Despite the subprime mortgage crisis occurring prior to the five-year period, the continued fallout from the burst of the housing bubble has dictated the Title Insurance industry's trends in recent years. Title insurance provides protection to mortgage lenders and buyers of real estate from potential loss or damage resulting from defects in the title they intend to acquire. Potential defects covered by title insurance include adverse ownership claims, liens and encumbrances. Industry operators rely extensively on both the volume and value of domestic real estate transactions, given that the issuance of a title insurance policy requires a real property purchase to take place. While moderate growth in existing home sales and the house price index are anticipated to cause industry revenue to rise at an annualized rate of 2.0% from 2009 to 2014 to reach $14.2 billion, revenue remains far below precessionary highs. Moreover, rising mortgage rates and poor construction activity in the first quarter of 2014 are anticipated to cause Title Insurance industry revenue to fall 8.2% in 2014.
Currently, the industry is dominated by four large players: Fidelity National Financial, First American Financial, Old Republic International and Stewart Information Services. In 2014, these national insurers are anticipated to account for 91.9% of total industry revenue. While the industry's market share concentration has declined slightly in recent years, it has exceeded 90.0% of revenue throughout the duration of the five-year period and spiked in 2009, a result of Fidelity National Financial's purchase of LandAmerica Financial Group's two principal title insurance underwriters. According to IBISWorld Industry Analyst Stephen Hoopes, “The existence of these dominant title insurers increases the industry's barriers to entry substantially, while their scale provides them with superior operating efficiencies and the capital to acquire additional competitors.”
Over the five years to 2019, industry revenue is forecast to rise strongly. “This strong growth is primarily a result of anticipated increases in key housing market variables, including the number of existing home sales and access to credit,” says Hoopes. Moreover, the industry's average profit margin is forecast to continue rising as a result of real estate market improvements. Yet, any increases in industry-relevant regulation, particularly with respect to capital and surplus requirements, holds the potential to damage the industry's profitability substantially.
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IBISWorld industry Report Key Topics
The Title Insurance industry underwrites (i.e. assumes the risks of and assigns premiums for) title insurance, which protects the policyholder from financial losses from defects in a real property title and from the inability to enforce a mortgage lien.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios
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