CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - DECEMBER 18, 2014 11:01 AM (EST)
A.M. Best has assigned the financial strength rating (FSR) of A (Excellent) and an issuer credit rating (ICR) of "a" to Fidelity National Financial, Inc.'s (FNF) (Jacksonville, FL) newly acquired subsidiary National Title Insurance of New York Inc (National Title) (New York, NY). National Title was acquired on Jan. 2, 2014 as part of FNF's acquisition of Lender Processing Services, Inc. (LPS). National Title and FNF's other domestic title insurance companies are collectively referred to as the Fidelity National Financial Group. The outlook for the ratings is stable.
The ratings of National Title reflect its solid risk-adjusted capitalization and historically profitable underwriting and operating performance. National Title's business model allows it to report relatively low loss ratios as the company writes centralized refinance business that has already been through an exhaustive search process, resulting in less likelihood of discovering junior liens. In addition, the ratings recognize the financial support and flexibility provided by being a part of a larger, more diverse organization such as FNF.
Offsetting these positive rating factors is National Title's narrow business scope and somewhat elevated underwriting leverage measures, when compared to the title industry composite. As National Title focuses primarily on underwriting refinance transactions, it is especially sensitive to changes in mortgage interest rates. Fluctuating mortgage interest rates in recent years have resulted in variable premium and underwriting leverage for the company.
While A.M. Best believes National Title is well-positioned at its current rating level, positive rating movement is unlikely over the near term. Factors that could lead to negative rating actions include a trend of deteriorating underwriting and operating profitability or the erosion of surplus that causes a significant decline in risk-adjusted capital.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
This press release relates to rating(s) 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 visit A.M. Best's Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.