Report: Title Industry Hit Hard in 2008

Based on ""Demotech’s"":http://www.demotech.com Performance of Title Insurance Companies"" report"":http://www.thetitlereport.com/ME2/Audiences/Default.asp, 2008 proved to be the title insurance industry's worst in 20 years.
Over the last year, the number of title underwriters able to withstand the housing crisis diminished, with a number closing their doors entirely and others looking to stay afloat through acquisitions. Demotech reported that of those who survived 2008, an overwhelming majority had lower operating income, with an average decrease of 24 percent from the prior year.
The company said the collapse of the financial markets punctuated these losses and led to a reduction in net investments of 28 percent for all companies from the previous year. All in all, Demotech's study shows the title industry saw a net loss in 2008 of nearly $400 million.
While this deficit represents all of the National Association of Insurance Companies' title underwriter groups, the Title Report pointed out that the unaffiliated title underwriters combined for a net gain. Specifically, the publication said, Title Resources Guaranty Company posted very strong results, while other smaller underwriters also had solid financial results.
Of the title insurance giants, the Title Report noted, Chicago Title topped the list with a net operating gain of over $100 million, although its parent company, Fidelity, was heavily impacted by the LandAmerica acquisition at the end of the year.
Demotech also found that direct losses paid in 2008 increased seven percent compared to 2007. However, the report noted that these losses were highly localized, with some larger states, such as Ohio and Colorado, actually recording decreases in paid losses.
According to Demotech, industry experts expect title underwriters to continue to struggle financially, at least until the housing market and the broader economy begin to improve. Despite the negative numbers, the company said the title industry remains well capitalized and should return to profitability later this year.