Kroll Bond Rating Agency (KBRA) today released its outlook report on the
U.S. title insurance sector.
While 2016 was an excellent year for the U.S. mortgage industry with
almost $2 trillion in new loan originations, KBRA believes it was also
likely to be the peak in terms of lending volumes for years to come. The
Mortgage Bankers Association is forecasting a sharp decline in
refinancing volumes in Q1 2017.
Despite these pessimistic - yet realistic - projections, KBRA believes
the title insurance industry is well positioned to manage this
considerable decline. As of year-end 2016, the industry's aggregated
policyholders' surplus (PHS) will be at an all-time high, driven by
strong earnings in recent years. Piggybacking on the rebound of the
housing market and commercial transactions following the financial
crisis, title insurers hav reported significantly improved financial
metrics such as net written premium to PHS as well as expense ratios and
loss ratios at or near 15-year lows.
Although the industry is much improved, some regulatory concerns remain
such as market share concentration, licensing and consumer value.
However, despite these persisting issues and the anticipated decline in
mortgage originations, KBRA believes the title industry will be able to
navigate through this environment. Additionally, companies with more
favorable expense management and relatively lower fixed costs should
continue to report strong operating results.
Please click here
to view the report.
About Kroll Bond Rating Agency
KBRA is registered with the U.S. Securities and Exchange Commission as a
Nationally Recognized Statistical Rating Organization (NRSRO). In
addition, KBRA is recognized by the National Association of Insurance
Commissioners (NAIC) as a Credit Rating Provider (CRP).
View source version on businesswire.com: http://www.businesswire.com/news/home/20170106005740/en/
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