A.M. Best Places Ratings of Fidelity National Financial Under Review With Negative Implications
November 13, 2008
A.M. Best Co. has placed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of "a" of Fidelity National Financial Group (Fidelity) and its eight title insurance members under review with negative implications. In addition, A.M. Best has placed the ICR of "bbb" of Fidelity National Financial, Inc. (FNF) (headquartered in Jacksonville, FL) (NYSE: FNF) under review with negative implications. (Please see below for a detailed listing of the companies and ratings.)
The ratings of FNF and Fidelity have been placed under review as A.M. Best assesses the implications of Fidelity´s recently announced plans to acquire the Land America Financial Group (Land America), the third-largest national writer of title insurance in the United States, in a stock transaction valued at $128 million. However, the proposed acquisition also calls for a significant transfer of liquidity from FNF´s title insurance subsidiaries to Land America´s leading statutory entities in order to partially pay down Land America´s outstanding debt, which may result in adversely impacting the financial strength and risk-adjusted capitalization of Fidelity´s title insurance members. Additionally, the acquisition is expected to carry execution risks of integrating two large insurance organizations. The proposed transaction, which will result in the largest title insurance organization in the United States, will be subject to anti-trust review, along with shareholder and other regulatory approvals.
A.M. Best expects to resolve the under review status of the ratings by the close of first quarter 2009.
The FSR of A (Excellent) and ICRs of "a" have been placed under review with negative implications for Fidelity National Financial Group and its following members:
- Alamo Title Insurance
- Chicago Title Insurance Company of Oregon
- Chicago Title Insurance Company
- Fidelity National Title Insurance Company
- National Title Insurance of New York, Inc.
- Security Union Title Insurance Company
- Ticor Title Insurance Company of Florida
- Ticor Title Insurance Company
The ICR of "bbb" has been placed under review with negative implications for Fidelity National Financial, Inc.
Source: AM Best