NU Online News Service, Nov. 30, 2:42 p.m. EST

Fitch Ratings has changed its outlook on the title-insurance industry from negative to stable, saying the current ratings of these companies reflect the weakened state of the companies.

Fitch says that “uncertainty tied to potential earnings and capital losses from adverse loss reserve development has diminished.”

Two insurers, Old Republic Title Group and Stewart Information Services Corp., maintain a negative outlook due to “company-specific issues.”

Old Republic is weighed down by its mortgage-guarantee business. Stewart is having profitability issues during the housing downturn.

Cost cutting is allowing title-insurance companies to remain profitable in the face of the economic downturn. The companies are “better equipped to respond to any future revenue volatility relative to the expense structures maintained when the market turned unfavorably in 2007-2008,” says Fitch.

The rating service notes that two insurers, New Jersey Title and Southern Title Insurance, were placed into runoff because of agent schemes to pilfer premium-escrow funds.

Special Reports /

Fitch Revises Title Insurance Outlook to Stable

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