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FOR IMMEDIATE RELEASE
OLDWICK - NOVEMBER 07, 2018 02:39 PM (EST)
A.M. Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” of First American Title Insurance Company (Omaha, NE), one of the five title insurance subsidiaries that are collectively referred to as First American Title Insurance Group (FATIG). Concurrently, A.M. Best has affirmed the Long-Term ICR of “bbb” for the parent holding company, First American Financial Corporation (FAF) (Delaware) [NYSE: FAF]. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies and ratings.)
Additionally, A.M. Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” of First American Property & Casualty Insurance Company and First American Specialty Insurance Company, collectively referred to as First American PC Companies (FAPCC). The outlook of these ratings is stable. These companies are domiciled in Santa Ana, CA.
The ratings of FATIG reflect the group’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
FATIG maintains a solid market position within the U.S. title insurance industry as the second largest underwriter based on 2017 direct premiums written. Policies are distributed on a direct basis and through a network of independent agents. The group invests heavily in its title plant, which is one of the most comprehensive in the industry. Operating results have generally been in-line with the title industry composite averages and supportive of surplus growth. FATIG benefits from a strong franchise value, financial flexibility and operational support from FAF, which maintains relatively modest financial leverage and solid interest coverage.
The ratings of the FAPCC group reflect its balance sheet strength, which A.M. Best categorizes as very strong, as well as its marginal operating performance, neutral business profile and appropriate ERM.
FAPCC primarily provides homeowners and renters insurance throughout the U.S. with a geographic concentration in the Western region. Operating results have been on a downward trend due to increased claim frequency and severity. The group reported an underwriting loss in 2017, which was largely driven by the unprecedented California wildfire activity.
The FSR of A (Excellent) and the Long-Term ICRs of “a” have been affirmed with stable outlooks for the five title subsidiaries of First American Financial Corporation:
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.
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