A.M. Best Affirms Rating of Attorneys' Title Insurance Fund Inc.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of Attorneys' Title Insurance Fund Inc (Attorneys' Title) (Orlando, FL). The outlook for the rating is stable.
This rating reflects Attorneys' Title's strong capitalization, favorable fa·vor·a·ble
1. Advantageous; helpful: favorable winds.
2. Encouraging; propitious: a favorable diagnosis.
3. operating results, long operating history in the Florida title insurance marketplace, strong brand identity and a solid business profile as one of the largest title insurance underwriters in Florida.
These positive rating factors are somewhat offset by the company's challenge to manage future economic cycles, inherent risks with managing significant premium growth in recent years and a high geographic concentration. The rating outlook is based on Attorneys' Title's strong capitalization, favorable operating earnings Operating Earnings
Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue.
Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before and leading market position in Florida.
Attorneys' Title's low fixed overhead costs overhead costs
see fixed costs. due to the use of an unaffiliated agency force has allowed management to maintain a disciplined approach toward managing expenses during real estate down cycles while substantially growing the revenue base, resulting in consistently favorable operating results in recent years. Furthermore, Attorneys' Title has made critical investments in cost saving technology, which will also enable it to further build its brand in the highly competitive Florida market.
Negative rating factors include the susceptibility of Attorneys' Title's underwriting Underwriting
1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).
2. The process of issuing insurance policies. revenue and profitability in fluctuating interest rate levels and a changing legal and regulatory environment, which could potentially have a generally negative impact on the title insurance industry. There are also significant execution risks in managing substantial premium growth related to the surge in refinancing Refinancing
An extension and/or increase in amount of existing debt. activity in recent years. Attorneys' Title also faces inherent risks associated with its significant geographic concentration in Florida, as the rapidly appreciating real estate markets of the past five years have shown some recent signs of price volatility and a slowdown in real estate activity. However, this risk is somewhat mitigated by Florida's favorable demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. trend as evidenced by a continued strong population growth and economic fundamentals.
For Best's Ratings Best's rating
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