While 2021 is expected to generate higher sales for title insurers, the current inventory shortage is likely to negatively impact their new activity, according to an annual analysis by the American Land Title Association.
Title insurers benefited from the strong refinancing market in 2020. There were $ 19.2 billion in rewards paid that year, up nearly 22% from $ 15.8 billion in 2019, according to ALTA.
"We don't expect refinancing activity will be the same in 2021, but the residential property purchase market appears to be stable," said Diane Tomb, managing director of ALTA, in a press release. "The real test of whether the 2020 volume is 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 a market share of 33.9%. This is a slight increase from 2019 when it was 33.2%.
At First American Financial, the market share fell from 25.8% in 2020 to 23.3%. Old Republic fell from 15.4% to 15% while Stewart's stake fell from 10.6% to 9.6%.
Independent businesses have been the biggest beneficiaries of the surge in mortgage activity over the past year. As a group, they achieved a market share of 19.2% in 2020 from 14.99% in 2019.
Almost half of that growth came from a company, Westcor, which increased its market share by more than two percentage points to 5.78% last year from 3.7% in 2019.
The national WFG title ranked sixth by market share at 2.96%, up 45 basis points from 2019, and the Title Resource Guarantee was second at 2.49%, an increase of 12 basis points.
North American title insurer, whose parent company Doma recently agreed to go public through a special purpose vehicle merger, had a market share of 1.82% last year, compared to 1.77% in 2019.
Title insurers' total operating income increased 17.60% but operating expenses increased 17.01%. The expense of adjusting losses and losses decreased 7.89%. In 2020, the industry paid more than $ 469 million in damages claims, compared to $ 544 million in 2019, ALTA said.
Fidelity's net income was $ 1.43 billion in 2021, while First American reported $ 694.6 million and Stewart reported $ 154.9 million.
Old Republic's title insurance business posted a pre-tax operating profit of $ 344 million for 2020. The company, which offers other lines of insurance, posted net income of $ 670.8 million.