FinTech, the industry aimed at improving financial services through the incorporation of technology, has officially made its way into the title insurance market. Title insurance is imperative for home buyers if they wish to be protected from anything unexpected that can show up on a property title. FinTech startup companies have formulated a strategy for advancing the title insurance process with technology – saving homeowners and mortgage companies both time and money. Below we examine the various ways in which three FinTech startups are shaking up the title insurance market.
States Title Makes Progress
The title insurance industry has long been controlled by four companies: Fidelity National Financial Inc., First American Financial Corp., Old Republic International Corp, and Stewart Information Services Corp. Recently, California’s Department of Insurance has issued States Title a license granting them the ability to offer title insurance in the state of California. This makes States Title the first FinTech startup to receive a license in the 15 billion dollar title insurance industry.
Dave Jones, Insurance Commissioner at California’s Department of Insurance, has praised States Title for their use of technology to increase efficiency of services while also saving consumers money. The title insurance process is very time-consuming and bothersome. However, it becomes less of a burden when automation is introduced to such tasks as searching through public records – a service that States Title makes possible.
OneTitle Takes on Industry Giant
Another FinTech startup that is determined to take on the leaders of the title insurance market is OneTitle National Guaranty Company. Similarly to States Title, they use technology to search through public records at lightning speed and for less money. In fact, the CEO of OneTItle claims that without title agents they can charge customers 25% less for premiums.
All of the services that you would expect from a title insurance company are offered by OneTitle, but with one key difference—it’s all automated. That includes the underwriting of policies, lien searches, escrow services, and recording services.
Spruce Has a Different Approach
While the other FinTech companies are opting to compete directly with the big names in the title insurance market, Spruce prefers to join them. This FinTech company is merging their technology with the title insurance services of current lenders. This will allow these lenders to reduce the price of their services, and will undoubtedly be appealing to many current title insurance companies looking to increase the efficiency of their services.
The title insurance and abstracting world as we knew it, just changed.