A.M. Best Assigns Financial Strength, Issuer Credit Ratings to Stewart

A.M. Best Co., Oldwick, N.J., has given Stewart Title Group a financial strength rating of "B++(Good)" and an issuer credit rating of "bbb+," stating the Houston-based global title insurer's ratings reflect its adequate capitalization along with its moderate underwriting leverage. Parent company Stewart Information Services Corp. received an ICR of "bb+." In its statement, Best added that in spite of the 35% decline in statutory surplus at the company, this is still "relatively moderate compared to that of the title insurance industry as a whole." The rating agency said it expects the statutory surplus to increase at the end of this year as Stewart Title Guaranty Co., the lead underwriting unit, retires short-term debt through the use of longer term debt issued by the parent company in the form of convertible senior notes. Stewart's underwriting results in 2009 have been affected by reserve strengthening because of an increase in claims from prior policy years, along with large title claims, some resulting from agency defalcations. Best noted that Stewart is not only the third largest underwriter of title insurance with a 14% market share in the U.S., it does business in approximately 40 countries, enhancing its geographic diversification.