Title insurance reports robust earnings for 10th year in a row.The title insurance industry's 2005 net income of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $972 million, while robust, was nearly 10% less than 2004's $1.1 billion, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the A.M. Best Special Report, Strong Housing Market Drives Title Insurance Growth in 2005, but Possible Slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. Ahead. The modest growth in industry revenue reflected sustained demand for title products as continued favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. interest rates supported both refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. activity and strong home sales.
Title Industry Revenue and Home
Sales Activity
Total
Operating Home
Revenue Percent Sales Percent
($ Millions) Change (Thousands) Change
1995 4,842.7 -17.4 4,519 -0.8
1996 5,552.2 14.7 4,924 9.0
1997 6,180.5 11.3 5,175 5.1
1998 8,276.8 33.9 5,852 13.1
1999 8,496.0 2.6 6,063 3.6
2000 7,869.2 -7.4 6,051 -0.2
2001 9,751.2 23.9 6,243 3.2
2002 12,625.9 30.1 6,605 5.8
2003 16,529.3 30.9 7,261 9.9
2004 16,377.3 -0.9 7,982 9.9
2005 17,825.0 8.8 8,358 4.7
Source: Title industry revenue from American Land Title
Association and NAIC Form 9 Financial Reporting. Total
home sales is the aggregate of new home sales published by
the U.S. Census Bureau and existing home sales per the
National Association of Realtors.
Key Elements of Title Insurance
Compared With P/C Insurance
Key elements of title insurance that distinguish it from
personal-lines classes of property/casualty insurance.
Features Title Insurance P/C Insurance
Protects Against Past Events Future Events
Scope of Coverage Specific Broad
Actuarially Defined Rates Evolving Yes
Administrative/
Acquisition Costs High Low
Loss Costs Low High
Policy Term Potentially Unlimited Finite
Premium (GAAP) Fully Earned at Issuance Earned Over
Policy Term
Rate Regulation Varies High
Rate Activity Varies Tied to
Inflation and
Underwriting
Business
Cycles
Loss Frequency Low to Moderate High
Loss Severity Low Moderate
Distribution Agents/Direct Agents/Direct/
Mass Market
Marketing Success Based on Service Based on Rates
Competition Semi-Concentrated Market Fragmented
Market
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