First American Financial Corp Maintains Strong Credit Ratings Amid Economic Challenges

In a recent press release dated November 21, 2025, AM Best announced the affirmation of the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "a" (Excellent) for First American Title Insurance Company and its affiliates, collectively known as First American Title Insurance Group (FATIG). Additionally, the Long-Term ICR of "bbb" (Good) for First American Financial Corporation (FAF), the parent holding company based in Delaware, was also affirmed. Notably, the outlook for these ratings remains stable.

The affirmation of FATIG's ratings reflects several key factors assessed by AM Best, including the group's exceptional balance sheet strength, adequate operating performance, and robust enterprise risk management (ERM) practices.

FATIG's balance sheet is regarded as "strongest" based on the risk-adjusted capitalization measured by Best’s Capital Adequacy Ratio (BCAR). This strength is bolstered by strong surplus levels and a conservative investment strategy. Moreover, the group's solid market positioning as the second-largest underwriter in the U.S. title insurance industry is notable, especially as it navigates through a challenging economic environment characterized by rising interest rates and a slowdown in the real estate sector.

FATIG's operating results align with industry composite averages, showcasing its adequate performance despite macroeconomic headwinds. The group continues to make significant investments in its title plants, ensuring that they remain among the most comprehensive in the industry. Policies are distributed through both direct channels and a network of independent agents, enhancing its market reach.

The ratings also underscore FATIG's commitment to enterprise risk management, which aligns with corporate objectives and regulatory requirements. This diligent risk management approach is essential in today’s volatile market conditions.

While the current ratings are stable, AM Best cautioned that negative rating actions could emerge if the economic landscape deteriorates further. Specific concerns include a significant decline in FATIG’s operating profitability due to sustained rising interest rates or a notable decrease in its risk-adjusted capitalization levels. Additionally, liquidity issues or increased leverage at the holding company could also trigger negative actions.

Conversely, positive rating adjustments could occur if FATIG demonstrates substantial improvements in operating profitability or a marked increase in risk-adjusted capitalization levels.

The affirmation of First American Financial Corporation's credit ratings by AM Best serves as a testament to its enduring strength in a challenging economic environment. As the company navigates the complexities of the real estate market, its robust financial foundation and proactive risk management strategies will be crucial in maintaining its competitive edge and ensuring long-term stability. The ratings reflect confidence in FATIG's ability to weather economic fluctuations while continuing to provide reliable title insurance services.