A.M. Best Downgrades Ratings of Old Republic Title Insurance Group and Its Members.

OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength rating (FSR) to A (Excellent) from A+ (Superior) and issuer credit ratings (ICR) to "a+" from "aa-" of Old Republic Title Insurance Group (Minneapolis, MN) and its members. The outlook for the FSR has been revised to stable from negative, and the outlook for the ICRs is negative. (See below for a detailed listing of the companies and ratings.)

The downgrading of the group's ratings, which previously benefited from support of its publicly traded parent, Old Republic International Corporation (Old Republic) (Chicago, IL) [NYSE: ORI], reflects the adverse impact on the group of the continued negative operating performance of Old Republic's mortgage guaranty operations and greater uncertainty surrounding the financial flexibility of Old Republic. This has resulted in elimination of lift previously afforded to the group.

The negative outlook for the ICRs primarily is based on the uncertainties associated with the significant adverse impact on Old Republic's mortgage guaranty operations as a result of the ongoing downturn in the housing and related mortgage finance markets, which also negatively impacts title operations.

The positive rating factors are derived from the group's moderate adjusted underwriting leverage, and conservative reserving practices. These positive rating factors are partially offset by the ongoing down cycle in the real estate market. The group faces challenges in achieving near-term profitability by controlling expenses and managing earnings and revenue volatility due to the current weakness in the housing market, as the demand for title insurance products is largely derived from transactions in residential real estate.

However, the group's title premium is nationally diversified, which somewhat limits volatility to regional fluctuations in real estate markets. Moreover, approximately two-thirds of the group's premium is generated through independent agents. This enables the group to potentially better manage down cycles as fixed costs are generally lower for that distribution channel.

The FSR has been downgraded to A (Excellent) from A+ (Superior) and the ICRs have been downgraded to "a+" from "aa-" for Old Republic Title Insurance Group and its following members:

* American Guaranty Title Insurance Company

* Mississippi Valley Title Insurance Company

* Old Republic General Title Insurance Corporation

* Old Republic National Title Insurance Company

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 global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.