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AM Best Upgrades Issuer Credit Rating of Southern Pioneer Property and Casualty Insurance Company

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AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to "bbb+" from "bbb" and affirmed the Financial Strength Rating of B++ (Good) of Southern Pioneer Property and Casualty Insurance Company (Southern Pioneer) (Jonesboro, AR). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Southern Pioneer's balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The upgrade of the Long-Term ICR reflects favorable trends in Southern Pioneer's balance sheet strength, including the strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), and a stabilization of loss reserves, following management's efforts to strengthen reserves and the decision to significantly reduce the Texas garage liability business. Underwriting leverage metrics also have trended down to levels in line with the composite, reflective of organic surplus growth and a capital contribution in 2020, following its acquisition by Biglari Holdings, Inc. (NYSE:BH). This new ownership provides Southern Pioneer with increased financial flexibility. Southern Pioneer's operating performance continues to stabilize, as the company continues to reposition and re-underwrite its Texas book of business. The company's limited business profile reflects its geographically concentrated position. Southern Pioneer benefits from an appropriate ERM program that supports the organization's risk profile.

This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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