10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto

Commission file number 001-02658

STEWART INFORMATION SERVICES CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	74-1677330
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1980 Post Oak Blvd., Houston TX	77056
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (713) 625-8100

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $1 par value	New York Stock Exchange (NYSE)
(Title of each class of stock)	(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  þ    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filerþ	Accelerated filer¨	Non-accelerated filer¨ (Do not check if smaller reporting company)	Smaller reporting company¨
Emerging growth company¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No þ

The aggregate market value of the Common Stock (based upon the closing sales price of the Common Stock of Stewart Information Services Corporation, as reported by the NYSE on June 30, 2017) held by non-affiliates of the Registrant was approximately $1.05 billion.

At February 23, 2018, there were 23,717,039 outstanding shares of the issuer's Common Stock, $1 par value per share.

Documents Incorporated by Reference

Portions of the definitive proxy statement (the Proxy Statement), in connection with the Registrant's 2018 Annual Meeting of Stockholders, are incorporated herein by reference in Part III of this document.

FORM 10-K ANNUAL REPORT

YEAR ENDED DECEMBER 31, 2017

TABLE OF CONTENTS

Item		Page
	PART I
1	Business	1
1A.	Risk Factors	5
1B.	Unresolved Staff Comments	9
2	Properties	9
3	Legal Proceedings	10
4	Mine Safety Disclosures	10
	PART II
5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
6	Selected Financial Data	13
7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
7A.	Quantitative and Qualitative Disclosures About Market Risk	31
8	Financial Statements and Supplementary Data	32
9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	32
9A.	Controls and Procedures	32
9B.	Other Information	33
	PART III
10	Directors, Executive Officers and Corporate Governance	34
11	Executive Compensation	34
12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	34
13	Certain Relationships and Related Transactions, and Director Independence	35
14	Principal Accountant Fees and Services	35
	PART IV
15	Exhibits and Financial Statement Schedules	35
	Signatures

As used in this report, “we,” “us,” “our,” the “Company” and “Stewart” mean Stewart Information Services Corporation and our subsidiaries, unless the context indicates otherwise.

PART I

Item 1. Business

We are a Delaware corporation formed in 1970. We and our predecessors have been engaged in the title business since 1893.

Stewart Information Services Corporation (NYSE:STC) is a global real estate services company, offering products and services through our direct operations, network of Stewart Trusted Providers™ and family of companies. From residential and commercial title insurance and closing and settlement services to specialized offerings for the mortgage industry, we offer the comprehensive service, deep expertise and solutions our customers need for any real estate transaction.

Our international division delivers products and services protecting and promoting private land ownership worldwide. Currently, our primary international operations are in Canada, the United Kingdom, Australia and Central Europe.

We currently report our business in two segments: title insurance and related services (title) and ancillary services and corporate. Refer to Note 19 to our audited consolidated financial statements and Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) for financial information related to the title and ancillary services and corporate segments.

Review of Strategic Alternatives

During November 2017, we announced that our Board formed a strategic committee to actively assess a full range of strategic alternatives available to Stewart. These alternatives include, among other things, business combinations, the sale of the Company, and continuing to execute on our stand-alone business plan. We have retained Citi as financial advisor and Davis Polk & Wardwell LLP as legal advisor to assist us in the strategic alternatives review process. We plan to complete this process in an expeditious manner, although there is no timeframe for its conclusion, and there is no assurance that this process will result in a particular outcome. Additionally, we do not intend to provide regular updates on this review process until we deem further disclosure is appropriate or required by law.

Title Segment

Title insurance and related services include the functions of searching, examining, closing and insuring the condition of the title to real property. The title segment also includes centralized title services (which include title and closing services, post-closing services, default and REO-related title services), home and personal insurance services and Internal Revenue Code Section 1031 tax-deferred exchanges.

Examination and closing. The purpose of a title examination is to ascertain the ownership of the property being transferred, debts that are owed on it and the scope of the title policy coverage. This involves searching for and examining documents such as deeds, mortgages, wills, divorce decrees, court judgments, liens, paving assessments and tax records.

At the closing or “settlement” of a sale transaction, the seller executes and delivers a deed to the new owner. The buyer typically signs new mortgage documents. Closing funds are disbursed to the seller, the prior lender, real estate brokers, the title company and others. The documents are then recorded in the public records. A title insurance policy is generally issued to both the new lender and the owner.

Title insurance policies. Lenders in the United States generally require title insurance as a condition to making a loan on real estate, including securitized lending. This is to assure lenders of the priority of their lien position. The purchasers of the property want insurance to protect against claims that may arise against the title to the property. The face amount of the policy is normally the purchase price or the amount of the related loan.

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Title insurance is substantially different from other types of insurance. Fire, auto, health and life insurance protect against future losses and events. In contrast, title insurance insures against losses from past events and seeks to protect the public by eliminating covered risks through the examination and settlement process. In essence, subject to its exceptions and exclusions, a title insurance policy provides a warranty to the policyholder that the title to the property is free from defects that might impair ownership rights, or in the case of a lender's policy, that there is priority of lien position. Most other forms of insurance provide protection for a limited period of time and, hence the policy must be periodically renewed. Title insurance, however, is issued for a one-time premium and the policy provides protection for as long as the owner owns the property or has liability in connection with the property. Also, a title insurance policy does not have a finite contract term, whereas most other lines of insurance have a definite beginning and ending date for coverage. Although a title insurance policy provides protection as long as the owner owns the property being covered, the title insurance company generally does not have information about which policies are still effective. Most other lines of insurance receive periodic premium payments and policy renewals thereby allowing the insurance company to know which policies are effective.

Losses. Losses on policies occur when a title defect is not discovered during the examination and settlement process. Reasons for losses include forgeries, misrepresentations, unrecorded or undiscovered liens, the failure to pay off existing liens, mortgage lending fraud, mishandling or defalcation of settlement funds, issuance by title agencies of unauthorized coverage and defending policyholders when covered claims are filed against their interest in the property.

Some claimants seek damages in excess of policy limits. Those claims are based on various legal theories. We vigorously defend against spurious claims and provide protection for covered claims up to the limits set forth in the policy. We have from time-to-time incurred losses in excess of policy limits.

Experience shows that most policy claims and claim payments are made in the first six years after the policy has been issued, although claims can also be incurred and paid many years later. By their nature, claims are often complex, vary greatly in dollar amounts and are affected by economic and market conditions and the legal environment existing at the time claims are processed.

Our liability for estimated title losses comprises both known claims and our estimate of claims that may be reported in the future. The amount of our loss reserve represents the aggregate future payments (net of recoveries) that we expect to incur on policy losses and in costs to settle claims. In accordance with industry practice, these amounts have not been discounted to their present values.

Estimating future title loss payments is difficult due to the complex nature of title claims, the length of time over which claims are paid, the significant variance in dollar amounts of individual claims and other factors. The amounts provided for policy losses are based on reported claims, historical loss payment experience, title industry averages and the current legal and economic environment. Estimated provisions for current year policy losses are charged to income in the same year the related premium revenues are recognized. Annual provisions for policy losses also include changes in the estimated aggregate liability on policies issued in prior years. Actual loss payment experience relating to policies issued in previous years, including the impact of large losses, is the primary reason for increases or decreases in our annual loss provision.

Amounts shown as our estimated liability for future loss payments are continually reviewed by us for reasonableness and adjusted as appropriate. We have consistently followed the same basic method of estimating and recording our loss reserves for more than 10 years. As part of our process, we also obtain input from third-party actuaries regarding our methodology and resulting reserve calculations. While we are responsible for determining our loss reserves, we utilize this actuarial input to assess the overall reasonableness of our reserve estimation.

See “Critical Accounting Estimates - Title Loss Reserves” under Item 7 - MD&A for information on current year policy losses and consolidated balance sheet reserves.

Factors affecting revenues. Title insurance revenues are closely related to the level of activity in the real estate markets we serve and the prices at which real estate sales are made. Real estate sales are directly affected by the availability and cost of money to finance purchases. Other factors include consumer confidence and demand by buyers. In periods of low interest rates, loan refinancing transactions are also an important contributor to revenues. These factors may override the seasonal nature of the title business. Generally, our first quarter is the least active and our second and third quarters are the most active in terms of title insurance revenues. Refer to "Industry Data" of Item 7 - MD&A for comparative information on home sales, mortgage interest rates and loan activity.

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Customers. The primary sources of title insurance business are attorneys, builders, developers, home buyers and home sellers, lenders, mortgage brokers, and real estate brokers and agents. No individual customer was responsible for as much as 10% or more of our consolidated revenues in any of the last three years. Titles insured include residential and commercial properties, undeveloped acreage, farms, ranches, wind and solar power installations and other energy-related projects.

Service, location, financial strength, company size and related factors affect customer acceptance. Increasing market share is accomplished primarily by providing superior service. The parties to a closing are concerned with accuracy, timeliness and cost. The rates charged to customers are regulated, to varying degrees, in most states.

The financial strength and stability of the title underwriter are important factors in maintaining and increasing our business, particularly commercial business. We are rated as investment grade by the title industry’s leading rating companies. Our principal underwriter, Stewart Title Guaranty Company (Guaranty), is currently rated “A” by Demotech Inc., "A-" by Fitch Ratings Ltd., "A-" by A.M. Best and "B+" by Kroll Bond Rating Agency Inc. Similarly, our second largest underwriter, Stewart Title Insurance Company (STIC), is also highly rated by such rating companies.

Market share. Title insurance statistics are compiled quarterly by the title industry’s national trade association. Based on 2017 unconsolidated statutory net premiums written through September 30, 2017, Guaranty is one of the leading title insurers in the United States.

Our principal competitors are Fidelity National Financial, Inc. (which includes Chicago Title Insurance Company, Fidelity National Title Insurance Company and Commonwealth Land Title Insurance Company), First American Financial Corporation (which includes First American Title Insurance Company) and Old Republic Title Insurance Group (which includes Old Republic National Title Insurance Company). We also compete with other independent title insurer companies, as well as abstractors, attorneys who issue title opinions and attorney-owned title insurance funds. A number of homebuilders, financial institutions, real estate brokers and others own or control title insurance agencies, some of which issue policies underwritten by Guaranty.

Refer to "Title revenues by geographic location" within the Results of Operations discussion under Item 7 - MD&A for the breakdown of title revenues by major geographic location.

Regulations. Title insurance companies are subject to comprehensive state regulations covering premium rates, agency licensing, policy forms, trade practices, reserve requirements, investments and the transfer of funds between an insurer and its parent or its subsidiaries and any similar related party transactions. Kickbacks and similar practices are prohibited by most state and federal laws. See Item 1A - Risk Factors: Our Insurance Subsidiaries Must Comply With Extensive Government Regulations.

Ancillary Services and Corporate Segment

The segment is comprised of the parent holding company, our centralized administrative services departments and our ancillary services operations. Our ancillary services operations primarily provide search and valuation services to the mortgage industry through Stewart Lender Services (SLS).

Factors affecting ancillary services revenues. As in the title segment, ancillary services revenues, particularly those generated by lender services, are closely related to the level of activity in the real estate market, including the volume of originations (new or refinancing), foreclosures or other distressed property activity. Revenues related to some services are generated on a project basis or through longer term contracts.

Companies that compete with our ancillary services businesses vary across a wide range of industries and include the major title insurance underwriters mentioned under “Title Segment - Market share” as well as other real estate technology and business process outsourcing providers.

Customers. Customers for our ancillary services products and services primarily include mortgage lenders and servicers, mortgage brokers and mortgage investors.

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Many of the services and products offered by our ancillary services business are used by professionals and intermediaries who have been retained to assist consumers with the sale, purchase, mortgage, transfer, recording and servicing of real estate transactions. To that end, timely, accurate and compliant services are critical to our customers since these factors directly affect the service they provide to their customers. Financial strength, scale, robust processes to ensure legal and regulatory compliance, marketplace presence and reputation as a reliable, compliant solution are important factors in attracting new business.

General

Investment policies. Our investment portfolios reside in two domestic and two international regulated insurance underwriters. These underwriters maintain investments in accordance with certain statutory requirements for the funding of premium reserves and deposits, or, in the case of our international operations, for the maintenance of certain capital ratios required by regulators. The activities of the portfolios are overseen by investment committees comprised of certain senior executives. Their oversight includes such activities as policy setting, determining appropriate asset classes with different and distinct risk/return profiles so as to prudently diversify the portfolio, and to approve all service vendors (managers and custodians). We also utilize the expertise of third-party investment advisors to maximize returns while managing risk. Our investment policies are designed to comply with regulatory requirements as applicable law imposes restrictions upon the types and amounts of investments that may be made by the regulated insurance subsidiaries.

Our investment policies further provide that investments are to be managed with a view to balancing profitability, liquidity, and risk (interest rate risk, credit risk, currency rate risk and liquidity risk) while mindful of negatively impacting earnings per share and income taxes.

As of December 31, 2017, approximately 95% of our combined debt and equity investment portfolios consisted of fixed income securities. As of that date, approximately 89% of the fixed income investments are held in securities that are A-rated or higher, and substantially all of the fixed income portfolios are rated investment grade or higher.  Percentages are based on the market value of the securities. In addition to our debt and equity investment securities portfolios, we maintain certain money-market and other short-term investments.

Trademarks. We have developed and acquired numerous automated products and processes that are crucial to both our title and ancillary services segments. These systems automate most facets of the real estate transaction. Among these trademarked products and processes are AIM+^®, AgencySecure^®, TitleWorkPlace™, Stewart Online™, Stewart Rate Calculator™, Property Profiles™, Stewart Select™, PropertyInfo^®, SureClose^®, TitleSearch^®, eTitleSearch^®, Virtual Underwriter^® and Stewart Access^®. We consider these trademarks, which are perpetual in duration, to be important to our business.

Employees. As of December 31, 2017, we employed approximately 5,960 people. We consider our relationship with our employees to be good.

Available information. We electronically file annual, quarterly and other reports and information with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934, as amended (Exchange Act). Our electronic filings can be accessed at the SEC's website at www.sec.gov. Additionally, filings not accessible via the SEC website can be accessed or requested through the SEC's Office of Freedom of Information and Privacy Act Operations located at 100 F Street, NE, Washington, DC 20549, phone number (202) 551-8300.

We also make available upon written request, free of charge, or through our Internet site (www.stewart.com), our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Code of Ethics and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Transfer agent. Our transfer agent is Computershare, which is located at P.O. Box 505000, Louisville, KY, 40233-5000. Its phone number is (888) 478-2392 and website is (https://www.us-computershare.com/investor).

CEO and CFO certifications. The CEO and CFO certifications required under Section 302 of the Sarbanes-Oxley Act are filed as exhibits to our 2017 Form 10-K. Stewart Information Services Corporation submitted in 2017 its annual CEO Certification under a Section 303A.12(a) of the New York Stock Exchange (NYSE) Listed Company Manual.

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Item 1A. Risk Factors

You should consider the following risk factors, as well as the other information presented in this report and our other filings with the SEC, in evaluating our business and any investment in Stewart. These risks could materially and adversely affect our business, financial condition and results of operations. In that event, the trading price of our Common Stock could decline materially.

Adverse changes in economic conditions, especially those affecting the levels of real estate and mortgage activity, may reduce our revenues.

Our financial condition and results of operations are affected by changes in economic conditions, particularly mortgage interest rates, credit availability, real estate prices and consumer confidence. Our revenues and earnings have fluctuated in the past due to the cyclical nature of the housing industry and we expect them to fluctuate in the future.

The demand for our title insurance-related and mortgage services offerings is dependent primarily on the volume of residential and commercial real estate transactions. The volume of these transactions historically has been influenced by such factors as mortgage interest rates, availability of financing and the overall state of the economy. Typically, when interest rates are increasing or when the economy is experiencing a downturn, real estate activity declines. As a result, the title insurance industry tends to experience decreased revenues and earnings. Increases in interest rates may also have an adverse impact on our bond portfolio and the amount of interest we pay on our floating-rate bank debt.

Our revenues and results of operations have been and may in the future be adversely affected by a decline in home prices, real estate activity and the availability of financing alternatives. In addition, weakness or adverse changes in the level of real estate activity could have a material adverse effect on our consolidated financial condition or results of operations.

Our claims experience may require us to increase our provision for title losses or to record additional reserves, either of which would adversely affect our earnings.

We estimate our future loss payments and our assumptions about future losses may prove inaccurate. Provisions for policy losses on policies written within a given year are charged to income in the same year the related premium revenues are recognized. The amounts provided are based on reported claims, historical loss payment experience, title industry averages and the current legal and economic environment. Losses that are higher than anticipated are an indication that total losses for a given policy year may be higher than originally calculated. Changes in the total estimated future loss for prior policy years are recorded in the period in which the estimate changes. Claims are often complex and involve uncertainties as to the dollar amount and timing of individual payments. Claims are often paid many years after a policy is issued. From time-to-time, we experience large losses, including losses from independent agency defalcations, from title policies that have been issued or worsening loss payment experience, any of which may require us to increase our title loss reserves. These events are unpredictable and may have a material adverse effect on our earnings.

Competition in the title insurance industry may affect our revenues.

Competition in the title insurance industry is intense, particularly with respect to price, service and expertise. Larger commercial customers and mortgage originators also look to the size and financial strength of a title insurer. Although we are one of the leading title insurance underwriters based on market share, Fidelity National Financial, Inc., Old Republic Title Insurance Group and First American Financial Corporation each has substantially greater revenues than we do and their holding companies have significantly greater capital. Further, the other independent title insurance companies collectively hold a relatively small but considerable share of the market. Although we are not aware of any current initiatives to reduce regulatory barriers to entering our industry, any such reduction could result in new competitors, including financial institutions, entering the title insurance business. Competition among the title insurance companies and any new entrants could lower our premium and fee revenues. From time-to-time, new entrants enter the marketplace with alternative products to traditional title insurance, although many of these alternative products have been disallowed by title insurance regulators. Further, advances in technologies such as Blockchain could, over time, significantly disrupt the traditional business model of financial services companies, including title insurance. These alternative products or disruptive technologies, if permitted by regulators, could have a material adverse effect on our revenues and earnings.

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Availability of credit may reduce our liquidity and negatively impact our ability to fund operations.

We expect that cash flows from operations and cash available from our underwriters, subject to regulatory restrictions, will be sufficient to fund our operations, pay our claims and fund operational initiatives. To the extent that these funds are not sufficient, we may be required to borrow funds on less than favorable terms or seek funding from the equity market, which may be on terms that are dilutive to existing shareholders.

A downgrade of our underwriters by rating agencies may reduce our revenues.

Ratings are a significant component in determining the competitiveness of insurance companies with respect to commercial title policies. Our domestic underwriters, Guaranty and STIC, have historically been highly rated by the rating agencies that cover us. These ratings are not credit ratings. Instead, the ratings are based on quantitative, and in some cases qualitative, information and reflect the conclusions of the rating agencies with respect to our financial strength, results of operations and ability to pay policyholder claims. Our ratings are subject to continual review by the rating agencies, and we cannot be assured that our current ratings will be maintained. If our ratings are downgraded from current levels by the rating agencies, our ability to retain existing customers and develop new customer relationships may be negatively impacted, which could result in a material adverse impact on our consolidated financial condition or results of operations.

Our insurance subsidiaries must comply with extensive government regulations. These regulations could adversely affect our ability to increase our revenues and operating results.

The Consumer Financial Protection Bureau (CFPB) is charged with protecting consumers by enforcing Federal consumer protection laws and regulations. The CFPB is an independent agency and funded by the United States Federal Reserve System. Its jurisdiction includes banks, credit unions, securities firms, payday lenders, mortgage servicing operations, foreclosure relief services, debt collectors and other financial companies. The nature and extent of these regulations include, but are not limited to:

• conducting rule-making, supervision, and enforcement of Federal consumer protection laws;

• restricting unfair, deceptive, or abusive acts or practices;

• taking consumer complaints;

• promoting financial education;

• researching consumer behavior;

• monitoring financial markets for new risks to consumers; and

• enforcing laws that outlaw discrimination and other unfair treatment in consumer finance.

The CFPB’s integrated disclosure rule for mortgage loan applications, known as "Know Before You Owe", imposes certain requirements for us and other mortgage industry participants regarding required mortgage disclosures and forms. Compliance with this integrated disclosure, which was introduced in 2015, has altered related business processes and interactions with customers.

Governmental authorities regulate our insurance subsidiaries in the various states and international jurisdictions in which we do business. These regulations generally are intended for the protection of policyholders rather than stockholders. The nature and extent of these regulations vary from jurisdiction to jurisdiction, but typically involve:

• approving or setting of insurance premium rates;

• standards of solvency and minimum amounts of statutory capital and surplus that must be maintained;

• limitations on types and amounts of investments;

• establishing reserves, including statutory premium reserves, for losses and loss adjustment expenses;

• regulating underwriting and marketing practices;

• regulating dividend payments and other transactions among affiliates;

• prior approval for the acquisition and control of an insurance company or of any company controlling an insurance company;

• licensing of insurers, agencies and, in certain states, escrow officers;

• regulation of reinsurance;

• restrictions on the size of risks that may be insured by a single company;

• deposits of securities for the benefit of policyholders;

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• approval of policy forms;

• methods of accounting; and

• filing of annual and other reports with respect to financial condition and other matters.

These regulations may impede or impose burdensome conditions on rate increases or other actions that we might want to take to enhance our operating results.

We may also be subject to additional state or federal regulations prescribed by legislation such as the Dodd-Frank Act or by regulations issued by the CFPB, Department of Labor, Office of the Comptroller of the Currency or other agencies. Changes in regulations may have a material adverse effect on our business. In addition, state regulators perform periodic examinations of insurance companies, which could result in increased compliance or litigation expenses.

Rapid changes in our industry require secure, timely and cost-effective technological responses. Our earnings may be adversely affected if we are unable to effectively use technology to address regulatory changes and increase productivity.

We believe that our future success depends, in part, on our ability to anticipate changes in the industry and to offer products and services that meet evolving standards on a timely and cost-effective basis. To do so requires a flexible technology architecture which can continuously comply with changing regulations, improve productivity, lower costs, reduce risk and enhance the customer experience. Inability to meet these requirements and any unanticipated downtime in our technology may have a material adverse effect on our earnings.

We rely on dividends from our insurance underwriting subsidiaries.

We are a holding company and our principal assets are our insurance underwriting subsidiaries. Consequently, we depend on receiving sufficient dividends from our insurance subsidiaries to meet our debt service obligations and to pay our parent company's operating expenses and dividends to our stockholders. The insurance statutes and regulations of some states require us to maintain a minimum amount of statutory capital and restrict the amount of dividends that our insurance subsidiaries may pay to us. Guaranty is a wholly owned subsidiary of Stewart and the principal source of our cash flow. In this regard, the ability of Guaranty to pay dividends to us is dependent on the approval of the Texas Insurance Commissioner. Refer to Note 3 to our audited consolidated financial statements for details on statutory surplus and dividend restrictions.

Claims by large classes of claimants may impact our financial condition or results of operations.

We are periodically involved in litigation arising in the ordinary course of business. In addition, we are currently, and have been in the past, subject to claims and litigation from large classes of claimants seeking substantial damages not arising in the ordinary course of business. Material pending legal proceedings, if any, not in the ordinary course of business, would be disclosed in Item 3—Legal Proceedings included elsewhere in this report. To date, the impact of the outcome of these proceedings has not been material to our consolidated financial condition or results of operations. However, an unfavorable outcome in any litigation, claim or investigation against us could have a material adverse effect on our consolidated financial condition or results of operations.

Information technology systems present potential targets for cyber security attacks.

Our operations are reliant on technology. These systems are used to store and process sensitive information regarding our operations, financial position and any information pertaining to our customers and vendors. While we take the utmost precautions, we cannot guarantee safety from all cyber threats and attacks to our systems. Any successful breach of security could result in the spread of inaccurate or confidential information, disruption of operations, endangerment of employees, damage to our assets and increased costs to respond. Although we maintain cyber liability insurance to protect us financially, there is no assurance that the instances noted above would not have a negative impact on cash flows, litigation status and/or our reputation, which could have a material adverse effect on our business, financial condition and results of operations.

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Unfavorable economic or other business conditions could cause us to record an impairment of all or a portion of our goodwill and other intangible assets.

We annually perform an impairment test of the carrying value of goodwill and other indefinite-lived intangible assets in the third quarter using June 30 balances. However, an evaluation may be made whenever events may indicate an impairment has occurred. In assessing whether an impairment has occurred, we consider whether the performance of our reporting units may be below projections, unexpected declines in our market capitalization, negative macroeconomic trends or negative industry and company-specific trends. If we conclude that the carrying values of these assets exceed the fair value, we may be required to record an impairment of these assets. Any substantial impairment that may be required in the future could have a material adverse effect on our results of operations or financial condition.

Failures at financial institutions at which we deposit funds could adversely affect us.

We deposit substantial operating and fiduciary funds, which are third-party funds, in many financial institutions in excess of insured deposit limits. In the event that one or more of these financial institutions fail, there is no guarantee that we could recover the deposited funds in excess of federal deposit insurance, and, as such, we could be held liable for the funds owned by third parties. Under these circumstances, our liability could have a material adverse effect on our results of operations or financial condition.

Our investment portfolio is subject to interest rate and other risks and could experience losses.

We maintain a substantial investment portfolio, primarily consisting of fixed income debt securities and, to a lesser extent, equity securities. Our portfolio holdings are subject to certain economic and financial market risks, including credit and interest rate risk and/or liquidity risk. Instability in credit markets and economic conditions can increase the risk of loss in our portfolio. Periodically, we measure the fair value of the investments against the carrying value. If the carrying value of the investments exceeds the fair value, and we conclude the decline is other-than-temporary, we are required to record an impairment of the investments. The impairment could have a material adverse effect on our results of operations or financial condition.

Our business could be disrupted as a result of a threatened proxy contest and other actions of activist stockholders.

We have been, and are , the subject of actions taken by activist stockholders. When activist activities occur, our business could be adversely affected because we may have difficulty in attracting and retaining customers, agents, mortgage lenders, servicers, employees and board members due to perceived uncertainties as to our future direction and negative public statements about our business; such activities may materially harm our relationships with current and potential customers, investors, lenders, and others; may otherwise materially harm our business, may adversely affect our operating results and financial condition; responding to proxy contests and other similar actions by stockholders is likely to result in our incurring substantial additional costs, including, but not limited to, legal fees, fees for financial advisors, fees for investor relations advisors, and proxy solicitation fees; significantly divert the attention of management, our Board of Directors and our employees; and changes in the composition of our Board of Directors due to activist campaigns may affect the Company's current strategic plan.

We cannot predict, and no assurances can be given as to, the outcome or timing of any matters relating to actions by activist stockholders or the ultimate impact on our business, liquidity, financial condition or results of operations.

8

Changes in federal, state and local, or foreign tax laws, changing interpretation of existing tax laws, or adverse determinations by tax authorities could increase our tax burden or otherwise adversely affect our financial condition or results of operations.

We are subject to taxation at the federal, state and local levels in the United States, Canada, the United Kingdom, and various other countries and jurisdictions in which we operate. The laws, regulations and other authoritative guidance relating to tax matters are extremely complex and subject to varying interpretations. Although we believe our tax positions are reasonable, we are subject to audit by the Internal Revenue Service in the United States, the Canada Revenue Agency in Canada, HM Revenue and Customs in the United Kingdom, state and local tax authorities in the jurisdictions in which we operate, and other similar tax authorities in other international locations. While we believe we comply with all applicable tax laws, rules, and regulations in the relevant jurisdictions, tax authorities may elect to audit us and determine that we owe additional taxes based on different applications and interpretations, which could result in a significant increase in our liabilities for taxes, interest, and penalties in excess of our accrued liabilities.

New tax legislative initiatives may be proposed or enacted from time to time, such as the recently-enacted Tax Cuts and Jobs Act in the United States, which may or will impact our effective tax rate and which could adversely affect our tax positions or tax liabilities. Our future effective tax rate could be adversely affected by, among other things, changes in the composition of earnings in jurisdictions with differing tax rates, changes in statutory tax rates and other legislative changes, changes in interpretations of existing tax laws, or changes in determinations regarding the jurisdictions in which we are subject to tax. From time to time, United States federal, state and local, and foreign governments make substantive changes to tax rules and their application, which could result in materially higher taxes than would be incurred under existing tax law and which could adversely affect our financial condition or results of operations. Refer to Note 7 to our audited consolidated financial statements for details on the impact of the recently-enacted Tax Cuts and Jobs Act.

We are exploring strategic alternatives, but there can be no assurance that we will be successful in identifying or completing any strategic alternative or that any such strategic alternative will yield additional value for stockholders.

As announced in November 2017, we have commenced a review of strategic alternatives which could result in, among other things, business combinations, the sale of the Company, and continuing to execute on our standalone business plan. There can be no assurance that the exploration of strategic alternatives will result in the identification or consummation of any transaction or any other particular outcome. Though completion of the strategic review process is of the highest priority, it may be suspended or terminated at any time if we determine such action is beneficial to the Company and our stockholders. In addition, we may incur substantial expenses associated with identifying, evaluating and/or, if applicable, seeking to execute on any potential strategic alternatives. The process of exploring strategic alternatives may be time consuming and disruptive to the business operations and the management teams of the Company. If we are unable to manage effectively both the process and the overall business of the Company, the financial condition and results of operations of the Company could be adversely affected. We also cannot assure that any potential transaction or other strategic alternative, if identified, evaluated and consummated, will provide greater value to our stockholders than that reflected in the current stock price. Any potential transaction or other outcome of this process is also dependent upon a number of factors that may be beyond our control.

Item 1B. Unresolved Staff Comments

None.

9

Item 2. Properties

We lease under a non-cancelable operating lease expiring in 2019 approximately 183,000 square feet in an office building in Houston, Texas, which is used for our corporate offices and for offices of several of our subsidiaries. Additionally, we lease offices at approximately 530 locations for title office operations, production, administrative and technology centers. These additional locations include significant leased facilities in Houston, Texas; Glendale, California; Dallas, Texas; New York, New York; Tampa, Florida; St. Louis, Missouri; San Diego, California; and Toronto, Canada.

Our leases expire from 2018 through 2028 and have an average term of 4.8 years, although our typical lease term ranges from three to five years. We believe we will not have any difficulty obtaining renewals of leases as they expire or, alternatively, leasing comparable properties. The aggregate annual rent expense under all leases was approximately $40.8 million in 2017.

We also own office buildings in Arizona, Texas, New York, New Mexico, Colorado and the United Kingdom. These owned properties are not material to our consolidated financial condition. We consider all buildings and equipment that we own or lease to be well maintained, adequately insured and generally sufficient for our purposes.

Item 3. Legal Proceedings

See discussion of legal proceedings in Note 18 to our audited consolidated financial statements included in Item 15 of Part IV of this report, which is incorporated by reference into this Part I, Item 3 of this report on Form 10-K for the year ended December 31, 2017.

Item 4. Mine Safety Disclosures

None.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market, Holders and Dividends Information

Our Common Stock is listed on the NYSE under the symbol “STC”. The following table sets forth the high and low sales prices of our Common Stock for each fiscal period indicated, as reported by the NYSE.

	High		Low
2017:
First quarter	$	46.50	$	42.09
Second quarter	48.03		42.12
Third quarter	46.49		34.48
Fourth quarter	43.75		36.80
2016:
First quarter	$	36.99	$	30.34
Second quarter	41.78		33.33
Third quarter	48.60		41.06
Fourth quarter	48.17		41.62

As of February 23, 2018, the number of stockholders of record was approximately 5,520 and the price of one share of our Common Stock was $41.31.

During 2017 and 2016, the Company declared and paid quarterly dividends of $0.30 per share, or a total of $1.20 per share annually. Additionally, during 2016, the Company paid $12.0 million in cash to the holders of the Class B Common Stock pursuant to an agreement involving the exchange and subsequent retirement of the Class B Common Stock. Such payment was treated as a dividend for calculating earnings per share (refer to Note 14 to our audited consolidated financial statements).

Book value per share was $28.62 and $27.69 at December 31, 2017 and 2016, respectively. As of December 31, 2017, book value per share was based on approximately $678.8 million in stockholders’ equity and 23,719,522 shares of Common Stock outstanding. As of December 31, 2016, book value per share was based on approximately $648.8 million in stockholders’ equity and 23,431,279 shares of Common Stock outstanding.

Stock Performance Graph

The following graph compares the yearly percentage change in our cumulative total stockholder return on Common Stock with the cumulative total return of the Russell 2000 Index and the Russell 2000 Financial Services Sector Index for the five years ended December 31, 2017. The graph assumes that the value of the investment in our Common Stock and each index was $100 at December 31, 2012 and that all dividends were reinvested.

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	2012	2013	2014	2015	2016	2017
Stewart	100.00	124.50	143.29	147.38	186.78	176.39
Russell 2000 Index	100.00	138.83	145.62	152.04	184.39	211.45
Russell 2000 Financial Services Sector Index	100.00	131.40	143.04	143.90	188.58	199.44

The performance graph above and the related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act, as amended, except to the extent that the Company specifically incorporates it by reference into such filing.

Stock Repurchases

There were no stock repurchases during 2017, except for repurchases of approximately 17,300 shares (aggregate purchase price of approximately $0.7 million) related to statutory income tax withholding on the annual vesting of restricted share grants to executives and senior management.

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Item 6. Selected Financial Data

The following table sets forth selected consolidated financial data, which were derived from our consolidated financial statements and should be read in conjunction with our audited consolidated financial statements, including the Notes thereto, beginning on page F-1 of this report. See also Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.

	2017	2016		2015		2014	2013
	($ millions, except percentage, share and per share data)
Total revenues	1,955.7	2,006.6		2,033.9		1,870.8	1,928.0
Title operating revenues	1,878.7	1,904.1		1,888.4		1,714.4	1,810.0
Ancillary services revenues	55.8	84.3		130.0		132.9	103.5
Investment income	18.9	18.9		16.9		16.8	15.5
Realized investment and other gains (losses) - net	2.2	(0.7	)	(1.4	)	6.7	(1.1	)
Title loss provisions	96.5	91.1		106.3		81.3	106.3
% title operating revenues	5.1	4.8		5.6		4.7	5.9
Pretax income(1)	75.1	88.0		9.7		51.8	101.1
Net income (loss) attributable to Stewart	48.7	55.5		(6.2	)	29.8	63.0
Cash provided by operations	108.1	123.0		80.5		64.0	87.1
Total assets	1,405.9	1,341.7		1,321.6		1,392.5	1,326.1
Notes payable and convertible senior notes	109.3	106.8		102.4		71.2	39.5
Stockholders’ equity	678.8	648.8		637.1		700.5	663.1
Per share data:
Diluted average shares outstanding (millions)	23.6	23.5		23.5		24.7	24.7
Basic earnings (loss) attributable to Stewart	2.08	1.86		(0.26	)	1.31	2.85
Diluted earnings (loss) attributable to Stewart	2.06	1.85		(0.26	)	1.24	2.60
Cash dividends	1.20	1.20		0.80		0.10	0.10
Stockholders’ equity	28.62	27.69		27.30		29.18	29.47
Market price:
High	48.03	48.60		44.01		37.87	34.39
Low	34.48	30.34		35.12		27.02	22.74
Year end	42.30	46.08		37.33		37.04	32.27

⁽¹⁾ Pretax income figures are before noncontrolling interests.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT'S OVERVIEW

We reported net income attributable to Stewart of $15.1 million ($0.64 per diluted share) for the fourth quarter 2017 compared to net income attributable to Stewart of $16.7 million ($0.71 per diluted share) for the fourth quarter 2016. Pretax income before noncontrolling interests for the fourth quarter 2017 was $17.5 million compared to pretax income before noncontrolling interests of $23.0 million for the fourth quarter 2016.

Fourth quarter 2017 results included:

• $2.9 million of third party advisory expenses recorded in other operating expenses in the ancillary services and corporate segment relating to our previously announced review of strategic alternatives,

• $3.5 million of office closure costs, primarily lease termination and litigation expenses recorded in other operating expenses in the title segment,

• $1.7 million of executive severance and retention expenses recorded in employee costs in the title and ancillary services and corporate segments,

• $1.0 million of acquisition integration expenses recorded in other operating expenses in the title segment, and

• $6.6 million of net income tax benefits related to the effects of the recently-enacted Tax Cuts and Jobs Act.

Fourth quarter 2016 results included:

• $5.4 million of net realized losses, primarily realized losses on the sale of assets related to certain ancillary services business lines, and

• $2.4 million of income tax benefits related to previously unrecognized tax credits.

During November 2017, we announced that our Board formed a strategic committee to actively assess a full range of strategic alternatives available to Stewart. The strategic alternatives review continues and while there is no timeframe for its conclusion, its completion is of the highest priority. Given the ongoing review, there can be no assurance that this process will result in any particular outcome.

Summary results of the title segment are as follows ($ in millions, except pretax margin):

	Quarter Ended December 31,
	2017		2016		% Change
Total revenues	514.6		511.6		1	%
Pretax income	27.0		38.1		(29	)%
Pretax margin	5.2	%	7.4	%

Total title segment revenues for the fourth quarter 2017 were slightly higher than the prior year quarter, while pretax income declined $11.1 million for the fourth quarter 2017 compared to the fourth quarter 2016. The lower pretax income was primarily due to increased employee costs related to our investment in stabilizing and growing target markets, a lower agency remittance rate and slightly higher title loss expense as a percent of title revenues. Also included in the segment’s results for the fourth quarter 2017, as mentioned above, are approximately $3.5 million of office closure costs and $1.0 million related to acquisition integration costs.

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Direct revenue information is presented below:

	Quarter Ended December 31,
	2017	2016	% Change
	($ in millions)
Non-commercial:
Domestic	134.0	148.3	(10	)%
International	21.0	23.8	(12	)%
	155.0	172.1	(10	)%
Commercial:
Domestic	59.1	52.7	12	%
International	12.4	5.4	130	%
	71.5	58.1	23	%
Total direct title revenues	226.5	230.2	(2	)%

Non-commercial domestic revenues include revenues from purchase transactions and centralized title operations (processing primarily refinancing and default title orders), which decreased 7% and 33%, respectively, in the fourth quarter 2017 compared to the prior year. Total commercial revenues improved 23% from the prior year quarter, driven by domestic strength across multiple geographies and an increased contribution from our international operations. Total international title revenues increased 14% in the fourth quarter 2017 compared to the prior year quarter driven by higher commercial revenues and stronger foreign exchange rates against the U.S. dollar, partially offset by lower non-commercial transaction volume.

Gross revenues from independent agency operations in the fourth quarter 2017 increased 1% compared to the fourth quarter 2016. The independent agency remittance rate decreased to 17.2% in the fourth quarter 2017 from 18.2% in the prior year quarter as a result of the geographic mix of our agency business (decreased revenues in higher-remitting states and increased revenues in lower-remitting states); revenues, net of agency retention, decreased 4% in the fourth quarter 2017 compared to the prior year quarter.

Summary results of the ancillary services and corporate segment are as follows ($ in millions):

	Quarter Ended December 31,
	2017		2016		% Change
Total revenues	11.1		14.2		(22	)%
Pretax loss	(9.6	)	(15.1	)	37	%

The decline in fourth quarter 2017 segment revenues compared to the prior year quarter was primarily due to the divestitures from certain ancillary services lines of business at the end of 2016 and lower revenues generated by the valuation services operations in the current year quarter.

The segment’s pretax results for the fourth quarter 2017 improved to a $9.6 million pretax loss, which included $2.9 million of expenses relating to our strategic alternatives review, compared to the prior year quarter’s pretax loss of $15.1 million, which included net realized losses of $4.9 million primarily related to the sale of certain ancillary services business lines. This improvement was primarily due to the higher reduction in overall segment expenses relative to the decrease in revenues. The segment’s results for the fourth quarter 2017 and 2016 included approximately $8.8 million and $6.4 million, respectively, of net expenses attributable to parent company and corporate operations.

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CRITICAL ACCOUNTING ESTIMATES

Actual results can differ from our accounting estimates. While we do not anticipate significant changes in our estimates, there is a risk that such changes could have a material impact on our consolidated financial condition or results of operations for future periods. The discussion of critical accounting estimates below should be read in conjunction with the related accounting policies disclosed within Note 1 to our audited consolidated financial statements.

Title loss reserves

Our most critical accounting estimate is the provision for title loss reserves.

Provisions for title losses, as a percentage of title operating revenues, were 5.1%, 4.8% and 5.6% for the years ended December 31, 2017, 2016 and 2015, respectively. Actual loss payment experience, including the impact of large losses, is the primary reason for increases or decreases in our loss provision. A change of 100 basis points in the loss provisioning percentage, a reasonably likely scenario based on our historical loss experience, would have increased or decreased our provision for title losses and pretax operating results by approximately $18.8 million for the year ended December 31, 2017.

We consider our actual claims payments and incurred loss experience, including the frequency and severity of claims, compared to our actuarial estimates of claims payments and incurred losses in determining whether our overall loss experience has improved or worsened compared to prior periods. We also consider the impact of economic or market factors on particular policy years to determine whether the results of those policy years are indicative of future expectations. In addition, large claims, including large title losses due to independent agency defalcations, are analyzed and reserved for separately due to the potential higher dollar amount of loss, lower volume of claims reported and sporadic reporting of such claims. We evaluate the frequency and severity of large losses in determining whether our experience has improved or worsened. Our method for recording the reserves for title losses on both an interim and annual basis begins with the calculation of our current loss provision rate which is applied to our current premium revenues, resulting in a title loss expense for the period. This loss provision rate is set to provide for losses on current year policies and is determined using moving average ratios of recent actual policy loss payment experience (net of recoveries) to premium revenues.

Due to the inherent uncertainty in predicting future title policy losses, significant judgment is required by our management and our third party actuaries in estimating reserves. As a consequence, our ultimate liability may be materially greater or lower than current reserves and/or our third party actuary’s calculated estimates.

Provisions for known claims relate primarily to prior policy years as claims are not typically reported until several years after policies are issued. Provisions - Incurred But Not Reported (IBNR) are estimates of claims expected to be incurred over the next 20 years; therefore, it is not unusual or unexpected to experience changes to those estimated provisions for both current and prior policy years as additional loss experience on policy years is obtained. This loss experience may result in changes to our estimate of total ultimate losses expected (i.e., the IBNR policy loss reserve). Current year provisions - IBNR are recorded on policies issued in the current year as a percentage of premiums realized (provisioning rate). As claims become known, provisions are reclassified from IBNR to known claims. Adjustments relating to large claims (those individually in excess of $1.0 million) may impact provisions either for known claims or for IBNR.

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	2017		2016		2015
	($ in millions)
Provisions – Known Claims:
Current year	18.2		20.6		14.1
Prior policy years	59.3		64.8		81.0
	77.5		85.4		95.1
Provisions – IBNR
Current year	53.8		52.0		54.0
Prior policy years	24.5		18.5		38.2
	78.3		70.5		92.2
Transferred IBNR to Known Claims	(59.3	)	(64.8	)	(81.0	)
Total provisions	96.5		91.1		106.3

In 2017, total known claims provisions decreased to $77.5 million from $85.4 million in 2016, as a result of a relatively lower dollar amount of claims reported to us relating to both current and prior year policies. Current year provisions - IBNR increased in 2017 by $1.8 million to $53.8 million compared to 2016, principally due to a slight increase in the loss provisioning rate related to certain foreign operations. In 2016, total known claims provisions decreased to $85.4 million from $95.1 million in 2015, primarily as a result of relatively lower dollar amount of claims reported to us relating to policies issued in previous years. Current year provisions - IBNR decreased in 2016 by $2.0 million to $52.0 million compared to 2015, principally due to the decrease of our overall provisioning rate in 2016. As a percentage of title operating revenues, provisions - IBNR (current year) was 2.9%, 2.7% and 2.9% in 2017, 2016 and 2015, respectively. Provisions - IBNR relating to prior policy years increased in 2017 as compared to 2016 primarily due to unfavorable loss experience. Provisions - IBNR relating to prior policy years decreased in 2016 as compared to 2015 mainly due to the losses experienced in 2015 relating to certain older policy years with higher than normal claims.

In addition to title policy claims, we incur losses in our direct operations from escrow, closing and disbursement functions. These escrow losses typically relate to errors or other miscalculations of amounts to be paid at closing, including timing or amount of a mortgage payoff, payment of property or other taxes and payment of homeowners’ association fees. Escrow losses also arise in cases of mortgage fraud, and in those cases the title insurer incurs the loss under its obligation to ensure that an unencumbered title is conveyed. Escrow losses are recognized as expense when discovered or when contingencies associated with them (such as litigation) are resolved and are typically paid less than 12 months after the loss is recognized. For the years ended December 31, 2017, 2016 and 2015, we accrued approximately $5.0 million, $8.3 million and $11.5 million, respectively, for policy loss reserves relating to escrow losses arising principally from mortgage fraud.

Large title losses due to independent agency defalcations typically occur when the independent agency misappropriates funds from escrow accounts under its control. Such losses are usually discovered when the independent agency fails to pay off an outstanding mortgage loan at closing (or immediately thereafter) from the proceeds of the new loan. These incurred losses are typically more severe in terms of dollar value compared with traditional title policy claims since the independent agency is often able, over time, to conceal misappropriation of escrow funds relating to more than one transaction through the constant volume of funds moving through its escrow accounts. In declining real estate markets, lower transaction volumes result in a lower incoming volume of funds, making it more difficult to cover up the misappropriation with incoming funds. Thus, when the defalcation is discovered, it often relates to several transactions. In addition, the overall decline in an independent agency’s revenues, profits and cash flows increases the agency’s incentive to improperly utilize the escrow funds from real estate transactions. For the three years ended December 31, 2017, our net title losses due to independent agency defalcations were immaterial.

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Internal controls relating to independent agencies include, but are not limited to, periodic audits, site visits and reconciliations of policy inventories and premiums. The audits and site visits cover examination of the escrow account bank reconciliations and an examination of a sample of closed transactions. In some instances, the scope of our review is limited by attorney agencies that cite client confidentiality. Certain states have mandated annual reviews of all agencies by their underwriter. We also determine whether our independent agencies have appropriate internal controls as defined by the American Land Title Association's best practices and us. However, even with adequate internal controls in place, their effectiveness can be circumvented by collusion or improper override of the controls by management at the independent agencies. To aid in the selection of independent agencies to review, we have developed an agency risk model that aggregates data from different areas to identify possible problems. This is not a guarantee that all independent agencies with deficiencies will be identified. In addition, we are typically not the only underwriter for which an independent agency issues policies, and independent agencies may not always provide complete financial records for our review. Due to improved agency internal controls as well as better overall economic conditions, we did not experience any significant agency defalcation losses during the three years ended December 31, 2017.

Agency revenues

We recognize revenues on title insurance policies written by independent agencies (agencies) when the policies are reported to us. In addition, where reasonable estimates can be made, we accrue for revenues on policies issued but not reported until after period end. We believe that reasonable estimates can be made when recent and consistent policy issuance information is available. Our estimates are based on historical reporting patterns and other information about our agencies. We also consider current trends in our direct operations and in the title industry. In this accrual, we are not estimating future transactions; we are estimating revenues on policies that have already been issued by agencies but not yet reported to or received by us. We have consistently followed the same basic method of estimating unreported policy revenues for more than 10 years.

Our accruals for revenues on unreported policies from agencies were not material to our consolidated assets or stockholders’ equity as of December 31, 2017 and 2016. The differences between the amounts our agencies have subsequently reported to us compared to our estimated accruals are substantially offset by any differences arising from prior years’ accruals and have been immaterial relative to consolidated assets and stockholders’ equity during each of the three prior years. We believe our process provides the most reliable estimate of the unreported revenues on policies and appropriately reflects the trends in agency policy activity.

Goodwill impairment

Goodwill is not amortized, but is reviewed annually during the third quarter using June 30 balances, or whenever occurrences of events indicate a potential impairment at the reporting unit level. We evaluate goodwill based on four reporting units with goodwill balances - direct operations, agency operations, international operations and ancillary services.

We have an option to assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. In performing the qualitative assessment, we consider factors that include macroeconomic conditions, industry and market considerations, overall actual and expected financial performance, market perspective on the Company, as well as other relevant events and circumstances determined by management. We evaluate the weight of each factor to determine whether an impairment more-likely-than-not exists. If we decide not to use a qualitative assessment or if the reporting unit fails the qualitative assessment, we perform the quantitative impairment analysis.

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The quantitative analysis involves the comparison of the fair value of each reporting unit to its carrying amount. The goodwill impairment is calculated as the excess of the reporting unit's carrying amount over the estimated fair value and is charged to current operations. While we are responsible for assessing whether an impairment of goodwill exists, we utilize inputs from third-party appraisers in performing the quantitative analysis. We estimate the fair value using a combination of the income approach (discounted cash flow (DCF) technique) and the market approach (guideline company and precedent transaction analyses). The DCF model utilizes historical and projected operating results and cash flows, initially driven by estimates of changes in future revenue levels, and risk-adjusted discount rates. Our projected operating results are primarily driven by anticipated mortgage originations, which we obtain from projections by industry experts, for our title reporting units and expected contractual revenues for our ancillary services reporting unit. Fluctuations in revenues, followed by our ability to appropriately adjust our employee count and other operating expenses, or large and unanticipated adjustments to title loss reserves, are the primary reasons for increases or decreases in our projected operating results. Our market-based valuation methodologies utilize (i) market multiples of earnings and/or other operating metrics of comparable companies and (ii) our market capitalization and a control premium based on market data and factors specific to our ownership and corporate governance structure.

The valuation techniques performed in our quantitative analysis make use of our estimates and assumptions related to critical factors, which include revenue and operating margin growth rates, future market conditions, determination of market multiples and comparative companies, assignment of a control premium, and determination of risk-adjusted discount rates. Forecasts of future operations are based, in part, on actual operating results and our expectations as to future market conditions. Our calculation of fair value requires analysis of a range of possible outcomes and applying weights to each of the valuation technique used. Due to the uncertainty and complexity of performing the goodwill impairment analysis, actual results may not be consistent with our estimates and assumptions, which may result in a future material goodwill impairment.

In 2017 and 2016, we concluded that the goodwill related to each of our reporting units was not impaired after performing our impairment analysis. We utilized the qualitative assessment in 2017 and the quantitative analysis in 2016. Refer to "Results of Operations" and Note 8 to our audited consolidated financial statements for details of our analysis.

Operations. Our primary business is title insurance and settlement-related services. We close transactions and issue title policies on homes, commercial and other real properties located in all 50 states, the District of Columbia and international markets through policy-issuing offices, agencies and centralized title services centers. Our ancillary services and corporate segment includes our parent holding company expenses and certain enterprise-wide overhead costs, along with our remaining ancillary services operations, principally appraisal and valuation services.

Factors affecting revenues. The principal factors that contribute to changes in operating revenues for our title and ancillary services and corporate segments include:

• mortgage interest rates;

• availability of mortgage loans;

• number and average value of mortgage loan originations;

• ability of potential purchasers to qualify for loans;

• inventory of existing homes available for sale;

• ratio of purchase transactions compared with refinance transactions;

• ratio of closed orders to open orders;

• home prices;

• consumer confidence, including employment trends;

• demand by buyers;

• number of households;

• premium rates;

• foreign currency exchange rates;

• market share;

• ability to attract and retain highly productive sales associates;

• independent agency remittance rates;

• opening of new offices and acquisitions;

• number of commercial transactions, which typically yield higher premiums;

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• government or regulatory initiatives, including tax incentives and the implementation of the new integrated disclosure requirements;

• acquisitions or divestitures of businesses;

• volume of distressed property transactions; and

• seasonality and/or weather.

Premiums are determined in part by the values of the transactions we handle. To the extent inflation or market conditions cause increases in the prices of homes and other real estate, premium revenues are also increased. Conversely, falling home prices cause premium revenues to decline. As an overall guideline, a 5% increase in median home prices results in an approximate 3.7% increase in title premiums. Home price changes may override the seasonal nature of the title insurance business. Historically, our first quarter is the least active in terms of title insurance revenues as home buying is generally depressed during winter months. Our second and third quarters are the most active as the summer is the traditional home buying season, and while commercial transaction closings are skewed to the end of the year, individually large commercial transactions can occur any time of year.

Industry data. Published mortgage interest rates and other selected residential housing data for the years ended December 31, 2017, 2016 and 2015 follow (amounts shown for 2017 are preliminary and subject to revision). The amounts below may not relate directly to or provide accurate data for forecasting our operating revenues or order counts.

Our statements on home sales, mortgage interest rates and loan activity are based on published industry data from sources including Fannie Mae, the National Association of Realtors^®, the Mortgage Bankers Association and Freddie Mac.

	2017	2016	2015
Mortgage interest rates (30-year, fixed-rate) – %
Averages for the year	3.99	3.65	3.85
First quarter	4.17	3.74	3.73
Second quarter	3.99	3.59	3.83
Third quarter	3.89	3.45	3.95
Fourth quarter	3.92	3.81	3.90
Mortgage originations – $ billions	1,830	2,052	1,730
Refinancings – % of originations	37.5	48.7	46.7
New home sales – in millions	0.61	0.56	0.50
New home sales – median sales price in $ thousands	321.1	307.8	297.0
Existing home sales – in millions	5.51	5.45	5.25
Existing home sales – median sales price in $ thousands	247.3	233.8	222.4

The year 2017 generated the highest volumes for the real estate market since 2007 as both new and existing home sales volumes improved 8% and 1%, respectively, from 2016. Although total mortgage originations decreased 11% (primarily due to lower refinancing originations) and average mortgage interest rates were higher in 2017 compared to the prior year, purchase originations improved 9% in 2017 versus 2016. For the three years ended December 31, 2017, average monthly mortgage interest rates (30-year, fixed-rate) have fluctuated from a low of 3.44% in July 2016 to a high of 4.20% in March 2017. For the year 2018, Fannie Mae projects the 30-year mortgage rate to average at 4.0%, comparable to 2017, and new and existing home sales volumes to increase by 8% and 2%, respectively, from 2017.

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RESULTS OF OPERATIONS

A comparison of our consolidated results of operations for 2017 to 2016 and 2016 to 2015 is discussed as follows. Factors contributing to fluctuations in our results of operations are presented in the order of their monetary significance, and we have quantified, when necessary, significant changes. Results from our ancillary services and corporate segment are included in year-to-year discussions and, when relevant, are discussed separately. Our employee costs and certain other operating expenses are sensitive to inflation.

Title revenues.Direct title revenue information is presented below:

	Year Ended December 31			% Change
	2017	2016	2015	2017 vs. 2016		2016 vs. 2015
	($ in millions)
Non-commercial
Domestic	551.8	606.4	616.6	(9	)%	(2	)%
International	96.9	92.5	82.7	5	%	12	%
	648.7	698.9	699.3	(7	)%	—	%
Commercial:
Domestic	186.5	176.4	178.1	6	%	(1	)%
International	27.2	19.0	19.7	43	%	(4	)%
	213.7	195.4	197.8	9	%	(1	)%
Total direct title revenues	862.4	894.3	897.1	(4	)%	—	%

Revenues from direct title operations in 2017 decreased $31.9 million, or 4%, compared to 2016 primarily as a result of overall declines in refinancing, commercial and purchase orders closed, partially offset by higher international revenues. Non-commercial domestic revenues include revenues from purchase transactions and centralized title operations (processing primarily refinancing and default title orders) which decreased 7% and 26%, respectively, in 2017 compared to the prior year, primarily as a result of reduced purchase and refinancing orders closed. Total commercial revenues improved $18.3 million, or 9%, in 2017 compared to 2016, primarily driven by a higher domestic commercial fee per file and increased input from our international operations. Total international revenues improved $12.6 million, or 11%, in 2017 compared to 2016 due to higher commercial revenues and transaction volume growth from our United Kingdom and Canada operations.

Revenues from direct title operations in 2016 decreased $2.8 million compared to 2015 primarily due to the 5% decline in closed orders, attributable to commercial and refinancing orders, partially offset by an improvement in international revenues. International revenues (including foreign-sourced commercial revenues of $19.0 million) increased $9.1 million, or 9%, in 2016 compared to 2015, primarily due to higher transaction volume from our Canadian operations, partially offset by the weakening of the British pound and Canadian dollar against the U.S. dollar. Total commercial revenues in 2016 decreased $2.4 million, or 1%, compared to 2015 consistent with the trend of our commercial orders closed.

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Closed and opened orders information is as follows:

	Year Ended December 31			% Change
	2017	2016	2015	2017 vs. 2016		2016 vs. 2015
Opened Orders:
Commercial	42,871	46,553	49,994	(8	)%	(7	)%
Purchase	239,148	245,697	245,169	(3	)%	—	%
Refinance	98,990	147,205	177,072	(33	)%	(17	)%
Other	17,610	12,648	21,133	39	%	(40	)%
Total	398,619	452,103	493,368	(12	)%	(8	)%
Closed Orders:
Commercial	30,286	32,234	35,066	(6	)%	(8	)%
Purchase	184,532	192,303	190,771	(4	)%	1	%
Refinance	71,885	106,796	120,827	(33	)%	(12	)%
Other	12,523	16,594	18,556	(25	)%	(11	)%
Total	299,226	347,927	365,220	(14	)%	(5	)%

Gross revenues from independent agency operations increased $6.6 million, or approximately 1%, in 2017 compared to 2016 and increased $18.5 million, or 2%, in 2016 compared to 2015. The 2017 gross revenue improvement was driven by increases, primarily from Michigan, California, Minnesota, Ohio, Colorado and Arizona, partially offset by declines in Massachusetts, Florida, Texas and New York. The 2016 gross revenues increase resulted from increased revenues, primarily from Texas, Michigan, Washington and Florida, partially offset by declines in New York, California and New Jersey. Compared to the prior year, the 2017 net agency revenues (net of agency retention) decreased $4.5 million, or 3%, primarily due to the lower average agency remittance rate; while the 2016 net agency revenues increased $2.0 million, or 1%, compared to 2015, driven by the increased gross revenues, partially offset by a slight decline in the average agency remittance rate in 2016. Refer further to the "Retention by agencies" discussion under Expenses below.

Title revenues by geographic location. The approximate amounts and percentages of consolidated title operating revenues for the last three years were as follows:

	Amounts ($ millions)			Percentages
	2017	2016	2015	2017		2016		2015
Texas	328	362	341	17	%	19	%	18	%
New York	226	226	250	12	%	12	%	13	%
California	140	125	142	8	%	7	%	8	%
International	131	116	107	7	%	6	%	6	%
Florida	78	87	88	4	%	5	%	5	%
All others	976	988	960	52	%	51	%	50	%
	1,879	1,904	1,888	100	%	100	%	100	%

Ancillary services revenues. Ancillary services revenues decreased $28.4 million, or 34%, in 2017 compared to 2016 and also decreased $45.7 million, or 35%, in 2016 compared to 2015. The revenue decline in 2017 was primarily due to our divestitures of the loan file review, quality control services and government services lines of business at the end of 2016; while the revenue decline in 2016 was primarily due to decreased demand and lower pricing within our delinquent loan servicing activities, which was discontinued at the end of the first quarter 2016 as a result of the the industry-wide decline in inventory of defaulted and distressed loans following the housing market recovery. Beginning in 2017, the principal offerings of ancillary services are search and valuation services, total revenues of which were $50.8 million in 2017 compared to $52.5 million in 2016.

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Investment income. Investment income for 2017 was $18.9 million, which was comparable to 2016. Investment income from debt securities increased as a result of higher invested balances in 2017, offset by lower investment income from short-term investments and cash equivalents. The 2016 investment income increased $2.1 million, or 12%, compared to 2015, due to increased income from our debt securities, short-term investments, cash equivalents and equity securities as a result of higher invested balances in 2016.

Realized investment and other gains (loss) - net. In 2017, realized investment and other gains - net included $3.2 million of net realized gains from the sale of investments available-for-sale, partially offset by $0.8 million of net realized loss due to an increase in the fair value of a contingent consideration liability related to a prior acquisition.

In 2016, realized investment and other losses - net included $3.4 million of realized losses related to the exit of a service offering, and $3.3 million of realized losses from sale of certain businesses within ancillary services operations, partially offset by $4.0 million of net realized gains from the sale of investments available-for-sale and $1.2 million of realized gain on a cost-basis investment transaction.

In 2015, realized investment and other losses – net included realized losses of $2.7 million relating to other-than-temporary impairment of investment in equity securities available-for-sale, $1.8 million impairment of other intangible assets and $1.4 million relating to office closure costs, partially offset by realized gains of $2.4 million from the sale of debt and equity investments available-for-sale and $1.5 million from the sale of office buildings.

Expenses. An analysis of expenses is shown below:

	Year Ended December 31						% Change
	2017		2016		2015		2017 vs. 2016		2016 vs. 2015
	($ in millions)
Amounts retained by agencies	837.1		826.0		809.6		1	%	2	%
As a % of agency revenues	82.4	%	81.8	%	81.7	%
Employee costs	566.2		604.4		658.3		(6	)%	(8	)%
As a % of operating revenues	29.3	%	30.4	%	32.6	%
Other operating expenses	351.5		364.0		382.0		(3	)%	(5	)%
As a % of operating revenues	18.2	%	18.3	%	18.9	%
Title losses and related claims	96.5		91.1		106.3		6	%	(14	)%
As a % of title revenues	5.1	%	4.8	%	5.6	%

Overall employee costs and other operating expenses in 2017 decreased 5% from 2016 in comparison to the 3% decline in operating revenues. In 2016, total employee costs and other operating expenses decreased 7% from 2015 compared to the 2% decline in operating revenues.

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Expense comparisons for the three years ended December 31, 2017 are influenced by the following net charges:

	2017	2016		2015
	($000 omitted)
Title segment:
Office closures: early lease terminations and asset write-offs	3,178	—		—
Title365 acquisition and integration-related expenses	2,368	—		—
Severance and retention expenses	595	—		810
Litigation-related accruals	350	—		5,959
Prior policy reserve adjustments, net	—	(5,400	)	4,527
Total title segment	6,491	(5,400	)	11,296
Ancillary services and corporate segment:
Strategic alternatives review expenses	2,868	—		—
Severance and retention expenses	1,095	—		—
Litigation-related accruals	—	3,599		—
Class B Common Stock exchange expenses	—	2,193		—
Shareholder activism and settlement charges	—	1,186		3,542
Accelerated depreciation from the exit of delinquent loan servicing activities	—	1,089		1,452
Cost Management Program and severance expenses	—	442		21,344
Impairment of goodwill	—	—		35,749
Total ancillary services and corporate segment	3,963	8,509		62,087
Total	10,454	3,109		73,383

Retention by agencies. Amounts retained by title agencies are based on agreements between the agencies and our title underwriters. Amounts retained by independent agencies, as a percentage of revenues generated by them, averaged 82.4%, 81.8% and 81.7% in 2017, 2016 and 2015, respectively. The average retention percentage may vary from year-to-year due to the geographical mix of agency operations, the volume of title revenues and, in some states, laws or regulations. Due to the variety of such laws or regulations, as well as competitive factors, the average retention rate can differ significantly from state to state. In addition, a high proportion of our independent agencies are in states with retention rates greater than 80%. The increase of the agency retention rate in 2017 compared to 2016 was primarily due to decreased revenues in higher-remitting states and increased revenues in lower-remitting states. We continue to focus on increasing profit margins in every state, increasing premium revenue in states where remittance rates are above 20%, and maintaining the quality of our agency network, which we believe to be the industry’s best, in order to mitigate claims risk and drive consistent future performance. While market share is important in our agency operations channel, it is not as important as margins, risk mitigation and profitability.

Selected cost ratios (by segment). The following table shows employee costs and other operating expenses as a percentage of related segment operating revenues for the years ended December 31:

	Employee Costs						Other Operating Expenses
	2017		2016		2015		2017		2016		2015
Title	28.1	%	28.3	%	28.0	%	16.6	%	16.1	%	17.0	%
Ancillary services and corporate	67.6	%	77.5	%	99.0	%	69.2	%	67.9	%	47.3	%

Employee costs. Employee costs for the combined business segments in 2017 decreased $38.2 million, or 6%, from 2016 primarily due to an 8% reduction in average employee counts, related to volume declines in our ancillary services and centralized title operations and staff departures in direct operations during the second quarter 2017. Consolidated employee costs in 2016 decreased $53.9 million, or 8%, compared to 2015, primarily as a result of the Cost Management Program we completed at the end of 2015, as well as reductions in employee counts tied to volume declines. As a percentage of total operating revenues, employee costs were 29.3%, 30.4% and 32.6% in 2017, 2016 and 2015, respectively. Our total employee count at December 31, 2017, 2016 and 2015 was approximately 5,960, 6,350 and 6,940, respectively.

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Employee costs in the title segment decreased $10.3 million, or 2%, in 2017 compared to 2016, due to reduced salaries and incentive compensation as a result of reductions in the average number of employees, primarily in direct operations as a result of the staff departures discussed above, and in centralized title operations as a result of volume declines. However, title segment employee costs in 2016 increased $9.7 million, or 2%, compared to the prior year as the result of increased salaries, commissions and incentive compensation on higher title operating revenues, which increased by approximately 1.0%.

The ancillary services and corporate segment's employee costs decreased $27.9 million, or 42%, and $63.6 million, or 49%, in 2017 and 2016, respectively, due to employee count reductions, primarily relating to the disposition of several lines of business within the ancillary services. Additionally, the Cost Management Program, which was completed at the end of 2015, contributed to the reduction of employee costs in 2016 compared to 2015.

Other operating expenses. Other operating expenses include costs that are fixed in nature, costs that follow, to varying degrees, changes in transaction volumes and revenues and costs that fluctuate independently of revenues. Costs that are fixed in nature include attorney and professional fees, third-party-outsourcing provider fees, equipment rental, insurance, rent and other occupancy expenses, repairs and maintenance, technology costs, telephone and title plant expenses. Costs that follow, to varying degrees, changes in transaction volumes and revenues include attorney fee splits, bad debt expenses, ancillary services cost of sales expenses, copy supplies, delivery fees, outside search fees, postage, premium taxes and title plant maintenance expenses. Costs that fluctuate independently of revenues include general supplies, litigation defense, business promotion and marketing and travel.

Other operating expenses for the combined business segments decreased $12.5 million, or 3%, in 2017 compared to 2016 and also decreased $18.0 million, or 5%, in 2016 compared to 2015. As a percentage of total operating revenues, other operating costs were 18.2%, 18.3% and 18.9% in 2017, 2016 and 2015, respectively. In 2017, other operating expenses included $3.2 million of office closure costs, $2.9 million of third-party consulting fees related to the corporate strategic alternatives review and $2.4 million of Title365 acquisition integration expenses. In 2016, other operating expenses included approximately $3.6 million for litigation-related accruals, $1.2 million of shareholder activism costs and $2.2 million of costs associated with the Class B common stock exchange agreement. In 2015, other operating expenses included approximately $6.0 million for litigation-related accruals and $19.5 million of aggregate costs related to our Cost Management Program (consisting of consulting and third party service provider transition costs), costs associated with a shareholder settlement, and CFPB integrated disclosure preparations. Excluding the impact of these non-operating charges, other operating expenses as a percentage of total operating revenues would have been 17.7%, 18.0% and 17.7% in 2017, 2016 and 2015, respectively.

In 2017, excluding the costs listed above, costs fixed in nature decreased $4.8 million, or 3%, compared to 2016, primarily due to reduced professional and consulting fees and insurance expense, partially offset by higher technology costs. Costs that follow, to varying degrees, changes in transaction volumes and revenues also decreased $8.3 million, or 5%, mainly due to lower bad debt expense and decreased outside search fees and cost of sales expenses in ancillary services as a result of lower ancillary services revenues. Excluding the non-operating litigation-related expenses, costs that fluctuate independently of revenues decreased $0.7 million, or 2%, primarily due to lower general supplies expenses.

In 2016, excluding the costs listed above, costs fixed in nature were comparable to 2015 as increased costs related to third-party outsourcing provider fees were offset by decreases in rent and other occupancy expenses, technology costs, attorney and professional fees and insurance expenses. Costs that follow, to varying degrees, changes in transaction volumes and revenues increased $9.5 million, or 6%, mainly due to increases in outside search fees and fee attorney splits driven by higher title revenues. Excluding the non-operating litigation-related costs, costs that fluctuate independently of revenues decreased $9.8 million, or 19%, in 2016 compared to 2015, primarily due to reduced business promotion and marketing, travel and general legal expenses.

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Title losses. Provisions for title losses, as a percentage of title operating revenues, were 5.1%, 4.8% and 5.6% in 2017, 2016 and 2015, respectively, including adjustments to certain large claims and escrow losses. The title loss ratio in any given year can be significantly influenced by new large claims incurred as well as adjustments to reserves for existing large claims. We continue to manage and resolve large claims prudently and in keeping with our commitments to our policyholders.

For the year ended December 31, 2017, title losses increased $5.4 million, or 6%, compared to 2016, primarily due to the loss reserve reductions recorded in 2016, as detailed below. In 2017, we recorded increases to policy loss reserves of approximately $3.3 million relating to our European and Australian businesses which were more than offset by favorable adjustments to policy loss reserves for our U.S. business.

For the year ended December 31, 2016, we recorded a $3.1 million decrease to the reserve for existing large losses and a $5.4 million policy loss reserve reduction relating to non-large policy losses as a result of favorable loss development experience. Title losses decreased $15.1 million, or 14%, in 2016 compared to the same period in 2015.

For the year ended December 31, 2015, we recorded $22.1 million of increases to existing large loss reserves relating to prior policy years, partially offset by a $17.5 million policy loss reserve reduction relating to non-large policy losses as a result of favorable loss development experience.

Excluding the impact of the reserve reductions and large losses (net of recoveries), title losses as a percent of title operating revenues were 5.1%, 5.2% and 5.4% in 2017, 2016 and 2015, respectively. Title losses paid were $84.2 million, $92.0 million and $123.6 million in 2017, 2016 and 2015, respectively. The 8% decrease in cash claims paid in 2017 compared to 2016 was primarily due to lower payments on large claims relating to prior policy years; as compared to the 26% decrease in cash claim payments in 2016 compared to 2015, which was primarily influenced by the favorable loss experience during 2016 and a $22.5 million payment in 2015 on a large prior policy year claim.

Our liability for estimated title losses as of December 31, 2017 and 2016 comprises both known claims and our IBNR. Known claims reserves are reserves related to actual losses reported to us. Our reserve for known claims comprises both claims related to title insurance policies as well as losses arising from escrow closing and funding operations due to fraud or error (which are recognized as expense when discovered). The amount of the reserve represents the aggregate, non-discounted future payments (net of recoveries) that we expect to incur on policy and escrow losses and in costs to settle claims.

Total title policy loss reserve balances at December 31 were as follows:

	2017	2016
	($ in millions)
Known claims	69.8	76.5
IBNR	411.2	386.1
Total estimated title losses	481.0	462.6

Title claims are generally incurred three to five years after policy issuance and the timing of payments on these claims can significantly impact the balance of known claims, since in many cases claims, may be open for several years before resolution and payment occur. As a result, the estimate of ultimate amount to be paid on any claim may be modified over that time period. As of December 31, 2017 and 2016, our reserve balance was above the actuarial midpoint of total estimated policy loss reserves.

Impairment of goodwill. During the year ended December 31, 2015, we recorded a non-cash $35.7 million impairment of goodwill relating to certain ancillary services and title businesses, primarily as a result of continued losses and reduced revenue and margin outlook, driven primarily by falling demand and contract pricing pressures. Refer also to Note 19 to our audited consolidated financial statements for details.

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Depreciation and amortization. Depreciation and amortization expense decreased $4.2 million, or 14%, in 2017 compared to 2016, primarily due to lower amortization expense in 2017 as a result of the disposal of certain intangible assets in connection with the divestitures in ancillary services, as earlier discussed, and the higher depreciation expense recorded in 2016 resulting from accelerated depreciation charges relating to our exit from the delinquent loan servicing operations. Depreciation and amortization expense in 2016 was comparable to 2015.

Income taxes. Our effective tax rates for 2017, 2016 and 2015 were 23.5%, 26.1%, and (1,019.4)%, respectively, based on income (loss) before taxes, after deducting noncontrolling interests, of $63.6 million, $75.1 million and $(0.6) million, respectively. Our 2017 effective tax rate included $6.6 million of net income tax benefits relating to the effects of the recently-enacted Tax Cuts and Jobs Act (the 2017 Act) and $2.2 million of income tax benefits relating to previously unrecognized research and development tax credits. Our 2016 effective tax rate reflected a $4.1 million income tax benefit for the 2015 return-to-provision and true-up adjustments and $3.4 million of income tax benefit relating to previously unrecognized research and development tax credits. Our 2015 effective tax rate resulted principally from the $35.7 million goodwill impairment recorded during the year 2015, of which $20.3 million was not subject to tax benefits, combined with the effects of minimal pretax earnings for that year.

Refer to Note 7 to our audited consolidated financial statements for details on the impact of the 2017 Act.

Contractual obligations. Our material contractual obligations at December 31, 2017 were:

	Payments due by period ($ millions)
	Within 1 year	Over 1 to 3 years	Over 3 to 5 years	More than 5 years	Total
Credit facility	—	98.9	—	—	98.9
Other notes payable	7.4	3.0	—	—	10.4
Operating leases	52.1	67.2	30.0	17.8	167.1
Estimated title losses	105.8	168.4	86.6	120.2	481.0
	165.3	337.5	116.6	138.0	757.4

Material contractual obligations consist primarily of amounts drawn on our line of credit facility (which expires in October 2019), other notes payable, operating leases and estimated title losses. The timing above for payments of notes payable is based upon contractually stated payment terms of each debt agreement. Operating leases are primarily for office space and expire over the next eleven years. The timing shown above for the payments of estimated title losses is not set by contract. Rather, it is projected based on historical payment patterns. The actual timing of estimated title loss payments may vary materially from the above projection since claims, by their nature, are complex and paid over long periods of time.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity and capital resources reflect our ability to generate cash flow to meet our obligations to shareholders, customers (payments to satisfy claims on title policies), vendors, employees, lenders and others. As of December 31, 2017, our cash and investments, including amounts reserved pursuant to statutory requirements, aggregated $883.9 million ($378.8 million, net of statutory reserves on cash and investments). Of our total cash and investments at December 31, 2017, $603.2 million ($307.7 million, net of statutory reserves) was held in the United States and the rest internationally, principally in Canada.

Cash held at the parent company totaled $11.6 million at December 31, 2017. As a holding company, the parent company is funded principally by cash from its subsidiaries in the form of dividends, operating and other administrative expense reimbursements and pursuant to intercompany tax sharing agreements. The expense reimbursements are paid in accordance with management agreements, approved by the Texas Department of Insurance (TDI), among us and our subsidiaries. In addition to funding operating expenses, cash held at the parent company is used for dividend payments to common stockholders and for stock repurchases, if any. To the extent such uses exceed cash available, the parent company is dependent on distributions from its regulated title insurance underwriter, Stewart Title Guaranty Company (Guaranty).

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A substantial majority of our consolidated cash and investments as of December 31, 2017 was held by Guaranty and its subsidiaries. The use and investment of these funds, dividends to the parent company, and cash transfers between Guaranty and its subsidiaries and the parent company are subject to certain legal and regulatory restrictions. In general, Guaranty may use its cash and investments in excess of its legally-mandated statutory premium reserve (established in accordance with requirements under Texas law) to fund its insurance operations, including claims payments. Guaranty may also, subject to certain limitations, provide funds to its subsidiaries (whose operations consist principally of field title offices and ancillary services operations) for their operating and debt service needs.

We maintain investments in accordance with certain statutory requirements in the states of domicile of our underwriters for the funding of statutory premium reserves. Statutory premium reserves, which approximated $490.8 million and $485.4 million at December 31, 2017 and 2016, respectively, are required to be fully funded and invested in high-quality securities and short-term investments. Statutory reserve funds are not available for current claim payments, which must be funded from current operating cash flow. In addition, included within cash and cash equivalents are statutory reserve funds of approximately $14.2 million and $13.9 million at December 31, 2017 and 2016, respectively. Although these cash statutory reserve funds are not restricted or segregated in depository accounts, they are required to be held pursuant to state statutes. If the Company fails to maintain minimum investments or cash and cash equivalents sufficient to meet statutory requirements, the Company may be subject to fines or other penalties, including potential revocation of its business license. As of December 31, 2017, our known claims reserve totaled $69.8 million and our estimate of claims that may be reported in the future, under generally accepted accounting principles, totaled $411.2 million. In addition to this, we had cash and investments (excluding equity method investments) of $268.0 million which are available for underwriter operations, including claims payments.

The ability of Guaranty to pay dividends to its parent is governed by Texas insurance law. The TDI must be notified of any dividend declared, and any dividend in excess of the statutory maximum of 20% of surplus (approximately $102.0 million and $108.5 million for 2017 and 2018, respectively) would be, by regulation, considered extraordinary and subject to pre-approval by the TDI. Also, the Texas Insurance Commissioner may raise an objection to a planned distribution during the notification period. Guaranty’s actual ability or intent to pay dividends to its parent may be constrained by business and regulatory considerations, such as the impact of dividends on surplus and the liquidity ratio, which could affect its ratings and competitive position, the amount of insurance it can write and its ability to pay future dividends. As of December 31, 2017, our liquidity ratio for our principal underwriter was 107% based on its statutory balance sheet. Our internal objective is to maintain a ratio of at least 100%, as we believe that ratio is crucial to our competitiveness in the market and our insurer financial strength ratings. On an ongoing basis, this ratio will largely guide our decisions as to frequency and magnitude of dividends from Guaranty to the parent company. Further, depending on business and regulatory conditions, we may in the future need to retain cash in Guaranty or even raise cash in the capital markets to contribute to it in order to maintain its ratings or statutory capital position. Such a requirement could be the result of investment losses, reserve charges, adverse economic environment operating conditions or changes in interpretation of statutory accounting requirements by regulators. Guaranty paid dividends of $20.0 million to its parent during each of 2017 and 2016.

As the parent company conducts no operations apart from its wholly-owned subsidiaries, the discussion below focuses on consolidated cash flows.

	2017		2016		2015
	($ millions)
Net cash provided by operating activities	108.1		123.0		80.5
Net cash used by investing activities	(103.9	)	(56.8	)	(68.8	)
Net cash used by financing activities	(43.6	)	(59.3	)	(25.6	)

Operating activities. Our principal sources of cash from operations are premiums on title policies and revenue from title service-related transactions, ancillary services and other operations. Our independent agencies remit cash to us net of their contractual retention. Our principal cash expenditures for operations are employee costs, operating costs and title claims payments.

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Cash provided by operations in 2017 decreased by approximately $14.9 million to $108.1 million, compared to 2016, primarily as a result of the lower 2017 net income and lower collections on accounts receivable, partially offset by lower payments on claims. Cash provided by operations in 2016 increased by approximately $42.5 million to $123.0 million compared to 2015. This increase was primarily the result of the higher net income and lower payment on claims in 2016.

Cash payments on title claims in 2017, 2016 and 2015 were $84.2 million, $92.0 million and $123.6 million, respectively. The decrease in cash claims payments in 2017, compared to the prior year, was primarily the result of reduced payments on large claims; while the decrease in cash claims payments in 2016, compared to 2015, was primarily due to the $22.5 million payment in 2015 to fully resolve a large prior policy year claim. Claim payments made on large title claims, net of insurance recoveries, during 2017, 2016 and 2015 were $7.3 million, $14.6 million and $48.4 million, respectively.

Although our business is labor intensive, we are focused on a cost-effective, scalable business model which includes utilization of technology, centralized back and middle office functions and business process outsourcing. Our approach allows us to adjust more easily to seasonal and cyclical fluctuations in transaction volumes. We are continuing our emphasis on cost management, specifically focusing on lowering unit costs of production, which will result in improved margins. Our plans to improve margins also include additional automation of manual processes, and further consolidation of our various systems and production operations. We are currently investing in the technology necessary to accomplish these goals.

Investing activities. Cash used by investing activities was primarily driven by purchases of investments, capital expenditures and acquisition of subsidiaries, offset by proceeds from matured and sold investments. Total proceeds from available-for-sale investments sold and matured amounted to $110.9 million, $108.2 million and $111.5 million, while cash used for purchases of available-for-sale investments approximated $179.7 million, $166.4 million and $147.7 million in 2017, 2016 and 2015, respectively. Cash (used) generated by net (purchases) sales of short-term investments amounted to $(2.2) million, $17.5 million and $(14.7) million in 2017, 2016 and 2015, respectively.

During 2017, we used $17.8 million of cash for acquisitions of new subsidiaries, while cash used for purchases of property and equipment amounted to $16.4 million. Cash used for purchases of property and equipment during 2016 and 2015 was $18.2 million and $19.7 million, respectively. We maintain investment in capital expenditures at a level that enables us to implement technologies for increasing our operational and back-office efficiencies and to pursue growth in key markets.

Financing activities and capital resources. Total debt and stockholders’ equity were $109.3 million and $678.8 million, respectively, as of December 31, 2017. Of the total notes payable activity during 2017, 2016 and 2015, proceeds of $40.4 million, $37.8 million and $7.7 million, respectively, and payments of $42.7 million, $31.2 million and $12.4 million, respectively, were related to short-term loan agreements in connection with our Section 1031 tax-deferred property exchange business. Also during 2017, 2016 and 2015, we drew $16.0 million, $20.0 million and $45.0 million, respectively, from our $125.0 million line of credit facility and repaid $10.0 million, $25.1 million and $7.0 million, respectively, on the line of credit facility. Refer to Note 10 to our audited consolidated financial statements for details on the line of credit facility. Our debt-to-equity ratio at December 31, 2017, excluding our Section 1031 notes, was approximately 15.5%, below the 20% we have set as our unofficial internal limit on leverage.

During 2017, 2016 and 2015, we paid total dividends of $1.20, $1.20 and $0.80 per common share, which aggregated $28.1 million, $27.8 million and $18.0 million, respectively. In 2016, we paid $12.0 million in cash as part of the consideration in exchange for the retirement of the outstanding Class B Common Stock shares in relation to the Class B Exchange Agreement approved by our stockholders.

There were no stock repurchases during 2017 and 2016, except for repurchases of approximately 17,300 shares (aggregate purchase price of approximately $0.7 million) and 22,800 shares (aggregate purchase price of approximately $1.1 million), respectively, related to the statutory income tax withholding on the vesting of restricted share grants to executives and senior management. During 2015, we acquired approximately 762,000 shares of our Common Stock for an aggregate purchase price of approximately $28.0 million pursuant to a previous stock repurchase program.

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Effect of changes in foreign currency rates. The effect of changes in foreign currency rates on the consolidated statements of cash flows was a net increase (decrease) in cash and cash equivalents of $3.7 million, $(0.1) million and $(7.7) million in 2017, 2016 and 2015, respectively. Our principal foreign operating unit is in Canada, and, on average, the value of the Canadian dollar relative to the U.S. dollar appreciated during 2017 and 2016, and decreased during 2015.

***********

We believe we have sufficient liquidity and capital resources to meet the cash needs of our ongoing operations. However, we may determine that additional debt or equity funding is warranted to provide liquidity for achievement of strategic goals or acquisitions or for unforeseen circumstances. Other than scheduled maturities of debt, operating lease payments and anticipated claims payments, we have no material contractual commitments. We expect that cash flows from operations and cash available from our underwriters, subject to regulatory restrictions, will be sufficient to fund our operations, including claims payments. However, to the extent that these funds are not sufficient, we may be required to borrow funds on terms less favorable than we currently have or seek funding from the equity market, which may not be successful or may be on terms that are dilutive to existing stockholders.

Other-than-temporary impairments of investments. During 2017 and 2016, no impairment was recorded on any of our investments. Additionally, during 2015, we recognized $2.7 million of other-than-temporary impairment on certain equity securities available-for-sale.

Other comprehensive income (loss). Unrealized gains and losses on investments and changes in foreign currency exchange rates are reported net of deferred taxes in accumulated other comprehensive (loss) income, a component of stockholders’ equity, until realized. In 2017, net unrealized investment losses of $0.3 million, net of taxes, which decreased our other comprehensive income, were primarily related to temporary decreases in fair values of foreign bond and equity securities investments, partially offset by the increase in fair values of municipal and corporate investments. Changes in foreign currency exchange rates, primarily related to our Canadian operations, increased other comprehensive income by $8.4 million, net of taxes, in 2017.

In 2016, net unrealized investment losses of $1.6 million, net of taxes, which increased our other comprehensive loss, were primarily related to temporary decreases in fair values of municipal, corporate and foreign bond investments, partially offset by the increase in fair values of equity securities investments. Changes in foreign currency exchange rates, primarily related to our Canadian operations, increased other comprehensive loss by $3.4 million, net of taxes, in 2016.

In 2015, net unrealized investment losses of $5.4 million, net of taxes, which increased our other comprehensive loss, were primarily related to temporary decreases in fair values of corporate and government bond investments and equity securities, partially offset by the increase in fair values of municipal bond investments. Changes in foreign currency exchange rates, primarily related to our Canadian operations, increased other comprehensive loss by $11.1 million, net of taxes, in 2015.

Off-balance sheet arrangements. We do not have any material source of liquidity or financing that involves off-balance sheet arrangements, other than our contractual obligations under operating leases. We also routinely hold funds in segregated escrow accounts pending the closing of real estate transactions and have qualified intermediaries in tax-deferred property exchanges for customers pursuant to Section 1031 of the Internal Revenue Code. The Company holds the proceeds from these transactions until a qualifying exchange can occur. In accordance with industry practice, these segregated accounts are not included on the balance sheet. See Note 17 to our audited consolidated financial statements included in Item 15 of Part IV of this report.

30

Forward-looking statements.Certain statements in this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to future, not past, events and often address our expected future business and financial performance.  These statements often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "will," "foresee" or other similar words. Forward-looking statements by their nature are subject to various risks and uncertainties that could cause our actual results to be materially different than those expressed in the forward-looking statements. These risks and uncertainties include, among other things, the challenging economic conditions; adverse changes in the level of real estate activity; changes in mortgage interest rates, existing and new home sales, and availability of mortgage financing; our ability to respond to and implement technology changes, including the completion of the implementation of our enterprise systems; the impact of unanticipated title losses or the need to strengthen our policy loss reserves; any effect of title losses on our cash flows and financial condition; the ability to attract and retain highly productive sales associates; the impact of vetting our agency operations for quality and profitability; independent agency remittance rates; changes to the participants in the secondary mortgage market and the rate of refinancing that affects the demand for title insurance products; regulatory non-compliance, fraud or defalcations by our title insurance agencies or employees; our ability to timely and cost-effectively respond to significant industry changes and introduce new products and services; the outcome of pending litigation; the impact of changes in governmental and insurance regulations, including any future reductions in the pricing of title insurance products and services; our dependence on our operating subsidiaries as a source of cash flow; the continued realization of expense savings from our cost management program; our ability to successfully integrate acquired businesses; our ability to access the equity and debt financing markets when and if needed; our ability to grow our international operations; seasonality and weather; and our ability to respond to the actions of our competitors. We expressly disclaim any obligation to update, amend or clarify any forward-looking statements contained in this report to reflect events or circumstances that may arise after the date hereof, except as may be required by applicable law.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The discussion below about our risk management strategies includes forward-looking statements that are subject to risks and uncertainties. Management’s projections of hypothetical net losses in the fair values of our market rate-sensitive financial instruments, should certain potential changes in market rates occur, are presented below. While we believe that the potential market rate changes are possible, actual rate changes could differ from our projections. Although we are exposed to a currency exchange rate risk for our foreign operations, this risk is not material to Stewart’s financial condition or results of operations.

The material market risk in our investments in financial instruments is related to our debt securities portfolio. We invest primarily in municipal, corporate, foreign and U.S. Government debt securities. Our investments in equity securities represent approximately only 5% of our total investments in available-for-sale securities and we do not invest in financial instruments of a derivative or hedging nature.

We have established policies and procedures to minimize our exposure to changes in the fair values of our investments. These policies include retaining an investment advisory firm, an emphasis upon credit quality, management of portfolio duration, maintaining or increasing investment income through high coupon rates and actively managing our risk profile and security mix depending upon market conditions. We have classified all of our investments as available-for-sale.

Investments in debt securities at December 31, 2017 mature, according to their contractual terms, as follows (actual maturities may differ because of call or prepayment rights):

	Amortized costs	Fair values
	($ thousands)
In one year or less	35,974	36,092
After one year through two years	48,843	49,056
After two years through three years	98,194	98,751
After three years through four years	107,851	109,341
After four years through five years	103,850	105,058
After five years	270,934	273,143
	665,646	671,441

31

We believe our investment portfolios are diversified and do not expect any material loss to result from the failure to perform by issuers of the debt securities we hold. Our investments are not collateralized. Foreign debt securities primarily include Canadian government and corporate bonds with aggregate fair values of $198.7 million and $139.6 million as of December 31, 2017 and 2016, respectively. Also included in foreign debt securities are United Kingdom treasury and corporate bonds with aggregate fair values of $24.5 million and $22.6 million as of December 31, 2017 and 2016, respectively.

Based on our foreign debt securities portfolio and foreign currency exchange rates at December 31, 2017, a 100 basis-point increase (decrease) in foreign currency exchange rates would result in an increase (decrease) of approximately $2.2 million in the fair value of our foreign debt securities portfolio. We do not currently employ hedging strategies with respect to foreign currency risk as we do not consider this risk as material to the Company. In addition, our international businesses conduct substantially all of their operations in their respective local currencies. Changes in foreign currency exchange rates may affect the fair value of the debt securities portfolio and may result in unrealized gains or losses.

Based on our debt securities portfolio and interest rates at December 31, 2017, a 100 basis-point increase (decrease) in interest rates would result in a decrease (increase) of approximately $30.7 million, or 4.6%, in the fair value of our portfolio. Changes in interest rates may affect the fair value of the debt securities portfolio and may result in unrealized gains or losses.

Unrealized gains or losses on investments from changes in foreign currency exchange rates or interest rates would only be realized upon the sale of such investments. Any other-than-temporary declines in fair values of securities are charged to operations.

Item 8. Financial Statements and Supplementary Data

The information required to be provided in this item is included in our audited consolidated financial statements, including the Notes thereto, beginning on page F-1 of this report, and such information is incorporated in this report by reference.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Our principal executive officer and principal financial officer are responsible for establishing and maintaining disclosure controls and procedures. They evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2017 and have concluded that, as of such date, our disclosure controls and procedures are adequate and effective to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)). Our internal control over financial reporting is a process, under the supervision of our principal executive officer and principal financial officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our management, with the participation of our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2017. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on this assessment, management believes that, as of December 31, 2017, our internal control over financial reporting is effective based on those criteria.

32

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Due to such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

See page F-3 for the Report of Independent Registered Public Accounting Firm on our effectiveness of internal control over financial reporting.

There has been no change in our internal control over financial reporting during the quarter ended December 31, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. As a result, no corrective actions were required or undertaken.

Item 9B. Other Information

None.

33

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Information regarding our directors and management team will be included in our proxy statement for our 2018 Annual Meeting of Stockholders (Proxy Statement), to be filed within 120 days after December 31, 2017, and is incorporated in this report by reference.

Our Board of Directors and Management Team as of February 28, 2018 are:

Board of Directors:
Thomas G. Apel	Chairman of the Board of the Company and CEO of VLN, Inc.
Arnaud Ajdler	Managing Partner of Engine Capital LP
Clifford Allen Bradley, Jr.	Former Chairman of the board and CEO of Amerisafe, Inc.
James Chadwick	Director of Ancora Advisors LLC
Glenn C. Christenson	Managing Director of Velstand Investments, LLC
Robert L. Clarke	Of Counsel, Bracewell LLP
Frederick H. Eppinger	Director of Centene Corp. and former President and CEO of The Hanover Insurance Group, Inc.
Matthew W. Morris	Chief Executive Officer of Stewart
Clifford Press	Partner and Managing Member of Oliver Press Partners, LLC
Management Team:
Matthew W. Morris	Chief Executive Officer
John L. Killea	President, Chief Legal Officer and Chief Compliance Officer
David C. Hisey	Chief Financial Officer, Secretary and Treasurer
John Magness	Chief Corporate Development Officer
Brad Rable	Chief Information Officer
Ann Manal	Chief Human Resources Officer
Patrick Beall	Group President
David A. Fauth	Group President

The Board of Directors has adopted the Stewart Code of Business Conduct and Ethics and Guidelines on Corporate Governance, as well as the Code of Ethics for Chief Executive Officers, Principal Financial Officer and Principal Accounting Officer. Each of these documents can be found at our website, www.stewart.com.

Item 11. Executive Compensation

Information regarding compensation for our executive officers will be included in the Proxy Statement and is incorporated in this report by reference. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management and based on that review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information regarding security ownership of certain beneficial owners and management and related stockholder matters will be included in the Proxy Statement and is incorporated in this report by reference.

34

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information regarding certain relationships and related transactions and director independence will be included in the Proxy Statement and is incorporated in this report by reference.

Item 14. Principal Accountant Fees and Services

Information regarding fees paid to and services provided by our independent registered public accounting firm will be included in the Proxy Statement and is incorporated in this report by reference.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Financial Statements and Financial Statement Schedules

The financial statements and financial statement schedules filed as part of this report are listed in the Index to Consolidated Financial Statements and Financial Statement Schedules on Page F-1 of this document. All other schedules are omitted, as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.

(b) Exhibits

Those exhibits required to be filed by Item 601 of Regulation S-K are listed in the Index to Exhibits immediately preceding the exhibits filed herewith and such listing is incorporated herein by reference.

35

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, we have duly caused this report to be signed on our behalf by the undersigned, thereunto duly authorized.

STEWART INFORMATION SERVICES CORPORATION

(Registrant)

By:	/s/ Matthew W. Morris
	Matthew W. Morris, Chief Executive Officer
By:	/s/ David C. Hisey
	David C. Hisey, Chief Financial Officer, Secretary and Treasurer
By:	/s/ Brian K. Glaze
	Brian K. Glaze, Controller and Principal Accounting Officer

Date: February 28, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on our behalf on February 28, 2018 by the following Directors:

/s/ Thomas G. Apel	/s/ James Chadwick	/s/ Frederick H. Eppinger
(Thomas G. Apel)	(James Chadwick)	(Frederick H. Eppinger)
/s/ Arnaud Ajdler	/s/ Glenn C. Christenson	/s/ Matthew W. Morris
(Arnaud Ajdler)	(Glenn C. Christenson)	(Matthew W. Morris)
/s/ Clifford Allen Bradley Jr.	/s/ Robert L. Clarke	/s/ Clifford Press
(Clifford Allen Bradley)	(Robert L. Clarke)	(Clifford Press)

36

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND FINANCIAL STATEMENT SCHEDULES

Stewart Information Services Corporation and Subsidiaries’ Consolidated Financial Statements:
Reports of Independent Registered Public Accounting Firm	F - 2
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended December  31 2017, 2016 and 2015	F - 5
Consolidated Balance Sheets as of December 31, 2017 and 2016	F - 6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016 and 2015	F - 7
Consolidated Statements of Equity for the Years Ended December 31, 2017, 2016 and 2015	F - 9
Notes to Consolidated Financial Statements	F - 10
Financial Statement Schedules:
Schedule I - Financial Information of the Registrant (Parent Company)	S - 1
Schedule II - Valuation and Qualifying Accounts	S - 5

F - 1

Report of Independent Registered Public Accounting Firm

The Stockholders and Board of Directors

Stewart Information Services Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Stewart Information Services Corporation and subsidiaries (the "Company") as of December 31, 2017 and 2016, the related consolidated statements of operations and comprehensive income (loss), cash flows, and equity for each of the years in the three‑year period ended December 31, 2017, the related notes and financial statement schedules as listed in the accompanying index (collectively, the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28, 2018 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 1980.

Houston, Texas

February 28, 2018

F - 2

Report of Independent Registered Public Accounting Firm

The Stockholders and Board of Directors

Stewart Information Services Corporation:

Opinion on Internal Control Over Financial Reporting

We have audited Stewart Information Services Corporation and subsidiaries’ (the "Company") internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the consolidated balance sheets of the Company as of December 31, 2017 and 2016, the related consolidated statements of operations and comprehensive income (loss), cash flows, and equity for each of the years in the three-year period ended December 31, 2017, the related notes, and financial statement schedules as listed in the accompanying index (collectively, the "consolidated financial statements"), and our report dated February 28, 2018 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting included in Item 9A. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F - 3

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Houston, Texas

February 28, 2018

F - 4

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

	For the Years Ended December 31,
	2017		2016		2015
	($000 omitted, except per share)
Revenues
Title insurance:
Direct operations	862,392		894,313		897,118
Agency operations	1,016,356		1,009,797		991,332
Ancillary services	55,837		84,271		129,954
Operating revenues	1,934,585		1,988,381		2,018,404
Investment income	18,932		18,925		16,850
Realized investment and other gains (losses) – net	2,207		(666	)	(1,369	)
	1,955,724		2,006,640		2,033,885
Expenses
Amounts retained by agencies	837,100		826,022		809,564
Employee costs	566,178		604,353		658,266
Other operating expenses	351,511		363,986		381,954
Title losses and related claims	96,532		91,147		106,265
Impairment of goodwill	—		—		35,749
Depreciation and amortization	25,878		30,044		30,298
Interest	3,458		3,062		2,096
	1,880,657		1,918,614		2,024,192
Income before taxes and noncontrolling interests	75,067		88,026		9,693
Income tax expense	14,921		19,605		5,650
Net income	60,146		68,421		4,043
Less net income attributable to noncontrolling interests	11,487		12,943		10,247
Net income (loss) attributable to Stewart	48,659		55,478		(6,204	)
Net income	60,146		68,421		4,043
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments	8,354		(3,367	)	(11,145	)
Change in unrealized net gains on investments	1,766		354		(3,741	)
Reclassification adjustment for net gains included in net income	(2,086	)	(1,911	)	(1,626	)
Other comprehensive income (loss), net of taxes	8,034		(4,924	)	(16,512	)
Comprehensive income (loss)	68,180		63,497		(12,469	)
Less comprehensive income attributable to noncontrolling interests	11,487		12,943		10,247
Comprehensive income (loss) attributable to Stewart	56,693		50,554		(22,716	)
Basic average shares outstanding (000)	23,445		23,364		23,544
Basic earnings (loss) per share attributable to Stewart	2.08		1.86		(0.26	)
Diluted average shares outstanding (000)	23,597		23,472		23,544
Diluted earnings (loss) per share attributable to Stewart	2.06		1.85		(0.26	)

See notes to consolidated financial statements.

F - 5

CONSOLIDATED BALANCE SHEETS

	As of December 31,
	2017		2016
	($000 omitted)
Assets
Cash and cash equivalents	150,079		185,772
Short-term investments	24,463		22,239
Investments in debt and equity securities available-for-sale, at fair value:
Statutory reserve funds	490,824		485,409
Other	218,531		146,094
	709,355		631,503
Receivables:
Premiums from agencies	27,903		31,246
Trade and other	51,299		41,897
Income taxes	1,267		4,878
Notes	3,203		3,402
Allowance for uncollectible amounts	(5,156	)	(9,647	)
	78,516		71,776
Property and equipment, at cost:
Land	3,991		3,991
Buildings	22,849		22,529
Furniture and equipment	226,461		217,105
Accumulated depreciation	(186,279	)	(173,119	)
	67,022		70,506
Title plants, at cost	74,237		75,313
Investments in investees, on an equity method basis	9,202		9,796
Goodwill	231,428		217,094
Intangible assets, net of amortization	9,734		10,890
Deferred tax assets, net	4,186		3,860
Other assets	47,664		42,975
	1,405,886		1,341,724
Liabilities
Notes payable	109,312		106,808
Accounts payable and accrued liabilities	117,740		115,640
Estimated title losses	480,990		462,572
Deferred tax liabilities, net	19,034		7,856
	727,076		692,876
Contingent liabilities and commitments
Stockholders’ equity
Common Stock – $1 par, authorized 50,000,000; issued 24,071,683 and 23,783,440; outstanding 23,719,522 and 23,431,279, respectively	24,072		23,783
Additional paid-in capital	159,954		157,176
Retained earnings	491,698		471,788
Accumulated other comprehensive (loss) income:
Foreign currency translation adjustments	(8,373	)	(16,727	)
Net unrealized gains on investments available-for-sale	7,526		7,846
Treasury stock – 352,161 common shares, at cost, for 2017 and 2016	(2,666	)	(2,666	)
Total stockholders’ equity attributable to Stewart	672,211		641,200
Noncontrolling interests	6,599		7,648
Total stockholders’ equity	678,810		648,848
	1,405,886		1,341,724

See notes to consolidated financial statements.

F - 6

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
	2017		2016		2015
	($000 omitted)
Reconciliation of net income to cash provided by operating activities:
Net income	60,146		68,421		4,043
Add (deduct):
Depreciation and amortization	25,878		30,044		30,298
Provision for bad debt	207		3,349		3,396
Realized investment and other (gains) losses – net	(2,207	)	666		1,369
Amortization of net premium on investments available-for-sale	6,806		7,215		6,540
Payments for title losses less than (in excess of) provisions	12,937		(1,056	)	(17,154	)
Adjustments for insurance recoveries of title losses	(654	)	(173	)	213
Impairment of goodwill	—		—		35,749
(Increase) decrease in receivables – net	(6,910	)	7,759		12,894
(Increase) decrease in other assets – net	(4,512	)	391		3,073
Increase (decrease) in payables and accrued liabilities – net	1,933		(3,888	)	2,088
Decrease (increase) in net deferred income taxes	8,328		7,446		(5,800	)
Net income from equity investees	(2,163	)	(2,834	)	(3,579	)
Dividends received from equity investees	2,493		2,640		3,811
Stock based compensation expense	5,303		2,982		4,445
Other – net	483		—		(872	)
Cash provided by operating activities	108,068		122,962		80,514
Investing activities:
Proceeds from investments available-for-sale sold	76,942		81,091		69,280
Proceeds from investments available-for-sale matured	33,912		27,125		42,195
Purchases of investments available-for-sale	(179,732	)	(166,444	)	(147,697	)
Net (purchases) sales of short-term investments	(2,224	)	17,468		(14,664	)
Purchases of property and equipment, title plants and real estate	(16,396	)	(18,155	)	(19,658	)
Proceeds from the sale of land, buildings, property and equipment, and real estate	502		692		4,214
Net cash (paid for acquisition) received from disposal of subsidiaries and other assets	(17,359	)	1,268		(3,958	)
Other – net	458		181		1,497
Cash used by investing activities	(103,897	)	(56,774	)	(68,791	)
Financing activities:
Proceeds from notes payable	56,493		57,758		52,651
Payments on notes payable	(56,467	)	(60,339	)	(22,494	)
Purchase of remaining interest of consolidated subsidiaries	(1,810	)	(991	)	(209	)
Cash dividends paid	(28,135	)	(27,840	)	(18,010	)
Cash paid on Class B Common Shares conversion	—		(12,000	)	—
Distributions to noncontrolling interests	(11,651	)	(12,961	)	(9,706	)
Repurchases of Common Stock	(727	)	(1,053	)	(27,950	)
Payment of contingent consideration related to an acquisition	(1,298	)	(2,002	)	—
Other - net	—		86		168
Cash used by financing activities	(43,595	)	(59,342	)	(25,550	)
Effects of changes in foreign currency exchange rates	3,731		(141	)	(7,664	)
(Decrease) increase in cash and cash equivalents	(35,693	)	6,705		(21,491	)
Cash and cash equivalents at beginning of year	185,772		179,067		200,558
Cash and cash equivalents at end of year	150,079		185,772		179,067

F - 7

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
	2017		2016		2015
	($000 omitted)
Supplemental information:
Net changes in financial statement amounts due to purchase and disposal of subsidiaries and other assets:
Goodwill acquired (disposed)	14,334		(628	)	7,220
Intangible assets acquired (disposed)	2,598		(1,730	)	38
Receivables and other assets disposed	(60	)	(1,272	)	—
Liabilities disposed (recognized)	327		(499	)	(3,300	)
Net realized loss on the disposal	160		2,861		—
Net cash paid for acquisition (received from disposal) of subsidiaries and other assets	17,359		(1,268	)	3,958
Assets purchased through capital lease obligations	2,477		6,990		1,062
Income taxes – net (refunded) paid	(1,642	)	15,265		14,982
Interest paid	3,466		3,020		1,873

See notes to consolidated financial statements.

F - 8

CONSOLIDATED STATEMENTS OF EQUITY

	Common and Class B Common  Stock ($1 par value) (Note 12)		Additional paid-in capital		Accumulated other comprehensive income (loss)		Retained Earnings		Treasury stock		Noncontrolling interests		Total
	($000 omitted)
Balances at January 1, 2015	24,358		179,205		12,555		479,733		(2,666	)	7,268		700,453
Net loss attributable to Stewart	—		—		—		(6,204	)	—		—		(6,204	)
Dividends on Common Stock ($0.80 per share)	—		—		—		(18,010	)	—		—		(18,010	)
Stock bonuses and other (including tax effects)	93		4,758		—		—		—		—		4,851
Exercise of stock options	4		126		—		—		—		—		130
Stock repurchases	(762	)	(27,188	)	—		—		—		—		(27,950	)
Purchase of remaining interest of consolidated subsidiary	—		(209	)	—		—		—		—		(209	)
Net change in unrealized gains and losses on investments (net of tax)	—		—		(3,741	)	—		—		—		(3,741	)
Net realized gain reclassification (net of tax)	—		—		(1,626	)	—		—		—		(1,626	)
Foreign currency translation (net of tax)	—		—		(11,145	)	—		—		—		(11,145	)
Net income attributable to noncontrolling interests	—		—		—		—		—		10,247		10,247
Distributions to noncontrolling interests	—		—		—		—		—		(9,706	)	(9,706	)
Net effect of changes in ownership and other	—		—		—		—		—		38		38
Balances at December 31, 2015	23,693		156,692		(3,957	)	455,519		(2,666	)	7,847		637,128
Cumulative effect adjustment on adoption of ASU 2016-09 (Note 12)	—		(631	)	—		631		—		—		—
Net income attributable to Stewart	—		—		—		55,478		—		—		55,478
Dividends on Common Stock ($1.20 per share)	—		—		—		(27,840	)	—		—		(27,840	)
Cash paid on Class B Common Shares conversion	—		—		—		(12,000	)	—		—		(12,000	)
Stock bonuses and other (including tax effects)	110		2,872		—		—		—		—		2,982
Exercise of stock options	3		83		—		—		—		—		86
Stock repurchases	(23	)	(1,030	)	—		—		—		—		(1,053	)
Purchase of remaining interest of consolidated subsidiary	—		(810	)	—		—		—		(181	)	(991	)
Net change in unrealized gains and losses on investments (net of tax)	—		—		354		—		—		—		354
Net realized gain reclassification (net of tax)	—		—		(1,911	)	—		—		—		(1,911	)
Foreign currency translation (net of tax)	—		—		(3,367	)	—		—		—		(3,367	)
Net income attributable to noncontrolling interests	—		—		—		—		—		12,943		12,943
Distributions to noncontrolling interests	—		—		—		—		—		(12,961	)	(12,961	)
Balances at December 31, 2016	23,783		157,176		(8,881	)	471,788		(2,666	)	7,648		648,848
Net income attributable to Stewart	—		—		—		48,659		—		—		48,659
Dividends on Common Stock ($1.20 per share)	—		—		—		(28,749	)	—		—		(28,749	)
Stock bonuses and other (including tax effects)	306		4,997		—		—		—		—		5,303
Stock repurchases	(17	)	(710	)	—		—		—		—		(727	)
Purchase of remaining interest of consolidated subsidiary	—		(1,509	)	—		—		—		(301	)	(1,810	)
Net change in unrealized gains and losses on investments (net of tax)	—		—		1,766		—		—		—		1,766
Net realized gain reclassification (net of tax)	—		—		(2,086	)	—		—		—		(2,086	)
Foreign currency translation (net of tax)	—		—		8,354		—		—		—		8,354
Net income attributable to noncontrolling interests	—		—		—		—		—		11,487		11,487
Distributions to noncontrolling interests	—		—		—		—		—		(11,651	)	(11,651	)
Net effect of changes in ownership and other	—		—		—		—		—		(584	)	(584	)
Balances at December 31, 2017	24,072		159,954		(847	)	491,698		(2,666	)	6,599		678,810

See notes to consolidated financial statements.

F - 9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Years Ended December 31, 2017

NOTE 1

General. Stewart Information Services Corporation, through its subsidiaries (collectively, the Company), is primarily engaged in the business of providing title insurance and real estate transaction related services. The Company is a global real estate services company, offering products and services through its directly owned policy-issuing offices, network of independent agencies and other businesses within the Company. The Company provides its products and services to homebuyers and sellers; residential and commercial real estate professionals; mortgage lenders and servicers; title agencies and real estate attorneys; and home builders. The Company also provides services to large mortgage lenders and servicers, mortgage brokers and mortgage investors which are primarily related to appraisal and valuation services (referred to as ancillary services operations). The Company operates in the United States (U.S.) and internationally, primarily in Canada, the United Kingdom, Australia and Central Europe. Approximately 48% of consolidated title revenues for the year ended December 31, 2017 were generated in Texas, New York, California, Florida and international markets (principally Canada).

A. Management’s responsibility. The accompanying consolidated financial statements were prepared by management, who is responsible for their integrity and objectivity. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP), including management’s best judgments and estimates. Actual results could differ from those estimates.

B. Reclassifications. Certain prior year amounts in these consolidated financial statements have been reclassified for comparative purposes. Net income (loss) attributable to Stewart and stockholders’ equity, as previously reported, were not affected.

C. Consolidation. The consolidated financial statements include all subsidiaries in which the Company owns more than 50% voting rights in electing directors. All significant intercompany amounts and transactions have been eliminated and provisions have been made for noncontrolling interests. Unconsolidated investees, in which the Company typically owns 20% through 50% of the entity, are accounted for by the equity method.

D. Statutory accounting. Stewart Title Guaranty Company (Guaranty) and other title insurance underwriters owned by the Company prepare financial statements in accordance with statutory accounting practices prescribed or permitted by regulatory authorities. In conforming the statutory financial statements to GAAP, statutory premium reserves and reserves for known title losses are eliminated and, in substitution, amounts are established for estimated title losses (Note 1F), for which the net effect, after providing for income taxes, is included in the consolidated statements of operations and comprehensive income (loss). Additionally, the investments in debt securities available-for-sale, which are carried at amortized cost for statutory accounting, are reported at fair value and the net unrealized gains and losses, net of applicable deferred taxes, on the investments are included as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

E. Revenue recognition. Operating revenues from direct title operations are considered earned at the time of the closing of the related real estate transaction. The Company recognizes premium revenues on title insurance policies written by independent agencies (agencies) when the policies are reported to the Company. In addition, where reasonable estimates can be made, the Company accrues for policies issued but not reported until after period end. The Company believes that reasonable estimates can be made when recent and consistent policy issuance information is available. Estimates are based on historical reporting patterns and other information obtained about agencies, as well as current trends in direct operations and in the title industry. In this accrual, future transactions are not being estimated. The Company is estimating revenues on policies that have already been issued by agencies but not yet reported to or received by the Company. The Company has consistently followed the same basic method of estimating unreported policy revenues for more than 10 years.

Revenues generated by the Company's ancillary services operations are generally considered earned at the time the related service is performed or the product is delivered to the customer.

F - 10

F. Title losses and related claims. The Company’s method for recording reserves for title losses on both an interim and annual basis begins with the calculation of its current loss provision rate, which is applied to the Company’s current premiums resulting in a title loss expense for the period. This loss provision rate is set to provide for estimated losses on current year policies and is determined using moving average ratios of recent actual policy loss payment experience (net of recoveries) to premium revenues.

At each quarter end, the Company’s recorded reserve for title losses begins with the prior period’s reserve balance for claim losses, adds the current period provision to that balance and subtracts actual paid claims, resulting in an amount that management compares to its actuarially-based calculation of the ending reserve balance necessary to provide for future reported title losses. The actuarially-based calculation is a paid loss development calculation where loss development factors are selected based on company data and input from the Company’s third-party actuaries. The Company also obtains input from third-party actuaries in the form of a reserve analysis utilizing generally accepted actuarial methods. While the Company is responsible for determining its loss reserves, it utilizes this actuarial input to assess the overall reasonableness of its reserve estimation. If the Company’s recorded reserve amount is not at the third-party actuarial point estimate, but is within a reasonable range (+5.0%/-4.0%)of its actuarially-based reserve calculation and the actuary’s point estimate, the Company’s management assesses the major factors contributing to the different reserve estimates in order to determine the overall reasonableness of its recorded reserve, as well as the position of the recorded reserves relative to the point estimate and the estimated range of reserves. The major factors considered can change from period to period and include items such as current trends in the real estate industry (which management can assess although there is a time lag in the development of this data for use by the actuary), the size and types of claims reported and changes in the Company’s claims management process. If the recorded amount is not within a reasonable range of the Company’s third-party actuary’s point estimate, the Company will adjust the recorded reserves in the current period and reassess the provision rate on a prospective basis. Once the Company’s reserve for title losses is recorded, it is reduced in future periods as a result of claims payments and may be increased or reduced by revisions to the Company’s estimate of the overall level of required reserves.

Large claims (those exceeding $1.0 million on a single claim), including large title losses due to independent agency defalcations, are analyzed and reserved for separately due to the higher dollar amount of loss, lower volume of claims reported and sporadic reporting of such claims.

Due to the inherent uncertainty in predicting future title policy losses, significant judgment is required by both the Company’s management and its third party actuaries in estimating reserves. As a consequence, the Company’s ultimate liability may be materially greater or less than its current reserves and/or its third party actuary’s calculated estimate.

G. Cash equivalents. Cash equivalents are highly liquid investments with insignificant interest rate risks and maturities of three months or less at the time of acquisition.

H. Short-term investments. Short-term investments comprise time deposits with banks, federal government obligations and other investments maturing in less than one year.

I. Investments in debt and equity securities. The investment portfolio is classified as available-for-sale. Realized gains and losses on sales of investments are determined using the specific identification method. Net unrealized gains and losses on investments available-for-sale, net of applicable deferred taxes, are included as a component of accumulated other comprehensive income (loss) within stockholders’ equity. At the time unrealized gains and losses become realized, they are reclassified from accumulated other comprehensive income (loss) using the specific identification method. Other-than-temporary declines in fair values of investments available-for-sale are charged to income.

J. Property and equipment. Depreciation is principally computed using the straight-line method using the following estimated useful lives: buildings – 30 to 40 years and furniture and equipment – 3 to 10 years. Maintenance and repairs are expensed as incurred while improvements are capitalized. Gains and losses are recognized at disposal.

F - 11

K. Title plants. Title plants include compilations of a county’s official land records, prior title examination files, copies of prior title policies, maps and related materials that are geographically indexed to a specific property. The costs of acquiring existing title plants and creating new ones, prior to the time such plants are placed in operation, are capitalized. Title plants are not amortized since there is no indication of any loss of value over time but are subject to review for impairment. The costs of maintaining and operating title plants are expensed as incurred. Gains and losses on sales of copies of title plants or interests in title plants are recognized at the time of sale.

L. Goodwill. Goodwill is not amortized, but is reviewed annually during the third quarter using June 30 balances, or whenever occurrences of events indicate a potential impairment at the reporting unit level. The Company evaluates goodwill based on four reporting units with goodwill balances - direct operations, agency operations, international operations and ancillary services.

Under GAAP, the Company has an option to assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. In performing the qualitative assessment, the Company considers factors that include macroeconomic conditions, industry and market considerations, overall actual and expected financial performance, market perspective on the Company, as well as other relevant events and circumstances determined by management. The Company evaluates the weight of each factor to determine whether an impairment more-likely-than-not exists. If the Company decides not to use a qualitative assessment or if the reporting unit fails the qualitative assessment, the quantitative impairment analysis is performed.

The quantitative analysis involves the comparison of the fair value of each reporting unit to its carrying amount. The goodwill impairment is calculated as the excess of the reporting unit's carrying amount over the estimated fair value and is charged to current operations. While the Company is responsible for assessing whether an impairment of goodwill exists, inputs from third-party appraisers are utilized in performing the quantitative analysis. The Company estimates the fair value using a combination of the income approach (discounted cash flow (DCF) technique) and the market approach (guideline company and precedent transaction analyses). The DCF model utilizes historical and projected operating results and cash flows, initially driven by estimates of changes in future revenue levels, and risk-adjusted discount rates. Projected operating results are primarily driven by anticipated mortgage originations, which are obtained from projections by industry experts, for the title reporting units and expected contractual revenues for the ancillary services reporting unit. Fluctuations in revenues, followed by the ability to appropriately adjust employee count and other operating expenses, or large and unanticipated adjustments to title loss reserves, are the primary reasons for increases or decreases in the projected operating results. Market-based valuation methodologies utilize (i) market multiples of earnings and/or other operating metrics of comparable companies and (ii) the Company's market capitalization and a control premium based on market data and factors specific to ownership and corporate governance structure.

Goodwill is assigned to the reporting units at the time the goodwill is initially recorded. Once assigned to a reporting unit, the goodwill is pooled and no longer attributable to a specific acquisition. All activities within a reporting unit are available to support the carrying value of the goodwill. When a business component within a reporting unit is disposed, goodwill is allocated to the component based on the ratio of the component's fair value over the total fair value of the reporting unit.

M. Other intangibles. Other intangible assets are comprised principally of non-compete, underwriting and customer relationship agreements and acquired software. Intangible assets are amortized over their estimated lives, which are primarily 3 to 10 years. These intangible assets are reviewed for impairment when certain events or changes in circumstances occur that indicate that the carrying amount of an asset may not be recoverable. The Company performs an analysis to determine whether the carrying amount of each intangible asset is recoverable. The carrying amount is not recoverable when it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. For any intangible asset that is not recoverable, the Company calculates the excess of the carrying amount of the intangible asset over its fair value, estimated using the income approach (DCF technique). The resulting difference of the carrying amount over the fair value is treated as the impairment of the asset and is charged to current operations.

F - 12

N. Other long-lived assets. The Company reviews the carrying values of title plants and other long-lived assets if certain events occur that may indicate impairment. An impairment of these long-lived assets is indicated when projected undiscounted cash flows over the estimated lives of the assets are less than carrying values. If impairment is indicated, the recorded amounts are written down to fair values. There were no significant impairment charges for long-lived assets during the three years ended December 31, 2017.

O. Fair values. The fair values of financial instruments, including cash and cash equivalents, short-term investments, notes receivable, notes payable and accounts payable, are determined by the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. The net fair values of these financial instruments approximate their carrying values. Investments in debt and equity securities and certain financial instruments are carried at their fair values.

P. Leases. The Company recognizes rent expense under noncancelable operating leases, which generally expire over the next 10 years, on the straight-line basis over the terms of the leases, including provisions for any free rent periods or escalating lease payments.

Q. Income taxes. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the tax basis and the book carrying values of certain assets and liabilities. To the extent that the Company does not believe its deferred tax assets meet the more-likely-than-not realization criteria, it establishes a valuation allowance. When it establishes a valuation allowance, or increases (decreases) the allowance during the year, it records a tax expense (benefit) in its consolidated statements of operations and comprehensive income (loss). Enacted tax rates are used in calculating amounts.

The Company provides for uncertainties in income taxes by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

R. Recently adopted accounting pronouncements. In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-01, Business Combination: Clarifying the Definition of a Business. The amendments in this ASU change the definition of a business to assist with evaluating when a set of transferred assets and activities is a business. This ASU is effective for annual and interim periods beginning after December 15, 2017 and early adoption is allowed. The Company early adopted ASU 2017-01 effective January 1, 2017.

Also in January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the amendments in this ASU eliminate Step 2 from the two-step quantitative goodwill impairment test. Under this new guidance, the annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge, if determined applicable, should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss. This ASU does not amend the optional qualitative assessment of goodwill impairment. This ASU is effective for annual and interim periods beginning after December 15, 2019 and early adoption is allowed. The Company early adopted ASU 2017-04 effective January 1, 2017. The adoption did not result in any impact in 2017.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting, to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new standard, modification is required only if the fair value, the vesting conditions, or the classification of an award as equity or liability changes as a result of the change in terms or conditions. This ASU is effective for annual and interim periods beginning after December 15, 2017, with prospective application, and early adoption is allowed. The Company early adopted ASU 2017-09 effective June 1, 2017. The adoption did not result in any impact in 2017.

F - 13

S. Recent significant accounting pronouncements not yet adopted. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which eliminated the transaction-specific and industry-specific revenue recognition guidance under current GAAP and replaced it with a principles-based approach for determining revenue recognition. The new guidance sets forth the steps to be followed to recognize revenue: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 is effective on annual and interim periods beginning after December 15, 2017. The Company adopted ASU 2014-09 on January 1, 2018 and will utilize the cumulative effect method of adoption for its disclosures beginning the first quarter 2018. Based on management's assessment, the Company determined that ASU 2014-09, other than certain additional footnote disclosures, does not materially impact the accounting or reporting of the Company's revenue streams.

In February 2016, the FASB issued ASU 2016-02, Leases, which updated the current guidance related to leases. The new guidance includes the requirement for the lessee to recognize in the balance sheet a liability equal to the present value of contractual lease payments with terms of more than twelve months and a right-of-use asset representing the right to use the underlying asset for the lease term. Disclosures will be required by lessees to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. This ASU is effective for annual and interim periods beginning after December 15, 2018 and early adoption is allowed. The Company expects to adopt ASU 2016-02 on January 1, 2019 using the modified retrospective approach. The Company expects the adoption of ASU 2016-02 will result in material increases in the assets and liabilities reported on its consolidated balance sheets. As disclosed in Note 16, the undiscounted future contractual lease payments with terms of more than twelve months were approximately $167.1 million as of December 31, 2017. The Company expects the new ASU will likely have an insignificant impact on its consolidated statements of operations and cash flows. The Company is currently evaluating certain lease management and accounting systems and plans to begin system customization and implementation by mid 2018.

NOTE 2

Restrictions on cash and investments. The Company maintains investments in accordance with certain statutory requirements in the states of domicile of our underwriters for the funding of statutory premium reserves. Statutory reserve funds, which approximated $490.8 million and $485.4 million at December 31, 2017 and 2016, respectively, are required to be fully funded and invested in high-quality securities and short-term investments. In addition, included within cash and cash equivalents are statutory reserve funds of approximately $14.2 million and $13.9 million at December 31, 2017 and 2016, respectively. Although these cash statutory reserve funds are not restricted or segregated in depository accounts, they are required to be held pursuant to state statutes. If the Company fails to maintain minimum investments or cash and cash equivalents sufficient to meet statutory requirements, the Company may be subject to fines or other penalties, including potential revocation of its business license. These funds are not available for any other purpose. In the event that insurance regulators adjust the determination of the statutory premium reserves of the Company’s title insurers, these restricted funds as well as statutory surplus would correspondingly increase or decrease.

A substantial majority of consolidated cash and investments at each year end was held by the Company’s title insurance subsidiaries. Generally, the types of investments a title insurer can make are subject to legal restrictions. Furthermore, the transfer of funds by a title insurer to its parent or subsidiary operations, as well as other related party transactions, is restricted by law and generally requires the approval of state insurance authorities.

NOTE 3

Statutory surplus and dividend restrictions. Substantially all of the consolidated retained earnings at each year end were represented by Guaranty, which owns substantially all of the subsidiaries included in the consolidation. Guaranty cannot pay a dividend to its parent in excess of certain limits without the approval of the Texas Insurance Commissioner. The maximum dividend that can be paid after such approval in 2017 and 2018 is $102.0 million and $108.5 million, respectively. Guaranty paid dividends of $20.0 million, $20.0 million and $15.0 million in 2017, 2016, and 2015, respectively.

F - 14

Dividends from Guaranty are also voluntarily restricted primarily to maintain statutory surplus and liquidity at competitive levels and to demonstrate significant claims payment ability. The ability of a title insurer to pay claims can significantly affect the decision of lenders and other customers when buying a policy from a particular insurer.

Surplus as regards policyholders (sum of statutory capital plus surplus) for Guaranty was $542.7 million and $509.9 million at December 31, 2017 and 2016, respectively. Statutory net income for Guaranty was $47.7 million, $53.6 million and $83.2 million in 2017, 2016 and 2015, respectively.

The amount of statutory capital and surplus necessary to satisfy regulatory requirements for Guaranty was $2.0 million (and in the aggregate less than $15.0 million for all of the Company’s underwriter subsidiaries) at December 31, 2017, and each of its underwriter entities was in compliance with such requirements as of December 31, 2017.

NOTE 4

Investments in debt and equity securities. Amortized costs and fair values at December 31, follow:

	2017		2016
	Amortized costs	Fair values	Amortized costs	Fair values
	($000 omitted)
Debt securities:
Municipal	71,581	72,669	72,284	72,432
Corporate	351,477	357,933	338,365	343,047
Foreign	229,750	228,237	165,735	167,027
U.S. Treasury Bonds	12,838	12,602	12,795	12,613
Equity securities	32,132	37,914	30,255	36,384
	697,778	709,355	619,434	631,503

The Company believes its investment portfolio is diversified and expects no material loss to result from the failure to perform by issuers of the debt securities it holds. Investments made by the Company are not collateralized. Foreign debt securities primarily include Canadian government and corporate bonds, with aggregate fair values of $198.7 million and $139.6 million as of December 31, 2017 and 2016, respectively, and United Kingdom treasury and corporate bonds with aggregate fair values of $24.5 million and $22.6 million as of December 31, 2017 and 2016, respectively.

Gross unrealized gains and losses at December 31, were:

	2017		2016
	Gains	Losses	Gains	Losses
	($000 omitted)
Debt securities:
Municipal	1,263	175	723	575
Corporate	6,953	497	6,871	2,189
Foreign	1,742	3,255	2,912	1,620
U.S. Treasury Bonds	—	236	4	186
Equity securities	6,367	585	6,800	671
	16,325	4,748	17,310	5,241

F - 15

Debt securities at December 31, 2017 mature, according to their contractual terms, as follows (actual maturities may differ due to call or prepayment rights):

	Amortized costs	Fair values
	($000 omitted)
In one year or less	35,974	36,092
After one year through five years	358,738	362,206
After five years through ten years	221,792	221,994
After ten years	49,142	51,149
	665,646	671,441

Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2017, were:

	Less than 12 months		More than 12 months		Total
	Losses	Fair values	Losses	Fair values	Losses	Fair values
	($000 omitted)
Debt securities:
Municipal	58	17,023	117	5,784	175	22,807
Corporate	386	81,632	111	4,926	497	86,558
Foreign	1,528	116,130	1,727	39,031	3,255	155,161
U.S. Treasury Bonds	53	5,830	183	6,772	236	12,602
Equity securities:	555	6,475	30	860	585	7,335
	2,580	227,090	2,168	57,373	4,748	284,463

The number of specific investment holdings in an unrealized loss position as of December 31, 2017 was 205, 36 securities of which were in unrealized loss positions for more than 12 months. Since the Company does not intend to sell and will more-likely-than-not maintain its investment in equity and debt securities until recovery of the fair value or amortized cost, respectively, these investments are not considered other-than-temporarily impaired. The Company also determined that there is no significant credit risk existing with its debt securities. The Company determined that there was no other-than-temporary impairment on its investments in available-for-sale securities during the years ended December 31, 2017 and 2016.

Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2016, were:

	Less than 12 months		More than 12 months		Total
	Losses	Fair values	Losses	Fair values	Losses	Fair values
	($000 omitted)
Debt securities:
Municipal	575	32,038	—	—	575	32,038
Corporate	2,189	119,965	—	—	2,189	119,965
Foreign	1,427	70,012	193	3,160	1,620	73,172
U.S. Treasury Bonds	186	11,847	—	—	186	11,847
Equity securities:	424	5,950	247	2,250	671	8,200
	4,801	239,812	440	5,410	5,241	245,222

F - 16

NOTE 5

Fair value measurements. The Fair Value Measurements and Disclosures Topic of the FASB Accounting Standards Codification (ASC) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. This guidance establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs when possible. The three levels of inputs used to measure fair value are as follows:

• Level 1 – quoted prices in active markets for identical assets or liabilities;

• Level 2 – observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and

• Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

At December 31, 2017, financial instruments measured at fair value on a recurring basis are summarized below:

	Level 1	Level 2	Level 3	Fair value measurements
	($000 omitted)
Investments available-for-sale:
Debt securities:
Municipal	—	72,669	—	72,669
Corporate	—	357,933	—	357,933
Foreign	—	228,237	—	228,237
U.S. Treasury Bonds	—	12,602	—	12,602
Equity securities:	37,914	—	—	37,914
	37,914	671,441	—	709,355

At December 31, 2016, financial instruments measured at fair value on a recurring basis are summarized below:

	Level 1	Level 2	Level 3	Fair value measurements
	($000 omitted)
Investments available-for-sale:
Debt securities:
Municipal	—	72,432	—	72,432
Corporate	—	343,047	—	343,047
Foreign	—	167,027	—	167,027
U.S. Treasury Bonds	—	12,613	—	12,613
Equity securities:	36,384	—	—	36,384
	36,384	595,119	—	631,503

At December 31, 2017, Level 1 financial instruments consist of equity securities. Level 2 financial instruments consist of municipal, governmental, and corporate bonds, both U.S. and foreign. In accordance with the Company’s policies and guidelines which incorporate relevant statutory requirements, the Company’s third-party registered investment manager invests only in securities rated as investment grade or higher by the major rating services, where observable valuation inputs are significant. The fair value of the Company's investments in available-for-sale securities are primarily determined using a third-party pricing service provider. The third-party pricing service provider calculates the fair values using both market approach and model valuation methods, as well as pricing information obtained from brokers, dealers and custodians. Management ensures the reasonableness of the third-party service valuations by comparing them with pricing information from the Company's investment manager.

F - 17

There were no transfers of investments between Level 1 and Level 2 during the three years ended December 31, 2017.

NOTE 6

Investment income and other gains and losses. Income from investments and gross realized investment and other gains and losses are detailed below:

	2017		2016		2015
	($000 omitted)
Investment income:
Debt securities	17,222		16,476		15,181
Short-term investments, cash equivalents and other	1,710		2,449		1,669
	18,932		18,925		16,850
Realized investment and other gains (losses) – net:
Realized gains	4,997		9,882		5,948
Realized losses	(2,790	)	(10,548	)	(7,317	)
	2,207		(666	)	(1,369	)

Proceeds from the sales of investments available-for-sale were $76.9 million, $81.1 million and $69.3 million for the years ended December 31, 2017, 2016 and 2015, respectively. Expenses assignable to investment income were insignificant, and there were no significant investments that did not produce income for all years presented.

In 2017, realized investment and other gains - net included $3.2 million of net realized gains from the sale of investments available-for-sale, partially offset by $0.8 million of net realized loss due to an increase in the fair value of a contingent consideration liability related to a prior acquisition.

In 2016, realized investment and other losses - net included $3.4 million of realized loss related to the exit of a service offering and $3.3 million of realized losses from sale of certain businesses within ancillary services operations, partially offset by $4.0 million of net realized gains from the sale of investments available-for-sale and $1.2 million of realized gain on a cost-basis investment transaction.

In 2015, realized investment and other losses – net included realized losses of $2.7 million relating to other-than-temporary impairment of investment in equity securities available-for-sale, $1.8 million impairment of other intangible assets and $1.4 million relating to office closure costs, partially offset by realized gains of $2.4 million from the sale of debt and equity investments available-for-sale and $1.5 million from the sale of office buildings.

NOTE 7

Income taxes. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the 2017 Act), which revised the U.S. corporate income tax regime by, among other things, lowering the corporate tax rate from 35% to 21% effective on January 1, 2018 and imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. In accordance with ASC 740, Income Taxes, changes in tax rates and tax laws are accounted for in the period of enactment, and the resulting effects are recorded as discrete components of the income tax provision related to continuing operations in the same period. As a result of the 2017 Act, the Company recorded (i) net income tax benefits of $7.8 million, consisting of a $7.2 million federal benefit and a $0.6 million state benefit, related to the remeasurement of deferred tax assets and liabilities and (ii) an income tax expense of $1.2 million related to the transition tax on deemed repatriation of deferred foreign income.

F - 18

Also on December 22, 2017, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 118 (SAB 118), which provides guidance on accounting for tax effects of the 2017 Act. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date of the 2017 Act for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the 2017 Act for which the accounting under ASC 740 is complete. To the extent that accounting for certain income tax effects of the 2017 Act is incomplete but a reasonable estimate is determinable, a provisional estimate must be recorded in the financial statements. The adjustments discussed above represent provisional amounts and are based on the Company's best estimates of the impact of the 2017 Act. The adjustment for the remeasurement of deferred tax assets and liabilities is provisional since it is based on certain estimated 2017 amounts. The adjustment for the transition tax on deemed repatriation of deferred foreign income is provisional as we continue to gather information and analyze existing and expected guidance from the Internal Revenue Service (IRS). The final determination of the impact may differ from these estimates, due to, among other things, changes in the Company's interpretations and assumptions, additional guidance that may be issued by the IRS, and actions that the Company may take. The Company expects to finalize its computation for both adjustments prior to filing its 2017 U.S. income tax return in the third quarter 2018.

Income tax expense consists of the following:

	2017		2016		2015
	($000 omitted)
Current income tax expense:
Federal	1,154		4,718		4,774
State	814		1,447		709
Foreign	4,625		5,983		5,967
	6,593		12,148		11,450
Deferred income tax expense (benefit):
Federal	4,088		6,262		(3,986	)
State	(254	)	(1,347	)	(1,375	)
Foreign	4,494		2,542		(439	)
	8,328		7,457		(5,800	)
Total income tax expense	14,921		19,605		5,650

The following reconciles income tax expense (benefit) computed at the federal statutory rate with income tax expense as reported:

	2017		2016		2015
	($000 omitted)
Expected income tax expense (benefit) at 35% (1)	22,253		26,279		(194	)
2017 Act impact from the U.S. corporate tax rate change	(7,196	)	—		—
Nondeductible expenses	2,610		2,772		2,768
Research and development credits	(2,158	)	(3,434	)	—
Federal net benefit offset to Canadian expense (2)	(1,480	)	(639	)	—
2017 Act impact from deemed repatriation of deferred foreign income	1,213		—		—
Return-to-provision and true-up adjustments	923		(4,127	)	(1,329	)
Impairment of goodwill	—		—		7,099
Other – net (3)	(1,244	)	(1,246	)	(2,694	)
Income tax expense	14,921		19,605		5,650
Effective income tax rate (1)	23.5	%	26.1	%	(1,019.4	)%

⁽¹⁾ Calculated using income (loss) before taxes and after noncontrolling interests.

⁽²⁾ For U.S. income tax purposes, the Company’s Canadian operation is a branch of Guaranty. As a result, the Canadian net deferred tax liability is offset in the U.S. as a deferred tax asset but not in an equal amount given differing tax rates in Canada and the U.S.

⁽³⁾ Included within this line is $0.6 million of 2017 net income tax benefit from the remeasurement of the state deferred tax assets and liabilities relating to the 2017 Act.

F - 19

Deferred tax assets and liabilities resulting from the same tax jurisdiction are netted and presented as either an asset or liability on the consolidated balance sheets. Deferred tax assets and liabilities resulting from different tax jurisdictions are not netted. Deferred tax assets and liabilities as of December 31 are detailed below.

	2017		2016
	($000 omitted)
Deferred tax assets:
Accrued expenses	14,435		26,835
Net operating loss (NOL) carryforwards	6,483		6,275
Federal offset to Canadian deferred tax liability (1)	6,300		4,335
Allowance for uncollectible amounts	1,133		3,454
Foreign currency translation adjustments	925		4,238
Investments	894		978
Tax credit carryforwards	1		6,154
Fixed assets	—		2,067
Other	711		476
Deferred tax assets – gross	30,882		54,812
Valuation allowance	(2,231	)	(2,457	)
Deferred tax assets – net	28,651		52,355
Deferred tax liabilities:
Amortization – goodwill and other intangibles	(18,155	)	(26,851	)
Title loss provisions	(17,889	)	(21,433	)
Deferred compensation on life insurance policies	(2,278	)	(3,345	)
Fixed assets	(1,968	)	—
Unrealized gains on investments	(1,826	)	(3,873	)
Other	(1,383	)	(849	)
Deferred tax liabilities – gross	(43,499	)	(56,351	)
Net deferred income tax liability	(14,848	)	(3,996	)

⁽¹⁾ For U.S. income tax purposes, the Company’s Canadian operation is a branch of Guaranty. As a result, the Canadian net deferred tax liability is offset in the U.S. as a deferred tax asset but not in an equal amount given differing tax rates in Canada and the U.S.

At December 31, 2017 and 2016, net deferred tax liabilities for U.S. federal tax paying components totaled approximately $7.7 million and $1.2 million, respectively, and net deferred tax liabilities for foreign tax paying components totaled approximately $7.1 million and $2.8 million, respectively. The net (decrease) increase to the valuation allowance during 2017 and 2016 was $(0.2) million and $0.2 million, respectively.

The Company has no remaining foreign tax credit carryforwards at December 31, 2017. The Company's $6.5 million of deferred tax assets relating to NOL carryforwards include certain state amounts which expire in varying amounts from 2019 through 2037 and foreign amounts which expire in varying amounts from 2020 through 2027 or have unlimited carryforward periods. The future utilization of all NOL carryforwards is subject to various limitations. The remaining valuation allowance at December 31, 2017 relates principally to certain state and foreign NOL carryforwards.

The Company’s income tax returns are routinely subject to examinations by U.S. federal, foreign, and state and local tax authorities. The Company is involved in routine examinations by state and local tax jurisdictions for calendar years 2010 through 2013. The Company expects no material adjustments from any ongoing tax return examinations.

F - 20

NOTE 8

Goodwill and other intangibles. The summary of changes in goodwill is as follows:

	Title		Ancillary Services and Corporate		Total
	($000 omitted)
Balances at January 1, 2016	211,255		6,467		217,722
Acquisitions	300		—		300
Disposals	(190	)	(738	)	(928	)
Balances at December 31, 2016	211,365		5,729		217,094
Acquisitions	14,419		—		14,419
Disposals	(85	)	—		(85	)
Balances at December 31, 2017	225,699		5,729		231,428

The Company evaluates goodwill for impairment annually based on information as of June 30 of the current year or more frequently if circumstances suggest that impairment may exist. In 2017 and 2016, the Company determined that it was more likely than not that goodwill related to all of its reporting units was not impaired. For its impairment analysis, the Company performed a qualitative assessment in 2017 and utilized a quantitative analysis in 2016.

During 2017, the Company acquired certain title businesses primarily funded by borrowings on the Company's unsecured line of credit. As a result of these acquisitions, the Company increased its goodwill related to the title segment by a total of $14.4 million, which is deductible in full for income tax purposes over a period of 15 years. Also, in connection with the acquisitions, the Company identified and recorded $2.6 million of other intangibles, primarily related to acquired software to be amortized over 5 years from the date of acquisition.

The gross carrying amount, and accumulated amortization and impairment of other intangibles was $30.5 million and $20.8 million, respectively, at December 31, 2017 and $27.9 million and $17.0 million, respectively, at December 31, 2016. During 2016, other intangible assets with total gross carrying amounts and accumulated amortization and impairment of $11.2 million and $9.1 million, respectively, were written off as part of the sale of certain businesses within the Company's ancillary services operations.

The amortization expense recorded for the Company's other intangible assets was $3.8 million and $5.5 million in 2017 and 2016, respectively. The annual amortization expense expected to be recognized in the next five years is approximately $3.4 million in 2018, $2.5 million in 2019, $1.5 million in 2020, $0.9 million in 2021 and $0.4 million in 2022.

NOTE 9

Equity investees. Summarized aggregate financial information for equity investees (in which the Company typically owns 20% through 50% of the equity) is as follows:

	2017	2016	2015
	($000 omitted)
For the year:
Revenues	25,351	24,274	28,843
Net income	4,997	6,542	8,830
At December 31:
Total assets	32,171	32,324	33,555
Notes payable	20,902	20,895	20,200
Stockholders’ equity	9,023	9,483	7,213

F - 21

Net premium revenues from policies issued by equity investees were approximately $2.1 million, $2.1 million and $2.5 million in 2017, 2016 and 2015, respectively. Income related to equity investees was $2.2 million, $2.8 million and $3.6 million in 2017, 2016 and 2015, respectively. These amounts are included in title insurance – direct operations in the consolidated statements of operations and comprehensive income (loss).

Goodwill related to equity investees was $7.3 million and $7.4 million as of December 31, 2017 and 2016, respectively, and is included in investments in investees in the consolidated balance sheets. Equity investments, including the related goodwill balances, are reviewed for impairment annually and upon the occurrence of an event that may indicate an impairment. No impairment was recorded during the three years ended December 31, 2017.

NOTE 10

Notes payable and line of credit. A summary of notes payable is as follows:

	2017	2016
	($000 omitted)
Banks – varying payments and rates (1)	98,875	92,875
Other than banks	10,437	13,933
	109,312	106,808

⁽¹⁾ Average interest rates were 2.59% and 1.97% during the year ended December 31, 2017 and 2016, respectively.

Principal payments on the above notes, based upon the contractual maturities, are due in the amounts of $7.4 million in 2018, $101.0 million in 2019, and $0.9 million in 2020. Included within notes payable - other than banks are $6.1 million and $7.3 million of capital lease obligations at December 31, 2017 and 2016, respectively.

As of December 31, 2017, the Company had available a $125.0 million unsecured line of credit commitment (Credit Agreement), which expires October 2019, under which borrowings of $98.9 million were outstanding; the remaining balance of the line of credit available for use was $23.6 million, net of an unused $2.5 million letter of credit. The unsecured line of credit can be used for general corporate purposes, including acquisitions. Borrowings bear interest, at the Company's election, at either (a) an Alternate Base Rate plus the Applicable Rate (ABR Borrowing) or (b) LIBOR plus the Applicable Rate (Eurodollar Borrowing). The Applicable Rate ranges from 0.50% to 1.00% per annum for ABR Borrowings and 1.50% to 2.00% per annum for Eurodollar Borrowings based on the Company's consolidated Leverage Ratio.

Also, under the terms of the Credit Agreement, the Company may at any time, subject to certain conditions, request an increase in the amount of the line of credit up to $50.0 million. The Credit Agreement contains customary affirmative and negative covenants. The Credit Agreement, as amended in February 2016 (First Amendment), also contains certain consolidated financial covenants providing that (a) the ratio of EBITDA (as defined in the Credit Agreement) to fixed charges (as defined in the agreement) not be below 1.25 to 1.00 on a trailing four-quarter basis (Fixed Charge Ratio); (b) the ratio of total Indebtedness to EBITDA for the prior four consecutive quarters must not be greater than 2.25 to 1.00 (Leverage Ratio); and (c) Capital Expenditures in the aggregate for the Company in any calendar year may not exceed $25.0 million, with certain allowances for carryover of unused amounts. The Company was in compliance with all covenants as of December 31, 2017 and 2016.

Included in the First Amendment were other restrictions relating to the Credit Agreement such as an establishment of an exception to the limitation on restricted payments under the Credit Agreement in respect of the Company’s share repurchase program of up to $50.0 million that was announced in November 2015, and an increase in the general permitted restricted payments (dividends) basket in Section 6.07 of the Credit Agreement from $25.0 million to $35.0 million annually.

F - 22

The Company's qualified intermediary in tax-deferred property exchanges pursuant to Section 1031 of the Internal Revenue Code enters into short-term loan agreements with parties to an exchange in the ordinary course of its business. The outstanding balances pursuant to these loans, as included within notes payable - other than banks in the above table, were $4.3 million and $6.5 million as of December 31, 2017 and 2016, respectively, and are secured by cash that is included in cash and cash equivalents on the Company's consolidated balance sheet. Borrowings and repayments on these short-term loans are reflected as financing activities in the consolidated statements of cash flows.

NOTE 11

Estimated title losses. A summary of estimated title losses is as follows:

	2017		2016		2015
	($000 omitted)
Balances at January 1	462,572		462,622		495,395
Provisions:
Current year	71,966		72,586		68,029
Previous policy years	24,566		18,561		38,236
Total provisions	96,532		91,147		106,265
Payments, net of recoveries:
Current year	(20,335	)	(18,836	)	(19,182	)
Previous policy years	(63,914	)	(73,194	)	(104,450	)
Total payments, net of recoveries	(84,249	)	(92,030	)	(123,632	)
Adjustments related to acquired balance	—		—		(2,303	)
Effects of changes in foreign currency exchange rates	6,135		833		(13,103	)
Balances at December 31	480,990		462,572		462,622
Loss ratios as a percentage of title operating revenues:
Current year provisions	3.8	%	3.8	%	3.6	%
Total provisions	5.1	%	4.8	%	5.6	%

The loss provision recorded for the year ended December 31, 2017 reflected an ultimate loss rate of 3.8% of title revenues for policies issued in the current year and a net increase in the loss reserve estimates for prior policy years of $24.6 million. The increase in the loss reserve estimate for prior policy years included $18.4 million related to adverse loss development due to continued elevated claims payment experience for certain years. Total provisions for large title claims related to prior policy years were $4.3 million, $3.8 million and $31.7 million in 2017, 2016 and 2015, respectively.

The 2016 and 2015 loss provisions included 3.8% and 3.6%, respectively, of title revenues related to the current policy year and net increases in the loss reserves estimate for prior policy years of $18.6 million and $38.2 million, respectively. The adverse prior policy year loss development in 2016 was primarily due to the continued elevated claims payment experience for certain policy years, while the adverse prior policy year loss development in 2015 was primarily driven by the $31.7 million additional provision for large title claims related to prior policy years.

F - 23

NOTE 12

Stockholders' Equity. Prior to April 2016, the Company had two classes of stock outstanding - the Common Stock and the Class B Common Stock. On January 26, 2016, the Company entered into an Exchange Agreement with the holders of Class B Common Stock relating to the exchange of 1,050,012 Class B Common Stock shares, representing all outstanding Class B Common Stock, for 1,050,012 shares of Common Stock plus $12.0 million in aggregate cash. On April 27, 2016, the Company's stockholders approved the Exchange Agreement and the related amendments to the Company's by-laws and certificate of incorporation and entered into a Registration Rights Agreement with the holders of the Class B Common Stock. On the same date after the stockholders' approval, the Company issued 1,050,012 shares of Common Stock plus $12.0 million cash in exchange for the retirement of the outstanding 1,050,012 Class B Common Stock shares. In accordance with U.S. GAAP, the $12.0 million cash payment was recorded as a reduction to retained earnings, similar to dividends on preferred stock (refer to Note 14).

In 2016, the Company adopted ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplified several aspects of the accounting for share-based transactions. The new guidance requires, among others, excess tax benefits and tax deficiencies to be recorded in the statement of operations and comprehensive income (loss) when the awards vest or are settled. Using the modified retrospective method of adoption, the Company recognized a cumulative effect adjustment at January 1, 2016 and reclassified the remaining $0.6 million of unrecognized excess tax benefits from additional paid-in capital to retained earnings in the 2016 statement of equity.

At December 31, 2017 and 2016, there were 145,820 shares of Common Stock held by a subsidiary of the Company which are included in the treasury stock reported in the consolidated balance sheets.

NOTE 13

Share-based payments. During the three years ended December 31, 2017, the Company granted executives and senior management shares of restricted common stock which are time-based. Prior to 2016, time-based restricted common stock grants vested at the end of three years after the grant date. The time-based grants in 2016 and future periods vest equally on each of the first three anniversaries of the grant date. The Company also granted performance-based shares of restricted common stock which vest upon achievement of certain financial objectives over a period of three years. The aggregate grant-date fair values of restricted common stock awards in 2017, 2016 and 2015 were $5.7 million (133,000 shares with an average grant price of $42.59), $4.1 million (110,000 shares with an average grant price of $37.34) and $4.4 million (119,000 shares with an average grant price of $37.16), respectively. Awards were made pursuant to the Company’s employee incentive compensation plans and the compensation expense associated with restricted stock awards is recognized over the corresponding vesting period as part of employee costs in the consolidated statements of operations. Award forfeitures are recorded as credits against employee costs in the period in which they occur.

Additionally, in 2017, 2016 and 2015, the Company granted its board of directors, as a component of their annual director retainer compensation, approximately 13,000, 18,000 and 18,000 shares, respectively, of common stock, which immediately vested at grant date. The aggregate fair values of these director awards at grant dates were $0.6 million, $0.6 million and $0.7 million, respectively, and the associated expense is recognized in other operating expenses in the consolidated statements of operations.

F - 24

A summary of the restricted common stock award activity during the year ended December 31, 2017 is presented below:

	Shares		Weighted-Average Grant-Date Fair Value per Share ($)
Nonvested balance at January 1, 2017	206,327		37.18
Granted	132,957		42.59
Adjustment for performance-based shares	(59,348	)	42.78
Vested	(59,260	)	36.98
Forfeited	(76,712	)	37.28
Nonvested balance at December 31, 2017	143,964		39.89

The fair value of shares that vested in 2017 and 2016 aggregated to $2.5 million and $3.8 million, respectively. For the years ended December 31, 2017, 2016 and 2015, compensation costs recognized in the statements of operations, presented within employee costs, were approximately $5.3 million, $3.0 million and $4.4 million, respectively. The total tax benefits recognized in the statement of operations from tax deductions relating to vesting of restricted common stock awards in 2017, 2016 and 2015 were $1.2 million, $1.7 million and $1.0 million, respectively. As of December 31, 2017, compensation costs not yet recognized related to nonvested restricted common stock awards was $5.1 million, which is expected to be recognized over a weighted average period of 1.5 years.

NOTE 14

Earnings per share. The Company’s basic earnings (loss) per share (EPS) attributable to Stewart is calculated by dividing net income (loss) attributable to Stewart by the weighted-average number of shares of Common Stock outstanding during the reporting periods. To calculate diluted earnings per share, the number of shares is adjusted for the effects of any applicable dilutive shares. The treasury stock method is used to calculate the dilutive number of shares related to the Company’s long term incentive and stock option plans. In periods of loss, dilutive shares are excluded from the calculation of the diluted earnings per share and diluted earnings per share is computed in the same manner as basic earnings per share.

The calculation of the basic and diluted earnings (loss) per share is as follows:

	For the Years Ended    December 31,
	2017	2016		2015
	($000 omitted)
Numerator:
Net income (loss) attributable to Stewart	48,659	55,478		(6,204	)
Less: Cash paid on Class B Common Shares conversion (a)	—	(12,000	)	—
Adjusted net income (loss) for calculating basic and diluted EPS	48,659	43,478		(6,204	)
Denominator (000):
Basic average shares outstanding	23,445	23,364		23,544
Average number of dilutive shares relating to restricted shares grants	152	108		—
Diluted average shares outstanding	23,597	23,472		23,544
Basic earnings (loss) per share attributable to Stewart	2.08	1.86		(0.26	)
Diluted earnings (loss) per share attributable to Stewart	2.06	1.85		(0.26	)

(a) - In accordance with the ASC 260, Earnings Per Share, the $12.0 million payment to the holders of the Class B Common Stock shares (refer to Note 12) is treated in a manner similar to the treatment of dividends on preferred stock for the purpose of calculating EPS. Accordingly, the $12.0 million payment was deducted from the 2016 net income to arrive at the adjusted net income for calculating basic and diluted EPS.

F - 25

NOTE 15

Reinsurance. As is industry practice, the Company cedes risks to other title insurance underwriters and reinsurers on certain transactions. However, the Company remains liable if the reinsurer should fail to meet its obligations. The Company also assumes risks from other underwriters on a transactional basis as well as on certain reinsurance treaties. Payments and recoveries on reinsured losses were insignificant during each of the years ended December 31, 2017, 2016, and 2015. The total amount of premiums for assumed and ceded risks was less than 1.0% of consolidated title revenues in each of the last three years and there were no outstanding amounts of reinsurance recoverable or payable at December 31, 2017 and 2016.

NOTE 16

Leases. Lease expense was $40.8 million, $41.3 million and $42.9 million in 2017, 2016 and 2015, respectively. The future minimum lease payments relating to operating leases are summarized as follows (in thousands of dollars):

2018	52,112
2019	39,996
2020	27,184
2021	18,147
2022	11,851
2023 and after	17,843
	167,133

NOTE 17

Contingent liabilities and commitments. The Company routinely holds third-party funds in segregated escrow accounts pending the closing of real estate transactions resulting in a contingent liability to the Company of approximately $1.2 billion at December 31, 2017. In addition, the Company is contingently liable for disbursements of escrow funds held by agencies in those cases where specific insured closing guarantees have been issued.

The Company owns a qualified intermediary in tax-deferred property exchanges for customers pursuant to Section 1031 of the Internal Revenue Code (Section 1031). The Company holds the proceeds from these transactions until a qualifying exchange can occur. This resulted in a contingent liability to the Company of approximately $1.1 billion at December 31, 2017. As is industry practice, escrow and Section 1031 exchanger fund accounts are not included in the consolidated balance sheets.

In the ordinary course of business, the Company guarantees the third-party indebtedness of certain of its consolidated subsidiaries. As of December 31, 2017, the maximum potential future payments on the guarantees are not more than the related notes payable recorded in the consolidated balance sheets (refer to Note 10). The Company also guarantees the indebtedness related to lease obligations of certain of its consolidated subsidiaries. The maximum future obligations arising from these lease-related guarantees are not more than the Company’s future minimum lease payments (refer to Note 16). As of December 31, 2017, the Company also had unused letters of credit aggregating $5.4 million related to workers’ compensation coverage and other insurance. The Company does not expect to make any payments on these guarantees.

F - 26

NOTE 18

Regulatory and legal developments. The Company is subject to claims and lawsuits arising in the ordinary course of its business, most of which involve disputed policy claims. In some of these lawsuits, the plaintiff seeks exemplary or treble damages in excess of policy limits. The Company does not expect that any of these ordinary course proceedings will have a material adverse effect on its consolidated financial condition or results of operations. In addition, along with the other major title insurance companies, the Company is party to class action lawsuits concerning the title insurance industry. The Company believes that it has adequate reserves for the various litigation matters and contingencies discussed in this paragraph and that the likely resolution of these matters will not materially affect its consolidated financial condition or results of operations.

Additionally, the Company receives from time to time various other inquiries from governmental regulators concerning practices in the insurance industry. Many of these practices do not concern title insurance. To the extent the Company is in receipt of such inquiries, it believes that it has adequately reserved for these matters and does not anticipate that the outcome of these inquiries will materially affect its consolidated financial condition or results of operations.

The Company is subject to various other administrative actions and inquiries into its business conduct in certain of the states in which it operates. While the Company cannot predict the outcome of the various regulatory and administrative matters, it believes that it has adequately reserved for these matters and does not anticipate that the outcome of any of these matters will materially affect its consolidated financial condition or results of operations.

NOTE 19

Segment information. Prior to 2016, the Company reported three operating segments: title insurance and related services (title), mortgage services and corporate. Effective in the first quarter 2016, as a result of realigning and streamlining the management of the mortgage services operations, the Company began reporting two operating segments: title and ancillary services and corporate. The centralized title services business, previously included in the mortgage services segment, is now included in the title segment. The remaining operations of the mortgage services segment, principally search and valuation services, are not material, in the aggregate, for separate segment presentation and are now included in the ancillary services and corporate segment. In addition, the Company began allocating the costs of its centralized administrative services departments to the respective operating businesses. The operating segments reflect the current manner that management uses in allocating resources and assessing performance of the Company's businesses.

The title segment provides services needed to transfer title to property in a real estate transaction and includes services such as searching, examining, closing and insuring the condition of the title to the property. In addition, the title segment includes centralized title services, home and personal insurance services and Section 1031 exchanges. The ancillary services and corporate segment historically provided search and valuation services, loan file review, quality control services, government services, document management, recording and call center-related services offered to large mortgage lenders and servicers, mortgage brokers and mortgage investors. Beginning in 2017, the principal offering of ancillary services are search and valuation services. Also included in the ancillary services and corporate segment are expenses of the parent holding company and certain other enterprise-wide overhead costs, net of centralized administrative services costs allocated to respective operating businesses.

F - 27

Selected statement of operations information related to these segments for the years ended December 31 is as follows (2015 amounts have been restated to conform to the new segment presentation):

	2017		2016		2015
	($000 omitted)
Title segment:
Revenues	1,899,462		1,922,422		1,904,258
Impairment of goodwill	—		—		1,569
Depreciation and amortization	21,384		21,176		18,767
Income before taxes and noncontrolling interest	103,361		139,083		119,032
Ancillary services and corporate segment:
Revenues	56,262		84,218		129,627
Impairment of goodwill	—		—		34,180
Depreciation and amortization	4,494		8,868		11,531
Loss before taxes and noncontrolling interest	(28,294	)	(51,057	)	(109,339	)
Consolidated Stewart:
Revenues	1,955,724		2,006,640		2,033,885
Impairment of goodwill	—		—		35,749
Depreciation and amortization	25,878		30,044		30,298
Income before taxes and noncontrolling interest	75,067		88,026		9,693

In 2015, management determined a goodwill impairment of $35.7 million related to the ancillary services reporting unit and presented as impairment of goodwill in the 2015 consolidated statement of operations and comprehensive loss. As a result of the Company's realignment of its operating segments, as discussed above, an impairment of $1.6 million related to the centralized title services business was subsequently included as part of the title segment.

The Company does not provide asset information by reportable operating segment as it does not routinely evaluate the asset position by segment.

Revenues for the years ended December 31 in the United States and all international operations are as follows:

	2017	2016	2015
	($000 omitted)
United States	1,825,186	1,889,144	1,925,865
International	130,538	117,496	108,020
	1,955,724	2,006,640	2,033,885

F - 28

NOTE 20

Other comprehensive income (loss). Changes in the balances of each component of other comprehensive income (loss) and the related tax effects are as follows:

	For the Year Ended December 31, 2017						For the Year Ended December 31, 2016						For the Year Ended December 31, 2015
	Before-Tax Amount		Tax Expense (Benefit)		Net-of-Tax Amount		Before-Tax Amount		Tax Expense (Benefit)		Net-of Tax  Amount		Before-Tax Amount		Tax  Expense (Benefit)		Net-of-Tax Amount
	($000 omitted)						($000 omitted)						($000 omitted)
Foreign currency translation adjustments	11,050		2,696		8,354		(2,385	)	982		(3,367	)	(16,022	)	(4,877	)	(11,145	)
Unrealized net gains on investments:
Change in unrealized net gains on investments	2,718		952		1,766		544		190		354		(5,757	)	(2,016	)	(3,741	)
Less: reclassification adjustment for net gains included in net income (loss)	(3,210	)	(1,124	)	(2,086	)	(2,940	)	(1,029	)	(1,911	)	(2,501	)	(875	)	(1,626	)
	(492	)	(172	)	(320	)	(2,396	)	(839	)	(1,557	)	(8,258	)	(2,891	)	(5,367	)
Other comprehensive income (loss)	10,558		2,524		8,034		(4,781	)	143		(4,924	)	(24,280	)	(7,768	)	(16,512	)

NOTE 21

Quarterly financial information (unaudited).

	Mar 31		June 30	Sept 30	Dec 31	Total
	($000 omitted, except per share)
Revenues:
2017	443,039		485,452	501,569	525,664	1,955,724
2016	438,229		489,437	553,210	525,764	2,006,640
Net income (loss) attributable to Stewart:
2017	4,087		18,568	10,944	15,060	48,659
2016	(11,195	)	23,599	26,375	16,699	55,478
Diluted earnings (loss) per share attributable to Stewart (1):
2017	0.17		0.79	0.46	0.64	2.06
2016	(0.48	)	0.49	1.12	0.71	1.85

⁽¹⁾ Quarterly per share data may not sum to annual totals due to rounding or effects of dilution in particular quarters but not in annual totals.

F - 29

SCHEDULE I

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

	For the Years Ended December 31,
	2017		2016		2015
	($000 omitted)
Revenues
Investment income	20,000		20,000		15,000
Other income	784		1,252		922
	20,784		21,252		15,922
Expenses
Employee costs	1,388		832		156
Other operating expenses, including $276 each year to affiliates	4,447		6,641		7,617
Depreciation	5		69		162
Interest	3,123		2,726		1,726
	8,963		10,268		9,661
Income before taxes and income (losses) from subsidiaries	11,821		10,984		6,261
Income tax (benefit) expense	(776	)	2,928		—
Income (losses) from subsidiaries	36,062		47,422		(12,465	)
Net income (loss)	48,659		55,478		(6,204	)
Retained earnings at beginning of year	471,788		455,519		479,733
Cash dividends on Common Stock	(28,749	)	(27,840	)	(18,010	)
Cash paid on Class B Common Shares conversion	—		(12,000	)	—
Cumulative effect adjustment on adoption of new accounting pronouncement	—		631		—
Retained earnings at end of year	491,698		471,788		455,519

See accompanying note to financial statement information.

See accompanying Report of Independent Registered Public Accounting Firm.

S - 1

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

BALANCE SHEETS

	As of December 31,
	2017		2016
	($000 omitted)
Assets
Cash and cash equivalents	11,622		2,890
Receivables:
Notes - due from subsidiaries	26,316		40,879
Receivables from affiliates	930		848
Allowance for uncollectible amounts	(1	)	(4	)
	27,245		41,723
Property and equipment, at cost:
Furniture and equipment	2,733		2,733
Accumulated depreciation	(2,517	)	(2,512	)
	216		221
Title plant, at cost	48		48
Investments in subsidiaries, on an equity-method basis	731,975		688,837
Goodwill	8,470		8,470
Other assets	18,274		16,698
	797,850		758,887
Liabilities
Notes payable	98,875		92,875
Accounts payable and other liabilities	26,764		24,812
	125,639		117,687
Contingent liabilities and commitments	—		—
Stockholders’ equity
Common Stock – $1 par, authorized 50,000,000; issued 24,071,683 and 23,783,440; outstanding 23,719,522 and 23,431,279, respectively	24,072		23,783
Additional paid-in capital	159,954		157,176
Retained earnings (1)	491,698		471,788
Accumulated other comprehensive (loss) income:
Foreign currency translation adjustments	(8,373	)	(16,727	)
Unrealized investment gains	7,526		7,846
Treasury stock – 352,161 common shares, at cost	(2,666	)	(2,666	)
Total stockholders’ equity	672,211		641,200
	797,850		758,887

⁽¹⁾ Includes undistributed earnings of subsidiaries of $529,417 in 2017 and $522,104 in 2016.

See accompanying note to financial statement information.

See accompanying Report of Independent Registered Public Accounting Firm.

S - 2

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
	2017		2016		2015
	($000 omitted)
Reconciliation of net income (loss) to cash provided by operating activities:
Net income (loss)	48,659		55,478		(6,204	)
Add (deduct):
Depreciation	5		69		162
(Increase) decrease in receivables – net	(81	)	245		(596	)
(Increase) decrease in other assets – net	(1,576	)	359		(558	)
Increase (decrease) in payables and accrued liabilities – net	563		(496	)	(515	)
(Income) losses from subsidiaries	(36,062	)	(47,421	)	12,465
Other – net	1,705		(6,731	)	(4,593	)
Cash provided by operating activities	13,213		1,503		161
Investing activities:
Dividends from subsidiary	20,000		20,000		15,000
Purchase of property and equipment –net	—		(22	)	—
Collections on notes receivables	23,375		27,500		—
Increases in notes receivables	(16,000	)	—		(21,500	)
Contributions to a subsidiary	(7,184	)	—		—
Cash provided (used) by investing activities	20,191		47,478		(6,500	)
Financing activities:
Proceeds from notes payable	16,000		20,000		45,000
Payments on notes payable	(10,000	)	(25,125	)	(7,000	)
Dividends paid	(28,135	)	(27,840	)	(18,010	)
Cash paid on Class B Common Shares conversion	—		(12,000	)	—
Repurchases of Common Stock	(727	)	(1,053	)	(27,950	)
Purchase of remaining interest of consolidated subsidiary	(1,810	)	(991	)	(209	)
Other – net	—		86		130
Cash used by financing activities	(24,672	)	(46,923	)	(8,039	)
Increase (decrease) in cash and cash equivalents	8,732		2,058		(14,378	)
Cash and cash equivalents at beginning of year	2,890		832		15,210
Cash and cash equivalents at end of year	11,622		2,890		832
Supplemental information:
Income taxes paid	—		1		1
Interest paid	3,128		2,716		1,681

See accompanying note to financial statement information.

See accompanying Report of Independent Registered Public Accounting Firm.

S - 3

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

NOTE TO FINANCIAL STATEMENT INFORMATION

The Parent Company operates as a holding company, transacting substantially all of its business through its subsidiaries. Its consolidated financial statements are included in Part II, Item 8 of Form 10-K. The Parent Company financial statements should be read in conjunction with the aforementioned consolidated financial statements and notes thereto and financial statement schedules.

Investment income. During 2017, 2016 and 2015, Guaranty paid to the Parent Company dividends of $20.0 million, $20.0 million and $15.0 million, respectively.

Stockholders' equity. In 2016, the Parent Company's stockholders approved the Class B Exchange Agreement, in which all outstanding shares of Class B Common Stock were retired in exchange for shares of Common Stock plus $12.0 million in cash. Also at the beginning of 2016, the Parent Company reclassified $0.6 million of unrecognized excess tax benefits related to share-based awards from additional paid-in capital to retained earnings as a result of adopting a new accounting standard. Refer to Note 12 to the consolidated financial statements for details for these equity transactions.

Income taxes. The Parent Company consistently generates losses, exclusive of dividends or equity earnings from its subsidiaries, and is not expected to generate future income without its subsidiaries. On December 22, 2017, the United States (U.S.) enacted the Tax Cuts and Jobs Act (the 2017 Act), which revised the U.S. corporate income tax regime by, among other things, lowering the corporate tax rate from 35% to 21% effective on January 1, 2018. As a result of the 2017 Act, the Parent Company recorded an income tax benefit of $1.2 million related to the remeasurement of its deferred tax assets and liabilities at December 31, 2017.

S - 4

SCHEDULE II

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

December 31, 2017

Col. A	Col. B	Col. C Additions		Col. D Deductions		Col. E
Description	Balance at beginning of period	Charged to costs and expenses		(Describe)		Balance At end of period
	($000 omitted)
Stewart Information Services Corporation and subsidiaries:
Year ended December 31, 2017:
Estimated title losses	462,572	96,532		78,114	(A)	480,990
Valuation allowance for deferred tax assets	2,457	—		226		2,231
Allowance for uncollectible amounts	9,647	207		4,698	(B)	5,156
Year ended December 31, 2016:
Estimated title losses	462,622	91,147		91,197	(A)	462,572
Valuation allowance for deferred tax assets	2,217	240		—		2,457
Allowance for uncollectible amounts	9,833	3,349		3,535	(B)	9,647
Year ended December 31, 2015:
Estimated title losses	495,395	106,265		139,038	(A)	462,622
Valuation allowance for deferred tax assets	2,564	(347	)	—		2,217
Allowance for uncollectible amounts	9,193	3,396		2,756	(B)	9,833

(A) Represents primarily payments of policy and escrow losses and loss adjustment expenses.

(B) Represents uncollectible accounts written off.

See accompanying Report of Independent Registered Public Accounting Firm.

S - 5

INDEX TO EXHIBITS

Exhibit
3.1	—	Restated Certificate of Incorporation of the Registrant, dated April 28, 2016 (incorporated by reference in this report from Exhibit 3.1 of the Current Report on Form 8-K filed April 29, 2016)
3.2	—	Third Amended and Restated By-Laws of the Registrant, as of April 27, 2016 (incorporated by reference in this report from Exhibit 3.2 of the Current Report on Form 8-K filed April 28, 2016)
4.1	—	Credit Agreement, dated as of October 21, 2014, by and between the Registrant, the Guarantors party thereto, and Compass Bank, as administrative agent and lenders party thereto (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed October 23, 2014)
4.2	—	First Amendment to Credit Agreement, dated effective as of December 31, 2015, among the Registrant, the guarantors named therein, Compass Bank, as administrative agent, and the lenders party thereto (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed February 11, 2016)
10.1 †	—	Deferred Compensation Agreements dated March 10, 1986, amended July 24, 1990 and October 30, 1992, between the Registrant and certain executive officers (incorporated by reference in this report from Exhibit 10.2 of the Annual Report on Form 10-K for the year ended December 31, 1997)
10.2 †	—	Stewart Information Services Corporation 1999 Stock Option Plan (incorporated by reference in this report from Exhibit 10.3 of the Annual Report on Form 10-K for the year ended December 31, 1999)
10.3 †	—	Stewart Information Services Corporation 2005 Long-Term Incentive Plan, as amended and restated May 1, 2009 (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed May 5, 2009)
10.4 †	—	Stewart Information Services Corporation 2008 Strategic Incentive Pool Plan (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed May 14, 2008)
10.5	—	Nomination and Standstill Agreement, dated as of February 12, 2014, by and among the Registrant and Foundation Onshore Fund, L.P., Foundation Offshore Master Fund, Ltd., Foundation Offshore Fund, Ltd., Foundation Asset Management GP, LLC, Foundation Asset Management, LLC, David Charney, Sky Wilber, Engine Capital, L.P., Engine Jet Capital, L.P., Engine Capital Management, LLC, Engine Investments, LLC, Arnaud Ajdler and Glenn Christenson. (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed February 14, 2014)
10.6	—	Agreement, dated as of March 26, 2015, by and among the Registrant and Bulldog Investors, LLC (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed on March 27, 2015)
10.7	—	Exchange Agreement, dated as of January 26, 2016, by and among the Registrant and the holders of the Class B common stock, par value $1.00 per share, of the Company (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed on January 27, 2016)
10.8 †	—	Employment Agreement, effective January 1, 2017, by and between the Registrant and Stewart Morris, Jr. (incorporated by reference in this report from Exhibit 10.3 of the Current Report on Form 8-K filed February 1, 2016)

Exhibit
10.9 †	—	Employment Agreement, effective January 1, 2017, by and between the Registrant and Malcolm S. Morris (incorporated by reference in this report from Exhibit 10.4 of the Current Report on Form 8-K filed February 1, 2016)
10.10 †	—	Amended and Restated Employment Agreement entered as of March 31, 2016, effective as of January 1, 2016, by and between the Registrant and Matthew W. Morris (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed April 6, 2016)
10.11 †	—	Amended and Restated Employment Agreement entered as of March 31, 2016, effective as of January 1, 2016, by and between the Registrant and Joseph Allen Berryman (incorporated by reference in this report from Exhibit 10.2 of the Current Report on Form 8-K filed April 6, 2016)
10.12 †	—	Amended and Restated Employment Agreement entered as of March 31, 2016, effective as of January 1, 2016, by and between the Registrant and Steven M. Lessack (incorporated by reference in this report from Exhibit 10.3 of the Current Report on Form 8-K filed April 6, 2016)
10.13 †	—	Amended and Restated Employment Agreement entered as of January 1, 2016, effective as of January 1, 2016, by and between the Registrant and David Fauth (incorporated by reference in this report from Exhibit 10.3 of the Current Report on Form 8-K filed March 31, 2017)
10.14 †	—	Addendum, entered into as of March 30, 2017 and effective as of January 1, 2017, to Employment Agreement entered into as of March 31, 2016 and effective as of January 1, 2016, by and between the Registrant and Matthew W. Morris (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed March 31, 2017)
10.15 †	—	Addendum, entered into as of March 30, 2017 and effective as of January 1, 2017, to the Amended and Restated Employment Agreement entered into as of January 1, 2016 and effective as of January 1, 2016, by and between the Registrant and David A. Fauth (incorporated by reference in this report from Exhibit 10.4 of the Current Report on Form 8-K filed March 31, 2017)
10.16 †	—	Addendum, entered into as of June 15, 2017 and effective as of January 1, 2017, to Employment Agreement entered as of March 31, 2016, effective as of January 1, 2016, by and between the Registrant and Joseph Allen Berryman (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed June 16, 2017)
10.17 †		Employment Agreement entered into and effective as of September 1, 2017, by and between the Registrant and David C. Hisey (incorporated by reference in this report from Exhibit 10.1 of the Quarterly Report on Form 10-Q filed November 7, 2017)
10.18 †*		Amended and Restated Employment Agreement entered into as of November 21, 2017 and effective as of November 6, 2017, by and between the Registrant and John L. Killea
10.19 †*	—	Bonus Recovery and Authorization For Payroll Deduction Agreement, effective December 29, 2017, by and between the Registrant and Matthew W. Morris
10.20 †*	—	Bonus Recovery and Authorization For Payroll Deduction Agreement, effective December 29, 2017, by and between the Registrant and David C. Hisey
10.21 †	—	Registration Rights Agreement, dated as of April 27, 2016, by and among the Registrant and the Class B Common Stockholders (incorporated by reference in this report from Exhibit 10.1 of the Current Report on Form 8-K filed April 28, 2016)

Exhibit
14.1	—	Code of Ethics for Chief Executive Officers, Principal Financial Officer and Principal Accounting Officer (incorporated by reference in this report from Exhibit 14.1 of the Annual Report on Form 10-K for the year ended December 31, 2004)
21.1*	—	Subsidiaries of the Registrant
23.1*	—	Consent of KPMG LLP, including consent to incorporation by reference of their reports into previously filed Securities Act registration statements
31.1*	—	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	—	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	—	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	—	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	—	XBRL Instance Document
101.SCH*	—	XBRL Taxonomy Extension Schema Document
101.CAL*	—	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	—	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	—	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	—	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

† Management contract or compensatory plan

A complete copy of this Annual Report on Form 10-K,

including these exhibits, can be viewed at www.stewart.com.

EX-10.18

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT    AGREEMENT (this "Agreement") is entered into as of November 6, 2017 (the "Effective Date', by and between Stewart Information Services Corporation, a Delaware corporation (the "Company"), and John L. Killea ("Executive") (collectively, the "Parties" This Agreement amends, restates and supersedes any prior written employment agreement between the Parties and any other written or unwritten agreement or understanding between the Parties regarding the subject matter hereof.

The Company and Executive agree as follows:

1.Definitions. The following terms used in this Agreement shall, unless otherwise clearly required by the context, have the meanings assigned to them in this Section 1,

"Annual Salary" means the annual salary payable to Executive in the amount of four hundred fifty thousand dollars ($450,000), as it may be adjusted by the Company from time to time.

"Benefits" has the meaning set forth in Section 4.5.

"Board'' means the Board of Directors of the Company.

"Cause" means, in the good faith determination of the Board, any of the following:

(a)Executive's willful failure to substantially perform Executive's duties with the Company (other than by reason of Executive's Disability), after a written demand for substantial performance is delivered to Executive that specifically identifies the manner in which the Company believes that Executive has not substantially performed such duties, and Executive has failed to remedy the situation within thirty (30) days of such written notice from the Company;

(b) Executive's gross negligence in the performance of Executive's duties;

(c)Executive's conviction of, or plea of guilty or nolo contendre to any felony or any crime involving moral turpitude or the personal enrichment of Executive at the expense of the Company;

(d)Executive's willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, including, without limitation, Executive's breach of fiduciary duties owed to the Company;

(e)Executive's willful violation of any material prov1s10n of the Company's code of conduct;

(f)Executive's willful violation of any of the material covenants contained in Section 5;

(g)Executive's act of dishonesty resulting in or intending to result in personal gain at the expense of the Company; or

(h)Executive's engaging in any material act that is intended or may be reasonably expected to harm the reputation, business prospects, or operations of the Company.

"Code" means the Internal Revenue Code of 1986, as amended.

"Company Business" means the business of providing real estate services, including title insurance, closing and settlement services, real estate information services, escrow services and other transaction services or any other business that the Company or any of its affiliates engages in or becomes or contemplates becoming engaged in.

1

"Confidential Information" means confidential or proprietary information of the Company and its affiliates, including, without limitation, information of a technical and business nature regarding the past, current or anticipated business of the Company and its affiliates that may encompass financial information, financial figures, trade secrets, customer lists, details of client or consultant contracts, pricing policies, operational methods, marketing plans or strategies, product development techniques or plans, business acquisition plans, employee information, organizational charts, new personnel acquisition plans, technical processes, inventions and research projects, ideas, discoveries, inventions, improvements, writings and other works of authorship.

"Conflict of Interest" has the meaning set forth in Section 5.7.

"Date of Termination" means the date that is Executive's last day of work for the Company.

"Disability" means a physical or mental disability, whether total or partial, as defined by the Company's Long-Term Disability Plan, as in effect from time to time.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Expenses" means all damages, losses, judgments, liabilities, fines, penalties, excise taxes, settlements, and costs, attorneys' fees, accountants' fees, and disbursements and costs of attachment or similar bonds, investigations, and any other expenses incurred in establishing a right to indemnification under this Agreement.

"Omnibus Plan" means the Company's shareholder approved incentive plan or plans, which may include long-term equity-based compensation plans, short-term performance­ based compensation plans and any other similar plans, as such may be in effect, amended and/or superseded from time to time.

"Proceeding" means any action, suit or proceeding, whether civil, criminal, administrative or investigative.

"Restrictive Covenants" has the meaning set forth in Section 5.8.

"Term" has the meaning set forth in Section 2.

2.Term. The term of this Agreement (the "Term") begins on the Effective Date and continues until the third anniversary of the Effective Date; provided, however, that this Agreement shall renew for a one-year period (and for successive one-year periods thereafter) unless either of the Parties provides the other Party with a written notice of non-renewal at least (thirty) 30 days prior to the end of current Term; provided, however, that Executive's employment may terminate at an earlier date as established by either Executive or the Company by means of a written notice provided by the Party initiating such termination to the other Party, which termination date shall be no earlier than thirty (30) days following the date such notice of termination is provided. In the event notice of termination is provided by Executive to the Company, the Company may, at its sole and absolute discretion, establish a termination date for Executive that is prior to the termination date indicated in Executive's notice to the Company. For purposes of clarity and avoidance of doubt, any provisions of this Agreement that extend beyond the termination of Executive's employment shall continue in effect as provided herein.

3.Title and Duties. Executive shall serve as the President, Chief Legal Officer & Chief Compliance Officer of the Company and/or such other executive position as the Board shall determine from time to time. Executive will have duties and responsibilities appropriate to

Executive's position, and shall report to Chief Executive Officer, or to such other officer of the Company as may be designated by the Company's Board as Executive's direct manager from time to time. In addition, Executive will have such duties and responsibilities as the Board may assign from time to time. Executive will devote all reasonable efforts and all of his business time to the Company.

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4. Compensation and Benefits.

4.1.Annual Salary. The Annual Salary will be payable in accordance with the payroll policies of the Company in effect from time to time, but in no event less frequently than twice each month, less any deductions required to be withheld by applicable law and less any voluntary deductions made by Executive.

4.2.Incentive Compensation. Executive shall be eligible to receive long and short-term incentive compensation in the form of annual bonuses or long-term grants under the Omnibus Plan. The decision to award any incentive compensation to Executive under the Omnibus Plan and the amount and terms of any such awards or grants are subject to change from year to year and shall be in the sole and absolute discretion of the administrative committee for the Omnibus Plan. Effective as of January 1, 2018, Executive's short-term incentive compensation shall have a target payout equal to Executive's Annual Salary, subject to payment of more or less than such target payout as determined by reference to the performance goals established for the year and the discretion of the Compensation Committee of the Board, pursuant to the terms of the Company's plan that provides for short-term performance-based bonus compensation, as such plan may be amended or superseded from time to time. Executive's 2017 short-term incentive compensation shall not be modified by the terms of this Agreement, except that Executive's actual base salary amount paid during 2017 shall be used in calculating the 2017 short-term incentive target (which includes the increase in Annual Salary under this Agreement). In addition, commencing in 2018, Executive annually shall be granted stock rights under the Omnibus Plan with a target grant date fair value (determined as of the date of grant) equal to 100% of Executive's Annual Salary, as in effect from time to time, on such terms and conditions as are established by the Compensation Committee of the Board, at its discretion, and otherwise on the terms and conditions as are applicable under the Omnibus Plan as in effect from time to time.

4.3.Retention Grant. Company shall make a one-time grant to Executive under the Omnibus Plan in the form of restricted stock units ("Stock Units"), to be granted as of the Effective Date, with a value equal to seven hundred fifty thousand dollars ($750,000), determined by reference to the closing price of the Company's stock on the most recent prior date as of which trading in the Company's stock occurred.

(a)The Stock Units shall vest as follows (provided Executive remains continuously employed through the relevant vesting date):

(i)Thirteen and thirty-three one hundredths percent (13.33%) of the Stock Units granted pursuant to this Section 4.3shall vest on the first anniversary of the Effective Date;

(ii)An additional twenty percent (20%) of the Stock Units granted pursuant to this Section 4.3 shall vest on the second anniversary of the Effective Date;

(iii)An additional thirty three and thirty-three one hundredths percent (33.33%) of the Stock Units granted pursuant to this Section 4.3 shall vest on the day after the second anniversary of the Effective Date; and

(iv)The remainder of the Stock Units granted pursuant to this Section 4.3 shall vest on the third anniversary of the Effective Date.

(b)The Stock Units shall be settled, contingent on the vesting of the Stock Units, on the following schedule:

(i)Thirteen and thirty-three one hundredths percent (13.33%) of the Stock Units shall be settled on or as soon as practicable following the first anniversary of the Effective Date;

(ii)Twenty percent (20%) of the Stock Units shall be settled on or as soon as practicable following the second anniversary of the Effective Date; and

(iii)The balance of the vested Stock Units shall be settled on or as soon as practicable following the third anniversary of the Effective Date.

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Notwithstanding anything set forth in any other program or plan otherwise applicable to Executive, the vesting of the Stock Units shall not be accelerated except as expressly set forth in this Agreement.

(c)Notwithstanding anything set forth above to the contrary, in the event there is a Change of Control (as hereinafter defined) and, in connection with, or during the twenty-four (24) month period following, the consummation of the relevant transaction, Executive incurs a separation from service (as that term is defined for purposes of Code Section 409A) by reason of the Company's termination of Executive's employment without Cause or, in connection with, or during the twenty-four (24) month period following the consummation of the relevant transaction, Executive incurs a separation from service by reason of Executive's resignation for Good Reason, then the outstanding Stock Units shall be fully vested as of the date of Executive's separation from service, and settlement shall occur as soon as practicable following Executive's separation from service, subject to a six month waiting period in the event such delay in settlement is required in order to comply with Code Section 409A(a)(2)(B)(i) (regarding required delay in payment of nonqualified deferred compensation to "specified employees"). For purposes of this Section 4.3(c),a "Change of Control" shall be deemed to have occurred if any of the following events shall occur:

(i)any "Person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Act") is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company's then outstanding securities;

(ii)there occurs a proxy contest or a consent solicitation, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization, as a consequence of which members of the Board in office immediately prior to such transaction or event thereafter constitute less than a majority of the Board;

(iii)there occurs a reverse merger involving the Company in which the Company is the surviving corporation but the shares of common stock of the Company outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise;

(iv)there is a sale of other disposition of all or substantially all of the assets of the Company;

(v)there is an adoption of any plan or proposal for theliquidation or dissolution of the Company; or

(vi)Stewart Title Guaranty Company is placed in supervision, receivership, conservatorship, or special administrative action by the Texas Department of Insurance.

Notwithstanding the foregoing, in any circumstance or transaction in which compensation resulting from or in respect of an Award would result in the imposition of an additional tax under Section 409A if the foregoing definition of "Change of Control" were to apply, but would not result in the imposition of any additional tax if the term "Change of Control" were defined herein to mean a "change in control event" within the meaning of Treasury Regulation Section 1.409A- 3(i)(5), then "Change of Control" shall mean a "change in control event" within the meaning of Treasury Regulation Section 1.409A-3(i)(5), but only to the extent necessary to prevent such compensation from becoming subject to an additional tax under Section 409A.

4.4.Vacation Policy. Executive shall be entitled to paid vacation consistent with other similarly situated Company executives, subject to the Company's paid time off or vacation policy as may be in effect from time to time.

4.5.Participation in Employee Benefit Plans. Executive may participate in any group life, hospitalization or disability insurance plan, health program, retirement plan, similar benefit plan or other so called "fringe benefits" of the Company as are offered to other similarly situated senior executive officers and key management employees from time to time (collectively, "Benefits"). Executive's participation in any such plans shall be on the terms and conditions set forth in the governing plan documents as they may be in effect from time to time.

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4.6.General Business Expenses. The Company shall pay or reimburse Executive for all business expenses reasonably and necessarily incurred by Executive in the performance of Executive's duties under this Agreement, consistent with the Company's business expense reimbursement policy, as in effect from time to time.

4.7.Other Benefits.Executive shall be entitled to participate in or receive benefits under any compensatory employee benefit plan or other benefit or similar arrangements made available by the Company now or in the future to its senior executive officers and key management employees, subject to and on a basis consistent with the terms, conditions, and overall administration of such plans or arrangement.

4.8.Clawback Policy. Executive agrees that the compensation and benefits provided by the Company under this Agreement or otherwise may be subject to recoupment under the Company's Clawback Policy, as in effect from time to time. A copy of the current clawback Policy is available on request.

4.9.Stock Ownership. Executive understands and agrees that Executive may be subject to the Company's stock ownership policy, as such policy may be in effect from time to time (the "Stock Ownership Policy") and shall take all appropriate steps to comply with the Stock Ownership Policy. A copy of the Stock Ownership Policy is available on request. Executive understands and the Company agrees that notice of changes to the Stock Ownership Policy shall be made available by the Company as appropriate.

4.10. Perquisites. Executive shall be entitled to the following perquisites:

(a) Auto allowance of seven hundred dollars ($700) per month; and

(b) Such other perquisites as may be determined to be appropriate by

the Board.

5. Confidentiality and Company Property, Non-Competition and Non-Solicitation.

5.1.Confidentiality, Non-Solicit, and Non-Compete Agreement. Executive agrees that, as a condition of Executive's employment, Executive shall execute and shall be bound by the terms of the Confidentiality, Non-Solicit, and Non-Compete Agreement attached hereto as Exhibit A, the terms of which are incorporated herein by reference.

5.2.Non-Disparagement. Executive also agrees, as a condition of Executive's employment, that Executive and Executive's immediate family will not make any comments to the employees, vendors, customers, or suppliers of the Company or any of its affiliates, or to any media outlet or to others with the intent to impugn, castigate or otherwise damage the reputation of Company, any of its affiliates or any of the owners, directors, officers, or employees of Company.

5.3.Covenants Independent. The covenants of Executive contained in this Section 5will be construed as independent of any other provision in this Agreement; and the existence of any claim or cause of action by Executive against the Company will not constitute a defense to the enforcement by the Company of said covenants. Executive has been advised to consult with counsel in order to be informed in all respects concerning the reasonableness and propriety of this Section5 and its provisions with the specific regard to the nature of the business conducted by the Company. Executive acknowledges that this Section 5and its provisions are reasonable in all respects.

5.4.Company Property. All memoranda, notes, lists, records, and other documents or papers (and all copies thereof) relating to the Company and its affiliates, including such items stored in computer memories, microfiche or by any other means, made or compiled by or on behalf of Executive in connection with Executive's employment, or made available to Executive shall be the property of the Company, and shall be delivered to the Company promptly upon the termination of Executive's employment with the Company or at any other time upon the Company's request; provided, however, that Executive's address books, diaries and chronological correspondence files (including digital formats) shall be deemed to be property of Executive (except to the extent any of the foregoing contain Confidential Information).

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5.5.Original Material. Without limiting the terms and conditions of the Confidentiality, Non-Solicit, and Non-Compete Agreement attached hereto as Exhibit A and in accordance therewith, (a) Executive hereby agrees that any inventions, discoveries, improvements, ideas, concepts or original works of authorship relating directly to the Company Business, including without limitation information of a technical or business nature such as ideas, discoveries, inventions, trade secrets, know-how, writings and other works of authorship, computer programs, financial figures, marketing plans, customer lists and data, business plans or methods and the like, which relate in any manner to the actual or anticipated business or the actual or anticipated areas of business of the Company and its divisions and affiliates, whether or not protectable by patent or copyright, that have been originated, developed or reduced to practice by Executive alone or jointly with others during Executive's employment with the Company (and any and all intellectual property rights related thereto) shall be the property of and belong exclusively to the Company, (b) Executive shall promptly and fully disclose to the Company the origination or development by Executive of any such material and shall provide the Company with any information that it may reasonably request about such material and (c) both, either during or subsequent to Executive's employment, upon the request and at the expense of the Company or its nominee, and for no remuneration in addition to that due Executive pursuant to Executive's employment by the Company, but at no expense to Executive, Executive hereby agrees to execute, acknowledge, and deliver to the Company or its attorneys any and all instruments which, in the judgment of the Company or its attorneys, may be necessary or desirable to secure or maintain for the benefit of the Company adequate patent, copyright, and other property rights in the United States and foreign countries with respect to any such inventions, improvements, ideas, concepts, or original works of authorship embraced within this Agreement.

5.6.Non-Competition During Employment. Executive agrees that during Executive's employment with the Company Executive will not compete with the Company by engaging in the Company Business or in the conception, design, development, production, marketing, or servicing of any product or service that is substantially similar to the products or services which the Company provides, and that Executive will not work for (in any capacity), assist, or became affiliated with as an owner, partner, or otherwise, either directly or indirectly, any individual or business which engages in the Company Business or offers or performs services, or offers or provides products substantially similar to the services and products provided by the Company.

5.7.Conflicts of Interest. Executive agrees that, during his employment with the Company, he will not engage, either directly or indirectly, in any activity which might adversely affect the Company or its affiliates (a "Conflict of Interest"), including ownership of a material interest in any supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business or acceptance of any material payment, service, loan, gift, trip, entertainment, or other favor from a supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business, and that Executive will promptly inform the Board as to each offer received by Executive to engage in any such activity. Executive further agrees to disclose to the Company any other facts of which Executive becomes aware which might in Executive's good faith judgment reasonably be expected to involve or give rise to a Conflict of Interest or potential Conflict of Interest.

5.8.Rights and Remedies Upon Breach. If Executive breaches any of the prov1s10ns contained in Section 5, including any provisions of Exhibit A (collectively, the "Restrictive Covenants"), the Company shall have the following rights and remedies, each of which rights and remedies shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity, including, without limitation, recovery of money damages and termination of this Agreement:

(a)Specific Performance.    The right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, and the right to seek an injunction without bond and enjoin any breach of the Restrictive Covenants, it being agreed that any breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company.

(b)Accounting. The right and remedy to require Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by Executive as the result of any action constituting a breach of the Restrictive Covenants.

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(c)Remedies For Violation of Non-Competition or Confidentiality Provisions. Executive acknowledges and agrees that: (i) the skills, experience and contacts of Executive are of a special, unique, unusual and extraordinary character which give them a peculiar value; (ii) because of the business of the Company, the restrictions agreed to by Executive as to time and area contained in this Section 5are reasonable; and (iii) the injury suffered by the Company by a violation of this Section 5will be difficult to calculate in damages in an action at law and damages cannot fully compensate the Company for any violation of any obligation or covenant in this Section 5. Executive's compliance with this Section 5is a condition precedent to the Company's obligation to make payments of any nature to Executive (including, without limitation, payments otherwise payable pursuant to the LTI Plan).

5.9.Materiality and Conditionality of This Section 5. The covenants contained in this Section 5are material to this Agreement. Executive's agreement to strictly comply with this Section 5is a precondition for Executive's receipt of payments of any nature under this Agreement (including, without limitation, payments otherwise payable pursuant to the LTI Plan). Whether or not this Section 5or any portion thereof has been held or found invalid or unenforceable for any reason whatsoever by a court or other constituted legal authority of competent jurisdiction, upon any violation of this Section 5or any portion thereof, or upon a finding that a violation would have occurred if this Section 5or any portion thereof were enforceable, Executive and the Company agree that (i) Executive's interest in unvested awards granted pursuant to the LTI Plan shall automatically lapse and be forfeited; and (ii) Company shall have no obligation to make any further payments to Executive under this Agreement.

5.10.Severability, Modification of Covenants. The Restrictive Covenants shall survive the termination or expiration of this Agreement, and in the event any of the Restrictive Covenants shall be held by any court to be effective in any particular area or jurisdiction only if said Restrictive Covenant is modified to be limited in its duration or scope, then, at the sole option of Company, the provisions of Section 5.9may be deemed to have been triggered, and the rights, liabilities and obligations set forth therein shall apply. In the event Company does not elect to trigger application of Section 5.9,then the court shall have such authority to so reform the covenants and the parties hereto shall consider such covenants and/or other provisions of this Section 5to be amended and modified with respect to that particular area or jurisdiction so as to comply with the order of such court and, as to all other jurisdictions, the covenants contained herein shall remain in full force and effect as originally written. Should any court hold that the covenants in this Section 5are void and otherwise unenforceable in a particular area or jurisdiction, then notwithstanding the foregoing provisions of this Section 5.10, the provisions of Section 5.9shall be applicable and the rights, liabilities and obligations of the parties set forth therein shall apply. Alternatively, at the sole option of Company, Company may consider such covenants to be amended and modified so as to eliminate therefrom the particular area or jurisdictions as to which such covenants are so held void or otherwise unenforceable and, as to all other areas and jurisdictions covered herein, the covenants contained herein shall remain in full force and effect as originally written.

5.11.Agreement Limitations. Nothing in this Agreement (i) prohibits Executive from reporting an event that he reasonably and in good faith believes is a violation of law to the relevant governmental or law-enforcement agency (such as the Securities and Exchange Commission or Department of Labor), (ii) requires notice to or approval from the Company before doing so, or (iii) prohibits Executive from cooperating in an investigation conducted by such a governmental or law enforcement agency. The Company may not retaliate against Executive for any of these activities, and nothing in this Agreement requires Executive to waive any monetary award or other payment that Executive might become entitled to from any relevant governmental or law enforcement agency. This may include a disclosure of trade secret information provided that it must comply with the restrictions in the Defend Trade Secrets Act of 2016 (DTSA). The DTSA provides that no individual will be held criminally or civilly liable under Federal or State trade secret law for the disclosure of a trade secret that: (i) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (ii) is made in a complaint or other document if such filing is under seal so that it is not made public. Also, an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.

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6. Termination.

6.1.In general, on termination of Executive's employment for any reason, the following amounts (the "Accrued Amounts") will be paid to Executive, or Executive's estate, as the case may be:

(a)All accrued but unpaid Annual Salary, payable in a lump sum within (thirty) 30 days following Executive's termination of employment;

(b)Accrued but unused vacation time, to the extent payment is either required by law or provided for in the Company's vacation or paid-time-off policy, as such may be in effect from time to time;

(c)Any amounts payable to Executive under the terms of any employee benefit plans in which Executive was a participant;

(d)Reimbursement of any of Executive's business expenses not previously reimbursed, to the extent provided for under the Company's business expense reimbursement policy; and

(e)Any other amounts that determined to be due under the terms of the Omnibus Plan, or any grants or awards made thereunder.

6.2.Termination upon Death. If during the Term Executive dies, this Agreement shall terminate, and in addition to the Accrued Amounts, and to the extent not inconsistent with the Omnibus Plan, Executive's estate shall be entitled to an amount equal to Executive's short-term incentive compensation target payout for the fiscal year in which Executive dies, payable within 30 days from the date of death, such percentage to be determined by dividing the number of full, completed calendar months worked by Executive during such fiscal year by 12.

6.3.Termination for Cause. The Company has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving notice, effective on or after the date of service of such notice as specified therein, to terminate Executive's employment under this Agreement and discharge Executive for Cause, in which case Executive shall not be entitled to any payments or benefits other than the Accrued Amounts.

6.4.Termination without Cause. The Company has the right, at any time during the Term to terminate Executive's employment without Cause by providing Executive with notice at least ninety (90) days prior to the effective date of such notice.

(a)In the event Executive's employment is terminated without Cause, subject to Section 6.8below, in addition to the Accrued Amounts, Executive shall be entitled to such benefits as may be provided pursuant to the Company's Executive Separation Pay and Change in Control Plan (the "Executive Separation Pay Plan"). For purposes of clarity and avoidance of doubt, Executive's entitlement to any severance pay benefits described in this Section 6.4shall be subject to the requirements set forth for eligibility for benefits under the Executive Separation Pay Plan, including the execution and non-revocation of a release of claims against the Company and Executive's adherence to this Agreement and any restrictive covenant agreements with the Company. The Company shall also have the right to terminate Executive's employment without Cause with less than ninety (90) days' advanced notice, but shall pay, in addition to anything payable under the Separation Pay Plan, Executive's Annual Salary as determined for the period that represents ninety (90) days' of continued employment, reduced by the period of actual advanced notice of termination provided by the Company. In the event of Executive's termination without Cause, Executive shall have the right to elect to voluntarily retire and to receive the benefits and compensation provided on voluntary retirement; provided Executive complies with any applicable requirements for benefits and compensation provided in connection with a voluntary retirement.

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6.5.Termination upon Disability. If during the Term Executive experiences a Disability, the Company shall, by written notice to Executive, terminate Executive's employment with the Company. Any such termination of Executive's employment shall be treated for these purposes as Executive's Voluntary Retirement (as hereinafter defined), and Executive shall be entitled to the benefits provided for under Section 6.8(c)of this Agreement.

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6.6.Resignation for Good Reason. Executive's resignation for Good Reason, as set forth below, shall be treated in all respects like a Termination by the Company without Cause. For these purposes, the following provisions shall be applicable:

(a)The term "Good Reason" shall mean any of the following:

(i)The occurrence of any material breach by the Company or any of its affiliates of the terms of this Agreement or of the terms of any other material agreement between Executive and the Company or any of its affiliates;

(ii)The Company's or its successor's assignment to Executive of any duties materially inconsistent with Executive's position as Chief Legal Officer of the parent holding company as opposed to any of its subsidiaries, including any other action which results in a material diminution in such status, title, authority, duties or responsibility; provided, however, that in no event shall the Company's re-assignment to Executive of his title or duties as in effect immediately prior to the Effective Date (i.e., to narrow Executive's title to Chief Legal Officer & Chief Compliance Officer (but not President) and narrow his duties and role commensurate with such title), result in Good Reason; or

(iii)The relocation of Executive's office to a location more than 35 miles outside Executive's office location as agreed at time of execution of Agreement.

(b)In order for Executives resignation to be deemed to be for Good Reason, Executive must provide written notice to the Company specifying the event or condition claimed to constitute Good Reason for Executive's resignation within sixty (60) days following the initial existence of such event or condition, the Company must, thereafter, have failed to have cured or corrected such event or condition within sixty (60) days following receipt of the initial notice from Executive and Executive must, then resign from employment and separate from service with the Company no later than thirty (30) days after the end of the Company's sixty (60) day cure period.

6.7.Resignation Without Good Reason. Executive has the right, at any time during the Term, subject to all of the provisions hereof, exercisable by serving ninety (90) days' advance notice, to resign his employment under this Agreement. If such resignation does not qualify as Good Reason (pursuant to Section 6.6 above) or a resignation on account of Voluntary Retirement (pursuant to Section 6.8(c)below), the Executive shall only be entitled to receive the Accrued Amounts. To the extent Executive terminates employment upon a Voluntary Retirement, Executive shall be entitled to the payments and benefits described in Section 6.8(c)below.

6.8.CurrentEquityAwards,SeveranceandRetirementBenefits. Notwithstanding the above or anything else set forth in this Agreement:

(a)The terms of Executive's long-term incentive awards outstanding prior to the Effective Date, which terms are set forth in the Executive's employment agreements in effect prior to this Agreement (including, for clarity, the Prior Agreement as hereinafter defined) and in any other applicable plan or award documentation, including the vesting schedule and treatment upon a change in control (as defined in the current award terms) or termination of Executive's employment, shall not be modified or amended by this Agreement and will remain in full force and effect;

(b)Until the date on which the Company adopts the Executive Separation Pay Plan, the Executive shall continue to be eligible to receive the severance payments as set forth in, and subject to the terms of, Section 6.6 of the Amended and Restated Employment Agreement dated January 1, 2016 prior to the amendment and restatement of such agreement hereunder (the "Prior Agreement"); and

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(c)In the event Executive terminates employment under circumstances constituting a Voluntary Retirement (as defined in the Prior Agreement) prior to December 31, 2018, Executive shall be entitled to receive retirement payments under the Prior Agreement (provided all requirements for such payments are satisfied). Such payments shall be calculated using the Annual Salary and STI Plan target (as defined in the Prior Agreement) as in effect immediately prior to the Effective Date. Effective on and after January 1, 2019, subject to the Company's adoption of an Executive Voluntary Retirement Plan (or other plan providing for retirement payments to senior executive officers of the Company on retirement), this Section 6.8(c)shall be superseded.

7. Section 409A; Certain Excise Taxes.

7.1.In-kind Benefits and Reimbursements. Notwithstanding anything to the contrary in this Agreement or in any Company policy with respect to such payments, in-kind benefits and reimbursements provided under this Agreement during any tax year of Executive shall not affect in-kind benefits or reimbursements to be provided in any other tax year of Executive and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and, if timely submitted, reimbursement payments shall be made to Executive as soon as administratively practicable following such submission in accordance with the Company's policies regarding reimbursements, but in no event later than the last day of Executive's taxable year following the taxable year in which the expense was incurred. This Section shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to Executive. In addition, and notwithstanding anything herein to the contrary, in the event any payments hereunder are determined to be payments of deferred compensation to which Code Section 409A is applicable, and such payments are made by reason of Executive's separation from service, such payments shall be made no earlier than the first (1st) day of seventh (7th) month following Executive's separation from service to the extent such deferral is required to avoid a violation of Code Section 409A(a)(2)(B)(i).

7.2.Certain Excise Taxes. Notwithstanding anything to the contrary in this Agreement, if Executive is a "disqualified individual" (as defined in Section 280G(c) of the Code), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which Executive has the right to receive from the Company or any of its affiliates, would constitute a "parachute payment" (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by Executive from the Company and its affiliates will be one dollar ($1.00) less than three times Executive's "base amount" (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by Executive shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to Executive (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in-kind hereunder in a similar order. The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by the Company in good faith. If a reduced payment or benefit is made or provided and through error or otherwise that payment or benefit, when aggregated with other payments and benefits from the Company (or its affiliates) used in determining if a "parachute payment" exists, exceeds one dollar ($1.00) less than three times Executive's base amount, then Executive shall immediately repay such excess to the Company upon notification that an overpayment has been made. Nothing in this Section 7.2shall require the Company to be responsible for, or have any liability or obligation with respect to, Executive's excise tax liabilities under Section 4999 of the Code.

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7.3.Tax Law Changes. To the extent any changes to the Code or regulations thereunder following the Effective Date result, or could result, in the accelerated taxation to Executive of any nonqualified deferred compensation or equity based compensation, then the Parties shall use commercially reasonably efforts to amend or supplement the terms of this Agreement as may be necessary or appropriate to preserve the economic benefit of the compensation arrangements, which may, in the sole discretion of the Company, include payment to Executive of a portion of the nonqualified deferred compensation or settling the equity based compensation at the time such compensation is required to be taken into income, with the portion paid or provided to Executive being sufficient to provide Executive with the funds needed to pay the tax liability when due. Notwithstanding the previous sentence, nothing in this Section 7.3shall (i) be construed as a representation by the Company of the future tax treatment of any nonqualified deferred compensation or equity based compensation arrangements, (ii) create an obligation of the Company to accelerate any payments, benefits, or vestings if such acceleration would subject the Company to foregone deductions or penalties, or (iii) create an obligation of the Company to provide any gross-up or indemnity payment to Executive.

8. Indemnification.

8.1.General. The Company agrees that if Executive is made a party or is threatened to be made a party to any Proceeding by reason of the fact that Executive is or was a trustee, director or officer of the Company, or any predecessor to the Company (including any sole proprietorship owned by Executive) or any of their affiliates or is or was serving at the request of the Company, any predecessor to the Company (including any sole proprietorship owned by Executive), or any of their affiliates as a trustee, director, officer, member, employee or agent of another corporation or a partnership, joint venture, limited liability company, trust or other enterprise, including, without limitation, service with respect to employee benefit plans, whether or not the basis of such Proceeding is alleged action in an official capacity as a trustee, director, officer, member, employee or agent while serving as a trustee, director, officer, member, employee or agent, Executive shall be indemnified and held harmless by the Company to the fullest extent authorized by Texas or Delaware law, as the same exists or may hereafter be amended, against all Expenses incurred or suffered by Executive in connection therewith, and such indemnification shall continue as to Executive even if Executive has ceased to be an officer, director, trustee or agent, or is no longer employed by the Company and shall inure to the benefit of his heirs, executors and administrators.

8.2.Enforcement. If a claim or request under this Section 8is not paid by the Company or on its behalf, within thirty (30) days after a written claim or request has been received by the Company, Executive may at any time thereafter bring an arbitration claim against the Company to recover the unpaid amount of the claim or request and if successful in whole or in part, Executive shall be entitled to be paid also the expenses of prosecuting such suit. All obligations for indemnification hereunder shall be subject to, and paid in accordance with, applicable Texas or Delaware law.

8.3.Partial Indemnification. If Executive is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Executive for the portion of such Expenses to which Executive is entitled.

8.4.Advances of Expenses. Expenses incurred by Executive in connection with any Proceeding shall be paid by the Company in advance upon request of Executive that the Company pay such Expenses, but only in the event that Executive shall have delivered in writing to the Company (i) an undertaking to reimburse the Company for Expenses with respect to which Executive is not entitled to indemnification and (ii) a statement of his good faith belief that the standard of conduct necessary for indemnification by the Company has been met.

8.5.Notice of Claim. Executive shall give to the Company notice of any claim made against Executive for which indemnification will or could be sought under this Agreement. In addition, Executive shall give the Company such information and cooperation as it may reasonably require and as shall be within Executive's power and at such times and places as are convenient for Executive.

8.6.Defense of Claim. With respect to any Proceeding as to which Executive notifies the Company of the commencement thereof:

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(a)The Company will be entitled to participate therein at its own

expense;

(b) Except as otherwise provided below, to the extent that it may wish,

the Company will be entitled to assume the defense thereof, with counsel reasonably satisfactory to Executive, which in the Company's sole discretion may be regular counsel to the Company and may be counsel to other officers and directors of the Company or any subsidiary. Executive also shall have the right to employ his own counsel in such action, suit or proceeding if Executive reasonably concludes that failure to do so would involve a conflict of interest between the Company and Executive, and under such circumstances the fees and expenses of such counsel shall be at the expense of the Company; and

(c)The Company shall not be liable to indemnify Executive under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent. The Company shall not settle any action or claim in any manner which would impose any penalty that would not be paid directly or indirectly by the Company or limitation on Executive without Executive's written consent. Neither the Company nor Executive will umeasonably withhold or delay their consent to any proposed settlement.

8.7.Non-exclusivity. The right to indemnification and the payment of expenses incurred in defending a Proceeding in advance of its final disposition conferred in this Section 8shall not be exclusive of any other right which Executive may have or hereafter may acquire under any statute or certificate of incorporation or by-laws of the Company or any subsidiary, agreement, vote of shareholders or disinterested directors or trustees or otherwise.

9. Miscellaneous.

9.1.Legal Fees and Expenses. If any contest or dispute shall arise between the Company and Executive regarding any provision of this Agreement, the Company shall reimburse Executive for all legal fees and expenses reasonably incurred by Executive in connection with such contest or dispute, but only if Executive prevails to a substantial extent with respect to Executive's claims brought and pursued in connection with such contest or dispute. Such reimbursement shall be made as soon as practicable following the resolution of such contest or dispute (whether or not appealed) to the extent the Company receives reasonable written evidence of such fees and expenses.

9.2.Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, sent by courier service, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally or sent by facsimile transmission or, if mailed or sent by courier service, on the date of actual receipt thereof, as follows:

if to the Company, to:

Chief Executive Officer

1980 Post Oak Blvd.

Houston, Texas 77056

if to Executive, to:

John L. Killea

1901 Post Oak Boulevard, Unit 4507

Houston, Texas 77056

Any party may change its address for notice hereunder by notice to the other party hereto.

9.3.Entire Agreement. Subject to Section 6.7above, this Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements (including but not limited to prior employment agreements and incentive plans and agreements), written or oral, with respect thereto, however, the terms of any benefit plans shall remain in force and effect.

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9.4.Waivers and Amendments. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any waiver on the part of any party of any such right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

9.5.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas (without giving effect to the choice of law provisions thereof) and disputes settled in arbitration in Houston, Texas.

9.6.Assignment. This Agreement, and any rights and obligations hereunder, may not be assigned by Executive and may be assigned by the Company only to a successor by merger or purchasers of substantially all of the assets of the Company or its affiliates.

9.7.Counterparts. This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which together shall constitute one and the same instrument.

9.8.Headings. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

9.9.No Presumption Against Interest. This Agreement has been negotiated, drafted, edited and reviewed by the respective parties, and therefore, no provision of this Agreement shall be construed against any party as being drafted by said party.

9.10.No Duty to Mitigate. Executive shall not be required to mitigate damages with respect to the termination of his employment under this Agreement by seeking other employment or otherwise, and there shall be no offset against amounts due Executive under this Agreement on account of subsequent employment except as specifically provided in this Agreement. Additionally, amounts owed to Executive under this Agreement shall not be offset by any claims the Company may have against Executive, and the Company's obligation to make the payments provided for in this Agreement, and otherwise to perform its obligations hereunder, shall not be affected by any other circumstances, including, without limitation, any counterclaim, recoupment, defense or other right which the Company may have against Executive or others.

9.11.Dispute Resolution. If any dispute arises out of or relates to this Agreement, or the breach thereof, Executive and the Company agree to promptly negotiate in good faith to resolve such dispute. If the dispute cannot be settled by the parties through negotiation, Executive and the Company agree to try in good faith to settle the dispute by mediation under the Commercial Mediation Rules of the American Arbitration Association before resorting to arbitration or any other dispute resolution procedure. If the parties are unable to settle the dispute by mediation as provided in the preceding sentence within thirty (30) days of a written demand for mediation, any claim, controversy or dispute arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration before one (1) arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall be conducted in English and held in Houston, Harris County, Texas, or such other location to which the parties mutually agree. The arbitrator shall among other things determine the validity, scope, interpretation and enforceability of this arbitration clause. The award shall be a reasoned award and rendered within thirty (30) days of the conclusion of the arbitration hearing. The decision of the arbitrator shall be final and binding and judgment upon the award rendered may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing provisions of this Section 9.11, the Company may seek injunctive relief from a court of competent jurisdiction located in Harris County, Texas, in the event of a breach or threatened breach of any covenant contained in Section 5.

9.12. Binding Agreement. This Agreement shall inure to the benefit of and be binding upon the Company and its respective successors and assigns and Executive and Executive's legal representatives.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

EXECUTIVE:                    COMPANY:

STEWART INFORMATION SERVICES, INC.

/s/ John L. Killea/s/ Matthew W. Morris

John L. Killea                    Matthew W. Morris

Chief Executive Officer

Date: November 17, 2017         Date: November 21, 2017

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Exhibit A

Stewart Title Guaranty Company, Stewart Title Company and Affiliates Confidentiality, Non-Solicit, and Non-Compete Agreement

This Confidentiality, Non-Solicit, and Non-Compete Agreement ("Agreement") is entered into between the undersigned individual ("I", "me", or "Employee") and Stewart Title Guaranty Company, Stewart Title Company, or an affiliated company ("Employer"), for the benefit of Stewart Title Guaranty Company, and its parents, subsidiaries, affiliates, successors, and assigns to or for which Employee provides services, including Employer (collectively the "Company"). I understand the Company is in the business of providing global real estate services, including residential and commercial title insurance and closing and settlement services, offering products and services through its direct operations, network of Stewart Trusted Providers and family of companies, (the Company's "Business" or "line of business"), and seeks to employ me in a position of trust and confidence related to this line of business, and I wish to be employed in such a position. In consideration of my employment and the compensation and other benefits received as a consequence thereof, and the other mutual promises and representations of the parties made herein, the parties agree as follows:

1.Position of Trust and Confidence. In reliance upon the promises made by me in this Agreement, the Company will provide me with access to Confidential Information (including trade secrets) related to my position, and may also provide me specialized training related to the Company's Business and/or the opportunity to develop relationships with the Company's employees, business contacts (customers and others) and agents for the purpose of developing goodwill for the Company. I agree that my receipt of the foregoing would give me an unfair competitive advantage if my activities during employment, and for a reasonable period thereafter, were not restricted as provided for in this Agreement.

2.Confidential Information and Company Property. Subject to Paragraph 6, I agree to use Company's Confidential Information only in the performance of my duties, to hold such information in confidence and trust, and not to engage in any unauthorized use or disclosure of such information during my employment and for so long thereafter as such information qualifies as Confidential Information. "Confidential Information" means an item of information or compilation of information in any form (tangible or intangible) related to the Company's Business that I acquire or gain access to during my employment that the Company has not authorized public disclosure of, and that is not readily available to the public or persons outside the Company. By way of example and not limitation, Confidential Information is understood to include: lists and records, contact information, private contract terms, business preferences, and historical transaction data regarding existing and prospective customers; non­ public records and data regarding the Company's financial performance; business plans and strategies, forecasts and analyses; internal business methods and systems, know how, and innovations; marketing plans, research and analysis; unpublished pricing information, and variables such as costs, discounting options, and profit margins; business sale and acquisition opportunities identified by the Company and related analysis; records of private dealings with vendors, suppliers, and distributors; and Company trade secrets. I acknowledge that items of Confidential Information are the Company's valuable assets and have economic value because they are not generally known by the public or others who could use them to their own economic benefit and/or to the competitive disadvantage of the Company. I agree that all records, in any form (such as email, database, correspondence, notes, files, contact lists, drawings, specifications, spreadsheets, manuals, and calendars) that contain Confidential Information or otherwise relate to the Company's Business, with the exception of wage and benefit related materials provided to me as an employee for my own use as an employee, are the property of the Company (collectively "Company Records"). I will follow all Company policies regarding use or storage of Company Records, and return all such records (including all copies) when my employment with Company ends or sooner if requested.

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Confidential Information does not include information lawfully acquired by a non-management employee about wages, hours or other terms and conditions of employment when used for purposes protected by §7 of the National Labor Relations Act such as joining or forming a union, engaging in collective bargaining, or engaging in other concerted activity for mutual aid or protection of laborers. For purpose of clarity, it shall still be a violation of this Agreement for a non-management employee to wrongfully compete by sharing Confidential Information with a competitor about other employees' compensation and benefits which was obtained through the course of employment with the Company for purposes of assisting such competitor in soliciting Company employees.

3.Protective Covenants. In order to protect the Company's Confidential Information (including trade secrets) and key business relationships, I agree that for a period of one (1) year after my employment ends (irrespective of which party ends the relationship or why it ends), I will not:

(a) solicit any employee of Company that I gained knowledge of through my employment with Employer (a "Covered Employee") to leave the employment of the Company; or,

(b) hire, attempt to hire, or assist in hiring any Covered Employee on behalf of a Competing Business; or,

(c) solicit, or attempt to solicit a Covered Customer or Key Relationship (terms separately defined below), as defined below, for the purpose of doing any business that would compete with the Company's Business, or,

(d) knowingly engage in any conduct that is intended to cause, or could reasonably be expected to cause the Covered Customer or Key Relationship to stop or reduce doing business with the Company, or that would involve diverting business opportunities away from the Company; or,

(e) provide services for the benefit of a Competing Business within the Territory (terms separately defined below) that are the same or similar in function or purpose to those I provided to the Employer during the Look Back Period; or

(f) take on any other responsibilities for a Competing Business that would involve the probable use or disclosure of Confidential Information or the conversion of Covered Customers or Key Relationships to the benefit of a Competing Business or detriment of the Company.

Nothing herein is intended or to be construed as a prohibition against general advertising such as "help wanted" ads that are not targeted at the Company's employees. This Agreement is not intended to prohibit: (i) employment with a non-competitive independently operated subsidiary, division, or unit of a family of companies that include a Competing Business, so long as the employing independently operated business unit is truly independent and my services to it do not otherwise violate this Agreement; or, (ii) a passive and non-controlling ownership of less than 2% of the stock in a publicly traded company. Further, nothing herein is intended to preclude conduct protected by Section 7 of the NLRA such as joining or forming a union, engaging in collective bargaining, or engaging in other concerted activity for mutual aid and protection.

"Competing Business" means any person or entity that engages in (or is planning to engage in) a business that competes with a portion of the Company Business that I had involvement with or access to Confidential Information during the last two years of my employment (or such shorter period of time as I am employed)(the "Look Back Period"). "Covered Customer" means a customer that I had material business-related contact or dealings with or received Confidential Information about during the Look Back Period. "Key Relationships" refers to a person or entity with an ongoing business relationship with the Company (including vendors, agents, and contractors) that I had material business-related contact or dealings with during the Look Back Period. "Territory" means the geographic territory(ies) assigned to me by Company during the Look Back Period (by state, county, or other recognized geographic boundary used in the Company's business); and, if I have no such specifically assigned geographic territory then: (i) those states and counties in which Company does business that I participated in and/or about which I was provided access to Confidential Information during the Look Back Period; and, (ii) the state and county where I reside and the states and counties contiguous thereto. I am responsible for seeking clarification from the Company's Human Resources department if it is unclear to me at any time what the scope of the Territory is. State and county references include equivalents.

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4.Severability and Special Remedies. Each of my obligations under this Agreement shall be considered a separate and severable obligation. If a court determines that a restriction in this Agreement cannot be enforced as written due to an overbroad limitation (such as time, geography, or scope of activity), the parties agree that the court shall reform or modify the restrictions or enforce the restrictions to such lesser extent as is allowed by law. If, despite the foregoing, any provision contained in this Agreement is determined to be void or unenforceable, in whole or in part, then the other provisions of this Agreement will remain in full force and effect. The parties agree that the Company will suffer irreparable harm, in addition to any damages that can be quantified, by a breach of this Agreement by me. Accordingly, in the event of such a breach or a threatened breach, the Company will be entitled to all remedies that may be awarded by a Court of competent jurisdiction, recovery of its attorneys' fees and expenses (including not only costs of court, but also expert fees, travel expenses, and other expenses incurred), and any other legal or equitable relief allowed by law.

5. Choice of Law and Venue.The Parties agree that the law of the State in which the Employee primarily resides and was last employed by the Employer shall govern the interpretation, application, and enforcement of this Agreement, without regard to any choice of law rules of that or any other state. All disputes arising out of this Agreement or concerning the interpretation or enforcement of this Agreement shall be exclusively brought in the state and federal courts covering Harris County, Texas. Employee hereby expressly consents to the personal jurisdiction of the state and federal courts located in Harris County, Texas, for any lawsuit arising from or relating to this Agreement.

6.Agreement Limitations.Nothing in this Agreement (i) prohibits me from reporting an event that I reasonably and in good faith believe is a violation of law to the relevant governmental or law­ enforcement agency (such as the Securities and Exchange Commission or Department of Labor), (ii) requires notice to or approval from the Company before doing so, or (iii) prohibits me from cooperating in an investigation conducted by such a governmental or law enforcement agency. The Company may not retaliate against me for any of these activities, and nothing in this Agreement requires me to waive any monetary award or other payment that I might become entitled to from any relevant governmental or law enforcement agency. This may include a disclosure of trade secret information provided that it must comply with the restrictions in the Defend Trade Secrets Act of 2016 (DTSA). The DTSA provides that no individual will be held criminally or civilly liable under Federal or State trade secret law for the disclosure of a trade secret that: (i) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (ii) is made in a complaint or other document if such filing is under seal so that it is not made public. Also, an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order. To the extent that I am covered by Section 7 of the National Labor Relations

Act (NLRA) because I am not in a supervisor or management role, nothing in this Agreement shall be construed to prohibit me from using information I acquire regarding the wages, benefits, or other terms and conditions of employment at the Company for any purpose protected under the NLRA. I understand that under the NLRA, covered employees have a right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and to refrain from any or all of such activities.

7.Intellectual Property Protection and Assignment.Employee is expected to use his or her inventive and creative capacities for the benefit of the Employer and to contribute, where possible, to the Employer's intellectual property in the ordinary course of employment.

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(a)Definitions. "Inventions" mean any and all inventions, software source code, discoveries, improvements, designs, processes, machines, products, innovations, business methods or systems, know how, ideas or concepts of commercial value or utility, and related technologies or methodologies, whether or not shown or described in writing or reduced to practice and whether patentable or not. "Works" mean any and all original works of authorship, including, but not limited to: literary works (including any and all written material), mask works, computer programs, formulas, tests, notes, data compilations, databases, artistic and graphic works (including designs, graphs, drawings, blueprints, and other works), recordings, models, photographs, slides, motion pictures, and audio visual works; whether copyrightable or not, and regardless of the form or manner in which documented or recorded. "Trademarks" mean any and all trademarks, service marks, trade dress or names, domain names, symbols, special wording or devices used to identify a business or its business activities whether subject to trademark protection or not and all goodwill associated therewith. The foregoing is collectively referred to in this Agreement as "Intellectual Property."

(b) Inventions Assignment. I agree to and do hereby grant and assign to Employer or its nominee my entire right, title and interest in and to all Inventions that are made, conceived, or reduced to practice by me, alone or jointly with others, during my employment with Employer (whether during working hours or not) that either (i) relate to Employer's business, or actual or demonstrably anticipated research or development of the Employer, or (ii) involve the use or assistance of any tools, time, material, personnel, information, or facility of the Employer, or (iii) result from or relate to any work, services, or duties undertaken by me for the Employer.

(c) Works and Trademarks. I recognize that all Works and Trademarks conceived, created, or reduced to practice by me, alone or jointly with others, during my employment shall to the fullest extent permissible by law be considered the Employer's sole and exclusive property and "works made for hire" as defined in the U.S. Copyright Laws for purposes of United States law and the law of any other country adhering to the "works made for hire" or similar notion or doctrine, and will be considered the Employer's property from the moment of creation or conception forward for all purposes without the need for any further action or agreement by Employee or the Employer. If any such Works, Trademarks or portions thereof shall not be legally qualified as a works made for hire in the United States or elsewhere, or shall subsequently be held to not be a work made for hire or not the exclusive property of the Employer, I do hereby assign to Employer all of my rights, title and interest, past, present and future, to such Works or Trademarks. I will not engage in any unauthorized publication or use of such Company Works or Trademarks, nor will I use same to compete with or otherwise cause damage to the business interests of the Employer.

(d) Waiver, License and Cooperation Obligation. It is the purpose and intent of this Agreement to convey to Employer all of the rights (inclusive of moral rights) and interests of every kind, that I may hold in Inventions, Works, Trademarks and other Intellectual Property that are covered by Paragraphs 7 (a) - (c) above ("Company Intellectual Property"), past, present and future; and, Employee waives any right that Employee may have to assert moral rights or other claims contrary to the foregoing understanding. It is understood that this means that in addition to the original work product (be it invention, plan, idea, know how, concept, development, discovery, process, method, or any other legally recognized item that can be legally owned), the Employer exclusively owns all rights in any and all derivative works, copies, improvements, patents, registrations, claims, or other embodiments of ownership or control arising or resulting from an item of assigned Intellectual Property everywhere such may arise throughout the world. The decision whether or not to commercialize or market any Company Intellectual Property is within the Employer's sole discretion and for the Employer's sole benefit and no royalty will be due to Employee as a result of the Employer's efforts to commercialize or market any such invention. In the event that there is any Invention, Work, Trademark, or other form of intellectual property that is incorporated into any product or service of the Employer that Employee retains any ownership of or rights in despite the assignments created by this Agreement, then Employee does hereby grant to the Employer and its assigns a nonexclusive, perpetual, irrevocable, fully paid-up, royalty-free, worldwide license to the use and control of any such item that is so incorporated and any derivatives thereof, including all rights to make, use, sell, reproduce, display, modify, or distribute the item and its derivatives. All assignments of rights provided for in this Agreement are understood to be fully completed and immediately effective and enforceable assignments by Employee of all intellectual property rights in Company Intellectual Property. When requested to do so by Employer, either during or subsequent to employment with Employer, Employee will (i) execute all documents requested by Employer to affirm or effect the vesting in Employer of the entire

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right, title and interest in and to the Company Intellectual Property at issue, and all patent, trademark, and/or copyright applications filed or issuing on such property; (ii) execute all documents requested by Employer for filing and obtaining of patents, trademarks and/or copyrights; and (iii) provide assistance that Employer reasonably requires to protect its right, title and interest in the Company Intellectual Property, including, but not limited to, providing declarations and testifying in administrative and legal proceedings with regard to Company Intellectual Property. Power of Attorney: Employee does hereby irrevocably appoint the Employer as its agent and attorney in fact to execute any documents and take any action necessary for applications, registrations, or similar measures needed to secure the issuance of letters patent, copyright or trademark registration, or other legal establishment of the Employer's ownership and control rights in Company Intellectual Property in the event that Employee's signature or other action is necessary and cannot be secured due to Employee's physical or mental incapacity or for any other reason.

(e)Records and Notice Obligations. Employee will make and maintain, and not destroy, notes and other records related to the conception, creation, discovery, and other development of Company Intellectual Property. These records shall be considered the exclusive property of the Employer and are covered by Paragraphs 1 and 3 above. During employment and for a period of one (1) year thereafter, Employee will promptly disclose to the Employer (without revealing the trade secrets of any third party) any Intellectual Property that Employee creates, conceives, or contributes to, alone or with others, that involve, result from, relate to, or may reasonably be anticipated to have some relationship to the line of business the Employer is engaged in or its actual or demonstrably anticipated research or development activity.

(f) Prior Intellectual Property. Employee will not claim rights in, or control over, any Invention, Work, or Trademark as something excluded from this Agreement because it was conceived or created prior to being employed by Employer (a "Prior Work") unless such item is identified on Appendix Band signed by Employee as of the date of this Agreement. Employee will not incorporate any such Prior Work into any work or product of the Employer without prior written authorization from the Employer to do so; and, if such incorporation does occur, Employee grants Employer and its assigns a nonexclusive, perpetual, irrevocable, fully paid-up, royalty-free, worldwide license to the use and control of any such item that is so incorporated and any derivatives thereof, including all rights to make, use, sell, reproduce, display, modify, or distribute the item and its derivatives.

(g) Notice. To the extent that Employee is a citizen of California and subject to its law, then Employee is notified that the foregoing assignment shall not include inventions excluded under Cal. Lab. Code § 2870 which provides: "(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) relate at the time of concept or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or (2) result from any work performed by the employee for the employer", and to the extent Employee is a citizen of and subject to the law of another state which provides a similar limitation on invention assignments then Employee is notified that the foregoing assignment shall not include inventions excluded under such law (namely, Delaware Code Title 19 Section 805; Illinois 765ILCS1060/1-3, "Employees Patent Act"; Kansas Statutes Section 44-130; Minnesota Statutes 13A Section 181.78; North Carolina General Statutes Article lOA, Chapter 66, Commerce and Business, Section 66-57.1; Utah Code Sections 34-39-1 through 34-39-3, "Employment Inventions Act"; Washington Rev. Code, Title 49 RCW: Labor Regulations, Chapter 49.44.140).

7.Survival, All Duties and At-Will Status Preserved.Nothing in this Agreement limits or reduces any common law or statutory duty I owe to the Company, nor does this Agreement limit or eliminate any remedies available to the Company for a violation of such duties. This Agreement will survive the expiration or termination of Employee's employment with the Company and/or any assignee pursuant to Paragraph 9 and shall, likewise, continue to apply and be valid notwithstanding any change in the Employee's duties, responsibilities, position, or title. Nothing in this Agreement modifies the parties' at­ will employment relationship or limits either party's right to end the employment relationship between them.

8.Tolling.If Employee fails to comply with a timed restriction in this Agreement, the time period for that will be extended by one day for each day Employee is found to have violated the restriction, up to a maximum of twelve (12) months.

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9.Assignment. This Agreement, including the restnct1ons on Employee's activities set forth herein, also apply to any parent, subsidiary, affiliate, successor and assign of the Company to which Employee provides services or about which Employee receives Confidential Information. The Company shall have the right to assign this Agreement at its sole election without the need for further notice to or consent by Employee.

AGREED:

Employee:                    For Company:

/s/ John L. Killea/s/ Matthew W. Morris

John L. Killea                    Matthew W. Morris

Chief Executive Officer

Date: November 17, 2017         Date: November 21, 2017

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APPENDIX A

Arizona:

If Employee resides in Arizona and is subject to Arizona law, then the following applies to Employee: (a) Employee's nondisclosure obligation in Paragraph 2 shall extend for a period of three (3) years after Employee's termination as to Confidential Information that does not qualify for protection as a trade secret. Trade Secret information shall be protected from disclosure as long as the information at issue continues to qualify as a trade secret; and (b) the restrictions in Paragraph 3 shall be limited to the Territory.

California:

If Employee resides in California, then the following applies to Employee: (a) the no-hire provision in Paragraph 3(b) shall not apply; (b) Paragraph 3(c)-(d) shall be limited to situations where Employee is aided in his or her conduct by the use or disclosure of the Company's trade secrets (as defined by California law); (c) the noncompetition restrictions in Paragraph 3(e) and (f) shall not apply; (d) the provision in Paragraph 4 allowing the Company to recover its attorneys' fees and expenses shall not apply; and (e) the venue provision in Paragraph 5 shall not apply.

Oklahoma:

For so long as Employee resides in Oklahoma and is subject to Oklahoma law, the noncompetition restrictions in Paragraph 3(e) and (f) shall not apply.

Oregon:

For so long as Employee resides in Oregon and is subject to Oregon law, the restrictions in Paragraph 3(e) and (f) shall only apply if Employee: (a) is engaged in administrative, executive or professional work and performs predominantly intellectual, managerial, or creative tasks, exercises discretion and independent judgment and earns a salary or is otherwise exempt from Oregon's minimum wage and overtime laws; (b) the Company has a "protectable interest" (meaning, access to trade secrets or competitively sensitive confidential business or professional information); and (c) the total amount of the Employee's annual gross salary and commission, calculated on an annual basis, at the time of the Employee's termination, exceeds the median family income for a family of four, as determined by the United States Census Bureau. However, if Employee does not meet requirements of either (a) or (c) (or both), the Company may, on a case-by-case basis, decide to make Paragraphs 3(e) and (f) enforceable as to Employee (as allowed by Oregon law), but paying the Employee during the period of time the Employee is restrained from competing the greater of: (i) compensation equal to at least 50 percent of the Employee's annual gross base salary and commissions at the time of the Employee's termination; or (ii) fifty percent of the median family income for a four-person family, as determined by the United States Census Bureau for the most recent year available at the time of the Employee's termination.

Wisconsin:

For so long as Employee resides in Wisconsin and is subject to Wisconsin law: (a) Employee's nondisclosure obligation in Paragraph 2 shall extend for a period of three (3) years after Employee's termination as to Confidential Information that does not qualify for protection as a trade secret. Trade Secret information shall be protected from disclosure as long as the information at issue continues to qualify as a trade secret; (b) Paragraph 8 shall not apply; and (c) Paragraph 3(a) and (b) is rewritten as follows: "While employed and for a period of one (1) year from the date of the termination of Employee's employment, I will not participate in soliciting any Covered Employee of the Company that is in a Sensitive Position to leave the employment of the Company on behalf of (or for the benefit of) a Competing Business nor will I knowingly assist a Competing Business in efforts to hire a Covered Employee away from the Company. As used in this paragraph, an employee is a "Covered Employee" if the employee is someone with whom Employee worked, as to whom Employee had supervisory responsibilities, or regarding which Employee received Confidential Information during the Look Back Period. An employee in a "Sensitive Position" refers to an employee of the Company who is in a management, supervisory, sales, research and development, or similar role where the employee 1s provided Confidential Information or is involved in business dealings with the Company's customers."

21

APPENDIX B

Statement Regarding Prior Inventions, Works &Trademarks

Employee seeks to exclude his or her Prior Works (Invention, Work, or Trademark) listed below from assignment to the Employer under Paragraph 7(-t) of the attached Agreement (if there are none, write "none" or leave the section below blank):

___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Employee agrees not to disclose the trade secrets of any third party in describing the Prior Work. If additional pages are attached to provide a description, this fact and the number of pages attached are described above.

Employee:

/s/ John L. Killea Date: November 17, 2017

(signature)

22

STEWART INFORMATION SERVICES CORPORATION

RESTRICTED STOCK UNIT AGREEMENT

THIS RESTRICTED STOCK UNIT AGREEMENT (the “Award Agreement”) is hereby granted as of November 6, 2017 (the “Grant Date”) by Stewart Information Services Corporation, a Delaware corporation (the “Company”), to John L. Killea (the “Participant”) pursuant to the Stewart Information Services Corporation 2014 Long Term Incentive Plan (the “Plan”), subject to the terms and conditions set forth therein and as set out in this Award Agreement. Capitalized terms used herein shall, unless otherwise required by the context, have the meaning ascribed to such terms in the Plan.

By action of the Committee, and subject to the terms of the Plan, the Participant is hereby granted restricted stock units (the “Stock Units”), each of which represent a contractual right that entitles the Participant potentially to receive a share of the Company’s Common Stock, no par value (“Shares”), provided all of the conditions for settlement of the Stock Units have been satisfied, subject to the Plan and to the restrictions and risks of forfeiture as set forth in this Award Agreement.

NOW, THEREFORE, in consideration of the promises and the mutual covenants contained in this Award Agreement, the Company and the Participant agree as follows:

1.Grant. The Company grants to the Participant, upon the terms and conditions set forth in this Award Agreement and as set forth in the Plan 19,664 Stock Units.

2.Vesting and Forfeiture.

(a)Any Stock Units that are not vested as of the date of the Participant’s termination of employment for any reason shall be automatically forfeited without any further action required to be taken by the Participant or the Company.

(b)In general, the Stock Units shall become vested on the dates set forth below (each, a “Vesting Date”), as to the specified percentage of the Stock Units indicated:

Vesting Date	Cumulative Vested Stock Units
First anniversary of the Grant Date	2,621
Second anniversary of the Grant Date	6,553
One day following the second anniversary of the Grant Date	13,107
Third anniversary of the Grant Date	19,664

The vesting of the Participant’s Stock Units, as set forth above, shall only occur if the Participant has remained continuously employed through the relevant Vesting Date. Any Stock Units that are not vested as of the Participant’s termination of employment for any reason shall be forfeited.

3.Accelerated Vesting. This Section 3 constitutes the sole basis on which the Stock Units become vested prior to the vesting provided for in Section 2(b).

(a)Notwithstanding anything set forth above to the contrary, in the event there is a Change of Control (as hereinafter defined) and, in connection with, or during the twenty-four (24) month period following, the consummation of the relevant transaction, the Participant incurs a separation from service (as that term is defined for purposes of Code Section 409A) by reason of the Company’s termination of the Participant’s employment without Cause (as defined in the Participant’s employment agreement) or, during the twenty-four (24) month period following the consummation of the relevant transaction, the Participant incurs a separation from service by reason of the Participant’s resignation for Good Reason (as defined for purposes of the Participant’s employment agreement), then the Stock Units shall be fully vested as of the date of the Participant’s separation from service, and settlement shall occur as soon as practicable following the Participant’s separation from service, subject to deferral of settlement until the first day of the seventh month following the Participant’s termination of employment if such deferral is required to comply with Code Section 409A(a)(2)(B)(i) (regarding required delay in payment of nonqualified deferred compensation to “specified employees”).

(b)For purposes of this Section 3, a “Change of Control” shall be deemed to have occurred if any of the following events shall occur:

RSU- 1

(i)any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Act”) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities;

(ii)there occurs a proxy contest or a consent solicitation, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization, as a consequence of which members of the Board in office immediately prior to such transaction or event thereafter constitute less than a majority of the Board;

(iii)there occurs a reverse merger involving the Company in which the Company is the surviving corporation but the shares of common stock of the Company outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise;

(iv)there is a sale of other disposition of all or substantially all of the assets of the Company;

(v)there is an adoption of any plan or proposal for the liquidation or dissolution of the Company; or

(vi)Stewart Title Guaranty Company is placed in supervision, receivership, conservatorship, or special administrative action by the Texas Department of Insurance.

Notwithstanding the foregoing, in any circumstance or transaction in which compensation resulting from or in respect of an Award would result in the imposition of an additional tax under Section 409A if the foregoing definition of “Change of Control” were to apply, but would not result in the imposition of any additional tax if the term “Change of Control” were defined herein to mean a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5), then “Change of Control” shall mean a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5), but only to the extent necessary to prevent such compensation from becoming subject to an additional tax under Section 409A.

4.Settlement of Vested Stock Units.

(a)The portion of the Stock Units that become vested on the first anniversary of the Grant Date shall be settled by the delivery of cash or shares of Common Stock (as determined at the discretion of the Committee) as soon as practicable following the first anniversary of the Grant Date.

(b)The portion of the Stock Units that become vested on the second anniversary of the Grant Date shall be settled by the delivery of cash or shares of Common Stock (as determined at the discretion of the Committee) as soon as practicable following the second anniversary of the Grant Date.

(c)Any additional vested Stock Units shall be settled by the delivery of cash or shares of Common Stock (as determined at the discretion of the Committee) as soon as practicable following the third anniversary of the Grant Date.

(d)In addition, in the event any dividends are paid to shareholders during the period following the Grant Date and up to the settlement of any Stock Units, the Participant shall be entitled to a payment, at the same time the Stock Units are settled, equal to the amount that would have been paid as dividends to the Participant had the Participant held the underlying Shares during that period (“Dividend Equivalents”). The Committee shall have the right to determine whether the Dividend Equivalents shall be paid in cash or in the form of a distribution of additional shares of Common Stock having the same value and to determine whether to deem such dividends to have been reinvested in shares at the time the dividends were paid.

RSU- 2

5.Status of Stock Units and Certain Tax Matters. The Stock Units subject to this Award Agreement are only a contractual right of the Participant potentially to receive Shares corresponding to the number of Stock Units granted to the Participant. As a consequence, the Stock Units do not constitute property for purposes of Code Section 83. As a consequence, the Participant will be taxable for federal income tax purposes on the value of the Shares distributed to the Participant at the time the Shares are distributed, and not at the time the Stock Units vest. Notwithstanding the foregoing, the value of the Stock Units is treated as creating a form of nonqualified deferred compensation to which Code Sections 409A and 3121(v) are applicable. As a consequence, the value of the Stock Units is subject to certain wages taxes (for Social Security and Medicare) at the time of vesting and the Company shall be entitled to cancel vested Stock Units as a means to cover the Company’s wage withholding obligations that arise on vesting. Vesting is not, however, intended generally to be a taxable event for purposes of federal income taxation or Code Section 409A. Because the time of settlement or payment is, in all cases, fixed by reference to a specified schedule of payments that is not subject to acceleration, except for the cancellation of Stock Units for withholding purposes, which is permissible under Code Section 409A, all requirements of Code Section 409A are intended to be met, and this Award Agreement shall be interpreted in a manner consistent with the Company’s intent to satisfy all applicable requirements of Code Section 409A.

6.Employment. Nothing in the Plan or in this Award Agreement shall confer upon the Participant any right to be continued as an employee of the Company or interfere in any way with the right of the Company to remove the Grantee as an employee at any time for any cause.

7.Binding Effect. This Award Agreement shall be binding upon and shall inure to the benefit of any successor of the Company, but except as provided above, the Shares subject to this Award Agreement shall not be assigned or otherwise disposed of by the Participant.

8.The Plan. This Award Agreement is subject to the terms and conditions of the Plan. In the event of a conflict between the Plan and this Agreement, the terms of the Plan shall control.

IN WITNESS WHEREOF, this Award Agreement has been executed on this 29th day of November, 2017.

STEWART INFORMATION SERVICES CORPORATION

By: /s/ Matthew W. Morris

Matthew W. Morris

Chief Executive Officer

ACKNOWLEDGED

By: /s/ John L. Killea

John L. Killea

RSU- 3

EX-10.19

BONUS RECOVERY AND AUTHORIZATION FOR PAYROLL DEDUCTION AGREEMENT

WHEREAS, Stewart Information Services Corporation, referred herein as (“Stewart”) has agreed to pay a retention bonus (the "Bonus") in the amount of Three Hundred Thousand Dollars and Zero Cents ($300,000.00), subject to applicable payroll taxes, to Matthew W. Morris as set forth herein; and,

WHEREAS, the Bonus, will be paid to the Employee on or before, December 29, 2017, provided Employee has executed this Bonus Recovery and Authorization for Payroll Deduction Agreement (“Agreement”) and is an active Employee upon payment being made; and

WHEREAS, Stewart and Employee have agreed that if Employee’s employment with Stewart is terminated by Stewart for Cause or by the Employee for any reason, referred herein as (“Employment Separation”), within one year from the date the Bonus is paid, Employee shall become immediately liable for and obligated to repay to Stewart the full amount of the Bonus, Three Hundred Thousand Dollars and Zero Cents ($300,000);

WHEREAS, the parties stipulate that this Agreement is done for a lawful purpose, including but not limited to the purpose of insuring that Stewart obtains the full benefits of paying the full amount of the Bonus; and

WHEREAS, for the purpose of this Agreement, “Cause” means termination of employment for any of the following reasons: (a) Stewart’s determination that Employee has committed insubordination or grossly failed or refused to perform any material duties or obligations of Stewart employment; (b) Stewart’s determination that Employee has materially violated any provision of Stewart policy (whether now in effect or subsequently promulgated or revised) regarding drugs, alcohol, discrimination, harassment, retaliation, honesty, confidentiality and/or other employee misconduct; (c) Employee’s conviction for, or entry of a plea of guilty or no contest with respect to, any felony or crime of moral turpitude; and/or (d) any act or omission of Employee involving fraud, theft, dishonesty, disloyalty, or illegality with respect to Stewart, any affiliate, or any of Stewart’s businesses;

NOW, THEREFORE, intending to be legally bound, Employee and Stewart agree and covenant, as follows:

1.Repayment Obligation. Employee acknowledges and agrees that in the event of Employment Separation, Employee shall immediately owe Stewart the full amount of the Bonus, Three Hundred Thousand Dollars and Zero Cents ($300,000); then due and owing. Further in the event of Employment Separation, Employee hereby authorizes Stewart to deduct the full amount of the Bonus from Employee’s final pay (including but not limited to any accrued bonus, commissions, wages and/or unused vacation), subject to any applicable minimum wage requirements. If the amount of Employee's final pay is less than the full amount of the Bonus, Employee covenants and agrees to pay said amount to Stewart by wire or cashier’s check within sixty (60) days from the date of the Employment Separation.

2.Governing Law and Venue. This Agreement shall be governed by the laws of the state of Texas and is performable in Harris County, Houston, Texas. Exclusive venue for any dispute with respect to this Agreement shall reside in a court of competent jurisdiction in Harris County, Houston, Texas.

3.Entire Agreement. This Agreement constitutes the entire understanding between Employee and Stewart with respect to the subject matter hereof (repayment of the Bonus) and supersedes any and all other prior understandings, written or oral.

4.Attorneys’ Fees. If any action at law or in equity is necessary to enforce the terms of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which that party may be entitled.

1

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has executed this Bonus Recovery and Authorization for Payroll Deduction Agreement as of December 29, 2017.

/s/ Matthew W. Morris

Matthew W. Morris

COMPANY

Stewart Information Services Corporation

By: /s/ Thomas G. Apel

Name:    Thomas G. Apel

Title:    Chairman of the Board of Directors

Date: December 29, 2017                        

2

EX-10.20

BONUS RECOVERY AND AUTHORIZATION FOR PAYROLL DEDUCTION AGREEMENT

WHEREAS, Stewart Information Services Corporation, referred herein as (“Stewart”) has agreed to pay a retention bonus (the "Bonus") in the amount of One Hundred Fifty Thousand Dollars and Zero Cents ($150,000.00), subject to applicable payroll taxes, to David C. Hisey as set forth herein; and,

WHEREAS, the Bonus, will be paid to the Employee on or before, December 29, 2017, provided Employee has executed this Bonus Recovery and Authorization for Payroll Deduction Agreement (“Agreement”) and is an active Employee upon payment being made; and

WHEREAS, Stewart and Employee have agreed that if Employee’s employment with Stewart is terminated by Stewart for Cause or by the Employee for any reason, referred herein as (“Employment Separation”), within one year from the date the Bonus is paid, Employee shall become immediately liable for and obligated to repay to Stewart the full amount of the Bonus, One Hundred Fifty Thousand Dollars and Zero Cents ($150,000.00);

WHEREAS, the parties stipulate that this Agreement is done for a lawful purpose, including but not limited to the purpose of insuring that Stewart obtains the full benefits of paying the full amount of the Bonus; and

WHEREAS, for the purpose of this Agreement, “Cause” means termination of employment for any of the following reasons: (a) Stewart’s determination that Employee has committed insubordination or grossly failed or refused to perform any material duties or obligations of Stewart employment; (b) Stewart’s determination that Employee has materially violated any provision of Stewart policy (whether now in effect or subsequently promulgated or revised) regarding drugs, alcohol, discrimination, harassment, retaliation, honesty, confidentiality and/or other employee misconduct; (c) Employee’s conviction for, or entry of a plea of guilty or no contest with respect to, any felony or crime of moral turpitude; and/or (d) any act or omission of Employee involving fraud, theft, dishonesty, disloyalty, or illegality with respect to Stewart, any affiliate, or any of Stewart’s businesses;

NOW, THEREFORE, intending to be legally bound, Employee and Stewart agree and covenant, as follows:

1.Repayment Obligation. Employee acknowledges and agrees that in the event of Employment Separation, Employee shall immediately owe Stewart the full amount of the Bonus, One Hundred Fifty Thousand Dollars and Zero Cents ($150,000.00), then due and owing. Further in the event of Employment Separation, Employee hereby authorizes Stewart to deduct the full amount of the Bonus from Employee’s final pay (including but not limited to any accrued bonus, commissions, wages and/or unused vacation), subject to any applicable minimum wage requirements. If the amount of Employee's final pay is less than the full amount of the Bonus, Employee covenants and agrees to pay said amount to Stewart by wire or cashier’s check within sixty (60) days from the date of the Employment Separation.

2.Governing Law and Venue. This Agreement shall be governed by the laws of the state of Texas and is performable in Harris County, Houston, Texas. Exclusive venue for any dispute with respect to this Agreement shall reside in a court of competent jurisdiction in Harris County, Houston, Texas.

3.Entire Agreement. This Agreement constitutes the entire understanding between Employee and Stewart with respect to the subject matter hereof (repayment of the Bonus) and supersedes any and all other prior understandings, written or oral.

4.Attorneys’ Fees. If any action at law or in equity is necessary to enforce the terms of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which that party may be entitled.

1

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has executed this Bonus Recovery and Authorization for Payroll Deduction Agreement as of December 29, 2017.

/s/ David C. Hisey

David C. Hisey

COMPANY

Stewart Information Services Corporation

By: /s/ Matthew W. Morris     

Name:    Matthew W. Morris

Title:    Chief Executive Officer

Date: December 29, 2017                        

2

EX-21.1

Exhibit 21.1

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

Name of Subsidiary	State, Territory or Country of Origin
Stewart Title of Alabama, LLC	Alabama
United Title Guaranty Agency, LLC	Alaska
Stewart Title & Trust of Tucson	Arizona
Stewart Title of Arkansas, LLC	Arkansas
Asset Preservation, Inc.	California
Intercity Capital Corporation	California
Intercity Escrow Services	California
Stewart Title of California, Inc.	California
SAB Holdings, LLC	Colorado
Stewart Institutional Exchange Services, LLC	Delaware
Stewart Title & Trust of Phoenix, Inc.	Delaware
Stewart Valuation Services, LLC	Delaware
Stewart Properties of Tampa, Inc.	Florida
Timeshare Administration Group, LLC	Florida
Kemp Title Agency, LLC	Kentucky
Stewart Title Group, LLC	Maryland
Stewart Title of Maryland, Inc.	Maryland
Broker’s Title, LLC	Missouri
CBKC Title & Escrow, LLC	Missouri
CBKC Title Holdings, LLC	Missouri
Metropolitan Title & Escrow, LLC	Missouri
Stewart Title of Albuquerque, LLC	New Mexico
Monroe-Gorman Title Agency, LLC	New York
Parked Properties NY, Inc.	New York
Stewart Title Insurance Company	New York
Red River Title Services, Inc.	North Dakota
First Ohio Title Insurance Agency, Ltd.	Ohio
RET Solutions, LLC	Ohio

Name of Subsidiary	State, Territory or Country of Origin
Oklahoma Land Title Services, LLC	Oklahoma
Stewart Title of Oklahoma, Inc.	Oklahoma
Yankton Title Company, Inc.	South Dakota
Memorial Title, LLC	Tennessee
Summit Land Title, LLC	Tennessee
ABC Title, LLC dba Prosperity Title Company	Texas
Advantage Title Solutions, LLC	Texas
Bedrock Title Company, LLC	Texas
Chadco Builders, Inc.	Texas
Classic Title Company, LLC	Texas
Crown Title Company of Houston, LLC	Texas
Dominion Title, LLC	Texas
Fulghum, Inc.	Texas
GESS Management, LLC	Texas
GESS Real Estate Investments, LP	Texas
Graystone Title Company, LLC	Texas
HMH Title Company, LLC	Texas
Home Retention Services, Inc.	Texas
IT24 of Houston, LLC	Texas
Landon Title Company, LLC	Texas
LCH Title Company, LLC	Texas
Millennium Title of Houston, LC	Texas
Millennium Title Company of North Texas, LLC	Texas
National Transfer Services, LLC	Texas
NETC Title Company, LLC	Texas
Priority Title Company of Dallas, LC	Texas
Priority Title Company of Houston, LC	Texas
Professional Real Estate Tax Service, LLC	Texas
Professional Real Estate Tax Service of North Texas, LLC	Texas
PropertyInfo Corporation	Texas
PSI-Fire, L.P.	Texas
Red Oak Title, LLC	Texas
S&S Title Company LLC	Texas
Stewart Financial Services, Inc.	Texas
Stewart Lender Services, Inc.	Texas
Stewart Solutions, LLC	Texas
Stewart Title Company	Texas
Stewart Title Guaranty Company	Texas
Stewart Title of Austin, LLC	Texas
Stewart Title of Lubbock, Inc.	Texas
Stewart Title of the Coastal Bend, Inc.	Texas
Strategic Title Company, LLC	Texas
Texarkana Title and Abstract Company, Inc.	Texas
Texas Guild Title, LLC	Texas
U.S. Title Company of Wichita County I, Ltd.	Texas

Name of Subsidiary	State, Territory or Country of Origin
Stewart Title Insurance Agency of Utah, Inc.	Utah
Western America Title Service, LLC	Utah
Brazos Insurance Company	Vermont
Richmond Settlement Solutions, LLC	Virginia
Stewart Land Title Services, L.L.C.	Virginia
Stewart Title & Settlement Services, Inc.	Virginia
Stewart Title & Escrow, Inc.	Virginia
Stewart Title of Shenandoah Valley, LC	Virginia
Stewart Title of Spokane, LLC	Washington
Stewart Lender Services - Latin America, S.A.	Costa Rica
Stewart Title Guaranty de México, S.A. de C.V.	Mexico
CTO 24/7 (Private) Limited	Pakistan
Stewart Title sp. z o.o.	Poland
Advantage Title Solutions, S.R.L.	Romania
Stewart Title Limited	United Kingdom

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Stewart Information Services Corporation:

We consent to the incorporation by reference in the registration statements (Nos. 333-159285, 333-124954, 333-196389) on Form S-8 of Stewart Information Services Corporation of our reports dated February 28, 2018, with respect to the consolidated balance sheets of Stewart Information Services Corporation and subsidiaries as of December 31, 2017 and 2016, and the related consolidated statements of operations and comprehensive income (loss), cash flows, and equity for each of the years in the three-year period ended December 31, 2017, and the related notes and financial statement schedules (collectively, the "consolidated financial statements"), and the effectiveness of internal control over financial reporting as of December 31, 2017, which reports appear in the December 31, 2017 annual report on Form 10-K of Stewart Information Services Corporation.

/s/ KPMG LLP

Houston, Texas

February 28, 2018

EX-31.1

EXHIBIT 31.1

CERTIFICATION

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Matthew W. Morris, certify that:

1. I have reviewed this annual report on Form 10-K of Stewart Information Services Corporation (registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	February 28, 2018
		/s/ Matthew W. Morris
		Name:  Matthew W. Morris
		Title:    Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, David C. Hisey, certify that:

1. I have reviewed this annual report on Form 10-K of Stewart Information Services Corporation (registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	February 28, 2018
		/s/ David C. Hisey
		Name:  David C. Hisey
		Title: Chief Financial Officer, Secretary and Treasurer

EX-32.1

EXHIBIT 32.1

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Stewart Information Services Corporation (the “Company”) on Form 10-K for the period ended December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew W. Morris, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:

February 28, 2018

        /s/ Matthew W. Morris

Name: Matthew W. Morris

Title: Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Stewart Information Services Corporation and will be retained by Stewart Information Services Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Stewart Information Services Corporation (the “Company”) on Form 10-K for the period ended December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David C. Hisey, Chief Financial Officer, Secretary, and Treasurer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:

February 28, 2018

        /s/ David C. Hisey

Name: David C. Hisey

Title: Chief Financial Officer, Secretary and Treasurer

A signed original of this written statement required by Section 906 has been provided to Stewart Information Services Corporation and will be retained by Stewart Information Services Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Feb. 23, 2018	Jun. 30, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	STEWART INFORMATION SERVICES CORP
Entity Central Index Key	0000094344
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Trading Symbol	STC
Amendment Flag	false
Entity Common Stock, Shares Outstanding		23,717,039
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 1,050

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Title insurance:
Direct operations	$ 862,392	$ 894,313	$ 897,118
Agency operations	1,016,356	1,009,797	991,332
Ancillary services	55,837	84,271	129,954
Operating revenues	1,934,585	1,988,381	2,018,404
Investment income	18,932	18,925	16,850
Realized investment and other gains (losses) – net	2,207	(666)	(1,369)
Total revenues	1,955,724	2,006,640	2,033,885
Expenses
Amounts retained by agencies	837,100	826,022	809,564
Employee costs	566,178	604,353	658,266
Other operating expenses	351,511	363,986	381,954
Title losses and related claims	96,532	91,147	106,265
Impairment of goodwill	0	0	35,749
Depreciation and amortization	25,878	30,044	30,298
Interest	3,458	3,062	2,096
Total expenses	1,880,657	1,918,614	2,024,192
Income before taxes and noncontrolling interests	75,067	88,026	9,693
Income tax expense	14,921	19,605	5,650
Net income	60,146	68,421	4,043
Less net income attributable to noncontrolling interests	11,487	12,943	10,247
Net income (loss) attributable to Stewart	48,659	55,478	(6,204)
Net income (loss) attributable to Stewart
Net income	60,146	68,421	4,043
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments	8,354	(3,367)	(11,145)
Change in unrealized net gains on investments	1,766	354	(3,741)
Reclassification adjustment for net gains included in net income	(2,086)	(1,911)	(1,626)
Other comprehensive income (loss), net of taxes	8,034	(4,924)	(16,512)
Comprehensive income (loss)	68,180	63,497	(12,469)
Less comprehensive income attributable to noncontrolling interests	11,487	12,943	10,247
Comprehensive income (loss) attributable to Stewart	$ 56,693	$ 50,554	$ (22,716)
Basic average shares outstanding (000)	23,445	23,364	23,544
Basic earnings (loss) per share attributable to Stewart (USD per share)	$ 2.08	$ 1.86	$ (0.26)
Diluted average shares outstanding (000)	23,597	23,472	23,544
Diluted earnings (loss) per share attributable to Stewart (USD per share)	$ 2.06	$ 1.85	$ (0.26)

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Assets
Cash and cash equivalents	$ 150,079	$ 185,772
Short-term investments	24,463	22,239
Investments in debt and equity securities available-for-sale, at fair value:
Statutory reserve funds	490,824	485,409
Other	218,531	146,094
Available for sale securities, Total	709,355	631,503
Receivables:
Premiums from agencies	27,903	31,246
Trade and other	51,299	41,897
Income taxes	1,267	4,878
Notes	3,203	3,402
Allowance for uncollectible amounts	(5,156)	(9,647)
Total receivables	78,516	71,776
Property and equipment, at cost:
Land	3,991	3,991
Buildings	22,849	22,529
Furniture and equipment	226,461	217,105
Accumulated depreciation	(186,279)	(173,119)
Total property and equipment, at cost	67,022	70,506
Title plants, at cost	74,237	75,313
Investments in investees, on an equity method basis	9,202	9,796
Goodwill	231,428	217,094
Intangible assets, net of amortization	9,734	10,890
Deferred tax assets, net	4,186	3,860
Other assets	47,664	42,975
Total assets	1,405,886	1,341,724
Liabilities
Notes payable	109,312	106,808
Accounts payable and accrued liabilities	117,740	115,640
Estimated title losses	480,990	462,572
Deferred tax liabilities, net	19,034	7,856
Total Liabilities	727,076	692,876
Contingent liabilities and commitments
Stockholders’ equity
Common Stock – $1 par, authorized 50,000,000; issued 24,071,683 and 23,783,440; outstanding 23,719,522 and 23,431,279, respectively	24,072	23,783
Additional paid-in capital	159,954	157,176
Retained earnings	491,698	471,788
Accumulated other comprehensive (loss) income:
Foreign currency translation adjustments	(8,373)	(16,727)
Net unrealized gains on investments available-for-sale	7,526	7,846
Treasury stock – 352,161 common shares, at cost, for 2017 and 2016	(2,666)	(2,666)
Total stockholders’ equity attributable to Stewart	672,211	641,200
Noncontrolling interests	6,599	7,648
Total stockholders’ equity	678,810	648,848
Total liabilities and stockholders' equity	$ 1,405,886	$ 1,341,724

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Common stock, par value (USD per share)	$ 1	$ 1
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	24,071,683	23,783,440
Common stock, shares outstanding	23,719,522	23,431,279
Treasury stock, common shares	352,161	352,161

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation of net income to cash provided by operating activities:
Net income	$ 60,146	$ 68,421	$ 4,043
Add (deduct):
Depreciation and amortization	25,878	30,044	30,298
Provision for bad debt	207	3,349	3,396
Realized investment and other (gains) losses – net	(2,207)	666	1,369
Amortization of net premium on investments available-for-sale	6,806	7,215	6,540
Payments for title losses less than (in excess of) provisions	12,937	(1,056)	(17,154)
Adjustments for insurance recoveries of title losses	(654)	(173)	213
Impairment of goodwill	0	0	35,749
(Increase) decrease in receivables – net	(6,910)	7,759	12,894
(Increase) decrease in other assets – net	(4,512)	391	3,073
Increase (decrease) in payables and accrued liabilities – net	1,933	(3,888)	2,088
Decrease (increase) in net deferred income taxes	8,328	7,446	(5,800)
Net income from equity investees	(2,163)	(2,834)	(3,579)
Dividends received from equity investees	2,493	2,640	3,811
Stock based compensation expense	5,303	2,982	4,445
Other – net	483	0	(872)
Cash provided by operating activities	108,068	122,962	80,514
Investing activities:
Proceeds from investments available-for-sale sold	76,942	81,091	69,280
Proceeds from investments available-for-sale matured	33,912	27,125	42,195
Purchases of investments available-for-sale	(179,732)	(166,444)	(147,697)
Net (purchases) sales of short-term investments	(2,224)	17,468	(14,664)
Purchases of property and equipment, title plants and real estate	(16,396)	(18,155)	(19,658)
Proceeds from the sale of land, buildings, property and equipment, and real estate	502	692	4,214
Net cash (paid for acquisition) received from disposal of subsidiaries and other assets	(17,359)	1,268	(3,958)
Other – net	458	181	1,497
Cash used by investing activities	(103,897)	(56,774)	(68,791)
Financing activities:
Proceeds from notes payable	56,493	57,758	52,651
Payments on notes payable	(56,467)	(60,339)	(22,494)
Purchase of remaining interest of consolidated subsidiaries	(1,810)	(991)	(209)
Cash dividends paid	(28,135)	(27,840)	(18,010)
Cash paid on Class B Common Shares conversion	0	(12,000)	0
Distributions to noncontrolling interests	(11,651)	(12,961)	(9,706)
Repurchases of Common Stock	(727)	(1,053)	(27,950)
Payment of contingent consideration related to an acquisition	(1,298)	(2,002)	0
Other - net	0	86	168
Cash used by financing activities	(43,595)	(59,342)	(25,550)
Effects of changes in foreign currency exchange rates	3,731	(141)	(7,664)
(Decrease) increase in cash and cash equivalents	(35,693)	6,705	(21,491)
Cash and cash equivalents at beginning of year	185,772	179,067	200,558
Cash and cash equivalents at end of year	150,079	185,772	179,067
Net changes in financial statement amounts due to purchase and disposal of subsidiaries and other assets:
Goodwill acquired (disposed)	14,334	(628)	7,220
Intangible assets acquired (disposed)	2,598	(1,730)	38
Receivables and other assets disposed	(60)	(1,272)	0
Liabilities disposed (recognized)	327	(499)	(3,300)
Net realized loss on the disposal	160	2,861	0
Net cash paid for acquisition (received from disposal) of subsidiaries and other assets	17,359	(1,268)	3,958
Assets purchased through capital lease obligations	2,477	6,990	1,062
Income taxes – net (refunded) paid	(1,642)	15,265	14,982
Interest paid	$ 3,466	$ 3,020	$ 1,873

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CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Common and Class B Common Stock ($1 par value) (Note 12)	Additional paid-in capital	Accumulated other comprehensive income (loss)	Retained Earnings	Treasury stock	Noncontrolling interests
Beginning balance at Dec. 31, 2014	$ 700,453	$ 24,358	$ 179,205	$ 12,555	$ 479,733	$ (2,666)	$ 7,268
Increase (Decrease) in Stockholders' Equity
Net income (loss) attributable to Stewart	(6,204)				(6,204)
Dividends on Common Stock	(18,010)				(18,010)
Stock bonuses and other (including tax effects)	4,851	93	4,758
Exercise of stock options	130	4	126
Stock repurchases	(27,950)	(762)	(27,188)
Purchase of remaining interest of consolidated subsidiary	(209)		(209)
Net change in unrealized gains and losses on investments (net of tax)	(3,741)			(3,741)
Net realized gain reclassification (net of tax)	(1,626)			(1,626)
Foreign currency translation (net of tax)	(11,145)			(11,145)
Net income attributable to noncontrolling interests	10,247						10,247
Distributions to noncontrolling interests	(9,706)						(9,706)
Net effect of changes in ownership and other	38						38
Ending balance at Dec. 31, 2015	637,128	23,693	156,692	(3,957)	455,519	(2,666)	7,847
Increase (Decrease) in Stockholders' Equity
Cumulative effect adjustment on adoption of ASU 2016-09 (Note 12)	0		(631)		631
Net income (loss) attributable to Stewart	55,478				55,478
Dividends on Common Stock	(27,840)				(27,840)
Cash paid on Class B Common Shares conversion	(12,000)				(12,000)
Stock bonuses and other (including tax effects)	2,982	110	2,872
Exercise of stock options	86	3	83
Stock repurchases	(1,053)	(23)	(1,030)
Purchase of remaining interest of consolidated subsidiary	(991)		(810)				(181)
Net change in unrealized gains and losses on investments (net of tax)	354			354
Net realized gain reclassification (net of tax)	(1,911)			(1,911)
Foreign currency translation (net of tax)	(3,367)			(3,367)
Net income attributable to noncontrolling interests	12,943						12,943
Distributions to noncontrolling interests	(12,961)						(12,961)
Ending balance at Dec. 31, 2016	648,848	23,783	157,176	(8,881)	471,788	(2,666)	7,648
Increase (Decrease) in Stockholders' Equity
Net income (loss) attributable to Stewart	48,659				48,659
Dividends on Common Stock	(28,749)				(28,749)
Stock bonuses and other (including tax effects)	5,303	306	4,997
Stock repurchases	(727)	(17)	(710)
Purchase of remaining interest of consolidated subsidiary	(1,810)		(1,509)				(301)
Net change in unrealized gains and losses on investments (net of tax)	1,766			1,766
Net realized gain reclassification (net of tax)	(2,086)			(2,086)
Foreign currency translation (net of tax)	8,354			8,354
Net income attributable to noncontrolling interests	11,487						11,487
Distributions to noncontrolling interests	(11,651)						(11,651)
Net effect of changes in ownership and other	(584)						(584)
Ending balance at Dec. 31, 2017	$ 678,810	$ 24,072	$ 159,954	$ (847)	$ 491,698	$ (2,666)	$ 6,599

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CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Dividends on Common Stock per share (USD per share)	$ 1.2	$ 1.2	$ 0.8
Common stock, par value (USD per share)	1	1
Common Stock
Common stock, par value (USD per share)	1	1	1
Class B Common Stock
Common stock, par value (USD per share)	$ 1	$ 1	$ 1

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General

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

General

General. Stewart Information Services Corporation, through its subsidiaries (collectively, the Company), is primarily engaged in the business of providing title insurance and real estate transaction related services. The Company is a global real estate services company, offering products and services through its directly owned policy-issuing offices, network of independent agencies and other businesses within the Company. The Company provides its products and services to homebuyers and sellers; residential and commercial real estate professionals; mortgage lenders and servicers; title agencies and real estate attorneys; and home builders. The Company also provides services to large mortgage lenders and servicers, mortgage brokers and mortgage investors which are primarily related to appraisal and valuation services (referred to as ancillary services operations). The Company operates in the United States (U.S.) and internationally, primarily in Canada, the United Kingdom, Australia and Central Europe. Approximately 48% of consolidated title revenues for the year ended December 31, 2017 were generated in Texas, New York, California, Florida and international markets (principally Canada).

A. Management’s responsibility. The accompanying consolidated financial statements were prepared by management, who is responsible for their integrity and objectivity. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP), including management’s best judgments and estimates. Actual results could differ from those estimates.

B. Reclassifications. Certain prior year amounts in these consolidated financial statements have been reclassified for comparative purposes. Net income (loss) attributable to Stewart and stockholders’ equity, as previously reported, were not affected.

C. Consolidation. The consolidated financial statements include all subsidiaries in which the Company owns more than 50% voting rights in electing directors. All significant intercompany amounts and transactions have been eliminated and provisions have been made for noncontrolling interests. Unconsolidated investees, in which the Company typically owns 20% through 50% of the entity, are accounted for by the equity method.

D. Statutory accounting. Stewart Title Guaranty Company (Guaranty) and other title insurance underwriters owned by the Company prepare financial statements in accordance with statutory accounting practices prescribed or permitted by regulatory authorities. In conforming the statutory financial statements to GAAP, statutory premium reserves and reserves for known title losses are eliminated and, in substitution, amounts are established for estimated title losses (Note 1F), for which the net effect, after providing for income taxes, is included in the consolidated statements of operations and comprehensive income (loss). Additionally, the investments in debt securities available-for-sale, which are carried at amortized cost for statutory accounting, are reported at fair value and the net unrealized gains and losses, net of applicable deferred taxes, on the investments are included as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

E. Revenue recognition. Operating revenues from direct title operations are considered earned at the time of the closing of the related real estate transaction. The Company recognizes premium revenues on title insurance policies written by independent agencies (agencies) when the policies are reported to the Company. In addition, where reasonable estimates can be made, the Company accrues for policies issued but not reported until after period end. The Company believes that reasonable estimates can be made when recent and consistent policy issuance information is available. Estimates are based on historical reporting patterns and other information obtained about agencies, as well as current trends in direct operations and in the title industry. In this accrual, future transactions are not being estimated. The Company is estimating revenues on policies that have already been issued by agencies but not yet reported to or received by the Company. The Company has consistently followed the same basic method of estimating unreported policy revenues for more than 10 years.

Revenues generated by the Company's ancillary services operations are generally considered earned at the time the related service is performed or the product is delivered to the customer.

F. Title losses and related claims. The Company’s method for recording reserves for title losses on both an interim and annual basis begins with the calculation of its current loss provision rate, which is applied to the Company’s current premiums resulting in a title loss expense for the period. This loss provision rate is set to provide for estimated losses on current year policies and is determined using moving average ratios of recent actual policy loss payment experience (net of recoveries) to premium revenues.

At each quarter end, the Company’s recorded reserve for title losses begins with the prior period’s reserve balance for claim losses, adds the current period provision to that balance and subtracts actual paid claims, resulting in an amount that management compares to its actuarially-based calculation of the ending reserve balance necessary to provide for future reported title losses. The actuarially-based calculation is a paid loss development calculation where loss development factors are selected based on company data and input from the Company’s third-party actuaries. The Company also obtains input from third-party actuaries in the form of a reserve analysis utilizing generally accepted actuarial methods. While the Company is responsible for determining its loss reserves, it utilizes this actuarial input to assess the overall reasonableness of its reserve estimation. If the Company’s recorded reserve amount is not at the third-party actuarial point estimate, but is within a reasonable range (+5.0%/-4.0%)of its actuarially-based reserve calculation and the actuary’s point estimate, the Company’s management assesses the major factors contributing to the different reserve estimates in order to determine the overall reasonableness of its recorded reserve, as well as the position of the recorded reserves relative to the point estimate and the estimated range of reserves. The major factors considered can change from period to period and include items such as current trends in the real estate industry (which management can assess although there is a time lag in the development of this data for use by the actuary), the size and types of claims reported and changes in the Company’s claims management process. If the recorded amount is not within a reasonable range of the Company’s third-party actuary’s point estimate, the Company will adjust the recorded reserves in the current period and reassess the provision rate on a prospective basis. Once the Company’s reserve for title losses is recorded, it is reduced in future periods as a result of claims payments and may be increased or reduced by revisions to the Company’s estimate of the overall level of required reserves.

Large claims (those exceeding $1.0 million on a single claim), including large title losses due to independent agency defalcations, are analyzed and reserved for separately due to the higher dollar amount of loss, lower volume of claims reported and sporadic reporting of such claims.

Due to the inherent uncertainty in predicting future title policy losses, significant judgment is required by both the Company’s management and its third party actuaries in estimating reserves. As a consequence, the Company’s ultimate liability may be materially greater or less than its current reserves and/or its third party actuary’s calculated estimate.

G. Cash equivalents. Cash equivalents are highly liquid investments with insignificant interest rate risks and maturities of three months or less at the time of acquisition.

H. Short-term investments. Short-term investments comprise time deposits with banks, federal government obligations and other investments maturing in less than one year.

I. Investments in debt and equity securities. The investment portfolio is classified as available-for-sale. Realized gains and losses on sales of investments are determined using the specific identification method. Net unrealized gains and losses on investments available-for-sale, net of applicable deferred taxes, are included as a component of accumulated other comprehensive income (loss) within stockholders’ equity. At the time unrealized gains and losses become realized, they are reclassified from accumulated other comprehensive income (loss) using the specific identification method. Other-than-temporary declines in fair values of investments available-for-sale are charged to income.

J. Property and equipment. Depreciation is principally computed using the straight-line method using the following estimated useful lives: buildings – 30 to 40 years and furniture and equipment – 3 to 10 years. Maintenance and repairs are expensed as incurred while improvements are capitalized. Gains and losses are recognized at disposal.

K. Title plants. Title plants include compilations of a county’s official land records, prior title examination files, copies of prior title policies, maps and related materials that are geographically indexed to a specific property. The costs of acquiring existing title plants and creating new ones, prior to the time such plants are placed in operation, are capitalized. Title plants are not amortized since there is no indication of any loss of value over time but are subject to review for impairment. The costs of maintaining and operating title plants are expensed as incurred. Gains and losses on sales of copies of title plants or interests in title plants are recognized at the time of sale.

L. Goodwill. Goodwill is not amortized, but is reviewed annually during the third quarter using June 30 balances, or whenever occurrences of events indicate a potential impairment at the reporting unit level. The Company evaluates goodwill based on four reporting units with goodwill balances - direct operations, agency operations, international operations and ancillary services.

Under GAAP, the Company has an option to assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. In performing the qualitative assessment, the Company considers factors that include macroeconomic conditions, industry and market considerations, overall actual and expected financial performance, market perspective on the Company, as well as other relevant events and circumstances determined by management. The Company evaluates the weight of each factor to determine whether an impairment more-likely-than-not exists. If the Company decides not to use a qualitative assessment or if the reporting unit fails the qualitative assessment, the quantitative impairment analysis is performed.

The quantitative analysis involves the comparison of the fair value of each reporting unit to its carrying amount. The goodwill impairment is calculated as the excess of the reporting unit's carrying amount over the estimated fair value and is charged to current operations. While the Company is responsible for assessing whether an impairment of goodwill exists, inputs from third-party appraisers are utilized in performing the quantitative analysis. The Company estimates the fair value using a combination of the income approach (discounted cash flow (DCF) technique) and the market approach (guideline company and precedent transaction analyses). The DCF model utilizes historical and projected operating results and cash flows, initially driven by estimates of changes in future revenue levels, and risk-adjusted discount rates. Projected operating results are primarily driven by anticipated mortgage originations, which are obtained from projections by industry experts, for the title reporting units and expected contractual revenues for the ancillary services reporting unit. Fluctuations in revenues, followed by the ability to appropriately adjust employee count and other operating expenses, or large and unanticipated adjustments to title loss reserves, are the primary reasons for increases or decreases in the projected operating results. Market-based valuation methodologies utilize (i) market multiples of earnings and/or other operating metrics of comparable companies and (ii) the Company's market capitalization and a control premium based on market data and factors specific to ownership and corporate governance structure.

Goodwill is assigned to the reporting units at the time the goodwill is initially recorded. Once assigned to a reporting unit, the goodwill is pooled and no longer attributable to a specific acquisition. All activities within a reporting unit are available to support the carrying value of the goodwill. When a business component within a reporting unit is disposed, goodwill is allocated to the component based on the ratio of the component's fair value over the total fair value of the reporting unit.

M. Other intangibles. Other intangible assets are comprised principally of non-compete, underwriting and customer relationship agreements and acquired software. Intangible assets are amortized over their estimated lives, which are primarily 3 to 10 years. These intangible assets are reviewed for impairment when certain events or changes in circumstances occur that indicate that the carrying amount of an asset may not be recoverable. The Company performs an analysis to determine whether the carrying amount of each intangible asset is recoverable. The carrying amount is not recoverable when it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. For any intangible asset that is not recoverable, the Company calculates the excess of the carrying amount of the intangible asset over its fair value, estimated using the income approach (DCF technique). The resulting difference of the carrying amount over the fair value is treated as the impairment of the asset and is charged to current operations.

N. Other long-lived assets. The Company reviews the carrying values of title plants and other long-lived assets if certain events occur that may indicate impairment. An impairment of these long-lived assets is indicated when projected undiscounted cash flows over the estimated lives of the assets are less than carrying values. If impairment is indicated, the recorded amounts are written down to fair values. There were no significant impairment charges for long-lived assets during the three years ended December 31, 2017.

O. Fair values. The fair values of financial instruments, including cash and cash equivalents, short-term investments, notes receivable, notes payable and accounts payable, are determined by the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. The net fair values of these financial instruments approximate their carrying values. Investments in debt and equity securities and certain financial instruments are carried at their fair values.

P. Leases. The Company recognizes rent expense under noncancelable operating leases, which generally expire over the next 10 years, on the straight-line basis over the terms of the leases, including provisions for any free rent periods or escalating lease payments.

Q. Income taxes. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the tax basis and the book carrying values of certain assets and liabilities. To the extent that the Company does not believe its deferred tax assets meet the more-likely-than-not realization criteria, it establishes a valuation allowance. When it establishes a valuation allowance, or increases (decreases) the allowance during the year, it records a tax expense (benefit) in its consolidated statements of operations and comprehensive income (loss). Enacted tax rates are used in calculating amounts.

The Company provides for uncertainties in income taxes by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

R. Recently adopted accounting pronouncements. In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-01, Business Combination: Clarifying the Definition of a Business. The amendments in this ASU change the definition of a business to assist with evaluating when a set of transferred assets and activities is a business. This ASU is effective for annual and interim periods beginning after December 15, 2017 and early adoption is allowed. The Company early adopted ASU 2017-01 effective January 1, 2017.

Also in January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the amendments in this ASU eliminate Step 2 from the two-step quantitative goodwill impairment test. Under this new guidance, the annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge, if determined applicable, should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss. This ASU does not amend the optional qualitative assessment of goodwill impairment. This ASU is effective for annual and interim periods beginning after December 15, 2019 and early adoption is allowed. The Company early adopted ASU 2017-04 effective January 1, 2017. The adoption did not result in any impact in 2017.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting, to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new standard, modification is required only if the fair value, the vesting conditions, or the classification of an award as equity or liability changes as a result of the change in terms or conditions. This ASU is effective for annual and interim periods beginning after December 15, 2017, with prospective application, and early adoption is allowed. The Company early adopted ASU 2017-09 effective June 1, 2017. The adoption did not result in any impact in 2017.

S. Recent significant accounting pronouncements not yet adopted. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which eliminated the transaction-specific and industry-specific revenue recognition guidance under current GAAP and replaced it with a principles-based approach for determining revenue recognition. The new guidance sets forth the steps to be followed to recognize revenue: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 is effective on annual and interim periods beginning after December 15, 2017. The Company adopted ASU 2014-09 on January 1, 2018 and will utilize the cumulative effect method of adoption for its disclosures beginning the first quarter 2018. Based on management's assessment, the Company determined that ASU 2014-09, other than certain additional footnote disclosures, does not materially impact the accounting or reporting of the Company's revenue streams.

In February 2016, the FASB issued ASU 2016-02, Leases, which updated the current guidance related to leases. The new guidance includes the requirement for the lessee to recognize in the balance sheet a liability equal to the present value of contractual lease payments with terms of more than twelve months and a right-of-use asset representing the right to use the underlying asset for the lease term. Disclosures will be required by lessees to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. This ASU is effective for annual and interim periods beginning after December 15, 2018 and early adoption is allowed. The Company expects to adopt ASU 2016-02 on January 1, 2019 using the modified retrospective approach. The Company expects the adoption of ASU 2016-02 will result in material increases in the assets and liabilities reported on its consolidated balance sheets. As disclosed in Note 16, the undiscounted future contractual lease payments with terms of more than twelve months were approximately $167.1 million as of December 31, 2017. The Company expects the new ASU will likely have an insignificant impact on its consolidated statements of operations and cash flows. The Company is currently evaluating certain lease management and accounting systems and plans to begin system customization and implementation by mid 2018.

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Restrictions on cash and investments

12 Months Ended

Dec. 31, 2017

Cash and Cash Equivalents [Abstract]

Restrictions on cash and investments

Restrictions on cash and investments. The Company maintains investments in accordance with certain statutory requirements in the states of domicile of our underwriters for the funding of statutory premium reserves. Statutory reserve funds, which approximated $490.8 million and $485.4 million at December 31, 2017 and 2016, respectively, are required to be fully funded and invested in high-quality securities and short-term investments. In addition, included within cash and cash equivalents are statutory reserve funds of approximately $14.2 million and $13.9 million at December 31, 2017 and 2016, respectively. Although these cash statutory reserve funds are not restricted or segregated in depository accounts, they are required to be held pursuant to state statutes. If the Company fails to maintain minimum investments or cash and cash equivalents sufficient to meet statutory requirements, the Company may be subject to fines or other penalties, including potential revocation of its business license. These funds are not available for any other purpose. In the event that insurance regulators adjust the determination of the statutory premium reserves of the Company’s title insurers, these restricted funds as well as statutory surplus would correspondingly increase or decrease.

A substantial majority of consolidated cash and investments at each year end was held by the Company’s title insurance subsidiaries. Generally, the types of investments a title insurer can make are subject to legal restrictions. Furthermore, the transfer of funds by a title insurer to its parent or subsidiary operations, as well as other related party transactions, is restricted by law and generally requires the approval of state insurance authorities.

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Statutory surplus and dividend restrictions

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Statutory surplus and dividend restrictions

Statutory surplus and dividend restrictions. Substantially all of the consolidated retained earnings at each year end were represented by Guaranty, which owns substantially all of the subsidiaries included in the consolidation. Guaranty cannot pay a dividend to its parent in excess of certain limits without the approval of the Texas Insurance Commissioner. The maximum dividend that can be paid after such approval in 2017 and 2018 is $102.0 million and $108.5 million, respectively. Guaranty paid dividends of $20.0 million, $20.0 million and $15.0 million in 2017, 2016, and 2015, respectively.

Dividends from Guaranty are also voluntarily restricted primarily to maintain statutory surplus and liquidity at competitive levels and to demonstrate significant claims payment ability. The ability of a title insurer to pay claims can significantly affect the decision of lenders and other customers when buying a policy from a particular insurer.

Surplus as regards policyholders (sum of statutory capital plus surplus) for Guaranty was $542.7 million and $509.9 million at December 31, 2017 and 2016, respectively. Statutory net income for Guaranty was $47.7 million, $53.6 million and $83.2 million in 2017, 2016 and 2015, respectively.

The amount of statutory capital and surplus necessary to satisfy regulatory requirements for Guaranty was $2.0 million (and in the aggregate less than $15.0 million for all of the Company’s underwriter subsidiaries) at December 31, 2017, and each of its underwriter entities was in compliance with such requirements as of December 31, 2017.

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Investments in debt and equity securities

12 Months Ended

Dec. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Investments in debt and equity securities

Investments in debt and equity securities. Amortized costs and fair values at December 31, follow:

	2017		2016
	Amortized costs	Fair values	Amortized costs	Fair values
	($000 omitted)
Debt securities:
Municipal	71,581	72,669	72,284	72,432
Corporate	351,477	357,933	338,365	343,047
Foreign	229,750	228,237	165,735	167,027
U.S. Treasury Bonds	12,838	12,602	12,795	12,613
Equity securities	32,132	37,914	30,255	36,384
	697,778	709,355	619,434	631,503

The Company believes its investment portfolio is diversified and expects no material loss to result from the failure to perform by issuers of the debt securities it holds. Investments made by the Company are not collateralized. Foreign debt securities primarily include Canadian government and corporate bonds, with aggregate fair values of $198.7 million and $139.6 million as of December 31, 2017 and 2016, respectively, and United Kingdom treasury and corporate bonds with aggregate fair values of $24.5 million and $22.6 million as of December 31, 2017 and 2016, respectively.

Gross unrealized gains and losses at December 31, were:

	2017		2016
	Gains	Losses	Gains	Losses
	($000 omitted)
Debt securities:
Municipal	1,263	175	723	575
Corporate	6,953	497	6,871	2,189
Foreign	1,742	3,255	2,912	1,620
U.S. Treasury Bonds	—	236	4	186
Equity securities	6,367	585	6,800	671
	16,325	4,748	17,310	5,241

Debt securities at December 31, 2017 mature, according to their contractual terms, as follows (actual maturities may differ due to call or prepayment rights):

	Amortized costs	Fair values
	($000 omitted)
In one year or less	35,974	36,092
After one year through five years	358,738	362,206
After five years through ten years	221,792	221,994
After ten years	49,142	51,149
	665,646	671,441

Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2017, were:

	Less than 12 months		More than 12 months		Total
	Losses	Fair values	Losses	Fair values	Losses	Fair values
	($000 omitted)
Debt securities:
Municipal	58	17,023	117	5,784	175	22,807
Corporate	386	81,632	111	4,926	497	86,558
Foreign	1,528	116,130	1,727	39,031	3,255	155,161
U.S. Treasury Bonds	53	5,830	183	6,772	236	12,602
Equity securities:	555	6,475	30	860	585	7,335
	2,580	227,090	2,168	57,373	4,748	284,463

The number of specific investment holdings in an unrealized loss position as of December 31, 2017 was 205, 36 securities of which were in unrealized loss positions for more than 12 months. Since the Company does not intend to sell and will more-likely-than-not maintain its investment in equity and debt securities until recovery of the fair value or amortized cost, respectively, these investments are not considered other-than-temporarily impaired. The Company also determined that there is no significant credit risk existing with its debt securities. The Company determined that there was no other-than-temporary impairment on its investments in available-for-sale securities during the years ended December 31, 2017 and 2016.

Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2016, were:

	Less than 12 months		More than 12 months		Total
	Losses	Fair values	Losses	Fair values	Losses	Fair values
	($000 omitted)
Debt securities:
Municipal	575	32,038	—	—	575	32,038
Corporate	2,189	119,965	—	—	2,189	119,965
Foreign	1,427	70,012	193	3,160	1,620	73,172
U.S. Treasury Bonds	186	11,847	—	—	186	11,847
Equity securities:	424	5,950	247	2,250	671	8,200
	4,801	239,812	440	5,410	5,241	245,222

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Fair value measurements

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair value measurements

Fair value measurements. The Fair Value Measurements and Disclosures Topic of the FASB Accounting Standards Codification (ASC) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. This guidance establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs when possible. The three levels of inputs used to measure fair value are as follows:

• Level 1 – quoted prices in active markets for identical assets or liabilities;

• Level 2 – observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and

• Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

At December 31, 2017, financial instruments measured at fair value on a recurring basis are summarized below:

	Level 1	Level 2	Level 3	Fair value measurements
	($000 omitted)
Investments available-for-sale:
Debt securities:
Municipal	—	72,669	—	72,669
Corporate	—	357,933	—	357,933
Foreign	—	228,237	—	228,237
U.S. Treasury Bonds	—	12,602	—	12,602
Equity securities:	37,914	—	—	37,914
	37,914	671,441	—	709,355

At December 31, 2016, financial instruments measured at fair value on a recurring basis are summarized below:

	Level 1	Level 2	Level 3	Fair value measurements
	($000 omitted)
Investments available-for-sale:
Debt securities:
Municipal	—	72,432	—	72,432
Corporate	—	343,047	—	343,047
Foreign	—	167,027	—	167,027
U.S. Treasury Bonds	—	12,613	—	12,613
Equity securities:	36,384	—	—	36,384
	36,384	595,119	—	631,503

At December 31, 2017, Level 1 financial instruments consist of equity securities. Level 2 financial instruments consist of municipal, governmental, and corporate bonds, both U.S. and foreign. In accordance with the Company’s policies and guidelines which incorporate relevant statutory requirements, the Company’s third-party registered investment manager invests only in securities rated as investment grade or higher by the major rating services, where observable valuation inputs are significant. The fair value of the Company's investments in available-for-sale securities are primarily determined using a third-party pricing service provider. The third-party pricing service provider calculates the fair values using both market approach and model valuation methods, as well as pricing information obtained from brokers, dealers and custodians. Management ensures the reasonableness of the third-party service valuations by comparing them with pricing information from the Company's investment manager.

There were no transfers of investments between Level 1 and Level 2 during the three years ended December 31, 2017.

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Investment income and other gains and losses

12 Months Ended

Dec. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Investment income and other gains and losses

Investment income and other gains and losses. Income from investments and gross realized investment and other gains and losses are detailed below:

	2017		2016		2015
	($000 omitted)
Investment income:
Debt securities	17,222		16,476		15,181
Short-term investments, cash equivalents and other	1,710		2,449		1,669
	18,932		18,925		16,850
Realized investment and other gains (losses) – net:
Realized gains	4,997		9,882		5,948
Realized losses	(2,790	)	(10,548	)	(7,317	)
	2,207		(666	)	(1,369	)

Proceeds from the sales of investments available-for-sale were $76.9 million, $81.1 million and $69.3 million for the years ended December 31, 2017, 2016 and 2015, respectively. Expenses assignable to investment income were insignificant, and there were no significant investments that did not produce income for all years presented.

In 2017, realized investment and other gains - net included $3.2 million of net realized gains from the sale of investments available-for-sale, partially offset by $0.8 million of net realized loss due to an increase in the fair value of a contingent consideration liability related to a prior acquisition.

In 2016, realized investment and other losses - net included $3.4 million of realized loss related to the exit of a service offering and $3.3 million of realized losses from sale of certain businesses within ancillary services operations, partially offset by $4.0 million of net realized gains from the sale of investments available-for-sale and $1.2 million of realized gain on a cost-basis investment transaction.

In 2015, realized investment and other losses – net included realized losses of $2.7 million relating to other-than-temporary impairment of investment in equity securities available-for-sale, $1.8 million impairment of other intangible assets and $1.4 million relating to office closure costs, partially offset by realized gains of $2.4 million from the sale of debt and equity investments available-for-sale and $1.5 million from the sale of office buildings.

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Income taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income taxes

Income taxes. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the 2017 Act), which revised the U.S. corporate income tax regime by, among other things, lowering the corporate tax rate from 35% to 21% effective on January 1, 2018 and imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. In accordance with ASC 740, Income Taxes, changes in tax rates and tax laws are accounted for in the period of enactment, and the resulting effects are recorded as discrete components of the income tax provision related to continuing operations in the same period. As a result of the 2017 Act, the Company recorded (i) net income tax benefits of $7.8 million, consisting of a $7.2 million federal benefit and a $0.6 million state benefit, related to the remeasurement of deferred tax assets and liabilities and (ii) an income tax expense of $1.2 million related to the transition tax on deemed repatriation of deferred foreign income.

Also on December 22, 2017, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 118 (SAB 118), which provides guidance on accounting for tax effects of the 2017 Act. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date of the 2017 Act for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the 2017 Act for which the accounting under ASC 740 is complete. To the extent that accounting for certain income tax effects of the 2017 Act is incomplete but a reasonable estimate is determinable, a provisional estimate must be recorded in the financial statements. The adjustments discussed above represent provisional amounts and are based on the Company's best estimates of the impact of the 2017 Act. The adjustment for the remeasurement of deferred tax assets and liabilities is provisional since it is based on certain estimated 2017 amounts. The adjustment for the transition tax on deemed repatriation of deferred foreign income is provisional as we continue to gather information and analyze existing and expected guidance from the Internal Revenue Service (IRS). The final determination of the impact may differ from these estimates, due to, among other things, changes in the Company's interpretations and assumptions, additional guidance that may be issued by the IRS, and actions that the Company may take. The Company expects to finalize its computation for both adjustments prior to filing its 2017 U.S. income tax return in the third quarter 2018.

Income tax expense consists of the following:

	2017		2016		2015
	($000 omitted)
Current income tax expense:
Federal	1,154		4,718		4,774
State	814		1,447		709
Foreign	4,625		5,983		5,967
	6,593		12,148		11,450
Deferred income tax expense (benefit):
Federal	4,088		6,262		(3,986	)
State	(254	)	(1,347	)	(1,375	)
Foreign	4,494		2,542		(439	)
	8,328		7,457		(5,800	)
Total income tax expense	14,921		19,605		5,650

The following reconciles income tax expense (benefit) computed at the federal statutory rate with income tax expense as reported:

	2017		2016		2015
	($000 omitted)
Expected income tax expense (benefit) at 35% (1)	22,253		26,279		(194	)
2017 Act impact from the U.S. corporate tax rate change	(7,196	)	—		—
Nondeductible expenses	2,610		2,772		2,768
Research and development credits	(2,158	)	(3,434	)	—
Federal net benefit offset to Canadian expense (2)	(1,480	)	(639	)	—
2017 Act impact from deemed repatriation of deferred foreign income	1,213		—		—
Return-to-provision and true-up adjustments	923		(4,127	)	(1,329	)
Impairment of goodwill	—		—		7,099
Other – net (3)	(1,244	)	(1,246	)	(2,694	)
Income tax expense	14,921		19,605		5,650
Effective income tax rate (1)	23.5	%	26.1	%	(1,019.4	)%

⁽¹⁾ Calculated using income (loss) before taxes and after noncontrolling interests.

⁽²⁾ For U.S. income tax purposes, the Company’s Canadian operation is a branch of Guaranty. As a result, the Canadian net deferred tax liability is offset in the U.S. as a deferred tax asset but not in an equal amount given differing tax rates in Canada and the U.S.

⁽³⁾ Included within this line is $0.6 million of 2017 net income tax benefit from the remeasurement of the state deferred tax assets and liabilities relating to the 2017 Act.

Deferred tax assets and liabilities resulting from the same tax jurisdiction are netted and presented as either an asset or liability on the consolidated balance sheets. Deferred tax assets and liabilities resulting from different tax jurisdictions are not netted. Deferred tax assets and liabilities as of December 31 are detailed below.

	2017		2016
	($000 omitted)
Deferred tax assets:
Accrued expenses	14,435		26,835
Net operating loss (NOL) carryforwards	6,483		6,275
Federal offset to Canadian deferred tax liability (1)	6,300		4,335
Allowance for uncollectible amounts	1,133		3,454
Foreign currency translation adjustments	925		4,238
Investments	894		978
Tax credit carryforwards	1		6,154
Fixed assets	—		2,067
Other	711		476
Deferred tax assets – gross	30,882		54,812
Valuation allowance	(2,231	)	(2,457	)
Deferred tax assets – net	28,651		52,355
Deferred tax liabilities:
Amortization – goodwill and other intangibles	(18,155	)	(26,851	)
Title loss provisions	(17,889	)	(21,433	)
Deferred compensation on life insurance policies	(2,278	)	(3,345	)
Fixed assets	(1,968	)	—
Unrealized gains on investments	(1,826	)	(3,873	)
Other	(1,383	)	(849	)
Deferred tax liabilities – gross	(43,499	)	(56,351	)
Net deferred income tax liability	(14,848	)	(3,996	)

⁽¹⁾ For U.S. income tax purposes, the Company’s Canadian operation is a branch of Guaranty. As a result, the Canadian net deferred tax liability is offset in the U.S. as a deferred tax asset but not in an equal amount given differing tax rates in Canada and the U.S.

At December 31, 2017 and 2016, net deferred tax liabilities for U.S. federal tax paying components totaled approximately $7.7 million and $1.2 million, respectively, and net deferred tax liabilities for foreign tax paying components totaled approximately $7.1 million and $2.8 million, respectively. The net (decrease) increase to the valuation allowance during 2017 and 2016 was $(0.2) million and $0.2 million, respectively.

The Company has no remaining foreign tax credit carryforwards at December 31, 2017. The Company's $6.5 million of deferred tax assets relating to NOL carryforwards include certain state amounts which expire in varying amounts from 2019 through 2037 and foreign amounts which expire in varying amounts from 2020 through 2027 or have unlimited carryforward periods. The future utilization of all NOL carryforwards is subject to various limitations. The remaining valuation allowance at December 31, 2017 relates principally to certain state and foreign NOL carryforwards.

The Company’s income tax returns are routinely subject to examinations by U.S. federal, foreign, and state and local tax authorities. The Company is involved in routine examinations by state and local tax jurisdictions for calendar years 2010 through 2013. The Company expects no material adjustments from any ongoing tax return examinations.

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Goodwill and other intangibles

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and other intangibles

Goodwill and other intangibles. The summary of changes in goodwill is as follows:

	Title		Ancillary Services and Corporate		Total
	($000 omitted)
Balances at January 1, 2016	211,255		6,467		217,722
Acquisitions	300		—		300
Disposals	(190	)	(738	)	(928	)
Balances at December 31, 2016	211,365		5,729		217,094
Acquisitions	14,419		—		14,419
Disposals	(85	)	—		(85	)
Balances at December 31, 2017	225,699		5,729		231,428

The Company evaluates goodwill for impairment annually based on information as of June 30 of the current year or more frequently if circumstances suggest that impairment may exist. In 2017 and 2016, the Company determined that it was more likely than not that goodwill related to all of its reporting units was not impaired. For its impairment analysis, the Company performed a qualitative assessment in 2017 and utilized a quantitative analysis in 2016.

During 2017, the Company acquired certain title businesses primarily funded by borrowings on the Company's unsecured line of credit. As a result of these acquisitions, the Company increased its goodwill related to the title segment by a total of $14.4 million, which is deductible in full for income tax purposes over a period of 15 years. Also, in connection with the acquisitions, the Company identified and recorded $2.6 million of other intangibles, primarily related to acquired software to be amortized over 5 years from the date of acquisition.

The gross carrying amount, and accumulated amortization and impairment of other intangibles was $30.5 million and $20.8 million, respectively, at December 31, 2017 and $27.9 million and $17.0 million, respectively, at December 31, 2016. During 2016, other intangible assets with total gross carrying amounts and accumulated amortization and impairment of $11.2 million and $9.1 million, respectively, were written off as part of the sale of certain businesses within the Company's ancillary services operations.

The amortization expense recorded for the Company's other intangible assets was $3.8 million and $5.5 million in 2017 and 2016, respectively. The annual amortization expense expected to be recognized in the next five years is approximately $3.4 million in 2018, $2.5 million in 2019, $1.5 million in 2020, $0.9 million in 2021 and $0.4 million in 2022.

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Equity investees

12 Months Ended

Dec. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

Equity investees

Equity investees. Summarized aggregate financial information for equity investees (in which the Company typically owns 20% through 50% of the equity) is as follows:

	2017	2016	2015
	($000 omitted)
For the year:
Revenues	25,351	24,274	28,843
Net income	4,997	6,542	8,830
At December 31:
Total assets	32,171	32,324	33,555
Notes payable	20,902	20,895	20,200
Stockholders’ equity	9,023	9,483	7,213

Net premium revenues from policies issued by equity investees were approximately $2.1 million, $2.1 million and $2.5 million in 2017, 2016 and 2015, respectively. Income related to equity investees was $2.2 million, $2.8 million and $3.6 million in 2017, 2016 and 2015, respectively. These amounts are included in title insurance – direct operations in the consolidated statements of operations and comprehensive income (loss).

Goodwill related to equity investees was $7.3 million and $7.4 million as of December 31, 2017 and 2016, respectively, and is included in investments in investees in the consolidated balance sheets. Equity investments, including the related goodwill balances, are reviewed for impairment annually and upon the occurrence of an event that may indicate an impairment. No impairment was recorded during the three years ended December 31, 2017.

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Notes payable and line of credit

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Notes payable and line of credit

Notes payable and line of credit. A summary of notes payable is as follows:

	2017	2016
	($000 omitted)
Banks – varying payments and rates (1)	98,875	92,875
Other than banks	10,437	13,933
	109,312	106,808

⁽¹⁾ Average interest rates were 2.59% and 1.97% during the year ended December 31, 2017 and 2016, respectively.

Principal payments on the above notes, based upon the contractual maturities, are due in the amounts of $7.4 million in 2018, $101.0 million in 2019, and $0.9 million in 2020. Included within notes payable - other than banks are $6.1 million and $7.3 million of capital lease obligations at December 31, 2017 and 2016, respectively.

As of December 31, 2017, the Company had available a $125.0 million unsecured line of credit commitment (Credit Agreement), which expires October 2019, under which borrowings of $98.9 million were outstanding; the remaining balance of the line of credit available for use was $23.6 million, net of an unused $2.5 million letter of credit. The unsecured line of credit can be used for general corporate purposes, including acquisitions. Borrowings bear interest, at the Company's election, at either (a) an Alternate Base Rate plus the Applicable Rate (ABR Borrowing) or (b) LIBOR plus the Applicable Rate (Eurodollar Borrowing). The Applicable Rate ranges from 0.50% to 1.00% per annum for ABR Borrowings and 1.50% to 2.00% per annum for Eurodollar Borrowings based on the Company's consolidated Leverage Ratio.

Also, under the terms of the Credit Agreement, the Company may at any time, subject to certain conditions, request an increase in the amount of the line of credit up to $50.0 million. The Credit Agreement contains customary affirmative and negative covenants. The Credit Agreement, as amended in February 2016 (First Amendment), also contains certain consolidated financial covenants providing that (a) the ratio of EBITDA (as defined in the Credit Agreement) to fixed charges (as defined in the agreement) not be below 1.25 to 1.00 on a trailing four-quarter basis (Fixed Charge Ratio); (b) the ratio of total Indebtedness to EBITDA for the prior four consecutive quarters must not be greater than 2.25 to 1.00 (Leverage Ratio); and (c) Capital Expenditures in the aggregate for the Company in any calendar year may not exceed $25.0 million, with certain allowances for carryover of unused amounts. The Company was in compliance with all covenants as of December 31, 2017 and 2016.

Included in the First Amendment were other restrictions relating to the Credit Agreement such as an establishment of an exception to the limitation on restricted payments under the Credit Agreement in respect of the Company’s share repurchase program of up to $50.0 million that was announced in November 2015, and an increase in the general permitted restricted payments (dividends) basket in Section 6.07 of the Credit Agreement from $25.0 million to $35.0 million annually.

The Company's qualified intermediary in tax-deferred property exchanges pursuant to Section 1031 of the Internal Revenue Code enters into short-term loan agreements with parties to an exchange in the ordinary course of its business. The outstanding balances pursuant to these loans, as included within notes payable - other than banks in the above table, were $4.3 million and $6.5 million as of December 31, 2017 and 2016, respectively, and are secured by cash that is included in cash and cash equivalents on the Company's consolidated balance sheet. Borrowings and repayments on these short-term loans are reflected as financing activities in the consolidated statements of cash flows.

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Estimated title losses

12 Months Ended

Dec. 31, 2017

Loss Contingency [Abstract]

Estimated title losses

Estimated title losses. A summary of estimated title losses is as follows:

	2017		2016		2015
	($000 omitted)
Balances at January 1	462,572		462,622		495,395
Provisions:
Current year	71,966		72,586		68,029
Previous policy years	24,566		18,561		38,236
Total provisions	96,532		91,147		106,265
Payments, net of recoveries:
Current year	(20,335	)	(18,836	)	(19,182	)
Previous policy years	(63,914	)	(73,194	)	(104,450	)
Total payments, net of recoveries	(84,249	)	(92,030	)	(123,632	)
Adjustments related to acquired balance	—		—		(2,303	)
Effects of changes in foreign currency exchange rates	6,135		833		(13,103	)
Balances at December 31	480,990		462,572		462,622
Loss ratios as a percentage of title operating revenues:
Current year provisions	3.8	%	3.8	%	3.6	%
Total provisions	5.1	%	4.8	%	5.6	%

The loss provision recorded for the year ended December 31, 2017 reflected an ultimate loss rate of 3.8% of title revenues for policies issued in the current year and a net increase in the loss reserve estimates for prior policy years of $24.6 million. The increase in the loss reserve estimate for prior policy years included $18.4 million related to adverse loss development due to continued elevated claims payment experience for certain years. Total provisions for large title claims related to prior policy years were $4.3 million, $3.8 million and $31.7 million in 2017, 2016 and 2015, respectively.

The 2016 and 2015 loss provisions included 3.8% and 3.6%, respectively, of title revenues related to the current policy year and net increases in the loss reserves estimate for prior policy years of $18.6 million and $38.2 million, respectively. The adverse prior policy year loss development in 2016 was primarily due to the continued elevated claims payment experience for certain policy years, while the adverse prior policy year loss development in 2015 was primarily driven by the $31.7 million additional provision for large title claims related to prior policy years.

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Stockholders' Equity

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Stockholders' Equity

Stockholders' Equity. Prior to April 2016, the Company had two classes of stock outstanding - the Common Stock and the Class B Common Stock. On January 26, 2016, the Company entered into an Exchange Agreement with the holders of Class B Common Stock relating to the exchange of 1,050,012 Class B Common Stock shares, representing all outstanding Class B Common Stock, for 1,050,012 shares of Common Stock plus $12.0 million in aggregate cash. On April 27, 2016, the Company's stockholders approved the Exchange Agreement and the related amendments to the Company's by-laws and certificate of incorporation and entered into a Registration Rights Agreement with the holders of the Class B Common Stock. On the same date after the stockholders' approval, the Company issued 1,050,012 shares of Common Stock plus $12.0 million cash in exchange for the retirement of the outstanding 1,050,012 Class B Common Stock shares. In accordance with U.S. GAAP, the $12.0 million cash payment was recorded as a reduction to retained earnings, similar to dividends on preferred stock (refer to Note 14).

In 2016, the Company adopted ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplified several aspects of the accounting for share-based transactions. The new guidance requires, among others, excess tax benefits and tax deficiencies to be recorded in the statement of operations and comprehensive income (loss) when the awards vest or are settled. Using the modified retrospective method of adoption, the Company recognized a cumulative effect adjustment at January 1, 2016 and reclassified the remaining $0.6 million of unrecognized excess tax benefits from additional paid-in capital to retained earnings in the 2016 statement of equity.

At December 31, 2017 and 2016, there were 145,820 shares of Common Stock held by a subsidiary of the Company which are included in the treasury stock reported in the consolidated balance sheets.

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Share-based payments

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based payments

Share-based payments. During the three years ended December 31, 2017, the Company granted executives and senior management shares of restricted common stock which are time-based. Prior to 2016, time-based restricted common stock grants vested at the end of three years after the grant date. The time-based grants in 2016 and future periods vest equally on each of the first three anniversaries of the grant date. The Company also granted performance-based shares of restricted common stock which vest upon achievement of certain financial objectives over a period of three years. The aggregate grant-date fair values of restricted common stock awards in 2017, 2016 and 2015 were $5.7 million (133,000 shares with an average grant price of $42.59), $4.1 million (110,000 shares with an average grant price of $37.34) and $4.4 million (119,000 shares with an average grant price of $37.16), respectively. Awards were made pursuant to the Company’s employee incentive compensation plans and the compensation expense associated with restricted stock awards is recognized over the corresponding vesting period as part of employee costs in the consolidated statements of operations. Award forfeitures are recorded as credits against employee costs in the period in which they occur.

Additionally, in 2017, 2016 and 2015, the Company granted its board of directors, as a component of their annual director retainer compensation, approximately 13,000, 18,000 and 18,000 shares, respectively, of common stock, which immediately vested at grant date. The aggregate fair values of these director awards at grant dates were $0.6 million, $0.6 million and $0.7 million, respectively, and the associated expense is recognized in other operating expenses in the consolidated statements of operations.

A summary of the restricted common stock award activity during the year ended December 31, 2017 is presented below:

	Shares		Weighted-Average Grant-Date Fair Value per Share ($)
Nonvested balance at January 1, 2017	206,327		37.18
Granted	132,957		42.59
Adjustment for performance-based shares	(59,348	)	42.78
Vested	(59,260	)	36.98
Forfeited	(76,712	)	37.28
Nonvested balance at December 31, 2017	143,964		39.89

The fair value of shares that vested in 2017 and 2016 aggregated to $2.5 million and $3.8 million, respectively. For the years ended December 31, 2017, 2016 and 2015, compensation costs recognized in the statements of operations, presented within employee costs, were approximately $5.3 million, $3.0 million and $4.4 million, respectively. The total tax benefits recognized in the statement of operations from tax deductions relating to vesting of restricted common stock awards in 2017, 2016 and 2015 were $1.2 million, $1.7 million and $1.0 million, respectively. As of December 31, 2017, compensation costs not yet recognized related to nonvested restricted common stock awards was $5.1 million, which is expected to be recognized over a weighted average period of 1.5 years.

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Earnings per share

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Earnings per share

Earnings per share. The Company’s basic earnings (loss) per share (EPS) attributable to Stewart is calculated by dividing net income (loss) attributable to Stewart by the weighted-average number of shares of Common Stock outstanding during the reporting periods. To calculate diluted earnings per share, the number of shares is adjusted for the effects of any applicable dilutive shares. The treasury stock method is used to calculate the dilutive number of shares related to the Company’s long term incentive and stock option plans. In periods of loss, dilutive shares are excluded from the calculation of the diluted earnings per share and diluted earnings per share is computed in the same manner as basic earnings per share.

The calculation of the basic and diluted earnings (loss) per share is as follows:

	For the Years Ended    December 31,
	2017	2016		2015
	($000 omitted)
Numerator:
Net income (loss) attributable to Stewart	48,659	55,478		(6,204	)
Less: Cash paid on Class B Common Shares conversion (a)	—	(12,000	)	—
Adjusted net income (loss) for calculating basic and diluted EPS	48,659	43,478		(6,204	)
Denominator (000):
Basic average shares outstanding	23,445	23,364		23,544
Average number of dilutive shares relating to restricted shares grants	152	108		—
Diluted average shares outstanding	23,597	23,472		23,544
Basic earnings (loss) per share attributable to Stewart	2.08	1.86		(0.26	)
Diluted earnings (loss) per share attributable to Stewart	2.06	1.85		(0.26	)

(a) - In accordance with the ASC 260, Earnings Per Share, the $12.0 million payment to the holders of the Class B Common Stock shares (refer to Note 12) is treated in a manner similar to the treatment of dividends on preferred stock for the purpose of calculating EPS. Accordingly, the $12.0 million payment was deducted from the 2016 net income to arrive at the adjusted net income for calculating basic and diluted EPS.

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Reinsurance

12 Months Ended

Dec. 31, 2017

Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract]

Reinsurance

Reinsurance. As is industry practice, the Company cedes risks to other title insurance underwriters and reinsurers on certain transactions. However, the Company remains liable if the reinsurer should fail to meet its obligations. The Company also assumes risks from other underwriters on a transactional basis as well as on certain reinsurance treaties. Payments and recoveries on reinsured losses were insignificant during each of the years ended December 31, 2017, 2016, and 2015. The total amount of premiums for assumed and ceded risks was less than 1.0% of consolidated title revenues in each of the last three years and there were no outstanding amounts of reinsurance recoverable or payable at December 31, 2017 and 2016.

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Leases

12 Months Ended

Dec. 31, 2017

Leases [Abstract]

Leases

Leases. Lease expense was $40.8 million, $41.3 million and $42.9 million in 2017, 2016 and 2015, respectively. The future minimum lease payments relating to operating leases are summarized as follows (in thousands of dollars):

2018	52,112
2019	39,996
2020	27,184
2021	18,147
2022	11,851
2023 and after	17,843
	167,133

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Contingent liabilities and commitments

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Contingent liabilities and commitments

Contingent liabilities and commitments. The Company routinely holds third-party funds in segregated escrow accounts pending the closing of real estate transactions resulting in a contingent liability to the Company of approximately $1.2 billion at December 31, 2017. In addition, the Company is contingently liable for disbursements of escrow funds held by agencies in those cases where specific insured closing guarantees have been issued.

The Company owns a qualified intermediary in tax-deferred property exchanges for customers pursuant to Section 1031 of the Internal Revenue Code (Section 1031). The Company holds the proceeds from these transactions until a qualifying exchange can occur. This resulted in a contingent liability to the Company of approximately $1.1 billion at December 31, 2017. As is industry practice, escrow and Section 1031 exchanger fund accounts are not included in the consolidated balance sheets.

In the ordinary course of business, the Company guarantees the third-party indebtedness of certain of its consolidated subsidiaries. As of December 31, 2017, the maximum potential future payments on the guarantees are not more than the related notes payable recorded in the consolidated balance sheets (refer to Note 10). The Company also guarantees the indebtedness related to lease obligations of certain of its consolidated subsidiaries. The maximum future obligations arising from these lease-related guarantees are not more than the Company’s future minimum lease payments (refer to Note 16). As of December 31, 2017, the Company also had unused letters of credit aggregating $5.4 million related to workers’ compensation coverage and other insurance. The Company does not expect to make any payments on these guarantees.

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Regulatory and legal developments

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Regulatory and legal developments

Regulatory and legal developments. The Company is subject to claims and lawsuits arising in the ordinary course of its business, most of which involve disputed policy claims. In some of these lawsuits, the plaintiff seeks exemplary or treble damages in excess of policy limits. The Company does not expect that any of these ordinary course proceedings will have a material adverse effect on its consolidated financial condition or results of operations. In addition, along with the other major title insurance companies, the Company is party to class action lawsuits concerning the title insurance industry. The Company believes that it has adequate reserves for the various litigation matters and contingencies discussed in this paragraph and that the likely resolution of these matters will not materially affect its consolidated financial condition or results of operations.

Additionally, the Company receives from time to time various other inquiries from governmental regulators concerning practices in the insurance industry. Many of these practices do not concern title insurance. To the extent the Company is in receipt of such inquiries, it believes that it has adequately reserved for these matters and does not anticipate that the outcome of these inquiries will materially affect its consolidated financial condition or results of operations.

The Company is subject to various other administrative actions and inquiries into its business conduct in certain of the states in which it operates. While the Company cannot predict the outcome of the various regulatory and administrative matters, it believes that it has adequately reserved for these matters and does not anticipate that the outcome of any of these matters will materially affect its consolidated financial condition or results of operations.

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Segment information

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Segment information

Segment information. Prior to 2016, the Company reported three operating segments: title insurance and related services (title), mortgage services and corporate. Effective in the first quarter 2016, as a result of realigning and streamlining the management of the mortgage services operations, the Company began reporting two operating segments: title and ancillary services and corporate. The centralized title services business, previously included in the mortgage services segment, is now included in the title segment. The remaining operations of the mortgage services segment, principally search and valuation services, are not material, in the aggregate, for separate segment presentation and are now included in the ancillary services and corporate segment. In addition, the Company began allocating the costs of its centralized administrative services departments to the respective operating businesses. The operating segments reflect the current manner that management uses in allocating resources and assessing performance of the Company's businesses.

The title segment provides services needed to transfer title to property in a real estate transaction and includes services such as searching, examining, closing and insuring the condition of the title to the property. In addition, the title segment includes centralized title services, home and personal insurance services and Section 1031 exchanges. The ancillary services and corporate segment historically provided search and valuation services, loan file review, quality control services, government services, document management, recording and call center-related services offered to large mortgage lenders and servicers, mortgage brokers and mortgage investors. Beginning in 2017, the principal offering of ancillary services are search and valuation services. Also included in the ancillary services and corporate segment are expenses of the parent holding company and certain other enterprise-wide overhead costs, net of centralized administrative services costs allocated to respective operating businesses.

Selected statement of operations information related to these segments for the years ended December 31 is as follows (2015 amounts have been restated to conform to the new segment presentation):

	2017		2016		2015
	($000 omitted)
Title segment:
Revenues	1,899,462		1,922,422		1,904,258
Impairment of goodwill	—		—		1,569
Depreciation and amortization	21,384		21,176		18,767
Income before taxes and noncontrolling interest	103,361		139,083		119,032
Ancillary services and corporate segment:
Revenues	56,262		84,218		129,627
Impairment of goodwill	—		—		34,180
Depreciation and amortization	4,494		8,868		11,531
Loss before taxes and noncontrolling interest	(28,294	)	(51,057	)	(109,339	)
Consolidated Stewart:
Revenues	1,955,724		2,006,640		2,033,885
Impairment of goodwill	—		—		35,749
Depreciation and amortization	25,878		30,044		30,298
Income before taxes and noncontrolling interest	75,067		88,026		9,693

In 2015, management determined a goodwill impairment of $35.7 million related to the ancillary services reporting unit and presented as impairment of goodwill in the 2015 consolidated statement of operations and comprehensive loss. As a result of the Company's realignment of its operating segments, as discussed above, an impairment of $1.6 million related to the centralized title services business was subsequently included as part of the title segment.

The Company does not provide asset information by reportable operating segment as it does not routinely evaluate the asset position by segment.

Revenues for the years ended December 31 in the United States and all international operations are as follows:

	2017	2016	2015
	($000 omitted)
United States	1,825,186	1,889,144	1,925,865
International	130,538	117,496	108,020
	1,955,724	2,006,640	2,033,885

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Other comprehensive income (loss)

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Other comprehensive income (loss)

Other comprehensive income (loss). Changes in the balances of each component of other comprehensive income (loss) and the related tax effects are as follows:

	For the Year Ended December 31, 2017						For the Year Ended December 31, 2016						For the Year Ended December 31, 2015
	Before-Tax Amount		Tax Expense (Benefit)		Net-of-Tax Amount		Before-Tax Amount		Tax Expense (Benefit)		Net-of Tax  Amount		Before-Tax Amount		Tax  Expense (Benefit)		Net-of-Tax Amount
	($000 omitted)						($000 omitted)						($000 omitted)
Foreign currency translation adjustments	11,050		2,696		8,354		(2,385	)	982		(3,367	)	(16,022	)	(4,877	)	(11,145	)
Unrealized net gains on investments:
Change in unrealized net gains on investments	2,718		952		1,766		544		190		354		(5,757	)	(2,016	)	(3,741	)
Less: reclassification adjustment for net gains included in net income (loss)	(3,210	)	(1,124	)	(2,086	)	(2,940	)	(1,029	)	(1,911	)	(2,501	)	(875	)	(1,626	)
	(492	)	(172	)	(320	)	(2,396	)	(839	)	(1,557	)	(8,258	)	(2,891	)	(5,367	)
Other comprehensive income (loss)	10,558		2,524		8,034		(4,781	)	143		(4,924	)	(24,280	)	(7,768	)	(16,512	)

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Quarterly financial information (unaudited)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Quarterly financial information (unaudited)

Quarterly financial information (unaudited).

	Mar 31		June 30	Sept 30	Dec 31	Total
	($000 omitted, except per share)
Revenues:
2017	443,039		485,452	501,569	525,664	1,955,724
2016	438,229		489,437	553,210	525,764	2,006,640
Net income (loss) attributable to Stewart:
2017	4,087		18,568	10,944	15,060	48,659
2016	(11,195	)	23,599	26,375	16,699	55,478
Diluted earnings (loss) per share attributable to Stewart (1):
2017	0.17		0.79	0.46	0.64	2.06
2016	(0.48	)	0.49	1.12	0.71	1.85

⁽¹⁾ Quarterly per share data may not sum to annual totals due to rounding or effects of dilution in particular quarters but not in annual totals.

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Schedule I - Financial Information of the Registrant (Parent Company)

12 Months Ended

Dec. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule I - Financial Information of the Registrant (Parent Company)

SCHEDULE I

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

	For the Years Ended December 31,
	2017		2016		2015
	($000 omitted)
Revenues
Investment income	20,000		20,000		15,000
Other income	784		1,252		922
	20,784		21,252		15,922
Expenses
Employee costs	1,388		832		156
Other operating expenses, including $276 each year to affiliates	4,447		6,641		7,617
Depreciation	5		69		162
Interest	3,123		2,726		1,726
	8,963		10,268		9,661
Income before taxes and income (losses) from subsidiaries	11,821		10,984		6,261
Income tax (benefit) expense	(776	)	2,928		—
Income (losses) from subsidiaries	36,062		47,422		(12,465	)
Net income (loss)	48,659		55,478		(6,204	)
Retained earnings at beginning of year	471,788		455,519		479,733
Cash dividends on Common Stock	(28,749	)	(27,840	)	(18,010	)
Cash paid on Class B Common Shares conversion	—		(12,000	)	—
Cumulative effect adjustment on adoption of new accounting pronouncement	—		631		—
Retained earnings at end of year	491,698		471,788		455,519

See accompanying note to financial statement information.

See accompanying Report of Independent Registered Public Accounting Firm.

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

BALANCE SHEETS

	As of December 31,
	2017		2016
	($000 omitted)
Assets
Cash and cash equivalents	11,622		2,890
Receivables:
Notes - due from subsidiaries	26,316		40,879
Receivables from affiliates	930		848
Allowance for uncollectible amounts	(1	)	(4	)
	27,245		41,723
Property and equipment, at cost:
Furniture and equipment	2,733		2,733
Accumulated depreciation	(2,517	)	(2,512	)
	216		221
Title plant, at cost	48		48
Investments in subsidiaries, on an equity-method basis	731,975		688,837
Goodwill	8,470		8,470
Other assets	18,274		16,698
	797,850		758,887
Liabilities
Notes payable	98,875		92,875
Accounts payable and other liabilities	26,764		24,812
	125,639		117,687
Contingent liabilities and commitments	—		—
Stockholders’ equity
Common Stock – $1 par, authorized 50,000,000; issued 24,071,683 and 23,783,440; outstanding 23,719,522 and 23,431,279, respectively	24,072		23,783
Additional paid-in capital	159,954		157,176
Retained earnings (1)	491,698		471,788
Accumulated other comprehensive (loss) income:
Foreign currency translation adjustments	(8,373	)	(16,727	)
Unrealized investment gains	7,526		7,846
Treasury stock – 352,161 common shares, at cost	(2,666	)	(2,666	)
Total stockholders’ equity	672,211		641,200
	797,850		758,887

⁽¹⁾ Includes undistributed earnings of subsidiaries of $529,417 in 2017 and $522,104 in 2016.

See accompanying note to financial statement information.

See accompanying Report of Independent Registered Public Accounting Firm.

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

STATEMENTS OF CASH FLOWS

	For the Years Ended December 31,
	2017		2016		2015
	($000 omitted)
Reconciliation of net income (loss) to cash provided by operating activities:
Net income (loss)	48,659		55,478		(6,204	)
Add (deduct):
Depreciation	5		69		162
(Increase) decrease in receivables – net	(81	)	245		(596	)
(Increase) decrease in other assets – net	(1,576	)	359		(558	)
Increase (decrease) in payables and accrued liabilities – net	563		(496	)	(515	)
(Income) losses from subsidiaries	(36,062	)	(47,421	)	12,465
Other – net	1,705		(6,731	)	(4,593	)
Cash provided by operating activities	13,213		1,503		161
Investing activities:
Dividends from subsidiary	20,000		20,000		15,000
Purchase of property and equipment –net	—		(22	)	—
Collections on notes receivables	23,375		27,500		—
Increases in notes receivables	(16,000	)	—		(21,500	)
Contributions to a subsidiary	(7,184	)	—		—
Cash provided (used) by investing activities	20,191		47,478		(6,500	)
Financing activities:
Proceeds from notes payable	16,000		20,000		45,000
Payments on notes payable	(10,000	)	(25,125	)	(7,000	)
Dividends paid	(28,135	)	(27,840	)	(18,010	)
Cash paid on Class B Common Shares conversion	—		(12,000	)	—
Repurchases of Common Stock	(727	)	(1,053	)	(27,950	)
Purchase of remaining interest of consolidated subsidiary	(1,810	)	(991	)	(209	)
Other – net	—		86		130
Cash used by financing activities	(24,672	)	(46,923	)	(8,039	)
Increase (decrease) in cash and cash equivalents	8,732		2,058		(14,378	)
Cash and cash equivalents at beginning of year	2,890		832		15,210
Cash and cash equivalents at end of year	11,622		2,890		832
Supplemental information:
Income taxes paid	—		1		1
Interest paid	3,128		2,716		1,681

See accompanying note to financial statement information.

See accompanying Report of Independent Registered Public Accounting Firm.

STEWART INFORMATION SERVICES CORPORATION

(Parent Company)

NOTE TO FINANCIAL STATEMENT INFORMATION

The Parent Company operates as a holding company, transacting substantially all of its business through its subsidiaries. Its consolidated financial statements are included in Part II, Item 8 of Form 10-K. The Parent Company financial statements should be read in conjunction with the aforementioned consolidated financial statements and notes thereto and financial statement schedules.

Investment income. During 2017, 2016 and 2015, Guaranty paid to the Parent Company dividends of $20.0 million, $20.0 million and $15.0 million, respectively.

Stockholders' equity. In 2016, the Parent Company's stockholders approved the Class B Exchange Agreement, in which all outstanding shares of Class B Common Stock were retired in exchange for shares of Common Stock plus $12.0 million in cash. Also at the beginning of 2016, the Parent Company reclassified $0.6 million of unrecognized excess tax benefits related to share-based awards from additional paid-in capital to retained earnings as a result of adopting a new accounting standard. Refer to Note 12 to the consolidated financial statements for details for these equity transactions.

Income taxes. The Parent Company consistently generates losses, exclusive of dividends or equity earnings from its subsidiaries, and is not expected to generate future income without its subsidiaries. On December 22, 2017, the United States (U.S.) enacted the Tax Cuts and Jobs Act (the 2017 Act), which revised the U.S. corporate income tax regime by, among other things, lowering the corporate tax rate from 35% to 21% effective on January 1, 2018. As a result of the 2017 Act, the Parent Company recorded an income tax benefit of $1.2 million related to the remeasurement of its deferred tax assets and liabilities at December 31, 2017.

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Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2017

Valuation and Qualifying Accounts [Abstract]

Schedule II - VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II

STEWART INFORMATION SERVICES CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

December 31, 2017

Col. A	Col. B	Col. C Additions		Col. D Deductions		Col. E
Description	Balance at beginning of period	Charged to costs and expenses		(Describe)		Balance At end of period
	($000 omitted)
Stewart Information Services Corporation and subsidiaries:
Year ended December 31, 2017:
Estimated title losses	462,572	96,532		78,114	(A)	480,990
Valuation allowance for deferred tax assets	2,457	—		226		2,231
Allowance for uncollectible amounts	9,647	207		4,698	(B)	5,156
Year ended December 31, 2016:
Estimated title losses	462,622	91,147		91,197	(A)	462,572
Valuation allowance for deferred tax assets	2,217	240		—		2,457
Allowance for uncollectible amounts	9,833	3,349		3,535	(B)	9,647
Year ended December 31, 2015:
Estimated title losses	495,395	106,265		139,038	(A)	462,622
Valuation allowance for deferred tax assets	2,564	(347	)	—		2,217
Allowance for uncollectible amounts	9,193	3,396		2,756	(B)	9,833

(A) Represents primarily payments of policy and escrow losses and loss adjustment expenses.

(B) Represents uncollectible accounts written off.

See accompanying Report of Independent Registered Public Accounting Firm.

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General (Policies)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Management's responsibility

Management’s responsibility. The accompanying consolidated financial statements were prepared by management, who is responsible for their integrity and objectivity. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP), including management’s best judgments and estimates. Actual results could differ from those estimates.

Reclassifications

Reclassifications. Certain prior year amounts in these consolidated financial statements have been reclassified for comparative purposes. Net income (loss) attributable to Stewart and stockholders’ equity, as previously reported, were not affected.

Consolidation

Consolidation. The consolidated financial statements include all subsidiaries in which the Company owns more than 50% voting rights in electing directors. All significant intercompany amounts and transactions have been eliminated and provisions have been made for noncontrolling interests. Unconsolidated investees, in which the Company typically owns 20% through 50% of the entity, are accounted for by the equity method.

Statutory accounting

Statutory accounting. Stewart Title Guaranty Company (Guaranty) and other title insurance underwriters owned by the Company prepare financial statements in accordance with statutory accounting practices prescribed or permitted by regulatory authorities. In conforming the statutory financial statements to GAAP, statutory premium reserves and reserves for known title losses are eliminated and, in substitution, amounts are established for estimated title losses (Note 1F), for which the net effect, after providing for income taxes, is included in the consolidated statements of operations and comprehensive income (loss). Additionally, the investments in debt securities available-for-sale, which are carried at amortized cost for statutory accounting, are reported at fair value and the net unrealized gains and losses, net of applicable deferred taxes, on the investments are included as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

Revenue recognition

Revenue recognition. Operating revenues from direct title operations are considered earned at the time of the closing of the related real estate transaction. The Company recognizes premium revenues on title insurance policies written by independent agencies (agencies) when the policies are reported to the Company. In addition, where reasonable estimates can be made, the Company accrues for policies issued but not reported until after period end. The Company believes that reasonable estimates can be made when recent and consistent policy issuance information is available. Estimates are based on historical reporting patterns and other information obtained about agencies, as well as current trends in direct operations and in the title industry. In this accrual, future transactions are not being estimated. The Company is estimating revenues on policies that have already been issued by agencies but not yet reported to or received by the Company. The Company has consistently followed the same basic method of estimating unreported policy revenues for more than 10 years.

Revenues generated by the Company's ancillary services operations are generally considered earned at the time the related service is performed or the product is delivered to the customer.

Title losses and related claims

Title losses and related claims. The Company’s method for recording reserves for title losses on both an interim and annual basis begins with the calculation of its current loss provision rate, which is applied to the Company’s current premiums resulting in a title loss expense for the period. This loss provision rate is set to provide for estimated losses on current year policies and is determined using moving average ratios of recent actual policy loss payment experience (net of recoveries) to premium revenues.

At each quarter end, the Company’s recorded reserve for title losses begins with the prior period’s reserve balance for claim losses, adds the current period provision to that balance and subtracts actual paid claims, resulting in an amount that management compares to its actuarially-based calculation of the ending reserve balance necessary to provide for future reported title losses. The actuarially-based calculation is a paid loss development calculation where loss development factors are selected based on company data and input from the Company’s third-party actuaries. The Company also obtains input from third-party actuaries in the form of a reserve analysis utilizing generally accepted actuarial methods. While the Company is responsible for determining its loss reserves, it utilizes this actuarial input to assess the overall reasonableness of its reserve estimation. If the Company’s recorded reserve amount is not at the third-party actuarial point estimate, but is within a reasonable range (+5.0%/-4.0%)of its actuarially-based reserve calculation and the actuary’s point estimate, the Company’s management assesses the major factors contributing to the different reserve estimates in order to determine the overall reasonableness of its recorded reserve, as well as the position of the recorded reserves relative to the point estimate and the estimated range of reserves. The major factors considered can change from period to period and include items such as current trends in the real estate industry (which management can assess although there is a time lag in the development of this data for use by the actuary), the size and types of claims reported and changes in the Company’s claims management process. If the recorded amount is not within a reasonable range of the Company’s third-party actuary’s point estimate, the Company will adjust the recorded reserves in the current period and reassess the provision rate on a prospective basis. Once the Company’s reserve for title losses is recorded, it is reduced in future periods as a result of claims payments and may be increased or reduced by revisions to the Company’s estimate of the overall level of required reserves.

Large claims (those exceeding $1.0 million on a single claim), including large title losses due to independent agency defalcations, are analyzed and reserved for separately due to the higher dollar amount of loss, lower volume of claims reported and sporadic reporting of such claims.

Due to the inherent uncertainty in predicting future title policy losses, significant judgment is required by both the Company’s management and its third party actuaries in estimating reserves. As a consequence, the Company’s ultimate liability may be materially greater or less than its current reserves and/or its third party actuary’s calculated estimate.

Cash equivalents

Cash equivalents. Cash equivalents are highly liquid investments with insignificant interest rate risks and maturities of three months or less at the time of acquisition.

Short-term investments

Short-term investments. Short-term investments comprise time deposits with banks, federal government obligations and other investments maturing in less than one year.

Investments in debt and equity securities

Investments in debt and equity securities. The investment portfolio is classified as available-for-sale. Realized gains and losses on sales of investments are determined using the specific identification method. Net unrealized gains and losses on investments available-for-sale, net of applicable deferred taxes, are included as a component of accumulated other comprehensive income (loss) within stockholders’ equity. At the time unrealized gains and losses become realized, they are reclassified from accumulated other comprehensive income (loss) using the specific identification method. Other-than-temporary declines in fair values of investments available-for-sale are charged to income.

Property and equipment

Property and equipment. Depreciation is principally computed using the straight-line method using the following estimated useful lives: buildings – 30 to 40 years and furniture and equipment – 3 to 10 years. Maintenance and repairs are expensed as incurred while improvements are capitalized. Gains and losses are recognized at disposal.

Title plants

Title plants. Title plants include compilations of a county’s official land records, prior title examination files, copies of prior title policies, maps and related materials that are geographically indexed to a specific property. The costs of acquiring existing title plants and creating new ones, prior to the time such plants are placed in operation, are capitalized. Title plants are not amortized since there is no indication of any loss of value over time but are subject to review for impairment. The costs of maintaining and operating title plants are expensed as incurred. Gains and losses on sales of copies of title plants or interests in title plants are recognized at the time of sale.

Goodwill

Goodwill. Goodwill is not amortized, but is reviewed annually during the third quarter using June 30 balances, or whenever occurrences of events indicate a potential impairment at the reporting unit level. The Company evaluates goodwill based on four reporting units with goodwill balances - direct operations, agency operations, international operations and ancillary services.

Under GAAP, the Company has an option to assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. In performing the qualitative assessment, the Company considers factors that include macroeconomic conditions, industry and market considerations, overall actual and expected financial performance, market perspective on the Company, as well as other relevant events and circumstances determined by management. The Company evaluates the weight of each factor to determine whether an impairment more-likely-than-not exists. If the Company decides not to use a qualitative assessment or if the reporting unit fails the qualitative assessment, the quantitative impairment analysis is performed.

The quantitative analysis involves the comparison of the fair value of each reporting unit to its carrying amount. The goodwill impairment is calculated as the excess of the reporting unit's carrying amount over the estimated fair value and is charged to current operations. While the Company is responsible for assessing whether an impairment of goodwill exists, inputs from third-party appraisers are utilized in performing the quantitative analysis. The Company estimates the fair value using a combination of the income approach (discounted cash flow (DCF) technique) and the market approach (guideline company and precedent transaction analyses). The DCF model utilizes historical and projected operating results and cash flows, initially driven by estimates of changes in future revenue levels, and risk-adjusted discount rates. Projected operating results are primarily driven by anticipated mortgage originations, which are obtained from projections by industry experts, for the title reporting units and expected contractual revenues for the ancillary services reporting unit. Fluctuations in revenues, followed by the ability to appropriately adjust employee count and other operating expenses, or large and unanticipated adjustments to title loss reserves, are the primary reasons for increases or decreases in the projected operating results. Market-based valuation methodologies utilize (i) market multiples of earnings and/or other operating metrics of comparable companies and (ii) the Company's market capitalization and a control premium based on market data and factors specific to ownership and corporate governance structure.

Goodwill is assigned to the reporting units at the time the goodwill is initially recorded. Once assigned to a reporting unit, the goodwill is pooled and no longer attributable to a specific acquisition. All activities within a reporting unit are available to support the carrying value of the goodwill. When a business component within a reporting unit is disposed, goodwill is allocated to the component based on the ratio of the component's fair value over the total fair value of the reporting unit.

Other intangibles

Other intangibles. Other intangible assets are comprised principally of non-compete, underwriting and customer relationship agreements and acquired software. Intangible assets are amortized over their estimated lives, which are primarily 3 to 10 years. These intangible assets are reviewed for impairment when certain events or changes in circumstances occur that indicate that the carrying amount of an asset may not be recoverable. The Company performs an analysis to determine whether the carrying amount of each intangible asset is recoverable. The carrying amount is not recoverable when it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. For any intangible asset that is not recoverable, the Company calculates the excess of the carrying amount of the intangible asset over its fair value, estimated using the income approach (DCF technique). The resulting difference of the carrying amount over the fair value is treated as the impairment of the asset and is charged to current operations.

Other long-lived assets

Other long-lived assets. The Company reviews the carrying values of title plants and other long-lived assets if certain events occur that may indicate impairment. An impairment of these long-lived assets is indicated when projected undiscounted cash flows over the estimated lives of the assets are less than carrying values. If impairment is indicated, the recorded amounts are written down to fair values.

Fair values

Fair values. The fair values of financial instruments, including cash and cash equivalents, short-term investments, notes receivable, notes payable and accounts payable, are determined by the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal, or most advantageous, market for the asset or liability in an orderly transaction between market participants at the measurement date. The net fair values of these financial instruments approximate their carrying values. Investments in debt and equity securities and certain financial instruments are carried at their fair values.

Leases

Leases. The Company recognizes rent expense under noncancelable operating leases, which generally expire over the next 10 years, on the straight-line basis over the terms of the leases, including provisions for any free rent periods or escalating lease payments.

Income taxes

Income taxes. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the tax basis and the book carrying values of certain assets and liabilities. To the extent that the Company does not believe its deferred tax assets meet the more-likely-than-not realization criteria, it establishes a valuation allowance. When it establishes a valuation allowance, or increases (decreases) the allowance during the year, it records a tax expense (benefit) in its consolidated statements of operations and comprehensive income (loss). Enacted tax rates are used in calculating amounts.

The Company provides for uncertainties in income taxes by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Recently adopted accounting pronouncements and Recent significant accounting pronouncements not yet adopted

Recently adopted accounting pronouncements. In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-01, Business Combination: Clarifying the Definition of a Business. The amendments in this ASU change the definition of a business to assist with evaluating when a set of transferred assets and activities is a business. This ASU is effective for annual and interim periods beginning after December 15, 2017 and early adoption is allowed. The Company early adopted ASU 2017-01 effective January 1, 2017.

Also in January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the amendments in this ASU eliminate Step 2 from the two-step quantitative goodwill impairment test. Under this new guidance, the annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge, if determined applicable, should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss. This ASU does not amend the optional qualitative assessment of goodwill impairment. This ASU is effective for annual and interim periods beginning after December 15, 2019 and early adoption is allowed. The Company early adopted ASU 2017-04 effective January 1, 2017. The adoption did not result in any impact in 2017.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting, to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new standard, modification is required only if the fair value, the vesting conditions, or the classification of an award as equity or liability changes as a result of the change in terms or conditions. This ASU is effective for annual and interim periods beginning after December 15, 2017, with prospective application, and early adoption is allowed. The Company early adopted ASU 2017-09 effective June 1, 2017. The adoption did not result in any impact in 2017.

S. Recent significant accounting pronouncements not yet adopted. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which eliminated the transaction-specific and industry-specific revenue recognition guidance under current GAAP and replaced it with a principles-based approach for determining revenue recognition. The new guidance sets forth the steps to be followed to recognize revenue: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 is effective on annual and interim periods beginning after December 15, 2017. The Company adopted ASU 2014-09 on January 1, 2018 and will utilize the cumulative effect method of adoption for its disclosures beginning the first quarter 2018. Based on management's assessment, the Company determined that ASU 2014-09, other than certain additional footnote disclosures, does not materially impact the accounting or reporting of the Company's revenue streams.

In February 2016, the FASB issued ASU 2016-02, Leases, which updated the current guidance related to leases. The new guidance includes the requirement for the lessee to recognize in the balance sheet a liability equal to the present value of contractual lease payments with terms of more than twelve months and a right-of-use asset representing the right to use the underlying asset for the lease term. Disclosures will be required by lessees to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. This ASU is effective for annual and interim periods beginning after December 15, 2018 and early adoption is allowed. The Company expects to adopt ASU 2016-02 on January 1, 2019 using the modified retrospective approach. The Company expects the adoption of ASU 2016-02 will result in material increases in the assets and liabilities reported on its consolidated balance sheets. As disclosed in Note 16, the undiscounted future contractual lease payments with terms of more than twelve months were approximately $167.1 million as of December 31, 2017. The Company expects the new ASU will likely have an insignificant impact on its consolidated statements of operations and cash flows. The Company is currently evaluating certain lease management and accounting systems and plans to begin system customization and implementation by mid 2018.

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Investments in debt and equity securities (Tables)

12 Months Ended

Dec. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Amortized costs and fair values

Amortized costs and fair values at December 31, follow:

	2017		2016
	Amortized costs	Fair values	Amortized costs	Fair values
	($000 omitted)
Debt securities:
Municipal	71,581	72,669	72,284	72,432
Corporate	351,477	357,933	338,365	343,047
Foreign	229,750	228,237	165,735	167,027
U.S. Treasury Bonds	12,838	12,602	12,795	12,613
Equity securities	32,132	37,914	30,255	36,384
	697,778	709,355	619,434	631,503

Gross unrealized gains and losses

Gross unrealized gains and losses at December 31, were:

	2017		2016
	Gains	Losses	Gains	Losses
	($000 omitted)
Debt securities:
Municipal	1,263	175	723	575
Corporate	6,953	497	6,871	2,189
Foreign	1,742	3,255	2,912	1,620
U.S. Treasury Bonds	—	236	4	186
Equity securities	6,367	585	6,800	671
	16,325	4,748	17,310	5,241

Debt securities according to contractual terms

Debt securities at December 31, 2017 mature, according to their contractual terms, as follows (actual maturities may differ due to call or prepayment rights):

	Amortized costs	Fair values
	($000 omitted)
In one year or less	35,974	36,092
After one year through five years	358,738	362,206
After five years through ten years	221,792	221,994
After ten years	49,142	51,149
	665,646	671,441

Gross unrealized losses on investments and fair values of related securities

Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2017, were:

	Less than 12 months		More than 12 months		Total
	Losses	Fair values	Losses	Fair values	Losses	Fair values
	($000 omitted)
Debt securities:
Municipal	58	17,023	117	5,784	175	22,807
Corporate	386	81,632	111	4,926	497	86,558
Foreign	1,528	116,130	1,727	39,031	3,255	155,161
U.S. Treasury Bonds	53	5,830	183	6,772	236	12,602
Equity securities:	555	6,475	30	860	585	7,335
	2,580	227,090	2,168	57,373	4,748	284,463

Gross unrealized losses on investments and the fair values of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2016, were:

	Less than 12 months		More than 12 months		Total
	Losses	Fair values	Losses	Fair values	Losses	Fair values
	($000 omitted)
Debt securities:
Municipal	575	32,038	—	—	575	32,038
Corporate	2,189	119,965	—	—	2,189	119,965
Foreign	1,427	70,012	193	3,160	1,620	73,172
U.S. Treasury Bonds	186	11,847	—	—	186	11,847
Equity securities:	424	5,950	247	2,250	671	8,200
	4,801	239,812	440	5,410	5,241	245,222

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Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Financial instruments measured at fair value on recurring basis

At December 31, 2017, financial instruments measured at fair value on a recurring basis are summarized below:

	Level 1	Level 2	Level 3	Fair value measurements
	($000 omitted)
Investments available-for-sale:
Debt securities:
Municipal	—	72,669	—	72,669
Corporate	—	357,933	—	357,933
Foreign	—	228,237	—	228,237
U.S. Treasury Bonds	—	12,602	—	12,602
Equity securities:	37,914	—	—	37,914
	37,914	671,441	—	709,355

At December 31, 2016, financial instruments measured at fair value on a recurring basis are summarized below:

	Level 1	Level 2	Level 3	Fair value measurements
	($000 omitted)
Investments available-for-sale:
Debt securities:
Municipal	—	72,432	—	72,432
Corporate	—	343,047	—	343,047
Foreign	—	167,027	—	167,027
U.S. Treasury Bonds	—	12,613	—	12,613
Equity securities:	36,384	—	—	36,384
	36,384	595,119	—	631,503

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Investment income and other gains and losses (Tables)

12 Months Ended

Dec. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Gross realized investment and other gains and losses

Income from investments and gross realized investment and other gains and losses are detailed below:

	2017		2016		2015
	($000 omitted)
Investment income:
Debt securities	17,222		16,476		15,181
Short-term investments, cash equivalents and other	1,710		2,449		1,669
	18,932		18,925		16,850
Realized investment and other gains (losses) – net:
Realized gains	4,997		9,882		5,948
Realized losses	(2,790	)	(10,548	)	(7,317	)
	2,207		(666	)	(1,369	)

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Income taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income tax expense

Income tax expense consists of the following:

	2017		2016		2015
	($000 omitted)
Current income tax expense:
Federal	1,154		4,718		4,774
State	814		1,447		709
Foreign	4,625		5,983		5,967
	6,593		12,148		11,450
Deferred income tax expense (benefit):
Federal	4,088		6,262		(3,986	)
State	(254	)	(1,347	)	(1,375	)
Foreign	4,494		2,542		(439	)
	8,328		7,457		(5,800	)
Total income tax expense	14,921		19,605		5,650

Reconciliation of income tax expense (benefit) at federal statutory rate

The following reconciles income tax expense (benefit) computed at the federal statutory rate with income tax expense as reported:

	2017		2016		2015
	($000 omitted)
Expected income tax expense (benefit) at 35% (1)	22,253		26,279		(194	)
2017 Act impact from the U.S. corporate tax rate change	(7,196	)	—		—
Nondeductible expenses	2,610		2,772		2,768
Research and development credits	(2,158	)	(3,434	)	—
Federal net benefit offset to Canadian expense (2)	(1,480	)	(639	)	—
2017 Act impact from deemed repatriation of deferred foreign income	1,213		—		—
Return-to-provision and true-up adjustments	923		(4,127	)	(1,329	)
Impairment of goodwill	—		—		7,099
Other – net (3)	(1,244	)	(1,246	)	(2,694	)
Income tax expense	14,921		19,605		5,650
Effective income tax rate (1)	23.5	%	26.1	%	(1,019.4	)%

⁽¹⁾ Calculated using income (loss) before taxes and after noncontrolling interests.

⁽²⁾ For U.S. income tax purposes, the Company’s Canadian operation is a branch of Guaranty. As a result, the Canadian net deferred tax liability is offset in the U.S. as a deferred tax asset but not in an equal amount given differing tax rates in Canada and the U.S.

⁽³⁾ Included within this line is $0.6 million of 2017 net income tax benefit from the remeasurement of the state deferred tax assets and liabilities relating to the 2017 Act.

Schedule of deferred tax assets and liabilities

Deferred tax assets and liabilities as of December 31 are detailed below.

	2017		2016
	($000 omitted)
Deferred tax assets:
Accrued expenses	14,435		26,835
Net operating loss (NOL) carryforwards	6,483		6,275
Federal offset to Canadian deferred tax liability (1)	6,300		4,335
Allowance for uncollectible amounts	1,133		3,454
Foreign currency translation adjustments	925		4,238
Investments	894		978
Tax credit carryforwards	1		6,154
Fixed assets	—		2,067
Other	711		476
Deferred tax assets – gross	30,882		54,812
Valuation allowance	(2,231	)	(2,457	)
Deferred tax assets – net	28,651		52,355
Deferred tax liabilities:
Amortization – goodwill and other intangibles	(18,155	)	(26,851	)
Title loss provisions	(17,889	)	(21,433	)
Deferred compensation on life insurance policies	(2,278	)	(3,345	)
Fixed assets	(1,968	)	—
Unrealized gains on investments	(1,826	)	(3,873	)
Other	(1,383	)	(849	)
Deferred tax liabilities – gross	(43,499	)	(56,351	)
Net deferred income tax liability	(14,848	)	(3,996	)

⁽¹⁾ For U.S. income tax purposes, the Company’s Canadian operation is a branch of Guaranty. As a result, the Canadian net deferred tax liability is offset in the U.S. as a deferred tax asset but not in an equal amount given differing tax rates in Canada and the U.S.

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Goodwill and other intangibles (Tables)

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of goodwill

The summary of changes in goodwill is as follows:

	Title		Ancillary Services and Corporate		Total
	($000 omitted)
Balances at January 1, 2016	211,255		6,467		217,722
Acquisitions	300		—		300
Disposals	(190	)	(738	)	(928	)
Balances at December 31, 2016	211,365		5,729		217,094
Acquisitions	14,419		—		14,419
Disposals	(85	)	—		(85	)
Balances at December 31, 2017	225,699		5,729		231,428

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Equity investees (Tables)

12 Months Ended

Dec. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

Summary of aggregate financial information for equity investees

Summarized aggregate financial information for equity investees (in which the Company typically owns 20% through 50% of the equity) is as follows:

	2017	2016	2015
	($000 omitted)
For the year:
Revenues	25,351	24,274	28,843
Net income	4,997	6,542	8,830
At December 31:
Total assets	32,171	32,324	33,555
Notes payable	20,902	20,895	20,200
Stockholders’ equity	9,023	9,483	7,213

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Notes payable and line of credit (Tables)

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Summary of notes payable

A summary of notes payable is as follows:

	2017	2016
	($000 omitted)
Banks – varying payments and rates (1)	98,875	92,875
Other than banks	10,437	13,933
	109,312	106,808

⁽¹⁾ Average interest rates were 2.59% and 1.97% during the year ended December 31, 2017 and 2016, respectively.

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Estimated title losses (Tables)

12 Months Ended

Dec. 31, 2017

Loss Contingency [Abstract]

Summary of estimated title losses

A summary of estimated title losses is as follows:

	2017		2016		2015
	($000 omitted)
Balances at January 1	462,572		462,622		495,395
Provisions:
Current year	71,966		72,586		68,029
Previous policy years	24,566		18,561		38,236
Total provisions	96,532		91,147		106,265
Payments, net of recoveries:
Current year	(20,335	)	(18,836	)	(19,182	)
Previous policy years	(63,914	)	(73,194	)	(104,450	)
Total payments, net of recoveries	(84,249	)	(92,030	)	(123,632	)
Adjustments related to acquired balance	—		—		(2,303	)
Effects of changes in foreign currency exchange rates	6,135		833		(13,103	)
Balances at December 31	480,990		462,572		462,622
Loss ratios as a percentage of title operating revenues:
Current year provisions	3.8	%	3.8	%	3.6	%
Total provisions	5.1	%	4.8	%	5.6	%

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Share-based payments (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of the restricted common stock award activity

A summary of the restricted common stock award activity during the year ended December 31, 2017 is presented below:

	Shares		Weighted-Average Grant-Date Fair Value per Share ($)
Nonvested balance at January 1, 2017	206,327		37.18
Granted	132,957		42.59
Adjustment for performance-based shares	(59,348	)	42.78
Vested	(59,260	)	36.98
Forfeited	(76,712	)	37.28
Nonvested balance at December 31, 2017	143,964		39.89

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Earnings per share (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Basic and diluted earnings (loss) per share

The calculation of the basic and diluted earnings (loss) per share is as follows:

	For the Years Ended    December 31,
	2017	2016		2015
	($000 omitted)
Numerator:
Net income (loss) attributable to Stewart	48,659	55,478		(6,204	)
Less: Cash paid on Class B Common Shares conversion (a)	—	(12,000	)	—
Adjusted net income (loss) for calculating basic and diluted EPS	48,659	43,478		(6,204	)
Denominator (000):
Basic average shares outstanding	23,445	23,364		23,544
Average number of dilutive shares relating to restricted shares grants	152	108		—
Diluted average shares outstanding	23,597	23,472		23,544
Basic earnings (loss) per share attributable to Stewart	2.08	1.86		(0.26	)
Diluted earnings (loss) per share attributable to Stewart	2.06	1.85		(0.26	)

(a) - In accordance with the ASC 260, Earnings Per Share, the $12.0 million payment to the holders of the Class B Common Stock shares (refer to Note 12) is treated in a manner similar to the treatment of dividends on preferred stock for the purpose of calculating EPS. Accordingly, the $12.0 million payment was deducted from the 2016 net income to arrive at the adjusted net income for calculating basic and diluted EPS.

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Leases (Tables)

12 Months Ended

Dec. 31, 2017

Leases [Abstract]

Future minimum lease payments

The future minimum lease payments relating to operating leases are summarized as follows (in thousands of dollars):

2018	52,112
2019	39,996
2020	27,184
2021	18,147
2022	11,851
2023 and after	17,843
	167,133

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Segment information (Tables)

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Summary of segmental revenues and expenses

Selected statement of operations information related to these segments for the years ended December 31 is as follows (2015 amounts have been restated to conform to the new segment presentation):

	2017		2016		2015
	($000 omitted)
Title segment:
Revenues	1,899,462		1,922,422		1,904,258
Impairment of goodwill	—		—		1,569
Depreciation and amortization	21,384		21,176		18,767
Income before taxes and noncontrolling interest	103,361		139,083		119,032
Ancillary services and corporate segment:
Revenues	56,262		84,218		129,627
Impairment of goodwill	—		—		34,180
Depreciation and amortization	4,494		8,868		11,531
Loss before taxes and noncontrolling interest	(28,294	)	(51,057	)	(109,339	)
Consolidated Stewart:
Revenues	1,955,724		2,006,640		2,033,885
Impairment of goodwill	—		—		35,749
Depreciation and amortization	25,878		30,044		30,298
Income before taxes and noncontrolling interest	75,067		88,026		9,693

Revenues generated in domestic and foreign country

Revenues for the years ended December 31 in the United States and all international operations are as follows:

	2017	2016	2015
	($000 omitted)
United States	1,825,186	1,889,144	1,925,865
International	130,538	117,496	108,020
	1,955,724	2,006,640	2,033,885

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Other comprehensive income (loss) (Tables)

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Schedule of changes in other comprehensive income (loss)

Changes in the balances of each component of other comprehensive income (loss) and the related tax effects are as follows:

	For the Year Ended December 31, 2017						For the Year Ended December 31, 2016						For the Year Ended December 31, 2015
	Before-Tax Amount		Tax Expense (Benefit)		Net-of-Tax Amount		Before-Tax Amount		Tax Expense (Benefit)		Net-of Tax  Amount		Before-Tax Amount		Tax  Expense (Benefit)		Net-of-Tax Amount
	($000 omitted)						($000 omitted)						($000 omitted)
Foreign currency translation adjustments	11,050		2,696		8,354		(2,385	)	982		(3,367	)	(16,022	)	(4,877	)	(11,145	)
Unrealized net gains on investments:
Change in unrealized net gains on investments	2,718		952		1,766		544		190		354		(5,757	)	(2,016	)	(3,741	)
Less: reclassification adjustment for net gains included in net income (loss)	(3,210	)	(1,124	)	(2,086	)	(2,940	)	(1,029	)	(1,911	)	(2,501	)	(875	)	(1,626	)
	(492	)	(172	)	(320	)	(2,396	)	(839	)	(1,557	)	(8,258	)	(2,891	)	(5,367	)
Other comprehensive income (loss)	10,558		2,524		8,034		(4,781	)	143		(4,924	)	(24,280	)	(7,768	)	(16,512	)

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Quarterly financial information (unaudited) (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Summary of quarterly financial information

	Mar 31		June 30	Sept 30	Dec 31	Total
	($000 omitted, except per share)
Revenues:
2017	443,039		485,452	501,569	525,664	1,955,724
2016	438,229		489,437	553,210	525,764	2,006,640
Net income (loss) attributable to Stewart:
2017	4,087		18,568	10,944	15,060	48,659
2016	(11,195	)	23,599	26,375	16,699	55,478
Diluted earnings (loss) per share attributable to Stewart (1):
2017	0.17		0.79	0.46	0.64	2.06
2016	(0.48	)	0.49	1.12	0.71	1.85

⁽¹⁾ Quarterly per share data may not sum to annual totals due to rounding or effects of dilution in particular quarters but not in annual totals.

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General - General (Details)	12 Months Ended
	Dec. 31, 2017
Accounting Policies [Abstract]
Revenue major segments percentage	48.00%

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General - Revenue Recognition (Details)	12 Months Ended
	Dec. 31, 2017
Accounting Policies [Abstract]
Method for estimating unreported policy revenues, period of use (more than) (years)	10 years

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General - Title Losses and Related Claims (Details)	12 Months Ended
	Dec. 31, 2017 USD ($)
Reserve for Title Losses [Line Items]
Threshold amount for large claims	$ 1,000,000.0
Maximum
Reserve for Title Losses [Line Items]
Reserve amount, threshold percentage	5.00%
Minimum
Reserve for Title Losses [Line Items]
Reserve amount, threshold percentage	4.00%

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General - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2017
Buildings | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life (years)	30 years
Buildings | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life (years)	40 years
Furniture and equipment | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life (years)	3 years
Furniture and equipment | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life (years)	10 years

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General - Other Intangibles (Details)	12 Months Ended
	Dec. 31, 2017
Minimum
Finite-Lived Intangible Assets [Line Items]
Intangible assets estimated life (years)	3 years
Maximum
Finite-Lived Intangible Assets [Line Items]
Intangible assets estimated life (years)	10 years

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General - Leases (Details)	12 Months Ended
	Dec. 31, 2017
Accounting Policies [Abstract]
Non-cancelable operating lease, expiration period (years)	10 years

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General - Recent Significant Accounting Pronouncements Not Yet Adopted (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Accounting Policies [Abstract]
Undiscounted future minimum lease payments	$ 167,133

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Restrictions on cash and investments (Details) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
Cash and Cash Equivalents [Abstract]
Investments restricted for statutory reserve funds	$ 490.8	$ 485.4
Restricted cash and cash equivalent	$ 14.2	$ 13.9

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Statutory surplus and dividend restrictions (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2018
Equity [Abstract]
Dividends paid by guaranty	$ 20.0	$ 20.0	$ 15.0
Surplus for guaranty	542.7	509.9
Statutory net income	47.7	$ 53.6	$ 83.2
Dividends Payable [Line Items]
Maximum amount of dividend to be paid	102.0
Statutory capital and surplus necessary to satisfy regulatory requirements for guaranty	2.0
Underwriter entities
Dividends Payable [Line Items]
Statutory capital and surplus necessary to satisfy regulatory requirements for guaranty	$ 15.0
Scenario, Forecast
Dividends Payable [Line Items]
Maximum amount of dividend to be paid				$ 108.5

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Investments in debt and equity securities - Amortized Costs and Fair Values (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Debt securities, Amortized costs	$ 665,646
Equity securities, Amortized costs	32,132	$ 30,255
Amortized costs, Total	697,778	619,434
Debt securities, Fair values	671,441
Equity securities, Fair values	37,914	36,384
Available for sale securities, Total	709,355	631,503
Municipal
Schedule of Available-for-sale Securities [Line Items]
Debt securities, Amortized costs	71,581	72,284
Debt securities, Fair values	72,669	72,432
Corporate
Schedule of Available-for-sale Securities [Line Items]
Debt securities, Amortized costs	351,477	338,365
Debt securities, Fair values	357,933	343,047
Foreign
Schedule of Available-for-sale Securities [Line Items]
Debt securities, Amortized costs	229,750	165,735
Debt securities, Fair values	228,237	167,027
U.S. Treasury Bonds
Schedule of Available-for-sale Securities [Line Items]
Debt securities, Amortized costs	12,838	12,795
Debt securities, Fair values	$ 12,602	$ 12,613

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Investments in debt and equity securities - Additional Information (Details)	12 Months Ended
	Dec. 31, 2017 USD ($) investment	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Schedule of Available-for-sale Securities [Line Items]
Foreign debt securities	$ 671,441,000
Number of investments in an unrealized loss position | investment	205
Number of investments in an unrealized loss positions for more than 12 months | investment	36
Recognized other than temporary impairment	$ 0	$ 0	$ 2,700,000
Foreign
Schedule of Available-for-sale Securities [Line Items]
Foreign debt securities	228,237,000	167,027,000
Foreign | Canada
Schedule of Available-for-sale Securities [Line Items]
Foreign debt securities	198,700,000	139,600,000
Foreign | United Kingdom
Schedule of Available-for-sale Securities [Line Items]
Foreign debt securities	$ 24,500,000	$ 22,600,000

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Investments in debt and equity securities - Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Gains	$ 16,325	$ 17,310
Losses	4,748	5,241
Municipal
Schedule of Available-for-sale Securities [Line Items]
Gains	1,263	723
Losses	175	575
Corporate
Schedule of Available-for-sale Securities [Line Items]
Gains	6,953	6,871
Losses	497	2,189
Foreign
Schedule of Available-for-sale Securities [Line Items]
Gains	1,742	2,912
Losses	3,255	1,620
U.S. Treasury Bonds
Schedule of Available-for-sale Securities [Line Items]
Gains	0	4
Losses	236	186
Equity securities
Schedule of Available-for-sale Securities [Line Items]
Gains	6,367	6,800
Losses	$ 585	$ 671

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Investments in debt and equity securities - Debt Securities According Contractual Terms (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Amortized costs
In one year or less	$ 35,974
After one year through five years	358,738
After five years through ten years	221,792
After ten years	49,142
Amortized costs, Total	665,646
Fair values
In one year or less	36,092
After one year through five years	362,206
After five years through ten years	221,994
After ten years	51,149
Fair values, Total	$ 671,441

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Investments in debt and equity securities - Gross Unrealized Losses on Investments and Fair Values of Related Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Losses
Less than 12 months	$ 2,580	$ 4,801
More than 12 months	2,168	440
Total	4,748	5,241
Fair values
Less than 12 months	227,090	239,812
More than 12 months	57,373	5,410
Total	284,463	245,222
Municipal
Losses
Less than 12 months	58	575
More than 12 months	117	0
Total	175	575
Fair values
Less than 12 months	17,023	32,038
More than 12 months	5,784	0
Total	22,807	32,038
Corporate
Losses
Less than 12 months	386	2,189
More than 12 months	111	0
Total	497	2,189
Fair values
Less than 12 months	81,632	119,965
More than 12 months	4,926	0
Total	86,558	119,965
Foreign
Losses
Less than 12 months	1,528	1,427
More than 12 months	1,727	193
Total	3,255	1,620
Fair values
Less than 12 months	116,130	70,012
More than 12 months	39,031	3,160
Total	155,161	73,172
U.S. Treasury Bonds
Losses
Less than 12 months	53	186
More than 12 months	183	0
Total	236	186
Fair values
Less than 12 months	5,830	11,847
More than 12 months	6,772	0
Total	12,602	11,847
Equity securities
Losses
Less than 12 months	555	424
More than 12 months	30	247
Total	585	671
Fair values
Less than 12 months	6,475	5,950
More than 12 months	860	2,250
Total	$ 7,335	$ 8,200

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Fair value measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	$ 709,355	$ 631,503
Fair value measurements, recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	709,355	631,503
Fair value measurements, recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	37,914	36,384
Fair value measurements, recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	671,441	595,119
Fair value measurements, recurring | Municipal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	72,669	72,432
Fair value measurements, recurring | Municipal | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	0	0
Fair value measurements, recurring | Municipal | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	72,669	72,432
Fair value measurements, recurring | Corporate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	357,933	343,047
Fair value measurements, recurring | Corporate | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	0	0
Fair value measurements, recurring | Corporate | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	357,933	343,047
Fair value measurements, recurring | Foreign
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	228,237	167,027
Fair value measurements, recurring | Foreign | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	0	0
Fair value measurements, recurring | Foreign | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	228,237	167,027
Fair value measurements, recurring | U.S. Treasury Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	12,602	12,613
Fair value measurements, recurring | U.S. Treasury Bonds | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	0	0
Fair value measurements, recurring | U.S. Treasury Bonds | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	12,602	12,613
Fair value measurements, recurring | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	37,914	36,384
Fair value measurements, recurring | Equity securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	37,914	36,384
Fair value measurements, recurring | Equity securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value measurements	$ 0	$ 0

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Investment income and other gains and losses - Gross Realized Investment and Other Gains and Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Investment income	$ 18,932	$ 18,925	$ 16,850
Realized investment and other gains (losses) – net:
Realized gains	4,997	9,882	5,948
Realized losses	(2,790)	(10,548)	(7,317)
Investment and other (losses) gains – net	2,207	(666)	(1,369)
Debt securities
Schedule of Available-for-sale Securities [Line Items]
Investment income	17,222	16,476	15,181
Short-term investments, cash equivalents and other
Schedule of Available-for-sale Securities [Line Items]
Investment income	$ 1,710	$ 2,449	$ 1,669

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Investment income and other gains and losses - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net Investment Income [Line Items]
Proceeds from the sales of investments available-for-sale	$ 76,900,000	$ 81,100,000	$ 69,300,000
Realized gains from sale of debt and equity investments available-for-sale	3,200,000	4,000,000	2,400,000
Net realized losses from change in fair value of contingent consideration liabilities	800,000
Realized loss from sale of a business		3,300,000
Realized gains		1,200,000
Recognized other than temporary impairment	$ 0	0	2,700,000
Impairment of an intangible asset			1,800,000
Gain on sale of office buildings			1,500,000
Facility Closing
Net Investment Income [Line Items]
Charges related to office closures		$ 3,400,000	$ 1,400,000

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Income taxes - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Tax Credit Carryforward [Line Items]
Total income tax benefit resulting from the 2017 Act	$ 7,800
Income tax expense impact on deemed repatriation of deferred foreign income	1,200
Net deferred tax liabilities	14,848	$ 3,996
Net increase (decrease) in valuation allowance	(200)	200
Deferred tax assets relating to NOL carryforwards	6,483	6,275
U.S. Federal
Tax Credit Carryforward [Line Items]
Total income tax benefit resulting from the 2017 Act	7,200
Net deferred tax liabilities	7,700	1,200
State
Tax Credit Carryforward [Line Items]
Total income tax benefit resulting from the 2017 Act	600
Foreign
Tax Credit Carryforward [Line Items]
Net deferred tax liabilities	$ 7,100	$ 2,800

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Income taxes - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Current income tax expense:
Federal	$ 1,154	$ 4,718	$ 4,774
State	814	1,447	709
Foreign	4,625	5,983	5,967
Current income tax expense:	6,593	12,148	11,450
Deferred income tax expense (benefit):
Federal	4,088	6,262	(3,986)
State	(254)	(1,347)	(1,375)
Foreign	4,494	2,542	(439)
Deferred income tax expense (benefit):	8,328	7,457	(5,800)
Total income tax expense	$ 14,921	$ 19,605	$ 5,650

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Income taxes - Reconciliation of Income Tax Expenses Computed at Federal Statutory Rate with Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Expected income tax expense (benefit) at 35%	$ 22,253	$ 26,279	$ (194)
2017 Act impact from the U.S. corporate tax rate change	(7,196)	0	0
Nondeductible expenses	2,610	2,772	2,768
Research and development credits	(2,158)	(3,434)	0
Federal net benefit offset to Canadian expense	(1,480)	(639)	0
2017 Act impact from deemed repatriation of deferred foreign income	1,213	0	0
Return-to-provision and true-up adjustments	923	(4,127)	(1,329)
Impairment of goodwill	0	0	7,099
Other – net	(1,244)	(1,246)	(2,694)
Total income tax expense	$ 14,921	$ 19,605	$ 5,650
Effective income tax rate	23.50%	26.10%	(1019.40%)

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Income taxes - Reconciliation of Income Tax Expenses Computed at Federal Statutory Rate with Income Tax Expense (Additional Information) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Income tax rate	35.00%	35.00%	35.00%
Income Tax Contingency [Line Items]
Total income tax benefit resulting from the 2017 Act	$ 7.8
State
Income Tax Contingency [Line Items]
Total income tax benefit resulting from the 2017 Act	$ 0.6

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Income taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets:
Accrued expenses	$ 14,435	$ 26,835
Net operating loss (NOL) carryforwards	6,483	6,275
Federal offset to Canadian deferred tax liability	6,300	4,335
Allowance for uncollectible amounts	1,133	3,454
Foreign currency translation adjustments	925	4,238
Investments	894	978
Tax credit carryforwards	1	6,154
Fixed assets	0	2,067
Other	711	476
Deferred tax assets – gross	30,882	54,812
Valuation allowance	(2,231)	(2,457)
Deferred tax assets – net	28,651	52,355
Deferred tax liabilities:
Amortization – goodwill and other intangibles	(18,155)	(26,851)
Title loss provisions	(17,889)	(21,433)
Deferred compensation on life insurance policies	(2,278)	(3,345)
Fixed assets	(1,968)	0
Unrealized gains on investments	(1,826)	(3,873)
Other	(1,383)	(849)
Deferred tax liabilities – gross	(43,499)	(56,351)
Net deferred income tax liability	$ (14,848)	$ (3,996)

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Goodwill and other intangibles - Summary of Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Goodwill summary
Beginning balances	$ 217,094	$ 217,722
Acquisitions	14,419	300
Disposals	(85)	(928)
Ending balances	231,428	217,094
Title
Goodwill summary
Beginning balances	211,365	211,255
Acquisitions	14,419	300
Disposals	(85)	(190)
Ending balances	225,699	211,365
Ancillary Services and Corporate
Goodwill summary
Beginning balances	5,729	6,467
Acquisitions	0	0
Disposals	0	(738)
Ending balances	$ 5,729	$ 5,729

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Goodwill and other intangibles - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Acquired Finite-Lived Intangible Assets [Line Items]
Increase in goodwill	$ 14,419	$ 300
Other intangibles acquired	2,600
Other intangibles, gross carrying amount	30,500	27,900
Accumulated amortization and impairment of other intangibles	20,800	17,000
Amortization expense of other intangibles	3,800	5,500
Future amortization expense
Expected amortization expense in 2018	3,400
Expected amortization expense in 2019	2,500
Expected amortization expense in 2020	1,500
Expected amortization expense in 2021	900
Expected amortization expense in 2022	$ 400
Acquired Software
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization period	5 years
Title
Acquired Finite-Lived Intangible Assets [Line Items]
Increase in goodwill	$ 14,419	300
Ancillary Services and Corporate
Acquired Finite-Lived Intangible Assets [Line Items]
Increase in goodwill	$ 0	0
Other intangibles, gross carrying amount		11,200
Accumulated amortization and impairment of other intangibles		$ 9,100

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Equity investees - Summarized Aggregate Financial Information for Equity Investees (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Equity Method Investments and Joint Ventures [Abstract]
Revenues	$ 25,351	$ 24,274	$ 28,843
Net income	4,997	6,542	8,830
Total assets	32,171	32,324	33,555
Notes payable	20,902	20,895	20,200
Stockholders’ equity	$ 9,023	$ 9,483	$ 7,213

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Equity investees - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Subsidiary, Sale of Stock [Line Items]
Net premium revenues from policies issued by equity investees	$ 25,351,000	$ 24,274,000	$ 28,843,000
Earnings related to equity investees	4,997,000	6,542,000	8,830,000
Goodwill related to equity investees	231,428,000	217,094,000	217,722,000
Impairment of goodwill	0	0	35,749,000
Equity securities
Subsidiary, Sale of Stock [Line Items]
Goodwill related to equity investees	7,300,000	7,400,000
Impairment of goodwill	0	0	0
Direct Operations
Subsidiary, Sale of Stock [Line Items]
Net premium revenues from policies issued by equity investees	2,100,000	2,100,000	2,500,000
Earnings related to equity investees	$ 2,200,000	$ 2,800,000	$ 3,600,000

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Notes payable and line of credit - Summary of Notes Payable (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Debt Disclosure [Abstract]
Banks – varying payments and rates	$ 98,875	$ 92,875
Other than banks	10,437	13,933
Notes payable	$ 109,312	$ 106,808
Average interest rate	2.59%	1.97%

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Notes payable and line of credit - Additional Information (Details)		1 Months Ended	12 Months Ended
	Feb. 10, 2016 USD ($)	Feb. 28, 2016 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2016 USD ($)
Debt Disclosure [Abstract]
Principal payments on notes in 2018			$ 7,400,000
Principal payments on notes in 2019			101,000,000
Principal payments on notes in 2020			900,000
Debt Instrument [Line Items]
Capital lease obligations			10,437,000		$ 13,933,000
Notes Payable, Other Than Banks
Debt Instrument [Line Items]
Outstanding balances of short-term loan agreements			4,300,000		6,500,000
Capital Lease Obligations
Debt Instrument [Line Items]
Capital lease obligations			6,100,000		$ 7,300,000
Line of Credit
Debt Instrument [Line Items]
Bank line of credit facility amount			125,000,000
Bank line of credit facility, outstanding			98,900,000
Remaining borrowing capacity			23,600,000
Line of credit, conditional increase in maximum borrowing capacity			$ 50,000,000
Fixed charge ratio, minimum		1.25
Leverage ratio, maximum		2.25
Aggregate annual capital expenditures allowed		$ 25,000,000
Maximum exception to allowed restricted payments for the new share repurchase program	$ 50,000,000
Annual dividend payments allowed		$ 35,000,000		$ 25,000,000
Line of Credit | Base Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate, line of credit (percent)			0.50%
Line of Credit | Base Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate, line of credit (percent)			1.00%
Line of Credit | LIBOR | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate, line of credit (percent)			1.50%
Line of Credit | LIBOR | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate, line of credit (percent)			2.00%
Line of Credit | Letter of Credit
Debt Instrument [Line Items]
Remaining borrowing capacity			$ 2,500,000

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Estimated title losses - Estimated Title Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Loss Contingency Accrual
Beginning balance	$ 462,572	$ 462,622	$ 495,395
Provisions:
Current year	71,966	72,586	68,029
Previous policy years	24,566	18,561	38,236
Total provisions	96,532	91,147	106,265
Payments, net of recoveries:
Current year	(20,335)	(18,836)	(19,182)
Previous policy years	(63,914)	(73,194)	(104,450)
Total payments, net of recoveries	(84,249)	(92,030)	(123,632)
Adjustments related to acquired balance	0	0	(2,303)
Effects of changes in foreign currency exchange rates	6,135	833	(13,103)
Ending balance	$ 480,990	$ 462,572	$ 462,622
Loss ratios as a percentage of title operating revenues:
Current year provisions (percent)	3.80%	3.80%	3.60%
Total provisions (percent)	5.10%	4.80%	5.60%

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Estimated title losses - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Gain (Loss) on Investments [Line Items]
Current year estimated loss (percent)	3.80%	3.80%	3.60%
Increase (decrease) in liability claims provision	$ 24.6
Increase (decrease) in prior year estimates		$ 18.6	$ 38.2
Change in prior years reserve, claims payment experience
Gain (Loss) on Investments [Line Items]
Increase (decrease) in liability claims provision	18.4
Change in prior years reserve, large title claims
Gain (Loss) on Investments [Line Items]
Increase (decrease) in liability claims provision	$ 4.3	$ 3.8	$ 31.7

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Stockholders' Equity (Details) - USD ($) $ in Thousands			12 Months Ended
	Apr. 27, 2016	Jan. 26, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Conversion of Stock [Line Items]
Additional cash issued to class B common stock holders			$ 0	$ 12,000	$ 0
Unrecognized excess tax benefits from additional paid-in capital to retained earnings					0
Number of treasury shares held			352,161	352,161
Subsidiaries
Conversion of Stock [Line Items]
Number of treasury shares held			145,820	145,820
Retained Earnings
Conversion of Stock [Line Items]
Unrecognized excess tax benefits from additional paid-in capital to retained earnings					$ 631
Conversion, Class B Common Stock to Common Stock
Conversion of Stock [Line Items]
Additional cash issued to class B common stock holders	$ 12,000	$ 12,000	$ 12,000	$ 12,000
Conversion, Class B Common Stock to Common Stock | Class B Common Stock
Conversion of Stock [Line Items]
Number of shares converted	1,050,012	1,050,012
Conversion, Class B Common Stock to Common Stock | Common Stock
Conversion of Stock [Line Items]
Number of shares issued	1,050,012	1,050,012

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Share-based payments - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of vested shares	$ 2.5	$ 3.8
Compensation costs	$ 5.3	$ 3.0	$ 4.4
Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted and immediately vested in relation to the annual director retainer compensation	13,000	18,000	18,000
Fair value of vested shares	$ 0.6	$ 0.6	$ 0.7
Time-Based Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (years)	3 years		3 years
Performance-Based Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (years)	3 years
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate fair values at grant date	$ 5.7	$ 4.1	$ 4.4
Shares issued	132,957	110,000	119,000
Average grant price (USD per share)	$ 42.59	$ 37.34	$ 37.16
Shares granted and immediately vested in relation to the annual director retainer compensation	59,260
Tax benefits related to vesting of awards	$ 1.2	$ 1.7	$ 1.0
Compensation costs not yet recognized	$ 5.1
Compensation costs not yet recognized, period for recognition (years)	1 year 6 months 17 days

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Share-based payments - Summary of the Restricted Common Stock Award Activity (Details) - Restricted Stock - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Shares
Nonvested balance at beginning of period (shares)	206,327
Granted (shares)	132,957	110,000	119,000
Adjustment for performance-based shares (shares)	(59,348)
Vested (shares)	(59,260)
Forfeited (shares)	(76,712)
Nonvested balance at end of period (shares)	143,964	206,327
Weighted-Average Grant-Date Fair Value per Share ($)
Nonvested balance at beginning of period (USD per share)	$ 37.18
Granted (USD per share)	42.59	$ 37.34	$ 37.16
Adjustment for performance-based shares (USD per share)	42.78
Vested (USD per share)	36.98
Forfeited (USD per share)	37.28
Nonvested balance at end of period (USD per share)	$ 39.89	$ 37.18

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Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands			3 Months Ended								12 Months Ended
	Apr. 27, 2016	Jan. 26, 2016	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Numerator:
Net income (loss) attributable to Stewart			$ 15,060	$ 10,944	$ 18,568	$ 4,087	$ 16,699	$ 26,375	$ 23,599	$ (11,195)	$ 48,659	$ 55,478	$ (6,204)
Less: Cash paid on Class B Common Shares conversion											0	(12,000)	0
Adjusted net income (loss) for calculating basic and diluted EPS											$ 48,659	$ 43,478	$ (6,204)
Denominator (000):
Basic average shares outstanding											23,445	23,364	23,544
Average number of dilutive shares relating to restricted shares grants											152	108	0
Diluted average shares outstanding											23,597	23,472	23,544
Basic earnings (loss) per share attributable to Stewart (USD per share)											$ 2.08	$ 1.86	$ (0.26)
Diluted earnings (loss) per share attributable to Stewart (USD per share)			$ 0.64	$ 0.46	$ 0.79	$ 0.17	$ 0.71	$ 1.12	$ 0.49	$ (0.48)	$ 2.06	$ 1.85	$ (0.26)
Conversion, Class B Common Stock to Common Stock
Numerator:
Less: Cash paid on Class B Common Shares conversion	$ (12,000)	$ (12,000)									$ (12,000)	$ (12,000)

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Reinsurance (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract]
Total amount of Premiums for assumed and ceded risks as a percentage of consolidated title revenue (less than)	1.00%	1.00%	1.00%

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Leases - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Leases [Abstract]
Lease expense	$ 40.8	$ 41.3	$ 42.9

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Leases - Summary of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2015
Leases [Abstract]
2018	$ 52,112
2019	39,996
2020	27,184
2021	18,147
2022	11,851
2023 and after	17,843
Future minimum payments, total	$ 167,133
Cumulative effect adjustment on adoption of new accounting pronouncement		$ 0

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Contingent liabilities and commitments (Details) $ in Millions	Dec. 31, 2017 USD ($)
Loss Contingencies [Line Items]
Guarantee of indebtedness, relating to unused letters of credit	$ 5.4
Escrow Account Deposit
Loss Contingencies [Line Items]
Contingent liability, escrow deposit	1,200.0
Escrow Account Deposit - Section 1031 Exchange
Loss Contingencies [Line Items]
Contingent liability, escrow deposit	$ 1,100.0

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Segment information - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) segment	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($) segment
Segment Reporting [Abstract]
Number of operating segments | segment	2		3
Segment Reporting Information [Line Items]
Impairment of goodwill	$ 0	$ 0	$ 35,749
Title
Segment Reporting Information [Line Items]
Impairment of goodwill	$ 0	$ 0	$ 1,569

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Segment information - Selected Statement of Operations and Income (Loss) Information Related to Segments (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Revenues	$ 525,664	$ 501,569	$ 485,452	$ 443,039	$ 525,764	$ 553,210	$ 489,437	$ 438,229	$ 1,955,724	$ 2,006,640	$ 2,033,885
Impairment of goodwill									0	0	35,749
Depreciation and amortization									25,878	30,044	30,298
Income (loss) before taxes and noncontrolling interest									75,067	88,026	9,693
Title
Segment Reporting Information [Line Items]
Revenues									1,899,462	1,922,422	1,904,258
Impairment of goodwill									0	0	1,569
Depreciation and amortization									21,384	21,176	18,767
Income (loss) before taxes and noncontrolling interest									103,361	139,083	119,032
Ancillary Services and Corporate
Segment Reporting Information [Line Items]
Revenues									56,262	84,218	129,627
Impairment of goodwill									0	0	34,180
Depreciation and amortization									4,494	8,868	11,531
Income (loss) before taxes and noncontrolling interest									$ (28,294)	$ (51,057)	$ (109,339)

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Segment information - Revenues Generated in Domestic and Foreign Country (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenue	$ 525,664	$ 501,569	$ 485,452	$ 443,039	$ 525,764	$ 553,210	$ 489,437	$ 438,229	$ 1,955,724	$ 2,006,640	$ 2,033,885
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenue									1,825,186	1,889,144	1,925,865
International
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenue									$ 130,538	$ 117,496	$ 108,020

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Other comprehensive income (loss) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Before-Tax Amount
Other comprehensive income (loss)	$ 10,558	$ (4,781)	$ (24,280)
Tax Expense (Benefit)
Other comprehensive income (loss)	2,524	143	(7,768)
Net-of-Tax Amount
Other comprehensive income (loss)	8,034	(4,924)	(16,512)
Foreign currency translation adjustments
Before-Tax Amount
Other comprehensive income (loss)	11,050	(2,385)	(16,022)
Tax Expense (Benefit)
Other comprehensive income (loss)	2,696	982	(4,877)
Net-of-Tax Amount
Other comprehensive income (loss)	8,354	(3,367)	(11,145)
Unrealized net gains on investments
Before-Tax Amount
Other comprehensive income (loss), before reclassifications	2,718	544	(5,757)
Less: reclassification adjustment for net gains included in net income (loss)	(3,210)	(2,940)	(2,501)
Other comprehensive income (loss)	(492)	(2,396)	(8,258)
Tax Expense (Benefit)
Other comprehensive income (loss), before reclassifications	952	190	(2,016)
Less: reclassification adjustment for net gains included in net income (loss)	(1,124)	(1,029)	(875)
Other comprehensive income (loss)	(172)	(839)	(2,891)
Net-of-Tax Amount
Other comprehensive income (loss), before reclassifications	1,766	354	(3,741)
Less: reclassification adjustment for net gains included in net income (loss)	(2,086)	(1,911)	(1,626)
Other comprehensive income (loss)	$ (320)	$ (1,557)	$ (5,367)

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Quarterly financial information (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Quarterly Financial Information Disclosure [Abstract]
Revenues	$ 525,664	$ 501,569	$ 485,452	$ 443,039	$ 525,764	$ 553,210	$ 489,437	$ 438,229	$ 1,955,724	$ 2,006,640	$ 2,033,885
Net income (loss) attributable to Stewart	$ 15,060	$ 10,944	$ 18,568	$ 4,087	$ 16,699	$ 26,375	$ 23,599	$ (11,195)	$ 48,659	$ 55,478	$ (6,204)
Diluted earnings (loss) per share attributable to Stewart (USD per share)	$ 0.64	$ 0.46	$ 0.79	$ 0.17	$ 0.71	$ 1.12	$ 0.49	$ (0.48)	$ 2.06	$ 1.85	$ (0.26)

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Schedule I - Financial Information of the Registrant (Parent Company) - Statements of Operations and Retained Earnings (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenues
Investment income									$ 18,932	$ 18,925	$ 16,850
Total revenues	$ 525,664	$ 501,569	$ 485,452	$ 443,039	$ 525,764	$ 553,210	$ 489,437	$ 438,229	1,955,724	2,006,640	2,033,885
Expenses
Employee costs									566,178	604,353	658,266
Other operating expenses, including $276 each year to affiliates									351,511	363,986	381,954
Depreciation and amortization									25,878	30,044	30,298
Interest									3,458	3,062	2,096
Total expenses									1,880,657	1,918,614	2,024,192
Income before taxes and income (losses) from subsidiaries									75,067	88,026	9,693
Income tax (benefit) expense									14,921	19,605	5,650
Net income (loss) attributable to Stewart	15,060	$ 10,944	$ 18,568	4,087	16,699	$ 26,375	$ 23,599	(11,195)	48,659	55,478	(6,204)
Retained earnings at beginning of year				471,788					471,788
Cash paid on Class B Common Shares conversion										(12,000)
Cumulative effect adjustment on adoption of new accounting pronouncement											0
Retained earnings at end of year	491,698				471,788				491,698	471,788
Parent Company
Revenues
Investment income									20,000	20,000	15,000
Other income									784	1,252	922
Total revenues									20,784	21,252	15,922
Expenses
Employee costs									1,388	832	156
Other operating expenses, including $276 each year to affiliates									4,447	6,641	7,617
Depreciation and amortization									5	69	162
Interest									3,123	2,726	1,726
Total expenses									8,963	10,268	9,661
Income before taxes and income (losses) from subsidiaries									11,821	10,984	6,261
Income tax (benefit) expense									(776)	2,928	0
Income (losses) from subsidiaries									36,062	47,422	(12,465)
Net income (loss) attributable to Stewart									48,659	55,478	(6,204)
Retained earnings at beginning of year				$ 471,788				$ 455,519	471,788	455,519	479,733
Cash dividends on Common Stock									(28,749)	(27,840)	(18,010)
Cash paid on Class B Common Shares conversion									0	(12,000)	0
Cumulative effect adjustment on adoption of new accounting pronouncement	0				631				0	631	0
Retained earnings at end of year	$ 491,698				$ 471,788				$ 491,698	$ 471,788	$ 455,519

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Schedule I - Financial Information of the Registrant (Parent Company) - Statements of Operations and Retained Earnings (Additional Information) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Other operating expenses	$ 351,511	$ 363,986	$ 381,954
Affiliates
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Other operating expenses	$ 276	$ 276	$ 276

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Schedule I - Financial Information of the Registrant (Parent Company) - Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Assets
Cash and cash equivalents	$ 150,079	$ 185,772	$ 179,067	$ 200,558
Receivables:
Notes - due from subsidiaries	3,203	3,402
Allowance for uncollectible amounts	(5,156)	(9,647)
Total receivables	78,516	71,776
Property and equipment, at cost:
Furniture and equipment	226,461	217,105
Accumulated depreciation	(186,279)	(173,119)
Total property and equipment, at cost	67,022	70,506
Title plant, at cost	74,237	75,313
Investments in subsidiaries, on an equity-method basis	9,202	9,796
Goodwill	231,428	217,094	217,722
Other assets	47,664	42,975
Total assets	1,405,886	1,341,724
Liabilities
Notes payable	109,312	106,808
Accounts payable and other liabilities	117,740	115,640
Total Liabilities	727,076	692,876
Contingent liabilities and commitments
Stockholders’ equity
Common Stock – $1 par, authorized 50,000,000; issued 24,071,683 and 23,783,440; outstanding 23,719,522 and 23,431,279, respectively	24,072	23,783
Additional paid-in capital	159,954	157,176
Retained earnings	491,698	471,788
Accumulated other comprehensive (loss) income:
Foreign currency translation adjustments	(8,373)	(16,727)
Treasury stock – 352,161 common shares, at cost	(2,666)	(2,666)
Total stockholders’ equity	678,810	648,848	637,128	700,453
Total liabilities and stockholders' equity	1,405,886	1,341,724
Parent Company
Assets
Cash and cash equivalents	11,622	2,890	832	15,210
Receivables:
Notes - due from subsidiaries	26,316	40,879
Receivables from affiliates	930	848
Allowance for uncollectible amounts	(1)	(4)
Total receivables	27,245	41,723
Property and equipment, at cost:
Furniture and equipment	2,733	2,733
Accumulated depreciation	(2,517)	(2,512)
Total property and equipment, at cost	216	221
Title plant, at cost	48	48
Investments in subsidiaries, on an equity-method basis	731,975	688,837
Goodwill	8,470	8,470
Other assets	18,274	16,698
Total assets	797,850	758,887
Liabilities
Notes payable	98,875	92,875
Accounts payable and other liabilities	26,764	24,812
Total Liabilities	125,639	117,687
Contingent liabilities and commitments	0	0
Stockholders’ equity
Common Stock – $1 par, authorized 50,000,000; issued 24,071,683 and 23,783,440; outstanding 23,719,522 and 23,431,279, respectively	24,072	23,783
Additional paid-in capital	159,954	157,176
Retained earnings	491,698	471,788	$ 455,519	$ 479,733
Accumulated other comprehensive (loss) income:
Foreign currency translation adjustments	(8,373)	(16,727)
Unrealized investment gains	7,526	7,846
Treasury stock – 352,161 common shares, at cost	(2,666)	(2,666)
Total stockholders’ equity	672,211	641,200
Total liabilities and stockholders' equity	$ 797,850	$ 758,887

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Schedule I - Financial Information of the Registrant (Parent Company) - Balance Sheets (Additional Information) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Condensed Balance Sheet Statements, Captions [Line Items]
Common stock, par value (USD per share)	$ 1	$ 1
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	24,071,683	23,783,440
Common stock, shares outstanding	23,719,522	23,431,279
Treasury stock, common shares	352,161	352,161
Parent Company
Condensed Balance Sheet Statements, Captions [Line Items]
Common stock, par value (USD per share)	$ 1	$ 1
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	23,783,440	22,643,255
Common stock, shares outstanding	23,431,279	22,291,094
Treasury stock, common shares	352,161	352,161
Undistributed earnings	$ 529,417	$ 522,104

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Schedule I - Financial Information of the Registrant (Parent Company) - Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation of net income (loss) to cash provided by operating activities:
Net income (loss) attributable to Stewart	$ 15,060	$ 10,944	$ 18,568	$ 4,087	$ 16,699	$ 26,375	$ 23,599	$ (11,195)	$ 48,659	$ 55,478	$ (6,204)
Add (deduct):
Depreciation and amortization									25,878	30,044	30,298
(Increase) decrease in receivables – net									(6,910)	7,759	12,894
(Increase) decrease in other assets – net									(4,512)	391	3,073
Increase (decrease) in payables and accrued liabilities – net									1,933	(3,888)	2,088
(Income) losses from subsidiaries									(2,163)	(2,834)	(3,579)
Other – net									483	0	(872)
Cash provided by operating activities									108,068	122,962	80,514
Investing activities:
Cash used by investing activities									(103,897)	(56,774)	(68,791)
Financing activities:
Proceeds from notes payable									56,493	57,758	52,651
Payments on notes payable									(56,467)	(60,339)	(22,494)
Cash paid on Class B Common Shares conversion									0	(12,000)	0
Repurchases of Common Stock									(727)	(1,053)	(27,950)
Purchase of remaining interest of consolidated subsidiary									(1,810)	(991)	(209)
Other – net									0	86	168
Cash used by financing activities									(43,595)	(59,342)	(25,550)
(Decrease) increase in cash and cash equivalents									(35,693)	6,705	(21,491)
Cash and cash equivalents at beginning of year				185,772				179,067	185,772	179,067	200,558
Cash and cash equivalents at end of year	150,079				185,772				150,079	185,772	179,067
Supplemental information:
Income taxes paid									(1,642)	15,265	14,982
Interest paid									3,466	3,020	1,873
Parent Company
Reconciliation of net income (loss) to cash provided by operating activities:
Net income (loss) attributable to Stewart									48,659	55,478	(6,204)
Add (deduct):
Depreciation and amortization									5	69	162
(Increase) decrease in receivables – net									(81)	245	(596)
(Increase) decrease in other assets – net									(1,576)	359	(558)
Increase (decrease) in payables and accrued liabilities – net									563	(496)	(515)
(Income) losses from subsidiaries									(36,062)	(47,421)	12,465
Other – net									1,705	(6,731)	(4,593)
Cash provided by operating activities									13,213	1,503	161
Investing activities:
Dividends from subsidiary									20,000	20,000	15,000
Purchase of property and equipment –net									0	(22)	0
Collections on notes receivables									23,375	27,500	0
Increases in notes receivables									(16,000)	0	(21,500)
Contributions to a subsidiary									(7,184)	0	0
Cash used by investing activities									20,191	47,478	(6,500)
Financing activities:
Proceeds from notes payable									16,000	20,000	45,000
Payments on notes payable									(10,000)	(25,125)	(7,000)
Dividends paid									(28,135)	(27,840)	(18,010)
Cash paid on Class B Common Shares conversion									0	(12,000)	0
Repurchases of Common Stock									(727)	(1,053)	(27,950)
Purchase of remaining interest of consolidated subsidiary									(1,810)	(991)	(209)
Other – net									0	86	130
Cash used by financing activities									(24,672)	(46,923)	(8,039)
(Decrease) increase in cash and cash equivalents									8,732	2,058	(14,378)
Cash and cash equivalents at beginning of year				$ 2,890				$ 832	2,890	832	15,210
Cash and cash equivalents at end of year	$ 11,622				$ 2,890				11,622	2,890	832
Supplemental information:
Income taxes paid									0	1	1
Interest paid									$ 3,128	$ 2,716	$ 1,681

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Schedule I - Financial Information of the Registrant (Parent Company) - Additional Information (Details) - USD ($) $ in Thousands			12 Months Ended
	Apr. 27, 2016	Jan. 26, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Condensed Financial Statements, Captions [Line Items]
Dividends paid by guaranty			$ 20,000	$ 20,000	$ 15,000
Additional cash issued to class B common stock holders			0	12,000	0
Unrecognized excess tax benefits from additional paid-in capital to retained earnings					0
Total income tax benefit resulting from the 2017 Act			7,800
Parent Company
Condensed Financial Statements, Captions [Line Items]
Additional cash issued to class B common stock holders			0	12,000	0
Unrecognized excess tax benefits from additional paid-in capital to retained earnings			0	631	0
Total income tax benefit resulting from the 2017 Act			1,200
Retained Earnings
Condensed Financial Statements, Captions [Line Items]
Unrecognized excess tax benefits from additional paid-in capital to retained earnings					$ 631
Conversion, Class B Common Stock to Common Stock
Condensed Financial Statements, Captions [Line Items]
Additional cash issued to class B common stock holders	$ 12,000	$ 12,000	$ 12,000	$ 12,000

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Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Estimated title losses
Movement in Valuation Allowances and Reserves
Balance at beginning of period	$ 462,572	$ 462,622	$ 495,395
Additions charged to costs and expenses	96,532	91,147	106,265
Deductions	78,114	91,197	139,038
Balance At end of period	480,990	462,572	462,622
Valuation allowance for deferred tax assets
Movement in Valuation Allowances and Reserves
Balance at beginning of period	2,457	2,217	2,564
Additions charged to costs and expenses	0	240	(347)
Deductions	226
Balance At end of period	2,231	2,457	2,217
Allowance for uncollectible amounts
Movement in Valuation Allowances and Reserves
Balance at beginning of period	9,647	9,833	9,193
Additions charged to costs and expenses	207	3,349	3,396
Deductions	4,698	3,535	2,756
Balance At end of period	$ 5,156	$ 9,647	$ 9,833