Best Is Bearish on Title.

Oldwick, NJ -- A.M. Best Co. here has revised its outlook on Old Republic Title Insurance Co. from stable to negative because of uncertainties related to the parent company's mortgage guaranty business as a result of the downturn in the housing and mortgage finance markets.

Otherwise, Best affirmed its financial strength and issuer credit ratings of ORTIC.

In its statement, Best noted, "The positive rating factors are derived from the group's moderate underwriting leverage, conservative reserving practices and commitment to technology advancement. These positive rating factors are partially offset by the ongoing down cycle in the real estate market. The group faces challenges in controlling expenses and managing earnings and revenue volatility due to the current weakness in the housing market as the demand for title insurance products is largely derived from transactions in residential real estate."

On the other hand, Best noted ORTIC and its sister title companies are nationally diversified, limiting exposure to volatility to fluctuations in regional real estate markets. "Moreover, approximately two-thirds of the group's premium is generated through independent agents. This enables the group to potentially better manage down cycles as fixed costs are generally lower for that distribution channel," Best said.

In a separate release Best revised the outlook on a number of other Old Republic International Corp. subsidiaries to negative as well ...