Best’s Commentary: Blockchain an Enabler for Title Insurance, Not a Replacement

A blockchain initiative in the title insurance industry is an example of how early adoption of emerging technologies or a proactive insurtech partnership potentially may help insurance companies get ahead of or avert market disruption, according to an AM Best commentary.

First American Financial Corporation in late 2018 launched a shared blockchain system to be used in the title insurance process. Blockchain technology is a distributed digital ledger that promises higher levels of transactional transparency, security and efficiency. A new Bests Commentary, Blockchain: Enabler for Title Insurance; Not a Replacement, states that a successful blockchain implementation in the title insurance industry has the potential to reshape title insurers processes and business models to offer significantly improved insurance products to customers. In particular, among other benefits, it could streamline the title search process and increase the accuracy of searches during the underwriting process.

The commentary notes that blockchain implementation is not without challenges. New procedures will require significant resource commitments at the outset, particularly from information technology teams. Additionally, there may be a learning curve to ensure that key personnel become knowledgeable about implementing blockchain.

AM Best believes blockchain will support, and not replace, the title insurance industry. Title insurers play a valuable role in protecting property rights and enabling transactions, including those between lenders and homeowners. The insured will still need an insurer behind the blockchain who can compensate them and provide support as needed when it comes time to defend their property rights.

Several hurdles still must be addressed before blockchain is implemented in a mature, scalable and reliable manner, but the First American Financial initiative demonstrates that insurers are taking notice of the inevitable move toward digitizing assets.

To access the full copy of this commentary, please visit

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Sridhar Manyem
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