In 2014, OneTitle launched with an audacious goal: eliminate agents and offer title insurance for much less. Six years later, the VC-backed startup is being liquidated, the apparent victim of an opaque industry controlled by a handful of players.
Last month, a New York judge approved OneTitle’s liquidation, which was being sought by the state Department of Financial Services, the agency that oversees the insurance industry. All policies will be canceled, effective Nov. 5.
According to court documents, OneTitle’s business, which set out to transform the industry, had stalled sometime in 2018. It began winding down operations that year, and it has not written new business since 2019. “OneTitle has less than $400,000 in assets and its assets are eroding as expenses come due,” according to a Sept. 3 petition filed by DFS Superintendent Linda Lacewell.
In New York and elsewhere, underwriters have worked together to set rates for the industry for decades but OneTitle aimed to break from that tradition. And the company’s start was auspicious.
Founded by Seth Brown and Daniel Price, OneTitle raised $17 million from investors, including $13 million from White Mountains Insurance Group, a public underwriter based in New Hampshire. From the outset, it sought to set its own rates by working directly with homeowners and developers and cutting out insurance agents.
In 2017, OneTitle got approval from state regulators to slash its rates by 25 percent on deals exceeding $15 million. In short, someone who bought a $50 million condo could purchase a OneTitle policy for $77,597 compared to a standard policy of $103,920.
Nationwide, the $15 billion title insurance industry is dominated by Fidelity, First American, Old Republic and Stewart. The “Big Four” account for 90 percent of the market, according to the American Land Title Association.
In recent years, New York regulators have tried to crack down on the title insurance industry, which it accused of wining-and-dining clients to win business. But title insurers have mounted legal challenges to a 2018 DFS directive aimed at ending heavy spending. An August 2019 court decision reversed the DFS ban; in January, a state appeals court reinstated the ban.
OneTitle’s own effort to change the industry soon hit a wall. In 2018, both Brown and Price left the company, according to their LinkedIn profiles. And a year after regulators approved its new rate model, the company tried to sell itself, according to an April 2 letter to DFS. Signed by its board of directors, the letter said OneTitle discussed a possible business combination with Munich Re, a publicly traded reinsurance firm in Germany, and the Related Companies. Neither deal panned out.
In June 2019, it entered a purchase agreement with Ameristract, a New York-based title insurance firm.
But Ameristract was unable to obtain financing to complete the deal, OneTitle wrote in the letter to DFS. In late March, Ameristract terminated its rights under the contract. “With Ameristract no longer a viable buyer, there is no market for OneTitle, and OneTitle has no recourse to additional capital or financial resources,” the letter said.
Representatives for OneTitle did not respond for comment.