The Long-Term Issuer Credit Rating (Long-Term ICR) of Southern Pioneer Property and Casualty Insurance Co.(Southern Pioneer) in Jonesboro, Arkansas, has been upgraded by AM Best to “bbb+” from “bbb.” The ratings agency also has affirmed the insurer’s Financial Strength Rating of B++ (Good).
The outlook of these Credit Ratings (ratings) is stable.
Southern Pioneer offers commercial property, homeowners, dwelling and other coverages. The insurer was formed in 1981 in Trumann, Ark.; it moved to Jonesboro in 2007. The company originally focused on providing credit-related coverages for banks and furniture dealers. In 1992, it began writing license bonds and garage liability insurance for non-franchised automobile dealers in Arkansas. Its geographic territory for those products territory now includes Tennessee, Missouri, Alabama and Texas.
In March 2020, Southern Pioneer was acquired by Biglari Holdings Inc.
The AM Best ratings reflect Southern Pioneer’s balance sheet strength, categorized 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.
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.
Source: AM Best
Topics Texas Property Property Casualty Casualty
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