Fitch: Title Insurers To Break Revenue Records

Fitch: Title Insurers To Break Revenue Records

NU Online News Service, Sept. 25, 12:12 p.m. EST?Powered by the housing boom, the title insurance industry is expected to break records in revenue and earnings this year, Fitch Ratings in New York said today.

According to a report by Fitch, the title insurers are well-positioned to break record revenues and earnings reported in 2001, with title-related revenue up more than 25 percent during the first half of this year and continued favorable market conditions.

Title operating segment revenue for the seven publicly-traded title insurance companies reached $5.9 billion for the first six months of 2002, up from $4.6 billion over the same period in 2001, a 27 percent increase, Fitch said.

"The tentative recovery from the U.S. economic recession, combined with significant uncertainties such as potential military action against Iraq, are effectively keeping interest rates at very low levels," said Doug M. Pawlowski, senior director at Fitch Ratings. "Due to the continued low interest rates and current real estate market activity, title insurance order flow appears sufficient to maintain recent strong revenue trends throughout the rest of 2002."

Fitch noted that for 2003, the National Association of Home Builders is projecting a modest reduction in housing starts and home sales.

Mortgage originations are anticipated to decline as well, barring a further significant decline in interest rates. Still, activity should be at levels that are conducive with favorable earnings for the title insurance sector, Fitch predicted.

The report--"Title Insurer Midyear 2002 Results: Continued Strong Performance"--is available at Fitch's Web site, www.fitchratings.com, or through the Ratings Desk at 1-800-893-4824.