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 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 and leading market position in Florida.

Attorneys' Title's low fixed overhead 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 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 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 trend as evidenced by a continued strong population growth and economic fundamentals.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.