OLDWICK, N.J.–(BUSINESS WIRE)–After the real estate market freefall in 2008—when title insurance revenues fell sharply and most major title insurance underwriters posted net losses—operating results rebounded in 2009, although total industry written premiums declined from 2008 levels. During the first quarter of 2010, however, title insurance revenues—helped partly by federal policy and tax incentives—improved compared with the similar period in 2009.

While revenues were down in the second quarter of 2010, most major underwriters posted positive operating margins through the first six months of the year. Despite economic uncertainties and housing market challenges—particularly given recent foreclosure processing issues—A.M. Best Co. has revised its rating outlook for the title sector to stable from negative, given strengthened capitalization and improved operating performance trends.

In 2009, the industry reported:

• An approximate 22% increase in surplus, due to improved operating performance as well as capital contributions.
• Title insurance direct premiums written were down about 9%, year over year; a smaller decline compared with that of 2008.
• A yearly net income of $429 million, compared with a net loss of $416 million in 2008, driven by a pretax operating gain of $418 million.
• The net underwriting loss of $96 million was far smaller compared with 2008’s relatively large underwriting loss of $688 million. As a result, the industry’s combined ratio (known as composite ratio) improved to 102.9% from 109.1% in 2008.
• Investment income improved to $552 million from $380 million in 2008, which more than offset the modest underwriting loss resulting in an operating gain.

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Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.