NREI looks into the top title insurance firms and finds that these firms often reflect the disciplines of their leaders.

Real estate is an industry where success depends largely on relationships. If two individuals have done business in the past, they know what to expect and there are few surprises. Furthermore, if they are successful and each likes how the other operates, the relationship will certainly continue to grow.

Knowing who you're dealing with is important in any business, particularly at the top. Most companies tend to reflect the values and ideals of the person who runs the show, and the title insurance industry is no exception. Each executive has his own ideas about what area of the business is most important, as it relates to the future of the title insurance business, and these decisions will determine future market shares.

A knowledge of these executives' backgrounds, how they got their start in the industry and what their experiences are, can give an indication of the company's focus and where it is heading -- to the cutting edge of technology, geographic expansion and/or diversity of services. And from this direction, potential title clients can get an idea of how each firm operates and decide which one or ones would be the best fit for a business relationship.

The following collection of "Who's Who in Title Insurance" features provides some insight into the people behind the policies and how their backgrounds and philosophies have, and will, continue to mold the development of their firms and the title insurance industry in general.

Attorneys' Title Insurance Charles Kovaleski, president of Orlando-based Attorneys' Title Insurance Co. (The Fund) got involved in the title insurance industry just as many of the company's clients do, on the basis of need. However, Kovaleski's initial need was law school tuition.

While attending law school in 1972, Kovaleski began working part time for Attorneys' Title Guaranty Fund in Champaign, Ill. The paycheck got him through law school, and the experience outlined his career path.

In 1980, Kovaleski joined Attorneys' Title Insurance Fund Inc., a firm which had been applying data processing technology to the title insurance industry since the late-1960s, as well as promoting the computerization of land records.

Today, the firm has approximately 6,000 member attorneys who indirectly own The Fund, and its stated goal is "to make real estate lawyers and their firms more efficient, more competitive and more successful, both now and in the future."

Kovaleski became president of the firm in 1985 and has maintained the ambitious and forward-thinking approach of the company. "In 1986, we began a formalized strategic planning process in which every major initiative we have undertaken has been formed," says Kovaleski.

Attorneys' Title Information Data System (ATIDS) is the most comprehensive computerized title information service in Florida. Through on-line access it provides members access to millions of real estate records in the state and grows every year. "This is a big advantage to us in the state," Kovaleski adds.

To make ATIDS easier to use, last year, Attorneys' Title simplified and lowered the cost of using the system, tripled its modem speed capability and added new software making the system more accessible to various personal computers.

These investments are prudent considering the important spot the computer has created for itself in today's law office. Attorneys' Title statistics point out that today, more than 90% of law firms are using computers, compared with under 60% five years ago.

In addition, The Fund has created DoubleTime, the company's state-of-the-art real estate closing software package, specifically designed by and for attorneys, and provides legal education courses, seminars, publications and periodicals.

While maintaining its position as the largest title insurance underwriter in The Sunshine State, The Fund has also begun to expand geographically, particularly in the Southeast where the company has a presence in Alabama, Arkansas, Georgia and South Carolina. But the firm is also doing business in Maryland, Indiana, Illinois, Minnesota, North Dakota, Colorado and Utah.

Kovaleski has definitely put his stamp on The Fund and tries to use his own business philosophy to shape that of The Fund. "I don't care for surprises and we try very hard, both internally with our employees and externally with our board of directors, to predict bad news and let them know about it as soon as possible," he says.

Additionally, he says that credibility is the key to all business relationships, "and that is what we seek to achieve in the eyes of every member of our business audience," he says.

Chicago Title and Trust Co. 1996 was an important year of decision for John Rau. Should he sign on for another four-year term as dean of the Indiana University School of Business or take his corporate experience as the past CEO of two Chicago banks and go back to the private sector?

"The opportunity to work at a company with the heritage and growth potential of Chicago Title & Trust was what first interested me in this job," explains Rau, who accepted the position with CT&T and began the new year in Chicago rather than Bloomington, Ind.

Suffice it to say, CT&T was not going to turn the flagship of the largest family of title insurance operations in the country (including Ticor Title Insurance Cos., Chicago Title Insurance Co. and Security Union Title Insurance Co.) -- with revenues in excess of $1 billion -- over to an outsider without a thorough knowledge of his capabilities.

Although Rau labels his entry into the industry as "unconventional," he says his business background has been beneficial. "I have a reputation for producing results and leading companies through difficult transformations."

Rau says he senses an understanding among employees that change is now part of the strategic plan. A plan that includes an aggressive approach to battling for marketshare.

More specifically, Rau is focusing on interaction with commercial lenders and financial decision-makers in New York as well as major residential lenders, that seek "a more efficient means of handling bundled packages of properties."

Meeting this goal has required investment in the technology that allows CT&T to respond quickly and efficiently with these customers.

He stresses that investment in the company is critical to its continued success. "My primary goal is a balance between marketshare and profitability; it does you no good to go solely for marketshare and lose your ability to service customers."

Commonwealth Land Title Insurance Co./Transnation Title Insurance Co. Herbert Wender, chairman and CEO of Philadelphia-based Commonwealth Land Title Insurance Co., spent 10 years working his way up the ladder at Commonwealth's parent firm, Reliance Group Holdings, before taking the reins in 1983.

In 1990, Reliance Group acquired Transnation Title Insurance Co., and Wender assumed leadership of that company as well. As the head of the two firms, Wender has worked to build a broad foundation that can support the company in any economy. "My focus has always been centered on attaining profitable growth for the company throughout every type of market cycle that our industry experiences," says Wender.

Commonwealth's diversification of services has moved beyond title insurance. The company also has subsidiaries offering relocation services, mortgage insurance, tax-deferred property exchanges and appraisal management.

The firm is also incorporating technology to enhance its responsiveness to clients. "We have invested our resources and staff into developing faster, more responsive and more adaptable technological systems," says Wender, which includes finding ways to better use the Internet to enhance services to customers. Currently, Commonwealth offers its customers in Arizona, California, Oregon and Washington the ability to access a full range of real property information on-line through its NiteOwl website.

The firm's future could face a major change. Currently, Commonwealth and Richmond, Va.-based Lawyers Title are negotiating an acquisition/merger which, if approved, would make the combined companies the largest title insurance firm in the country. The deal is expected to close late this month.

"Economies of scale, critical mass and technological capabilities are essential to success in the evolving real estate services marketplace," says Wender. "Combined, we are a stronger, more effective organization."

Fidelity National Financial Inc. William P. Foley II, CEO of Irvine, Calif.-based Fidelity National Financial Inc., is a graduate of West Point, and -- as would be expected of someone with a military background -- the man knows how to take the offensive.

In 1984, as a real estate attorney working for a Phoenix savings & loan, Foley saw an opportunity and took it. He acquired the company's title insurance subsidiary, Fidelity National Title Co., through a leveraged buyout and began a rapid ascent into the upper echelon of title insurance providers.

At the time, the title company had annual revenues of about $6 million, but, as Pat Stone, Fidelity's current COO says, "Bill is very adept at buying companies in the fire sale mode and turning them around very quickly."

Indeed, by 1989 the firm's revenues had ballooned to $130 million, says Stone.

Fidelity National Financial's growth has continued to be mainly through acquisitions, and a series of these transactions raised revenues for 1996 to $636 million, with Stone estimating 1997's total at $700 million.

Stone credits the company's success to Foley's building the company's business philosophy around his own aggressive style.

"Fidelity National is very entrepreneurial," explains Stone. "Bill grants a lot of autonomy, and he believes in rewarding performance. The company is totally results oriented."

He says management is incentived very aggressively to drive business growth and, in addition, the employees stock plan allows many employees to, in effect, be working for themselves.

"Of our 4,500 employees, a third of them own stock in the company," says Stone. "No unwanted sale of the company could take place because management controls a lot of stock."

The relaxed, informal work atmosphere has obviously been advantageous and helped the company succeed. Stone points out that the company has the feel of a smaller firm.

"Anyone looking at the company and how we all work together would never have the impression that Fidelity National is as large as it is," he says.

First American Title Insurance Co. Parker S. Kennedy, the president of Santa Ana, Calif.-based First American Title Insurance Co., is the latest in a long line of his family members that have headed the firm since its creation in 1894 by his great-grandfather.

"My grandfather, father and great-uncle were all executives with the firm as I was growing up," says Kennedy. So Kennedy was exposed to the business as a child and, after graduating from law school and spending a few years in private practice, he joined the company's Los Angeles office in 1977 as a county manager. And after several years and promotions, he became president in 1989 and took over as president of the parent company, First American Financial Corp., in 1993 from his father.

Kennedy credits his father, D.P. Kennedy, the company's chairman, with making First American a national firm. And since 1993, he has tried to further those efforts, which meant expanding the services. "It became apparent that we had to become more than just a title insurer," Kennedy says. "Our company is now the largest provider of real estate-related financial and information services."

With 1996 revenues of nearly $1.6 billion (a 28% increase over 1995), First American's diversification has paid off handsomely; it has paid a cash dividend every year since 1909. However, despite its diversification, the title insurance segment still accounts for 81% of last year's revenues.

The additional services include: tax reporting, certification and outsourcing; flood zone determination; mortgage and consumer credit reporting; property appraisal; equity loan services; trust service; and commercial and industrial loans.

"We have put together not just a comprehensive menu of services for our lender-customers, but we have assembled some of the very best companies in each of the categories," says Kennedy. "I want to keep our reputation for excellent customer service, expand our customer base where it makes sense and remain independent and continue to provide a good return to our shareholders."

Lawyers Title Insurance Corp. Charles H. Foster Jr., the chairman and CEO of Lawyers Title Insurance Corp. and the firm's parent operation Lawyers Title Corp., both based in Richmond, Va., joined the firm's Los Angeles office in 1979 but soon was transferred to the company's headquarters. And after years of climbing the firm's corporate ladder, he took his present position as chairman and CEO in January 1991.

As the head of the firm, Foster has stressed the on-going repositioning of the company to fit the changing environment in the title insurance industry. There is a shift toward "bundled service," which will allow for quicker, more efficient and cheaper closings.

To provide one-stop shopping, title insurance firms need to become much more. So, Foster and company have added title and credit reporting, appraisal and inspection services, and flood and tax certifications to their repertoire. The firm also established a relocation company, Argonaut, in a joint venture with General Motors. "That business can be going strong when the real estate economy is weak," Foster says.

While the title insurance industry's structure has historically been based on geography, Foster claims the "new emerging customers" need more "centralized and standardized processes."

As a result, Lawyers Title is realigning its management according to function, rather than geography. "This gives us the most effective, expedient means of maintaining profitability and growth, as well as a competitive edge in meeting the changing customer demands," says Foster.

And the firm has enjoyed good success under Foster's leadership. Since 1991, the firm's revenues have risen at a rate of 8.5% a year, and both income and stock prices have grown several fold. Currently the firm is in negotiation with Philadelphia-based Commonwealth Land Title Insurance Co. about a potential acquisition/merger. If approved, the transaction could be completed before the end of the year.

Old Republic National Title Insurance Co. Richard Cecchettini, president and CEO of Minneapolis-based Old Republic National Title Insurance Co., has been involved in the title insurance business for 39 years, and his ascension of the corporate ladder has gone from the ground up.

Beginning in 1958, Cecchettini worked in both title and escrow operations for a firm in Sacramento. Then in 1972, he was transferred to New York as senior vice president and COO of Title Guarantee Co. Subsequently, he was named president and later, senior vice president-Eastern Region for Pioneer National Title.

In 1981, he joined Old Republic Title as senior vice president-operations and, in 1983, he was appointed executive vice president and COO. Finally, Cecchettini was named president in 1987 and CEO the next year.

Old Republic national title has a reputation as one of the most conservatively run firms in the industry, say analysts with Standard & Poor's, who have given the firm an A+ (its highest rating) for three consecutive years.

The company's strength is its reserve policies, which in 1995 were 123.5% of claims paid. "We are not interested in marketshare growth at the expense of financial stability," states Cecchettini, in the firm's 1996 annual report.

And although the firm is less geographically diversified than some, it has made significant strides in this area in the 1990s, reports Standard & Poor's, reducing the amount of business concentrated in its top-10 states from 76.3% to just 66.1% through 1995.

The company's patience and attention to detail with regard to its growth has showed results. States Cecchettini in the firm's 1996 annual report, "For an unprecedented fifth consecutive year, claim frequency and severity have improved as compared to historical measurements, resulting in continued reduced loss provision rates and a positive impact on the composite ratio."

Stewart Title Guaranty Co. It is doubtful that anyone has ever gotten an earlier start on learning the title insurance business than Malcolm Morris, the president of Houston-based Stewart Title Guaranty Co. In 1956 (at the age of 10), Morris began spending his summers at the company's office with his father.

In the ensuing summers, Morris learned every part of the family business firsthand, by actually doing the work, before heading off to SMU, where he earned a law degree in 1970. After graduating, he came back to the firm and even handled the inside legal work for its first public offering in 1972.

Morris became president of the company in 1991, and his experience has proven beneficial to the firm from the start. He sparked an initiative to increase Stewart Title's size through the acquisition of more outside agencies, establishing a goal of having at least one owned office in every state. A goal that will soon be achieved. And Morris has overseen increased earnings and the doubling of the company's marketshare from 6% to 11%.

An important factor in Stewart Title's growth has been Morris' and the company's embracing of technology. The firm's initial forays into computer-based systems has blossomed today into two entire floors of Stewart's headquarters being devoted to technology. "Many of the programs we have developed have won various awards and are used not only in-house but by our competitors as well," says Morris.

One characteristic which the Texan has made it a point to brand the entire firm with is integrity. "We made a commitment to grow the company's surplus and reserves every year and, for 22 straight years, we have done just that."

He says Stewart Title is known as a stable environment for employees because they don't have to worry about their jobs. With all of the consolidation going on in the industry, Morris says, "our employees don't have that worry," because the family is not interested in selling.

Ticor Title Insurance Co. Ticor Title Insurance Co., part of The Chicago Title and Trust Family of title insurers, is also under the leadership of John Rau.

While part of the Chicago Title And Trust Family, Ticor is a completely separate company from Chicago Title Insurance Co. In 1996, Ticor Title and its New York-based subsidiary Ticor Title Guarantee Co. earned a combined statutory net income of $20.9 million, and combined policyholders' surplus rose to $70.4 million, a nearly 6% increase over 1995.

As its sister company, Chicago Title, Ticor has received good marks regarding its financial strength from a number of the national rating agencies. The company has a rating of A' (A prime) from Demotech Inc., A3 from Moody's Investors Services and A+ from LACE Financial Corp.

For 1996, the CT&T Family led the title insurance industry by reserving more than twice as many assets as its nearest competitor on a GAAP (Generally Accepted Accounting Principles) basis.

Ticor, which was acquired by CT&T in 1991, has greatly benefitted from the investments made by the parent firm to enhance the services capabilities of its title insurance subsidiaries. The acquisition of a number of firms offering a diverse mix of real estate services has sped up the closing process.

Flood certification, credit reporting and residential appraisal services were all added in 1995, helping to meet the request for bundled services from clients. Last year, CT&T's acquisition of Market Intelligence Inc., a Hopkinton, Mass.-based firm, added the capability of providing automated property evaluations as an alternative to traditional appraisals.

Other investments have led to the establishment of more efficient communication lines with both clients and agents. This has allowed electronic access to information, streamlined the production process and simplified the electronic delivery of products and services.

Attorneys' Title Insurance Fund Inc. P.O. Box 628600 Orlando, FL 32862-8600 Phone: (407) 240-3863 Fax: (407) 438-4562 Website: www.thefund.com Rating: Demotech (A'), Duff & Phelps (A-), LACE (A) 1996 Revenue: $74,850,502

Chicago Title and Trust Co. 171 North Clark St. Chicago, IL 60601-3294 Phone: (312) 223-2000 Fax: (312) 223-2600 Website: www.ctt.com Ratings: Demotech (A'), Duff & Phelps (A), LACE (A), Moody's (A2), Standard & Poor's (A) 1996 revenue: $861,264,782

Commonwealth Land Title Insurance Co. 1700 Market St. Philadelphia, PA 19103-3990 Phone: (215) 241-6000 Fax: (215) 241-1083 E-mail: hwender@CLTIC.com Ratings: Demotech (A"), Duff & Phelps (A+), LACE Financial Corp. (A+), Standard & Poor's (A-) 1996 revenue: $811,000,000

Fidelity National Financial Inc. 17911 Von Karman Ave. Suite 510 Irvine, CA 92714-6253 Phone: (714) 622-5000 Fax: (714) 622-5087 Ratings: Demotech (A), Duff & Phelps (BBB), Moody's (Baa3) 1996 revenues: $636,000,000

First American Title Insurance Co. 114 East Fifth Street Santa Ana, CA 92701 Phone: (714) 558-3211 Fax: (714) 836-1841 Website: www.firstam.com Ratings: A.M. Best (A), Demotech (A'), Duff & Phelps (A), Moody's (A3) 1996 revenues: (First American Financial Corp.): $1,571,168,000

Lawyers Title Insurance Corp. P.O. Box 27567 Richmond, VA 23361 Phone: (804) 281-6700 Fax: (804) 282-5453 Website address: www.htmlltic.com Ratings: Demotech (A"), Duff & Phelps (A'), LACE (A) 1996 revenues: $594,000,000

Old Republic National Title Insurance Co. 400 Second Ave., South Minneapolis, MN 55401-2499 Phone: (612) 371-1111 Fax: (612) 371-1191 Website: www.oldrepnatl.com Ratings: A.M. Best (A), Demotech (A"), Duff & Phelps (AA-), LACE (A+), Moody's (A1), Standard & Poor's (A+) 1996 revenues: $367,400,000

Stewart Title Guaranty Co. 1980 Post Oak Blvd. Suite 800 Houston, TX 77056 Phone: 1-800-Stewart Fax: (713) 552-9523 Website address: www.stewart.com Ratings: Demotech (A"), Duff & Phelps (A+), LACE (A+) 1996 revenues: $328,296,000

Ticor Title Insurance Co. 171 North Clark St. Chicago, IL 60601-3294 Phone: (312) 223-2000 Fax: (312) 223-2600 Website: www.ctt.com Ratings: Demotech (A'), Duff & Phelps (A), LACE (A+), Moody's (A3), Standard & Poor's (A) 1996 Revenue: $188,097,757