Competitive Effects of a Merger among Title Insurers

The Situation

In order to consummate a proposed merger among title insurers, the companies needed to provide state insurance regulators with an analysis of the competitive effect of the merger on title insurance business in their states.

NERA's Role

NERA was engaged to perform such an analysis for a combination of title insurers. Title insurance is somewhat unique in that most of the cost of insurance provision is not associated with claims payments but rather with developing and maintaining records in a database of transactions and records. NERA’s economic analysis evaluated the factors affecting competition among title insurers and in the provision of databases as well as the impact of potential entrants and regulation.

The Result

NERA’s expert prepared reports for each of the affected states that presented the findings that the proposed merger was unlikely to reduce competition and testified to this conclusion in one state's regulatory hearing.