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Investors Title Company provides title insurance for homeowners, commercial property owners and mortgage lenders through Investors Title Insurance Company and National Investors Title Insurance Company. Borrowers generally buy lenders’ policies as a condition of obtaining a mortgage. Property purchases and refinancing generate most of the business, with premiums paid once at closing rather than renewed each year. The company sells directly and through agents; independent agencies retain most of the premium as commission and send the remainder to the company. These agencies supply most of its premium business.
Revenue depends on property transaction activity and sale prices, with North Carolina and Texas accounting for most premiums. No single customer dominates, but major mortgage lenders must accept its policies, and lender requirements for title insurance help sustain demand. State regulation limits its ability to change insurance prices and transfer money from its insurance subsidiaries to the parent company.
A smaller business helps property investors sell one property and buy another under tax-deferral rules. Investors Title Exchange Corporation holds the sale proceeds between transactions and earns service fees and part of the interest on client deposits. The company also earns interest and dividends from its own investment portfolio, making investment returns another important source of income.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Investors Title’s results hinge on property closings and refinancing, and Old Republic Title Insurance Group is another major competitor to watch beyond this list.
Stewart Information Services Corporation competes with Investors Title for property owners’ and mortgage lenders’ title insurance and closing business; both also help clients exchange properties on a tax-deferred basis under Section 1031. Watch Stewart’s title insurance and related services revenue for signs of the property-closing and refinancing demand that also drives Investors Title.
First American Financial Corporation competes with Investors Title for property buyers’ and mortgage lenders’ title insurance and settlement business, with both selling directly and through agents. Its title premiums are earned when transactions close, so that revenue is a useful read on the completed property deals that also generate Investors Title’s premiums.
Fidelity National Financial competes with Investors Title to insure property titles for owners and mortgage lenders and to hold transaction funds until closing through escrow services. Watch its Title segment rather than overall earnings for signals about property purchases and refinancing: its annuity and life insurance business adds a separate earnings driver.
Housing Starts (Sep)
New-home construction and sales indicate how much housing is being built and bought, shaping closings that generate Investors Title’s residential title-insurance premiums and related fees.
Expected1.31MLast release1.275M
If it comes in above expectations
If the reading is above the 1.31M estimate, it is above the previous 1.275M. More construction or sales can mean more home purchases reaching closing, increasing policies issued by Investors Title directly and through its agents, and the premiums and transaction fees they generate.
If it comes in below expectations
Less construction or sales can mean fewer home purchases reaching closing, reducing policies issued by Investors Title directly and through its agents, and the premiums and transaction fees they generate.
First American Financial Corporation earningsFAF
First American Financial earns title premiums when property deals close, so its report offers Investors Title Co a read on closing demand in the title-insurance and settlement business they compete in.
Focus on First American Financial’s title premiums, not just its overall results, which also reflect other businesses. Rising premiums would indicate more revenue from completed deals and a firmer market signal for Investors Title Co’s title-insurance business; falling premiums would point to pressure on closing-related revenue and a weaker demand backdrop for Investors Title Co. The companies do not insure the exact same transactions, so First American’s figures show the market’s direction, not Investors Title Co’s own results.
Initial Jobless Claims (Oct/17)
Weekly jobless claims count new applications for unemployment benefits and can signal employment weakness that reduces property and mortgage transactions generating Investors Title’s title premiums and related fees.
Expected200.0KLast release199.0K
If it comes in above expectations
If the reading is above the 200.0K estimate, it is above the previous 199.0K. More claims can point to rising layoffs and weaker employment, potentially reducing home purchases and mortgage transactions that generate Investors Title’s policies, premiums and closing-related fees.
If it comes in below expectations
Fewer claims can point to steadier employment, potentially supporting home purchases and mortgage transactions that generate Investors Title’s policies, premiums and closing-related fees.
Fed Interest Rate Decision
For Investors Title, Fed rate decisions can shift mortgage borrowing costs and investment income, changing property closings that generate title premiums and exchange fees as well as interest earned on client deposits and investments.
Expected4.0%Last release4.0%
If it comes in above expectations
If rates rise more than expected, costlier mortgages may reduce refinancing and property closings, weighing on Investors Title’s premiums and exchange fees; higher rates may also increase interest earned on client deposits and investments.
If it comes in below expectations
If rates fall more than expected, cheaper mortgages may support refinancing and property closings, lifting premiums and exchange fees; lower rates may also reduce interest earned on client deposits and investments.
Investors Title Co earningsThis company
Investors Title Co’s report will show whether title premiums from property closings are growing enough to cover agent commissions and other operating costs.
Compare title premiums with agent commissions and other operating expenses, ideally against the same quarter a year earlier because real-estate activity is seasonal. Premiums growing faster than those costs would show that transaction-related revenue is translating into better profitability; flat or falling premiums while costs stay high would show the fixed-cost base squeezing profits. Premiums reflect factors such as transaction activity and property prices, so they do not by themselves reveal which factor changed.
Non Farm Payrolls (Oct)
The monthly jobs report counts changes in payroll employment and signals whether work and income are strengthening, factors that can shift home purchases and mortgage transactions generating Investors Title’s premiums and related fees.
Stronger payroll growth may support employment and family income, helping sustain home purchases and mortgage transactions that generate Investors Title’s policies, premiums and fees; weaker growth may restrain those transactions and revenues.
