LandAmerica Ratings Dropped by Fitch

Fitch has changed the Rating Outlook for LandAmerica Financial Group (LFG) Inc.’s insurer financial strength rating from stable to negative.

Less than expected operating results for LFG were the reason behind the change. Despite the fact that LFG’s revenue growth and operating profits are thought to be impacted by cyclical factors, for the current rating, Fitch figures operating results to be better than industry performance.

In 2000, LFG’s GAAP title revenues dropped 12 percent while GAAP pretax operating income (not counting the write-off for good will) dropped 42 percent. While interest rates fell in the first quarter of this year, results improved with GAAP title revenues gaining eight percent and GAAP pretax operating income increasing to 10 million from a drop of three million (compared to the same period during 2000).

Present ratings reflect LFG’s positive franchise in the title insurance industry, conservative statutory reserve position, and proven balance sheet fundamentals. Other strengths include conservative operating leverage as compared to peer companies, and reasonable agency viewing and auditing controls.