OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of First American Corporation Property Casualty Companies (First American P&C Group) (Santa Ana, CA) and its member companies, First American Property & Casualty Insurance Company and First American Specialty Insurance Company. The outlook for all ratings is negative.

These rating actions are due to First American P&C Group's continued favorable underwriting performance despite a generally softening underwriting cycle characterized by increased competition as well as continued wildfire activity in California, its predominant market.

On a stand-alone basis, First American P&C Group continues to exhibit favorable operating performance due in part to strong underwriting discipline. The negative outlook reflects the continuing pressures on First American P&C Group's capitalization as a result of the reduced financial flexibility of its parent holding company, The First American Corporation, Inc. (First American) (Santa Ana, CA) (NYSE: FAF). This is evidenced by continuing dividend payments by First American P&C Group to First American, totaling $37 million since 2007. These payments, while supported by First American P&C Group's operating results, have hindered growth in policyholders' surplus and risk-adjusted capitalization over the past two years.


For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.





A.M. Best Co.

Analysts:

Neil DasGupta, 908-439-2200, ext. 5206

neil.dasgupta@ambest.com

or

Gary Davis, 908-439-2200, ext. 5665

gary.davis@ambest.com

or

Public Relations:

Jim Peavy, 908-439-2200, ext. 5644

james.peavy@ambest.com

or

Rachelle Morrow, 908-439-2200, ext. 5378

rachelle.morrow@ambest.com



Source: A.M. Best Co.