Former Citi CEO Pandit to buy majority stake in title insurer Westcor
Orogen Group, an investment firm controlled by former Citigroup CEO Vikram Pandit, will acquire a majority ownership stake in Westcor Land Title Insurance Co., the nation's largest independent underwriter.
The terms of the deal were not disclosed. The transaction is subject to customary regulatory approvals.
"Most aspects of the financial services landscape are being modernized, and we believe Westcor is at the forefront of bringing new and innovative approaches to the title insurance industry," Pandit, now Orogen's chairman and CEO, said in a press release. "We see a tremendous opportunity to leverage technology to improve efficiency, make agents' lives easier, and enhance the customer experience."
Westcor ended the second quarter with a market share of 5.9%, as measured by premiums written among all of the nation's independent title underwriters. That share is a high for this group, since the industry consolidated in the mid-2000s, according to the American Land Title Association. Westcor's share in the first quarter was 5.2% and in the first quarter of 2019 it was 3.4%.
In comparison, the smallest of the four national mortgage insurers, Stewart Information Services, had a second quarter market share of 10.1%.
"We believe that the values and vision we share with Orogen will allow us to continue to expand our business and deliver exceptional service to our customers," said Westcor President and CEO Mary O'Donnell, who is also the current president of ALTA.
Westcor was founded in 1993 by a group of title agents. The Maitland, Fla.-based company's business is 100% agent driven, unlike its larger competitors, which all source a significant portion of their business directly. Agents are believed to control 60% of all title business.
But the larger underwriters are looking to bring those agents under their control. In a deal announced on Sept. 16, Stewart purchased Alaska-based agency Yukon Title Co.
Among Westcor's affiliated companies is Closepin, which offers automated closing agent compliance validation technology.
Citigroup served as financial advisor to Westcor in the transaction, and Mayer Brown served as legal counsel. Davis Polk & Wardwell served as legal counsel to Orogen and Greenberg Traurig served as regulatory counsel. Pandit's partner in Orogen is another investment company, Atairos.