A.M. Best Values Southern Pioneer Property & Casualty Insurance [Manufacturing Close – Up]

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).

According to a release on June 12, 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.

A.M. Best Company is an insurance rating and information source.

More information:

www.ambest.com

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