MARKET NEED

The US title industry collected about $15 billion in policy premiums in 2018, with another $5 billion in estimated associated fees. About 25% of title searches have errors that require correction during underwriting, which is typically labor intensive and duplicative.

Allodeum’s blockchain and file storage is designed to reduce risk to the title insurance industry.  Tangible benefits include error reduction, cost savings, and faster underwriting.

Allodeum supports the existing paper-based recording system and is designed for the future of electronic signatures and smart contracts.  We understand that real estate is reluctant to change, and we are aiming to incentivize the industry to adapt blockchain.

A 2016 Goldman Sachs equity research report, Blockchain – Putting Theory into Practice, summarizes the opportunity for the title insurance industry:

“Reducing transaction costs in underwriting title insurance: Homeowners buying or re-financing property are subject to significant transaction costs, including title insurance, where the title search process can be labor-intensive. Along with business process changes, blockchain could reduce title insurance premiums and generate $2 – $4 billion in cost savings in the US by reducing errors and manual effort.” [Emphasis original]

Source: Goldman Sachs Investment Research,  Blockchain - Putting Theory Into Practice (2016)

Source: Goldman Sachs Investment Research, Blockchain - Putting Theory Into Practice (2016)

The American Land Title Association (ALTA) describes many of the circumstances that contribute to error in the existing off-line title and recording system that are solvable with Allodeum and blockchain-based applications.

ALTA states “The protection of title insurance extends far beyond the risk that may be incurred by the purchaser as a result of an error or negligence by the person performing the search and examination. Among the many risks covered by title insurance (that would not be covered by the attorney’s malpractice insurance) are:” [1]

[1] ALTA –  Publication – “Title Insurance a Comprehensive Overview”, p. 7