Kroll Bond Rating Agency (KBRA) releases research which examines the implications of the ongoing coronavirus (COVID-19) pandemic as it relates to the U.S. title insurance sector.

KBRA believes that COVID-19 will generate headwinds for U.S. title insurers during the remainder of 2020 but reiterates our stable outlook for the sector. And while title insurers’ balance sheets are vulnerable due to elevated exposure to equities, the expected surge in mortgage refinancings should offset investment declines, leading to the sector’s ninth consecutive year of net income (NI). However, we expect some of the smaller and independent title insurers with elevated equity holdings to experience more significant challenges.

For 2020, KBRA has reduced its premium and profitability expectations for the sector. As title insurance premium revenues are directly connected to the volume of mortgage originations. A decline in large commercial premiums will also be significant, as KBRA has noted the commercial real estate market is being meaningfully affected.

KBRA continues to monitor the direct and indirect impacts of the coronavirus disease (COVID-19) on the insurance sector. Please refer to our recent publication, KBRA Monitors COVID-19 Credit Impact by Sector for more details.

Click here to view the report.

Related Publications

• Coronavirus (COVID-19): Global Insurance Update
• Coronavirus (COVID-19) and P&C: Not a Straightforward Development
• Coronavirus (COVID-19): Implications Spread to Life Insurers

About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe Limited is located at 6-8 College Green, Dublin 2, Ireland.

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