As mortgage activity hit historic highs in 2020, it pushed title insurance premium volume up more than 20 percent in 2020, according to the American Land Title Association’s latest Market Share Analysis.
The title insurance industry generated $19.2 billion in title insurance premiums during 2020 compared to $15.8 billion during 2019, according to the analysis. This is an increase of 21.7 percent from 2019 to 2020.
“At the start of the pandemic in early 2020, it was a very uncertain time, with few in the industry clear on what the road ahead looked like for the industry and those we serve,” ALTA CEO Diane Tomb said. “As the year progressed, however, the purchase market remained robust alongside strong refinance activity overall, generating significant title insurance premium volume.”
“We do not expect 2021 will have the same level of refinance activity, but the residential purchase market appears to be holding steady,” Tomb said. “The true test of whether 2020 volume represents a unique event will be whether the historically low inventory of homes for sale continues into the summer.”
The Big Four title companies continued to dominate the market in 2020 with the Fidelity Family of title insurance underwriters capturing 32.9 percent of the market, followed by the First American Family with 23.3 percent, the Old Republic Family at 15 percent and the Stewart Family at 9.6 percent. Independent title insurance underwriters comprised 19.2 percent of the market.
Title insurance industry: 2020 market share by company
Source: American Land Title Association.
The Big Four may soon be challenged by industry disruptors including virtual insurance companies like States Title, virtual title agencies like JetClosing and integrated residential brokerage platforms such as Flyhomes, Knock and Orchard.
Overall, total operating income for the industry was up 17.60 percent, operating expenses were up 17.01 percent, and loss and loss adjustment expenses were down 7.89 percent. In 2020, the industry paid more than $469 million in claims.
“Title insurance professionals worked tirelessly to innovate and serve the needs of their communities, keep the real estate market moving and supporting the overall economy throughout the COVID-19 pandemic as essential businesses,” Tomb said. “I am very proud to work in an industry full of people who are willing to roll up their sleeves, dive in and get the job done, with a relentless focus on their customers.”