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As mortgage rates rise, the “big four” title insurers are proving to be more adept at pivoting with lenders to serve homebuyers, with established industry players taking market share away from smaller independent companies.
The title insurance industry generated $12.16 billion in premiums during the first six months of the year, a drop of just half a percentage point from the same time a year ago, according to data compiled by the American Land Title Association (ALTA).
With claims up 25 percent from a year ago to $277.2 million, net operating income for the title insurance industry as a whole during the first half of the year was down 5.3 percent to $562.5 million, ALTA said.
But business did cool off at a faster pace during the second quarter, with premiums written down 5 percent from a year ago to $6.21 billion.
Last year title insurers generated a record $26.2 billion in premium revenue, an increase driven largely by a surge in refinancings as mortgage rates hit record lows.
This year, as lenders have pivoted from serving borrowers looking to refinance to making more complex purchase loan transactions, independent title insurers saw second-quarter premiums written drop by 18.4 percent to $1.05 billion.
One leading independent title insurer, Doma, has laid off more than 500 workers this year as it races to adapt technology the company pioneered for mortgage refinancings so it can be applied to purchase loans.
Diane Tomb
“This quarter’s report reinforces the fact that real estate remains local,” said ALTA CEO Diane Tomb in a statement. “Housing markets in several states continued to remain strong, while other areas have started to pull back as affordability constraints increase and the Federal Reserve continues to raise interest rates to combat inflation.”
Title insurer market share, Q2 2022
Title insurer market share by premiums written ($ billions) Source: American Land Title Association
During the second quarter, independent title insurers saw their market share slip to 16.9 percent, down from 19.7 percent a year ago.
The top five independent title insurers, accounting for nearly three-quarters of the business handled by independents, were:
- Westcor Land Title Insurance (4.2 percent)
- Title Resources Guaranty (2.7 percent)
- WFG National Title Insurance (2.5 percent)
- Doma Title Insurance (1.8 percent)
- Investors Title Insurance family (1.1 percent)
While Westcor and WFG lost market share, Title Resources Guaranty, Doma and Investors grew their market share by a tenth of a percentage point from a year ago.
Among the big four title insurers, only Old Republic failed to boost its market share during the second quarter, while companies under the umbrellas of First American and Stewart Title made the biggest gains.
The First American Financial Corp. family of companies including First American Title Insurance and First American Title Guaranty generated 24.5 percent of premiums written, up from 22.5 percent a year ago.
The Stewart family of companies, which include Stewart Title Guaranty and Stewart Title Limited, claimed 10.3 percent market share, up from 9.6 percent a year ago.
The Fidelity family of companies, which include Chicago Title, Fidelity National Title and Commonwealth Land Title, kept their place at the top of the title insurance heap, generating 33.3 percent of title insurance premiums during the second quarter, up from 33.1 percent a year ago.
The Old Republic Title Insurance Group of companies including Old Republic National Title Insurance and American Guaranty Title Insurance, saw their market share dip slightly to 15.0 percent, down from 15.1 percent a year ago.
Title insurance premiums written, Q2 2022
Title insurance premiums written by company, ($ billions) Source: American Land Title Association.
While independent title insurers suffered a double-digit drop in premiums written during the second quarter, two of the big four title insurers achieved year-over-year growth.
Companies in the First American family boosted second quarter premiums written by 3.4 percent from a year ago to $1.523 billion.
Companies in the Stewart family did 2.2 percent more business with premiums written during April, May and June growing to $639 million.
Companies under the umbrella of industry leader Fidelity saw premiums written fall by 4.4 percent from a year ago to $2.069 billion, while the Old Republic family of companies saw premiums decline by 5.6 percent.
“Despite the changing conditions, title professionals understand the cyclical nature of the housing market and are committed to delivering safe and efficient real estate closings, protecting property rights and helping all consumers achieve homeownership,” Tomb said.
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