Fitch Affirms Attorneys' Title's 'A-' IFS; Revises Rating Outlook to Negative

CHICAGO--(Business Wire)--
Fitch Ratings has affirmed the 'A-' insurer financial strength
(IFS) rating of Attorneys' Title Insurance Fund, Inc. (The Fund) and
revised the Rating Outlook to Negative from Stable.

The rating action reflects The Fund's poor operating performance
and slower response to cutting operating expenses relative to peers
during this current difficult environment of reduced mortgage
originations and greater title insurance claims. Additional concerns
include The Fund's concentration of business in Florida, which along
with California has suffered disproportionately in the real estate
down cycle, and lost surplus given the company's limited financial
flexibility.

Favorably, The Fund's risk-adjusted capital position, measured by
Fitch's RAC ratio continues to compare favorably to industry peers and
remains an important element in The Fund's financial strength rating.

Through first half-2008, The Fund reported a net loss of $8.5
million, which has already exceeded the nearly $6 million loss posted
for the full year 2007. The Fund's combined ratio was a product of
both higher losses and a slowness in expense cutting relative to
peers.

The Fund is the third-largest title insurer in Florida based on
premium volume behind both Fidelity National Financial and First
American Corporation. The geographic concentration in the Florida
market is currently hurting operating results, however, historically
The Fund has benefitted from Florida's real estate market
outperforming other regions of the country.

Although The Fund has lost in excess of $33 million in surplus
since its peak of $159 million at yearend 2006, the $125 million of
surplus as of June 30, 2008 is still two and one-half times the level
recorded in 2002. The Fund's capital adequacy, as measured by Fitch's
RAC ratio, remains better than the average for Fitch's rating
universe. Capital adequacy is always a key component of financial
strength ratings, but it takes on greater importance during times of
stress like the current down cycle.

The Fund has an above-average exposure to unaffiliated common and
preferred stocks, representing approximately one-half of total
invested assets or 85% of policyholders' surplus. This compares to
equity exposure within Fitch's rating universe of less than 5% of
invested assets or 15% of policyholders' surplus. The concerns over
the large allocation to equity securities are additional volatility in
earnings and surplus from stock market fluctuations.

The Fund is owned by a business trust that in turn is owned by
attorneys who serve as agents for the company. This ownership
structure limits The Fund's access to outside capital, as well as the
likelihood of the company being an acquisition target.

Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from this
site, at all times. Fitch's code of conduct, confidentiality,
conflicts of interest, affiliate firewall, compliance and other
relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, Chicago
Douglas M. Pawlowski,CFA, 312-368-2054
Gerald B. Glombicki, 312-606-2354
Sandro Scenga, 212-908-0278
(Media Relations, New York)

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