Rising home sales, prices help title insurers make record profits

Rising home sales and prices helped title insurers to their best-ever second-quarter earnings thanks to lower claims and an increase in written premiums from rising home sales and prices.

Overall, according to an analysis by the American Land Title Association, the title insurance industry increased the written premiums in the second quarter compared to the previous year by 56 percent to 6.5 billion US dollars. Net income rose 84.6 percent to $ 559 million, according to ALTA, with title insurers paying out $ 221.1 million in claims in the first six months of the year, up from $ 232.9 million in the first half of 2020 .

“The continued strength in the buying market and the strong recovery in the commercial market continue to drive historic title insurance premium volumes,” said Diane Tomb, CEO of ALTA, in a statement. “Despite the recent spike in COVID-19 cases, the housing market remains resilient as ALTA members across the country continue to serve their customers’ needs, protect property rights and empower communities.”

Market share of title insurers based on premiums written Q2 2021

Source: American Land Title Association.

Among the top four title insurers, the Fidelity National Financial family of companies – which include the Chicago Title, Fidelity National Title and Commonwealth Land Title – gained second market share over First American.

With written rewards of US $ 2.16 billion, the Fidelity corporate family achieved a market share of 33.1 percent in the second quarter, compared to 32.7 percent in the previous year.

The First American Financial Corp. family of companies. – to which First American Title Insurance and First American Title Guaranty belong – recorded a market share drop from 23 percent to 22.5 percent over the same period.

The Old Republic Title Insurance Group family of companies, which includes Old Republic National Title Insurance and American Guaranty Title Insurance, remained in third place with a market share of 15.1 percent after 14.8 percent in the previous year.

The Stewart Information Services Corp family of companies, including Stewart Title Guaranty and Stewart Title Limited, saw market share fall to 9.6 percent from 10.1 percent a year earlier.

Independent companies earned $ 1.286 billion in premiums, a 19.7 percent market share, up from 19.5 percent a year ago.

Two independent companies – Westcor Land Title Insurance and WFG Title Insurance – accounted for 47 percent of the premiums posted by independents. With 406.4 million US dollars in premiums, Westcor increased its market share to 6.2 percent compared to 5.9 percent in the previous year. WFG retained its 3 percent market share with premiums posted of $ 197.5 million in the second quarter.

Growth in title insurance premiums written

Source: American Land Title Association.

The Old Republic family of companies posted the strongest year-over-year growth with $ 990 million in bonuses in the second quarter, 59.7 percent more than last year.

The Fidelity family of companies saw premiums written up 58.5 percent to $ 2.165 billion.

Independent property insurance companies recorded a 57.8 percent growth in written premiums to $ 1.286 billion.

The First American family of companies increased the written premiums by 53.4 percent to 1.473 billion US dollars.

The written rewards of the Stewart corporate family rose 48.5 percent from the previous year to 625 million US dollars.

Beyond title insurance

With title insurance business booming, the leading companies are investing in technology that will help streamline the provision of title insurance and ancillary services such as rating management services, search and evaluation, and online authentication and acquisition solutions.

Since a planned merger with Fidelity National Financial failed, Stewart Information Services Corp. expanded its ancillary services business and acquired several companies to build an end-to-end real estate services and technology platform. Most recently, the company announced an agreement to acquire data and analytics provider Informative Research for $ 192 million.

This year, Fidelity launched inHere, an end-to-end platform that provides transaction tracking, e-notarization, and e-closing services for agents and consumers.

First American Financial Corp. invested $ 70 million in trust and title technology company Endpoint and recently made an automated title decision engine, Clear2Go, available to independent title agents that enables them to offer title decisions on suitable mortgage refinancing and home equity on the same day loans.

Among the independents breaking new ground is Doma, which offers “instant underwriting” of title insurance for mortgage refinancing, as well as streamlined remote and digital close and escrow services for all types of mortgages.

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