Good Afternoon —
Fidelity National Financial announced its fourth quarter and full year earnings on Thursday. Like its "Big Four" counterparts, Fidelity had a strong year in 2021, reporting some record breaking figures.
The firm's full-year net earnings came in at $2.3 billion, a 49% increase over the year prior. Newly appointed CEO Mike Nolan attributed this success to a strong showing by Fidelity's title insurance segment.
During the fourth quarter, Fidelity's title business generated $3.1 billion in revenue, with $1.0 billion coming from direct title premiums, a 21% increase of the fourth quarter of 2020. Agency title premiums and commercial title revenue also increased 23% and 70%, respectively, during the fourth quarter.
The size of these increases is similar to those seen by First American, the second largest title insurer by market share. During the fourth quarter, First American generated a total of $2.3 billion in revenue from its title insurance and services segments, a 13% year-over-year increase. Most notably, commercial title revenue was up 66% to $377 million, contributing to a record of $1 billion in commercial title revenue for all of 2021.
Also similar to its "Big Four" counterparts, Fidelity executives during the call addressed concerns about the market shifting from refinance transactions to purchase transactions.
"Looking ahead, we expect refinance to decline through 2022, as interest rates rise in the outlook for inflation and the expectation for [the] Federal Reserve to tighten policy throughout the year," Nolan said.
The number of purchase transaction and commercial orders rose during the fourth quarter, but the number of refinance orders declined 39% compared to a year prior.
With the larger title companies all reporting record income, it leads me to wonder why smaller title firms like Doma did not have a great showing in 2021. The techie upstart recorded a $113 million loss for the full year. Its executives say Doma should be profitable in 2023.
Do you think this is a realistic goal? Did your smaller title company struggle in 2021, or did you have a great year? I want to know! Email me anonymously at bhan@housingwire.com.
Until next week,
Brooklee Han
Real Estate and Title Industry Reporter
bhan@housingwire.com
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