AM Best Affirms Credit Ratings of Stewart Title Group Members

Rhea-AI Summary

AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) for Stewart Title Group and a Long-Term Issuer Credit Rating (ICR) of 'a-' (Excellent) for Stewart Information Services Corporation (NYSE: STC). The group benefits from strong balance sheet strength and consistent profitability, bolstered by a strong real estate market over the past two years. However, rising interest rates and a slowing economy may impact future profitability. The outlook for these ratings remains stable, reflecting Stewart's market position as the fourth-largest title insurance writer in the U.S.

Positive

• FSR of A- (Excellent) and Long-Term ICR of 'a-' (Excellent) affirmed.
• Strong balance sheet strength assessed as very strong.
• Consistently profitable underwriting and investment results.
• Fourth-largest title insurance writer in the U.S. with a growing international presence.

Negative

• Potential future profitability risks from rising interest rates and a slowing economy.
• Negative rating action possible due to declines in operating profitability or risk-adjusted capitalization.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) for the member companies of Stewart Title Group (Stewart). AM Best also has affirmed the Long-Term ICR of “bbb-” (Good) for the parent holding company, Stewart Information Services Corporation (headquartered in Houston, TX) [NYSE: STC]. The outlook of these Credit Ratings (ratings) is stable. See below for a listing of companies.

The ratings reflect Stewart’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

Over the past two years, the group has benefited from record-high refinancing activity and an incredibly strong real estate market. However, rising interest rates, a slowing economy and a slowdown in the real estate sector are likely to dampen Stewart’s future profitability prospects. Despite these headwinds, Stewart’s underwriting and operating results are expected to remain in line with industry averages. Stewart’s ratings also consider the group’s favorable levels of risk-adjusted capitalization and its consistently profitable underwriting and investment results. In addition, Stewart benefits from its market position as the fourth-largest title insurance writer in the United States and writing business in all 50 states, as well as its growing international presence. This global diversification helps mitigate the concentration risk inherent to being a monoline writer of title insurance.

Negative rating action could occur if rising interest rates and a slowing economy lead to a significant decline in operating profitability and/or a material decline in risk-adjusted capitalization levels. Negative rating action also might result should the holding company experience liquidity issues or a significant increase in leverage.

The FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) have been affirmed with a stable outlook for the following members of the Stewart Title Group:

• Stewart Title Guaranty Company
• Stewart Title Insurance Company
• Stewart Title Limited
• Stewart Title Guaranty de Mexico, S.A. de C.V.

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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 © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220914005966/en/

Edward Zonenberg

Senior Financial Analyst

+1 908 439 2200, ext. 5135

edward.zonenberg@ambest.com



Fred Eslami

Associate Director

+1 908 439 2200, ext. 5406

fred.eslami@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Jeff Mango

Managing Director,

Strategy & Communications

+1 908 439 2200, ext. 5204

jeffrey.mango@ambest.com

Source: AM Best

FAQ

What is the recent financial rating for Stewart Information Services Corporation (STC)?

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of 'a-' (Excellent) for Stewart Information Services Corporation.

What factors could negatively impact Stewart's financial ratings in the future?

Rising interest rates and a slowing economy may lead to a decline in operating profitability and risk-adjusted capitalization.

What is Stewart Title Group's market position in the U.S. title insurance industry?

Stewart Title Group is the fourth-largest title insurance writer in the United States, operating in all 50 states.

What is the outlook for Stewart Information Services Corporation's credit ratings?

The outlook for Stewart's credit ratings is stable, reflecting its strong balance sheet and consistent performance.