Rising Home Sales, Prices Help Title Insurers Post Record Profits
Rising home sales and prices helped title insurers post their best second quarter earnings ever, thanks to lower claims and a surge in premiums written driven by rising home sales and home prices.
As a whole, the title insurance industry boosted second quarter premiums written by 56 percent from a year ago, to $6.5 billion, according to an analysis by the American Land Title Association. Net income was up 84.6 percent to $559 million, ALTA reported, with title insurers paying out $221.1 million in claims through the first six months of the year, down from $232.9 million in the first half 2020.
“The continued strength in the purchase market and strong rebound in the commercial market continue to drive the historic volume in title insurance premiums,” ALTA CEO Diane Tomb said in a statement. “Despite the recent surge of COVID-19 cases, the housing market remains robust as ALTA members across the country continue to serve the needs of their customers, protect property rights and strengthen communities.”
Title insurer market share, by premiums written Q2 2021
Source: American Land Title Association.
Among the big four title insurers, the Fidelity National Financial family of companies — which includes Chicago Title, Fidelity National Title and Commonwealth Land Title — picked up market share over second place First American.
With $2.16 billion in premiums written, the Fidelity family of companies captured 33.1 percent market share during the second quarter, up from 32.7 percent a year ago.
The First American Financial Corp. family of companies — which includes First American Title Insurance and First American Title Guaranty — saw market share slip from 23 percent to 22.5 percent during the same period.
The Old Republic Title Insurance Group family of companies, which include Old Republic National Title Insurance and American Guaranty Title Insurance, remained in third place, with 15.1 percent market share, up from 14.8 percent a year ago.
The Stewart Information Services Corp family of companies, including Stewart Title Guaranty and Stewart Title Limited, saw market share dip to 9.6 percent, down from 10.1 percent a year ago.
Independent companies wrote $1.286 billion in premiums, capturing 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 premiums written by independents. With $406.4 million in premiums, Westcor boosted its market share to 6.2 percent, up from 5.9 percent a year ago. WFG retained its 3 percent market share with $197.5 million in second quarter premiums written.
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 premiums written during the second quarter, up 59.7 percent from a year ago.
The Fidelity family of companies saw a 58.5 percent increase in premiums written, to $2.165 billion.
Independent title insurance companies posted 57.8 percent growth in premiums written, to $1.286 billion.
The First American family of companies grew premiums written by 53.4 percent, to $1.473 billion.
The Stewart family of companies saw premiums written grow by 48.5 percent from a year ago, to $625 million.
Beyond title insurance
With business booming in title insurance, the leading companies are investing in technology that helps streamline the provision of title insurance and ancillary services like appraisal management services, search and valuation, and online notarization and closing solutions.
Since a planned merger with Fidelity National Financial fell through, Stewart Information Services Corp. has been growing its ancillary services business, acquiring several companies in order 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.
Fidelity this year 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. has invested $70 million in escrow and title-tech company Endpoint, recently made an automated title decision engine, Clear2Go, available to independent title agents, allowing them to offer same-day title decisions on eligible mortgage refinancings and home equity loans.
Independents breaking new ground include Doma, which offers “instant underwriting” of title insurance for mortgage refinancing, and streamlined remote and digital closing and escrow services for all types of mortgages.