Fitch Affirms LandAmerica's 'A' Insurer Financial Strength Rating

March 8, 2004

Changes Outlook to Stable

CHICAGO, (BUSINESS WIRE) -- Fitch Ratings has affirmed the 'A' insurer financial strength (IFS) rating of the title insurance underwriting companies of LandAmerica Financial Group, Inc. (LFG) and changed the Rating Outlook to Stable from Negative.

The change in the Rating Outlook reflects that core operating results on a consolidated statutory accounting basis, which measures only title insurance results, have been strong in recent periods and better than expectations. This has lead to strong statutory capital growth.

The current ratings reflect LFG's strong brand name, a high-quality and liquid investment portfolio, conservative operating leverage, adequate statutory reserves and moderate parent company financial leverage. Offsetting these positives, LFG's enterprise -- wide earnings have not benefited from non-title operations and therefore, the organization has not reported optimal earnings growth during the recent favorable market.

In recent years, LFG, like many larger title insurers, has diversified into other real estate service businesses. Non-title operating earnings can allow for enhanced, unregulated parent company cash flow and lower the needs to upstream insurance subsidiary dividends to meet parent company needs. Over the long term, Fitch believes a mixture of title and non-title operating earnings can play an important role in determining LFG's financial position. In 2003, the company completed three non-title acquisitions that are expected to modestly enhance 2004 earnings.

LFG's debt-to-total capital ratio is expected to be managed long term to approximately 25%, and was 23.9% at Dec. 31, 2003.

LFG is the third largest provider of title insurance in the United States with a market share of approximately 18%. The organization has a strong market position in residential and commercial title insurance, and its title operations are well diversified geographically. LFG, a publicly traded holding company, with GAAP assets and shareholder's equity of $2.7 billion and $1.0 billion, respectively at Dec. 31, 2003, provides title insurance and real estate products in the U.S., Canada and the Caribbean.

Entity/Issue/Type Action Rating/
Outlook
Commonwealth Land Title Insurance Company
-- Insurer financial strength
Affirmed 'A'/Stable
Commonwealth Land Title Insurance Company of New Jersey
-- Insurer financial strength
Affirmed 'A'/Stable
Land Title Insurance Company of Pasadena
-- Insurer financial strength
Affirmed 'A'/Stable
Lawyers Title Insurance Corporation
-- Insurer financial strength
Affirmed 'A'/Stable
Title Insurance Company of America
-- Insurer financial strength
Affirmed 'A'/Stable
Transnation Title Insurance Company
-- Insurer financial strength
Affirmed 'A'/Stable
Transnation Title Insurance Co. of New York.
-- Insurer financial strength
Affirmed 'A'/Stable

Source: Fitch Ratings


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