KBRA Affirms Ratings for CATIC Financial, Inc. and Insurance Subsidiaries
20 Jul 2023 | New York
KBRA affirms the insurance financial strength rating (IFSR) of A- for Connecticut Attorneys Title Insurance Company (CATIC), the lead operating subsidiary of CATIC Financial, Inc. (CATIC Financial). Additionally, KBRA affirms the IFSR of BBB- for CATIC Title Insurance Company (CATIC Title). Further, KBRA affirms CATIC Financial’s issuer rating of BBB-. CATIC Financial and its subsidiaries provide title insurance and related services on residential and commercial properties in New England, Georgia, Florida, New York, New Jersey and Pennsylvania, and operates exclusively through a network of independent title agents. All Outlooks are Stable.
Key Credit Considerations
CATIC's market presence and expertise, strong premium growth and revenue generation, reduction in excess exposure through reinsurance, favorable scale, and conservative balance sheet and liquidity positively impact the rating.
An elevated expense ratio, potential execution risk, and exposure to some high risk assets negatively impact CATIC's rating.
CATIC Title benefits from expense benefits and support from its parent company CATIC Financial. Factors that are negatively impacting CATIC Title's rating include execution risk and unfavorable scale.
Rating Sensitivities
The ratings could be upgraded if the companies experience a sustained long-term trend of growth in earnings leading to organic surplus growth or continued growth in its fee-based business to improve earnings diversification.
The ratings could be downgraded if there is a trend in earnings deterioration causing surplus declines, the companies experience material investment losses, there is a departure of key members of the management team, there is a material negative change in reserves or loss of available reinsurance, or there is a change in capital support from its parent, CATIC Financial.
To access rating and relevant documents, click here.
Click here to view the report.