CHANNELS

Subscribe to the InfoTech eNewsletter

infoTECH News

TMCNet:  Fitch Releases U.S. Title Insurance Industry 2013 Outlook

[November 27, 2012]

Fitch Releases U.S. Title Insurance Industry 2013 Outlook

CHICAGO --(Business Wire)--

Link to Fitch Ratings' Report: 2013 Outlook: U.S. Title Insurance Industry
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm rpt_id=695374

Fitch Ratings maintains its stable rating outlook on the U.S. Title Insurance industry. The outlook reflects a belief that rating actions for the industry will on balance approximate current levels over the next 12 - 18 months as financial performance has improved recently and capital levels remain adequate based on several measures.

A new special report '2013 Outlook: U.S. Title Insurance Industry.' published today highlights key factors affecting title insurer ratings, reviews financial performance in 2012, and assesses industry prospects for 2013.

Operating profit margins on a GAAP basis for Fitch's title universe rose to 10.3% in the first nine months of 2012 versus 6.1% in the prior year. Earnings improved for all underwriters, but larger players First American Financial (FAF) and Fidelity National Title (FNF) posted the highest margins. Title revenues through nine months 2012 increased by over 15% as refinancing activity exceeded expectations and housing markets stabilized. The period's 90.7% underwriting combined ratio reached levels uneen since 2006, as growth reduced expense ratios and claims experience improved as well.

The title insurance industry is benefitting from an improving housing market that is showing less home inventory and increasing home prices nationally. According to the National Association of Realtors (NAR), US housing prices rose in 2012 with many markets showing year-over-year home price growth for the first time since the beginning of the housing crisis. Economists attribute the price increase primarily to reduced housing inventory and, to a lesser extent, fewer homes sold in distress.

The Mortgage Bankers Association of America (MBA) forecasts mortgage originations to decline to $1.3 billion in 2013 and just over $1 billion in 2014, compared with $1.7 billion in 2012. The drop is driven by a projected material decline in refinance activity over the next two years, which is expected to be somewhat offset by greater purchase activity.

Fitch continues to view the industry as adequately capitalized, although individual company capital strength varies considerably. Fitch's view is based on both a non-risk adjusted approach such as net written premiums to surplus and a risk adjusted approach via Fitch's Risk Adjusted Capital (RAC) model.

The report '2013 Outlook: U.S. Title Insurance Industry' dated Nov. 26, 2012, is available at 'www.fitchratings.com' under 'Insurance' and 'Special Reports'.

Additional information is available at 'www.fitchratings.com'.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.


[ InfoTech Spotlight's Homepage ]


blog comments powered by Disqus

FOLLOW US

Subscribe to InfoTECH Spotlight eNews

InfoTECH Spotlight eNews delivers the latest news impacting technology in the IT industry each week. Sign up to receive FREE breaking news today!
FREE eNewsletter