AM Best has assigned a Financial Strength Rating (FSR) of A (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” (Excellent) to Biglari Reinsurance Ltd. (Bermuda). The outlook assigned to these Credit Ratings (ratings) is stable. Concurrently, AM Best has removed from under review with developing implications and affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of First Guard Insurance Company (First Guard) (Scottsdale, AZ). At the same time, AM Best has removed from under review with developing implications and upgraded the FSR to A (Excellent) from B++ (Good) and the Long-Term ICR to “a+” (Excellent) from “bbb+” (Good) of Southern Pioneer Property and Casualty Insurance Company (Southern Pioneer) (Jonesboro, AR). The outlook assigned to these ratings is stable. These companies are collectively referred to as Biglari Re.

The ratings of Biglari Re reflect the group’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Biglari Re’s very strong balance sheet strength assessment is supported by AM Best’s view of the consolidated company’s capital adequacy, which is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The balance sheet strength is enhanced by the financial flexibility and liquidity of its ultimate parent, Biglari Holdings Inc., which is committed to supporting Biglari Re’s operating entities through capital maintenance agreements.

Initially, Biglari Re’s business will be entirely comprised of business assumed through whole account quota share reinsurance agreements put in place with its two subsidiaries, First Guard and Southern Pioneer. The ratings of First Guard and Southern Pioneer had been placed under review with developing implications due to the execution of these quota share reinsurance agreements. The affirmation of First Guard’s ratings and the rating upgrades of Southern Pioneer follow the completion of AM Best’s evaluation of the financial strength of Biglari Re. Their inclusion into the newly formed Biglari Re group reflects the companies’ larger capital base and enhanced business profile when viewed on a consolidated basis.

Biglari Re’s assumed businesses have a history of growing revenue and consistently positive operating performance metrics. While Biglari Re is a new structure, the underlying insurance entities have reported stability in their earnings, consistently showing their level of underwriting expertise in the markets they operate within, supporting a strong operating performance assessment.

The neutral business profile assessment reflects the centralization of operations, unified management, and improved product diversification both by line of business and geography. The management team is composed of individuals with extensive experience and tenure in its existing two insurance companies. AM Best views the group’s ERM as appropriate, as it continues to focus on improving its overall program, stress testing and governance.

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.

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