The fourth quarter of 2018 revealed a14% decline in title orders for the group, highlighting a shift inmarket activity in the first half of 2019. (Photo:Shutterstock)
Fitch Rating's outlook on the title insurance sector is stablewith few rating changes anticipated for title insurers in the next12-18 months.
|The market is poised to become more concentrated later on as thefour national underwriters that account for 85% of the totalindustry premiums — Fidelity National Financial Inc.(FNF), First American Financial Corp., Old Republic InternationalCorp. and Stewart Information Services Corp. (STC) — willdecline to three with the announced acquisition of STC by FNF. TheNew York Department of Financial Services disapproved theacquisition application of STC's New York subsidiary, but bothcompanies are working to gain approval.
|Related: N.Y. Dept. of Financial Services issues titleinsurance regs
|Market predictions
Modestly higher mortgage rates and emerging economic trends areanticipated to put pressure on both revenues and operating earningsin 2019, Fitch's report states. The fourth quarter of 2018 revealeda 14% decline in title orders for the group, highlighting a shiftin market activity in the first half of 2019.
|“Fitch Ratings expects that profitability will continue to befavorable and supportive of current ratings. Loss ratios areanticipated to remain below historical averages, and titleinsurers' ability to manage expenses will be a key driver inmaintaining operating margins as origination volumes come underpressure,” concludes the report.
|Related: N.Y. appeals court reinstates new regs on titleinsurance industry
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