A.M. Best Affirms Credit Ratings of Investors Title Company, Inc. and Its Subsidiaries
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.
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A.M. Best
Gary A. Davis, +1 908-439-2200, ext. 5665
Director
gary.davis@ambest.com
or
Christopher Sharkey, +1 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
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Daniel Ryan, +1 908-439-2200, ext. 5325
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Jim Peavy, +1 908-439-2200, ext. 5644
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