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FIRST AMERICAN FINANCIALInvestor Day May 18, 2018

Safe Harbor Statement

CERTAIN STATEMENTS MADE IN THIS PRESENTATION AND THE RELATED MANAGEMENT COMMENTARY AND RESPONSES TO INVESTOR QUESTIONS CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE FACT THAT THEY DO NOT RELATE STRICTLY TO HISTORICAL OR CURRENT FACTS AND MAY CONTAIN THE WORDS “BELIEVE,” “ANTICIPATE,” “EXPECT,” “INTEND,” “PLAN,” “PREDICT,” “ESTIMATE,” “PROJECT,” “WILL BE,” “WILL CONTINUE,” “WILL LIKELY RESULT,” OR OTHER SIMILAR WORDS AND PHRASES OR FUTURE OR CONDITIONAL VERBS SUCH AS “WILL,” “MAY,” “MIGHT,” “SHOULD,” “WOULD,” OR “COULD.” THESE FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, STATEMENTS REGARDING FUTURE OPERATIONS, PERFORMANCE, FINANCIAL CONDITION, PROSPECTS, PLANS AND STRATEGIES. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT EXPECTATIONS AND ASSUMPTIONS THAT MAY PROVE TO BE INCORRECT. RISKS AND UNCERTAINTIES EXIST THAT MAY CAUSE RESULTS TO DIFFER MATERIALLY FROM THOSE SET FORTH IN THESE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE THE ANTICIPATED RESULTS TO DIFFER FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, INTEREST RATE FLUCTUATIONS; CHANGES IN THE PERFORMANCE OF THE REAL ESTATE MARKETS; VOLATILITY IN THE CAPITAL MARKETS; UNFAVORABLE ECONOMIC CONDITIONS; FAILURES AT FINANCIAL INSTITUTIONS WHERE THE COMPANY DEPOSITS FUNDS; CHANGES IN APPLICABLE LAWS AND GOVERNMENT REGULATIONS; HEIGHTENED SCRUTINY BY LEGISLATORS AND REGULATORS OF THE COMPANY’S TITLE INSURANCE AND SERVICES SEGMENT AND CERTAIN OTHER OF THE COMPANY’S BUSINESSES; USE OF SOCIAL MEDIA BY THE COMPANY AND OTHER PARTIES; REGULATION OF TITLE INSURANCE RATES; LIMITATIONS ON ACCESS TO PUBLIC RECORDS AND OTHER DATA; CHANGES IN RELATIONSHIPS WITH LARGE MORTGAGE LENDERS AND GOVERNMENT-SPONSORED ENTERPRISES; CHANGES IN MEASURES OF THE STRENGTH OF THE COMPANY’S TITLE INSURANCE UNDERWRITERS, INCLUDING RATINGS AND STATUTORY CAPITAL AND SURPLUS; LOSSES IN THE COMPANY’S INVESTMENT PORTFOLIO; MATERIAL VARIANCE BETWEEN ACTUAL AND EXPECTED CLAIMS EXPERIENCE; DEFALCATIONS, INCREASED CLAIMS OR OTHER COSTS AND EXPENSES ATTRIBUTABLE TO THE COMPANY’S USE OF TITLE AGENTS; ANY INADEQUACY IN THE COMPANY’S RISK MANAGEMENT FRAMEWORK; SYSTEMS DAMAGE, FAILURES, INTERRUPTIONS AND INTRUSIONS, OR UNAUTHORIZED DATA DISCLOSURES; PROCESS AUTOMATION; TECHNOLOGICAL DEVELOPMENTS THAT CHANGE THE WAY REAL ESTATE TRANSACTIONS ARE CONDUCTED AND RELATED DOCUMENTS ARE PROCESSED; ERRORS AND FRAUD INVOLVING THE TRANSFER OF FUNDS; THE COMPANY’S USE OF A GLOBAL WORKFORCE; INABILITY OF THE COMPANY’S SUBSIDIARIES TO PAY DIVIDENDS OR REPAY FUNDS; AND OTHER FACTORS DESCRIBED IN THE COMPANY’S QUARTERLY REPORT ON FORM 10-Q, INCLUDING UNDER THE CAPTION “RISK FACTORS” IN ITEM 1A OF PART II OF THAT REPORT. THE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE TO UPDATE FORWARD-LOOKING STATEMENTS TO REFLECT CIRCUMSTANCES OR EVENTS THAT OCCUR AFTER THE DATE THE FORWARD-LOOKING STATEMENTS ARE MADE.

2

Use of non-GAAP Financial Measures

THIS SLIDE PRESENTATION CONTAINS CERTAIN FINANCIAL MEASURES THAT ARE NOT PRESENTED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP), INCLUDING ADJUSTED INVESTMENT INCOME. ADJUSTED INVESTMENT INCOME EXCLUDES AFFILIATED INVESTMENTS AND IS PRESENTED BECAUSE IT PROVIDES THE COMPANY’S MANAGEMENT AND READERS AND VIEWERS OF THIS PRESENTATION WITH A BETTER UNDERSTANDING OF THE IMPACT OF INTEREST RATES ON THE COMPANY’S INVESTMENT INCOME OVER TIME. THE COMPANY DOES NOT INTEND FOR THESE NON-GAAP FINANCIAL MEASURES TO BE A SUBSTITUTE FOR ANY GAAP FINANCIAL INFORMATION. IN THE SLIDE PRESENTATION THESE NON-GAAP FINANCIAL MEASURES HAVE BEEN PRESENTED WITH, AND RECONCILED TO, THE MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES. INVESTORS SHOULD USE THESE NON-GAAP FINANCIAL MEASURES ONLY IN CONJUNCTION WITH THE COMPARABLE GAAP FINANCIAL MEASURES.

3

9:00 a.m. Welcome Craig Barberio, VP Investor Relations

9:05 a.m. Strategy & Business Review Dennis Gilmore, Chief Executive Officer

9:45 a.m. Title Operations Chris Leavell, COO, Title Insurance and Services

10:15 a.m. Q&A/Break

10:50 a.m. Specialty Insurance Larry Davidson, COO, Specialty Insurance

11:10 a.m. Financial Review Mark Seaton, EVP and Chief Financial Officer

11:40 a.m. Q&A

12:00 p.m. Lunch

AGENDA

4

STRATEGY & BUSINESS REVIEW

Dennis GilmoreChief Executive Officer

5

PRESENTATION AGENDA

Strong Track Record of Results

Well Positioned in a Changing Environment

Attractive Growth Opportunities

6

PRESENTATION AGENDA




7

Leader in the Title and Settlement Services Industry

92% of Revenue, Title Segment

8% of Revenue, Specialty Insurance Segment26.2% Title Market Share

18,700 Employees

800 Offices

Largest Title Plant and Property

Record Database

Fortune 100 Best Companies to Work For®

2016 – 2017 – 2018

Trusted National Brand

$9.6B Total Assets

8

$5.8B Total Revenue

9 Countries

Note: Revenue and market share data for 2017. All other data as of December 31, 2017.

FORTUNE and FORTUNE 100 Best Companies to Work For are registered trademarks of Time Inc. FORTUNE and Time Inc. are not affiliated with and do not endorse products and services of First American Financial Corporation.

Established Reputation as Efficient Operator Dedicated to Long-Term Value Creation

$-

$10

$20

$30

$40

$50

$60

2011 2012 2013 2014 2015 20162010 2017

TOTAL SHAREHOLDER RETURN

22.5% ANNUALIZED$56

JUNE

$14

Completed expansion of title plant footprint to over 500 counties

Reorganized title operations into customer-centric divisions

Purchase originations bottom after 6 years of decline

Standalone company formed June 1, 2010

Assembled the largest property record database

CFPB’s integrated mortgage disclosure rule (TRID) implemented

First year recognized on the Fortune100 Best Companies to Work For list

• Achieved record pretax title margin of 12.1%

• Raised dividend for the seventh time since 2010 to $1.52 per share annually

9

Seasoned Leadership Team

Mark Seaton EVP and Chief Financial Officer 12 Years

Ken DeGiorgio Executive Vice President 19 Years

Chris Leavell COO, Title insurance and Services 21 Years

Larry Davidson COO, Specialty Insurance 18 Years

George Livermore EVP and President, Data and Mortgage Solutions 20 Years

Dennis Gilmore Chief Executive Officer 25 Years

Years with

First Am

erican

10

Deploy Our Capital to Maximize Long-Term Shareholder Returns

People and CultureCompliance and Risk Management

Innovation

Profitably Grow OurCore Title

andSettlement

Business

Strengthen the Enterprise Through Data and Process Advantage

Manageand Actively

Invest in Complementary Businesses that

Support or Expand the

Core

11

FIRST AMERICAN STRATEGY

To Be the Premier TitleInsurance and Settlement Services Company

VISION:

$378 $361

$551 $489

$632

$100

$200

$300

$400

$500

$600

$700

2013 2014 2015 2016 2017

Past 5 Years: Achieved Strong Financial Results

12

$5.0 $4.7

$5.2

$5.6 $5.8

$3.0

$3.5

$4.0

$4.5

$5.0

$5.5

$6.0

2013 2014 2015 2016 2017

$ in

Bill

ion

s

$1.71 $2.15

$2.62 $3.09

$3.76

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

2013 2014 2015 2016 2017

7.8%9.3%

10.8%11.9%

13.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2013 2014 2015 2016 2017

TOTAL REVENUE

$ in

Mill

ion

s

EARNINGS PER SHARE

CASH FROM OPERATIONS RETURN ON EQUITY

Past 5 Years: Growing Pretax Title Margin

Key Drivers of Margin Improvement

Favorable market conditions

Purchase

Commercial

Operating efficiencies

Favorable claims experience

Rising investment income

13

0%

2%

4%

6%

8%

10%

12%

14%

$-

$500

$1,000

$1,500

$2,000

$2,500

2013 2014 2015 2016 2017

2013 2014 2015 2016 2017

Total Shareholder Return

14 Source: Bloomberg

12/30/2017

FAF

S&P 500

57.9%1 Year

3 Year

5 Year

21.8%

11.3%

15.8%

21.6%

21.7%

-50%

0%

50%

100%

150%

200%

1/2/2013 1/2/2014 1/2/2015 1/2/2016 1/1/2017

PRESENTATION AGENDA




15

Real Estateand Mortgage

Process BecomingDIGITAL

HIGHERINTEREST RATES

Affect Business Mix

EMERGING TECHNOLOGIES

Create Opportunities

Consumer Experience Faster Closing

Purchase Commercial BlockchainArtificial Intelligence

Robotic Process AutomationRefinance

Key Forces Driving Market Change

16

Rising Mortgage Rates Result in Lower Refinance Volumes

17

Refinance Open Orders

30 Yr. Fixed Mortgage Rate

3.25%

3.50%

3.75%

4.00%

4.25%

4.50%

4.75%

750

1,250

1,750

2,250

2,750

3,250

3,750

Jan

-13

Mar

-13

May

-13

Jul-

13

Sep

-13

No

v-1

3

Jan

-14

Mar

-14

May

-14

Jul-

14

Sep

-14

No

v-1

4

Jan

-15

Mar

-15

May

-15

Jul-

15

Sep

-15

No

v-1

5

Jan

-16

Mar

-16

May

-16

Jul-

16

Sep

-16

No

v-1

6

Jan

-17

Mar

-17

May

-17

Jul-

17

Sep

-17

No

v-1

7

Jan

-18

Mar

-18

Op

en O

rder

s P

er D

ay

Source: Federal Reserve Bank of St. Louis

…But Refinance Revenue Remains at Multi Year Lows

18

21%

13%15%

17%

11%

0%

5%

10%

15%

20%

25%

$150

$200

$250

$300

$350

$400

2013 2014 2015 2016 2017

$ in

Mill

ion

s

Refinance % of Direct Premiums & Escrow Refinance RevenueRefinance – Direct Premiums & Escrows

… and Higher Short-term Rates Benefit Investment Income

19

(1)

(1) Excludes affiliated investments (See reconciliation in Appendix).(2) Company estimate.

0.00%

0.25%

0.50%

0.75%

1.00%

1.25%

1.50%

$16

$21

$26

$31

$36

$41

$46

Q1

'13

Q2

'13

Q3

'13

Q4

'13

Q1

'14

Q2

'14

Q3

'14

Q4

'14

Q1

'15

Q2

'15

Q3

'15

Q4

'15

Q1

'16

Q2

'16

Q3

'16

Q4

'16

Q1

'17

Q2

'17

Q3

'17

Q4

'17

Titl

e Se

gmen

t In

vest

men

t In

com

e ($

in M

illio

ns)

Investment Income Fed Funds Rate

Fed Fu

nd

s Rate

Each 25 basis point Fed hike increases investment income by ~$12 million/year(2)

Title Segment

$400

$500

$600

$700

$800

$900

$1,000

2013 2014 2015 2016 2017

$ in

Mill

ion

s

DIRECT PURCHASE REVENUE

Strong Purchase Market Continues

20

Purchase Market

Strong economy and job growth

Low inventory continues to drive home price appreciation

Expect home sales growth to continue given gradual increase in mortgage rates

First American Operations

550 local offices focused on purchase

Leading homebuilder business

Fee per file 2.5x refinance

Digital Transformation of Mortgage and Closing Process Underway

Quality Service Proactive Communication

Faster Closings Reduced Costs Improved Accuracy

Digital Experience Transparency

Lenders

Real Estate AgentsConsumers

First AmericanFinancial

21

Closing Timelines Will Compress

Lenders progressing toward faster mortgage timelines Closing timeline currently averaging 50-55 days

First American is developing automated title solutions to meet this growing demand

Title automation requires:1. Title and property record information

2. Underwriting expertise

22

First American Key Strengths

Consumers Increasingly Expect a Digital Closing Experience

Consumers want digital experience, with more transparency

Real estate agents want to deliver a better customer experience and improve productivity

Wire fraud a major risk related to real estate transaction

First American developing digital solutions to meet new market demands

23

Digital Experience

Secure Communications

IntegratedSolutions

First AmericanFinancial

Emerging Technologies Create Opportunities

24

EmergingTechnologies

BlockchainArtificial Intelligence

Robotic Process Automation “BOTS”

Opportunity to drive process efficiencies Collaborating with lenders on proof of concepts After extensive testing, nearing launch of first

production application for internal use In our view, unlikely to disrupt title

Doesn’t address many title issues (fraud, easements, special rights, etc.)

Numerous legal and financial challenges

Automation of standard, repeatable tasks improves productivity and reduces cost Nearly 100 pilots being evaluated across operations including accounting and underwriting A number of applications are now in production

High potential use case when coupled with proprietary data

Enhanced data collection and predictive analytics to drive title automation and enhance risk decisioning

Reduced operational costs Improved productivity

PRESENTATION AGENDA




25

Strong Outlook for Title and Settlement Business

Favorable purchase market trends continue

Commercial fundamentals remain strong

Investment income improves as short term rates rise

Refinance activity approaching a floor

26

Revenue Growth

Disciplined cost management culture

Prudent underwriting has driven claim losses lower

Leveraging data and technology to improve productivity and enhance risk decisioning

Cost Efficient Operation

Focus remains on margin expansion Record margin in 2016, again in 2017Title Margin

Disciplined M&A Strategy Drives Growth

Focused Strategy Title companies that expand our footprint

in key markets

Companies that enhance our data capabilities or expand product and service offerings

Disciplined Process Strategic and cultural fit

Risk adjusted return targets

Operational integration

27

Pursuing targets that support or

leverage our core title and settlement

business

Attractive Growth Prospects in Our Property Data Business

Property Record Database Largest property record database

Datatree.com and data licensing demonstrating growth

Title Plant

Continued expansion into new markets

Houston, Dallas, El Paso

Long-term strategy to expand plant coverage to facilitate title automation

28

94

73

87

94

43

17

97

96

99

99

83

60

85

Proprietary Title Plants

Document Images

Active Real Estate Listings

Map and Parcel Boundaries

Assignments and Releases

Deeds, Mortgages, Foreclosures

Assessor/Property Ownership 1st

1st

1st

1st

1st

1st

1st

% Share of counties % Share of population

CURRENT DATA COVERAGE

100100

99

Homeowners Associations

1st

RANK

Leveraging Data Assets to Drive Title Automation and Enhanced Risk Decisioning

First American is Expanding its Scope with Title Agents

29

Became Federal Savings Bankin 1999

$3.4 billion in assets

8.4% Tier 1 leverage ratio

Provides banking & wealthmanagement services

Regulated by the OCC

First American Trust

Title Insurance

Title Production

Banking Services

Closing Solutions Back Office Services

Primary Business

Age

nt

Ad

van

tage

Pilot launched in 2017

First American Objectives

Remain focused on growing profitable market share in title segment

Strengthen data capabilities to drive title automation and reduce transaction time, cost, and risk

Manage complementary businesses that leverage or support the core

30

Title Segment Pretax Margin

11% - 13%

FAF Return on Equity

12% - 14%

Financial

Operational

SUMMARY

31

Strong Track Record of Results 21.7% annualized total shareholder return past 5 years

Well Positioned in a Changing Environment Financial performance remains strong despite higher interest rates Actively investing for the digital future Application of emerging technologies creates opportunities

Attractive Growth Opportunities Strong industry outlook Active M&A pipeline Data assets drive title automation and enhance risk decisioning Expanding service offering for title agents

TITLE OPERATIONS

Chris LeavellChief Operating Officer

Title Insurance and Services

32

U.S. TITLE

DIRECT AGENCY COMMERCIAL

Total Revenue Trend

2.1 1.9 2.1 2.3 2.3

1.0 1.0

1.2 1.3 1.3

0.50.6

0.70.7 0.7

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

2013 2014 2015 2016 2017

Agent Direct Commercial

$ in

Bill

ion

s

$3.7$3.5

$4.0$4.2 $4.4

U.S. Title76%

$4.4B$5.8B $2.3BAgent41%

$1.3BDirect23%

$0.7BCommercial

12%

First American Financial Total Revenue

33

Strong Market Position

26.2% market share

Leader in all key markets

Commercial – Purchase – Refinance – Homebuilders – International

Industry-leading title plants and property record database

National presence

Trusted brand

Long-standing customer relationships

High employee engagement – Fortune 100 Best Companies to Work For

Efficient operations

34

Key Areas of Focus

Continue to expand title margins

Extending market leadership through operating fundamentals

Growth by leveraging unique assets (e.g. bank and data)

Developing digital closing solutions

35

1

2

3

4

Commercial Operations Overview

2017 Market Share (1)

31.8%Sales Channels & Customers Insurance companies Institutional leaders Foreign capital Lenders

Private equity/debt REITs Investment firms/banks Real estate law firms

2017 Total Revenue Mix

Title Premiums85%

Information& Other

13%

Investment Income

2%

$0.7B

Operations

1

1

1 1

1

1

3

3

8 1

1

1

1 1

1

1

1

1

1

1

2

1

1

3

2

1

11

2

49States

45Offices

1,280 Employees

36 (1) Source: ALTA

Commercial Business Outlook Remains Favorable

37

Market Outlook

Most major asset classes and geographic markets remain strong

High level of capital availability despite a decline in foreign capital

A few markets showing signs of fatigue

Expect strong activity level to persist, supported by continued economic growth

465 506

599 559 592

81 89

98 102

104

$0

$100

$200

$300

$400

$500

$600

$700

$800

2013 2014 2015 2016 2017

NCS Local

$546$595

$696$661

$696

$ in

Mill

ion

s

National Commercial Services

Purchase68%

Refinance11%

Commercial7%

Other7%

Info & Other7%

Direct Division Overview


% Total 10.8%% Direct 28.5%

Sales Channels & Customers Realtors Escrow Companies Mortgage Brokers

Lenders Homebuilders Homebuyers


$1.3B

Operations

26States

550Offices

5,100 Employees

(1) Source: ALTA38

Purchase Transaction Closing Process Today

ESCROW OR CLOSING OPENED Earnest Money

Deposited

BUYER’S OFFER ACCEPTED BY

SELLER

Application Loan Estimate Underwriting Approval

MORTGAGE PROCESS

Property & Termite Inspection

OTHER CONTINGENCIES

Disclosure Reports All Contingencies Removed

Opening Package Completed by Buyer & Seller

TITLE PROCESS

Preliminary Title Commitment

Curative Final Date Down

SIGNING/CLOSING Loan Docs Settlement Docs Required Disclosures Buyer Cash Notary Services

FINAL SETTLEMENT Record Docs Loan Funding Disbursement of Funds

READY TO FUND/CLOSE Closing Disclosure due 3 Days

Prior to Funding

SELLER + R.E. AGENT

BUYER + R.E. AGENT

50 – 55 DAYS

39


Deposited


SELLER


MORTGAGE PROCESS


OTHER CONTINGENCIES



TITLE PROCESS






Prior to Funding

SELLER + R.E. AGENT

BUYER + R.E. AGENT

First American is Investing for the Digital FutureDeveloped secure portal to streamline the closing process• Launched in AZ, FL and WA with full

rollout by year end• Digital consumer experience• Secure communication mitigates

wire fraud risk• Improves productivity

SecurePortal



40

TITLE PROCESS




Deposited


SELLER


MORTGAGE PROCESS


OTHER CONTINGENCIES



TITLE PROCESS






Prior to Funding

SELLER + R.E. AGENT

BUYER + R.E. AGENT

First American is Investing for the Digital Future

Developing electronic closing solutions All documents signed electronically Notary either in person or via webcam Legislation still evolving

Developed secure portal to streamline the closing process• Launched in AZ, FL and WA with full



SecurePortal


eClose


40

TITLE PROCESS




Deposited


SELLER


MORTGAGE PROCESS


OTHER CONTINGENCIES



TITLE PROCESS






Prior to Funding

SELLER + R.E. AGENT

BUYER + R.E. AGENT

First American is Investing for the Digital Future

25 - 30 DAYS

Streamlined, efficient process

Digital experience Easier to understand Improved quality

BenefitsDeveloping electronic closing solutions All documents signed electronically Notary either in person or via webcam Legislation still evolving

Developing integrated closing platform for real estate agents, lenders and consumers Digital experience for all

stakeholders Streamlined closing process

Developed secure portal to streamline the closing process• Launched in AZ, FL and WA with full



SecurePortal


Digital Close

eClose


40

TITLE PROCESS



Purchase65%

Refinance19%

Commercial14%

Information & Other2%

Agency Division Overview


% Total 15.4%% Agency 24.8%

Sales Channels & Customers Attorneys Local Agents Regional & National Agents

Lenders Homebuyers


$2.3B49States

65Offices

800Employees

Operations

(1) Source: ALTA41

Agency Division has Grown by Focusing on Larger Agents

42

First American has reduced smaller agents in recent years to focus on larger, more profitable relationships

Reduced risk and administrative costs

Growth with large commercial agents

Continual monitoring of profitability by agent Moved agent split to 85/15 in So. California

NUMBER OF AGENTS

$2,089

$1,877

$2,093

$2,259$2,339

$1,000

$1,500

$2,000

$2,500

2013 2014 2015 2016 2017

$ in

Mill

ion

s

TOTAL REVENUE

5,000

5,500

6,000

6,500

7,000

7,500

8,000

2013 2014 2015 2016 2017

Offering a Wider Array of Products to Title Agents

43

Customer Benefits

First American Benefits

Reduced operating costs Risk mitigation Process efficiency

Expands “share of wallet” with agents

Grows bank deposits Deepens customer

relationships Reduces underwriting risk

Full Search Limited Search

Document Preparation Recordings

Reconciliation Wires Deposit Accounts

Title Insurance

Title Production

Banking Services

Closing Solutions

Back Office Services

Primary Business

Age

nt

Ad

van

tage

Pilot launched in 2017

Expense Management Remains a Key Priority

Manage personnel costs to order volumes

Implemented seasonal workforce program

Leverage well-developed offshore platform

Strong underwriting controls

Keen focus on agent profitability

Margin expansion requires innovation:

Emerging technologies to drive operational efficiencies

Developing automated title solutions to reduce turn times and costs

44

Key Takeaways

Strong franchise in an attractive industry

Keen focus on expense management

Investing in a digital future to respond to an evolving real estate and mortgage industry landscape

Pursuing growth opportunities by leveraging unique assets

45

Q&A

46


FIRST AMERICAN FINANCIALInvestor Day 2018

BREAK

SPECIALTY INSURANCE SEGMENT

Larry DavidsonChief Operating Officer

Specialty Insurance

47

SPECIALTY INSURANCE

Total Revenue Trend

PROPERTY & CASUALTY HOME WARRANTY

220 237 260 299 327

120 132

134 137

139

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

2013 2014 2015 2016 2017

Home Warranty Property & Casualty

$ in

Mill

ion

s

$369$394

$436$465

$340

Specialty Segment

8% $0.5B$5.8B

48

First American Financial Total Revenue

Property & Casualty Overview2017 Premium MixOperations

Policies in Force (PIF)HomeownersRentersOthers

149,70097,6005,900

59%39%2%

100%

Homeowners83%

Renters11%

Others6%

(1) Homeowners policies only (active states)

$127MCA

AZ

UTNV

OR

WA

6States(1)

2Offices

200 Employees

49

Property & Casualty Loss Trend

50

Ceded to Reinsurers

- - - - $12.7

CAT losses in 2017 primarily driven by California wildfires Two events exceeded $5 million

reinsurance retention limit Conservative underwriting held

losses below level implied by market share

Unfavorable trend in core losses being addressed: Rate increases in multiple states Tighter new business and

renewal underwriting program

0%

15%

30%

45%

60%

75%

90%

$0

$20

$40

$60

$80

$100

$120

2013 2014 2015 2016 2017

$ in

Mill

ion

s

Core CAT Events Loss Ratio

Property & Casualty Strategy

Improve Profitability Comprehensive renewal underwriting program

Restructured homeowners policy in key California market

Raising rates where appropriate

Continued focus on risk management Conservative underwriting standards

Robust reinsurance program

51

Home Warranty Overview

Operations 560,000 Active Contracts 3,000 Contractors 5 Contact Centers

Sales Channels & Customers Existing Homeowners Homebuyers and Sellers Real Estate Agents/Brokers

2017 Market Share

35States(1)

7Offices

700Employees

Operations

Top 5 StatesCATXTNAZNV

% Total Premiums36.4%16.0%5.7%4.9%3.9%

66.9%

(1) Plus District of Columbia

First American 14%

American Home Shield45%

Old Republic10%

Fidelity5%

Other13%

$2.2B2/10 and

Cross Country13%

52

Home Warranty Distribution Channels

53

Sales driven by home purchases/sales 21%

Sales through direct marketing to consumer(direct mail, internet, TV)

73%

All contracts in 2nd renewal year or later 81%

Channel

Real Estate

Renewals

Direct-to-Consumer

2017 Retention Rate2017 Premiums

Real Estate36% Direct-to-

Consumer8%

Renewals56%

$312M

Home Warranty Premium Growth Trend

54

171 183 200

219 237

45 49

55

65

75

$0

$50

$100

$150

$200

$250

$300

$350

2013 2014 2015 2016 2017

Real Estate Direct-to-Customer

$ in

Mill

ion

s

Direct-to-Consumer (DTC) Channel Adds to Growth

55

Marketing Plan

Media Campaign

Direct Response TV & Radio

Web Marketing

Search engine optimization

Search engine marketing

Partner leads

Direct Marketing (targeted)

Direct mail

Email

Phone calls

DTC Channel Benefits from:

Low market penetration

Growth driven by marketing spend not real estate market

DTC

First Year Renewal Rate

Acquisition Cost

Initial Claims Rate

Customer Lifetime Value

Consumers Increasingly Expect an Integrated, Digital Platform

Integrated DigitalPlatform

Customer

CompanyContractor

Account access Submit claims Claim status

Work order acceptance Open job status “On my way” tracking

Enhanced contractor dispatch platform

Enables real-time work assignment and approval

Improved productivity

56

Home Warranty Strategy

Deploy technology to enhance customer experience and improve contractor productivity

Remain focused on quality of customer service delivery

Continue to strengthen contractor network

Maintain market leadership in the real estate channel

Grow direct-to-consumer business

57

FINANCIAL REVIEW

Mark SeatonEVP and Chief Financial Officer

58

Capital Management Strategy

Objective: Create long-term shareholder value

Capital management priorities:

Make value-creating investments in our core business

Acquire businesses that fit within our strategy

Return excess capital to shareholders through dividends and share repurchases

Maintain “A-” financial strength ratings and adequate capital levels

Manage our capital structure prudently

Maintain ample financial flexibility and holding company liquidity

59

Capital Expenditures

Fixed Assets

~$40 million annually

Migration to cloud will reduce future expenditures

Software

Customer-facing technology

Production system (FAST) enhancements

Title Plant

Geographic expansion

Capitalized Data

Property record data expansion

60

$0

$20

$40

$60

$80

$100

$120

$140

$160

2013 2014 2015 2016 2017

$ in

Mill

ion

s

Fixed Assets Software Title Plant Capitalized Data Software Licenses

Mergers & Acquisitions

61

2015

2014

20

13

TD Service Leading provider of technology and services to the mortgage banking industry; broadens and enhances our post-closing and document management capabilities.

Complementary

$115MRedVision Largest independent provider of title and real property research; expands

coverage to all 50 states and significantly improves product capabilities in the agent channel.

Complementary

Forsythe Largest independent appraisal company in the U.S.; significantly expanded valuation offering to lender customers.

Complementary

TSS Software Settlement software provider for independent title agents and attorneys; increased customer base and expanded national footprint.

Complementary$7M

TitleVest Title/Settlement service agent with significant residential position in NYC. Title $32M

Interthinx Provides solutions to help clients minimize risk, increase operational efficiencies, and satisfy regulatory requirements; best known for FraudGUARD, a market-leading mortgage fraud analytics product.

Complementary

$163M

Universal Land Title Title/Settlement service agent primarily located in southern Florida. Title

COMPANY TYPETOTALSPEND(1)

Note: Highlights transactions of $5 million or greater. (1) Aggregate purchase price for all completed acquisitions in given year. Source: Company’s 10-K filings.

2016

2017 SIS Buyout of long standing joint venture of title information provider. Complementary

$91MNevada Title Leading title and escrow company with a strong presence in southern Nevada. Title

Acquire companies strategic to our core business that:

Strengthen geographic presence

Enhance product breadth

Analyze expected returns on a risk-adjusted basis

Aggressively integrate acquisitions to realize synergies

Dividends

First American expects to pay a meaningful dividend given the company’s cash flow generation and investment opportunities

Dividend increases are intended to be sustainable in perpetuity

Dividend increases will be dependent upon expected holding company cash flows, market conditions and alternative uses of capital, among other factors

The company is not committed to increasing the dividend every year

62

Dividend Considerations

$0.48

$0.84$1.00

$1.20

$1.44

$0.25

$0.50

$0.75

$1.00

$1.25

$1.50

$1.75

2013 2014 2015 2016 2017

28%

39% 38% 38% 38%

0%

20%

40%

60%

2013 2014 2015 2016 2017

DIVIDENDS PER SHARE

PAYOUT RATIO

Share Repurchases

Share repurchases will be dependent upon capital levels, market conditions and alternative uses of capital, among other factors

$182 million remaining under share repurchase authorization

63

SHARE REPURCHASE HISTORY

2013 Repurchase Summary

Shares Purchased 3.0 million

Total Amount $64.6 million

Avg. Price Per Share $21.90

IRR 25.9% (as of March 31, 2018)

$0

$10

$20

$30

$40

$50

$60

$70

Jan

-13

Mar

-13

May

-13

Jul-

13

Sep

-13

No

v-1

3

Jan

-14

Mar

-14

May

-14

Jul-

14

Sep

-14

No

v-1

4

Jan

-15

Mar

-15

May

-15

Jul-

15

Sep

-15

No

v-1

5

Jan

-16

Mar

-16

May

-16

Jul-

16

Sep

-16

No

v-1

6

Jan

-17

Mar

-17

May

-17

Jul-

17

Sep

-17

No

v-1

7

Jan

-18

Mar

-18

Shar

e B

uyb

ack

Peri

od

Uses of Free Cash Flow and Debt Proceeds

64

~43% of cash flow used for investment portfolio to strengthen the balance sheet

Moving forward, portfolio strengthening not necessary as capital levels exceed current targets

A greater proportion of future cash flows will be allocated to dividends given recent increases

CUMULATIVE 5 YEAR USES

29%

21%

43%

3% 4%

Dividends

Acquisitions

Net Cash & Investments

Share RepurchasesPension Termination

$(200)

$(100)

$-

$100

$200

$300

$400

$500

$600

$700

2013 2014 2015 2016 2017

$ in

Mill

ion

s

$ in Millions

Q1 '18 Q4 '17 Q3 '17 Q2 '17 Q1 '17Holding Company Cash $181.4 $233.9 $259.3 $255.0 $269.1

Tax & Benefit Accounts (33.5) (28.7) (99.1) (110.4) (98.6)

Target Cash(1) (195.0) (190.0) (180.0) (160.0) (160.0)

(A) Potential Excess Cash at Holding Company ($47.0) $15.2 ($19.9) ($15.4) $10.6

FATICO Surplus $1,230.0 $1,173.8 $1,240.9 $1,251.8 $1,237.0

Less: Affiliate investments (80.4) (72.2) (178.6) (169.2) (163.4)

Less: Title Plants (164.0) (164.0) (158.9) (158.9) (157.3)

Less: Portfolio Shock(2) (182.8) (175.9) (163.2) (161.3) (158.0)

Add: Bulk Reserve (net of tax) 158.1 175.6 139.1 139.1 137.4

Minimum Surplus required to maintain A3/A- rating(3) (800.0) (800.0) (800.0) (800.0) (800.0)

(B) Potential Excess / (Deficiency) in Surplus $161.0 $137.3 $79.2 $101.6 $95.7

Debt $731.5 $732.8 $734.1 $734.5 $735.5

Debt-to-Capital 17.4% 17.4% 18.2% 18.7% 19.3%

(C) Additional Debt at 20% Debt-to-Capital $139.1 $137.9 $90.5 $65.1 $33.8

Excess Capital (A) + (B) + (C) $253.0 $290.4 $149.9 $151.3 $140.1

% of Total Capital 6.0% 6.9% 3.7% 3.8% 3.7%

Shareholders Equity $3,470.5 $3,480.0 $3,293.9 $3,193.4 $3,072.5

Debt 731.5 732.8 734.1 734.5 735.5

Noncontrolling interests 1.9 3.1 4.5 4.7 5.1

Total Capital $4,203.9 $4,215.9 $4,032.5 $3,932.6 $3,813.2

Excess Capital

65

(1) 1 year holding company cash outflows(2) Assumes 20% decline in equities and 200 basis point increase in rates across the yield curve(3) Company estimate

Credit Ratings

66

First American’s objective is to maintain at least A-/A3 financial strength ratings through the cycle

Financial Strength Senior Debt

S&P A- (stable) BBB- (stable)

Moody’s A3 (positive) Baa3 (stable)

Fitch A (stable) BBB (stable)

A.M. Best A (stable) BBB (stable)

Capital Structure

Management’s target debt-to-capital ratio is 18-20%

Supports target financial strength ratings

$160 million drawn on $700 million revolving credit facility

Revolving credit facility term ends in May 2019

Significant financial flexibility to seize strategic opportunities

67

5%

10%

15%

20%

25%

30%

35%

2013 2014 2015 2016 2017

As of December 31, 2017 ($ in Millions)

4.3% Senior Notes Due 2023 $250

4.6% Senior Notes Due 2024 300

Trust Deed Notes 23

Other Notes 4

Revolving Credit Facility 160

Total Debt $736

Total Equity $3,480

Debt-to-Capital Ratio 17.4%

Financial Covenant

DEBT-TO-CAPITAL RATIO

Statutory Surplus Trend

68

First American has improved the quality of capital by reducing the amount of affiliated investments within the title underwriter

2010 2011 2012 2013 2014 2015 2016 2017

Surplus ($mm) 847 849 956 996 979 1,104 1,187 1,174

Affiliates % of Surplus 97% 105% 73% 54% 28% 15% 13% 7%

0%

20%

40%

60%

80%

100%

120%

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400Su

rplu

s ($

in M

illio

ns)

% A

ffiliates

Statutory Marketable Securities vs Reserves

69

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Reserves Marketable Securities

$ in

Mill

ion

s

Investment Portfolio

70

CONSOLIDATED PORTFOLIO INSURANCE PORTFOLIO

BANK PORTFOLIO

Note: Debt and equity securities as of December 31, 2017

US Treasury3%

Gov't Agency4%

Municipal20%

Corporate14%

Gov't Agency MBS42%

Foreign8%

Equity9%

US Treasury

7%

Gov't Agency

3% Municipal18%

Corporate24%

Gov't Agency MBS12%Foreign

17%

Equity19%

Gov't Agency

5%

Municipal21%

Corporate5%

Gov't Agency MBS69%

Non-Agency

MBS0%

Equity0%

$5.2B

$2.5B

$2.7B

Avg. Rating : AADuration: 3.4Book Yield: 2.3%

Avg. Rating : ADuration: 4.7Book Yield: 3.0%

Avg. Rating : AADuration: 2.5Book Yield: 1.9%

Ultimate Loss Ratios by Policy Year

71 Note: Ultimate loss ratios are estimates and calculated as a percentage of title premiums and escrow fees for a given policy year as of December 31, 2017

-

50

100

150

200

250

300

350

400

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Paid to Date Ultimate Loss Ratio - Policy Year Paid Losses - Calendar Year

11.1%

13.1%

9.8%

6.4%

5.4% 5.1%

3.4%3.8%

4.7%

3.8%4.2% 4.0%

9.8%

Paid

Losses b

y Calen

dar Year ($

in M

illion

s)

Ult

imat

e Lo

ss R

atio

s b

y P

olic

y Ye

ar

7.6%

92%

93%90%

92%

88%

85%82%

78%

69% 60%57%

33% 17% 5%

$

$

$

$

$

$

$

$

$

Incremental Incurred Losses by Development Period

72

2007

20082009201020112012

2013

2014

2015

2016

2017

$0

$20

$40

$60

$80

$100

$120

0 12 24 36 48 60 72 84 96 108 120

$ in

Mill

ion

s

Age of Policy Year (Months)

Cumulative Losses by Policy Year

73 (1) Includes policy years 1998–2017, excluding 2005-2008

2007

2008

2009

2010

2011

20122013

2014

2015

2016

2017

Long Term Average

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

0 12 24 36 48 60 72 84

Cu

mu

lati

ve L

oss

Rat

io

Age of Policy Year (Months)

(1)

Impact of Fed Funds Rate on Investment Income

74(1) Excludes affiliated investments (See reconciliation in Appendix).(2) Company estimate.

1031 Exchange Escrow Deposits Cash Deposits Bank Earnings

(1)

0.00%

0.25%

0.50%

0.75%

1.00%

1.25%

1.50%

$16

$21

$26

$31

$36

$41

$46

Q1

'13

Q2

'13

Q3

'13

Q4

'13

Q1

'14

Q2

'14

Q3

'14

Q4

'14

Q1

'15

Q2

'15

Q3

'15

Q4

'15

Q1

'16

Q2

'16

Q3

'16

Q4

'16

Q1

'17

Q2

'17

Q3

'17

Q4

'17

Titl

e Se

gmen

t In

vest

men

t In

com

e ($

in M

illio

ns)

Investment Income Fed Funds Rate

Fed Fu

nd

s Rate

Each 25 basis point Fed hike increases investment income by ~$12 million/year(2)

Title Segment

Corporate Segment Investment Income – Deferred Compensation Plan

75

Deferred Compensation Plan

Investment gains and losses recorded in investment income

Investment income largely offset by personnel expense

Rising interest rates have a limited impact on investment income

Corporate pretax loss expected to be ~$75 million annually

$ in Millions

Q1 '18 Q4 '17 Q3 '17 Q2 '17 Q1 '17

Investment income

Deferred compensation ($1.5) $3.8 $3.6 $2.5 $4.0

Other 0.4 0.7 0.5 0.1 0.2

Total (1.2) 4.5 4.1 2.6 4.1

Personnel Costs

Deferred compensation (0.7) 3.4 2.7 2.1 3.1

Other 1.9 0.4 1.0 1.0 1.9

Total 1.3 3.7 3.6 3.1 5.0

Other Operating Expenses

Pension - 0.0 152.4 4.8 5.0

Other 8.5 9.8 9.2 9.6 10.1

Total 8.5 9.8 161.7 14.4 15.1

Depreciation and Amortization 0.0 0.0 0.0 0.0 0.0

Interest 8.3 8.2 8.2 7.8 8.3

Total Expenses 18.0 21.9 173.5 25.4 28.5

Pretax Loss ($19.2) ($17.4) ($169.4) ($22.7) ($24.4)

Tax Reform Impact

Lower federal rate partially offset by:

Higher foreign tax rates

Elimination of certain tax benefits (M&E, 162(m))

Shift to territorial tax system reduces cost to repatriate foreign earnings

76

Pre-reform Post-reform

Federal 35.0% 21.0%

State 1.5% 1.5%

International -1.0% 1.5%

Other -1.5% -

34.0% 24.0%

Historical Title Insurance Margin

77

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

Mortgage Originations Pretax Margin

$ in

Bill

ion

s

Source: MBA

Title Insurance Margin Objective

78

Downside Base Case Upside

Pretax Margin <11% 11% - 13% >13%

Mortgage Originations <$1.4 Trillion $1.4 - $1.8 Trillion >$1.8 Trillion

% Refinance ~25% ~25% ~25%

Investment Considerations

Focused strategy as “pure play” in title and settlement markets

Attractive industry characteristics

Strong competitive position in title and settlement services

Opportunity to grow by leveraging unique assets (e.g. bank and data)

Expect earnings and margin growth as mortgage originations improve

Strong balance sheet and financial flexibility

Commitment to return capital to shareholders

79

Q&A

80


FIRST AMERICAN FINANCIALInvestor Day 2018

THANK YOU

APPENDIX

81

SPECIALTY INSURANCE SEGMENT

U.S. Title

Direct

Agency

Commercial

International Title

Canada

United Kingdom

Mortgage & Data Solutions

Mortgage Solutions

Database Solutions

Banking & Services

Trust & Banking

Real Estate Services

Home Warranty

Property & Casualty

Australia/New Zealand

TITLE INSURANCE AND SERVICES SEGMENT

FIRST AMERICANFINANCIAL CORPORATION

ORGANIZATIONAL STRUCTURE

82

92%Title Segment

8%Specialty Segment

2017 Revenue Breakdown

83

FIRST AMERICAN FINANCIAL

45%Agency

26%Direct

13%Commercial

10%Mortgage & Data

Solutions

6%International

U.S. Title

$5.8B

$5.3B

TITLE SEGMENT

U.S. Title78%

70%Home Warranty

30%Property & Casualty

$0.5B

SPECIALTY SEGMENT

2017 Incurred Claims Detail

84

CLAIM CAUSE PROCESS CAUSE

No Error55%

Unclassified3% Escrow/Closing

14%

Underwriting6%

Exam9%

Search11%

Other2%

File Shortage0%

Escrow/Closing5%

GAP0%

Liens18%

Encumbrances18%

Fraud13%

Basic Risks20%

Other14%

Defective Title6%

Permit Violation6%

59% Direct / 41% Agent

Large Claims2%

Typical Claims65%

Minor Claims33%

Large Claims46%

Typical Claims54%

Minor Claims0%

Claim Severity Distribution

85

CLAIM COUNT BY SEVERITY GROUP PAID CLAIMS BY SEVERITY GROUP

Large claims: $250,000 and greater Typical claims: $1,000 to $250,000 Minor claims: Less than $1,000

Note: Data for 2017 paid claims; excludes file shortages and de minimis claims

Specialty Insurance Financial Summary

86

($ in Millions) 2013 2014 2015 2016 2017

Total Revenues $340 $369 $394 $436 $465

Pretax Income $42 $53 $40 $40 $37

Pretax Margin 12.4% 14.4% 10.0% 9.2% 7.9%

Loss Ratio 56.8% 55.7% 59.8% 61.5% 62.6%

Expense Ratio 32.6% 32.7% 32.2% 34.4% 34.2%

Combined Ratio 89.4% 88.4% 92.0% 95.9% 96.8%

Title Segment Net Investment Income Reconciliation

87

Net Investment Income Less Affiliate Investments$ in Millions

Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17

Net Investment Income $21.8 $26.0 $25.4 $24.4 $24.9 $27.5 $29.0 $29.4 $26.6 $34.7 $37.9 $38.3

Less: Affiliate Investments 1.1 3.7 2.8 0.1 0.9 2.1 2.8 2.4 1.6 1.8 1.1 (0.8)

Adjusted Net Investment Income $20.6 $22.2 $22.6 $24.3 $24.0 $25.4 $26.2 $27.0 $25.0 $32.9 $36.8 $39.0

Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14

Net Investment Income $19.0 $21.6 $22.2 $13.8 $15.7 $19.3 $22.0 $2.7

Less: Affiliate Investments 2.7 4.5 4.1 (3.9) (2.0) 0.3 2.8 (17.6)

Adjusted Net Investment Income $16.3 $17.1 $18.2 $17.7 $17.7 $19.0 $19.2 $20.3

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