Title Industry in Neutral
Columbus, Ohio – December 8, 2011: As the Title Industry heads toward the end of 2011, the trends of slow recovery are still continuing from the last quarter, albeit with a few bumps along the way. With employment rising and housing inventories falling, there was room for some optimism that the third quarter would continue to build upon gains posted earlier in the year. This largely did not happen as Title underwriters lost ground or saw only minor improvement on operating results, premiums and loss trends.
In third quarter 2011, the industry reported a net operating loss of $18.9 million. This reversed a trend of increasing operating results from the first two quarters of 2011. Unaffiliated underwriters significantly outperformed the larger companies operating results, reporting a YTD operating gain of $17.7 million against grouped company’s YTD operating loss of $36.6 million.
Income is up nearly 175 percent from the same period in 2010. The third quarter drop in operating results directly translated to the year over year decrease from the 200 percent improvement seen in the second quarter. The larger underwriter groups accounted for $148.8 million, or over 92 percent of the industry’s net income due to their ability to generate investment gains and cash in deferred tax assets. Direct losses unpaid declined; increasing $15 million from the second quarter but down 4.6 percent from last year. The industry paid $251.0 million in losses during the third quarter of 2011 and wrote $2.3 billion in premium, a gain of $62 million from the second quarter.
While premiums are not growing rapidly nationally, some jurisdictions have experienced greater changes from 2010. Texas and New York have increases in premiums written of 10.6 percent and 15.8 percent respectively. California and Utah have decreases in premiums written of 5.6 percent and 18.8 percent from third quarter 2010. California also reported $21.4 million in higher paid losses while Texas reported a decrease in paid losses to improve the overall profitability in the state.
Title Industry Information and Analysis
The 2012 Edition of Demotech Performance of Title Insurance Companies presents year-end 2011 Title industry results with over 400 pages of industry analysis, including supporting detail and reports. The 2012 Edition can be pre-ordered now by contacting Paul Osborne at (800) 354-7207.