AM Best Assigns Credit Ratings to First European Title Insurance Company Limited; Affirms Credit Ratings of Its Title Insurance Subsidiaries
AM Best has assigned a Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” to First European Title Insurance Company Limited (Malta). The outlook assigned to these Credit Ratings (rating) is stable. Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” of First American Title Insurance Company (Omaha, NE) and its title subsidiaries. Collectively, along with First European Title Insurance Company Limited, these companies are referred to as First American Title Insurance Group (FATIG). In addition, AM Best has affirmed the Long-Term ICR of “bbb” for the parent holding company, First American Financial Corporation (Delaware) [NYSE: FAF]. The outlook of these ratings is stable. (See below for a detailed listing of the companies and ratings.)
AM Best also has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” of First American Property & Casualty Insurance Company and First American Specialty Insurance Company, collectively referred to as First American PC Companies (FAPCC). The outlook of these ratings is stable. These companies are domiciled in Santa Ana, CA.
The ratings of FATIG reflect the group’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
FATIG maintains a solid market position within the U.S. title insurance industry as its second largest underwriter based on 2018 direct premiums written. Policies are distributed on a direct basis and through a network of independent agents. The group invests heavily in its title plant, which is one of the most comprehensive in the industry. Operating results have generally been in-line with the title industry composite averages and supportive of surplus growth. FATIG benefits from a strong franchise value, financial flexibility and operational support from FAF, which maintains relatively modest financial leverage and solid interest coverage.
The ratings of the FAPCC group reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, neutral business profile and appropriate ERM.
FAPCC primarily provides homeowners and renters insurance throughout the United States with a geographic concentration in the Western region. Operating results have been on a downward trend due to increased claim frequency and severity. The group reported underwriting losses in 2017 and 2018, which was driven largely by the unprecedented California wildfire activity.
The FSR of A (Excellent) and the Long-Term ICRs of “a” have been affirmed with stable outlooks for the subsidiaries of First American Financial Corporation:
- First American Title Insurance Company
- First American Title Insurance Company of Australia Pty Limited
- First American Title Insurance Company of Louisiana
- First Title Insurance plc
- Ohio Bar Title Insurance Company
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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