FOR IMMEDIATE RELEASE
OLDWICK - SEPTEMBER 28, 2022 12:53 PM (EDT)
AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (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 assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
Southern Pioneer’s balance sheet strength is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Credit Adequacy Ratio (BCAR), and continued stabilization of loss reserves. The company’s balance sheet strength also benefits from increased financial flexibility following its acquisition by Biglari Holdings Inc. [NYSE: BH] in 2020. Statutory surplus grew consistently between 2017 and 2021; however, capital declined through the first six months of 2022 driven by unrealized capital losses related to declines in the stock market and underwriting losses related to elevated weather activity. Nonetheless, underwriting leverage metrics continue to compare favorably with the composite averages, and liquidity metrics remain solid.
Southern Pioneer’s operating performance stabilized following management’s decision to exit the Texas garage liability business, with the runoff expected to be completed in 2023. Modest deterioration in performance was reported in 2022, related to elevated weather activity that generated material homeowners losses. The company’s limited business profile reflects its geographic concentration and niche focus on non-franchised auto dealerships. Southern Pioneer continues to implement an appropriate ERM program that supports its 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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.