by Ellen Schweppe
The greatest challenge the title insurance industry faces today is making people aware of its value, according to incoming American Land Title Association® President Charles Kovaleski. Solving the problem could prove to be an even greater challenge, he adds.
“People in positions of influence—and that would include consumers—don't know what we do and therefore don't value what we do,” said Kovaleski, also president of Attorneys' Title Insurance Fund, Inc. in Orlando, FL. “We've done what we do so well and so quietly for years that we're taken for granted.”
He plans to spend his year as president encouraging members to support ALTA®'s ongoing Public Awareness Campaign, a multiyear effort aimed at generating awareness and understanding of the title industry's vital role in the real estate process.
At the recent annual convention, ALTA® debuted its Title Industry Marketing Kit, which is designed to help title insurance professionals get the industry value message out to consumers and others involved in the real estate process.
The kit contains articles and advertisements to place in local publications and brochures to hand to consumers at the closing table. It also includes a video and PowerPoint presentation about the title insurance process that members can use in giving talks to local groups, training new employees, or educating homebuyers. Each kit component can be customized with a company logo.
“We need to get our story out in a coherent, nondefensive way, and not just over the next year but into the future,” Kovaleski said. “We can't ever sit back and assume that because we're doing a good job that people are going to appreciate it.”
Kovaleski speaks from experience. His company has been conducting an education campaign aimed at Florida consumers for years. The campaign—which includes English and Spanish Web sites, brochures, advertising, and a toll-free phone number—focuses on how consumers can protect themselves during the complex real estate process and on the importance of using an attorney.
One thing his company has learned is that such a campaign cannot be done inexpensively. “Our experience in Florida is that $900,000, which is what ALTA® has raised so far, is not going to go very far in a national campaign. We're spending a multiple of that number in Florida alone,” he said.
That's why he plans to encourage members that when the call comes to contribute to the ALTA® effort “to dig deep and dig often. Because it's a voluntary program, we all need to volunteer.”
Another point he plans to make is that ALTA®'s campaign is not a short-term solution. “Even if in the first couple of years we have some good results, we can't stop, because people forget,” he said. “It's not going to change overnight. It may never change entirely to our satisfaction. But it's important to recognize that it will be a long-term effort to help consumers understand why they need us in the real estate transaction.”
It was a need that got Kovaleski involved in the title insurance industry—the need to find a job so he could pay his tuition at the University of Illinois College of Law and marry his then fiancée, Becky.
He spotted a notice on a school bulletin board for a part-time clerk at Attorneys' Title Guaranty Fund in Champaign, IL, a bar-related title insurance firm owned and operated by attorneys who issue title insurance policies.
His job during the school year was to do legal research and review policy forms sent in by attorneys who belonged to the firm. He spent the summer on the road signing up new members.
“What really interested me was the idea that people do need legal counsel in real estate transactions, and we were working to make sure that happened,” he said.
After graduating, Kovaleski worked at the firm for a year before moving on to executive positions at other bar-related companies in the Midwest, helping to build their member networks of attorneys specializing in real estate law.
Kovaleski spent two years at a New York title insurance company owned by Attorneys' Title Insurance Fund before becoming vice president of development at the Fund's Florida headquarters in 1980. He was named president in 1985.
As the country's first bar-related title insurance company, the Fund has been in business more than 50 years and supports a network of more than 6,000 attorney agents who practice real estate law. The company—the nation's sixth largest title insurance underwriter and Florida's largest—writes more than 300,000 policies a year in the state.
Customer service has been a key focus for Kovaleski during his years as the Fund's president. During the late 1980s and early 1990s, he implemented an intensive customer service improvement program to quell a growing number of complaints.
Customer Service Focus
“Customer service programs are widespread now, but I think we were among the first to talk about changing our culture to one focused on service,” he said.
Now all employees undergo regular customer service training, and each year the company schedules a Customer Service Excellence Day to review its performance on several customer service-related measurements. The company also offers a money-back quality and service guarantee on title insurance products, billing itself as the only title insurance underwriter to make that offer.
The result has been a steady increase in market share—now nearly a quarter of all premium dollars generated in Florida—and a sharp drop in complaints. “I now get three or four letters a week commending us on our service,” Kovaleski said.
Technology has been another focus for the company, which started applying data-processing technology to the title insurance industry as early as the 1960s.
“This is a group of lawyers—who are not typically thought of as being progressive—who decided there was an application for technology in our business at a time when most people thought the only use for computers was crunching numbers,” Kovaleski said.
Over the years, the Fund has developed a number of technology-based products and services. Attorneys' Title Information Data System, the most comprehensive computerized title-information service in Florida, provides members with access to more than a hundred million real estate records.
“More than 2,000 people use ATIDS in their offices on a daily basis,” Kovaleski said. “It has been a huge part of our success story.”
In 2000 the Fund participated in one of the first fully electronic mortgage loan and home purchases to occur in the United States, a transaction in which the mortgage loan was closed, recorded, and delivered to the secondary mortgage market in less than three hours.
“I'm not one to adopt technology just for the sake of doing it,” Kovaleski said. “It has to be something that works, that either saves money or makes money.”
First Bar-Related President
Kovaleski is the first ALTA® president to come from the ranks
of bar-related companies and the first in about 30 years
to represent a regional underwriter. He served on the Underwriters
Section of the Executive Committee and the Board of Governors
before accepting the nomination to president-elect that led
to this year's presidency.
A past president of the National Association of Bar-Related Title Insurers, Kovaleski also has been active in the American Bar Association and state bar organizations.
Former ALTA® President Richard Toft, now retired from Chicago Title Insurance Corp., encouraged him to become active in the Underwriters Committee. “He thought it was time for regionals and bar-related companies to get more involved in ALTA®, and so I did,” Kovaleski said.
First American Corp. Chairman and former ALTA® President Parker Kennedy followed up with a nomination to the ALTA® Board of Governors.
Kovaleski hopes one outcome of his presidency is that ALTA® members will learn more about the contributions bar-related companies make to the industry. “I know a lot of people are somewhat familiar with bar funds, but perhaps now they'll have an opportunity to find out a little more about us.”
Two Issues of Concern
During his year as ALTA® president, Kovaleski expects ALTA® to focus on two key external issues: HUD's proposed revisions to RESPA regulations and attempts by non-title insurance companies like Radian Guaranty to sell title insurance products.
As reported in previous issues of Title News, ALTA® supports HUD's efforts at settlement-services legislation or regulations that promote consumer choice and require meaningful disclosure. However, ALTA® maintains that HUD's proposal does not achieve those goals and instead would have potentially adverse effects on consumers, the mortgage settlement process, and small businesses.
“Approximately 51% of title companies in the country had less than $500,000 in gross revenues in 2001, and 68 percent had ten or fewer employees,” Kovaleski testified before the U.S. Senate Committee on Banking, Housing and Urban Affairs in April 2003. “HUD's current proposal would have a very serious effect on small businesses in our industry and on our ability to compete for consumer business.”
Last fall ALTA® proposed an alternative to HUD's proposal—a two-package approach. The two-package approach has recently been gaining support from others in the real estate industry. ALTA® is not certain if HUD's revised proposal will include our two-package approach, HUD said we would hear something “soon.”
The other challenge the industry is facing is from companies offering substandard products and passing them off as alternatives to title insurance. As readers will surely be aware, ALTA® challenged Philadelphia-based mortgage insurer Radian Guaranty's introduction of a product they call Radian Lien Protection on grounds that the company is not licensed to sell title insurance.
Last summer California Insurance Commissioner John Garamendi sustained the cease-and-desist order the Department of Insurance issued against Radian earlier for attempting to sell an unlicensed title insurance product. The order also bans Radian from selling the product in other states or risk losing its license to sell mortgage guaranty insurance in California.
While Radian may challenge the ruling and other nontitle companies may try to introduce similar products, Kovaleski believes a positive outcome is the title industry's response to market challenges by developing new products to meet market requirements.
Energizing ALTA® Membership
Membership is the key internal issue that Kovaleski plans to address during the coming year, reflecting his strong background in membership development for bar-related title insurers.
“We have a real opportunity to attract and energize the large number of people in our industry who have not yet joined us,” he said. “We need to find out what we can do as an association to be more attractive to those potential members. What can we do to bring you in? What can we do to get you active on association committees? It's important for us to find ways to address that.”
Another membership issue on Kovaleski's list is equalizing the association's dues structure so that agents and underwriters who conduct comparable amounts of business pay similar dues. “We also need to fund the Public Awareness Campaign in a more equitable manner so that all of us sharing the benefits are also sharing the cost,” he said.
In addition to his career in the title insurance industry and his work for ALTA® and bar-related associations, Kovaleski—whose parents were educators—has been involved in a number of education-related organizations over the years.
He has served as chairman of Junior Achievement of Central Florida, part of an international organization that educates young people about business and economics. He also has been a trustee and vice chair of Olivet College in Michigan, a trustee of Seminole Community College in Florida, president of Planned Parenthood of Greater Orlando, a director of the Greater Orlando Area Chamber of Commerce, and a member of the chamber's Education Task Force. He was also an unsuccessful Democratic candidate for the U.S. House in 1992.
Kovaleski married his wife, Becky, after his second year of law school, after he found that first title insurance job. Their son, Michael, graduated from Texas Christian University recently with a bachelor's degree in marketing, while their daughter, Katie, attends the College of Charleston in South Carolina.
When it's time to unwind, Kovaleski often reaches for a book. In his reading pile are a new biography of Benjamin Franklin, Paul Elie's biography of four Catholic literary figures titled “The Life You Save May Be Your Own: An American Pilgrimage,” and Kevin Phillips's “Wealth and Democracy: A Political History of the American Rich.”
Kovaleski's real passion, though, is golf. “If I could figure out a way to make a living at it, I'd be out of here tomorrow,” he said with a laugh.
To order a copy of the ALTA® Title Industry Marketing Kit, e-mail email@example.com, or fill out the form on page 11 and return to ALTA®.
Ellen Schweppe is president of Ellen Schweppe Company, LLC, an editorial services firm serving the financial services and other industries. She can be reached at (703) 435-5621 or firstname.lastname@example.org.