In real estate transactions, purchasing a home can be exciting, yet it also presents some challenges, such as securing title insurance. In a competitive market, this essential step involves traditional and manual processes, frequently becoming a bottleneck. Such delays in obtaining title insurance can extend the closing process by several weeks.
To modernize an outdated industry, our client partnered with us to leverage AI technology and fundamentally improve the assessment of title insurance by automating the analysis of historical property records.
Navigating the Complex Terrain of Title Insurance
Title insurance stands as a safeguard, shielding lenders and buyers from financial losses stemming from defects in property titles. Yet, unlike conventional insurance policies that primarily anticipate future risks, title insurance delves into the past, scrutinizing historical records for any lurking liabilities. This approach often entails cumbersome, manual assessments involving meticulous examination of property records from county recorder offices. Handwritten corrections, noisy documents, and a lack of standardization across disparate data sources further compound the challenges, resulting in a process that typically spans one to two weeks.
Innovating with Machine Learning
Reducing processing time and effort was the key to truly changing the title insurance industry. To do so, we paired a prototype model with public data sources, including U.S. Geological and Census data, to predict the risk of claims against property titles. The team engineered a workflow automation system that seamlessly integrates a document AI model capable of extracting text from PDFs, thereby mitigating the inefficiencies inherent in manual data processing.
The key to the workflow system is a data ingestion pipeline combined with custom data analytics tools. The system is enhanced by incorporating ‘human-in-the-loop’ (HITL) feedback, where human input is integrated into the learning process of the system. Supplying training data to the AI model helps ensure the application's long-term viability and effectiveness.
Additionally, the team spearheaded the development of a business-to-business API that allows title carriers and title agents to share data. This API serves as a conduit, facilitating the exchange of data between title carriers and agents, thus alleviating the burden of manual data entry and fostering a more cohesive, digitally driven infrastructure.
Expansion and Impact
With the AI model validated and deployed in production, properties deemed low-risk now enjoy expedited closing processes, shaving weeks off the transaction timeline.
The introduction of this AI model:
- Accelerated the processing time by weeks
- Allowed for faster closings for properties identified as low-risk
- Aligned with broader business goals of reducing operational costs and enhancing customer satisfaction.
Active in three states, with expansion plans for more states, the technology’s impact is set to grow.
By adopting a holistic approach throughout our partnership that integrates cutting-edge technology, responsible engineering practices, thoughtful user experience design, and a firm commitment to achieving business goals, a system model may transform industry norms and facilitate a transition to a digital future in title insurance.