Despite rising interest rates, higher house prices and a fall refinancing volumethe American Land Titles Association recorded $5.89 billion in title insurance premium volume in the first quarter of 2022, up from $5.68 billion a year ago, according to the trade group Market share analysisreleased on Friday.
The title insurance industry had a banner year in 2021generating $26.2 billion in premiums, which ALTA attributes to historic mortgage origination activity and substantial increases in home values.
“A strong buying market and continued home appreciation helped offset the continued contraction in refinance volume to help drive the 3.6% increase in premium volume from the first quarter of 2021,” said said Diane Tomb, CEO of ALTA, in a statement.
The five states with the largest title premium volumes were Texas ($896.2 million), Florida ($696.6 million), California ($531.0 million), New York ( $362.7 million) and Pennsylvania ($246.8 million). The same five states held the top spots at the end of 2021.
Texas, Florida and New York all saw year-over-year increases in title premium volume of 30.6%, 22.3% and 15.9%, respectively. On the other hand, California and Pennsylvania both saw annual declines in title premium volumes at 17.4% and 9.3%, respectively.
Total industry operating income increased 3.6% year-over-year to $508.1 million in the first quarter of 2022, while operating expenses increased 40% year over year. Claims and settlement expenses recorded an annual increase of 13.8%. Overall, securities underwriters paid $132.7 million in claims for the quarter, compared to $107.1 million a year earlier.
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Top underwriters by market share for the quarter included First American Title Insurance Company., with 21.5%; Old Republic National Title Insurance Company., with 15.2%; Fidelity National Title Insurancewith 14.0%; Chicago Title Insurance Co., with 13.4%; and Stewart Title Guaranty Co., with 8.9%.
However, it should be noted that Chicago Title is part of Fidelity. And with nearly 27.4% of the market, it was the largest company by share of written premiums in the first quarter of 2022.
Also at the end of 2021, First American’s market share was 20.5%, while Old Republic’s was 14.8% and Stewart’s was 8.9%. Stewart — who continued his acquisition frenzy in early 2022 — is looking to recoup some of the title premium he’s lost in recent years. As recently as 2019Stewart’s market share was 10.62%.
To complete the top 10 for 2021, Westcor Land Title Insurance Co. with 5.3% of the market, good for sixth place. WFG National Title Insurance Co. held 2.7% market share, Title Resources Guaranty Co. had 2.3% Doma Title Insurance Co.held 1.7%, and First National Title Insurance Co.had 1.1%.
Although the “Big Four” still control the overwhelming majority of the market with a combined market share of 73%, their collective hold could weaken. In 2019, underwriters of independent securities such as Westcor, WFG and others had a combined market share of just under 15%, which rose to 27% in the first quarter of 2022.
As interest rates hit their highest level in more than a decade in recent weeks, causing slowdown in home buying activity and refinancing volumes continue to decline, the outlook for Q2 2022 does not look as strong as in Q1.
“Rising interest rates will impact housing affordability, as potential monthly payments on a typical new mortgage will increase significantly,” Tomb said. “While overall home buying expenses have increased significantly in recent years, the cost of title insurance coverage has decreased 7% since 2004. The title industry will continue to innovate and develop products that best serve and protect its customers.”