Title insurers are having a banner year, as rising home sales and prices helped the industry set another new record for premiums written during the third quarter.
During the three months ending Sept. 30, 2021, the title insurance industry generated $6.8 billion in title insurance premiums, according to an analysis by the American Land Title Association.
That’s a 32 percent increase from a year ago, helping title insurers break the previous record of $6.5 billion in premiums written during the second quarter.
For the first nine months of the year, premiums written were up 43.7 percent from a year ago, to $19 billion, while claims increased by only 1.3 percent, to $352.5 million.
The smallest of the big four title insurers posted the strongest third-quarter growth, while industry leader Fidelity grew less than the industry as a whole.
Growth in title insurance premiums written
The Stewart Information Services Corp. family of companies, which include Stewart Title Guaranty and Stewart Title Limited, posted the highest rate of annual growth during the third quarter, with premiums written growing by 52 percent to $641 million.
The Old Republic Title Insurance Group of companies, including Old Republic National Title Insurance and American Guaranty Title Insurance, also grew faster than the industry as a whole, with premiums written up 38 percent from a year ago, to $1.028 billion.
The First American Financial Corp. family of companies, which include First American Title Insurance and First American Title Guaranty, grew premiums written by 34 percent to $1.586 billion.
The Fidelity National Financial family of companies — which include Chicago Title, Fidelity National Title and Commonwealth Land Title — posted 29 percent annual growth in premiums written, with $2.221 billion in third quarter production.
Collectively, independent title insurers also posted below-average growth, with third quarter premiums written growing by 30 percent to $1.331 billion.
Title insurer market share, by premiums written
The Fidelity family of companies continued to command the biggest piece of the premiums pie, capturing 32.6 percent of the market during the third quarter. That’s down from 33.1 percent during the second quarter and 33.4 percent a year ago.
The First American family’s market share of 23.3 percent was up from 22.5 percent during the second quarter, but little changed from 23.1 percent a year ago.
The Old Republic family of companies’ third quarter market share of 15.1 percent was unchanged from the second quarter, but up from 14.5 percent a year ago.
At 9.4 percent, the Stewart family of companies’ third quarter market share was down slightly from 9.6 percent in the second quarter, but up from 9.1 percent a year ago.
Collectively, independent title insurers accounted for 19.6 percent of third quarter premiums written, down from 19.7 percent in the second quarter and 19.9 percent a year ago.
The two biggest independent companies — Westcor Land Title Insurance and WFG Title Insurance — accounted for 44 percent of premiums written by independents.
With $400.6 million in premiums written, Westcor’s third quarter market share slipped to 5.9 percent, down from 6.2 percent in the second quarter and 6 percent a year ago.
WFG’s market share also dipped to 2.7 percent with $182.3 million in third quarter premiums written. WFG had 3 percent market share in the second quarter and 2.9 percent a year ago.
The big picture
The title insurance business is increasingly about more than just premiums written, with leading companies investing in technology that streamlines the provision of title insurance and end-to-end real estate services.
In reporting 144 percent annual growth in third quarter net income, First American executives detailed investments the company is making in next-generation, cloud-based technology that will help it grow and automate its business. First American is investing heavily in its Endpoint subsidiary, a digital title and settlement services provider launched in 2018 that uses artificial intelligence to streamline document submissions and expedite processes.
First American is also building strategic partnerships through stakes in more than a dozen venture-funded proptech companies that are now valued at nearly $700 million, including Lev, Offerpad, Orchard, Pacaso, Ribbon, Side Inc. and Sundae.
Executives at Fidelity National Financial last month reported 39 percent growth in third quarter net earnings, and said the company’s growing suite of end-to-end digital transaction tools — collectively known as the “inHere Experience Platform” — are catching on with consumers.
Stewart Information Services Corp. acquired data and analytics provider Informative Research in September, furthering CEO Fred Eppinger’s vision of building an end-to-end real estate services and technology platform.
“Not only are ALTA members handling record volume, but title industry professionals continue to help enhance the customer experience to make the settlement process more efficient,” said ALTA CEO Diane Tomb, in a statement. “ALTA members are leading the way to help make real estate transactions digital and more accessible. As technology automates and digitizes certain processes of the real estate transaction, ALTA members continue to deliver a valuable service and insurance product. While quicker turnaround times are desired, getting it right and performing essential duties in the settlement process and issuance of title insurance to meet customer needs will remain paramount.”