Title premium volume continued to drop during the third quarter of 2023, as limited housing supply and high interest rates took their toll on home sales.
During the third quarter of 2023, the title industry generated $4.1 billion in title insurance premiums, down 24% year over year, according to the American Land Title Association’s Market Share Analysis, released Tuesday.
Despite the annual decline, title insurance premium volume was up quarter over quarter, rising from $3.91 billion in the second quarter of 2023. However, the $4.1 billion in title premium volume recorded in Q3 2023 is still below the $4.4 billion reported in Q4 2022.
“Results of the latest quarter reflect headwinds from continued higher interest rates and limited housing supply that have resulted in a significant drop in home sales and mortgage refinances the past several quarters,” Diane Tomb, ALTA’s CEO, said in a statement.
As title premium volume dropped, the industry recorded a 22.5% annual decline in operating income, which was partially offset by a 20.9% yearly drop in operating expenses. Overall, the industry reported a net income of $306.5 million for the quarter, down 21.2% compared to a year ago.
While title premium volume has declined over the first nine months of the year, the industry has paid out more in claims during the first nine months of 2023 ($485.2 million) compared to the first nine months of 2022 ($438.7 million).
The five states with the largest title premium volumes during the first quarter of the year were Texas ($613.9 million), Florida ($522.3 million), California ($344.0 million), New York ($243.7 million), and Pennsylvania ($165.1 million). The same five states held the top spots in Q2 2023.
All five states recorded year-over-year decreases in title premiums in Q3 2023, with Texas recording the largest yearly drop at 28.9%, and California recording the smallest annual drop at 18.8%.
Top underwriters for the quarter by market share included First American Title insurance Co. with 21.6%; Old Republic National Title Insurance Co. with 14.9%; Fidelity National Title Insurance with 13.4%; Chicago Title Insurance Co. with 13.2%; and Stewart Title Guaranty Co. with 9.0%.
However, it should be noted that Chicago Title is part of Fidelity. With 26.6% of the market, it was again the largest firm by share of premiums written during the third quarter of 2023.
In the second quarter of 2023, First American’s market share was 22.3%, while Old Republic’s was 14.8%, Fidelity’s was 27.8% and Stewart’s was 8.4%. Stewart has been looking to reclaim some of the title premium it lost in recent years. The firm’s market share was 10.62% as recently as 2019.
Rounding out the top 10 for Q3 2023 were Westcor Land Title Insurance Co. with 4.8% of the market, putting it in sixth place. Commonwealth Land Title Insurance Co. had 3.3%, Title Resources Guaranty Co. had 2.9%, WFG National Title Insurance Co. had 2.6% of the market share, and Doma Title had 1.8%.
The same five firms rounded out the top 10 during the second quarter of the year.
Although the “Big Four” still command the overwhelming majority of the market with a combined market share of 72.1%, their collective grip is not what it once was. In 2019, independent title underwriters such as Westcor, WFG, and others had a combined market share just shy of 15%, which increased to 27.9% in Q3 2023.
