©2018 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
FIRST AMERICAN FINANCIALInvestor Day May 18, 2018
Safe Harbor Statement
CERTAIN STATEMENTS MADE IN THIS PRESENTATION AND THE RELATED MANAGEMENT COMMENTARY AND RESPONSES TO INVESTOR QUESTIONS CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE FACT THAT THEY DO NOT RELATE STRICTLY TO HISTORICAL OR CURRENT FACTS AND MAY CONTAIN THE WORDS “BELIEVE,” “ANTICIPATE,” “EXPECT,” “INTEND,” “PLAN,” “PREDICT,” “ESTIMATE,” “PROJECT,” “WILL BE,” “WILL CONTINUE,” “WILL LIKELY RESULT,” OR OTHER SIMILAR WORDS AND PHRASES OR FUTURE OR CONDITIONAL VERBS SUCH AS “WILL,” “MAY,” “MIGHT,” “SHOULD,” “WOULD,” OR “COULD.” THESE FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, STATEMENTS REGARDING FUTURE OPERATIONS, PERFORMANCE, FINANCIAL CONDITION, PROSPECTS, PLANS AND STRATEGIES. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT EXPECTATIONS AND ASSUMPTIONS THAT MAY PROVE TO BE INCORRECT. RISKS AND UNCERTAINTIES EXIST THAT MAY CAUSE RESULTS TO DIFFER MATERIALLY FROM THOSE SET FORTH IN THESE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE THE ANTICIPATED RESULTS TO DIFFER FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, INTEREST RATE FLUCTUATIONS; CHANGES IN THE PERFORMANCE OF THE REAL ESTATE MARKETS; VOLATILITY IN THE CAPITAL MARKETS; UNFAVORABLE ECONOMIC CONDITIONS; FAILURES AT FINANCIAL INSTITUTIONS WHERE THE COMPANY DEPOSITS FUNDS; CHANGES IN APPLICABLE LAWS AND GOVERNMENT REGULATIONS; HEIGHTENED SCRUTINY BY LEGISLATORS AND REGULATORS OF THE COMPANY’S TITLE INSURANCE AND SERVICES SEGMENT AND CERTAIN OTHER OF THE COMPANY’S BUSINESSES; USE OF SOCIAL MEDIA BY THE COMPANY AND OTHER PARTIES; REGULATION OF TITLE INSURANCE RATES; LIMITATIONS ON ACCESS TO PUBLIC RECORDS AND OTHER DATA; CHANGES IN RELATIONSHIPS WITH LARGE MORTGAGE LENDERS AND GOVERNMENT-SPONSORED ENTERPRISES; CHANGES IN MEASURES OF THE STRENGTH OF THE COMPANY’S TITLE INSURANCE UNDERWRITERS, INCLUDING RATINGS AND STATUTORY CAPITAL AND SURPLUS; LOSSES IN THE COMPANY’S INVESTMENT PORTFOLIO; MATERIAL VARIANCE BETWEEN ACTUAL AND EXPECTED CLAIMS EXPERIENCE; DEFALCATIONS, INCREASED CLAIMS OR OTHER COSTS AND EXPENSES ATTRIBUTABLE TO THE COMPANY’S USE OF TITLE AGENTS; ANY INADEQUACY IN THE COMPANY’S RISK MANAGEMENT FRAMEWORK; SYSTEMS DAMAGE, FAILURES, INTERRUPTIONS AND INTRUSIONS, OR UNAUTHORIZED DATA DISCLOSURES; PROCESS AUTOMATION; TECHNOLOGICAL DEVELOPMENTS THAT CHANGE THE WAY REAL ESTATE TRANSACTIONS ARE CONDUCTED AND RELATED DOCUMENTS ARE PROCESSED; ERRORS AND FRAUD INVOLVING THE TRANSFER OF FUNDS; THE COMPANY’S USE OF A GLOBAL WORKFORCE; INABILITY OF THE COMPANY’S SUBSIDIARIES TO PAY DIVIDENDS OR REPAY FUNDS; AND OTHER FACTORS DESCRIBED IN THE COMPANY’S QUARTERLY REPORT ON FORM 10-Q, INCLUDING UNDER THE CAPTION “RISK FACTORS” IN ITEM 1A OF PART II OF THAT REPORT. THE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE TO UPDATE FORWARD-LOOKING STATEMENTS TO REFLECT CIRCUMSTANCES OR EVENTS THAT OCCUR AFTER THE DATE THE FORWARD-LOOKING STATEMENTS ARE MADE.
2
Use of non-GAAP Financial Measures
THIS SLIDE PRESENTATION CONTAINS CERTAIN FINANCIAL MEASURES THAT ARE NOT PRESENTED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP), INCLUDING ADJUSTED INVESTMENT INCOME. ADJUSTED INVESTMENT INCOME EXCLUDES AFFILIATED INVESTMENTS AND IS PRESENTED BECAUSE IT PROVIDES THE COMPANY’S MANAGEMENT AND READERS AND VIEWERS OF THIS PRESENTATION WITH A BETTER UNDERSTANDING OF THE IMPACT OF INTEREST RATES ON THE COMPANY’S INVESTMENT INCOME OVER TIME. THE COMPANY DOES NOT INTEND FOR THESE NON-GAAP FINANCIAL MEASURES TO BE A SUBSTITUTE FOR ANY GAAP FINANCIAL INFORMATION. IN THE SLIDE PRESENTATION THESE NON-GAAP FINANCIAL MEASURES HAVE BEEN PRESENTED WITH, AND RECONCILED TO, THE MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES. INVESTORS SHOULD USE THESE NON-GAAP FINANCIAL MEASURES ONLY IN CONJUNCTION WITH THE COMPARABLE GAAP FINANCIAL MEASURES.
3
9:00 a.m. Welcome Craig Barberio, VP Investor Relations
9:05 a.m. Strategy & Business Review Dennis Gilmore, Chief Executive Officer
9:45 a.m. Title Operations Chris Leavell, COO, Title Insurance and Services
10:15 a.m. Q&A/Break
10:50 a.m. Specialty Insurance Larry Davidson, COO, Specialty Insurance
11:10 a.m. Financial Review Mark Seaton, EVP and Chief Financial Officer
11:40 a.m. Q&A
12:00 p.m. Lunch
AGENDA
4
STRATEGY & BUSINESS REVIEW
Dennis GilmoreChief Executive Officer
5
PRESENTATION AGENDA
Strong Track Record of Results
Well Positioned in a Changing Environment
Attractive Growth Opportunities
6
PRESENTATION AGENDA
Strong Track Record of Results
Well Positioned in a Changing Environment
Attractive Growth Opportunities
7
Leader in the Title and Settlement Services Industry
92% of Revenue, Title Segment
8% of Revenue, Specialty Insurance Segment26.2% Title Market Share
18,700 Employees
800 Offices
Largest Title Plant and Property
Record Database
Fortune 100 Best Companies to Work For®
2016 – 2017 – 2018
Trusted National Brand
$9.6B Total Assets
8
$5.8B Total Revenue
9 Countries
Note: Revenue and market share data for 2017. All other data as of December 31, 2017.
FORTUNE and FORTUNE 100 Best Companies to Work For are registered trademarks of Time Inc. FORTUNE and Time Inc. are not affiliated with and do not endorse products and services of First American Financial Corporation.
Established Reputation as Efficient Operator Dedicated to Long-Term Value Creation
$-
$10
$20
$30
$40
$50
$60
2011 2012 2013 2014 2015 20162010 2017
TOTAL SHAREHOLDER RETURN
22.5% ANNUALIZED$56
JUNE
$14
Completed expansion of title plant footprint to over 500 counties
Reorganized title operations into customer-centric divisions
Purchase originations bottom after 6 years of decline
Standalone company formed June 1, 2010
Assembled the largest property record database
CFPB’s integrated mortgage disclosure rule (TRID) implemented
First year recognized on the Fortune100 Best Companies to Work For list
• Achieved record pretax title margin of 12.1%
• Raised dividend for the seventh time since 2010 to $1.52 per share annually
9
Seasoned Leadership Team
Mark Seaton EVP and Chief Financial Officer 12 Years
Ken DeGiorgio Executive Vice President 19 Years
Chris Leavell COO, Title insurance and Services 21 Years
Larry Davidson COO, Specialty Insurance 18 Years
George Livermore EVP and President, Data and Mortgage Solutions 20 Years
Dennis Gilmore Chief Executive Officer 25 Years
Years with
First Am
erican
10
Deploy Our Capital to Maximize Long-Term Shareholder Returns
People and CultureCompliance and Risk Management
Innovation
Profitably Grow OurCore Title
andSettlement
Business
Strengthen the Enterprise Through Data and Process Advantage
Manageand Actively
Invest in Complementary Businesses that
Support or Expand the
Core
11
FIRST AMERICAN STRATEGY
To Be the Premier TitleInsurance and Settlement Services Company
VISION:
$378 $361
$551 $489
$632
$100
$200
$300
$400
$500
$600
$700
2013 2014 2015 2016 2017
Past 5 Years: Achieved Strong Financial Results
12
$5.0 $4.7
$5.2
$5.6 $5.8
$3.0
$3.5
$4.0
$4.5
$5.0
$5.5
$6.0
2013 2014 2015 2016 2017
$ in
Bill
ion
s
$1.71 $2.15
$2.62 $3.09
$3.76
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
2013 2014 2015 2016 2017
7.8%9.3%
10.8%11.9%
13.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2013 2014 2015 2016 2017
TOTAL REVENUE
$ in
Mill
ion
s
EARNINGS PER SHARE
CASH FROM OPERATIONS RETURN ON EQUITY
Past 5 Years: Growing Pretax Title Margin
Key Drivers of Margin Improvement
Favorable market conditions
Purchase
Commercial
Operating efficiencies
Favorable claims experience
Rising investment income
13
0%
2%
4%
6%
8%
10%
12%
14%
$-
$500
$1,000
$1,500
$2,000
$2,500
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
Total Shareholder Return
14 Source: Bloomberg
12/30/2017
FAF
S&P 500
57.9%1 Year
3 Year
5 Year
21.8%
11.3%
15.8%
21.6%
21.7%
-50%
0%
50%
100%
150%
200%
1/2/2013 1/2/2014 1/2/2015 1/2/2016 1/1/2017
PRESENTATION AGENDA
Well Positioned in a Changing Environment
Attractive Growth Opportunities
Strong Track Record of Results
15
Real Estateand Mortgage
Process BecomingDIGITAL
HIGHERINTEREST RATES
Affect Business Mix
EMERGING TECHNOLOGIES
Create Opportunities
Consumer Experience Faster Closing
Purchase Commercial BlockchainArtificial Intelligence
Robotic Process AutomationRefinance
Key Forces Driving Market Change
16
Rising Mortgage Rates Result in Lower Refinance Volumes
17
Refinance Open Orders
30 Yr. Fixed Mortgage Rate
3.25%
3.50%
3.75%
4.00%
4.25%
4.50%
4.75%
750
1,250
1,750
2,250
2,750
3,250
3,750
Jan
-13
Mar
-13
May
-13
Jul-
13
Sep
-13
No
v-1
3
Jan
-14
Mar
-14
May
-14
Jul-
14
Sep
-14
No
v-1
4
Jan
-15
Mar
-15
May
-15
Jul-
15
Sep
-15
No
v-1
5
Jan
-16
Mar
-16
May
-16
Jul-
16
Sep
-16
No
v-1
6
Jan
-17
Mar
-17
May
-17
Jul-
17
Sep
-17
No
v-1
7
Jan
-18
Mar
-18
Op
en O
rder
s P
er D
ay
Source: Federal Reserve Bank of St. Louis
…But Refinance Revenue Remains at Multi Year Lows
18
21%
13%15%
17%
11%
0%
5%
10%
15%
20%
25%
$150
$200
$250
$300
$350
$400
2013 2014 2015 2016 2017
$ in
Mill
ion
s
Refinance % of Direct Premiums & Escrow Refinance RevenueRefinance – Direct Premiums & Escrows
… and Higher Short-term Rates Benefit Investment Income
19
(1)
(1) Excludes affiliated investments (See reconciliation in Appendix).(2) Company estimate.
0.00%
0.25%
0.50%
0.75%
1.00%
1.25%
1.50%
$16
$21
$26
$31
$36
$41
$46
Q1
'13
Q2
'13
Q3
'13
Q4
'13
Q1
'14
Q2
'14
Q3
'14
Q4
'14
Q1
'15
Q2
'15
Q3
'15
Q4
'15
Q1
'16
Q2
'16
Q3
'16
Q4
'16
Q1
'17
Q2
'17
Q3
'17
Q4
'17
Titl
e Se
gmen
t In
vest
men
t In
com
e ($
in M
illio
ns)
Investment Income Fed Funds Rate
Fed Fu
nd
s Rate
Each 25 basis point Fed hike increases investment income by ~$12 million/year(2)
Title Segment
$400
$500
$600
$700
$800
$900
$1,000
2013 2014 2015 2016 2017
$ in
Mill
ion
s
DIRECT PURCHASE REVENUE
Strong Purchase Market Continues
20
Purchase Market
Strong economy and job growth
Low inventory continues to drive home price appreciation
Expect home sales growth to continue given gradual increase in mortgage rates
First American Operations
550 local offices focused on purchase
Leading homebuilder business
Fee per file 2.5x refinance
Digital Transformation of Mortgage and Closing Process Underway
Quality Service Proactive Communication
Faster Closings Reduced Costs Improved Accuracy
Digital Experience Transparency
Lenders
Real Estate AgentsConsumers
First AmericanFinancial
21
Closing Timelines Will Compress
Lenders progressing toward faster mortgage timelines Closing timeline currently averaging 50-55 days
First American is developing automated title solutions to meet this growing demand
Title automation requires:1. Title and property record information
2. Underwriting expertise
22
First American Key Strengths
Consumers Increasingly Expect a Digital Closing Experience
Consumers want digital experience, with more transparency
Real estate agents want to deliver a better customer experience and improve productivity
Wire fraud a major risk related to real estate transaction
First American developing digital solutions to meet new market demands
23
Digital Experience
Secure Communications
IntegratedSolutions
First AmericanFinancial
Emerging Technologies Create Opportunities
24
EmergingTechnologies
BlockchainArtificial Intelligence
Robotic Process Automation “BOTS”
Opportunity to drive process efficiencies Collaborating with lenders on proof of concepts After extensive testing, nearing launch of first
production application for internal use In our view, unlikely to disrupt title
Doesn’t address many title issues (fraud, easements, special rights, etc.)
Numerous legal and financial challenges
Automation of standard, repeatable tasks improves productivity and reduces cost Nearly 100 pilots being evaluated across operations including accounting and underwriting A number of applications are now in production
High potential use case when coupled with proprietary data
Enhanced data collection and predictive analytics to drive title automation and enhance risk decisioning
Reduced operational costs Improved productivity
PRESENTATION AGENDA
Strong Track Record of Results
Attractive Growth Opportunities
Well Positioned in a Changing Environment
25
Strong Outlook for Title and Settlement Business
Favorable purchase market trends continue
Commercial fundamentals remain strong
Investment income improves as short term rates rise
Refinance activity approaching a floor
26
Revenue Growth
Disciplined cost management culture
Prudent underwriting has driven claim losses lower
Leveraging data and technology to improve productivity and enhance risk decisioning
Cost Efficient Operation
Focus remains on margin expansion Record margin in 2016, again in 2017Title Margin
Disciplined M&A Strategy Drives Growth
Focused Strategy Title companies that expand our footprint
in key markets
Companies that enhance our data capabilities or expand product and service offerings
Disciplined Process Strategic and cultural fit
Risk adjusted return targets
Operational integration
27
Pursuing targets that support or
leverage our core title and settlement
business
Attractive Growth Prospects in Our Property Data Business
Property Record Database Largest property record database
Datatree.com and data licensing demonstrating growth
Title Plant
Continued expansion into new markets
Houston, Dallas, El Paso
Long-term strategy to expand plant coverage to facilitate title automation
28
94
73
87
94
43
17
97
96
99
99
83
60
85
Proprietary Title Plants
Document Images
Active Real Estate Listings
Map and Parcel Boundaries
Assignments and Releases
Deeds, Mortgages, Foreclosures
Assessor/Property Ownership 1st
1st
1st
1st
1st
1st
1st
% Share of counties % Share of population
CURRENT DATA COVERAGE
100100
99
Homeowners Associations
1st
RANK
Leveraging Data Assets to Drive Title Automation and Enhanced Risk Decisioning
First American is Expanding its Scope with Title Agents
29
Became Federal Savings Bankin 1999
$3.4 billion in assets
8.4% Tier 1 leverage ratio
Provides banking & wealthmanagement services
Regulated by the OCC
First American Trust
Title Insurance
Title Production
Banking Services
Closing Solutions Back Office Services
Primary Business
Age
nt
Ad
van
tage
Pilot launched in 2017
First American Objectives
Remain focused on growing profitable market share in title segment
Strengthen data capabilities to drive title automation and reduce transaction time, cost, and risk
Manage complementary businesses that leverage or support the core
30
Title Segment Pretax Margin
11% - 13%
FAF Return on Equity
12% - 14%
Financial
Operational
SUMMARY
31
Strong Track Record of Results 21.7% annualized total shareholder return past 5 years
Well Positioned in a Changing Environment Financial performance remains strong despite higher interest rates Actively investing for the digital future Application of emerging technologies creates opportunities
Attractive Growth Opportunities Strong industry outlook Active M&A pipeline Data assets drive title automation and enhance risk decisioning Expanding service offering for title agents
TITLE OPERATIONS
Chris LeavellChief Operating Officer
Title Insurance and Services
32
U.S. TITLE
DIRECT AGENCY COMMERCIAL
Total Revenue Trend
2.1 1.9 2.1 2.3 2.3
1.0 1.0
1.2 1.3 1.3
0.50.6
0.70.7 0.7
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
2013 2014 2015 2016 2017
Agent Direct Commercial
$ in
Bill
ion
s
$3.7$3.5
$4.0$4.2 $4.4
U.S. Title76%
$4.4B$5.8B $2.3BAgent41%
$1.3BDirect23%
$0.7BCommercial
12%
First American Financial Total Revenue
33
Strong Market Position
26.2% market share
Leader in all key markets
Commercial – Purchase – Refinance – Homebuilders – International
Industry-leading title plants and property record database
National presence
Trusted brand
Long-standing customer relationships
High employee engagement – Fortune 100 Best Companies to Work For
Efficient operations
34
Key Areas of Focus
Continue to expand title margins
Extending market leadership through operating fundamentals
Growth by leveraging unique assets (e.g. bank and data)
Developing digital closing solutions
35
1
2
3
4
Commercial Operations Overview
2017 Market Share (1)
31.8%Sales Channels & Customers Insurance companies Institutional leaders Foreign capital Lenders
Private equity/debt REITs Investment firms/banks Real estate law firms
2017 Total Revenue Mix
Title Premiums85%
Information& Other
13%
Investment Income
2%
$0.7B
Operations
1
1
1 1
1
1
3
3
8 1
1
1
1 1
1
1
1
1
1
1
2
1
1
3
2
1
11
2
49States
45Offices
1,280 Employees
36 (1) Source: ALTA
Commercial Business Outlook Remains Favorable
37
Market Outlook
Most major asset classes and geographic markets remain strong
High level of capital availability despite a decline in foreign capital
A few markets showing signs of fatigue
Expect strong activity level to persist, supported by continued economic growth
465 506
599 559 592
81 89
98 102
104
$0
$100
$200
$300
$400
$500
$600
$700
$800
2013 2014 2015 2016 2017
NCS Local
$546$595
$696$661
$696
$ in
Mill
ion
s
National Commercial Services
Purchase68%
Refinance11%
Commercial7%
Other7%
Info & Other7%
Direct Division Overview
2017 Market Share (1)
% Total 10.8%% Direct 28.5%
Sales Channels & Customers Realtors Escrow Companies Mortgage Brokers
Lenders Homebuilders Homebuyers
2017 Total Revenue Mix
$1.3B
Operations
26States
550Offices
5,100 Employees
(1) Source: ALTA38
Purchase Transaction Closing Process Today
ESCROW OR CLOSING OPENED Earnest Money
Deposited
BUYER’S OFFER ACCEPTED BY
SELLER
Application Loan Estimate Underwriting Approval
MORTGAGE PROCESS
Property & Termite Inspection
OTHER CONTINGENCIES
Disclosure Reports All Contingencies Removed
Opening Package Completed by Buyer & Seller
TITLE PROCESS
Preliminary Title Commitment
Curative Final Date Down
SIGNING/CLOSING Loan Docs Settlement Docs Required Disclosures Buyer Cash Notary Services
FINAL SETTLEMENT Record Docs Loan Funding Disbursement of Funds
READY TO FUND/CLOSE Closing Disclosure due 3 Days
Prior to Funding
SELLER + R.E. AGENT
BUYER + R.E. AGENT
50 – 55 DAYS
39
ESCROW OR CLOSING OPENED Earnest Money
Deposited
BUYER’S OFFER ACCEPTED BY
SELLER
Application Loan Estimate Underwriting Approval
MORTGAGE PROCESS
Property & Termite Inspection
OTHER CONTINGENCIES
Disclosure Reports All Contingencies Removed
Opening Package Completed by Buyer & Seller
TITLE PROCESS
Preliminary Title Commitment
Curative Final Date Down
SIGNING/CLOSING Loan Docs Settlement Docs Required Disclosures Buyer Cash Notary Services
FINAL SETTLEMENT Record Docs Loan Funding Disbursement of Funds
READY TO FUND/CLOSE Closing Disclosure due 3 Days
Prior to Funding
SELLER + R.E. AGENT
BUYER + R.E. AGENT
First American is Investing for the Digital FutureDeveloped secure portal to streamline the closing process• Launched in AZ, FL and WA with full
rollout by year end• Digital consumer experience• Secure communication mitigates
wire fraud risk• Improves productivity
SecurePortal
Opening Package Completed by Buyer & Seller
SIGNING/CLOSING Loan Docs Settlement Docs Required Disclosures Buyer Cash Notary Services
40
TITLE PROCESS
Preliminary Title Commitment
Curative Final Date Down
ESCROW OR CLOSING OPENED Earnest Money
Deposited
BUYER’S OFFER ACCEPTED BY
SELLER
Application Loan Estimate Underwriting Approval
MORTGAGE PROCESS
Property & Termite Inspection
OTHER CONTINGENCIES
Disclosure Reports All Contingencies Removed
Opening Package Completed by Buyer & Seller
TITLE PROCESS
Preliminary Title Commitment
Curative Final Date Down
SIGNING/CLOSING Loan Docs Settlement Docs Required Disclosures Buyer Cash Notary Services
FINAL SETTLEMENT Record Docs Loan Funding Disbursement of Funds
READY TO FUND/CLOSE Closing Disclosure due 3 Days
Prior to Funding
SELLER + R.E. AGENT
BUYER + R.E. AGENT
First American is Investing for the Digital Future
Developing electronic closing solutions All documents signed electronically Notary either in person or via webcam Legislation still evolving
Developed secure portal to streamline the closing process• Launched in AZ, FL and WA with full
rollout by year end• Digital consumer experience• Secure communication mitigates
wire fraud risk• Improves productivity
SecurePortal
Opening Package Completed by Buyer & Seller
eClose
SIGNING/CLOSING Loan Docs Settlement Docs Required Disclosures Buyer Cash Notary Services
40
TITLE PROCESS
Preliminary Title Commitment
Curative Final Date Down
ESCROW OR CLOSING OPENED Earnest Money
Deposited
BUYER’S OFFER ACCEPTED BY
SELLER
Application Loan Estimate Underwriting Approval
MORTGAGE PROCESS
Property & Termite Inspection
OTHER CONTINGENCIES
Disclosure Reports All Contingencies Removed
Opening Package Completed by Buyer & Seller
TITLE PROCESS
Preliminary Title Commitment
Curative Final Date Down
SIGNING/CLOSING Loan Docs Settlement Docs Required Disclosures Buyer Cash Notary Services
FINAL SETTLEMENT Record Docs Loan Funding Disbursement of Funds
READY TO FUND/CLOSE Closing Disclosure due 3 Days
Prior to Funding
SELLER + R.E. AGENT
BUYER + R.E. AGENT
First American is Investing for the Digital Future
25 - 30 DAYS
Streamlined, efficient process
Digital experience Easier to understand Improved quality
BenefitsDeveloping electronic closing solutions All documents signed electronically Notary either in person or via webcam Legislation still evolving
Developing integrated closing platform for real estate agents, lenders and consumers Digital experience for all
stakeholders Streamlined closing process
Developed secure portal to streamline the closing process• Launched in AZ, FL and WA with full
rollout by year end• Digital consumer experience• Secure communication mitigates
wire fraud risk• Improves productivity
SecurePortal
Opening Package Completed by Buyer & Seller
Digital Close
eClose
SIGNING/CLOSING Loan Docs Settlement Docs Required Disclosures Buyer Cash Notary Services
40
TITLE PROCESS
Preliminary Title Commitment
Curative Final Date Down
Purchase65%
Refinance19%
Commercial14%
Information & Other2%
Agency Division Overview
2017 Market Share (1)
% Total 15.4%% Agency 24.8%
Sales Channels & Customers Attorneys Local Agents Regional & National Agents
Lenders Homebuyers
2017 Total Revenue Mix
$2.3B49States
65Offices
800Employees
Operations
(1) Source: ALTA41
Agency Division has Grown by Focusing on Larger Agents
42
First American has reduced smaller agents in recent years to focus on larger, more profitable relationships
Reduced risk and administrative costs
Growth with large commercial agents
Continual monitoring of profitability by agent Moved agent split to 85/15 in So. California
NUMBER OF AGENTS
$2,089
$1,877
$2,093
$2,259$2,339
$1,000
$1,500
$2,000
$2,500
2013 2014 2015 2016 2017
$ in
Mill
ion
s
TOTAL REVENUE
5,000
5,500
6,000
6,500
7,000
7,500
8,000
2013 2014 2015 2016 2017
Offering a Wider Array of Products to Title Agents
43
Customer Benefits
First American Benefits
Reduced operating costs Risk mitigation Process efficiency
Expands “share of wallet” with agents
Grows bank deposits Deepens customer
relationships Reduces underwriting risk
Full Search Limited Search
Document Preparation Recordings
Reconciliation Wires Deposit Accounts
Title Insurance
Title Production
Banking Services
Closing Solutions
Back Office Services
Primary Business
Age
nt
Ad
van
tage
Pilot launched in 2017
Expense Management Remains a Key Priority
Manage personnel costs to order volumes
Implemented seasonal workforce program
Leverage well-developed offshore platform
Strong underwriting controls
Keen focus on agent profitability
Margin expansion requires innovation:
Emerging technologies to drive operational efficiencies
Developing automated title solutions to reduce turn times and costs
44
Key Takeaways
Strong franchise in an attractive industry
Keen focus on expense management
Investing in a digital future to respond to an evolving real estate and mortgage industry landscape
Pursuing growth opportunities by leveraging unique assets
45
Q&A
46
©2018 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
FIRST AMERICAN FINANCIALInvestor Day 2018
BREAK
SPECIALTY INSURANCE SEGMENT
Larry DavidsonChief Operating Officer
Specialty Insurance
47
SPECIALTY INSURANCE
Total Revenue Trend
PROPERTY & CASUALTY HOME WARRANTY
220 237 260 299 327
120 132
134 137
139
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2013 2014 2015 2016 2017
Home Warranty Property & Casualty
$ in
Mill
ion
s
$369$394
$436$465
$340
Specialty Segment
8% $0.5B$5.8B
48
First American Financial Total Revenue
Property & Casualty Overview2017 Premium MixOperations
Policies in Force (PIF)HomeownersRentersOthers
149,70097,6005,900
59%39%2%
100%
Homeowners83%
Renters11%
Others6%
(1) Homeowners policies only (active states)
$127MCA
AZ
UTNV
OR
WA
6States(1)
2Offices
200 Employees
49
Property & Casualty Loss Trend
50
Ceded to Reinsurers
- - - - $12.7
CAT losses in 2017 primarily driven by California wildfires Two events exceeded $5 million
reinsurance retention limit Conservative underwriting held
losses below level implied by market share
Unfavorable trend in core losses being addressed: Rate increases in multiple states Tighter new business and
renewal underwriting program
0%
15%
30%
45%
60%
75%
90%
$0
$20
$40
$60
$80
$100
$120
2013 2014 2015 2016 2017
$ in
Mill
ion
s
Core CAT Events Loss Ratio
Property & Casualty Strategy
Improve Profitability Comprehensive renewal underwriting program
Restructured homeowners policy in key California market
Raising rates where appropriate
Continued focus on risk management Conservative underwriting standards
Robust reinsurance program
51
Home Warranty Overview
Operations 560,000 Active Contracts 3,000 Contractors 5 Contact Centers
Sales Channels & Customers Existing Homeowners Homebuyers and Sellers Real Estate Agents/Brokers
2017 Market Share
35States(1)
7Offices
700Employees
Operations
Top 5 StatesCATXTNAZNV
% Total Premiums36.4%16.0%5.7%4.9%3.9%
66.9%
(1) Plus District of Columbia
First American 14%
American Home Shield45%
Old Republic10%
Fidelity5%
Other13%
$2.2B2/10 and
Cross Country13%
52
Home Warranty Distribution Channels
53
Sales driven by home purchases/sales 21%
Sales through direct marketing to consumer(direct mail, internet, TV)
73%
All contracts in 2nd renewal year or later 81%
Channel
Real Estate
Renewals
Direct-to-Consumer
2017 Retention Rate2017 Premiums
Real Estate36% Direct-to-
Consumer8%
Renewals56%
$312M
Home Warranty Premium Growth Trend
54
171 183 200
219 237
45 49
55
65
75
$0
$50
$100
$150
$200
$250
$300
$350
2013 2014 2015 2016 2017
Real Estate Direct-to-Customer
$ in
Mill
ion
s
Direct-to-Consumer (DTC) Channel Adds to Growth
55
Marketing Plan
Media Campaign
Direct Response TV & Radio
Web Marketing
Search engine optimization
Search engine marketing
Partner leads
Direct Marketing (targeted)
Direct mail
Phone calls
DTC Channel Benefits from:
Low market penetration
Growth driven by marketing spend not real estate market
DTC
First Year Renewal Rate
Acquisition Cost
Initial Claims Rate
Customer Lifetime Value
Consumers Increasingly Expect an Integrated, Digital Platform
Integrated DigitalPlatform
Customer
CompanyContractor
Account access Submit claims Claim status
Work order acceptance Open job status “On my way” tracking
Enhanced contractor dispatch platform
Enables real-time work assignment and approval
Improved productivity
56
Home Warranty Strategy
Deploy technology to enhance customer experience and improve contractor productivity
Remain focused on quality of customer service delivery
Continue to strengthen contractor network
Maintain market leadership in the real estate channel
Grow direct-to-consumer business
57
FINANCIAL REVIEW
Mark SeatonEVP and Chief Financial Officer
58
Capital Management Strategy
Objective: Create long-term shareholder value
Capital management priorities:
Make value-creating investments in our core business
Acquire businesses that fit within our strategy
Return excess capital to shareholders through dividends and share repurchases
Maintain “A-” financial strength ratings and adequate capital levels
Manage our capital structure prudently
Maintain ample financial flexibility and holding company liquidity
59
Capital Expenditures
Fixed Assets
~$40 million annually
Migration to cloud will reduce future expenditures
Software
Customer-facing technology
Production system (FAST) enhancements
Title Plant
Geographic expansion
Capitalized Data
Property record data expansion
60
$0
$20
$40
$60
$80
$100
$120
$140
$160
2013 2014 2015 2016 2017
$ in
Mill
ion
s
Fixed Assets Software Title Plant Capitalized Data Software Licenses
Mergers & Acquisitions
61
2015
2014
20
13
TD Service Leading provider of technology and services to the mortgage banking industry; broadens and enhances our post-closing and document management capabilities.
Complementary
$115MRedVision Largest independent provider of title and real property research; expands
coverage to all 50 states and significantly improves product capabilities in the agent channel.
Complementary
Forsythe Largest independent appraisal company in the U.S.; significantly expanded valuation offering to lender customers.
Complementary
TSS Software Settlement software provider for independent title agents and attorneys; increased customer base and expanded national footprint.
Complementary$7M
TitleVest Title/Settlement service agent with significant residential position in NYC. Title $32M
Interthinx Provides solutions to help clients minimize risk, increase operational efficiencies, and satisfy regulatory requirements; best known for FraudGUARD, a market-leading mortgage fraud analytics product.
Complementary
$163M
Universal Land Title Title/Settlement service agent primarily located in southern Florida. Title
COMPANY TYPETOTALSPEND(1)
Note: Highlights transactions of $5 million or greater. (1) Aggregate purchase price for all completed acquisitions in given year. Source: Company’s 10-K filings.
2016
2017 SIS Buyout of long standing joint venture of title information provider. Complementary
$91MNevada Title Leading title and escrow company with a strong presence in southern Nevada. Title
Acquire companies strategic to our core business that:
Strengthen geographic presence
Enhance product breadth
Analyze expected returns on a risk-adjusted basis
Aggressively integrate acquisitions to realize synergies
Dividends
First American expects to pay a meaningful dividend given the company’s cash flow generation and investment opportunities
Dividend increases are intended to be sustainable in perpetuity
Dividend increases will be dependent upon expected holding company cash flows, market conditions and alternative uses of capital, among other factors
The company is not committed to increasing the dividend every year
62
Dividend Considerations
$0.48
$0.84$1.00
$1.20
$1.44
$0.25
$0.50
$0.75
$1.00
$1.25
$1.50
$1.75
2013 2014 2015 2016 2017
28%
39% 38% 38% 38%
0%
20%
40%
60%
2013 2014 2015 2016 2017
DIVIDENDS PER SHARE
PAYOUT RATIO
Share Repurchases
Share repurchases will be dependent upon capital levels, market conditions and alternative uses of capital, among other factors
$182 million remaining under share repurchase authorization
63
SHARE REPURCHASE HISTORY
2013 Repurchase Summary
Shares Purchased 3.0 million
Total Amount $64.6 million
Avg. Price Per Share $21.90
IRR 25.9% (as of March 31, 2018)
$0
$10
$20
$30
$40
$50
$60
$70
Jan
-13
Mar
-13
May
-13
Jul-
13
Sep
-13
No
v-1
3
Jan
-14
Mar
-14
May
-14
Jul-
14
Sep
-14
No
v-1
4
Jan
-15
Mar
-15
May
-15
Jul-
15
Sep
-15
No
v-1
5
Jan
-16
Mar
-16
May
-16
Jul-
16
Sep
-16
No
v-1
6
Jan
-17
Mar
-17
May
-17
Jul-
17
Sep
-17
No
v-1
7
Jan
-18
Mar
-18
Shar
e B
uyb
ack
Peri
od
Uses of Free Cash Flow and Debt Proceeds
64
~43% of cash flow used for investment portfolio to strengthen the balance sheet
Moving forward, portfolio strengthening not necessary as capital levels exceed current targets
A greater proportion of future cash flows will be allocated to dividends given recent increases
CUMULATIVE 5 YEAR USES
29%
21%
43%
3% 4%
Dividends
Acquisitions
Net Cash & Investments
Share RepurchasesPension Termination
$(200)
$(100)
$-
$100
$200
$300
$400
$500
$600
$700
2013 2014 2015 2016 2017
$ in
Mill
ion
s
$ in Millions
Q1 '18 Q4 '17 Q3 '17 Q2 '17 Q1 '17Holding Company Cash $181.4 $233.9 $259.3 $255.0 $269.1
Tax & Benefit Accounts (33.5) (28.7) (99.1) (110.4) (98.6)
Target Cash(1) (195.0) (190.0) (180.0) (160.0) (160.0)
(A) Potential Excess Cash at Holding Company ($47.0) $15.2 ($19.9) ($15.4) $10.6
FATICO Surplus $1,230.0 $1,173.8 $1,240.9 $1,251.8 $1,237.0
Less: Affiliate investments (80.4) (72.2) (178.6) (169.2) (163.4)
Less: Title Plants (164.0) (164.0) (158.9) (158.9) (157.3)
Less: Portfolio Shock(2) (182.8) (175.9) (163.2) (161.3) (158.0)
Add: Bulk Reserve (net of tax) 158.1 175.6 139.1 139.1 137.4
Minimum Surplus required to maintain A3/A- rating(3) (800.0) (800.0) (800.0) (800.0) (800.0)
(B) Potential Excess / (Deficiency) in Surplus $161.0 $137.3 $79.2 $101.6 $95.7
Debt $731.5 $732.8 $734.1 $734.5 $735.5
Debt-to-Capital 17.4% 17.4% 18.2% 18.7% 19.3%
(C) Additional Debt at 20% Debt-to-Capital $139.1 $137.9 $90.5 $65.1 $33.8
Excess Capital (A) + (B) + (C) $253.0 $290.4 $149.9 $151.3 $140.1
% of Total Capital 6.0% 6.9% 3.7% 3.8% 3.7%
Shareholders Equity $3,470.5 $3,480.0 $3,293.9 $3,193.4 $3,072.5
Debt 731.5 732.8 734.1 734.5 735.5
Noncontrolling interests 1.9 3.1 4.5 4.7 5.1
Total Capital $4,203.9 $4,215.9 $4,032.5 $3,932.6 $3,813.2
Excess Capital
65
(1) 1 year holding company cash outflows(2) Assumes 20% decline in equities and 200 basis point increase in rates across the yield curve(3) Company estimate
Credit Ratings
66
First American’s objective is to maintain at least A-/A3 financial strength ratings through the cycle
Financial Strength Senior Debt
S&P A- (stable) BBB- (stable)
Moody’s A3 (positive) Baa3 (stable)
Fitch A (stable) BBB (stable)
A.M. Best A (stable) BBB (stable)
Capital Structure
Management’s target debt-to-capital ratio is 18-20%
Supports target financial strength ratings
$160 million drawn on $700 million revolving credit facility
Revolving credit facility term ends in May 2019
Significant financial flexibility to seize strategic opportunities
67
5%
10%
15%
20%
25%
30%
35%
2013 2014 2015 2016 2017
As of December 31, 2017 ($ in Millions)
4.3% Senior Notes Due 2023 $250
4.6% Senior Notes Due 2024 300
Trust Deed Notes 23
Other Notes 4
Revolving Credit Facility 160
Total Debt $736
Total Equity $3,480
Debt-to-Capital Ratio 17.4%
Financial Covenant
DEBT-TO-CAPITAL RATIO
Statutory Surplus Trend
68
First American has improved the quality of capital by reducing the amount of affiliated investments within the title underwriter
2010 2011 2012 2013 2014 2015 2016 2017
Surplus ($mm) 847 849 956 996 979 1,104 1,187 1,174
Affiliates % of Surplus 97% 105% 73% 54% 28% 15% 13% 7%
0%
20%
40%
60%
80%
100%
120%
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400Su
rplu
s ($
in M
illio
ns)
% A
ffiliates
Statutory Marketable Securities vs Reserves
69
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Reserves Marketable Securities
$ in
Mill
ion
s
Investment Portfolio
70
CONSOLIDATED PORTFOLIO INSURANCE PORTFOLIO
BANK PORTFOLIO
Note: Debt and equity securities as of December 31, 2017
US Treasury3%
Gov't Agency4%
Municipal20%
Corporate14%
Gov't Agency MBS42%
Foreign8%
Equity9%
US Treasury
7%
Gov't Agency
3% Municipal18%
Corporate24%
Gov't Agency MBS12%Foreign
17%
Equity19%
Gov't Agency
5%
Municipal21%
Corporate5%
Gov't Agency MBS69%
Non-Agency
MBS0%
Equity0%
$5.2B
$2.5B
$2.7B
Avg. Rating : AADuration: 3.4Book Yield: 2.3%
Avg. Rating : ADuration: 4.7Book Yield: 3.0%
Avg. Rating : AADuration: 2.5Book Yield: 1.9%
Ultimate Loss Ratios by Policy Year
71 Note: Ultimate loss ratios are estimates and calculated as a percentage of title premiums and escrow fees for a given policy year as of December 31, 2017
-
50
100
150
200
250
300
350
400
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Paid to Date Ultimate Loss Ratio - Policy Year Paid Losses - Calendar Year
11.1%
13.1%
9.8%
6.4%
5.4% 5.1%
3.4%3.8%
4.7%
3.8%4.2% 4.0%
9.8%
Paid
Losses b
y Calen
dar Year ($
in M
illion
s)
Ult
imat
e Lo
ss R
atio
s b
y P
olic
y Ye
ar
7.6%
92%
93%90%
92%
88%
85%82%
78%
69% 60%57%
33% 17% 5%
$
$
$
$
$
$
$
$
$
Incremental Incurred Losses by Development Period
72
2007
20082009201020112012
2013
2014
2015
2016
2017
$0
$20
$40
$60
$80
$100
$120
0 12 24 36 48 60 72 84 96 108 120
$ in
Mill
ion
s
Age of Policy Year (Months)
Cumulative Losses by Policy Year
73 (1) Includes policy years 1998–2017, excluding 2005-2008
2007
2008
2009
2010
2011
20122013
2014
2015
2016
2017
Long Term Average
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
0 12 24 36 48 60 72 84
Cu
mu
lati
ve L
oss
Rat
io
Age of Policy Year (Months)
(1)
Impact of Fed Funds Rate on Investment Income
74(1) Excludes affiliated investments (See reconciliation in Appendix).(2) Company estimate.
1031 Exchange Escrow Deposits Cash Deposits Bank Earnings
(1)
0.00%
0.25%
0.50%
0.75%
1.00%
1.25%
1.50%
$16
$21
$26
$31
$36
$41
$46
Q1
'13
Q2
'13
Q3
'13
Q4
'13
Q1
'14
Q2
'14
Q3
'14
Q4
'14
Q1
'15
Q2
'15
Q3
'15
Q4
'15
Q1
'16
Q2
'16
Q3
'16
Q4
'16
Q1
'17
Q2
'17
Q3
'17
Q4
'17
Titl
e Se
gmen
t In
vest
men
t In
com
e ($
in M
illio
ns)
Investment Income Fed Funds Rate
Fed Fu
nd
s Rate
Each 25 basis point Fed hike increases investment income by ~$12 million/year(2)
Title Segment
Corporate Segment Investment Income – Deferred Compensation Plan
75
Deferred Compensation Plan
Investment gains and losses recorded in investment income
Investment income largely offset by personnel expense
Rising interest rates have a limited impact on investment income
Corporate pretax loss expected to be ~$75 million annually
$ in Millions
Q1 '18 Q4 '17 Q3 '17 Q2 '17 Q1 '17
Investment income
Deferred compensation ($1.5) $3.8 $3.6 $2.5 $4.0
Other 0.4 0.7 0.5 0.1 0.2
Total (1.2) 4.5 4.1 2.6 4.1
Personnel Costs
Deferred compensation (0.7) 3.4 2.7 2.1 3.1
Other 1.9 0.4 1.0 1.0 1.9
Total 1.3 3.7 3.6 3.1 5.0
Other Operating Expenses
Pension - 0.0 152.4 4.8 5.0
Other 8.5 9.8 9.2 9.6 10.1
Total 8.5 9.8 161.7 14.4 15.1
Depreciation and Amortization 0.0 0.0 0.0 0.0 0.0
Interest 8.3 8.2 8.2 7.8 8.3
Total Expenses 18.0 21.9 173.5 25.4 28.5
Pretax Loss ($19.2) ($17.4) ($169.4) ($22.7) ($24.4)
Tax Reform Impact
Lower federal rate partially offset by:
Higher foreign tax rates
Elimination of certain tax benefits (M&E, 162(m))
Shift to territorial tax system reduces cost to repatriate foreign earnings
76
Pre-reform Post-reform
Federal 35.0% 21.0%
State 1.5% 1.5%
International -1.0% 1.5%
Other -1.5% -
34.0% 24.0%
Historical Title Insurance Margin
77
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
Mortgage Originations Pretax Margin
$ in
Bill
ion
s
Source: MBA
Title Insurance Margin Objective
78
Downside Base Case Upside
Pretax Margin <11% 11% - 13% >13%
Mortgage Originations <$1.4 Trillion $1.4 - $1.8 Trillion >$1.8 Trillion
% Refinance ~25% ~25% ~25%
Investment Considerations
Focused strategy as “pure play” in title and settlement markets
Attractive industry characteristics
Strong competitive position in title and settlement services
Opportunity to grow by leveraging unique assets (e.g. bank and data)
Expect earnings and margin growth as mortgage originations improve
Strong balance sheet and financial flexibility
Commitment to return capital to shareholders
79
Q&A
80
©2018 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
FIRST AMERICAN FINANCIALInvestor Day 2018
THANK YOU
APPENDIX
81
SPECIALTY INSURANCE SEGMENT
U.S. Title
Direct
Agency
Commercial
International Title
Canada
United Kingdom
Mortgage & Data Solutions
Mortgage Solutions
Database Solutions
Banking & Services
Trust & Banking
Real Estate Services
Home Warranty
Property & Casualty
Australia/New Zealand
TITLE INSURANCE AND SERVICES SEGMENT
FIRST AMERICANFINANCIAL CORPORATION
ORGANIZATIONAL STRUCTURE
82
92%Title Segment
8%Specialty Segment
2017 Revenue Breakdown
83
FIRST AMERICAN FINANCIAL
45%Agency
26%Direct
13%Commercial
10%Mortgage & Data
Solutions
6%International
U.S. Title
$5.8B
$5.3B
TITLE SEGMENT
U.S. Title78%
70%Home Warranty
30%Property & Casualty
$0.5B
SPECIALTY SEGMENT
2017 Incurred Claims Detail
84
CLAIM CAUSE PROCESS CAUSE
No Error55%
Unclassified3% Escrow/Closing
14%
Underwriting6%
Exam9%
Search11%
Other2%
File Shortage0%
Escrow/Closing5%
GAP0%
Liens18%
Encumbrances18%
Fraud13%
Basic Risks20%
Other14%
Defective Title6%
Permit Violation6%
59% Direct / 41% Agent
Large Claims2%
Typical Claims65%
Minor Claims33%
Large Claims46%
Typical Claims54%
Minor Claims0%
Claim Severity Distribution
85
CLAIM COUNT BY SEVERITY GROUP PAID CLAIMS BY SEVERITY GROUP
Large claims: $250,000 and greater Typical claims: $1,000 to $250,000 Minor claims: Less than $1,000
Note: Data for 2017 paid claims; excludes file shortages and de minimis claims
Specialty Insurance Financial Summary
86
($ in Millions) 2013 2014 2015 2016 2017
Total Revenues $340 $369 $394 $436 $465
Pretax Income $42 $53 $40 $40 $37
Pretax Margin 12.4% 14.4% 10.0% 9.2% 7.9%
Loss Ratio 56.8% 55.7% 59.8% 61.5% 62.6%
Expense Ratio 32.6% 32.7% 32.2% 34.4% 34.2%
Combined Ratio 89.4% 88.4% 92.0% 95.9% 96.8%
Title Segment Net Investment Income Reconciliation
87
Net Investment Income Less Affiliate Investments$ in Millions
Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17
Net Investment Income $21.8 $26.0 $25.4 $24.4 $24.9 $27.5 $29.0 $29.4 $26.6 $34.7 $37.9 $38.3
Less: Affiliate Investments 1.1 3.7 2.8 0.1 0.9 2.1 2.8 2.4 1.6 1.8 1.1 (0.8)
Adjusted Net Investment Income $20.6 $22.2 $22.6 $24.3 $24.0 $25.4 $26.2 $27.0 $25.0 $32.9 $36.8 $39.0
Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14
Net Investment Income $19.0 $21.6 $22.2 $13.8 $15.7 $19.3 $22.0 $2.7
Less: Affiliate Investments 2.7 4.5 4.1 (3.9) (2.0) 0.3 2.8 (17.6)
Adjusted Net Investment Income $16.3 $17.1 $18.2 $17.7 $17.7 $19.0 $19.2 $20.3