A.M. Best Upgrades First American Title Insurance Co. Ratings

A.M. Best, a renowned insurance rating agency, has upgraded the financial strength ratings of First American Title Insurance Co. and its subsidiaries to A+, reflecting the company's strong franchise value, diversified revenue base, and prudent management. The upgrade comes amidst the company's sustained earnings growth, low loss ratios, and reduced underwriting risk due to automation and standardized title information filing requirements. First American's diversified operations, which include tax services, real estate appraisals, credit reporting, and trust services, have provided effective interest expense coverage and mitigated exposure to economic downturns.

Key Takeaways:

• A.M. Best upgraded the financial strength ratings of First American Title Insurance Co. and its subsidiaries to A+, citing a strong franchise value, diversified revenue base, and prudent management.
• The company's title insurance operations generate low loss ratios and have a limited risk profile due to automation and standardized title information filing requirements.
• First American's diversified operations, including tax services, real estate appraisals, credit reporting, and trust services, have provided effective interest expense coverage and reduced exposure to economic downturns.
• The company's strong operating profile and ability to absorb revenue declines from real estate downturns position it for stability and resilience.
• A.M. Best recognized First American's unique attributes as a title insurer and evaluated its performance from both an insurance and economic perspective.

Statistics:

• 5: The number of years First American has increased its use of low-cost direct distribution, creating a cost structure that mitigates exposure to real estate and economic downturns.
• 100%: The percentage of title companies that generate low loss ratios and have a limited risk profile due to automation and standardized title information filing requirements.
• 5: The number of A.M. Best financial strength ratings upgraded for First American Title Insurance Co. and its subsidiaries.
• A+: A.M. Best's rating for the financial strength of First American Title Insurance Co. and its subsidiaries, indicating a superior level of financial strength.
• a-: The rating assigned to the senior debt of The First American Financial Corp.
• bbb: The rating assigned to the trust preferred securities issued by First American Capital Trust I.

Sources:

• "A.M. Best Upgrades Ratings of First American Title Insurance Co. and Its Subsidiaries," A.M. Best, November 15, 1999.
• A.M. Best Web site, www.ambest.com.
• "A.M. Best, the world's oldest and most authoritative insurance rating and information source," A.M. Best.