AM Best has placed under review with developing implications the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good) of Connecticut Attorneys Title Insurance Company (CATIC) (Essex Junction, VT).

The Credit Ratings (ratings) reflect CATIC’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The ratings reflect AM Best’s revised assessment of CATIC’s overall balance sheet strength to adequate from a strong level due to continued deterioration in policyholder surplus, as well as uncertainty around the legacy loss coming from their run-off captive. The deterioration in surplus in recent years is due to the culmination of negative implications arising from the interest rate environment and dividends outpacing net results. The under review with developing implications status reflects CATIC’s efforts to strengthen the balance sheet to support business expansion and stabilize pressure on its balance sheet strength assessment, given the ongoing market challenges regarding profitability and improvement in surplus levels.

CATIC’s unfavorable five-year average combined and operating ratios underperform the title insurance industry composite due to its high expense ratio in support of their expansion efforts. However, the company has improved these ratios in the past five years and generated profits in four of those years, supporting the adequate operating performance assessment. CATIC continues to maximize growth investments while concurrently deploying expense reduction initiatives to alleviate its high expenses and improve its operating results. The limited business profile reflects the concentration that CATIC has as a monoline title insurer. AM Best views CATIC’s ERM as appropriate as the company has an established framework with a defined appetite and tolerances that are utilized to articulate the level and type of risks that are acceptable to CATIC.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240802214733/en/