This article is about the title insurer. For other uses of fidelity, see Fidelity (disambiguation)
Fidelity National Financial is the second largest title insurer in the U.S. Its three main subsidiaries are Fidelity National Title Group, Fidelity National Property and Casualty Insurance Group as well as Sedgewick CMS, a minority-owned subsidiary. In 2005, Fidelity sold off its ownership stake in Fidelity National Information Services (FIS), which processes transactions for financial institutions. Fidelity's revenues are tied to the real estate market. With fees and premiums earned only from the sales and refinancing of real estate.
On November 26th, 2008, Fidelity announced the signing of a stock purchase agreement with former competitor LandAmerica Financial Group (LFG). Under the terms of the stock purchase agreement, Fidelity National Title Insurance Company will acquire Lawyers Title Insurance Corporation and United Capital Title Insurance Company (both are for $139.4 million, for a total purchase price of $298.0 million.
FNF earned a net income of $222.3 million after incurring a $179.0 million net loss in 2008.
Fidelity operates through three reportable business segments: Fidelity National Title Group, Specialty Insurance, and Corporate and Other.
*Fidelity Title Group: This segment underwrites title insurance.
*Specialty Insurance: This segment issues flood, homeowners', automobile, and other personal insurance policies.
*Corporate and Other: Operations reported in this segment are actions of the holding company or other unallocated activities.
Premiums from Title Insurance policies generate the majority of Fidelity's revenue. Title Insurance policies are sold along with the sale of real estate. When more properties are sold, more premiums can be collected. However, with today's slow market for real estate, fewer properties are sold leaving fewer opportunities for Fidelity to earn premiums from Title Insurance policies.
High interest rates make the option of refinancing mortgages unattractive, since homeowners have to pay more for their loans. Drops in interest rates create a greater incentive to refinance and therefore more opportunities for Fidelity to earn Title Insurance premiums.
During an economic downturn, fewer consumers are willing to purchase a new home, diminishing the number of potential Title Insurance policies. In addition, fewer consumers are willing to purchase new cars and other products covered by Fidelity's Specialty Insurance segment. The reverse is true during an economic expansion. The Economic Cycles affect the U.S. Housing Market, Interest Rates, and the Appreciation of home prices.
The title insurance industry is an oligopoly, with the top five firms contributing 92.6% of the industry's revenues.  FNF is currently the second-largest title insurance underwriter and shares a co-leading position with LandAmerica in the commercial title insurance market. FNF's largest competitors are: