No Margin for Error in Title Insurance

COLUMBUS, Ohio, May 9, 2011 /PRNewswire/ -- The Title insurance industry continues to struggle to return to profitability as demonstrated by the 2010 financial results.  Premiums have remained relatively unchanged as investment returns dwindled and operating losses increased, resulting in a Net Loss in 2010 for the Title insurance industry.  Moreover, the industry continues to struggle with historically high loss ratio while maintaining over a 91 percent expense ratio, even after extensive consolidations which have left only 54 operating underwriters at year-end 2010, down from 95 in 2008.

It is difficult to imagine that the Title industry may continue to address worse financial hardships.  Forty-two underwriters reported an operating profit in 2010, but elevated Title losses may continue to jeopardize consistency of profits for years to come.

Demotech presents financial information on all Title Underwriters in Demotech Performance of Title Insurance Companies – available May 2011.  The 2011 Edition has been expanded to include new sections for Group Level Dashboards and Position Analysis Reports from the Exhibit of Premium and Losses for each jurisdiction.

Group Level Dashboards present consolidated metrics and historical perspectives for NAIC groups, affiliated company information, up to five years of benchmarks and include financial position, as well as operating and underwriting results.

Position Analysis Reports from Exhibit of Premium and Losses present jurisdiction level information.  Information contained in this section includes policies written, liability and agent retention.  As the data is being reported for the first time in 2010, it allows for new metrics to be reported.  For instance, the average amount insured in a Title policy written in 2010 was $269,351.  Also, the jurisdiction with the highest average amount insured was the District of Columbia at $785,213.  The new section also analyzes the percent of premium retained by agents on a group, underwriter and jurisdiction basis.

Continued elevated losses will likely overshadow operating revenue as the Title underwriters' profit margin has historically been light.  In the absence of reliable investment income, the Title industry will struggle to sustain its profitability.

Title Industry Information and Analysis

Demotech Performance of Title Insurance Companies is the most complete and thorough industry analysis available.  The 2011 Edition of Demotech Performance of Title Insurance Companies presents year-end 2010 Title industry results with over 400 pages of supporting detail and reports.  The 2011 Edition can be ordered now by contacting Demotech at (800) 354-7207 or visiting www.demotech.com/PTIC.

SOURCE Demotech, Inc.