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.
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