A.M. Best Affirms Ratings of Southern Pioneer Property & Casualty Insurance Company; Revises Outlook of ICR to Negative

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co.has affirmed the financial strength rating (FSR) of B++ (Good) and the issuer credit rating (ICR) of “bbb+” of Southern Pioneer Property & Casualty Insurance Company (Southern Pioneer) (Jonesboro, AR). The outlook for the FSR is stable, while the outlook for the ICR has been revised to negative from stable.

The affirmation of Southern Pioneer's ratings reflects its conservative underwriting leverage measures, demonstrated track record of favorable reserve development and solid liquidity. The ratings also reflect the company's niche expertise in its chosen markets utilizing multiple distribution sources and the recent underwriting actions and improved technology infrastructure, which should enable the company to return to profitability.

The revised outlook for Southern Pioneer’s ICR reflects the company's deterioration in underwriting performance and earnings in recent years as a result of storm-related losses generated from its personal lines business (homeowners, dwelling fire and vacant dwelling), and a continued elevated expense structure.

Downward rating pressure could result from continued margin compression, a continuation of severe weather-related events in key operating territories and management's inability to lower expenses.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Rick Barracato, 908-439-2200, ext. 5787
Senior Financial Analyst
[email protected]
or
Joseph Roethel, 908-439-2200, ext. 5630
Assistant Vice President
[email protected]
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
[email protected]
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Co.