S&P Revises LandAmerica Financial Group Inc., Outlook to Negative

June 13, 2002

NEW YORK--(BUSINESS WIRE)--Standard & Poor's-- Standard & Poor's has revised the outlook on the members of the LandAmerica Financial Group Inc.'s title insurance operations (collectively, LandAmerica) to negative from stable because of an erosion in LandAmerica's market share, strategic retrenchment to that of a more traditional title company, and good, but market-trailing, operating performance.

Standard & Poor's also said it affirmed its single-'A'-minus counterparty credit and financial strength ratings on the company.

"LandAmerica's market share will stabilize and the company will maintain its No. 3 market position, however, the company's higher expense structure has led to a competitive disadvantage because it has not been able to take full advantage of record title volume in 2001 and first-quarter 2002," said Standard & Poor's credit analyst Donovan Fraser.

LandAmerica is expected to earn an ROR of more than 6%, maintain expense discipline, and earn an underwriting profit in 2002 and 2003. The company's lack of material earnings diversification outside of title operations increases its exposure to the interest rate cycle and real estate sector dislocations.

As of year-end 2001 LandAmerica was ranked third in market share at 19.8%, down from No. 2 at 21.7% in 1999. The company's largest exposure has historically been in the Texas market and 2001 proved no exception as the state generated 15.3% of LandAmerica's title revenue in 2001. Consequently, the company has a lesser presence than its competitors in California, which has been the bedrock of the robust real estate sector.

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Copyright 2002, Standard & Poor's Ratings Services

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