Within the real estate world, no greater necessity has been disputed quite as much as title insurance. From understanding it’s basic functions to it’s critical importance in the home buying process, titles and tasks associated with them could use a bit of demystifying. Over the next 8 weeks, The Atlantis Organization’s title insurance imprint, Atlantis National Services will share everything agents need to know about the industry and the upcoming CFPB regulations that are effective as of 2015.
#8 Financial Stability
Insurance is all about efficiency. Whether you're assessing risk or issuing policies, the more efficient we work, the better the outcome. As a title agent , joining a company that aims to maximize efficiency will ultimately maximize your productivity at work. But how do we evaluate efficiency? Start with understanding the company’s relationship to the market. How well are they keeping up with their competition? Then, examine the company’s relationship with their clients – are they maximizing their services for every client? Finally, perhaps the most important factor in determining efficiency -- is researching financial stability.
There are several firms that monitor and rank the financial stability of agencies, institutions and businesses. The “Big 4” include Moody’s, A.M. Best, Fitch and Standard & Poor’s. These firms review the financial data and compile a profile based on factors like company size, quarterly revenues and other various statistics. They compare data and determine a ranking. Aside from the traditional “Big 4”, some companies specialize in specific trades and assess financial stability by studying these industries and their influencers.
The Financial Stability Rankings (FSR) system, developed in the late 90’s by financial services giant Demotech, was created especially for evaluating insurance institutions.
These rankings establish strength and efficiency based on quantitative ratios as they relate to the underwriting cycle and the general business cycle.
What’s separates Demotech’s rankings from the big bigger institutions like Moody’s, A.M. Best, Fitch and Standard & Poor’s is their niche. They use metrics only relative to the title insurance sector, because the title industry is so mechanically different than traditional real estate or insurance. It’s important to know the financial strength of your company as an agent because if they’re secured, so are you. All the underwriters we use at Atlantis – Old Republic Title and WFG National Title– have proven their financial strength, receiving A”’s or higher for unsurpassed financial stability in all 5 rankings.
Another added benefit of a financially sound company is that in the wake of new compliance regulations, the company will continue to make adjustments to adhere to regulations so that you don’t have to. Whether you work with Atlantis National Services or the other guys, financial strength is critical to the success of the agency and the agent. We are able to invest into more technology, hire better attorneys and maintain a comfortable clientele base why? Because we have proven solvency. To us, financial stability equals financial growth.