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Fitch Affirms Connecticut Attorneys Title's IFS at 'A-'; Revises Outlook to Negative

August 28, 2008

CHICAGO -- -Fitch Ratings has affirmed the 'A-' insurer financial strength (IFS) rating of Connecticut Attorneys Title Insurance Company (CATIC) and revised the Rating Outlook to Negative from Stable.

The Outlook revision to Negative is consistent with Fitch's view of the U.S. title insurance industry as a whole. In addition, the Negative Outlook reflects CATIC's relatively lower tolerance to absorb operating losses in the current environment because it is a modestly-sized underwriter in a concentrated geographic area with limited access to outside capital funds relative to larger, more geographically diverse peers with greater financial flexibility.

CATIC's combined ratio for the six months ended June 30, 2008 was 108.2%, and is considered high. However, CATIC has done a good job holding onto surplus which is considered critical during these difficult times. CATIC's ratings continue to be supported by a conservative balance sheet typified by a high quality, liquid investment portfolio and a strong capital position.

CATIC's strong balance sheet fundamentals include an above average Fitch risk adjusted capital (RAC) ratio of 326% at year-end 2007. CATIC's RAC ratio is the highest in Fitch's rating universe and a key consideration behind its financial strength rating. Operating leverage, measured by the ratio between net written premium and policyholders' surplus was 1.2 times (x), which is considerably better then the 5.6x average for Fitch's title insurance rating universe.

As an attorney-owned title insurance company, CATIC's primary purpose is to preserve and promote the use of independent legal counsel in real estate transactions. CATIC has a long history of success in the Connecticut title insurance market with the state's third largest market share at approximately 21%.

Source: Fitch Ratings



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