Land Title Industry Strong in First Quarter 2004
|June 21, 2004|
Washington, DC– The American Land Title Association (ALTA), released figures today which reveal a strong financial picture for the title insurance industry from the first quarter of 2004. However, the figures are a bit misleading.
"Total revenue for the first quarter of 2004 looks high because it actually includes income that had not been reported from the previous quarter,” according to ALTA director of research, Rich McCarthy. "The usual lag between closing and reporting of revenue was exacerbated by the rush of refinancings during the last half of 2003,” he said.
First quarter 2004 gross revenue (total operating income) for the industry is up 8.85 percent over 2003 (itself a record year) to $3.7 billion, and the loss ratio (losses and loss adjustment expenses as a percentage of total operating income) is 4.03 percent as compared to 3.5 percent for the first three months of last year. The level of pre-tax profit (before investment income) was $142.4 million in 2004 as compared to $186.4 million during the same period in 2003. On an after-tax, after investment income basis, industry profits totaled $123.2 million down from 2003’s figure of $183.2 million.
"It stands to reason that losses have increased as the amount of business has increased dramatically over the last two years,” said McCarthy.
The American Land Title Association represents title insurance companies and their agencies nationwide on a variety of industry and legislative issues. Members of the Association search and insure land titles to protect real estate investors including homebuyers and mortgage lenders.