At 2:42 p.m. Tuesday, Agents National Title Insurance Co. had underwritten title insurance for just less than $29.97 billion worth of property. By the end of the day, it crossed $30 billion.
Photo by Ryan Henriksen
David Townsend, president and CEO of Agents National Title Insurance Co., opens a gift Tuesday during the company's Christmas party.
Photo by Kit Doyle
Members of the Agents National Title Insurance Co. board of directors listen to a presentation in the company's Columbia office. Agents National is the only title insurer based in Missouri.
Townsend has been president and CEO since 2005.
Aggressive Growth: Since 2006, Agents National Title Insurance Co. has seen its revenue from title insurance premiums rise more than 13-fold.
That milestone came just six years after the company jumped into an industry dominated by a handful of multibillion-dollar firms. It has risen to become the fourth-largest title insurance underwriter in Missouri, navigating through the real estate bust and expanding into five other states. It's the only title insurer based in Missouri, and with its headquarters in Columbia, it can grow in a city with an already vibrant insurance industry and a pool of skilled workers.
"Because we weren't as big, we had to be better at customer service, we had to be nimble with technology," Agents National CEO David Townsend said.
That combination has worked out for the company. It spends time that the big boys won't partnering with smaller agencies in rural counties, and its small size meant it was able to build an online database for insurance policies from scratch. The move to electronic forms has only recently been adopted by the large companies. Because they already operate in most of the country, it has been massively expensive and difficult for them to build a similar database because of varying insurance regulations in each state.
"They're very computerized," Karen Brown, president of title insurance agency Boone Central Title Co., said of Agents National. "Their IT stuff is really good, so we can do a lot of stuff through their website."
Boone Central began underwriting some of their insurance policies with Agents National soon after the company launched, mainly because she knew Townsend when he worked at one of the big four underwriters, First American Title. While Boone Central still works with some of the large firms to underwrite its policies, Brown said they have been slow to move online. It's only been in the past month or two that one of their large underwriters has instituted an online system.
"It's kind of funny that a small company like Agents would kind of be at the forefront of it," Brown said.
The other driver for Agents National has been a willingness to work with agents of all sizes. To understand that, you have to understand the title insurance underwriting market. When any property transaction is made, people take out title insurance to protect against errors or fraud in the chain of ownership -- an agent who forgot to obtain a lien release from a bank that used the land as loan collateral, for example, or a forged signature on a warranty deed.
The risk of something like that is small, and title insurance agents and underwriters perform due diligence before issuing a policy that further minimizes the risk. Last year, Agents National lost only 8.76 percent worth of the premiums it wrote in the state, and the market leader, First American, lost 16.92 percent, the Missouri Department of Insurance said. Missouri loss ratios in homeowners and auto insurance, on the other hand, have run between 40 percent and 70 percent in recent years.
Title insurance, therefore, is a game of volume because the risk is low and the policies cheap. While a title agent can charge an additional fee for the initial title search to make sure all the recorded documents are in order, an underwriter such as Agents National, which pays out most of the money if something is later found to be wrong, relies on the premium, often a one-time fee. A policy for a $100,000 house from Agents, for instance, costs a one- time premium of $130, Townsend said.
The company started out slow, generating only $500,000 worth of premiums its first year. Its automated computer system, though, let it focus its staff and resources on adding agents, and it was willing to work with even the smallest. Small to mid-size agents have been the company's focus, Townsend said. Many of the big players won't even bother with them.
"They're not gonna go to Worth County, Mo., to find agents," Townsend said.
And once they get an agent, they don't ever plan on competing against them. While some underwriters also have in-house agents who also sell insurance policies, Townsend said Agents National doesn't want to get into that game. Agents who retire or sell have offered their book of business to Agents National, Townsend said. Rather than take it in house, the company tries to find another one of its partner agents who might be interested.
"We don't necessarily feel like we have to be the biggest company," he said. "We just want to run a good little insurance company that supports the agents."
For starting when it did, though, Agents National Title is lucky to even be around.
"Basically, as soon as we started the company, the real estate market fell in the tank," Townsend said.
Originally started by a group of seven investors, Agents National was founded under the name Farmers National Title Insurance Co., and it changed names in 2008 out of fear of copyright disputes with another insurer with "Farmers" in its name. Townsend and seven other investors started the company, including local real estate speculator David Atkins.
Atkins said he and his partners had kicked around the idea of starting a title insurance underwriter for a number of years. They were unable to get it off the ground until they met Townsend, an attorney who had already worked in the title insurance industry for a number of years.
"The first couple years were horrible, but he figured out how to make it work," Atkins said. "They have done an amazing job in a horrible environment."
The property market's plunge sent the volume of real estate transactions -- the key for the title insurance industry -- plummeting. Unable to raise outside capital when money fled the market, the company grew slowly, relying on organic growth to cover the capital requirements of its growing number of policies. Agents it worked with, like Anchor Title, the first one it signed, went out of business.
In retrospect, though, Townsend said it might have been a good thing the company started when it did. They weren't already burdened with a lot of overhead, and they were able to go slow and really learn their markets. "We learned how to be lean," Townsend said.
One of the things that kept them lean is their online database. That was part of the vision Townsend and Atkins had when they decided to launch the company, and it gave them an advantage as competitors slowly caught up.
"As opposed to an army of bookkeepers back at the office calculating everything, we've automated the accounting," Townsend said.
That makes it easier for the company's agents to enter and track policies, and it's easier to process them. The traditional paper- based process can take months, said Steve Powell, owner of Delta Systems, the company that designed Agents National's computer system.
"These guys are able to get invoices out within 30 days, and they collect their money within 30 days," Powell said.
As the company has expanded into other states, Powell and his staff are able to customize the software for the insurance laws in each state. Because it has been gradual, it's made the task manageable.
"My staff and I have had to literally become experts on title insurance," Powell said. "They explain it to us, and we have to digitize their explanations."
Right now, Agents National is licensed in Missouri, Kansas, Indiana, Arkansas and Mississippi. Last month, it bought a Wyoming- based title insurer, moving its operations into the West. Next year, Agents National plans to be operating in six more states: Nebraska, North Dakota, Colorado, Ohio, Tennessee and Alabama.
As the company expands, Townsend said he plans to keep the company's Midwest base. Expanding out to either coast -- while potentially more profitable -- would expose the company to more volatility. And Townsend doesn't like volatility.
"Will you make as much money in the Midwest? No," Townsend said. "But will you have as much risk? No."
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