Fidelity National Financial Inc. is bringing the operations of two Colorado-based title companies it acquired from bankrupt Mercury Cos. — Security Title Guaranty Co. and United Title Co. — under the umbrella of Fidelity National Title Insurance Co., extinguishing brands that once underwrote nearly one in three title insurance policies in the state.
Fidelity acquired Security and United Title in August 2008, after Mercury closed down 161 title and escrow offices operated by subsidiaries in California, Arizona and Texas, and lenders stopped doing business with Mercury’s Colorado subsidiaries.
Mercury, which had an exclusive underwriting agreement with First American Corp., claimed a 30 percent market share of Colorado’s title insurance business at the time (see story).
Signs that Mercury was in financial trouble first emerged in December 2007 when its California-based subsidiary, Alliance Title, closed its doors, leaving hundreds of workers to file claims for unpaid wages and commissions. Alliance Title filed for bankruptcy in June 2008, followed by Mercury and its other affiliates in October 2008.
The California Department of Industrial Relations in December announced a settlement under which 633 former employees of Mercury’s other California subsidiaries, Financial Title Co., Lenders Choice Title Co. and Lenders First Choice Agency Inc., were to receive $4.29 million in back wages, expenses and commissions. The settlement did not resolve the wage claims of 594 Alliance Title employees.
Fidelity National Financial became the nation’s largest title insurance underwriter in December 2008 when it acquired bankrupt LandAmerica Financial Group Inc.’s underwriting companies, Commonwealth Land Title Insurance Co., Lawyers Title Insurance Corp. and United Capital Title Insurance Co. …CONTINUED
The deal left the title insurance industry highly consolidated, with Fidelity and First American expected to control 70 percent of the market in all but one of the 12 states with the largest gross title insurance premiums, lawyers for a competing firm, Old Republic International Corp., said at the time (see story).
But in the process of integrating Lawyers and Commonwealth into its operations during the second quarter of 2009, Fidelity eliminated 2,300 positions, or about 40 percent of the employees transferred at the closing of the acquisition.
Fidelity’s market share declined from 45.8 percent during the second quarter to 39.6 percent during the third quarter, according to statistics compiled by the American Land Title Association.
First American boosted its market share from 26.7 percent to 28.6 percent during the same period. The combined market share of regional title companies and the two smallest national underwriters — Stewart Title Guaranty Co. and Old Republic — grew from 24.4 percent in 2007 to 31.9 percent in the third quarter of 2009, ALTA reported (see story).
Fidelity National Title Group, which also includes Chicago Title, Ticor Title, Security Union Title and Alamo Title, last week reported $370 million in earnings on $5.39 billion in revenue for 2009, compared with a $231 million loss on $3.82 billion in revenue in 2008.
"We are now unquestionably the largest, most profitable title insurance company in the country," Fidelity Chairman William P. Foley II said in a conference call with investors.
***
What’s your opinion? Leave your comments below or send a letter to the editor.
