Fitch Affirms Stewart Title Group Ratings
Rating Outlook Stable

January 23, 2003

NEW YORK--(BUSINESS WIRE)-- -Fitch Ratings has affirmed the 'A+' insurer financial strength ratings of Stewart Title Guaranty Company and its wholly owned subsidiary Stewart Title Insurance Company (collectively referred to as Stewart). The companies are ultimately owned by Stewart Information Services Corporation (NYSE: STC - News), a NYSE listed company. The Rating Outlook is Stable.

The primary factor supporting the affirmations is Stewart's excellent balance sheet characteristics. Specifically, the company's strong capital position on both a risk adjusted and an absolute basis. At yearend 2001, Stewart's risk-adjusted capital as measured by Fitch's RAC ratio at 223% was the second highest of the five national title groups. Through Sept. 30, 2002, absolute capital grew 1.6% to $252 million from $248 million at year end 2001.

Additional balance sheet strengths include conservative reserving practices, minimal debt leverage, a high-quality and very liquid investment portfolio, and moderate operating leverage.

Other factors considered in the affirmations include the company's sound agency monitoring and auditing controls, good market positioning as a national title insurer, and improving profitability, albeit from a poor year in 2000.

In 2001 and the first nine months of 2002, low interest rates produced a boom in the real estate market, which significantly improved the operating results of the title insurance industry. Consequently, Stewart's operating results were assisted by the market environment during this period. Stewart's GAAP pretax operating earnings increased significantly in 2001 to $81 million from $1.0 million in 2000 and in the first nine months of 2002 to $83 million from $53 million over the same period in 2001.

Despite the recent improvement, over the past five years, Stewart's operating performance has been below national peer averages. For the current ratings, Fitch expects long-term profitability to be among the best in the industry and will continue to monitor Stewart's operating results to assess the company's ability to meet these long-term expectations.

Stewart is one of the nation's largest title insurance groups with a national market share of just over 10% in 2001 (according to ALTA). Over half of Stewart's premiums come from its five largest states: Texas, California, New York, Florida, and Colorado. Stewart distributes its products through more than 6,400 locations on properties located in all 50 states and several foreign countries. Close to 41% of its business (title premiums plus escrow) comes from its affiliated agencies.

Entity/Issue/ Type ActionRating/OutlookStewart Title Guaranty
--Insurer financial strengthAffirmedA+'/Stable.Stewart Title Insurance Company
--Insurer financial strengthAffirmed'A+'/Stable.

Source: Fitch Ratings

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