According to the American Land Title Association’s Market Share Analysis, published on Friday, 6th of May, title insurance premium volume increased about 36% year over year in 2021, amounting to an astounding $7 billion rise.
According to ALTA, the title insurance market collected $26.2 billion in premiums last year, up from $19.2 billion in 2020, which attributed the increase to increased mortgage origination activity and rising home values. However, despite such rapid growth throughout those years, the question in early 2022 appears to be how long it will endure and how many titles insurance premiums will normalize in the face of drastically altering economic conditions.
In the third quarter, the industry’s total operating income increased 33.4% year over year, while operating expenses increased 32%. Expenses for losses and loss adjustments increased by 2.3% year over year. Title underwriters paid out over $475 million in claims for the year.
According to ALTA, the cost of title insurance has fallen by 7% since 2004, implying that for every dollar spent on a premium, consumers receive an additional $26 in coverage.
Without a doubt, title insurers and underwriters had a banner year in 2021. However, with housing inventory remaining scarce, refinance volume down due to rising mortgage rates, and prices rising, pricing more homeowners out of the market, the title sector faces an uphill battle in 2022.
This substantial volume increment in insurance premiums was due to incredibly low mortgage rates, which increased real estate transactions and higher home values. To read more on this, click here.
https://www.housingwire.com/articles/title-insurance-industry-premiums-spike-7b-year-over-year/
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