BrokerageIndustry News

Title insurance biz ‘highly concentrated’

News analysis: LandAmerica's demise may undermine competition

The title insurance business was "highly concentrated" in the hands of a few companies even before Fidelity National Financial Inc. got the nod from antitrust regulators to take over LandAmerica Financial Group Inc.'s two primary underwriting subsidiaries. That's according to one measurement used by the Department of Justice to analyze whether mergers and acquisitions will result in a potentially anti-competitive concentration of market share, the Herfindahl-Hirschman Index, or HHI. Accountant and author Steven Bragg explains that the basic HHI calculation is simple: Square the market shares of competitors in an industry, then add them up. Before the third-biggest player in the title insurance business, LandAmerica Financial Group, filed for Chapter 11 bankruptcy protection on Nov. 26 and put its underwriting subsidiaries up for sale, five companies pretty much owned the business. LandAmerica and three competitors each commanded double-digit market shares. Acco...