Earlier this summer, five regional title insurance underwriters reported their decision to join forces and form the American Title Reinsurance Alliance (ATRA). The Agents include National Title Insurance, Alliant National Title Insurance, Attorneys’ Title Guaranty Fund, Connecticut Attorneys Title Insurance, and Security Title Guarantee—and more may be joining the fold.
What’s behind this alliance, and what are the pros—and cons? Is it a game changer?
First, the background: These companies are underwriters that issue title insurance policies. Title insurance agents provide title insurance policies to clients –such as purchasers of real estate and lenders financing real estate deals — through such underwriters. When real estate was booming, prior to the recession, the number of underwriters grew substantially. However, when the real estate market crashed, some underwriters went out of business. Big underwriters also took the opportunity to buy out smaller underwriters, consolidating the market further. Smaller, regional underwriters were left to compete against a handful of giants.
ATRA Alliance Positions Regional Underwriters To Better Compete
Consolidation in a market resulted in less competition. Additionally, big underwriters increased exclusions demonstrated a reluctance to insure certain kinds of transactions. With fewer underwriters and more exclusions, these five regional underwriters formed an alliance to form a powerful group, better able to compete with the largest underwriters.
Is it a game changer? That remains to be seen. Certainly, title agencies benefit from having a variety of willing title insurance underwriters to ensure they are able to insure even the largest and most complex transactions. Greater choice and a competitive landscape is also typically good for clients.
Possible cons? Questions include how well the corporate cultures of ATRA’s members will blend. How will the five firms, which have been functioning in regional markets, operate cooperatively in states with varying regulations and statutes? These and other questions abound. This alliance will provide a very interesting scenario to watch as it unfolds.