A.M. Best is becoming more bullish on the prospects of the title insurance sector.

After the sector, which is dependent on housing demand, was pummeled in 2008, it has steadily recovered since. In a note, A.M. Best said has revised its rating outlook for the title sector to stable from negative, citing the improved balance sheet strength of the major title insurers.  

“Most of the major underwriters posted operating gains, while industry capitalization also improved significantly,” A.M. Best notes. “Moreover, during the first six months of 2010, most of the major title insurers, helped partly by federal policy and tax incentives as well as a continued decline in long-term interest rates, spurred higher refinancing activity and continued to post positive operating margins. This resulted in positive rating actions, which included the revision of the rating outlook to stable from negative, for Fidelity National Financial Group and First American Title Insurance Group, the two principal title insurance underwriters groups.”

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