has assigned a financial strength rating of A (Excellent) and issuer credit ratings (ICR) of “a” to the two subsidiaries of
Investors Title Company, Inc.
Investors Title Insurance Company
National Investors Title Insurance Company
(Columbia, SC). The companies are collectively referred to as the
Investors Title Company Group
(ITC Group). A.M. Best also has assigned an ICR of “bbb” to ITIC. The outlook assigned to all ratings is stable. All companies are domiciled in Chapel Hill, NC, unless otherwise specified.
The assigned ratings 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 2013, the group’s statutory surplus level increased for the fifth straight year. The group’s operating results have been consistently favorable in recent years, posting an underwriting profit in each of the past five years, and net pre-tax operating results have been solid throughout this 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 also has availed itself of additional protections against such losses through the use of escrow security bonds as well as fidelity coverage provided by high quality reinsurers. Additionally, the group has taken initiatives to diversify its book of business by reducing its concentration in North Carolina, its largest state, which previously represented nearly half of its book, to approximately 25% as of year-end 2013. ITC Group also has expanded its geographic footprint in recent years into more than 20 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.