The title insurance industry has shown a modestly declining Risk Adjusted Capital (RAC) ratio in 2005, according to a new study from Fitch Ratings.
Relative stability came as surplus growth was balanced against greater capital requirements. “The decline in title revenue to date in 2006 has been expected and will lead to more modest surplus growth in the near future than experienced over the past five years,” the report noted.
The decrease in the RAC ratio reflects growth in several of the risk components of Fitch's model, particularly related to expense leverage, potential adverse claims development and large policy loss exposures.
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