The title insurance industry rolled with the punches in 2022, withstanding a stark and ongoing downturn in the residential real estate market that resulted in a big drop-off in business for title companies, according to the most recent Market Share Analysis report from the American Land Title Association (ALTA).
Title insurers generated $21 billion in insurance premiums last year, down 16% from one year earlier, ALTA reported. Meanwhile, the industry paid more than $596.1 million in claims, up more than 25% year over year from the $474.4 million paid in 2021.
The end of the year saw an especially steep decline, as the Federal Reserve’s hawkish interest rate policy elevated the costs of borrowing while persistent inventory woes also discouraged potential homebuyers from making purchases. In fourth-quarter 2022, title premium volume was $4.4 billion, down 38% from the $7.1 billion in 2021.
On a state-by-state basis, Texas had the highest title premium volume for full-year 2022 at $3.39 billion, although that figure was down 3.9% year over year. Florida was next at $2.69 billion (down 6.9%), followed by California at $1.89 billion (down a staggering 33.1%). New York ($1.36 billion, down 6%) and Pennsylvania ($898 million, down 23.7%).
Total operating income for the title insurance industry was down 37.1% annually in the fourth quarter. Operating expenses fell 34.8%, while loss and loss-adjustment expenses also decreased, ALTA reported.
“Title professionals across the country continue to navigate their businesses through this challenging and volatile real estate cycle, dedicated to serving their customers, protecting property rights and supporting their communities despite the uncertainty of the marketplace,” said Diane Tomb, ALTA’s chief executive officer.
First American Title Insurance Co. led the industry in market share last year at 22.1% of premium volume, followed by Old Republic Title Insurance at 15.8%, Fidelity National Title Insurance Co. at 13.7% and Chicago Title Insurance Co. at 13.3%.