The title insurance industry is ripe for disruption due to its outdated, labor-intensive practices that yield high profits. New technologies like blockchain could replace title insurance by securely recording land records. This would drive down costs and premiums, threatening the monopoly and profits of major title insurance companies. Regulators may force price reductions due to reduced risk from improved systems. The title industry risks becoming marginalized unless it adapts, but centralization and a focus on profits may prevent meaningful change.
The title insurance industry has revenues of $21 billion annually with minimal claims, yielding high profits of 95-97% for over 50 years. However, the industry is ripe for disruption due to antiquated and inefficient processes. New technologies like blockchain have the potential to replace title insurance by simplifying real estate transactions. This could significantly reduce the industry's operating costs and premium revenues. While title insurers may develop their own blockchain initiatives, it will be difficult for them to maintain their high profits in a modernized system with lower risks and costs.
Title Insurance Monopoly Disruption: iTitleTransfer Introduces Anti-Monopoly and Pro-Costumer Choice "Alternative to Title Insurance" for a Third of the Closing Cost, Authorized by Fannie Mae and Freddie Mac, utilizing Real Estate Attorney Opinion Letters.
The title insurance industry has revenues of $21 billion annually with minimal claims, yielding high profits for decades. However, the industry is ripe for disruption due to its antiquated, labor-intensive processes. New technologies like blockchain have the potential to simplify real estate transactions and replace title insurance. This could significantly reduce industry revenues unless title insurers adapt their business models to the new technologies and lower costs.
The document discusses the title insurance industry and the potential for disruption. It notes that the title insurance industry is dominated by 5 companies that control 85% of the market and offer essentially the same product and pricing due to state regulations. This limits consumer choice. The industry also faces legal issues over kickbacks and relies on an outdated business model. The title insurance industry is ripe for disruption from new technologies, government programs, and innovative insurance alternatives that could make the product unnecessary for many and provide more options.
iTitleTransfer Introduces Anti-Monopoly and Pro-Costumer Choice "Alternative to Title Insurance" for a Third of the Closing Cost, Authorized by Fannie Mae and Freddie Mac, utilizing Real Estate Attorney Opinion Letters.
As alternatives to the old-school method of monopoly-required title insurance are developed by PropTech firm iTitleTransfer, Blockchain, Smart Contracts and AI, investors in title insurance are facing disruption,
The document discusses the title insurance industry and the potential for disruption. It notes that the title insurance industry is dominated by 5 companies that control 85% of the market and offer essentially the same product and pricing due to state regulations. This lack of competition and innovation leaves the industry ripe for disruption from new technologies and business models that could provide more efficient and affordable title services. The high costs and profits of the existing title insurance model are spent maintaining an outdated business model despite most residential properties having clear titles not requiring insurance.
iTitleTransfer Announces new, safe, reliable, low-cost method to transfer home-ownership. Title Insurance is an unnecessary cost...as ALTA has stated...75% pf homes are "clear title" and do not need costly title insurance. Title insurance in not correlated to consumer risk.
The title insurance industry has revenues of $21 billion annually with minimal claims, yielding high profits of 95-97% for over 50 years. However, the industry is ripe for disruption due to antiquated and inefficient processes. New technologies like blockchain have the potential to replace title insurance by simplifying real estate transactions. This could significantly reduce the industry's operating costs and premium revenues. While title insurers may develop their own blockchain initiatives, it will be difficult for them to maintain their high profits in a modernized system with lower risks and costs.
Title Insurance Monopoly Disruption: iTitleTransfer Introduces Anti-Monopoly and Pro-Costumer Choice "Alternative to Title Insurance" for a Third of the Closing Cost, Authorized by Fannie Mae and Freddie Mac, utilizing Real Estate Attorney Opinion Letters.
The title insurance industry has revenues of $21 billion annually with minimal claims, yielding high profits for decades. However, the industry is ripe for disruption due to its antiquated, labor-intensive processes. New technologies like blockchain have the potential to simplify real estate transactions and replace title insurance. This could significantly reduce industry revenues unless title insurers adapt their business models to the new technologies and lower costs.
The document discusses the title insurance industry and the potential for disruption. It notes that the title insurance industry is dominated by 5 companies that control 85% of the market and offer essentially the same product and pricing due to state regulations. This limits consumer choice. The industry also faces legal issues over kickbacks and relies on an outdated business model. The title insurance industry is ripe for disruption from new technologies, government programs, and innovative insurance alternatives that could make the product unnecessary for many and provide more options.
iTitleTransfer Introduces Anti-Monopoly and Pro-Costumer Choice "Alternative to Title Insurance" for a Third of the Closing Cost, Authorized by Fannie Mae and Freddie Mac, utilizing Real Estate Attorney Opinion Letters.
As alternatives to the old-school method of monopoly-required title insurance are developed by PropTech firm iTitleTransfer, Blockchain, Smart Contracts and AI, investors in title insurance are facing disruption,
The document discusses the title insurance industry and the potential for disruption. It notes that the title insurance industry is dominated by 5 companies that control 85% of the market and offer essentially the same product and pricing due to state regulations. This lack of competition and innovation leaves the industry ripe for disruption from new technologies and business models that could provide more efficient and affordable title services. The high costs and profits of the existing title insurance model are spent maintaining an outdated business model despite most residential properties having clear titles not requiring insurance.
iTitleTransfer Announces new, safe, reliable, low-cost method to transfer home-ownership. Title Insurance is an unnecessary cost...as ALTA has stated...75% pf homes are "clear title" and do not need costly title insurance. Title insurance in not correlated to consumer risk.
The document argues that iBuyers requiring title insurance unnecessarily increases costs and risks diluting their innovative technology-focused business model. It introduces iTitleTransfer as an alternative ownership transfer process that reduces costs by 75% compared to title insurance for many residential real estate transactions that involve clean titles. iTitleTransfer's process includes property searches, underwriting, document preparation, and uses a warranty deed to transfer ownership between buyer and seller. The title insurance industry faces significant disruption from innovative technology companies and alternative services that offer more affordable and efficient options without the excessive costs and commissions of the title insurance status quo. iBuyers should seek out these lower-cost alternatives to title insurance in order to protect their brands and customer value propositions.
The document argues that iBuyers requiring title insurance unnecessarily increases costs and risks diluting their innovative technology-focused business model. It introduces iTitleTransfer as an alternative ownership transfer process that reduces costs by 75% compared to title insurance for many residential real estate transactions that involve clean titles. iTitleTransfer's process includes property searches, underwriting, document preparation, and uses a warranty deed to transfer ownership between buyer and seller. The title insurance industry faces significant disruption from innovative technology companies and alternative services that threaten its outdated business model based on excessive costs, lack of consumer choice, and pricing not correlated to risk. iBuyers should seek alternatives to title insurance to protect their brand and customer value proposition.
Willis Real Estate Risk Insights Winter 2015laelchap
This document discusses how big data can provide insights for real estate companies to better understand and manage their risks. It describes how big data allows companies to analyze large datasets to identify trends and patterns that can improve decision making. Specifically for real estate, big data can help companies understand portfolio risks, comply with energy efficiency regulations, optimize building usage, and reduce costs. However, companies must have proper data handling procedures and security measures in place to safely leverage big data insights while avoiding data theft or loss.
Willis Real Estate Risk Insights Winter 2015laelchap
This document discusses how big data can provide insights for real estate companies to better understand and manage their risks. It describes how big data allows companies to analyze large datasets to identify trends and patterns that can improve decision making. Specifically for real estate, big data can help companies understand portfolio risks, comply with energy efficiency regulations, optimize building usage, and reduce costs. However, companies must have proper data handling procedures and security measures in place to safely leverage big data insights while avoiding data theft or loss.
The document discusses how the Internet of Things (IoT) will disrupt the property and casualty (P&C) insurance industry through connected devices and sensors that generate vast amounts of data. It identifies opportunities for insurers, including using data to better understand customer risks and behaviors, improving core business models, and developing new customer value propositions. Insurers need to prepare for IoT by partnering with emerging companies, developing new offerings, and using data to differentiate themselves as the industry becomes more commoditized.
The document discusses the title insurance industry's opposition to attorney opinion letters (AOL) as an alternative to title insurance. It argues that the title insurance trade association ALTA lobbies against AOL acceptance in order to protect the title insurance monopoly. Leading mortgage lenders have embraced the lower-cost AOL option, but ALTA executives are now lobbying Congress to pressure agencies to reject AOL. The document criticizes arguments made by title industry representatives against AOL, saying they inaccurately compare AOL to full title insurance policies and ignore the high profits and low claims costs of the title insurance industry. It supports consumer choice and alternatives to the costly title insurance monopoly.
Engineering the Next-Gen Digital Claims Organisation for Australian General I...Cognizant
The document discusses potential future states for the claims organization of Australian general insurers. It notes that gradual changes like increasing climate volatility, new technologies, and changing customer demographics will reshape the insurance industry and claims processes. Five potential end states for claims organizations are described: 1) traditional claims will demand faster processing; 2) a larger percentage of claims will come from new digital risks; 3) claims processes may become "Uberized" through partnerships; 4) claims organizations will face challenges in risk management propositions; 5) humans and machines will work together to adjudicate claims using large data and computing power. The document argues that insurers must transform claims through digital technologies to concurrently improve customer experience, operational effectiveness, and efficiencies
CBIZ Commercial Real Estate Newsletter - May 2018CBIZ, Inc.
CBIZ's Quarterly Hot Topics focus on reducing taxes, maximizing cash flow and minimizing risk. This issue addresses TCJA takeaways, the new leasing standard, insurance rate trends impacted by natural disasters, active shooter risk and online investing platforms and CRE equity capital.
Title insurance firms collect $18 billion annually for a product that is outdated and largely unnecessary due to modern technology, yet they are protected by antiquated state laws. Title insurance was originally needed to protect home buyers from fraud, but computerized records and online searches have made it far less necessary. However, laws prohibit competition from other insurers and make title insurance mandatory for home buyers and lenders. This lack of competition allows title insurance companies to raise prices dramatically despite falling costs. Various corrupt practices like kickbacks and sham companies have also arisen due to the lack of a competitive market. Attempts at reform have faced strong resistance from the politically powerful title insurance industry.
iTitleTransfer Introduces Anti-Monopoly and Pro-Costumer Choice "Alternative to Title Insurance" for a Third of the Closing Cost, Authorized by Fannie Mae and Freddie Mac, utilizing Real Estate Attorney Opinion Letters.
November 2017 Reprint - Actively Manage Your Risk with a Captive Insurance Co...CBIZ, Inc.
Captive insurance companies allow companies to insure and manage their own risks. They provide benefits for commercial real estate companies who deal with risks like workers compensation, general liability, floods, and loss of rents. Captive insurance structures include pure/single parent captives, group captives, and micro-captives. Micro-captives in particular provide tax benefits and flexibility for smaller companies. While captives provide advantages like tailored coverage and tax benefits, they also involve additional costs and regulatory requirements. Commercial real estate companies should evaluate whether a captive insurance company fits with their risk management strategy.
Using Advanced Analytics to Combat P&C Claims FraudCognizant
P&C insurers need to embrace predictive and advanced analytics -- as well as analytics as a service -- to combat the growing complexity and sophistication of claims fraud.
Blockchain has the potential to transform many processes in the insurance industry. The document discusses emerging applications of blockchain such as fraud detection, claims management, product development, distribution/payments, and reinsurance. It recommends insurance companies start with internal proofs of concept and pilots before expanding to customer-facing processes and integrating with IoT. The long-term potential lies in combining blockchain with big data and IoT to enable real-time sharing of sensor and device data.
The insurance industry has evolved over centuries from early forms of risk-sharing in ancient times to the modern insurance model that emerged in the late 19th century. The document outlines three eras of the insurance industry: Insurance 1.0 referred to analog insurance companies of the 20th century; Insurance 2.0 saw insurers adopt digital tools and the internet but still operate similar business models; Insurance 3.0 calls for insurers to fully embrace digital technologies and transform their business models to focus on customer needs in today's digital world. The industry now faces pressures to change as customer expectations have risen and new competitors have entered the market.
The document discusses how blockchain can help overcome challenges in the insurance industry such as errors, fraud, lack of trust and complexity. It outlines issues like claims processing delays, customer onboarding difficulties, and lack of transparency. The summary then explains how blockchain solutions utilizing areas like smart contracts, distributed ledgers, and cryptography can streamline insurance processes, reduce costs and fraud, and increase trust and efficiency.
This document discusses the evolution of the insurance industry from Insurance 1.0 to Insurance 3.0. Insurance 1.0 referred to analog insurance companies. Insurance 2.0 saw the industry become IT-enhanced through computerization and the internet. Insurance 2.5 saw some forays into digital with predictive analytics and customized products/services. Insurance 3.0 requires the industry to fully embrace digital technologies and create primarily digital business models that are customer-centric and able to quickly adapt. The insurance industry has been slow to change due to its complex regulatory environment and business model, but digital disruption requires it to now transform into a digital business.
Blockchain Smart Contracts - getting from hype to reality Capgemini
The potential of smart contracts – programmable contracts that automatically execute when pre-defined conditions are met – is the subject of much debate and discussion in the financial services industry. Smart contracts, enabled by blockchain or distributed ledgers, have been held up as a cure for many of the problems associated with traditional financial contracts, which are simply not geared up for the digital age. Reliance on physical documents leads to delays, inefficiencies and increases exposure to errors and fraud. Financial intermediaries, while providing interoperability for the
finance system and reducing risk, create overhead costs for and increase compliance requirements.
In this report, we aim to cut through the speculation and hype around the potential of smart contracts. We have conducted detailed discussions with financial services industry professionals, prominent smart contract startups and academics (see Research Methodology at the end of this paper). Our study confirms that smart contract adoption will lead to reduced risks, lower administration and service costs, and more efficient business processes across all major segments of the financial services industry. These benefits will accrue from technology, process redesign as well as from fundamental changes in operating models, as they require a group of firms to share a common view of the contract between trading parties. Consumers will benefit from more competitive products, such as mortgage loans and insurance policies, along with simpler processes that are free of many of the hassles of today’s customer experience.
Smart Contracts in Financial Services: Getting from Hype to Reality. Reporteraser Juan José Calderón
Smart Contracts in Financial Services: Getting from Hype to Reality.
Executive Summary
The potential of smart contracts – programmable contracts that automatically execute when pre-defi ned conditions are met – is the subject of much debate and discussion in the fi nancial services industry.
Smart contracts, enabled by blockchain or distributed ledgers, have been held up as a cure for many of the problems associated with traditional fi nancial contracts, which are simply not geared up for the digital age. Reliance on physical documents leads to delays, ineffi ciencies and increases exposure to errors and fraud. Financial intermediaries, while providing interoperability for the fi nance system and reducing risk, create overhead costs for and increase compliance requirements.
In this report, we aim to cut through the speculation and hype around the potential of smart contracts. We have conducted detailed discussions with fi nancial services industry professionals, prominent smart contract startups, and academics (see Research Methodology at the end of this paper). Our study confi rms that smart contract adoption will lead to reduced risks, lower administration and service costs, and more effi cient business processes across all major segments of the fi nancial services industry. These benefi ts will accrue from technology, process redesign as well as from fundamental changes in operating models, as they require a group of fi rms to share a common view of the contract between trading parties. Consumers will benefi t from more competitive products, such as mortgage loans and insurance policies, along with simpler processes that are free of many of the hassles of today’s customer experience.
How leading commercial building insurers are using innovative IoT solutions to reduce risk, lower premiums and develop collaborative partnerships with their clients.
ALTA is lobbying to protect the title insurance monopoly and eliminate alternatives like attorney opinion letters and iTitleTransfer's end-to-end loan closing platform. iTitleTransfer's platform provides search, examination, risk scoring, curative, escrow, GSE-compliant attorney opinion letters, eSigning, eNotary, eRecording and deed monitoring, saving consumers up to 65% of traditional closing costs. ALTA is demonstrating desperation to prevent competition from alternatives authorized by the GSEs and has recruited two Congressmen to influence federal agencies, but the GSEs remain steadfast in providing consumer choice beyond just the title insurance monopoly.
ALTA has doubled down on rhetoric and disinformation in an attempt to prevent competition in the title insurance industry and protect its monopoly. Providers of GSE-compliant attorney opinion letters (AOLs) offer a safe, reliable, and low-cost alternative to title insurance, saving consumers up to 65% of closing costs. However, ALTA has demonstrated desperation to eliminate this alternative, evidenced by false and misleading political statements designed to undermine AOLs. ALTA recruited two members of Congress to pressure federal agencies to remove the GSEs' authorization of AOLs, even though the GSEs are focused on introducing competition to benefit consumers in the multi-trillion dollar real estate market.
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Similar to TITLE INSURANCE INDUSTRY TARGETED FOR DISRUPTION
The document argues that iBuyers requiring title insurance unnecessarily increases costs and risks diluting their innovative technology-focused business model. It introduces iTitleTransfer as an alternative ownership transfer process that reduces costs by 75% compared to title insurance for many residential real estate transactions that involve clean titles. iTitleTransfer's process includes property searches, underwriting, document preparation, and uses a warranty deed to transfer ownership between buyer and seller. The title insurance industry faces significant disruption from innovative technology companies and alternative services that offer more affordable and efficient options without the excessive costs and commissions of the title insurance status quo. iBuyers should seek out these lower-cost alternatives to title insurance in order to protect their brands and customer value propositions.
The document argues that iBuyers requiring title insurance unnecessarily increases costs and risks diluting their innovative technology-focused business model. It introduces iTitleTransfer as an alternative ownership transfer process that reduces costs by 75% compared to title insurance for many residential real estate transactions that involve clean titles. iTitleTransfer's process includes property searches, underwriting, document preparation, and uses a warranty deed to transfer ownership between buyer and seller. The title insurance industry faces significant disruption from innovative technology companies and alternative services that threaten its outdated business model based on excessive costs, lack of consumer choice, and pricing not correlated to risk. iBuyers should seek alternatives to title insurance to protect their brand and customer value proposition.
Willis Real Estate Risk Insights Winter 2015laelchap
This document discusses how big data can provide insights for real estate companies to better understand and manage their risks. It describes how big data allows companies to analyze large datasets to identify trends and patterns that can improve decision making. Specifically for real estate, big data can help companies understand portfolio risks, comply with energy efficiency regulations, optimize building usage, and reduce costs. However, companies must have proper data handling procedures and security measures in place to safely leverage big data insights while avoiding data theft or loss.
Willis Real Estate Risk Insights Winter 2015laelchap
This document discusses how big data can provide insights for real estate companies to better understand and manage their risks. It describes how big data allows companies to analyze large datasets to identify trends and patterns that can improve decision making. Specifically for real estate, big data can help companies understand portfolio risks, comply with energy efficiency regulations, optimize building usage, and reduce costs. However, companies must have proper data handling procedures and security measures in place to safely leverage big data insights while avoiding data theft or loss.
The document discusses how the Internet of Things (IoT) will disrupt the property and casualty (P&C) insurance industry through connected devices and sensors that generate vast amounts of data. It identifies opportunities for insurers, including using data to better understand customer risks and behaviors, improving core business models, and developing new customer value propositions. Insurers need to prepare for IoT by partnering with emerging companies, developing new offerings, and using data to differentiate themselves as the industry becomes more commoditized.
The document discusses the title insurance industry's opposition to attorney opinion letters (AOL) as an alternative to title insurance. It argues that the title insurance trade association ALTA lobbies against AOL acceptance in order to protect the title insurance monopoly. Leading mortgage lenders have embraced the lower-cost AOL option, but ALTA executives are now lobbying Congress to pressure agencies to reject AOL. The document criticizes arguments made by title industry representatives against AOL, saying they inaccurately compare AOL to full title insurance policies and ignore the high profits and low claims costs of the title insurance industry. It supports consumer choice and alternatives to the costly title insurance monopoly.
Engineering the Next-Gen Digital Claims Organisation for Australian General I...Cognizant
The document discusses potential future states for the claims organization of Australian general insurers. It notes that gradual changes like increasing climate volatility, new technologies, and changing customer demographics will reshape the insurance industry and claims processes. Five potential end states for claims organizations are described: 1) traditional claims will demand faster processing; 2) a larger percentage of claims will come from new digital risks; 3) claims processes may become "Uberized" through partnerships; 4) claims organizations will face challenges in risk management propositions; 5) humans and machines will work together to adjudicate claims using large data and computing power. The document argues that insurers must transform claims through digital technologies to concurrently improve customer experience, operational effectiveness, and efficiencies
CBIZ Commercial Real Estate Newsletter - May 2018CBIZ, Inc.
CBIZ's Quarterly Hot Topics focus on reducing taxes, maximizing cash flow and minimizing risk. This issue addresses TCJA takeaways, the new leasing standard, insurance rate trends impacted by natural disasters, active shooter risk and online investing platforms and CRE equity capital.
Title insurance firms collect $18 billion annually for a product that is outdated and largely unnecessary due to modern technology, yet they are protected by antiquated state laws. Title insurance was originally needed to protect home buyers from fraud, but computerized records and online searches have made it far less necessary. However, laws prohibit competition from other insurers and make title insurance mandatory for home buyers and lenders. This lack of competition allows title insurance companies to raise prices dramatically despite falling costs. Various corrupt practices like kickbacks and sham companies have also arisen due to the lack of a competitive market. Attempts at reform have faced strong resistance from the politically powerful title insurance industry.
iTitleTransfer Introduces Anti-Monopoly and Pro-Costumer Choice "Alternative to Title Insurance" for a Third of the Closing Cost, Authorized by Fannie Mae and Freddie Mac, utilizing Real Estate Attorney Opinion Letters.
November 2017 Reprint - Actively Manage Your Risk with a Captive Insurance Co...CBIZ, Inc.
Captive insurance companies allow companies to insure and manage their own risks. They provide benefits for commercial real estate companies who deal with risks like workers compensation, general liability, floods, and loss of rents. Captive insurance structures include pure/single parent captives, group captives, and micro-captives. Micro-captives in particular provide tax benefits and flexibility for smaller companies. While captives provide advantages like tailored coverage and tax benefits, they also involve additional costs and regulatory requirements. Commercial real estate companies should evaluate whether a captive insurance company fits with their risk management strategy.
Using Advanced Analytics to Combat P&C Claims FraudCognizant
P&C insurers need to embrace predictive and advanced analytics -- as well as analytics as a service -- to combat the growing complexity and sophistication of claims fraud.
Blockchain has the potential to transform many processes in the insurance industry. The document discusses emerging applications of blockchain such as fraud detection, claims management, product development, distribution/payments, and reinsurance. It recommends insurance companies start with internal proofs of concept and pilots before expanding to customer-facing processes and integrating with IoT. The long-term potential lies in combining blockchain with big data and IoT to enable real-time sharing of sensor and device data.
The insurance industry has evolved over centuries from early forms of risk-sharing in ancient times to the modern insurance model that emerged in the late 19th century. The document outlines three eras of the insurance industry: Insurance 1.0 referred to analog insurance companies of the 20th century; Insurance 2.0 saw insurers adopt digital tools and the internet but still operate similar business models; Insurance 3.0 calls for insurers to fully embrace digital technologies and transform their business models to focus on customer needs in today's digital world. The industry now faces pressures to change as customer expectations have risen and new competitors have entered the market.
The document discusses how blockchain can help overcome challenges in the insurance industry such as errors, fraud, lack of trust and complexity. It outlines issues like claims processing delays, customer onboarding difficulties, and lack of transparency. The summary then explains how blockchain solutions utilizing areas like smart contracts, distributed ledgers, and cryptography can streamline insurance processes, reduce costs and fraud, and increase trust and efficiency.
This document discusses the evolution of the insurance industry from Insurance 1.0 to Insurance 3.0. Insurance 1.0 referred to analog insurance companies. Insurance 2.0 saw the industry become IT-enhanced through computerization and the internet. Insurance 2.5 saw some forays into digital with predictive analytics and customized products/services. Insurance 3.0 requires the industry to fully embrace digital technologies and create primarily digital business models that are customer-centric and able to quickly adapt. The insurance industry has been slow to change due to its complex regulatory environment and business model, but digital disruption requires it to now transform into a digital business.
Blockchain Smart Contracts - getting from hype to reality Capgemini
The potential of smart contracts – programmable contracts that automatically execute when pre-defined conditions are met – is the subject of much debate and discussion in the financial services industry. Smart contracts, enabled by blockchain or distributed ledgers, have been held up as a cure for many of the problems associated with traditional financial contracts, which are simply not geared up for the digital age. Reliance on physical documents leads to delays, inefficiencies and increases exposure to errors and fraud. Financial intermediaries, while providing interoperability for the
finance system and reducing risk, create overhead costs for and increase compliance requirements.
In this report, we aim to cut through the speculation and hype around the potential of smart contracts. We have conducted detailed discussions with financial services industry professionals, prominent smart contract startups and academics (see Research Methodology at the end of this paper). Our study confirms that smart contract adoption will lead to reduced risks, lower administration and service costs, and more efficient business processes across all major segments of the financial services industry. These benefits will accrue from technology, process redesign as well as from fundamental changes in operating models, as they require a group of firms to share a common view of the contract between trading parties. Consumers will benefit from more competitive products, such as mortgage loans and insurance policies, along with simpler processes that are free of many of the hassles of today’s customer experience.
Smart Contracts in Financial Services: Getting from Hype to Reality. Reporteraser Juan José Calderón
Smart Contracts in Financial Services: Getting from Hype to Reality.
Executive Summary
The potential of smart contracts – programmable contracts that automatically execute when pre-defi ned conditions are met – is the subject of much debate and discussion in the fi nancial services industry.
Smart contracts, enabled by blockchain or distributed ledgers, have been held up as a cure for many of the problems associated with traditional fi nancial contracts, which are simply not geared up for the digital age. Reliance on physical documents leads to delays, ineffi ciencies and increases exposure to errors and fraud. Financial intermediaries, while providing interoperability for the fi nance system and reducing risk, create overhead costs for and increase compliance requirements.
In this report, we aim to cut through the speculation and hype around the potential of smart contracts. We have conducted detailed discussions with fi nancial services industry professionals, prominent smart contract startups, and academics (see Research Methodology at the end of this paper). Our study confi rms that smart contract adoption will lead to reduced risks, lower administration and service costs, and more effi cient business processes across all major segments of the fi nancial services industry. These benefi ts will accrue from technology, process redesign as well as from fundamental changes in operating models, as they require a group of fi rms to share a common view of the contract between trading parties. Consumers will benefi t from more competitive products, such as mortgage loans and insurance policies, along with simpler processes that are free of many of the hassles of today’s customer experience.
How leading commercial building insurers are using innovative IoT solutions to reduce risk, lower premiums and develop collaborative partnerships with their clients.
Similar to TITLE INSURANCE INDUSTRY TARGETED FOR DISRUPTION (20)
ALTA is lobbying to protect the title insurance monopoly and eliminate alternatives like attorney opinion letters and iTitleTransfer's end-to-end loan closing platform. iTitleTransfer's platform provides search, examination, risk scoring, curative, escrow, GSE-compliant attorney opinion letters, eSigning, eNotary, eRecording and deed monitoring, saving consumers up to 65% of traditional closing costs. ALTA is demonstrating desperation to prevent competition from alternatives authorized by the GSEs and has recruited two Congressmen to influence federal agencies, but the GSEs remain steadfast in providing consumer choice beyond just the title insurance monopoly.
ALTA has doubled down on rhetoric and disinformation in an attempt to prevent competition in the title insurance industry and protect its monopoly. Providers of GSE-compliant attorney opinion letters (AOLs) offer a safe, reliable, and low-cost alternative to title insurance, saving consumers up to 65% of closing costs. However, ALTA has demonstrated desperation to eliminate this alternative, evidenced by false and misleading political statements designed to undermine AOLs. ALTA recruited two members of Congress to pressure federal agencies to remove the GSEs' authorization of AOLs, even though the GSEs are focused on introducing competition to benefit consumers in the multi-trillion dollar real estate market.
The document is an opinion piece criticizing the title insurance monopoly's lobbying efforts to eliminate consumer choice and competition from attorney opinion letters (AOLs). It notes that the title insurance industry, controlled by four conglomerates, generates $26 billion annually while paying out less than 3% in claims. The piece argues that AOLs provide a valid lower-cost alternative to title insurance and that the monopoly's lobbyist, ALTA, is pressuring Congress and agencies to restrict the acceptance of AOLs. It accuses ALTA and industry representatives of misleading comparisons between AOLs and title insurance products in order to protect the monopoly's profits and market dominance.
iTitleTransfer has launched the nation's first low-cost "Loan Closing Platform" as an alternative to costly title insurance. The platform provides an end-to-end loan closing solution using an Attorney Opinion Letter in place of title insurance, saving borrowers over half the cost. Inquiries from title agents indicate the American Land Title Association is pressuring lenders and agents to avoid diversifying options and denying consumer choice. iTitleTransfer argues excessive title insurance costs pose a barrier to homeownership, and their platform provides a safe, reliable and low-cost closing process respecting diversity and inclusion.
iTitleTransfer, LLC will attend the National Settlement Services Summit in St. Louis from June 6-8, 2023 to promote their loan closing platform. Their platform is the nation's first GSE-compliant automated online loan closing platform available to lenders, loan brokers, realtors and title insurance agencies. More information can be found at www.iTitleTransfer.com.
iTitleTransfer has introduced a new loan closing platform that aims to reduce costs for minority home buyers. The low-cost platform is consistent with Fannie Mae's updated guidelines for equitable housing programs. The platform provides an alternative to traditional title insurance and is the nation's first compliant automated online loan closing platform.
Fannie Mae and Freddie Mac have authorized the use of Attorney Opinion Letters as an alternative to title insurance for loan closings. iTitletransfer offers the first end-to-end Attorney Opinion Letter-based loan closing platform, providing lenders, realtors, and borrowers with safe, reliable, and lower-cost closings. The platform handles search and examination, risk scoring, curative services, insured opinion letters, document preparation, escrow, eSigning, and other closing functions to reduce costs while broadening the products title agents can offer.
A company called Sprink urges Congress to investigate the American Land Title Association (ALTA) for potentially pressuring Congress members to influence federal housing agencies. Sprink promotes its own service called iTitleTransfer as providing a lower-cost alternative to traditional title insurance.
Sprink proposes a standardized automated online loan closing (AOL) platform to help lenders fulfill anticipated increases in loan origination volume. The platform aims to provide a low-cost alternative to title insurance as the nation's first government-sponsored enterprise (GSE)-compliant AOL solution for loan closing. The platform was founded by Theodore Sprink of www.iTitleTransfer.com.
iTitleTransfer offers an alternative to traditional title insurance that can save borrowers 65% on closing costs. It is the nation's first government-sponsored enterprise compliant automated online loan closing platform. The website www.iTitleTransfer.com provides information on this new title insurance alternative.
The document is an opinion piece criticizing the title insurance monopoly's lobbying efforts to eliminate consumer choice and competition from attorney opinion letters (AOLs). It notes that the title insurance industry, controlled by four conglomerates, generates $26 billion annually while paying out less than 3% in claims. The piece argues that AOLs provide a valid lower-cost alternative to title insurance and that the monopoly's efforts to ban AOLs through lobbying Congress are anti-competitive and deny consumer choice. It concludes by stating that lenders and consumers deserve choice in loan closing options.
The document is an opinion piece criticizing the title insurance monopoly's lobbying efforts to eliminate consumer choice and competition from attorney opinion letters (AOLs). It notes that the title insurance industry, controlled by four conglomerates, generates $26 billion annually while paying out less than 3% in claims. The piece argues that AOLs provide a valid lower-cost alternative to title insurance and that the monopoly's efforts to ban AOLs through lobbying Congress denies consumer choice and competition. It concludes that lenders and consumers deserve alternatives to the high-cost title insurance monopoly.
Real estate agents are seeking an attorney opinion letter as an alternative to title insurance for their customers that is safe, reliable and lower cost. They believe offering this option adds "consumer choice" to what they provide clients. The managing director of a company that provides these letters discussed this development.
iTitleTransfer has launched the nation's first low-cost "Loan Closing Platform" as an alternative to costly title insurance. The platform provides an end-to-end loan closing solution using an Attorney Opinion Letter in place of title insurance, saving borrowers over half the cost. Inquiries from title agents indicate the American Land Title Association is enforcing outdated monopolistic practices and pressuring federal agencies to eliminate alternatives that provide consumer choice. iTitleTransfer aims to make homeownership more accessible by offering a safe, reliable and low-cost closing platform that respects diversity and inclusion.
The American Loan Closing Association promotes membership to title agents, lenders, realtors and loan brokers by offering an ALCA rating which can help increase their market share. ALCA membership is based on advocating for title agencies and borrowers, providing education and experience, ensuring transactional insurance and transparency, using ALCA forms, and offering low-cost attorney-managed loan closings through their website.
iTitleTransfer provides title transfer services for iBuyers that reduce costs through utilizing public land registry data, warranty deeds, and certificates of ownership. This allows for quicker transfers of single family homes between consumer sellers and iBuyers. The services also include monitoring land registry for unauthorized ownership changes and lien filings. iTitleTransfer offers a lower-cost alternative to traditional title insurance through streamlining the transfer process.
The document discusses a new loan closing platform called iTitleTransfer that provides an alternative to traditional title insurance for lenders and borrowers. It is the nation's first government-sponsored enterprise (GSE) compliant automated online (AOL) loan closing platform that allows for a low-cost closing process. The platform aims to offer a more affordable closing option compared to title insurance.
iTitleTransfer offers a loan closing platform that provides lenders, borrowers, sellers, and investors with GSE-compliant loan closings through an end-to-end process including document preparation, escrow, and eSigning. This platform gives loan brokers the ability to offer borrowers an alternative to overpriced title insurance through insured attorney opinion letters, reducing borrower loan closing costs. The platform handles the search, examination, curative services, and issues attorney opinion letters authorized by Fannie Mae and Freddie Mac to provide consumer choice and savings on costly title insurance.
iTitleTransfer provides title transfer services for iBuyers that reduce costs through leveraging public land registry data and proprietary technology. This allows iBuyers to increase profits through lower holding costs and closing expenses. The services include examining public records, facilitating quick property transfers with warranty deeds, monitoring for unauthorized title changes, and providing legal opinions, as a lower-cost alternative to traditional title insurance.
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TITLE INSURANCE INDUSTRY TARGETED FOR DISRUPTION
1. TITLE INSURANCE INDUSTRY
TARGETED FOR DISRUPTION
Theodore Sprink, Managing Director, Integrated Growth Strategies
Published on July 25, 2019
Apprehensive Investors Await the Storm
The title industry's revenues of $21 Billion in 2019, and minimal paid claims of 3-5%, yield gross profit
before G&A of a whopping 95-97%. These figures are consistent with ratios enjoyed by the title industry
monopoly for more than 60 years. Such revenue and profitability are defended by the title insurance industry
as necessary to sustain the bloated infrastructure to support basic functions of land record search,
examination and underwriting.
According to research firm iBiSWorld 5,300 title companies and agencies employ more than 100,000
individuals in more than 10,000 title insurance offices, located in 3,100 counties throughout the country.
The industry is the classic status quo: antiquated, monopolistic, excessively labor intensive, brick and
mortar-based, stale, slow, costly, cumbersome and dominated by a handful of bureaucratic "market leaders".
The common definition of disruption is "an innovation that creates a new market and value network and
eventually disrupts an existing market and value network, displacing established market-leading firms,
products, and alliances".
2. In the context of title insurance, the general proposition is that the title industry is ripe for disruption due to
its many points of friction.
Industry pain points are the cumbersome, labor intensive, brick & mortar based, time consuming
and costly nature of the title insurance underwriting and production, in addition to a lack of
correlation between price and risk, that is reliant on searching and examining land registry records
maintained in thousands of locations in disparate paper, yellow-stickies, folders, boxes of files,
index cards, microfiche and software developed in the 1990s.
Many investors, lenders and Realtors believe smart contract-enabled blockchain technology
development firms, data aggregators, title transfer companies and/or state-controlled land registry
firms may succeed in disrupting...essentially replacing...the antiquated title insurance business.
Title insurance provides the basic function of insuring chain of title, ownership to real property and the
lender’s proper lien priority. It is estimated that five title insurance underwriting "family of companies"
control greater than 85% of the real estate title insurance market.
Yet, The American Land Title Association (ALTA) has stated that 75% of residential transactions reflect
“clear title” and therefore do not need outdated, costly, cumbersome and unnecessary title insurance to
correct simple clerical errors.
The obvious problems for the title insurance monopoly are as follows:
1. Monopolistic pricing absent correlation to risk, and monopoly-protecting “Controlled
Business Agreements” with builders, developers, lenders, realtors and vendors negatively
impacting consumer choice and price.
2. Title Insurance provides the basic function of insuring ownership and chain of title to real
property, simply searching and examining the seller’s authority to transfer real estate. Yet,
title insurance policies are generally recognized as the most expensive and time-consuming
aspect associated with real estate transactions.
3. The conversion of real estate to “points-based assets” in which Tokens represent the
intersection traditional financial products (shares of stock). Tokens in real estate assets
allow owners to convert the rights of individual properties. or fractions interests thereof,
into non-real estate securities which can be insured by non-real estate, less costly insurance
products.
4. The expansion of the “Torrens” system of the government providing state guarantees of
real estate title, thereby eliminating monopolistic, costly and unnecessary title insurance.
The Torrens System is a land registry and transfer system created and maintained by a state
with authority over county land registry offices, empowered to maintain the land registry
system and serve as the final arbiter of land registry, transfers, interests and disputes.
As such, the state becomes a revenue generator in its own right, not a transactional tool of
low-cost data available for use by the monopoly of title companies to incorporate into their
excessive premiums.
3. 5. New de-centralized Smart Contract-enabled Blockchain technology validating and
converting land records into “immutable blocks of data”, thereby inexpensively
eliminating risk of fraud, forgery and inaccuracies.
6. New digitized land registry systems will increase search and examination efficiencies
reducing cost and risk, serving to undermine the monopolistic, long argued title insurance
price-risk correlation, thereby driving down title insurance premiums.
The Title Industry in Disarray:
In response to alternatives to title insurance set forth above, many industry observers anticipate the title
insurance industry doubling down on their outdated, costly, and inefficient status quo. In title insurance
parlance, this is a reference to brick and mortar, excessive labor, outdated technology and the reliance on
paper, yellow-stickies, folders, boxes of files, index cards, microfiche and poorly designed disparate
software.
Alternatively, the title insurance industry may develop their own individually branded or collective
initiatives. To do so they will have to admit to the significant cost, time, quality and efficiency advantages
that reduce risk, which regulators should “reward” with substantial reductions in title insurance premiums.
The title insurance cannot justify its price-risk correlation…not with 75% of properties deemed “clean” and
not in need of title insurance. Big problem. And, there is another big problem, this one a public relations
nightmare:
• Remember, title companies are the same monopolies that charged consumers excessive
fees related to loan origination...while obtrusively taking advantage of the Great Recession
by executing hundreds of thousands of home foreclosures under the guise of
"diversification".
• This contributed to the homeless population in America increasing ten-fold...and record-
breaking revenue and profits for the title insurance companies.
At the same time, the title industry was building and occupying spectacular home office HQ skyscrapers
and campuses, that represented little more than self-congratulatory Ivory Tower memorials to themselves.
Title Insurance Runs Out of Purpose Value and Options:
While title insurers will likely pursue their own blockchain strategies, they are strapped with a centralized
infrastructure of thousands of brick & mortar store fronts, dozens of title plants, dozens of claim centers,
thousands of employees, hundreds of grotesquely overpaid executives, outdated and disparate land record
searching, a bloated operating platform of hundreds of absurd silos designed in the 1950s and regulatory
restrictions defined in RESPA in response to well publicized decades of title insurance company bribery,
kickbacks, legal abuse and sham business alliances.
Many industry veterans predict that centralized, bureaucratic and self-protecting title industry Blockchain
initiatives will include yet more unnecessary insurance components, in an attempt to maintain revenue and
the industry’s traditional 95-97% gross profit margins as a method of protecting revenue, multiples, market
share, market cap and a general title insurance practice of rejecting consumer claims.
Further, in order to protect some modicum of relevance, the industry may attempt to "repurpose" its real
estate title insurance monopoly by re-defining "token insurance" as appropriate for Property & Casualty
4. Insurance products, or insurable as personal property defined by Article 9 of the Uniform Commercial
Code.
Or, the title insurance industry may shoe-horn Errors & Omissions Insurance coverage as an enticement to
land registry offices development of their own blockchain technology.
However, the real conundrum confronting the title insurance industry is that regulators and
independent actuaries focus on reduced risk and costs, thereby boxing in the title industry into a
corner of significant premium rate reductions, no matter what they re-name their insurance
monopoly.
Inflated real estate title insurance premiums have been foisted upon American homeowners for
decades. In other words, the title industry is likely to be marginalized, and its survival, based 1950s
centralized infrastructure to be substantially disrupted. Institutional investors can be expected to
vacate this space.
A Conundrum Comes Home to Roost:
The title insurance conundrum is, that in a shift to Torrens model, blockchain technology, digitized land
registry and/or tokenization of real property and the possible development of tokenizing real estate may
result in regulators forcing title companies to reduce by a large percent their pricing as the result of
significantly less risk.
The obvious result of reduced price and risk are a significant reduction in premium revenue.
Lenders and buyers of real estate could simply obtain land registry information directly from the
county-based land registry systems. Blockchain technology firms can assist the land registry
offices in digitizing and/or tokenizing their systems leading to a valuable direct point of sale,
resulting in significant new state revenue.
The Title Insurance Industry Fight for Survival:
Due to reduced future title premiums, likely to be based on efficiencies of the Torrens, blockchain,
digitization and tokenization, the title industry is may shift their target market to land registry offices for
payment to the title company of a contracted technology set-up service and/or annual land registry
operational fee.
Thus, the primary customer revenue source of the title companies shifts from the consumer and
lender to the state or county municipalities providing land registry data gathering, maintenance and
delivery.
The title industry conundrum is real, with a high probability of significant changes to their business
model. And, the revenue and profit potential are likely to come to a close after decades of regulator-
blessed price-fixing domination by the title insurance industry.
Conclusion: Status Quo to be Replaced by Technology and Innovation:
Brilliant technologists will present Blockchain Technology Land Registry Digitization and Tokenization,
in collaboration with state-controlled Torrens Title opportunities, as being the solution to problems faced
by consumers. Marginalizing the title insurance companies will benefit consumers.
5. Real estate transactions may be “blockchained”, “digitized”, “tokenized” or “Torrensed”. In any of these
events, title insurance is likely to be replaced by a vastly reduced role in the business of transferring real
property. The title insurance conglomerates are likely to become a glorified collection of service
companies...mandated to serve those who own and control the technology, state land registry systems and
the tokens.
_____________________________________________________________________________________
Theodore Sprink is a twenty-year senior executive of Fortune 500 real estate and title insurance
conglomerates. Sprink is currently the Managing Director the advisory firm Integrated Growth Strategies,
providing early stage companies with business plans, marketing strategies and sales initiatives.
Ted Sprink, Managing Director of Integrated Growth Strategies can be contacted at:
www.linkedin.com/in/TheodoreSprink www.tsprink@integrated-growth.com
www.IntegratedGrowthStrategies.com Telephone: 866-494-3727