Land titles in India are nothing but ambiguous, but American land title insurers are keen on entering this market. In a step towards this, Fidelity National Financial (FNF), the US-based insurer’s India arm has already undertaken pilot projects with the governments of Chhattisgarh andDelhi.
Sameer Dhanrajani, country head- India, Fidelity National Financial India, said, “We are conducting a pilot project for Chhattisgarh chief minister Raman Singh’s local constituency Rajnandgaon. We have finished mapping the land. In New Delhi we started the pilot four months ago in East Delhi, which has a population of 4 million. We have completed the mapping of East Delhi, digitising would happen next. If we get the Title Law cleared, we would be in a position to launch in six months.”
The dubiousness of the land title market can be understood from the first phase results of the land mapping done by Fidelity National Financial India. The titles of every 1 in 12 properties in East Delhi are illegal, which is a whopping 3,33,333 titles.
According to FNF they dominate 45% market share in the US title insurance market, followed by First American Title Insurance Company at 22%.
At present, the government does not allow title insurance products to be sold in the country, but that will change with the Land Titling Bill, which is waiting in the Parliament for a nod from law makers. The Centre has already sanctioned `50,000 crore for digitising land records. The government of New Delhi, Chhattisgarh, Rajasthan, Gujarat, Madhya Pradesh and Karnataka are keen to utilise this fund and set up their digitised land record format.
Though these insurers would bring in their technology, the government does not allow any international insurance firm to hold majority stake, which is acting as a deterrent for these players. Dhanrajani said, “We would be comfortable if it is a 51:49 model, where we get the majority holding.We are also talking to private banks for a tie-up, which would help in distribution channels and getting access to work force.”
If we get the permission to operate pan India, the premium collection we expect will be around $5-8 billion in the first year itself.”
In the United States, 80% of the population opts for title insurance. Fidelity, which faces claims of 5-6% in the US expects it to be in the range of 10-15% in India