16% Decrease In 2022 Title Insurance Premium Volume

Mortgage News May 18, 2023

According to the latest Market Share Analysis report from the American Land Title Association (ALTA), the title insurance industry adapted to the challenges of 2022 and successfully weathered the significant and continuous decline in the residential real estate market. This decline had a major impact on the business of title companies, causing a significant decrease in their operations.

ALTA reported that title insurers earned $21 billion in insurance premiums in the previous year, marking a 16% decline compared to the previous year. In contrast, the industry experienced a significant increase in claims payouts, surpassing $596.1 million, which is over 25% higher than the $474.4 million paid out in 2021.

In the final quarter of 2022, there was a significant decline attributed to multiple factors. The Federal Reserve’s adoption of a more stringent interest rate policy increased borrowing costs, discouraging potential homebuyers from making purchases. Additionally, persistent inventory challenges further deterred individuals from entering the housing market. As a result, the title premium volume in the fourth quarter of 2022 amounted to $4.4 billion, which represents a substantial 38% decrease compared to the $7.1 billion recorded in 2021.

When examining the title premium volume on a state-by-state basis for the entirety of 2022, Texas stood out with the highest figure of $3.39 billion. However, this amount represented a 3.9% decline compared to the previous year. Following Texas, Florida ranked second with a total of $2.69 billion, reflecting a 6.9% decrease. California experienced a significant drop, with a staggering 33.1% decline, resulting in a title premium volume of $1.89 billion. New York recorded $1.36 billion, marking a 6% decrease, while Pennsylvania generated $898 million, experiencing a notable drop of 23.7%.

ALTA reported that in the fourth quarter, the title insurance industry experienced a significant annual decline in total operating income, which reached 37.1%. Operating expenses also decreased by 34.8%, and there was a reduction in loss and loss-adjustment expenses as well.

In terms of market share, First American Title Insurance Co. secured the leading position in the industry last year with 22.1% of the premium volume. Following closely behind were Old Republic Title Insurance with 15.8%, Fidelity National Title Insurance Co. with 13.7%, and Chicago Title Insurance Co. with 13.3%.

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