Fitch Downgrades Stewart Title Group’s IFS to ‘BBB+’; Outlook Negative
Fitch Ratings has downgraded the Insurer Financial Strength (IFS) ratings of Stewart Title Guaranty Company (STG) and its wholly owned subsidiary Stewart Title Insurance Company (STIC), collectively referred to as Stewart, to ‘BBB+’ from ‘A-’. Fitch has also downgraded the Issuer Default Rating (IDR) of Stewart Information Services Corp. (SISCO), to ‘BBB-’ from ‘BBB’. The Rating Outlook for all ratings is Negative.
Fitch’s rating action was primarily driven by Stewart’s below average profitability relative to peers and declines in statutory surplus. Through the first half of 2009, Stewart’s GAAP pretax operating margin was -7.7% compared to a peer average of 2.8%. Similarly, Stewart’s statutory capital levels were down 13% since year-end compared to a dollar weighted peer average of positive 4%.
