CHICAGO, Jan. 6, 2021 /PRNewswire/ -- On December 18, 2020, the Board of Directors of Old
Republic International Corporation (NYSE: ORI) declared a special,
one-time cash dividend of $1.00 per
share payable on January 15, 2021 to
shareholders of record on January 5,
2021. The attached letter to shareholders provides further
background and context to the Board's evaluation relative to this
special dividend. The letter has also been posted to the ORI
website.
About Old Republic
Chicago-based Old Republic International
Corporation is one of the nation's 50 largest shareholder-owned
insurance businesses. It is a member of the Fortune 500
listing of America's largest companies. The Company is organized as
an insurance holding company whose subsidiaries actively market,
underwrite, and provide risk management services for a wide variety
of coverages mostly in the general and title insurance fields. A
long-term interest in mortgage guaranty and consumer credit
indemnity coverages has devolved to a run-off operating mode in
recent years. Old Republic's general insurance business ranks among
the nation's 50 largest, while its title insurance operations are
the third largest in its industry.
The nature of Old Republic's business requires that it be
managed for the long run, and its cash dividend policy reflects
this long-term orientation. Here's a summary of recent years' total
book and market returns, which includes the addition and
reinvestment of cash dividend payments, in comparison with the
financial performance of three selected indices similarly
developed.
|
ORI
|
Selected Indices'
Compounded
|
|
Annual
|
|
Annual
|
Total Annual
Returns
|
|
Book
Value
|
|
Market
Value
|
Nominal
|
|
S & P
|
|
Compounded
|
|
Compounded
|
Gross
|
S & P
|
P&C
|
|
Total
|
|
Total
|
Domestic
|
500
|
Insurance
|
|
Return
|
|
Return
|
Product
|
Index
|
Index
|
Ten Years 2000 -
2009
|
9.5%
|
|
7.4%
|
4.1%
|
-1.0%
|
4.7%
|
Ten Years 2010 -
2019
|
7.7%
|
|
14.8%
|
4.0%
|
13.6%
|
14.5%
|
Twenty Years 2000 -
2019
|
8.6%
|
|
11.0%
|
4.1%
|
6.1%
|
9.5%
|
|
|
|
|
|
|
|
According to the most recent edition of Mergent's Dividend
Achievers, Old Republic is listed in 58th place among just 113
qualifying publicly held companies, out of thousands considered,
that have posted at least 25 consecutive years of annual dividend
growth.
For Old Republic's
latest news releases and other corporate documents:
Please visit us
at www.oldrepublic.com
|
|
|
|
|
|
|
Alternatively,
please write or call: Investor Relations
Old Republic
International Corporation
307 North Michigan
Avenue, Chicago, IL 60601
(312)
346-8100
|
January 6, 2021
Dear Shareholders:
On January 15, 2021, all
shareholders of record on January 5
will receive a one-time special cash dividend of $1.00 per share. As this year begins, it
seems a good time to tell you more about why we decided to return
this significant amount of capital to investors.
Why the Board of Directors Declared this Special
Dividend
Near the end of each year, Directors evaluate Old Republic's
capital position in relation to the business's long-term
strategy.
Nearly all of ORI's capital is allocated and managed through 26
regulated insurance companies. Each focuses on offering many
insurance and related products to core industries in the North
American economy. State insurance regulations define the types of
coverages our separately chartered companies may underwrite. We
observe these regulatory distinctions and accounting conventions in
our financial reports.
However, we manage the business as a whole. This means we
consider two key factors. First: each subsidiary's
underwriting disciplines and the balance sheet leverage that
reflects its risk profile. Second: the risk management aspects of
the entire enterprise. Here is some useful background and
tables that describe how we do this.
We Have Sound Capital Allocation
Table A reflects the past several years' capital
allocation trends for each of the regulatory groupings of insurance
underwriting subsidiaries.
The Board and Senior Management use a number of Enterprise Risk
Management tools and controls to evaluate our operations. These
consider such important matters as maintaining high financial
ratings, plus the financial and business expectations of each
subsidiary's customer base. As a result, we determined ORI has
enough appropriately allocated capital in all regards, including a
reasonable cushion.
In addition, several years of favorable operating results for
most subsidiaries enabled them to safely raise their dividend
payments to the ORI holding company. The funds have been used
principally to 1) pay regular cash dividends to our shareholders,
and 2) add equity capital to several startups or long-operating
subsidiaries in periodic need of capital support.
These dividend receipts exceeded those outlays and generated
excess funds. These favorable results and the current evaluation of
capital levels enabled Directors to declare the additional special
dividend.
It's worth noting the table shows a continuing commitment of
capital to a previously active operation-the RMIC mortgage guaranty
group of companies. This was placed in run-off mode in 2012, and
the business remains highly capitalized, at $435 million. As we've reported in the past, our
objective is to manage RMIC in an economically efficient and
rewarding manner by: 1) selling the business to a cash buyer
interested in its re-activation, or 2) holding it for a few years
until nearly all of the insurance risk in force dissipates. We're
confident that either scenario will allow us to recoup cash equal
to any accumulated capital balance, plus more for a variety of
meaningful intangible values. With necessary regulatory approvals,
we expect to gradually extract and repurpose the capital it
generates.
We Specialize in Major Industries
Table B shows an average 91% of consolidated
premium and fee revenue comes from three industry groupings. These
account for nearly 55% of the nation's GDP. Most major subsidiaries
in the regulatory reporting segments contribute to the largest of
those three industry groups (see Tables C and D).
Concentrating on industries we know well is at the core of our
long-term strategy. Our primary goal is to achieve underwriting
profitability over industry and economic cycles. Experience has
shown that a greater possibility of long-term success rests on the
following approaches to enterprise-wide, insurance risk
management:
- Select insurance coverages that are more
counter-cyclical in product demand and market-pricing
sensitivity
- Select industries that tend to be counter-cyclical to
achieve greater stability of revenue and profit
- Combine industry specialization with expertise in
selecting and pricing insurance coverages in which we have strong
competencies
Our Approach to Underwriting Balances Profitability Over
Cycles
Table C shows the positive and steadying impact
these underwriting approaches have on balancing our profitability
over cycles. Together with the underlying strength of ORI's balance
sheet, our focused underwriting helped us weather many economic
downturns, including the Great Recession. During those years and
their aftermath (2008 to 2012), our balance sheet stood strong.
This shows the necessity of a diversified book of business that
advances ORI's long-term objectives in the best interests of our
shareholders and other stakeholders.
Table D also shows the complementary and usually
positive effects that the general economy and specific markets'
cyclical differences can have on overall underwriting profitability
(see the first three columns in this table). ORI's consolidated
management of invested assets, corporate taxation, and capital
resources is highly sensitive and responsive to those outcomes.
They are primarily geared to individual underwriting subsidiaries'
needs and reliance on capital stability and growth to achieve their
objectives in the interest of the entire enterprise.
We maintain a certain amount of permanent or debt capital for
acquiring or starting new businesses. Our deep and continually
updated knowledge of the insurance landscape gives us an edge in
this regard. Lately, we have not seen any opportunities to purchase
businesses that fit our competencies and culture. This means we're
largely focused on organic growth. We believe there are very good
opportunities to: 1) retain our currently balanced, diversified
book of underwriting exposures, 2) gain market share, and 3)
participate in the growth of the industries we serve.
We Manage Our Business for the Long Run
In our many years' stewardship, we have steadfastly managed our
business for the long run. This recognizes its nature as a
long-term undertaking that sustains resources essential to our
business. As a publicly traded company, however, we are
keenly aware of the common and varying interests of our investors:
individuals and large to small fiduciary institutions.
Throughout the years we have believed—and shown—that a
meaningful measure of Old Republic's stock performance is its total
market return over five- to 10- year periods. This measure includes
price appreciation, and intangible values that free markets may
attribute at any point. We also measure our financial performance
by calculating the total book return based on the actual,
measurable results we can effect and achieve as business managers.
The total book return calculation combines all cash dividends with
the change in shareholders' equity.
Table E shows the 52 years since ORI became a
publicly traded company. You can see the total market returns to
shareholders exceeded those of generally accepted baseline indices
most of the time. The returns have greatly benefitted all
shareholders. These include ORI's intellectual capital
providers who—together and through the Company's Employees Savings
and Stock Ownership Plan and other benefit plans, and the direct
holdings of our senior officers and Board members—represent 8.9% of
outstanding shares. For the group as a whole, these aggregate
holdings of 27 million shares place them as the second largest
shareholder group. This follows Black Rock, Inc., the world's
biggest money management institution and our largest
stockholder.
We hope this letter provides timely and pertinent context to the
thinking that led to the declaration of this latest special cash
dividend.
Sincerely,
On behalf of Old Republic's Board of
Directors,
Craig R.
Smiddy
|
Aldo C.
Zucaro
|
President and Chief
Executive
Officer
|
Chairman of the
Board
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Management: Trends and Objectives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Old Republic's
blended capital allocation process is principally driven by
enterprise risk management considerations based on the attained and
prospective growth of regulated insurance underwriting subsidiaries
and the ensuing balance sheet leverage.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Allocation
Percentages by Regulatory Insurance Groups
|
Actual as of December
31,*
|
|
General
|
|
Title
|
|
Subtotal
|
|
Life &
Accident
|
|
Other
|
|
RFIG
Run-off
|
|
Consolidated
|
2006
|
|
59.5%
|
|
8.6%
|
|
68.1%
|
|
2.2%
|
|
0.1%
|
|
29.6%
|
|
100.0%
|
2007
|
|
61.3%
|
|
8.8%
|
|
70.1%
|
|
2.4%
|
|
-0.1%
|
|
27.6%
|
|
100.0%
|
2008
|
|
62.7%
|
|
9.7%
|
|
72.4%
|
|
2.4%
|
|
0.3%
|
|
24.9%
|
|
100.0%
|
2009
|
|
68.3%
|
|
10.3%
|
|
78.6%
|
|
2.5%
|
|
1.3%
|
|
17.6%
|
|
100.0%
|
2010
|
|
71.0%
|
|
10.2%
|
|
81.2%
|
|
2.4%
|
|
3.0%
|
|
13.4%
|
|
100.0%
|
2011
|
|
80.0%
|
|
11.1%
|
|
91.1%
|
|
2.4%
|
|
2.0%
|
|
4.5%
|
|
100.0%
|
2012
|
|
83.7%
|
|
13.3%
|
|
97.0%
|
|
2.4%
|
|
2.0%
|
|
-1.4%
|
|
100.0%
|
2013
|
|
82.2%
|
|
13.7%
|
|
95.9%
|
|
2.1%
|
|
2.3%
|
|
-0.3%
|
|
100.0%
|
2014
|
|
78.0%
|
|
13.6%
|
|
91.6%
|
|
1.7%
|
|
2.3%
|
|
4.4%
|
|
100.0%
|
2015
|
|
78.2%
|
|
13.7%
|
|
91.9%
|
|
1.2%
|
|
1.6%
|
|
5.3%
|
|
100.0%
|
2016
|
|
78.0%
|
|
13.9%
|
|
91.9%
|
|
1.1%
|
|
0.5%
|
|
6.5%
|
|
100.0%
|
2017
|
|
76.5%
|
|
13.3%
|
|
89.8%
|
|
0.8%
|
|
1.8%
|
|
7.6%
|
|
100.0%
|
2018
|
|
76.5%
|
|
13.8%
|
|
90.3%
|
|
0.7%
|
|
0.9%
|
|
8.1%
|
|
100.0%
|
2019
|
|
75.5%
|
|
13.8%
|
|
89.3%
|
|
0.7%
|
|
2.4%
|
|
7.6%
|
|
100.0%
|
2020 - Nine
Months
|
76.4%
|
|
14.8%
|
|
91.2%
|
|
0.8%
|
|
1.1%
|
|
6.9%
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Long-Term
Objectives
|
82.5%
|
|
15.0%
|
|
N/A
|
|
1.0%
|
|
1.5%
|
|
0.0%
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Percentages are
inclusive of all capital instruments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
B
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance
Underwriting Long-Focused on Industry
Specialization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- In addition to its
insurance coverage concentrations (see Table D), Old Republic's
long-term underwriting success in its single business of insurance
is most significantly due to its long history of specialization in
cyclically heterogeneous industries that are at the core of the
North American economy.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of Premiums
and Fees Volume by Industry Groupings Underlying
Specialization
|
|
|
|
|
|
|
General
|
|
|
|
Natural
|
|
|
|
|
|
|
|
|
|
|
Banking,
|
|
|
|
Manufacturing
|
|
|
|
Energy
|
|
|
|
|
|
|
|
|
|
|
Construction,
|
|
|
|
&
Services,
|
|
|
|
Resources
|
|
|
|
|
|
|
|
|
|
|
Finance,
|
|
|
|
Retail
&
|
|
Subtotal
|
|
(Coal, Gas,
Oil,
|
|
|
|
|
|
|
|
|
Years
Ended
|
|
Housing
&
|
|
Air, Land &
Sea
|
|
Wholesale
|
|
Top 3
|
|
Utlities,
Wind
|
|
Education
&
|
|
|
|
|
|
|
December
31,
|
|
Real
Estate
|
|
Transportation
|
|
Trade
|
|
Industries
|
|
&
Turbines)
|
|
Government
|
|
Health
Care
|
|
All Other
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
53.6%
|
|
27.6%
|
|
8.0%
|
|
89.2%
|
|
4.0%
|
|
2.2%
|
|
0.2%
|
|
4.4%
|
|
100.0%
|
2007
|
|
54.8%
|
|
24.9%
|
|
9.9%
|
|
89.6%
|
|
3.7%
|
|
2.0%
|
|
0.2%
|
|
4.5%
|
|
100.0%
|
2008
|
|
53.5%
|
|
24.7%
|
|
12.8%
|
|
91.0%
|
|
4.0%
|
|
0.3%
|
|
0.2%
|
|
4.5%
|
|
100.0%
|
2009
|
|
54.7%
|
|
23.9%
|
|
13.5%
|
|
92.1%
|
|
3.4%
|
|
0.4%
|
|
0.5%
|
|
3.6%
|
|
100.0%
|
2010
|
|
55.5%
|
|
24.6%
|
|
11.9%
|
|
92.0%
|
|
2.9%
|
|
0.4%
|
|
0.8%
|
|
3.9%
|
|
100.0%
|
2011
|
|
51.6%
|
|
22.4%
|
|
16.4%
|
|
90.4%
|
|
2.7%
|
|
1.2%
|
|
2.4%
|
|
3.3%
|
|
100.0%
|
2012
|
|
52.5%
|
|
22.8%
|
|
14.9%
|
|
90.2%
|
|
2.7%
|
|
1.8%
|
|
2.4%
|
|
2.9%
|
|
100.0%
|
2013
|
|
54.0%
|
|
22.0%
|
|
15.2%
|
|
91.2%
|
|
2.6%
|
|
1.4%
|
|
2.2%
|
|
2.6%
|
|
100.0%
|
2014
|
|
49.7%
|
|
23.3%
|
|
17.5%
|
|
90.5%
|
|
3.0%
|
|
1.3%
|
|
2.5%
|
|
2.7%
|
|
100.0%
|
2015
|
|
50.9%
|
|
23.6%
|
|
17.4%
|
|
91.9%
|
|
2.5%
|
|
1.0%
|
|
2.4%
|
|
2.2%
|
|
100.0%
|
2016
|
|
50.3%
|
|
24.2%
|
|
17.0%
|
|
91.5%
|
|
2.2%
|
|
1.1%
|
|
2.1%
|
|
3.1%
|
|
100.0%
|
2017
|
|
48.5%
|
|
24.4%
|
|
18.6%
|
|
91.5%
|
|
2.2%
|
|
0.8%
|
|
1.8%
|
|
3.7%
|
|
100.0%
|
2018
|
|
47.7%
|
|
24.8%
|
|
18.8%
|
|
91.3%
|
|
2.4%
|
|
1.0%
|
|
1.6%
|
|
3.7%
|
|
100.0%
|
2019
|
|
47.6%
|
|
25.3%
|
|
18.5%
|
|
91.4%
|
|
2.3%
|
|
1.5%
|
|
1.3%
|
|
3.5%
|
|
100.0%
|
2020 *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006-2019
|
|
51.8%
|
|
24.2%
|
|
15.0%
|
|
91.0%
|
|
2.9%
|
|
1.2%
|
|
1.5%
|
|
3.5%
|
|
100.0%
|
Most
Recent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GDP
Industry
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions**
|
|
23.9%
|
|
3.6%
|
|
27.3%
|
|
54.8%
|
|
2.9%
|
|
11.8%
|
|
6.9%
|
|
23.6%
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Full year 2020 data not
available but is not expected to reflect any significant departure
from that of 2019.
|
** Derived from data
published by the U.S. Department of Commerce at
https://apps.bea.gov/iTable/iTable.cfm?reqid=150&step=2&isuri=1&categories=ugdpxind.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
C
|
|
|
|
|
|
|
|
|
|
|
|
Specialized
Balance of Business:
|
Leads to Greater
Stability of Long-Term Operating Margins*
|
|
|
|
|
|
|
|
|
|
|
|
- The long-term
success of Old Republic's single business of insurance underwriting
has been due to the sale of insurance products delivered through
four groups of state-regulated insurance underwriting subsidiaries
(see Tables B and D for industry specialization and insurance
coverages sold).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RFIG
|
|
|
Years Ended December
31,
|
|
General
(**)
|
|
Title
|
|
Subtotal
|
|
Run-off
(**)
|
|
Consolidated
|
2006
|
|
19.9%
|
|
3.2%
|
|
14.0%
|
|
49.1%
|
|
19.4%
|
2007
|
|
21.1%
|
|
-1.7%
|
|
14.2%
|
|
-14.8%
|
|
8.6%
|
2008
|
|
20.3%
|
|
-7.1%
|
|
13.0%
|
|
-83.2%
|
|
-10.0%
|
2009
|
|
18.7%
|
|
0.2%
|
|
12.3%
|
|
-78.0%
|
|
-8.3%
|
2010
|
|
18.7%
|
|
0.8%
|
|
11.2%
|
|
-69.0%
|
|
-2.3%
|
2011
|
|
16.8%
|
|
2.7%
|
|
11.2%
|
|
-144.6%
|
|
-8.7%
|
2012
|
|
11.2%
|
|
4.4%
|
|
8.4%
|
|
-123.9%
|
|
-3.9%
|
2013
|
|
11.5%
|
|
6.2%
|
|
9.1%
|
|
34.8%
|
|
10.7%
|
2014
|
|
8.1%
|
|
5.7%
|
|
7.1%
|
|
4.0%
|
|
7.0%
|
2015
|
|
11.6%
|
|
8.2%
|
|
10.2%
|
|
13.4%
|
|
10.4%
|
2016
|
|
10.9%
|
|
9.5%
|
|
10.3%
|
|
41.1%
|
|
11.5%
|
2017
|
|
10.9%
|
|
10.4%
|
|
10.7%
|
|
-59.8%
|
|
9.3%
|
2018
|
|
11.1%
|
|
9.4%
|
|
10.4%
|
|
65.7%
|
|
11.8%
|
2019
|
|
10.8%
|
|
9.3%
|
|
10.1%
|
|
51.2%
|
|
11.4%
|
2020 - Nine
Months
|
12.0%
|
|
10.2%
|
|
11.2%
|
|
22.8%
|
|
11.9%
|
|
|
|
|
|
|
|
|
|
|
|
Latest 5 Years'
Average
|
11.1%
|
|
9.3%
|
|
10.3%
|
|
22.3%
|
|
10.9%
|
Latest 10 Years'
Average
|
12.2%
|
|
6.6%
|
|
9.9%
|
|
-18.7%
|
|
5.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OBJECTIVES 2020 -
2024
|
11.0% -
13.0%
|
|
7.0% -
11.0%
|
|
10.0% -
12.0%
|
|
N/A
|
|
10.0 -
12.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Pretax operating
income (loss) as a percentage of net premiums and fees
earned.
|
** Effective July 1,
2019, immaterial results of the Consumer Credit Indemnity (CCI)
run-off business have been classified within the General Insurance
Group for all future periods.
|
|
|
|
|
|
|
|
|
|
|
Table
D
|
|
|
|
|
|
|
|
|
|
|
|
Insurance
Underwriting: Long-Focused on Selected Insurance Coverages Offered
through 26 Regulated Insurers Assigned to Four Regulatory Defined
Segments
|
|
|
|
|
|
|
|
|
|
|
|
- The long-term
success of Old Republic's single business of insurance underwriting
has resulted from the blending of industry specialization (see
Table B), types of insurance coverages (see Tables C and D), and a
capital allocation process that maximizes utilization among
regulated insurance underwriting subsidiaries to promote greater
operating returns (see Table C).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined Underwriting
Ratios*
|
|
|
|
|
|
|
|
|
RFIG
|
|
|
Years Ended December
31,
|
|
General
|
|
Title
|
|
Subtotal
|
|
Run-off
|
|
Consolidated
|
2006
|
|
92.4%
|
|
99.5%
|
|
95.5%
|
|
64.2%
|
|
90.0%
|
2007
|
|
91.3%
|
|
104.7%
|
|
95.4%
|
|
126.0%
|
|
101.5%
|
2008
|
|
93.1%
|
|
110.6%
|
|
97.8%
|
|
194.1%
|
|
120.9%
|
2009
|
|
95.6%
|
|
101.7%
|
|
97.7%
|
|
189.1%
|
|
118.5%
|
2010
|
|
94.7%
|
|
101.0%
|
|
97.5%
|
|
182.3%
|
|
111.4%
|
2011
|
|
94.4%
|
|
99.0%
|
|
96.2%
|
|
252.6%
|
|
115.8%
|
2012
|
|
98.7%
|
|
96.8%
|
|
97.9%
|
|
232.2%
|
|
110.4%
|
2013
|
|
97.3%
|
|
94.7%
|
|
96.1%
|
|
76.9%
|
|
95.0%
|
2014
|
|
100.8%
|
|
95.6%
|
|
98.8%
|
|
106.7%
|
|
99.4%
|
2015
|
|
97.6%
|
|
93.2%
|
|
95.7%
|
|
98.0%
|
|
96.0%
|
2016
|
|
97.8%
|
|
91.7%
|
|
95.2%
|
|
72.6%
|
|
94.6%
|
2017
|
|
97.3%
|
|
90.9%
|
|
94.6%
|
|
177.5%
|
|
96.7%
|
2018
|
|
97.2%
|
|
92.1%
|
|
95.1%
|
|
60.9%
|
|
94.7%
|
2019
|
|
97.5%
|
|
92.2%
|
|
95.3%
|
|
78.5%
|
|
95.1%
|
2020 - Nine
Months
|
96.5%
|
|
91.2%
|
|
94.0%
|
|
110.7%
|
|
94.2%
|
|
|
|
|
|
|
|
|
|
|
|
Average 2015 -
2020
|
97.3%
|
|
91.9%
|
|
95.0%
|
|
99.7%
|
|
95.2%
|
Average 2006 -
2020
|
96.1%
|
|
97.0%
|
|
96.2%
|
|
134.8%
|
|
102.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term
Objectives
|
90.0% -
95.0%
|
|
90.0% -
95.0%
|
|
90.0% -
95.0%
|
|
N/A
|
|
90.0% -
95.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Represents the sum
of the ratio of claims & claim expenses and the ratio of
general expenses, both taken as percentages of premiums and fees
revenues.
|
|
|
|
|
|
|
|
|
|
Table
E
|
|
|
|
|
|
|
|
|
|
|
Total Returns
Compared to Nominal GDP & Selected S&P Indices'
Returns
|
|
|
|
|
|
|
|
|
|
|
|
Old Republic
International Corporation (1)
|
Nominal Gross
Domestic Product (GDP)(2)
|
S&P 500 Index
(3)
|
S&P P&C
Insurance Index (3)
|
Year
|
Year End Book
Value
|
Year End Market
Price
|
Annual Cash
Dividend Declared
|
Total Book Value
Annual & Compounded Return
|
Total Market
Annual & Compounded Return
|
Total Annual &
Compounded Return
|
Total Annual &
Compounded Return
|
Total Annual &
Compounded Return
|
1968
|
$0.280
|
$0.472
|
$0.007
|
|
18.2%
|
41.8%
|
9.4%
|
11.0%
|
|
1969
|
0.312
|
0.336
|
0.010
|
|
15.1%
|
-26.6%
|
8.2%
|
-8.4%
|
|
1970
|
0.360
|
0.528
|
0.012
|
|
19.2%
|
60.7%
|
5.5%
|
3.9%
|
|
1971
|
0.472
|
0.840
|
0.014
|
|
34.9%
|
61.7%
|
8.5%
|
14.3%
|
|
1972
|
0.480
|
1.240
|
0.016
|
|
5.1%
|
49.5%
|
9.8%
|
19.0%
|
|
1973
|
0.472
|
0.456
|
0.018
|
|
2.2%
|
-61.7%
|
11.4%
|
-14.7%
|
|
1974
|
0.376
|
0.408
|
0.020
|
|
-16.1%
|
-6.1%
|
8.4%
|
-26.5%
|
|
1975
|
0.288
|
0.440
|
0.020
|
|
-18.1%
|
12.7%
|
9.0%
|
37.2%
|
|
1976
|
0.560
|
0.624
|
0.011
|
|
98.3%
|
44.4%
|
11.2%
|
23.9%
|
|
1977
|
0.792
|
0.792
|
0.022
|
|
45.3%
|
30.4%
|
11.1%
|
-7.2%
|
|
1978
|
0.976
|
0.976
|
0.033
|
|
27.4%
|
27.4%
|
13.0%
|
6.6%
|
|
1979
|
1.080
|
1.112
|
0.052
|
|
16.0%
|
19.3%
|
11.7%
|
18.6%
|
|
10 Year Annual
Compound Growth Rate
|
|
17.6%
|
16.2%
|
9.9%
|
5.9%
|
|
1980
|
1.224
|
0.888
|
0.054
|
|
18.3%
|
-15.3%
|
8.8%
|
32.5%
|
|
1981
|
1.392
|
1.144
|
0.054
|
|
18.1%
|
34.9%
|
12.2%
|
-4.9%
|
|
1982
|
1.648
|
1.456
|
0.056
|
|
22.4%
|
32.2%
|
4.3%
|
21.6%
|
|
1983
|
1.888
|
2.353
|
0.058
|
|
18.1%
|
65.6%
|
8.7%
|
22.6%
|
|
1984
|
2.208
|
2.039
|
0.059
|
|
20.1%
|
-11.2%
|
11.1%
|
6.3%
|
|
1985
|
2.304
|
3.014
|
0.062
|
|
7.1%
|
51.4%
|
7.5%
|
31.7%
|
|
1986
|
2.528
|
2.316
|
0.065
|
|
12.5%
|
-21.0%
|
5.5%
|
18.7%
|
|
1987
|
2.952
|
1.861
|
0.068
|
|
19.5%
|
-16.7%
|
6.0%
|
5.3%
|
|
1988
|
3.152
|
2.345
|
0.071
|
|
9.2%
|
29.8%
|
7.9%
|
16.6%
|
|
1989
|
3.544
|
2.604
|
0.076
|
|
14.8%
|
14.3%
|
7.7%
|
31.7%
|
|
10 Year Annual
Compound Growth Rate
|
|
15.9%
|
12.6%
|
7.9%
|
17.6%
|
|
1990
|
3.920
|
2.465
|
0.081
|
|
12.9%
|
-2.2%
|
5.7%
|
-3.1%
|
-2.3%
|
1991
|
4.456
|
4.207
|
0.086
|
|
15.9%
|
-74.2%
|
3.3%
|
30.5%
|
25.3%
|
1992
|
5.072
|
5.896
|
0.094
|
|
15.9%
|
42.7%
|
5.9%
|
7.6%
|
17.2%
|
1993
|
5.744
|
5.363
|
0.102
|
|
15.3%
|
-7.3%
|
5.2%
|
10.1%
|
-1.8%
|
1994
|
6.112
|
5.037
|
0.111
|
|
8.3%
|
-4.0%
|
6.3%
|
1.3%
|
4.8%
|
1995
|
7.248
|
8.415
|
0.121
|
|
20.6%
|
70.1%
|
4.8%
|
37.6%
|
35.4%
|
1996
|
7.768
|
9.511
|
0.148
|
|
9.2%
|
15.1%
|
5.7%
|
23.0%
|
21.5%
|
1997
|
8.312
|
13.222
|
0.178
|
|
9.3%
|
41.2%
|
6.2%
|
33.4%
|
45.5%
|
1998
|
9.216
|
12.000
|
0.206
|
|
13.4%
|
-7.8%
|
5.7%
|
28.6%
|
-6.6%
|
1999
|
9.590
|
7.267
|
0.262
|
|
6.9%
|
-37.5%
|
6.3%
|
21.0%
|
-25.5%
|
10 Year Annual
Compound Growth Rate
|
|
12.7%
|
13.1%
|
5.5%
|
18.2%
|
10.8%
|
2000
|
11.000
|
17.066
|
0.294
|
|
17.8%
|
142.1%
|
6.5%
|
-9.1%
|
55.9%
|
2001
|
12.480
|
14.938
|
0.314
|
|
16.3%
|
-10.6%
|
3.2%
|
-11.9%
|
-8.1%
|
2002
|
13.960
|
14.934
|
0.336
|
|
14.6%
|
2.0%
|
3.4%
|
-22.1%
|
-11.0%
|
2003
|
15.650
|
20.288
|
0.890
|
*
|
18.5%
|
42.4%
|
4.8%
|
28.7%
|
26.4%
|
2004
|
16.940
|
20.240
|
0.403
|
|
10.8%
|
1.9%
|
6.6%
|
10.9%
|
10.4%
|
2005
|
17.530
|
21.008
|
1.312
|
*
|
11.2%
|
10.5%
|
6.7%
|
4.9%
|
15.1%
|
2006
|
18.910
|
23.280
|
0.590
|
|
11.2%
|
13.9%
|
6.0%
|
15.8%
|
12.8%
|
2007
|
19.710
|
15.410
|
0.630
|
|
7.6%
|
-31.5%
|
4.6%
|
5.6%
|
-14.0%
|
2008
|
15.910
|
11.920
|
0.670
|
|
-15.9%
|
-18.0%
|
1.8%
|
-37.0%
|
-29.4%
|
2009
|
16.490
|
10.040
|
0.680
|
|
7.9%
|
-10.1%
|
-1.8%
|
26.5%
|
12.4%
|
10 Year Annual
Compound Growth Rate
|
|
9.5%
|
7.4%
|
4.1%
|
-1.0%
|
4.7%
|
2010
|
16.160
|
13.630
|
0.690
|
|
2.2%
|
43.4%
|
3.8%
|
15.1%
|
8.9%
|
2011
|
14.760
|
8.920
|
0.700
|
|
-4.3%
|
-27.2%
|
3.7%
|
2.1%
|
-0.3%
|
2012
|
14.030
|
10.650
|
0.710
|
|
-0.1%
|
23.4%
|
4.2%
|
16.0%
|
20.1%
|
2013
|
14.640
|
17.270
|
0.720
|
|
9.5%
|
70.7%
|
3.6%
|
32.4%
|
38.3%
|
2014
|
15.150
|
14.630
|
0.730
|
|
8.5%
|
-11.2%
|
4.4%
|
13.7%
|
15.7%
|
2015
|
14.980
|
18.630
|
0.740
|
|
3.8%
|
33.4%
|
4.0%
|
1.4%
|
9.5%
|
2016
|
17.160
|
19.000
|
0.750
|
|
19.6%
|
6.2%
|
2.7%
|
11.9%
|
15.7%
|
2017
|
17.720
|
21.380
|
1.760
|
*
|
13.5%
|
16.9%
|
4.3%
|
21.8%
|
22.4%
|
2018
|
17.230
|
20.570
|
0.780
|
|
1.6%
|
4.8%
|
5.4%
|
-4.4%
|
-4.7%
|
2019
|
$19.980
|
$22.370
|
$1.800
|
*
|
26.4%
|
17.8%
|
4.0%
|
31.5%
|
25.9%
|
10 Year Annual
Compound Growth Rate
|
|
7.7%
|
14.8%
|
4.0%
|
13.6%
|
14.5%
|
52 Year Annual
Compound Growth Rate
|
|
12.8%
|
12.4%
|
6.4%
|
10.2%
|
9.5%
|
|
|
|
|
|
|
|
|
|
|
Note: (*) Includes
special cash dividends of $1.000, $1.000, $0.800, and $0.534 per
share at September 2019 and December 2017, 2005, and 2003,
respectively.
|
Sources: (1) Old
Republic Database / (2) Nominal Gross Domestic Product from Federal
Reserve Bank St. Louis. / (3) Standard & Poor's Indices from
S&P Global Market Intelligence LLC. Data for years 1989 and
prior is not available for the S&P P&C Insurance
Index.
|
Safe Harbor Statement
Historical data pertaining to the operating results, liquidity,
and other performance indicators applicable to an insurance
enterprise such as Old Republic are not necessarily indicative of
results to be achieved in succeeding years. In addition to the
factors cited below, the long-term nature of the insurance
business, seasonal and annual patterns in premium production and
incidence of claims, changes in yields obtained on invested assets,
changes in government policies and free markets affecting inflation
rates and general economic conditions, and changes in legal
precedents or the application of law affecting the settlement of
disputed and other claims can have a bearing on period-to-period
comparisons and future operating results. Furthermore, due to the
financial market and economic disruptions caused by the COVID-19
pandemic and the associated governmental responses, it is therefore
possible that Old Republic's operating results, business and
financial condition could be adversely affected in subsequent
periods depending on the length and severity of these
disruptions.
Some of the oral or written statements made in the Company's
reports, press releases, and conference calls following earnings
releases, can constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Of
necessity, any such forward-looking statements involve assumptions,
uncertainties, and risks that may affect the Company's future
performance. With regard to Old Republic's General Insurance
segment, its results can be particularly affected by the level of
market competition, which is typically a function of available
capital and expected returns on such capital among competitors, the
levels of investment yields and inflation rates, and periodic
changes in claim frequency and severity patterns caused by natural
disasters, weather conditions, accidents, illnesses, work-related
injuries, and unanticipated external events. Title Insurance and
RFIG Run-off results can be affected by similar factors, and by
changes in national and regional housing demand and values, the
availability and cost of mortgage loans, employment trends, and
default rates on mortgage loans. Life and accident insurance
earnings can be affected by the levels of employment and consumer
spending, changes in mortality and health trends, and alterations
in policy lapsation rates. At the parent holding company level,
operating earnings or losses are generally reflective of the amount
of debt outstanding and its cost, interest income on temporary
holdings of short-term investments, and period-to-period variations
in the costs of administering the Company's widespread
operations.
The General Insurance, Title Insurance, Corporate and Other
Segments, and the RFIG Run-off business maintain customer
information and rely upon technology platforms to conduct their
business. As a result, each of them and the Company are exposed to
cyber risk. Many of the Company's operating subsidiaries maintain
separate IT systems which are deemed to reduce enterprise-wide
risks of potential cybersecurity incidents. However, given the
potential magnitude of a significant breach, the Company
continually evaluates on an enterprise-wide basis its IT hardware,
security infrastructure and business practices to respond to these
risks and to detect and remediate in a timely manner significant
cybersecurity incidents or business process interruptions.
A more detailed listing and discussion of the risks and other
factors which affect the Company's risk-taking insurance business
are included in Part I, Item 1A - Risk Factors, of the Company's
2019 Form 10-K Annual Report filing to the Securities and Exchange
Commission, which is specifically incorporated herein by
reference.
Any forward-looking statements or commentaries speak only as of
their dates. Old Republic undertakes no obligation to publicly
update or revise any and all such comments, whether as a result of
new information, future events or otherwise, and accordingly they
may not be unduly relied upon.
At Old
Republic:
|
At Financial
Relations Board:
|
|
|
Craig R. Smiddy:
President and Chief Executive Officer
|
Analysts/Investors:
Joe Calabrese 212/827-3772
|
View original
content:http://www.prnewswire.com/news-releases/old-republic-special-dividend-letter-to-the-shareholders-301202403.html
SOURCE Old Republic International Corporation