Best Downgrades FNF Again

Now that Fidelity National Financial Inc., Jacksonville, Fla., is purchasing some of the units of LandAmerica Financial Group, Richmond, Va., A.M. Best Co., Oldwick, N.J., has once again placed the financial strength rating and issuer credit ratings of FNF and its eight title insurance members under review with negative implications. The ratings had been removed from under review status when the original FNF-LandAmerica deal was cancelled on Nov. 21. Subsequent to that, LandAmerica filed for bankruptcy protection and agreed to sell four of its underwriting subsidiaries to FNF. "The proposed acquisitions are expected to result in a significant increase in underwriting leverage for Fidelity, which may result in adversely impacting its financial strength and risk-adjusted capitalization. Additionally, the acquisition is expected to carry execution risks of integrating two large insurance organizations." the Best statement said. Previously, Fitch Ratings, Chicago, placed the issuer default rating and insurer financial strength ratings of FNF and/or its subsidiaries on Rating Watch Negative as a result of the revived transaction.