Automating the Sales Channel
To outsiders, the title insurance industry is complicated; to insiders, the processes associated with the industry are perhaps too easy -- filling out paper forms and waiting, mostly.
Bill Baron, president of New York City-based title insurance specialist TitleVest, puts it this way: "There's a tremendous amount of redundancy in my sector." As an example, in order to transfer real estate property (houses, offices, co-op apartments, etc.) in New York City, there are no less than six legal documents that need to be created. For already busy real estate attorneys and institutional mortgage lenders, this forest of paperwork adds an unwelcome administrative burden.
There's also the issue of long cycle times, always an issue in paper-versus-electronic scenarios. Take the case of Chicago Title Insurance, which now subcontracts its co-op lien searches to TitleVest. "What we achieve in 2-3 days, they used to get back in 2 weeks," claims Baron. "And they were paying multiples of what we charge them." Longer cycle times issues from the method of ordering -- a faxed order can sit on a desk or be lost in a paper jam while an electronic order can trigger a cycle automatically. Plus, there are rekeying errors that take place when one has to re-input paper information into a computer. "Accuracy is paramount," says Baron. "If there's an extra letter in the last name, it's a fatal error."
TitleVest's approach to industry problems was to invest in e-business technology (including IBM Lotus Domino and Notes) with the goal of launching a website that could take orders, tie them into the existing back office system, and give customers the ability to track and print out paperwork associated with their orders. In a lot of other industries, such technology may be common, perhaps even commoditized, but, at least for the moment, it's a competitive advantage in title insurance. As proof, Baron points to the new business pulled in from Chicago Title Insurance and says that order volume has gone to 70 orders a day since the website launch (in April, 2003) -- an almost sixfold increase in business. Admittedly, volumes are up because TitleVest just got into the co-op lien search business in a big way, but Baron says there's no way the company's infrastructure would have been able to handle that kind of order volume offline.
TitleVest considers its e-business investments not only a competitive but also a marketing tool, as its website prominently says: "Our highly customized 'back-office' software greatly facilitates our ability to generate title commitments quickly and accurately. Our state-of-the-art, proprietary web-based tools ... are available exclusively to TitleVest clients."
These tools include online order placement, a closing costs calculator, and a legal form generator. The generator operates on an interesting principle. "Many of the forms have the same redundant information," Baron explains. "We have the ability for a user to enter the information in any form and it gets passed to all the other forms."
Baron concludes by emphasizing the strategic value of his company's investment. "Our approach to utilizing technology is to greatly different from competitors," he says. "Historically and currently, the technology in this business has been behind the times."