The title insurance industry has shown a modestly declining RiskAdjusted Capital (RAC) ratio in 2005, according to a new study fromFitch Ratings.
Relative stability came as surplus growth was balanced againstgreater capital requirements. “The decline in title revenue to datein 2006 has been expected and will lead to more modest surplusgrowth in the near future than experienced over the past fiveyears,” the report noted.
The decrease in the RAC ratio reflects growth in several of therisk components of Fitch's model, particularly related to expenseleverage, potential adverse claims development and large policyloss exposures.
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