubtful accounts; litigation; enforceability of exclusions and limitations in policies; reliance on information technology systems; ability to prevent or detect acts of fraud with disclosure controls and procedures; change in general economic conditions; dependence on key personnel; ability to attract, develop and retain employees and maintain appropriate staffing levels; insolvency, financial difficulties, or default in performance of obligations by parties with significant contracts or relationships; implementation of new computer software; ability to effectively compete; maximization of long-term value and no focus on short-term earnings expectations; control by a small number of shareholders; failure to maintain effective system of internal controls; difficulty in effecting a change of control or sale of any subsidiaries; and losses in excess of reinsurance limits. Except as may be required by law, the Company undertakes no obligation to update any forward-looking statements to reflect new information or events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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