Title insurer and real estate tech provider Fidelity National Financial says its growing suite of end-to-end digital transaction tools are a hit with consumers, with nearly two-thirds of the more than 2 million clients they’ve been offered to so far accepting the invitation.
Those tools — collectively known as the “inHere Experience Platform” — are part of a longer-term focus on integrating and leveraging automation to improve efficiency and grow market share, FNF executives said in announcing record third-quarter results.
The nation’s largest title insurer this week reported third-quarter adjusted net earnings grew 39 percent from a year ago, to $604 million, on $3.9 billion in revenue, which was up 31 percent.
“We are very pleased with our customers’ adoption of our digital platform, as we believe it will not only improve their satisfaction with our service and product, but also improve our efficiency,” said FNF president Mike Nolan in a call with investment analysts. “Ultimately, we believe the inHere Experience Platform, combined with our scale and our history and expertise in building market-leading technology solutions, positions FNF to grow market share.”
Since launching the inHere platform in December to provide transaction tracking, e-notarization and e-closing services for title agents and consumers, FNF has steadily been adding new components.
In January, the company added a guided digital closing tool for real estate transactions called “Close inHere” to the platform, followed in July by an online notarization tool, “Notarize inHere,” available in the 30 states where online notarization is permitted.
Consumers are invited to begin transactions in the “Start inHere” module, which guides buyers, sellers, and borrowers through the opening process.
“During the quarter, we reached a significant milestone as more than two million consumers have now been invited to begin their transactions on our digital inHere Experience Platform through Start inHere, and more than 1.3 million have chosen to do so,” Nolan said.
Asked if FNF expects to see more revenue or profit from improved inHere adoption, Nolan said that the inHere platform “does give us some efficiencies on the front end because [consumers] provide information in a secure environment, not email, directly into our production system.”
Over time, “that will lead us down the path of just doing more and more digitally, leading up to the final moment, which is the execution of the documents for the closing. And we’re just very excited about the fact that we’re seeing that adoption rate close to 65 percent. It tells us that there’s a pretty large group of consumers that are looking for a different way to transact. And we feel like we’ve built the platform that will really be a differentiator for us over time.”
Not just a title insurer
Most of FNF’s revenue and earnings come from its title insurance business — adjusted pre-tax title earnings of $669 million and margin of 21.7 percent were the strongest third quarter results in the company’s history.
But FNF also owns a stable of real estate technology companies, and companies that provide services to mortgage lenders and real estate professionals.
FNF’s real estate technology companies include SoftPro, a provider of closing, title, and escrow software solutions; NextAce, a pioneer in automating title search and examination; ServiceLink Auction, a full-service auction platform for short sales and foreclosed homes; CINC (Commissions Inc.) a provider of real estate marketing and CRM software for real estate agents and brokers; Real Geeks, a lead generation and management solution for real estate agents; and SkySlope, a digital transaction management platform for real estate brokerages.
Part of FNF’s growth strategy is to buy companies that are a good fit with its title insurance business. But last year’s $1.8 billion acquisition of F&G Annuities & Life Inc., a provider of annuity and life insurance products, also provided a major source of revenue that’s counter-cyclical to FNF’s title insurance business.
Future acquisitions
With FNF’s cash balance growing by 25 percent from the second quarter, to $1.5 billion, analyst John Campbell, managing director of financial services firm Stephens Inc., wanted to know if FNF still has an appetite for more acquisitions.
FNF CFO Anthony Park noted that some of that cash is earmarked to pay off $400 million in bonds that are coming due in September 2022, and to fund future growth at F&G.
But Nolan said FNF is “always on the lookout for acquisitions that can add value to the company.”
In title insurance, there are “a number of opportunities to continue to add agent acquisitions,” he said. “We’re doing those — a lot of them are smaller, we don’t always announce them.”
Outside of title insurance, “we have a number of businesses that could be potential beneficiaries of acquisitions if it makes sense,” Nolan said.
“But we’re not going to do acquisitions just for acquisition’s sake. And we also know that you don’t always know when something shows up that you want to act on. So it can be good to have some cash to be able to move quickly when those opportunities show up.”
FNF’s rivals in the title insurance industry are also looking to invest profits in next-generation technology that will help them grow and automate their businesses. The boom in mortgage refinancing and home sales during the pandemic has helped title insurers generate record profits.
Last month, FNF’s biggest rival, First American Financial Corp., announced it was providing another $150 million in funding to its digital title and settlement services subsidiary, Endpoint, to help the company bring a “reimagined” closing process to more markets. First American has also posted big gains on investments in 16 venture-funded companies including Offerpad, Orchard, Sundae and Pacaso, recently valued at $669 million.
Since FNF’s plans to acquire Stewart Information Services Corp. fell through two years ago, Stewart CEO Fred Eppinger has been on a quest to build an end-to-end real estate services and technology platform. A buying spree that began last year is expected to culminate in Stewart’s biggest bet on ancillary services yet — a $192 million deal to buy Informative Research, a data and analytics provider that helps mortgage lenders and banks acquire customers and originate and process loans.