AM Best


A.M. Best Upgrades Credit Ratings of Connecticut Attorneys Title Insurance Company


CONTACTS:

Stephen Ruane
Senior Financial Analyst
+1 908 439 2200, ext. 5431
stephen.ruane@ambest.com

Gary Davis
Director
+1 908 439 2200, ext. 5665
gary.davis@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - DECEMBER 05, 2016 03:05 PM (EST)
A.M. Best has upgraded the Financial Strength Rating to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Rating to “bbb” from “bbb-” of Connecticut Attorneys Title Insurance Company (CATIC) (headquartered in Rocky Hill, CT). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

The rating upgrades reflect CATIC’s favorable risk-adjusted capitalization, as evidenced by relatively low underwriting leverage measures, and a significant market presence as a leading regional writer of title insurance in the United States, focusing solely in the New England states. Despite some volatility in operating performance in recent years, the company benefits due to its favorable risk-adjusted capitalization and its business profile as a prominent regional underwriter, with a significant long-standing presence and strong brand identification in the New England market. Additionally, CATIC’s ongoing expense management efforts are likely to help improve operating earnings in the years ahead, as the housing market and overall macroeconomic conditions in the United States continue to recover.

Positive rating factors are derived from CATIC’s underwriting leverage measures, which remain comparable with its peers. However, the company’s reported premium to surplus measure has trended somewhat higher over the past five-year period, due to a modest increase in premium volume during this period, as a rebound in the housing market translated into greater demand for title policies, coupled with a slight decrease in surplus. The company has a well-developed market niche as the seventh-largest regional title insurer in the United States, as measured by premiums written. It is one of the few Bar-Related title insurance underwriters utilizing independent attorney agents with a long-standing presence in the New England region. The company also has taken steps to reduce future losses from defalcations through the formation of a captive insurer, as well as increased agency monitoring and further safeguards in agency auditing procedures. Additionally, the company continues to manage successfully its cost structure to process and service business more efficiently, thus alleviating pressure on underwriting results to some degree.

The company’s future revenue and earnings potential will depend upon the prevailing economic environment that affects the real estate-dependent title insurance industry and remains subject to variability in housing market conditions.

Positive rating actions could occur if there were continued improvement in underwriting and operating performance that is sustainable in the medium to long term. In addition, positive rating actions could occur if there were an appreciable gain in risk-adjusted capitalization. Negative rating actions could occur if a lack of underwriting discipline results in a trend of deteriorating underwriting operating performance to a level below peers. In addition, negative rating actions could occur if there were surplus erosion to an extent to cause a significant rise in the company’s underwriting leverage measures.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. 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.

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AMB# Company Name
010038 Connecticut Attorneys Title Insurance Co