S&P Assigns Stewart Title Guaranty Co. 'A-' Rating

May 15, 2002

NEW YORK,  /PRNewswire/ -- Standard & Poor's has assigned its single-'A'-minus financial strength rating to Stewart Title Guaranty Co. based on the company's very strong capitalization and moderately strong market position.

"Stewart Title is the flagship title insurer of Stewart Information Services Corp. and indirectly enjoys the benefits of its parent's low financial leverage and moderate earnings diversification," said Standard & Poor's credit analyst Charles Titterton. It is the third largest title insurer in the U.S. and is a member of the fourth largest title insurance group, with a market share of about 11%. Its strengths in customer service and its strong agency force enhance its market profile. The company is consistently profitable, but below-average profit margins relative to its peers render operating performance a moderate weakness to the rating.

Stewart Title is expected to grow moderately through organic growth and acquisitions of agencies. The company is expected to increase its market share in the profitable commercial title segment in the near term and to grow internationally over the long term, though international business is not expected to be significant to overall results for several years.

Stewart Title's earnings are expected to be moderately strong in 2002 but slightly below average relative to its competitors. Volatility of earnings, in the event of significant weakening in the housing market, is expected to be less than that of its competitors because of Stewart Title's lower financial leverage and its track record of positive net income throughout the business cycle since at least 1986. The company's level of success in reducing its expense ratio will be an important factor in its long-term success.

Source: Standard & Poor's

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