Fidelity National Financial Inc. chief executive officer Alan Stinson said the declining number of companies selling title insurance has created an oligopoly.
The limited competition allows the remaining title insurers to raise prices to more profitable levels, he told investors at a Barclays PLC conference in New York on Wednesday.
Regulators have permitted the price increases, he said, after Fidelity National's revenue declined 22% last year.
"We are probably in the best rate environment and best regulatory environment that we've been in for a long time," Stinson said. "We are seeing some rationality in pricing. I think you'd expect that as the industry consolidates," he said. "The industry has become more or less an oligopoly."
The industry is dominated by Fidelity National, First American Corp., Stewart Information Services Corp. and Old Republic International Corp. The four combined have a 92% market share, according to first-quarter data compiled by the American Land Title Association. Fidelity alone controls 45%.
Fidelity National bought assets from LandAmerica Financial Group Inc. after its former competitor's bankruptcy filing last year, vaulting it past First American to become the largest U.S. title insurer. Based in Jacksonville, Fla., the company has raised prices in 22 states, including a 10% California rate increase, Stinson said.
Homebuyers with mortgages typically are required by lenders to pay a one-time fee for title insurance to guard against ownership disputes.
Insurers are winning rate increases after a decline in home sales last year caused revenue to fall. Fidelity National had a net loss of $179 million in 2008.
State regulators in prior years had more often pushed for price cuts. New York forced title insurers to reduce rates by 15% in 2006 after alleging that the companies inflated prices and gave home builders free or discounted coverage in other states in exchange for New York business.
