AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a+” (Excellent) of Biglari Reinsurance Ltd. (Bermuda) and its reinsured affiliates, First Guard Insurance Company (First Guard) (Scottsdale, AZ) and Southern Pioneer Property and Casualty Insurance Company (Southern Pioneer) (Jonesboro, AR). The outlook of these Credit Ratings (ratings) is stable. These companies are collectively referred to as Biglari Re.

The ratings reflect Biglari Re’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 the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The BCAR is expected to remain at the strongest level in the near term. 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 in meeting regulatory capital requirements.

The initial and current business of Biglari Re is reinsuring its two affiliated insurance companies, First Guard and Southern Pioneer, through whole account quota share reinsurance agreements, covering all lines of property/casualty business written.

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 stable earnings, consistently demonstrating their underwriting expertise in the markets in which they operate, supporting a strong operating performance assessment. However, investment returns are low due to management’s current investment approach. Biglari Re does not rely on investment returns to support profitability.

The neutral business profile assessment reflects the centralization of operations, unified management, and product diversification across both lines of business and geographies. The management team is composed of individuals with extensive experience and tenure in its existing two insurance companies. AM Best assesses the group’s ERM as appropriate, as it continues to focus on improving its overall risk management program.

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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