How title insurers stacked up in 2020

While 2021 is expected to generate more higher-revenue purchase business for title insurers, the current inventory shortage is likely to have a negative impact on their new activity, according to an annual analysis by the American Land Title Association.

Title insurers benefitted from the strong refinance market in 2020. They wrote $19.2 billion in premiums that year, which was a nearly 22% increase from $15.8 billion in 2019, ALTA found.

"We do not expect 2021 will have the same level of refinance activity, but the residential purchase market appears to be holding steady," Diane Tomb, ALTA's chief executive, said in a press release. "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."

Fidelity National Financial remains the largest company by share of premiums written, ending 2020 with 33.9% of the market, a slight increase from 2019, when it did 33.2%.

But First American Financial saw its market share slip to 23.3% in 2020 from 25.8%. Old Republic dropped to 15% from 15.4% while Stewart's share dropped to 9.6% from 10.6%.

Independent companies were the biggest beneficiaries of last year's increased mortgage activity. As a group, they went to 19.2% of the market in 2020 from 14.99% for 2019.

Almost half of that growth came from one company, Westcor, which had a more than two percentage point increase in market share, to 5.78% last year from 3.7% in 2019.

WFG National Title ranked sixth by market share, at 2.96%, a 45 basis point gain over 2019 and Title Resources Guaranty was next at 2.49%, up 12 basis points.

North American Title Insurance, whose parent company Doma recently agreed to go public via a special purpose acquisition company merger, had a 1.82% market share last year, compared with 1.77% in 2019.

Total operating income for the title insurers increased 17.60% but operating expenses were up 17.01%. Loss and loss adjustment expenses were down 7.89%. In 2020, the idustry paid more than $469 million in claims, compared with $544 million in 2019, ALTA said.

Fidelity’s net earnings totalled $1.43 billion in 2021, while First American reported $694.6 million and Stewart reported $154.9 million.

Old Republic's title insurance business fad pretax operating earnings of $344 million for 2020; the company, which offers other lines of insurance, had net earnings of $670.8 million.