A.M. Best Revises Outlook to Stable from Negative for Fidelity National Financial, Inc. and Its Title Insurance Subsidiaries
June 07 2010 - 3:11PM
Business Wire
A.M. Best Co. has revised the outlook to stable from
negative and affirmed the financial strength rating (FSR) of A-
(Excellent) and issuer credit ratings (ICR) of “a-” for Fidelity
National Financial Group (Fidelity) and its ten title insurance
members. In addition, A.M. Best revised the outlook to stable from
negative and affirmed the ICR of “bbb-“ of the parent holding
company, Fidelity National Financial, Inc. (FNF)
(headquartered in Jacksonville, FL) (NYSE: FNF). (Please see below
a detailed listing of the companies and ratings).
The ratings are being affirmed and the outlook is being revised
to stable from negative due to the group’s stronger capitalization
in 2009 as compared to 2008 as evidenced by a significant
improvement in its underwriting leverage measures. The improved
capitalization reflects the successful integration of the four
former Land America underwriters that Fidelity had acquired in late
2008.
Also contributing to a change in outlook is a turnaround in
Fidelity’s operating performance in 2009 as compared to 2008 when
the group suffered a significant operating loss due to a reserve
strengthening of approximately $300 million primarily as a result
of adverse development of the 2006 and 2007 policy years.
The parent holding company, FNF, has also strengthened its
balance sheet following the issuance of approximately $330 million
in additional common stock in 2009 which was almost exclusively
used to pay down debt. As a result, FNF’s financial leverage
measures have improved as evidenced by a decrease in its
debt-to-capital ratio from approximately 32% as of 2008 Year End to
approximately 21% as of 2009 Year End.
The aforementioned acquisition of the four Land America
companies has also resulted in Fidelity becoming the largest
domestic title insurer in the United States with a market share of
over 40% as of 2009.
The FSR of A- (Excellent) and ICRs of “a-” have been affirmed
and the outlook revised to stable from negative for Fidelity
National Financial Group and its following members:
- Alamo Title
Insurance
- Chicago Title Insurance
Company of Oregon
- Chicago Title Insurance
Company
- Fidelity National Title
Insurance Company
- Security Union Title
Insurance Company
- Ticor Title Insurance
Company
- Lawyers’ Title Insurance
Corporation
- Commonwealth Land Title
Insurance Company
- United Capital Title
Insurance Company
- Continental Title Insurance
Company
The FSR of A- (Excellent) and ICR of “a-” have been withdrawn
for Ticor Title Insurance Company of Florida, previously a
member of the Fidelity National Financial Group, and an NR-5
(Not Formally Followed) has been assigned to the FSR and an “nr” to
the ICR following its merger into Chicago Title Insurance
Company, an existing member of the group.
The ICR of “bbb-” has been affirmed and the outlook revised to
stable from negative for Fidelity National Financial,
Inc.
The FSR of A- (Excellent) and ICRs of “a-” have been affirmed
with a stable outlook for Fidelity National Group and its
following property/casualty members:
- Fidelity National Insurance
Company
- Fidelity National Indemnity
Insurance Company
- Fidelity National Property
and Casualty Insurance Company
For Best’s Credit Ratings, an overview of the rating process and
rating methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings,
including any additional methodologies and factors that may have
been considered, can be found at
www.ambest.com/ratings/methodology.
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.
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