CHICAGO, Jan. 23, 2020 /PRNewswire/ -- Old Republic
International Corporation (NYSE: ORI) today reported the following
consolidated results (a):
|
|
Quarters Ended
December 31,
|
|
Years Ended December
31,
|
|
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
Pretax income
(loss)
|
|
$
|
346.0
|
|
|
$
|
(137.5)
|
|
|
351.6
|
%
|
|
$
|
1,322.4
|
|
|
$
|
438.1
|
|
|
201.8
|
%
|
Pretax investment
gains (losses) included in pretax income (loss)
|
|
167.4
|
|
|
(308.2)
|
|
|
154.3
|
|
|
636.1
|
|
|
(235.6)
|
|
|
N/M
|
|
Pretax income (loss)
excluding investment gains (losses)
|
|
$
|
178.5
|
|
|
$
|
170.6
|
|
|
4.6
|
%
|
|
$
|
686.2
|
|
|
$
|
673.7
|
|
|
1.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
275.8
|
|
|
$
|
(106.5)
|
|
|
N/M
|
|
|
$
|
1,056.4
|
|
|
$
|
370.5
|
|
|
185.1
|
%
|
Net of tax investment
gains (losses) included in net income (loss)
|
|
132.2
|
|
|
(243.3)
|
|
|
154.4
|
%
|
|
502.2
|
|
|
(185.9)
|
|
|
N/M
|
|
Net income (loss)
excluding investment gains (losses)
|
|
$
|
143.5
|
|
|
$
|
136.8
|
|
|
4.9
|
%
|
|
$
|
554.2
|
|
|
$
|
556.4
|
|
|
-0.4
|
%
|
Consolidated pretax and net income, exclusive of all investment
gains or (losses), for the fourth quarter and year ended
December 31, 2019 were slightly
higher to basically flat vis-a-vis 2018. Consolidated results were
driven by greater profitability in the Title Insurance segment.
Total and per share net income continued to be significantly
impacted by the required inclusion since January 1, 2018 of changes in the fair value of
equity securities pursuant to Generally Accepted Accounting
Principles ("GAAP"). Please see the information below and on pages
2 and 3.
|
FINANCIAL
HIGHLIGHTS (a)
|
|
|
|
Quarters Ended
December 31,
|
|
Years Ended December
31,
|
|
|
SUMMARY INCOME
STATEMENTS:
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums and fees
earned
|
$
|
1,613.8
|
|
|
$
|
1,448.4
|
|
|
11.4
|
%
|
|
$
|
5,994.2
|
|
|
$
|
5,703.9
|
|
|
5.1
|
%
|
|
|
Net investment
income
|
112.8
|
|
|
110.3
|
|
|
2.3
|
|
|
450.7
|
|
|
431.8
|
|
|
4.4
|
|
|
|
Other
income
|
35.1
|
|
|
30.4
|
|
|
15.5
|
|
|
132.6
|
|
|
121.6
|
|
|
9.0
|
|
|
|
Total operating
revenues
|
1,761.8
|
|
|
1,589.1
|
|
|
10.9
|
|
|
6,577.6
|
|
|
6,257.4
|
|
|
5.1
|
|
|
|
Investment gains
(losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized from actual
transactions
|
7.3
|
|
|
3.3
|
|
|
|
|
38.6
|
|
|
58.2
|
|
|
|
|
|
Realized from
impairments
|
—
|
|
|
—
|
|
|
|
|
(2.0)
|
|
|
—
|
|
|
|
|
|
Unrealized from
changes in fair value of equity securities
|
160.1
|
|
|
(311.6)
|
|
|
|
|
599.5
|
|
|
(293.8)
|
|
|
|
|
|
Total investment
gains (losses)
|
167.4
|
|
|
(308.2)
|
|
|
|
|
636.1
|
|
|
(235.6)
|
|
|
|
|
|
Total
revenues
|
1,929.3
|
|
|
1,280.9
|
|
|
|
|
7,213.7
|
|
|
6,021.8
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claim
costs
|
667.5
|
|
|
639.9
|
|
|
4.3
|
|
|
2,572.7
|
|
|
2,460.7
|
|
|
4.5
|
|
|
|
Sales and general
expenses
|
906.5
|
|
|
770.6
|
|
|
17.6
|
|
|
3,278.5
|
|
|
3,080.6
|
|
|
6.4
|
|
|
|
Interest and other
charges
|
9.2
|
|
|
7.8
|
|
|
16.8
|
|
|
40.0
|
|
|
42.2
|
|
|
-5.2
|
|
|
|
Total operating
expenses
|
1,583.2
|
|
|
1,418.0
|
|
|
11.6
|
%
|
|
5,891.3
|
|
|
5,583.7
|
|
|
5.5
|
%
|
|
|
Pretax income
(loss)
|
346.0
|
|
|
(137.5)
|
|
|
|
|
1,322.4
|
|
|
438.1
|
|
|
|
|
|
Income taxes
(credits)
|
70.2
|
|
|
(31.0)
|
|
|
|
|
265.9
|
|
|
67.5
|
|
|
|
|
|
Net income
(loss)
|
$
|
275.8
|
|
|
$
|
(106.5)
|
|
|
|
|
$
|
1,056.4
|
|
|
$
|
370.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON STOCK
STATISTICS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per share: Basic
|
$
|
0.92
|
|
|
$
|
(0.36)
|
|
|
|
|
$
|
3.52
|
|
|
$
|
1.26
|
|
|
|
|
|
Diluted
|
$
|
0.91
|
|
|
$
|
(0.36)
|
|
|
|
|
$
|
3.51
|
|
|
$
|
1.24
|
|
|
|
|
|
Components of net
income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net
income (loss) excluding investment gains (losses)
|
$
|
0.48
|
|
|
$
|
0.45
|
|
|
6.7
|
%
|
|
$
|
1.85
|
|
|
$
|
1.89
|
|
|
-2.1
|
%
|
|
|
Net investment gains
(losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized from actual
transactions and impairments
|
0.02
|
|
|
0.01
|
|
|
|
|
0.10
|
|
|
0.16
|
|
|
|
|
|
Unrealized from
changes in fair value of equity securities
|
0.42
|
|
|
(0.82)
|
|
|
|
|
1.57
|
|
|
(0.79)
|
|
|
|
|
|
Basic net income
(loss)
|
$
|
0.92
|
|
|
$
|
(0.36)
|
|
|
|
|
$
|
3.52
|
|
|
$
|
1.26
|
|
|
|
|
|
Diluted net
income (loss) excluding investment gains (losses)
|
$
|
0.47
|
|
|
$
|
0.45
|
|
|
4.4
|
%
|
|
$
|
1.84
|
|
|
$
|
1.86
|
|
|
-1.1
|
%
|
|
|
Net investment gains
(losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized from actual
transactions and impairments
|
0.02
|
|
|
0.01
|
|
|
|
|
0.10
|
|
|
0.15
|
|
|
|
|
|
Unrealized from
changes in fair value of equity securities
|
0.42
|
|
|
(0.82)
|
|
|
|
|
1.57
|
|
|
(0.77)
|
|
|
|
|
|
Diluted net income
(loss)
|
$
|
0.91
|
|
|
$
|
(0.36)
|
|
|
|
|
$
|
3.51
|
|
|
$
|
1.24
|
|
|
|
|
|
Cash dividends on
common stock (b)
|
$
|
0.200
|
|
|
$
|
0.195
|
|
|
|
|
$
|
1.800
|
|
|
$
|
0.780
|
|
|
|
|
|
Book value per
share
|
|
|
|
|
|
|
$
|
19.98
|
|
|
$
|
17.23
|
|
|
16.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) All amounts in
this report are stated in millions except common stock data and
percentages. / (b) 2019 includes a special $1.00
dividend.
|
|
|
|
|
|
|
|
|
|
|
Old Republic's business is necessarily managed for the long run.
In this context management's key objectives are to achieve a
continuous, long-term improvement in operating results, and to
ensure balance sheet strength for the primary needs of the
insurance subsidiaries' underwriting and related services business.
In this view, the evaluation of periodic and long-term results
excludes consideration of all investment gains or (losses). In
management's opinion, this focus provides a better way to
realistically analyze, evaluate, and establish accountability for
the results and benefits that arise from the basic operations of
the business. According to the tenets of GAAP, however, net income,
which includes all specifically defined realized and unrealized
investment gains or (losses), is the measure of total
profitability.
In management's opinion, the inclusion of realized investment
gains or (losses) in net income can mask the reality and trends in
the fundamental operating results of the insurance business. That's
because their realization is, more often than not, highly
discretionary. It's usually affected by such randomly occurring
factors as the timing of individual securities sales, tax-planning
considerations, and modifications of investment management
judgments about the direction of securities markets or the
prospects of individual investees or industry sectors. Moreover,
the inclusion of unrealized investment gains or (losses) in equity
(but not fixed maturity) securities required under GAAP can mask
such operating results and trends therein and thus lead to even
greater period-to-period fluctuations in reported net income. The
impact of the continuous volatility in stock market valuations is
most evident in its net of tax effect on net income for the periods
reported upon.
The table on the next page shows an array of numbers
purposefully arranged in 10 sections. Management believes the
information in sections A to G and J highlight the most meaningful,
realistic indicators of ORI's segmented and consolidated financial
performance. The information underscores the necessity of reviewing
reported results by separating the fait-accompli of economic
realities from the transient vagaries of securities markets and
their above-noted impact on reported GAAP net income.
|
Major Segmented
and Consolidated Elements of Income (Loss)
|
|
Quarters Ended
December 31,
|
|
Years Ended December
31,
|
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
A. Net premiums,
fees, and other income:
|
|
|
|
|
|
|
|
|
|
|
|
General
insurance
|
$
|
880.5
|
|
|
$
|
835.7
|
|
|
5.4
|
%
|
|
$
|
3,432.4
|
|
|
$
|
3,277.1
|
|
|
4.7
|
%
|
Title
insurance
|
716.8
|
|
|
592.5
|
|
|
21.0
|
|
|
2,489.2
|
|
|
2,336.1
|
|
|
6.6
|
|
Corporate and
other
|
3.1
|
|
|
3.4
|
|
|
-8.7
|
|
|
13.4
|
|
|
14.6
|
|
|
-8.8
|
|
Other
income
|
35.1
|
|
|
30.4
|
|
|
15.5
|
|
|
132.6
|
|
|
121.6
|
|
|
9.0
|
|
Subtotal
|
1,635.6
|
|
|
1,462.1
|
|
|
11.9
|
|
|
6,067.6
|
|
|
5,749.5
|
|
|
5.5
|
|
RFIG run-off business
(c)
|
13.3
|
|
|
16.6
|
|
|
-19.7
|
|
|
59.2
|
|
|
75.9
|
|
|
-22.0
|
|
Consolidated
|
$
|
1,649.0
|
|
|
$
|
1,478.8
|
|
|
11.5
|
%
|
|
$
|
6,126.8
|
|
|
$
|
5,825.5
|
|
|
5.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
B. Underwriting
and related
|
|
|
|
|
|
|
|
|
|
|
|
services income
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
General
insurance
|
$
|
10.2
|
|
|
$
|
13.2
|
|
|
-22.2
|
%
|
|
$
|
84.9
|
|
|
$
|
91.2
|
|
|
-6.9
|
%
|
Title
insurance
|
67.3
|
|
|
52.5
|
|
|
28.3
|
|
|
193.4
|
|
|
185.1
|
|
|
4.6
|
|
Corporate and
other
|
(4.6)
|
|
|
(4.5)
|
|
|
-2.6
|
|
|
(15.5)
|
|
|
(21.9)
|
|
|
29.1
|
|
Subtotal
|
72.9
|
|
|
61.1
|
|
|
19.3
|
|
|
262.8
|
|
|
254.3
|
|
|
3.4
|
|
RFIG run-off business
(c)
|
2.0
|
|
|
7.0
|
|
|
-71.7
|
|
|
12.7
|
|
|
29.7
|
|
|
-57.3
|
|
Consolidated
|
$
|
74.9
|
|
|
$
|
68.2
|
|
|
9.8
|
%
|
|
$
|
275.6
|
|
|
$
|
284.0
|
|
|
-3.0
|
%
|
C. Consolidated
underwriting ratio:
|
|
|
|
|
|
|
|
|
|
|
|
Claim
ratio
|
41.4
|
%
|
|
44.2
|
%
|
|
|
|
42.9
|
%
|
|
43.1
|
%
|
|
|
Expense
ratio
|
53.7
|
|
|
50.9
|
|
|
|
|
52.2
|
|
|
51.6
|
|
|
|
Composite
ratio
|
95.1
|
%
|
|
95.1
|
%
|
|
|
|
95.1
|
%
|
|
94.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Net investment
income:
|
|
|
|
|
|
|
|
|
|
|
|
General
insurance
|
$
|
90.6
|
|
|
$
|
87.2
|
|
|
3.9
|
%
|
|
$
|
356.4
|
|
|
$
|
341.0
|
|
|
4.5
|
%
|
Title
insurance
|
10.6
|
|
|
10.0
|
|
|
5.9
|
|
|
41.4
|
|
|
38.8
|
|
|
6.6
|
|
Corporate and
other
|
7.2
|
|
|
8.3
|
|
|
-13.5
|
|
|
35.1
|
|
|
31.7
|
|
|
10.7
|
|
Subtotal
|
108.4
|
|
|
105.5
|
|
|
2.7
|
|
|
433.0
|
|
|
411.7
|
|
|
5.2
|
|
RFIG run-off
business
|
4.3
|
|
|
4.7
|
|
|
-7.2
|
|
|
17.6
|
|
|
20.1
|
|
|
-12.6
|
|
Consolidated
|
$
|
112.8
|
|
|
$
|
110.3
|
|
|
2.3
|
%
|
|
$
|
450.7
|
|
|
$
|
431.8
|
|
|
4.4
|
%
|
E. Interest and
other charges (credits):
|
|
|
|
|
|
|
|
|
|
|
|
General
insurance
|
$
|
16.4
|
|
|
$
|
15.6
|
|
|
|
|
$
|
71.1
|
|
|
$
|
68.3
|
|
|
|
Title
insurance
|
0.8
|
|
|
1.3
|
|
|
|
|
4.1
|
|
|
4.6
|
|
|
|
Corporate and other
(a)
|
(8.0)
|
|
|
(9.0)
|
|
|
|
|
(35.2)
|
|
|
(30.6)
|
|
|
|
Subtotal
|
9.2
|
|
|
7.8
|
|
|
|
|
40.0
|
|
|
42.2
|
|
|
|
RFIG run-off
business
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
Consolidated
|
$
|
9.2
|
|
|
$
|
7.8
|
|
|
16.8
|
%
|
|
$
|
40.0
|
|
|
$
|
42.2
|
|
|
-5.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
F. Segmented and
consolidated
|
|
|
|
|
|
|
|
|
|
|
|
pretax income
(loss) excluding
|
|
|
|
|
|
|
|
|
|
|
|
investment gains
(losses)(B+D-E):
|
|
|
|
|
|
|
|
|
|
|
|
General
insurance
|
$
|
84.4
|
|
|
$
|
84.8
|
|
|
-0.4
|
%
|
|
$
|
370.2
|
|
|
$
|
363.9
|
|
|
1.7
|
%
|
Title
insurance
|
77.1
|
|
|
61.1
|
|
|
26.1
|
|
|
230.8
|
|
|
219.3
|
|
|
5.2
|
|
Corporate and
other
|
10.5
|
|
|
12.8
|
|
|
-17.6
|
|
|
54.8
|
|
|
40.4
|
|
|
35.5
|
|
Subtotal
|
172.1
|
|
|
158.8
|
|
|
8.4
|
|
|
655.9
|
|
|
623.8
|
|
|
5.2
|
|
RFIG run-off business
(c)
|
6.4
|
|
|
11.8
|
|
|
-45.9
|
|
|
30.3
|
|
|
49.9
|
|
|
-39.3
|
|
Consolidated
|
178.5
|
|
|
170.6
|
|
|
4.6
|
%
|
|
686.2
|
|
|
673.7
|
|
|
1.9
|
%
|
Income taxes
(credits) on above (b)
|
35.0
|
|
|
33.8
|
|
|
|
|
132.0
|
|
|
117.2
|
|
|
|
G. Net income
(loss) excluding
|
|
|
|
|
|
|
|
|
|
|
|
investment gains
(losses)
|
143.5
|
|
|
136.8
|
|
|
4.9
|
%
|
|
554.2
|
|
|
556.4
|
|
|
-0.4
|
%
|
H. Consolidated
pretax investment
|
|
|
|
|
|
|
|
|
|
|
|
gains
(losses):
|
|
|
|
|
|
|
|
|
|
|
|
Realized from actual
transactions
|
|
|
|
|
|
|
|
|
|
|
|
and
impairments
|
7.3
|
|
|
3.3
|
|
|
|
|
36.6
|
|
|
58.2
|
|
|
|
Unrealized from
changes in
|
|
|
|
|
|
|
|
|
|
|
|
fair value of equity
securities
|
160.1
|
|
|
(311.6)
|
|
|
|
|
599.5
|
|
|
(293.8)
|
|
|
|
Total
|
167.4
|
|
|
(308.2)
|
|
|
|
|
636.1
|
|
|
(235.6)
|
|
|
|
Income taxes
(credits) on above
|
35.1
|
|
|
(64.8)
|
|
|
|
|
133.8
|
|
|
(49.6)
|
|
|
|
Net of tax
investment gains (losses)
|
132.2
|
|
|
(243.3)
|
|
|
|
|
502.2
|
|
|
(185.9)
|
|
|
|
I. Net
income (loss)
|
$
|
275.8
|
|
|
$
|
(106.5)
|
|
|
|
|
$
|
1,056.4
|
|
|
$
|
370.5
|
|
|
|
J. Consolidated
operating cash flow
|
|
|
|
|
|
|
$
|
936.2
|
|
|
$
|
760.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes
consolidation/elimination entries. (b) The effective tax rates
applicable to pretax income excluding investment gains or losses
were 19.6% and 19.2% for the fourth quarter and year ended December
31, 2019, respectively, and 19.8% and 17.4% for the fourth quarter
and year ended 2018, respectively. (c) See Note (a) in RFIG Run-off
Segments Results on page (6).
|
General Insurance
Segment Results - The table below reflects the major elements
affecting this segment's financial performance for the periods
shown.
|
|
General Insurance
Summary Operating Results
|
|
Quarters Ended
December 31,
|
|
Years Ended December
31,
|
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
Net premiums
earned
|
$
|
880.5
|
|
|
$
|
835.7
|
|
|
5.4
|
%
|
|
$
|
3,432.4
|
|
|
$
|
3,277.1
|
|
|
4.7
|
%
|
Net investment
income
|
90.6
|
|
|
87.2
|
|
|
3.9
|
|
|
356.4
|
|
|
341.0
|
|
|
4.5
|
|
Other
income
|
34.9
|
|
|
30.7
|
|
|
13.7
|
|
|
131.9
|
|
|
121.3
|
|
|
8.8
|
|
Operating
revenues
|
1,006.0
|
|
|
953.7
|
|
|
5.5
|
|
|
3,920.8
|
|
|
3,739.4
|
|
|
4.8
|
|
Claim
costs
|
642.6
|
|
|
626.5
|
|
|
2.6
|
|
|
2,464.6
|
|
|
2,365.8
|
|
|
4.2
|
|
Sales and general
expenses
|
262.4
|
|
|
226.8
|
|
|
15.7
|
|
|
1,014.7
|
|
|
941.3
|
|
|
7.8
|
|
Interest and other
charges
|
16.4
|
|
|
15.6
|
|
|
5.4
|
|
|
71.1
|
|
|
68.3
|
|
|
4.1
|
|
Operating
expenses
|
921.6
|
|
|
868.9
|
|
|
6.1
|
|
|
3,550.5
|
|
|
3,375.5
|
|
|
5.2
|
|
Segment pretax
operating income (loss) (a)
|
$
|
84.4
|
|
|
$
|
84.8
|
|
|
-0.4
|
%
|
|
$
|
370.2
|
|
|
$
|
363.9
|
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Claim
ratio
|
73.0
|
%
|
|
75.0
|
%
|
|
|
|
71.8
|
%
|
|
72.2
|
%
|
|
|
Expense
ratio
|
25.8
|
|
|
23.5
|
|
|
|
|
25.7
|
|
|
25.0
|
|
|
|
Composite
ratio
|
98.8
|
%
|
|
98.5
|
%
|
|
|
|
97.5
|
%
|
|
97.2
|
%
|
|
|
__________________
(a)
|
In connection with
the combined run-off mortgage guaranty ("MI") and consumer credit
indemnity ("CCI"), $3.0 and $3.8 of pretax operating income for the
fourth quarter and year 2018 were retained by certain general
insurance companies pursuant to various quota share and stop loss
reinsurance agreements. All of these amounts historically have been
reclassified such that 100% of the CCI run-off business is reported
in the RFIG run-off segment. Effective July 1, 2019, the results of
the CCI run-off business are being classified in the General
Insurance Segment for all future periods.
|
General insurance underwriting/service profitability, gauged by
the composite underwriting ratios, declined slightly in the latest
quarter and 2019 as a whole. Revenue-wise earned premiums edged up
in mid single digits in both of these periods. With few exceptions,
premiums grew for most types of coverages and markets served. The
largest contributions principally stemmed from commercial
automobile (trucking), national accounts, and executive indemnity
coverages. The cumulative effects of recent years' and ongoing
premium rate increases for most insurance products, other than
workers' compensation coverages, along with new business production
were main factors in top line growth. Net investment income growth
was principally driven by a moderately higher invested asset base
with dividends from equity security investments providing the
greatest gain.
As the above table shows, the consolidated general insurance
ratio of claim costs to net premiums earned declined slightly in
2019. As such, it continues to reflect the past several years'
fairly consistent downtrends, and the effects of claim development
shown in the following table. Small year-over-year changes in
periodic expense ratios are generally reflective of ongoing product
mix dynamics, and the variability of attendant sales and general
expenses among various coverages.
|
|
|
|
|
Effect of Prior
Periods'
|
|
|
|
|
|
|
|
|
|
(Favorable)/
|
|
Claim Ratio
Excluding
|
|
Reported
|
|
Unfavorable
Claim
|
|
Prior Periods'
Claim
|
|
Claim
Ratio
|
|
Reserves
Development
|
|
Reserves
Development
|
2015
|
|
74.1
|
%
|
|
|
|
1.5
|
%
|
|
|
|
72.6
|
%
|
|
2016
|
|
73.0
|
|
|
|
|
0.3
|
|
|
|
|
72.7
|
|
|
2017
|
|
71.8
|
|
|
|
|
0.7
|
|
|
|
|
71.1
|
|
|
2018
|
|
72.2
|
|
|
|
|
—
|
|
|
|
|
72.2
|
|
|
2019
|
|
71.8
|
%
|
|
|
|
0.4
|
%
|
|
|
|
71.4
|
%
|
|
4th Quarter
2018
|
|
75.0
|
%
|
|
|
|
(0.9)
|
%
|
|
|
|
75.9
|
%
|
|
4th Quarter
2019
|
|
73.0
|
%
|
|
|
|
2.9
|
%
|
|
|
|
70.1
|
%
|
|
Quarterly and annual claim ratios and the trends they display,
may not be particularly meaningful indicators of future outcomes
for ORI's liability-oriented mix of business and its relatively
long claim payment patterns. Absent significant economic and
insurance industry dislocations in the foreseeable future,
management's targets are for annually reported claim ratio averages
in the high 60% to low 70% range, and assuming the current mix of
coverages, overall expense ratio averages between 23% and 25%, with
resulting composite ratio averages between 90% and 95%.
Title Insurance
Segment Results - The table below shows the major elements
affecting this segment's financial performance for the periods
shown.
|
|
Title Insurance
Summary Operating Results
|
|
Quarters Ended
December 31,
|
|
Years Ended December
31,
|
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
Net premiums and fees
earned
|
$
|
716.8
|
|
|
$
|
592.5
|
|
|
21.0
|
%
|
|
$
|
2,489.2
|
|
|
$
|
2,336.1
|
|
|
6.6
|
%
|
Net investment
income
|
10.6
|
|
|
10.0
|
|
|
5.9
|
|
|
41.4
|
|
|
38.8
|
|
|
6.6
|
|
Other
income
|
0.1
|
|
|
(0.2)
|
|
|
N/M
|
|
0.7
|
|
|
0.3
|
|
|
80.2
|
|
Operating
revenues
|
727.6
|
|
|
602.2
|
|
|
20.8
|
|
|
2,531.3
|
|
|
2,375.4
|
|
|
6.6
|
|
Claim
costs
|
14.0
|
|
|
3.2
|
|
|
N/M
|
|
67.4
|
|
|
48.3
|
|
|
39.4
|
|
Sales and general
expenses
|
635.6
|
|
|
536.4
|
|
|
18.5
|
|
|
2,228.9
|
|
|
2,103.0
|
|
|
6.0
|
|
Interest and other
charges
|
0.8
|
|
|
1.3
|
|
|
-40.2
|
|
|
4.1
|
|
|
4.6
|
|
|
-10.7
|
|
Operating
expenses
|
650.4
|
|
|
541.1
|
|
|
20.2
|
|
|
2,300.4
|
|
|
2,156.0
|
|
|
6.7
|
|
Segment pretax
operating income (loss)
|
$
|
77.1
|
|
|
$
|
61.1
|
|
|
26.1
|
%
|
|
$
|
230.8
|
|
|
$
|
219.3
|
|
|
5.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Claim
ratio
|
2.0
|
%
|
|
0.6
|
%
|
|
|
|
2.7
|
%
|
|
2.1
|
%
|
|
|
Expense
ratio
|
88.6
|
|
|
90.6
|
|
|
|
|
89.5
|
|
|
90.0
|
|
|
|
Composite
ratio
|
90.6
|
%
|
|
91.2
|
%
|
|
|
|
92.2
|
%
|
|
92.1
|
%
|
|
|
2019 year-over-year comparisons of revenues from title premiums
and fees reflect the continuation of a low interest rate
environment resulting in a favorable real estate market coupled
with a stable market share position. Claim costs trended higher as
favorable development of prior years' claim reserve estimates edged
down. The following table shows recent annual and interim periods'
claim ratios and the effects of claim development trends:
|
|
|
|
|
Effect of Prior
Periods'
|
|
|
|
|
|
|
|
|
|
(Favorable)/
|
|
Claim Ratio
Excluding
|
|
Reported
|
|
Unfavorable
Claim
|
|
Prior Periods'
Claim
|
|
Claim
Ratio
|
|
Reserves
Development
|
|
Reserves
Development
|
2015
|
|
4.9
|
%
|
|
|
|
(0.6)
|
%
|
|
|
|
5.5
|
%
|
|
2016
|
|
3.8
|
|
|
|
|
(1.1)
|
|
|
|
|
4.9
|
|
|
2017
|
|
0.9
|
|
|
|
|
(3.3)
|
|
|
|
|
4.2
|
|
|
2018
|
|
2.1
|
|
|
|
|
(2.0)
|
|
|
|
|
4.1
|
|
|
2019
|
|
2.7
|
%
|
|
|
|
(1.3)
|
%
|
|
|
|
4.0
|
%
|
|
4th Quarter
2018
|
|
0.6
|
%
|
|
|
|
(3.5)
|
%
|
|
|
|
4.1
|
%
|
|
4th Quarter
2019
|
|
2.0
|
%
|
|
|
|
(2.0)
|
%
|
|
|
|
4.0
|
%
|
|
Net investment income is reflective of both a moderately growing
invested asset base, and the overall investment yield environment.
The largest portion of investment income growth stemmed from
dividends earned from the equity securities portfolio. Operating
expenses remained generally aligned with revenues from premiums and
fees for all periods reported upon, except in the final quarter of
2019 when they grew at a relatively slower rate than such revenues.
In combination, these factors produced significantly greater pretax
operating income for 2019's fourth quarter.
RFIG Run-off
Segment Results - The table below reflects the major elements
affecting this segment's financial performance for the periods
shown.
|
|
RFIG Run-off
Summary Operating Results (a)
|
|
Quarters Ended
December 31,
|
|
Years Ended December
31,
|
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
A. Mortgage
Insurance (MI)
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums
earned
|
$
|
13.3
|
|
|
$
|
16.3
|
|
|
-18.1
|
%
|
|
$
|
58.8
|
|
|
$
|
74.4
|
|
|
-20.9
|
%
|
Net investment
income
|
4.3
|
|
|
4.5
|
|
|
-2.5
|
|
|
17.3
|
|
|
19.2
|
|
|
-9.9
|
|
Claim
costs
|
8.2
|
|
|
8.8
|
|
|
-6.6
|
|
|
32.3
|
|
|
32.1
|
|
|
0.7
|
|
MI pretax operating
income (loss)
|
$
|
6.4
|
|
|
$
|
8.7
|
|
|
-26.7
|
%
|
|
$
|
29.2
|
|
|
$
|
46.7
|
|
|
-37.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Claim
ratio
|
61.5
|
%
|
|
53.9
|
%
|
|
|
|
55.0
|
%
|
|
43.2
|
%
|
|
|
Expense
ratio
|
23.5
|
|
|
20.3
|
|
|
|
|
24.8
|
|
|
20.0
|
|
|
|
Composite
ratio
|
85.0
|
%
|
|
74.2
|
%
|
|
|
|
79.8
|
%
|
|
63.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B. Consumer Credit
Indemnity (CCI) (a)
|
|
|
|
|
|
|
|
|
|
|
|
CCI pretax operating
income (loss)
|
$
|
—
|
|
|
$
|
3.0
|
|
|
|
|
$
|
1.0
|
|
|
$
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. Total MI and
CCI Run-off business (a)
|
|
|
|
|
|
|
|
|
|
|
|
Segment pretax
operating income (loss)
|
$
|
6.4
|
|
|
$
|
11.8
|
|
|
-45.9
|
%
|
|
$
|
30.3
|
|
|
$
|
49.9
|
|
|
-39.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________
(a)
|
RFIG segment pretax
operating income (loss) includes amounts attributable to the
Company's consumer credit indemnity run-off business of $ - and
$1.0 for the fourth quarter and year 2019, respectively. These
amounts were $3.0 and $3.2 for the fourth quarter and year 2018,
respectively. Results for the CCI coverages are expected to be
immaterial in the remaining run-off periods. Effective July 1,
2019, these results have been re-classified to the General
Insurance Segment for all future periods.
|
Pretax operating results of the run-off MI business reflect: (a)
the expected, continuing drop in net earned premiums from declining
risk in force, and (b) lower investment income from a smaller
invested asset base as claim and expense payments exceed premium
receipts.
As indicated in the far right column of the following table, MI
claim ratios have continued to decline fairly consistently,
favorable developments of prior periods' reserves notwithstanding.
The downtrend is largely due to a combination of declining new loan
defaults, and stable-to-improving cure rates for outstanding
delinquent loans.
|
|
|
|
|
Effect of Prior
Periods'
|
|
|
|
|
|
|
|
|
|
(Favorable)/
|
|
Claim Ratio
Excluding
|
|
Reported
|
|
Unfavorable
Claim
|
|
Prior Periods'
Claim
|
|
Claim
Ratio
|
|
Reserves
Development
|
|
Reserves
Development
|
2015
|
|
56.4
|
%
|
|
|
|
(65.0)
|
%
|
|
|
|
121.4
|
%
|
|
2016
|
|
34.1
|
|
|
|
|
(39.8)
|
|
|
|
|
73.9
|
|
|
2017
|
|
57.6
|
|
|
|
|
(38.3)
|
|
|
|
|
95.9
|
|
|
2018
|
|
43.2
|
|
|
|
|
(27.0)
|
|
|
|
|
70.2
|
|
|
2019
|
|
55.0
|
%
|
|
|
|
(12.5)
|
%
|
|
|
|
67.5
|
%
|
|
4th Quarter
2018
|
|
53.9
|
%
|
|
|
|
(31.3)
|
%
|
|
|
|
85.2
|
%
|
|
4th Quarter
2019
|
|
61.5
|
%
|
|
|
|
(22.6)
|
%
|
|
|
|
84.1
|
%
|
|
Corporate and
Other Operating Results - The combination of a small life and
accident insurance business and the net costs associated with the
parent holding company and its internal corporate services
subsidiaries usually produce highly variable results. Earnings
variations stem from volatility inherent to the small scale of the
life and accident insurance line, net investment income, and net
interest charges (credits) pertaining to external and intra-system
financing arrangements. Year-to-date 2019 results were enhanced by
the elimination of interest costs associated with outstanding
external debt converted into ORI common stock in March 2018. The
interplay of these various elements is summarized in the following
table:
|
|
|
Corporate and
Other Summary Operating Results
|
|
|
Quarters Ended
December 31,
|
|
Years Ended December
31,
|
|
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
Net life and accident
premiums earned
|
|
$
|
3.1
|
|
|
$
|
3.4
|
|
|
-8.7
|
%
|
|
$
|
13.4
|
|
|
$
|
14.6
|
|
|
-8.8
|
%
|
Net investment
income
|
|
7.2
|
|
|
8.3
|
|
|
-13.5
|
|
|
35.1
|
|
|
31.7
|
|
|
10.7
|
|
Other operating
income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1)
|
|
|
31.4
|
|
Operating
revenues
|
|
10.3
|
|
|
11.7
|
|
|
-11.6
|
|
|
48.5
|
|
|
46.3
|
|
|
4.6
|
|
Claim
costs
|
|
2.5
|
|
|
4.0
|
|
|
-38.1
|
|
|
8.8
|
|
|
16.7
|
|
|
-46.7
|
|
Insurance
expenses
|
|
1.0
|
|
|
1.0
|
|
|
-1.0
|
|
|
4.5
|
|
|
4.8
|
|
|
-6.2
|
|
Corporate, interest
and other expenses - net
|
|
(3.7)
|
|
|
(6.2)
|
|
|
39.6
|
|
|
(19.7)
|
|
|
(15.6)
|
|
|
-26.4
|
|
Operating
expenses
|
|
(0.2)
|
|
|
(1.1)
|
|
|
81.5
|
|
|
(6.3)
|
|
|
5.9
|
|
|
-207.2
|
|
Corporate and other
pretax operating income (loss)
|
|
$
|
10.5
|
|
|
$
|
12.8
|
|
|
-17.6
|
%
|
|
$
|
54.8
|
|
|
$
|
40.4
|
|
|
35.5
|
%
|
Summary
Consolidated Balance Sheet - The table below shows Old
Republic's consolidated financial position at the dates
shown.
|
|
|
|
December
31,
|
|
|
|
2019
|
|
2018
|
Assets:
|
|
|
|
|
|
Cash and fixed
maturity securities
|
|
|
$
|
10,381.5
|
|
|
$
|
9,683.0
|
|
Equity
securities
|
|
|
4,030.5
|
|
|
3,380.9
|
|
Other invested
assets
|
|
|
115.4
|
|
|
123.4
|
|
Cash and invested
assets
|
|
|
14,527.4
|
|
|
13,187.4
|
|
Accounts and premiums
receivable
|
|
|
1,466.7
|
|
|
1,499.4
|
|
Federal income tax
recoverable: Current
|
|
|
5.7
|
|
|
16.8
|
|
Prepaid federal
income taxes
|
|
|
—
|
|
|
129.8
|
|
Reinsurance balances
recoverable
|
|
|
3,823.9
|
|
|
3,484.5
|
|
Deferred policy
acquisition costs
|
|
|
325.4
|
|
|
316.3
|
|
Sundry
assets
|
|
|
927.0
|
|
|
692.6
|
|
Total
assets
|
|
|
$
|
21,076.3
|
|
|
$
|
19,327.1
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity:
|
|
|
|
|
|
Policy
liabilities
|
|
|
$
|
2,419.2
|
|
|
$
|
2,303.5
|
|
Claim
reserves
|
|
|
9,929.5
|
|
|
9,471.2
|
|
Federal income tax
payable: Deferred
|
|
|
112.2
|
|
|
10.3
|
|
Reinsurance balances
and funds
|
|
|
616.0
|
|
|
600.4
|
|
Debt
|
|
|
974.0
|
|
|
981.4
|
|
Sundry
liabilities
|
|
|
1,025.1
|
|
|
813.7
|
|
Total
liabilities
|
|
|
15,076.1
|
|
|
14,180.8
|
|
Shareholders'
equity
|
|
|
6,000.1
|
|
|
5,146.2
|
|
Total liabilities and
shareholders' equity
|
|
|
$
|
21,076.3
|
|
|
$
|
19,327.1
|
|
Cash, Invested
Assets, and Shareholders' Equity - The table below shows Old
Republic's consolidated cash and invested assets as well as
shareholders' equity at the dates shown.
|
|
|
Cash, Invested
Assets, and Shareholders' Equity
|
|
|
|
|
|
|
|
|
% Change
|
|
|
December
31,
|
|
Dec. '19 /
|
|
Dec. '18 /
|
|
|
2019
|
|
2018
|
|
2017
|
|
Dec. '18
|
|
Dec. '17
|
Cash and invested
assets:
|
|
|
|
|
|
|
|
|
|
|
Available for sale
fixed maturity securities, cash
|
|
|
|
|
|
|
|
|
|
|
and
other invested assets, carried at fair value
|
$
|
9,475.2
|
|
|
$
|
8,761.7
|
|
|
$
|
9,203.4
|
|
|
8.1
|
%
|
|
-4.8
|
%
|
|
Equity securities,
carried at fair value
|
4,030.5
|
|
|
3,380.9
|
|
|
3,265.5
|
|
|
19.2
|
|
|
3.5
|
|
|
Held to maturity
securities, carried at amortized cost
|
1,021.7
|
|
|
1,044.8
|
|
|
1,067.4
|
|
|
-2.2
|
|
|
-2.1
|
|
|
Total per balance
sheet
|
$
|
14,527.4
|
|
|
$
|
13,187.4
|
|
|
$
|
13,536.4
|
|
|
10.2
|
%
|
|
-2.6
|
%
|
|
Total at cost for
all
|
$
|
13,327.2
|
|
|
$
|
12,950.6
|
|
|
$
|
12,783.4
|
|
|
2.9
|
%
|
|
1.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity: Total
|
$
|
6,000.1
|
|
|
$
|
5,146.2
|
|
|
$
|
4,733.3
|
|
|
16.6
|
%
|
|
8.7
|
%
|
|
|
Per common
share
|
$
|
19.98
|
|
|
$
|
17.23
|
|
|
$
|
17.72
|
|
|
16.0
|
%
|
|
-2.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Composition of
shareholders' equity per share:
|
|
|
|
|
|
|
|
|
|
|
Equity before items
below
|
$
|
17.25
|
|
|
$
|
17.04
|
|
|
$
|
16.26
|
|
|
1.2
|
%
|
|
4.8
|
%
|
|
Unrealized investment
gains (losses) and other
|
|
|
|
|
|
|
|
|
|
|
|
accumulated
comprehensive income (loss)
|
2.73
|
|
|
0.19
|
|
|
1.46
|
|
|
|
|
|
|
|
|
Total
|
$
|
19.98
|
|
|
$
|
17.23
|
|
|
$
|
17.72
|
|
|
16.0
|
%
|
|
-2.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segmented
composition of
|
|
|
|
|
|
|
|
|
|
shareholders' equity per
share:
|
|
|
|
|
|
|
|
|
|
|
Excluding run-off
segment
|
$
|
18.37
|
|
|
$
|
15.73
|
|
|
$
|
16.14
|
|
|
16.8
|
%
|
|
-2.5
|
%
|
|
RFIG run-off
segment
|
1.61
|
|
|
1.50
|
|
|
1.58
|
|
|
|
|
|
|
|
|
Consolidated
total
|
$
|
19.98
|
|
|
$
|
17.23
|
|
|
$
|
17.72
|
|
|
16.0
|
%
|
|
-2.8
|
%
|
Old Republic's invested assets portfolio is directed in
consideration of enterprise-wide risk management objectives. Most
importantly, these are intended to ensure solid funding of the
insurance subsidiaries' long-term obligations to policyholders and
other beneficiaries, as well as the long-term stability of the
subsidiaries' capital accounts. To this end, the investment
portfolio contains no significant insurance risk-correlated asset
exposures to real estate, mortgage-backed securities,
collateralized debt obligations ("CDO's"), derivatives, hybrid
securities, or illiquid private equity and hedge fund investments.
Moreover, the Company does not engage in hedging or securities
lending transactions, nor does it invest in securities whose values
are predicated on non-regulated financial instruments exhibiting
amorphous or unfunded counter-party risk attributes.
As of December 31, 2019, the
consolidated investment portfolio reflected an allocation of
approximately 72% to fixed-maturity (bonds and notes) and
short-term investments, and 28% to equity securities (common
stock). The fixed-maturity security portfolio continues to be the
basic anchor for the insurance underwriting subsidiaries'
obligations. The maturities are stratified and conservatively
matched to the expected timing of future years' payments of those
obligations. The asset quality has remained at high levels.
Since 2013, a significant portion of ORI's investable funds have
been directed toward the purchase of high-quality equity securities
(common stocks) of U.S. companies. We favor the securities of
issuers with long-term records of reasonable earnings growth and
steadily increasing dividends. As a result, dividends from equity
securities have been the greatest source of investment income
growth in recent years. The equities portfolio (currently limited
to fewer than 100 issues) is also structured to contribute a
measure of capital appreciation over time. Periodic stress tests of
this portfolio are made pursuant to enterprise risk management
guidelines and controls. Their purpose is to gain reasonable
assurance that periodic downdrafts in market prices, as typically
occur in economic depression or recession conditions, would not
seriously undermine ORI's financial strength and the long-term
continuity and prospects of the business.
Changes in shareholders' equity per share are reflected in the
following table. As shown, these resulted mostly from net income
excluding net investment gains (losses), realized and unrealized
investment gains (losses), and dividend payments to
shareholders.
|
|
|
Shareholders'
Equity Per Share
|
|
|
|
December
31,
|
|
|
|
2019
|
|
2018
|
|
2017
|
Beginning
balance
|
|
|
$
|
17.23
|
|
|
$
|
17.72
|
|
|
$
|
17.16
|
|
Changes in
shareholders' equity:
|
|
|
|
|
|
|
|
Net income (loss)
excluding net investment gains (losses)
|
|
|
1.85
|
|
|
1.89
|
|
|
1.21
|
|
Net of tax realized
investment gains (losses)
|
|
|
0.10
|
|
|
0.16
|
|
|
0.93
|
|
Net of tax unrealized
investment gains (losses) on
|
|
|
|
|
|
|
|
securities
carried at fair value
|
|
|
2.53
|
|
|
(1.38)
|
|
|
0.28
|
|
Total net of tax
realized and unrealized
|
|
|
|
|
|
|
|
investment gains
(losses)
|
|
|
2.63
|
|
|
(1.22)
|
|
|
1.21
|
|
Cash dividends
(a)
|
|
|
(1.800)
|
|
|
(0.780)
|
|
|
(1.760)
|
|
Debt conversion,
stock issuance, and other
|
|
|
0.07
|
|
|
(0.38)
|
|
|
(0.10)
|
|
Net change
|
|
|
2.75
|
|
|
(0.49)
|
|
|
0.56
|
|
Ending
balance
|
|
|
$
|
19.98
|
|
|
$
|
17.23
|
|
|
$
|
17.72
|
|
Percentage change for
the period
|
|
|
16.0
|
%
|
|
-2.8
|
%
|
|
3.3
|
%
|
__________________
(a)
|
Full year 2019 and
2017 include special cash dividends of $1.00 per share.
|
Capitalization
- The following table shows the components of ORI's total
capitalization. The Company completed conversion of its 3.75%
Convertible Senior Notes into ORI common stock in March 2018. Total
capitalization has risen as of December 31, 2019 due to continued
growth of the shareholders' equity account.
|
|
Capitalization
|
|
December
31,
|
|
2019
|
|
2018
|
|
2017
|
Debt:
|
|
|
|
|
|
3.75% Convertible
Senior Notes due 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
470.6
|
|
4.875% Senior Notes
due 2024
|
397.3
|
|
|
396.8
|
|
|
396.2
|
|
3.875% Senior Notes
due 2026
|
546.2
|
|
|
545.7
|
|
|
545.1
|
|
ESSOP debt
|
—
|
|
|
—
|
|
|
4.2
|
|
Other miscellaneous
debt
|
30.4
|
|
|
38.8
|
|
|
32.4
|
|
Total debt
|
974.0
|
|
|
981.4
|
|
|
1,448.7
|
|
Common shareholders'
equity
|
6,000.1
|
|
|
5,146.2
|
|
|
4,733.3
|
|
Total
capitalization
|
$
|
6,974.2
|
|
|
$
|
6,127.6
|
|
|
$
|
6,182.0
|
|
|
|
|
|
|
|
Capitalization
ratios:
|
|
|
|
|
|
Debt
|
14.0
|
%
|
|
16.0
|
%
|
|
23.4
|
%
|
Common shareholders'
equity
|
86.0
|
|
|
84.0
|
|
|
76.6
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Managing Old
Republic's Insurance Business for the Long-Run
|
The insurance business is distinguished from most others in that
the prices (premiums) charged for various insurance products are
set without certainty of the ultimate claim costs that will emerge,
often many years after issuance and expiration of a policy. Old
Republic's business is therefore conducted with a primary focus on
achieving favorable underwriting results over cycles, and on the
maintenance of financial soundness in support of its insurance
subsidiaries' long-term obligations to insurance beneficiaries.
In this light, the Company's affairs are managed for the long
run and without significant regard to the arbitrary strictures of
quarterly or even annual reporting periods that American industry
must observe. In Old Republic's view, such short reporting time
frames do not comport well with the long-term nature of much of its
business. Management therefore believes that the Company's
operating results and financial condition can best be evaluated by
observing underwriting and overall operating performance trends
over succeeding five- or preferably ten-year intervals. A ten-year
period in particular can likely encompass at least one economic
and/or underwriting cycle and thereby provide an appropriate time
frame for such cycle to run its course, and for premium rate
changes and reserved claim costs to be quantified and emerge in
financial results with greater finality and effect.
Accompanying Financial Data and Other Information:
- About Old Republic
- Safe Harbor Statement
Financial Supplement:
- A financial supplement to this news release is available on the
Company's website: www.oldrepublic.com
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. Its most
recent financial statements reflect consolidated assets of
approximately $21.07 billion and
common shareholders' equity of $6.00
billion, or $19.98 per share.
Its current stock market valuation is approximately $6.96 billion, or $22.94 per share.
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. The current annualized dividend rate
of $0.80 per share marks the 38th consecutive year
that Old Republic has boosted this rate, and 2019 becomes
the 78th year of uninterrupted regular cash dividend payments.
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
|
|
|
|
|
Annual
|
Annual
|
Selected Indices'
Compounded
|
|
Book Value
|
Market
Value
|
Total Annual
Returns
|
|
Compounded
|
Compounded
|
Gross
|
S & P
|
S & P
|
|
Total
|
Total
|
Domestic
|
500
|
Insurance
|
|
Return
|
Return
|
Product
|
Index
|
Index
|
Ten Years 2000 -
2009
|
9.5
|
%
|
7.4
|
%
|
4.1
|
%
|
-1.0
|
%
|
-3.7
|
%
|
Ten Years 2010 -
2019
|
7.7
|
%
|
14.8
|
%
|
4.0
|
%
|
13.6
|
%
|
12.4
|
%
|
Twenty Years 2000 -
2019
|
8.6
|
%
|
11.0
|
%
|
4.1
|
%
|
6.1
|
%
|
4.1
|
%
|
According to the most recent edition of Mergent's
Dividend Achievers, Old Republic is listed in 56th
place among just 105 qualifying publicly held companies, out of
thousands considered, that have posted at least 25 consecutive
years of annual dividend growth.
Conference Call Information
Old Republic has scheduled a conference call at 3:00 p.m. ET (2:00 p.m.
CT) today, to discuss its fourth quarter 2019 performance
and to review major operating trends and business developments. To
access this call live in listen-only mode:
Log on to the Company's website at www.oldrepublic.com 15
minutes before the call to download the necessary software, or,
alternatively
The call can also be accessed by phone at
888-393-2979.
Interested parties may also listen to a replay of the call
through January 30, 2020 by dialing
844-512-2921, passcode 8371749, or by accessing it on Old Republic
International's website through February 23,
2020.
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.
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 are exposed to the variability 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
2018 Form 10-K Annual Report and Part II, Item 1A - Risk Factors,
of the Company's recent Form 10-Q filings to the Securities and
Exchange Commission, which Items are 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.
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
|
Further
Information Contacts:
|
AT OLD
REPUBLIC:
|
AT FINANCIAL
RELATIONS BOARD:
|
Craig R. Smiddy:
President and CEO
|
Analysts/Investors:
Marilynn Meek
|
|
|
(312)
346-8100
|
(212)
827-3773
|
|
|
View original
content:http://www.prnewswire.com/news-releases/old-republic-reports-results-for-the-fourth-quarter-and-full-year-2019-300992118.html
SOURCE Old Republic International Corporation