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First American – Not the Cheapest Home Insurance, But Revenue Is Up

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By : John Cutts    99 or more times read
The title insurance company, First American Corp., is not exactly the cheapest home insurance provider around, but a big number of homeowners still prefer it over others as shown in the firm’s 2010 second quarter financial performance.

According to the latest reports, the Santa Ana, California-based insurer has recorded higher revenues for the second quarter of the year compared with the same period a year ago. The strong performance of the insurer has been attributed by market observers to gains in market shares and acquisition activities.

For the period in focus, the title insurance business was able to record revenue of $2.2 billion. This is a nine percent increase from the same quarter of 2009 and is the highest ever revenue for a second quarter for the company.

Despite a slowdown in the housing market and a decline in mortgage originations, First American posted strong results mainly due to rising market shares and increased average revenue for every title order that the company’s title insurance unit was able to close. Overall revenue was also helped by the strong performance of the firm’s property information, specialty insurance and business solution units.

First American is not exactly known for offering the cheapest home insurance, but the level of service provided by the company to its clients might have also played a role in the improved revenue statistics, some market analysts have claimed.

Although the company recorded income numbers higher than Wall Street predictions, they nevertheless experienced a net income decline of 18 percent for the second quarter. This, according to company observers, was due to provision rate loss for title insurance segments and because of a lawsuit charge worth more than $20 million.

The title insurer has stated that sales and cost cutting measures will be implemented within the business to help it maintain profit margins for the coming second half of 2010. Its income was also affected by new operations investments, but shares were up by two percent according to the latest data.

First American Corp. might not be homeowners’ first option for cheapest home insurance, but the revenue increase recorded by the company showed that customers still find the firm a reliable provider even during the housing market crisis.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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