Demotech Says Title Underwriters Ready to Support Real Estate Recovery

November 29, 2011

Title insurance underwriters may be exhibiting stabilization, according to Columbus, Ohio-based Demotech Inc.

The analysis firm reported that the underwriters’ policyholder surplus increased 2.9 percent to $3 billion from Dec. 31, 2010.

"Although a couple of well-publicized defalcations have impacted two regional title underwriters, they too continue to review, defend or honor claims. This fact underscores the title industry's ability to support a recovery of the housing and commercial real estate markets by insuring the marketability of title," said Joseph L. Petrelli, president of Demotech, Inc.

From Dec. 31, 2010 to Sept. 30, 2011, 27 of the 44 title underwriters reviewed and rated by Demotech reported an increase in net worth. It is important to note that all title underwriters reviewed and rated by Demotech continue to honor and pay claims and possess financial stability relating to positive policyholders’ surplus.

As a group, the title underwriters currently assigned a Financial Stability Rating (FSR) increased their liquidity and leverage positions period over period as well. At Dec. 31, 2010, rated title underwriters had a liquidity ratio of 1.33 and a leverage ratio of 1.91. At Sept. 30, 2011, rated title underwriters improved to a liquidity ratio of 1.36 and a leverage ratio of 1.82. For these 44 rated underwriters, cash and invested assets exceeded liabilities by nearly $2 billion.

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North American Title Insurance Company (NATIC) is a seasoned title insurance underwriter, helping title agents to achieve their individual business goals for more than 50 years. Today, the company conducts real estate settlement services in 39 states and the District of Columbia through a network of experienced, independent agents.