AM Best Affirms Credit Ratings of First American Title Insurance Group Members and First American Financial Corporation

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) of First American Title Insurance Company (Omaha, NE) and its title affiliates, which are referred to as First American Title Insurance Group (FATIG). In addition, AM Best has affirmed the Long-Term ICR of “bbb” (Good) of the parent holding company, First American Financial Corporation (FAF) (Delaware) [NYSE: FAF]. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies and ratings.)

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

FATIG’s strongest balance sheet strength is supported by its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), strong surplus levels and conservative investment strategy. In addition, FATIG benefits from a strong franchise value, financial flexibility and operational support from FAF, which maintains a conservative level of financial leverage and solid interest coverage. The assessment of adequate operating performance is supported by the group's operating results, which are aligned with the industry composite averages. FATIG is the second-largest underwriter in the U.S. title insurance industry and continues to maintain a solid market position based on 2024 premiums written, despite unfavorable macroeconomic market conditions with rising interest rates and a slowdown in the real estate sector.

The group makes significant investments in its title plants, which are some of the most comprehensive in the industry. Policies are distributed on a direct basis and through a network of independent agents. The ratings also reflect FATIG’s robust ERM practices, which are in line with its corporate objectives, regulatory requirements and rating agency guidelines.

Negative rating actions could occur if challenges from rising interest rates and a slowing economy pose a significant decline in FATIG’s operating profitability or a material decline in its risk-adjusted capitalization levels. Negative rating actions also could result should the holding company experience liquidity issues or a significant increase in leverage. Positive rating actions could occur if the group experiences significant improvements in its operating profitability and/or a material increase in its risk-adjusted capitalization levels.

The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been affirmed with stable outlooks for the following members of First American Title Insurance Group:

• First American Title Insurance Company
• First American Title Insurance Company of Australia Pty Limited
• First American Title Insurance Company of Louisiana
• First European Title Insurance Company Limited
• First Title Insurance plc
• Ohio Bar Title Insurance Company

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.

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