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