There’s going to be some improvement that we’re going to make. We’re able to leverage the engine now around underwriting. So kind of like an automated underwriting system that will help us on the non-delegated piece, again from an efficiency standpoint and we’ve continued to use over the years, technology to lessen those costs. So less underwriter input, more underwriter analysis. So we constantly look at that. And we’ll have, I would say, continued improvements on the MI side, but it’s a little bit of a law of diminishing returns, right? We only have 400 folks on the MI side. So there’s not a ton of efficiencies continue to be made other than you’ll make the model better. On the Title side, that’s a different story, right?
That’s — when you think about our business on the MI side, the three main risks are credit, regulatory and operational kind of in that order. I think on the Title side, operational risk is probably number one. Regulatory is number two, probably not as severe as on the MI side per se. And third is credit. They don’t really have a lot of credit risk because they do the work so well. I mean if you do the Title search well and a curative work well, you shouldn’t have a lot of claims. So, there’s a misnomer in the Title business that they don’t — there’s not a lot of claims. There’s not a lot of claims because they do a good job. That number one risk on the operational side is very people intensive. So that there is, can we use some of the learnings on the MI side to be a more efficient on the Title side?
It remains to be seen. It’s a technology. It’s definitely a way to lessen the amount of input and people that you need on that side of the business, but it’s not that simple. It’s going to take a while. And I think the technology on that side is pretty — we’re pretty early in the process. That’s — we’re going to have to make investments on the Title side around technology. The two big things on the Title side in order to scale longer term, are you going to need to have more control over your operating platform and more control over the data. And I think that’s smaller companies. They just use off-the-shelf software. They use the larger company’s data. Longer term for Essent, longer term meaning 5, 10 years, Rick, you have to take control of that.
I mean we own that on the MI side. We could have never built out our pricing engine, if we had to rely on competitors for data or for access to the system. It’s almost — it wouldn’t have been done. So you kind of have to have that same look on the Title side. In terms of ventures, Yes, we actually — we’re looking at some funds that are dedicated to artificial intelligence, and we’re close on a couple. And there, they don’t really do anything in financial services. So there the key is what can you learn? What are they investing in that’s applicable to the financial services side? So it’s a little bit of a jump. We’re seeing some in some of the portfolio companies, but I don’t think — I think we’re just kind of scratching the surface.
So again, that’s part of when we talk about ventures. It’s really outsourced corporate development. We’re looking for companies and funds where we can learn things that can now improve the core business. With Title now, we have two core businesses potentially to improve. So actually, the impact of venture should be a little bit wider going forward.
Operator: And your next question comes from the line of Bose George from KBW. Your line is open.
Bose George: Actually, I wanted to ask just about the ILN transaction you did. How would you compare the execution in the ILN market with what you’re seeing in the XOL, just the traditional reinsurance market?
Mark Casale: Yes, Bose, it’s — we had pretty good execution on the ILN side, I think significantly better than we had last year and probably closer to the 2021 levels. I think the more important — and you’ve heard me say this before, the more important aspect of reinsurance isn’t so much the quarter-to-quarter pricing. Yes, heck, we did a nice job this quarter. There wasn’t a lot of supply in the market. We hit the market at the great time, good for us. But that’s not really the importance of it. The importance of it is really the sustainability and the duration of the reinsurance market. And because it’s by managed and distributed operating model, but this is the distributed part of it. So you’re really looking for continued availability.
And financial service 101 is really multiple sources of capital. So we’re feeling better, I would say, quarter-by-quarter as to the ultimate sustainability of the reinsurance market. It’s been tested twice. It was tested during 2020 when clearly, the market shut down for a little bit, but did open up in the fourth quarter and there was transactions. And I thought last year, to be honest, it was the biggest test. You’re talking about volatility and upward movement in rates during the year, which caught everyone by — really whipsawed, HPA at all-time levels, media crying that HPA is going to be up, and it’s going to crash. The MIs, it’s going to be hard for the MIs to do well. And yet, we did an XOL and an ILN and a venture. So the markets were open, albeit at higher prices.
