A.M. Best Affirms Credit Ratings of Investors Title Company, Inc. and Its Subsidiaries
June 28 2017 - 2:33PM
Business Wire
A.M. Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR)
of “a” of the two subsidiaries of Investors Title Company,
Inc. (ITIC) [NASDAQ:ITIC]: Investors Title Insurance
Company and National Investors Title Insurance Company
(Austin, TX). These subsidiaries are collectively referred to as
Investors Title Company Group (ITC Group). A.M. Best also
has affirmed the Long-Term ICR of “bbb” of ITIC. The outlook of
these Credit Ratings (ratings) is stable. All companies are
domiciled in Chapel Hill, NC, unless otherwise specified.
The rating affirmations reflect ITC Group’s excellent
capitalization as evidenced by its conservative underwriting
leverage ratios, which are relatively modest compared to the title
industry as a whole. In 2016, the group’s statutory surplus level
increased for the sixth consecutive year. The group’s operating
results have been consistently favorable in recent years, posting
an underwriting profit in each of the past six years, and pre-tax
operating results have been solid throughout this same period. ITC
Group’s favorable results are partly due to its efforts to
carefully manage its expense structure while limiting losses,
including those from agency defalcations, through comprehensive
reinsurance protection and instituting extensive safeguards in the
selecting, monitoring and auditing of its title agency force and
other providers. Partly as a result of these initiatives, the group
has incurred no material defalcation losses in the last five years.
ITC Group has expanded its geographic footprint in recent years
into more than 21 states, including Texas, which is currently its
second-largest state. Furthermore, while its North Carolina
business continues to be conducted primarily through directly owned
branches, the group distributes its business in Texas and other
states primarily through independent agents, which has resulted in
greater diversification of its distribution channels.
The current economic environment and housing market conditions —
both of which determine the future revenue and earnings potential
of title insurers — have improved somewhat in recent years.
Uncertainty regarding potential economic and policy changes that
may occur under the current presidential administration continue to
persist over the industry and its prospects as a whole. With that
being said, the ITC Group’s consistent expense and risk management
efforts have been able to weather consistently these uncertainties,
as reflected in their financial results over the past several
years.
A.M. Best does not expect the current ratings or outlook to
change in the near term. Upward movement in rating or outlook will
depend on the ITC Group’s ability to sustain a positive operating
performance trend along with maintaining favorable risk-adjusted
capitalization in the operating companies. Conversely, significant
deterioration in operating performance or significant erosion in
risk-adjusted capitalization levels in the operating companies may
result in downward movement in the rating or outlook.
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. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2017 by A.M. Best Rating
Services, Inc. and/or its subsidiaries. ALL RIGHTS
RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20170628006314/en/
A.M. BestGary A. Davis, +1 908-439-2200, ext.
5665Directorgary.davis@ambest.comorChristopher
Sharkey, +1 908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorDaniel Ryan,
+1 908-439-2200, ext. 5325Senior
Directordaniel.ryan@ambest.comorJim Peavy, +1
908-439-2200, ext. 5644Director, Public
Relationsjames.peavy@ambest.com
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