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DUFF & PHELPS: UNITED GENERAL TITLE INSURANCE COMPANY CLAIMS PAYING ABILITY RATED 'A'

 CHICAGO, Nov. 10 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a claims paying ability of "A" (Single-A) to the United General Title Insurance Company (UGTIC). This rating reflects the company's conservative level of operating leverage, limited underwriting risk exposure, and overall control of operating expenses. These positives are somewhat offset by the company's plan for rapid expansion and lack of growth in policyholders' surplus which combined are anticipated to increase operating leverage over the short term.
 UGTIC, which was formed in 1983, is a wholly owned subsidiary of the United Companies Financial Corporation, a publicly traded $1.7 billion (assets) financial services company headquartered in Baton Rouge, Louisiana. During 1992, UGTIC had net written premium of $11.4 million, with policyholders' surplus of $5.2 million at yearend. The company markets to smaller independent title agents, typically in rural areas and smaller cities, focusing on the lower risk residential resale and refinance market segments. UGTIC's business focus, since its inception, has been servicing only independent agents. UGTIC avoids new construction and commercial market segments, which it considers to be more risky. The company's average policy size in 1992 was $50,000.
 During the last three years, UGTIC has strategically expanded its business geographically and through the addition of agents in existing markets. In 1989, UGTIC was represented by 400 agents in 13 states which were supervised by two agency managers in Baton Rouge. In 1993, the company's agent base is 625 and is supervised by eleven agency managers located in eight regional offices in the company's market area. At present, the company is licensed in 24 states with applications pending final approval in six others. Expansion plans call for further expansion into fifteen additional states over the next three years.
 UGTIC has experienced rapid growth in premium volume over the last three years, as a result of agent/geographical expansion and as a result of a change in business mix. Net written premium volume which was $1.5 million during 1989, increased to $11.4 million in 1992. Much of the company's rapid growth in net written premium is a result of expansion to states with a different definitions of title premium. Title premiums are of two basic types, risk rate and all inclusive. All inclusive premiums contain charges for title search and examination in addition to risk rate premium.
 For most of UGTIC's history its business was written in low premium "risk rate" states of the southeast. In more recent years, the company has starting writing business in "all inclusive" states such as Florida, Texas and Colorado. From 1989 through 1992, UGTIC's net written premium has increased 6.66 times, while the amount of net retained liability increased 3.62 times, and the number of policies written increased only 2.50 times. Net retained liability and the number of policies written are more reflective of underlying growth.
 During 1992, UGTIC reported GAAP net income of $491 thousand on earned premium of $10.6 million, compared with net income of $360 thousand on earned premium of $5.7 million in 1991. Pre-tax operating margin fell to 7.1 percent in 1992 from 9.8 percent in 1991, as a result of lower investment yields and increased operating leverage (size of invested assets relative to earned premium). UGTIC's statutory combined ratio was 93.5 percent during 1992, down from 94.6 percent in the previous year.
 UGTIC's ratio of net written premium to policyholders' surplus increased to 2.20:1 in 1992 from 1.23:1 in 1991, as a result of its rapid growth in net written premium. The company's net leverage ratio (net written premium and liabilities divided by policyholders' surplus) at the end of 1992 was 2.66:1. The company was conservatively leveraged at the end of 1992; however, UGTIC's leverage is anticipated to increase as a result of increased business from the company's growth strategy in combination with current favorable market conditions. UGTIC is not anticipated to pay dividends to its parent until its growth levels off.
 -0- 11/10/93
 /CONTACT: Timothy A. Bienek, CFA of Duff & Phelps Credit Rating Co., 312-368-3192/


CO: United General Title Insurance Company ST: Louisiana IN: INS SU: RTG

MP -- NY062 -- 2769 11/10/93 12:39 EST
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Date:Nov 10, 1993
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