Startups target $15bn title insurance business
Tech-focused startups are targeting the $15 billion title insurance industry that’s dominated by just four companies, according to an Aug. 22 Bloomberg News report.
The report follows the approval by California Insurance Commissioner Dave Jones of the first license for title insurance to an insurtech firm.
States Title Insurance Company of California is now the first insurtech title insurer licensed and domiciled in California. The company is replacing a manual and labor-intensive process of writing title insurance which often involves days of waiting, the regulator said. Its automated data-driven approach should lead to reduced wait times, modernized title insurance transactions, increased competition, and reduced costs for home buyers and others in need of title insurance, the regulator explained.
"I am pleased to approve a licence for States Title to not only sell title insurance in California but also to be domiciled here,” Jones said. “Title insurance transactions are often labour intensive and suffer from delays-States Title uses a digital platform which is data driven and automates the process which in turn should bring benefits for consumers."
States Title will use data-driven technology to predict the risk and severity of a title defect on a particular property, aiming to deliver title insurance more efficiently and at lower costs.
States Title joins newcomers including OneTitle National Guaranty and Spruce Holdings that have gained footholds in other US regions to enter the complex and closely regulated world of title insurance, Bloomberg News noted.
Consumers generally use title insurance just a few times in their lives when they’re financing the purchase of a home. Title companies and agents scour public records to help buyers and lenders avoid risks like liens or ownership disputes.
Fidelity National Financial and First American Financial are the largest title insurers, with Old Republic International and Stewart Information Services right behind, Bloomberg News said, citing data from the American Land Title Association. Title insurers generated nearly $15 billion in total premiums in 2017, ALTA data show. Earlier this year, Fidelity National agreed to buy Stewart for $1.2 billion.
The report also noted that some startups, such as OneTitle, are issuing policies, while others including Spruce are acting as title agents. They say that the industry relies on outdated technology, and some argue that the market’s driven more by complex ties between agents and insurers than by a desire to accommodate shifting consumer preferences, according to Bloomberg News.
Get all the latest re/insurance industry news with our daily newsletter - sign up here.
More of today's news
Swiss Re appoints Higginbotham as new EMEA reinsurance CEO
Paraline UK and Beat Capital sign merger deal
Arch Capital secures $653m reinsurance from capital markets
Kingstone reduces quota share of reinsurance treaty
SCOR reinsures Legal & General £300m longevity deal
Reinsurers see M&A as solution for tough markets
Insurtech Oscar secures $375m from Google parent Alphabet
Hurricane Lane hits Hawaii
Travelers acquires majority stake in Toronto-based Zensurance
RLI founder passes away
