Investors Title Company Announces Third Quarter 2011 Results
|November 17, 2011|
Chapel Hill, N.C.-based Investors Title Co. reported its net income increased 68.4 percent to $2.4 million, compared with $1.4 million for the prior year period, according to the company’s third-quarter 2011 earnings report.
Revenues increased 36.3 percent to $26.1 million versus the prior year period primarily due to a 43.2 percent increase in net premiums written, the company reported. Investors Title generated $24 million in premiums during the third quarter of 2011, compared to $16.7 million in premiums during the same period a year ago.
"We are pleased to report an increase in revenues for the quarter and year-to-date, driven by our entry into the Texas market and continued expansion of our agent base,” said J. Allen Fine, chairman of Investors Title. “Although commission expense has increased as we have grown our agent base, other operating expense categories, in total, are favorable to last year due to positive developments in claims loss rates and the continued impact of cost reduction initiatives from the past several years. We will continue to focus on enhancing our competitive strengths by emphasizing growth in market presence and careful management of expenses."
Premium growth in Texas was partially offset by declines in other markets. In addition, premiums in the third quarter were comprised of a larger percentage of higher-margin purchase transactions relative to the prior year period.
Operating expenses increased 32.1 percent to $22.7 million versus the prior year period, primarily due to increases in commissions to agents. Commissions to agents increased 75.6 percent, commensurate with the growth in agency premiums and reflective of an increase in agent business from markets with higher premium rates, primarily Texas. The provision for claims was substantially lower in the current quarter compared with the prior year primarily due to an adjustment for favorable loss development in prior policy years, as well as a decline in the relative share of North Carolina business as a percentage of the total versus the prior year period.
“Since North Carolina's premium rates are less than half the national average, the resulting loss ratio for North Carolina business is higher than for our other markets,” the company said in a release.
For the nine months ended September 30, 2011, net income increased 26.2 percent to $5.05 million, compared with $4 million for the prior year period. Revenues increased 42.3 percent to $69.9 million, while operating expenses increased 43 percent versus the prior year period, largely as a result of factors noted above for the quarter.