Did the title insurance industry drop 10% in 2012?
Oct 29th, 2013 | By Michael LeBlanc
I always read with great interest any stats on the financial information of the overall title insurance sector. Reports and magazines are generally issued mid year after the companies make their year-end financial reports to OSFI or a provincial regulator. A number of insurance magazines collect this data in a useable format by insurance business and create rankings. When I read the June edition of Canadian Underwriter I was surprised to learn that title insurance had dropped from $213 million in premiums earned in 2011 to $191 million in 2012- a 10% drop in one year!
As the largest provider of title insurance in Canada I knew that we had done better in 2012 than 2011. FCT represents more than half of title insurance annual sales in Canada, so I was curious to find out which one of our competitors was losing market share. On further examination of the data for 2012, I realized that the title insurance sector didn’t drop by one-tenth, but that the sector actually grew by almost 2%. In fact the whole sector was about $224 million not $191 as reported by the magazine. So the data reported in the magazine was off by 17% for 2012 premiums earned by title insurance companies.
So what did Canadian Underwriter miss? And how did I find the true data?
The magazine missed data for two companies- specifically the commercial arm of FCT and one of our competitors. The commercial title insurance division at FCT operates under First American Title Insurance Company. The missing data from FATIC accounted for the vast majority, 84% of the $33 million gap between the actual and the reported. The other piece of data that was missing was from one of our competitors which recently rebranded and changed their corporate name. Now I am not going to talk about a competitor in our corporate blog.
So where does one find this information? -on the OSFI website under P&C (property & casualty) insurers financial information. OSFI issues data quarterly for all federally regulated financial institutions by line of business (title insurance, mortgage insurance, auto, etc.) For the one provincially regulated title insurer you have to make a FOI (freedom of information) request to the Ontario regulator, FSCO.
I also reviewed the 2011 data which was only off by 3% and should have been reported at $220 million. So the true industry data is that title insurance grew by about 2% from $220 million in 2011 to $224 million in 2012. While I appreciate that we are a small sector in the overall P&C insurance industry, this type of data needs to be reported accurately. On behalf of our growing industry, I felt the need to set the record straight.