Fidelity National Financial Inc.

THE SCOOP

New name, new structure

In November 2006, Fidelity National Title Group (FNT) changed its name to Fidelity National Financial (FNF).  Fidelity National Financial had been the name of FNT's parent holding company; the name change followed a decision to eliminate the holding company structure and create an independent company.  Fidelity National Financial has approximately 1,500 offices in 49 states and the District of Columbia, plus agent operations in Guam, Puerto Rico, Canada, Mexico and the U.S. Virgin Islands.  Headquartered in Jacksonville, Fla., FNF provides title insurance, specialty insurance, claims management services, real estate solutions and information services.  Its specialty insurance business, Fidelity National Property and Casualty Insurance Group, offers homeowners, auto, personal and flood insurance.  Fidelity National Real Estate Solutions is one of the top providers of data and services to the multiple listing service industry.  FNF's claims management services (including workers' compensation, disability, and liability and claims services) are operated through its minority-owned subsidiary Sedgwick CMS, which serves corporate and public sector entities.

Undaunted by disaster

Fidelity National Financial was born in 1847 when a young Chicago law clerk named Edward Rucker created a system for tracking documents and legal proceedings related to real estate titles.  Rucker's system saved attorneys the laborious task of searching official records in connection with transfers of real property.  This service helped develop what would later become Chicago Title.  One year later, over in California, a San Francisco notary public named C.V. Gillespie began the company that would eventually become Fidelity National Title Insurance.  The respective firms of both men played important roles in American history: Chicago Trust employees risked their lives to save records from the devastating 1871 Chicago fire (their efforts led to the creation of the Cook County land records system).  And when the great earthquake struck San Francisco in 1906, Gillespie's successors and their wives rescued huge bundles of title recordsâ€"a good thing, as San Francisco's own Hall of Records and city hall were completely destroyed.  Chicago Title and Fidelity underwent a series of mergers and acquisitions in the ensuing decades; in 2000, their paths came together with Fidelity's purchase of the Chicago Title Corporation and its many subsidiaries.  This merger made Fidelity the biggest title insurance entity in the world.

The going gets rough

In 2007, a disastrous third quarter ended with the announcement that 1,700 employees had been laid off, a figure that included 14 percent of Fidelity National Financial's field staff.  “This quarter presented challenging operating environments for several of our businesses,†Chairman of the Board William P. Foley II said in a statement.  “Obviously, the mortgage and real estate markets have impacted volumes in our title insurance business and we have responded with significant staffing reductions.† Total revenue for 2007 was $5.5 billion, down from $9.4 billion in 2006.  The losses included the result of an $81.5 million charge to boost the reserve for claim losses.  Net income, meanwhile, plummeted to $129.7 million from $437.7 million a year earlier, due largely to the abysmal mortgage market.  Fidelity's job situation didn't look much better.  BusinessWeek reported that, since 2006, Fidelity had eliminated 4,000 jobs; that figure included the third-quarter layoffs, but not the 600 in October 2007.


Shop around


Despite the company's financial woes, 2007 was a banner year for acquisitions.  February saw the acquisition of Advanced Total Imaging, Inc., a document management company.  Terms of that deal were not disclosed.  Also in February, Fidelity subsidiary, Fidelity National Real Estate Solutions, bought Go Apply, a mortgage lead generator whose customers include 30 mortgage lenders and more than 2,500 mortgage brokers.  Then, in March, Fidelity National Real Estate Solutions snapped up Realigent, a California-based company that offers software for real estate professionals.  Terms of that deal were also kept quiet.


In August, 2007, ATM Holdings, whose primary subsidiary is a title insurance agency, was acquired by Fidelity.  One of the benefits of the acquisition was ATM's relationships with eight of the top 50 mortgage originators in the United States.  Finally, in November 2007, Fidelityâ€"along with its partner, Thomas H. Lee Partnersâ€"completed its acquisition of Ceridian Corporation for $5.3 billion, giving Fidelity a 33 percent ownership stake.  Ceridian offers a variety of human resources services, including payroll processing, tax filing, benefits administration and other services.


A steady decline

Fidelity cut another 1,600 jobs during the second quarter of 2008, during which the firm's net earnings decreased 92 percent to $6.9 million from $84.8 million in 2007's second quarter.  During 2008, the firm eliminated 1,200 positions before June, and then cut an additional 400 positions, which FNF attributed to decreasing volumes of new sales.  Revenue, meanwhile, also took a hit, tumbling 21 percent to $1.18 billion.  In February 2009, Fidelity Investments Chairman Edward C. Johnson III said that for the financial sector, 2008 had been a time “laced with toxic investment waste and the casual use of other people's money by a number of institutions.†In a letter to shareholders, Johnson also admitted to Fidelity weathering a “terrible†year. Still, assets under management dipped significantly, falling 25 percent to $1.2 trillion in 2008, while operating income dropped 17 percent to $2.4 billion. The company's mutual funds also fell during 2008, with only 16 percent of its funds breaking their benchmarks, compared with 69 percent in 2007. Its stock mutual funds didn't fare much better. Only 36 percent of stock mutual funds surpassed their competition, down from the 72 percent the funds outshined in 2007.


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Fidelity National Financial Inc.


601 Riverside Avenue
Jacksonville, FL 32204
Phone: 904-854-8100
Fax: 904-357-1007
www.fntg.com

STATS


  • Employer Type: Public
  • Stock Symbol: FNF
  • Stock Exchange: NYSE
  • CEO: Alan L. Stinson
  • 2008 Employees: 13,700

Major Office Locations

  • Jacksonville, FL

Key Financials

  • 2008 Revenue: $4,329 million

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