Fitch Affirms Old Republic Title Group's 'AA-' IFS Ratings.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms the 'AA-' insurer financial strength ratings of the Old Republic Title Group (ORT), which consists of the following title insurance companies: Old Republic National Title Insurance Co., Old Republic General Title Insurance Corp., Mississippi Valley Title Insurance Co., and 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 Co. The Rating Outlook is Stable. ORT is considered a strategic subsidiary of Old Republic International Corp. (NYSE NYSE See: New York Stock Exchange :ORI), and consequently, ORT's ratings benefit from the support of its parent. ORI's revenue is generated from three primary lines of business: property/casualty, title, and mortgage guaranty. The title operations represented 27% of consolidated operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. at ORI during the first six months of 2006, which was down somewhat from recent highs given the general deterioration in the real estate and mortgage markets. ORT's ratings also reflect a competitive position as one of the five U.S. title underwriters with a national presence, solid profitability, and a conservative management strategy anchored by a strong balance sheet. ORT is the smallest among the five national title insurers with a slightly less than 6% share of the market measured by premium volume. Importantly, ORT's market share has been relatively stable over the recent past, pointing to the company's ability to defend its competitive position in a competitive market. The company's distribution favors agents over owned distribution, which is different than most national peers. Consequently, ORT's cost structure is more variable and should help preserve profits as the market for title insurance slows. ORT's profitability measured by return on surplus was in line with national peers in 2005 at nearly 27%. Expectations for the entire title insurance industry are down as the real estate and mortgage market slow. The conservative management strategy at ORT mirrors that of ORI and includes modest use of financial leverage, an investment portfolio with a strong allocation of investment grade bonds, and strong capitalization. Fitch uses its own risk-adjusted capital (RAC See remote access concentrator. ) ratio to measure the capital adequacy of title insurance companies. ORT's RAC ratio was 206% in 2005, remaining comfortably above the industry average and three out of four national peers. ORT receives benefit from a statutory reserve redundancy relative to the actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin midpoint mid·point n. 1. Mathematics The point of a line segment or curvilinear arc that divides it into two parts of the same length. 2. A position midway between two extremes. for loss reserves. Fitch affirms the following: Old Republic National Title Insurance Company Old Republic General Title Insurance Corporation Mississippi Valley Title Insurance Company American Guaranty Title Insurance Company --Insurer financial strength at 'AA-'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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