OCTOBER 13, 2016 11:09 AM (EDT)
A.M. Best Withdraws Credit Ratings of Fidelity National Financial, Inc.’s Title Insurance Subsidiaries
FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 13, 2016 11:09 AM (EDT)
The Long-Term ICRs reflect Fidelity’s favorable capitalization and strong market profile as the largest title insurance group in the United States.
The group’s positive credit rating factors are derived from the franchise value of Fidelity’s leading brands, Fidelity National Title Insurance Company and Chicago Title Insurance Company, along with Commonwealth Land Title Insurance Company and Alamo Title Insurance. As of mid-year 2016, the group had market share of approximately 33%, making it the largest domestic title insurer. Over the past several years, the group has been able to reduce premium leverage measures as a result of significant surplus growth from improved operating earnings.
Although real estate market conditions have shown some improvement recently, the group will be challenged to manage and sustain operating performance through the current macroeconomic environment, which could hinder the rebound in real estate market activity due to increased mortgage interest rates and changes in the legal and regulatory environments. However, Fidelity continues to undertake aggressive efforts to achieve operating efficiencies, which along with its flexible cost structure, have helped to mitigate this effect.
The ratings could be negatively affected if underwriting discipline lapses and results in a trend of deteriorating underwriting and operating performance to a level below peers, or if an erosion of surplus causes a significant decline in risk-adjusted capital or a substantial increase in FNF’s debt-to-capital ratio.
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.
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