A.M. Best Comments on Credit Ratings of the Members of Pacific Specialty Insurance Group

Kyle Phelps News

FOR IMMEDIATE RELEASE

OLDWICK, N.J., May 26, 2017—A.M. Best has commented that the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of the members of Pacific Specialty Insurance Group (Pacific Specialty) remain unchanged following the recent announcement by Pacific Specialty that it has entered into a definitive agreement for Western Service Contract Corporation (parent of Pacific Specialty) and McGraw Insurance, Inc. (affiliated agency) to be acquired by Biglari Holdings Inc. [NYSE: BH]. The Credit Ratings (ratings) remain unchanged for the group members: Pacific Specialty Insurance Company and Pacific Specialty Property and Casualty Company (both headquartered in Palo Alto, CA). The outlook of these ratings remains stable.

The ratings and outlooks reflect Pacific Specialty’s excellent risk-adjusted capitalization, favorable operating earnings and in-depth product knowledge as a California predominant personal and specialty lines writer. These positive rating attributes are partially offset by the group’s business concentration in California, which exposes earnings and surplus to volatility from regulatory and judicial changes, market dislocations and catastrophe events.

The ownership change is not expected to have an impact on Pacific Specialty’s management or day-to-day operations. It is expected that Pacific Specialty and its affiliated agency will operate independently of Biglari Holding Inc.’s other insurance operations. The transaction is subject to customary closing conditions, including regulatory approvals. It is anticipated that the transaction will be completed in the third quarter of 2017.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit

Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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

Contacts

Kenneth Tappen
Senior Financial Analyst
+1 908 439 2200, ext. 5248
kenneth.tappen@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Richard Attanasio
Senior Director
+1 908 439 2200, ext. 5432
richard.attanasio@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

Kyle Phelps
Marketing
The McGraw Group of Affiliated Companies
+1 650 569 4103
kphelps@pacificspecialty.com