A.M. Best Upgrades Financial Strength Rating of Old Republic Title Insurance Group.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--May 6, 2004 A.M. Best Co. has upgraded the financial strength rating to A+ (Superior) from A (Excellent) of Old Republic Title Insurance Group and its subsidiaries (Minneapolis, MN). The rating outlook is stable. This rating action reflects the group's strong capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. operating results. These positive rating factors are partially offset by the inherent risks associated with managing significant premium advances in recent years and the challenge to manage future economic cycles. The positive factors are derived from the group's conservative investment policy, commitment to technology advancement and recently strong demand for title products reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of a favorable real estate environment. Furthermore, the group benefits from the financial flexibility from its publicly-traded parent, Old Republic International Corporation, which maintains low financial leverage. The positive rating factors are partially offset by the risk associated with absorbing significant premium advances in recent years and the challenges in handling earnings and revenue volatility stemming from the fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. dynamics of the real estate market. However, the group's title premium is nationally diversified diversified (di·verˑ·s , which limits volatility to regional changes in real estate markets. In addition, the majority of the group's title premium is generated from the agency sector that enables it to manage down cycles as fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). are generally lower as compared to competitors with larger allocations of direct business. The financial strength rating of A+ (Superior) has been upgraded for Old Republic Title Insurance Group and its following members: -- American Guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. Title Insurance Company -- Mississippi Valley Title Insurance Company -- Old Republic General Title Insurance Corporation -- Old Republic National Title Insurance Company A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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