OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good) of Connecticut Attorneys Title Insurance Company (CATIC) (South Burlington, VT).
These Credit Ratings (ratings) reflect CATIC’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The revised outlooks to stable from negative are driven by the company’s five-year average operating returns, as well as improved underwriting expenses and combine ratios. The low interest rate environment has prompted a steep acceleration resulting in home purchase activity and home appreciation beginning the second quarter of 2020. This environment supported the improvement in CATIC’s operating performance evidenced since 2020.
CATIC’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is at the strong level. The company’s surplus growth is consistent in each of the past three years. AM Best is concerned with CATIC’s expansion plans and the risk that aggressive growth potentially could have on the balance sheet. The company’s operating performance has improved in recent years and remains profitable; however, still lags the industry in operating performance. The limited business profile reflects the concentration that CATIC has as a mono-line title insurer with concentration in the New England region. AM Best views CATIC’s ERM as appropriate as it continues to formalize the underlying risk management components.
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