SOURCE: Demotech, Inc.

May 01, 2008 09:49 ET

Providing Perspective on the Title Insurance Industry

COLUMBUS, OH--(Marketwire - May 1, 2008) - Recent real estate market challenges and the effect on Title insurance and related industries are prominent topics. However, few examine current year-end results within the context of broader industry performance and trends. This oversight can be particularly misleading with the Title insurance industry, which, based on 2007 year-end results, is in the midst of a dramatic downturn, but follows the unprecedented industry expansion over the last decade. With the May 1st release of the 2008 edition of "Demotech Performance of Title Insurance Companies," Demotech provides the most thorough industry analysis available, evaluating 2007 industry results along with up to ten years of historic performance for comparison.

2007 results provided dramatic observations for the Title insurance industry, with premiums decreasing by 14 percent as losses increased 32 percent over 2006 results. For the first time since 2000, the industry's Combined Ratio exceeded 100 percent, indicating an underwriting loss. Meanwhile, the Title industry managed just over a 5 percent yield on invested assets, which is less than half of 2004's performance. The last industry downturn of this severity was 1995, when premiums decreased by 20 percent and the industry posted a Net Operating Loss.

Still, more than just disappointing results were introduced in 2007. New analysis in the 2008 publication documents that the industry increased Policyholders' Surplus from the prior year and is carrying an implied surplus of nearly $900 million in Statutory Premium Reserves. In addition, two new underwriters began writing business in 2007.

While the recent financial challenges are not to be minimized and recent forecasts point to a long and slow recovery, from a historical perspective, the Title industry remains near its peak. Since 1995, the industry increased its Direct Written Premiums and Policyholders' Surplus an unprecedented 228 percent and 129 percent, respectively. This broader perspective reveals a cyclical industry in a down cycle, but also reveals an industry that is maintaining exceptional financial stability and is still near record performance.

Title Industry Information and Analysis

For 20 years, "Performance of Title Insurance Companies" has analyzed the Title insurance industry and its competitive landscape, detailing all levels of the marketplace, providing the most complete and thorough industry analysis available.

The 2008 edition of "Demotech Performance of Title Insurance Companies" features established analysis and information industry professionals rely on, including corporate information for each underwriter, Financial Stability Ratings®, detailed financial statements, market share summaries, five-year trend and dashboard reports, as well as access to our Form 9 Database for customizable analysis and reporting. The 2008 edition also introduces new content and publication enhancements, including Intra-Group Ownership Structure, Inter-Report References, Jurisdiction Dashboards and new financial ratios and analysis.

Contact Demotech at (800) 354-7207 or visit www.demotech.com/PTIC to learn more about "Demotech Performance of Title Insurance Companies," to view sample pages, to order the 2008 the publication or for more information regarding the availability of customized research and analysis of industry data from our Form 9 Database.

About Demotech, Inc.

Since 1985, Demotech, Inc., a Columbus, Ohio based financial analysis and actuarial services firm, has provided responsive services to address actuarial and financial analysis issues, whether the issues have been for a particular insurer or prevalent throughout the insurance industry. As the first company to have its rating process formally reviewed and accepted by Fannie Mae, Freddie Mac and HUD, Demotech has been leveling the playing field by offering Financial Stability Ratings® (FSRs) to insurers of all sizes.

Visit www.demotech.com for more information.

Contact Information

  • Joseph L. Petrelli, Jr.
    Chief Operating Officer
    Tel: (800) 354-7207
    Email: Email Contact