AM Best Upgrades Credit Ratings of Members of Old Republic Title Insurance Group; Affirms Credit Ratings of Other Subsidiarie...
April 21 2021 - 2:32PM
Business Wire
AM Best has upgraded the Financial Strength Rating (FSR)
to A+ (Superior) from A (Excellent) and the Long-Term Issuer Credit
Ratings (Long-Term ICRs) to “aa-” from “a+” of Old Republic
National Title Insurance Company (Tampa, FL) and American Guaranty
Title Insurance Company (Oklahoma City, OK) (collectively referred
to as Old Republic Title Insurance Group [ORTIG]). Concurrently, AM
Best has affirmed the FSR of A+ (Superior) and the Long-Term ICRs
of “aa-” of members of Old Republic Insurance Companies (Old
Republic). (See below for a detailed list of companies.) At the
same time, AM Best has affirmed the FSR of A (Excellent) and the
Long-Term ICR of “a+” of Old Republic Insurance Company of Canada
(Old Republic Canada) (Hamilton, Ontario). In addition, AM Best has
affirmed the FSR of B++ (Good) and the Long-Term ICR of “bbb+” of
Old Republic Life Insurance Company (ORL) (Chicago, IL). The
outlook of these Credit Ratings (ratings) is stable. All companies
are subsidiaries of Old Republic International Corporation [NYSE:
ORI].
The rating action reflects ORTIG’s strategic position and
importance within the Old Republic International Corporation
enterprise. The title group continues to be integral to the overall
organization, with common branding and talent synergies, as well as
complementary enterprise risk management (ERM) programs. In
addition, the group is a consistently strong driver of revenue and
profitability for the organization.
The ratings of Old Republic, which is considered the lead rating
unit in the Old Republic International Corporation enterprise,
reflect its balance sheet strength, which AM Best assesses as
strongest, as well as its strong operating performance, favorable
business profile and appropriate ERM.
Old Republic is the flagship group for the Old Republic
Insurance enterprise and one of the top 35 property/casualty
insurers in the United States. The group is made up of commercial
lines insurance carriers that focus predominantly on providing
liability insurance for specific sectors of the North American
economy. Major lines of business include workers’ compensation,
commercial auto and general liability. Old Republic benefits from
its expertise within the alternative risk transfer market and
specialty commercial segments, as well as historically solid
profitability, expertise in its respective individual business
specialties and well-recognized franchises. Partially offsetting
these positive rating factors is some variability in prior
accident-year reserve development. In addition, Old Republic
maintains an elevated exposure to common stocks within its
investment portfolio; however, it remains within established
tolerance levels. The company continues to have a very modest
exposure to asbestos liabilities.
The ratings of Old Republic Canada reflect its balance sheet
strength, which AM Best assesses as very strong, as well as its
adequate operating performance, neutral business profile and
appropriate ERM.
The ratings of Old Republic Canada recognize the synergies it
gains as an affiliate of Great West Casualty Company, as well as
its accident and sickness business. Partially offsetting these
positive rating factors are the company’s limited product offering
and challenging market environment in Canada.
The ratings of ORTIG reflect its balance sheet strength, which
AM Best assesses as strongest, as well as its adequate operating
performance, neutral business profile and appropriate ERM. The
ratings of ORTIG also reflect the implicit support the group
receives from its position in the Old Republic enterprise and its
strategic role within the organization.
The ratings of ORTIG recognize its modest leverage measures and
strong reserving practices. The majority of ORTIG’s premiums and
fees are generated through independent agents. This enables ORTIG
to manage down cycles better, as fixed costs generally are lower
for that distribution channel. An offsetting rating factor is the
group’s higher underwriting leverage measures due to the rapid
increase in premium volume over the past five years. However, AM
Best expects that ORTIG will continue to generate underwriting and
operating results that are in line with its title competitors, but
which are significant contributors to the overall profitability of
the Old Republic International Corporation enterprise, while
maintaining the strongest level of risk-adjusted capitalization in
the intermediate term, as measured by Best’s Capital Adequacy Ratio
(BCAR).
The ratings of ORL reflect its balance sheet strength, which AM
Best assesses as very strong, as well as its marginal operating
performance, limited business profile and appropriate ERM.
The ratings of ORL also reflect its risk-adjusted
capitalization, which is assessed as strongest, as measured by
BCAR. Invested asset holdings are of good credit quality, as the
portfolio is designed to minimize credit default risk rather than
maximizing yield. Earnings have been positive in recent years. Due
to the small size of the reserves, any increase in claims or
mortality will cause large fluctuations in earnings. Premiums have
declined over the past several years, as the closed term block
premiums run off, and the occupational accident premiums trend
lower. The company’s business profile consists of a closed block of
term life insurance and the actively marketed occupational accident
line. Despite its modest size, ORL is important strategically to
the Old Republic organization.
The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” have
been affirmed, each with a stable outlook, for the following
members of Old Republic Insurance Companies:
- BITCO General Insurance Corporation
- BITCO National Insurance Company
- Great West Casualty Company
- Manufacturers Alliance Insurance Company
- Old Republic General Insurance Corporation
- Old Republic Insurance Company
- Old Republic Lloyds of Texas
- Old Republic Surety Company
- Old Republic Union Insurance Company
- Pennsylvania Manufacturers Indemnity Company
- Pennsylvania Manufacturers’ Association 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 Guide to 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.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20210421005926/en/
Robert Valenta Senior Financial Analyst +1 908
439 2200, ext. 5291 robert.valenta@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jennifer Marshall Director +1 908 439 2200,
ext. 5327 jennifer.marshall@ambest.com
Jim Peavy Director, Communications +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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