CHICAGO, April 28,
2022 /PRNewswire/ --
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OVERALL RESULTS
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Quarters Ended March
31,
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2022
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2021
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% Change
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Pretax income
(loss)
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$ 382.6
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$
630.6
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Pretax investment gains
(losses)
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145.1
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375.4
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Pretax income (loss)
excluding investment gains (losses)
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$ 237.5
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$
255.1
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-6.9 %
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Net income
(loss)
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$ 306.3
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$
502.1
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Net of tax investment
gains (losses)
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114.5
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295.7
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Net income (loss)
excluding investment gains (losses)
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$ 191.7
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$
206.3
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-7.0 %
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PER DILUTED SHARE
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Quarters Ended March
31,
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2022
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2021
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% Change
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Net income
(loss)
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$ 1.00
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$ 1.68
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Net of tax investment
gains (losses)
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.37
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.99
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Net income (loss)
excluding investment gains (losses)
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$
.63
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$
.69
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-8.7 %
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SHAREHOLDERS' EQUITY
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March 31,
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Dec. 31,
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2022
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2021
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% Change
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Total
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$
6,750.1
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$ 6,893.2
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-2.1 %
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Per Common
Share
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$ 22.23
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$
22.76
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-2.3 %
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All amounts in this
report are stated in millions except where noted, common stock data
and percentages.
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Old Republic International Corporation (NYSE: ORI) today
reported pretax income, excluding investment gains, of $237.5 for the quarter. The decline compared to
the 2021 period, is within our expectations as increasing mortgage
interest rates began to affect Title Insurance results. Both
General Insurance and Title Insurance produced solid underwriting
results that drove a consolidated combined ratio of 91.9% for the
quarter.
Consolidated net premiums and fees earned was $1.9 billion for the quarter representing growth
of 4.4% compared to the 2021 period. General Insurance net earned
premiums grew by 6.0%, while Title Insurance growth in premium and
fees was tempered by lower revenues within their direct operations.
Net investment income increased slightly for the quarter,
reflecting growth in the invested asset base, offset by lower
investment yields earned.
Book value per share was $22.23 as
of March 31, 2022, reflecting interest rate driven unrealized
losses in the fixed income portfolio, offset by operating earnings.
With the addition of dividends declared during the quarter, this
was a decrease of 1.3% over year-end 2021.
Old Republic's business is managed for the long run. In this
context management's key objectives are to achieve highly
profitable operating results over the long term, 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 (losses). Under Generally
Accepted Accounting Principles (GAAP), however, net income,
inclusive of investment gains (losses), is the measure of total
profitability.
In management's opinion, the focus on income excluding
investment gains (losses), also described herein as segment pretax
operating income (loss), provides a better way to analyze,
evaluate, and establish accountability for the results of the
insurance operations. The inclusion of realized investment gains
(losses) in net income can mask trends in operating results,
because such realizations are often highly discretionary.
Similarly, the inclusion of unrealized investment gains (losses) in
equity securities can further distort such operating results with
significant period-to-period fluctuations.
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FINANCIAL
HIGHLIGHTS
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Quarters Ended March
31,
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SUMMARY INCOME
STATEMENTS:
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2022
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2021
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% Change
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Revenues:
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Net
premiums and fees earned
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$
1,919.0
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$
1,838.9
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4.4 %
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Net
investment income
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106.2
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104.3
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1.8
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Other income
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36.2
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36.3
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-0.1
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Total operating revenues
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2,061.5
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1,979.6
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4.1
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Investment gains (losses):
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Realized from actual
transactions
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65.2
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7.8
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Unrealized from changes in fair
value of equity securities
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79.8
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367.5
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Total investment gains (losses)
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145.1
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375.4
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Total
revenues
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2,206.6
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2,355.0
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Operating
expenses:
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Claim costs
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607.9
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603.4
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0.8
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Sales and general expenses
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1,199.0
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1,110.3
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8.0
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Interest and other charges
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16.9
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10.6
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59.0
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Total operating
expenses
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1,823.9
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1,724.4
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5.8 %
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Pretax income
(loss)
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382.6
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630.6
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Income taxes
(credits)
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76.3
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128.5
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Net income
(loss)
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$ 306.3
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$ 502.1
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COMMON STOCK
STATISTICS:
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Components of net
income (loss) per share:
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Basic net income (loss) excluding investment gains
(losses)
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$
0.63
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$
0.69
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-8.7 %
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Net
investment gains (losses):
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Realized from actual transactions
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0.17
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0.02
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Unrealized from changes in fair value of equity
securities
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0.21
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0.97
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Basic net income
(loss)
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$
1.01
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$
1.68
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Diluted net income (loss) excluding investment gains
(losses)
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$
0.63
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$
0.69
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-8.7 %
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Net
investment gains (losses):
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Realized from actual transactions
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0.17
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0.02
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Unrealized from changes in fair value of equity
securities
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0.20
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0.97
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Diluted net income
(loss)
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$
1.00
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$
1.68
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Cash dividends on
common stock
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$
0.23
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$
0.22
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Book value per
share
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$ 22.23
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$ 21.59
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3.0 %
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We believe the information presented in the following table
highlights the most meaningful indicators of ORI's segmented and
consolidated financial performance. The information underscores the
performance of our underwriting operations, as well as our sound
investment of the capital and underwriting cash flows from these
operations.
Sources of
Consolidated Income (Loss)
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Quarters Ended March
31,
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2022
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2021
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% Change
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A. Net premiums,
fees, and other income:
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General insurance
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$
910.9
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$
859.1
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6.0 %
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Title insurance
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998.9
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967.7
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3.2
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Corporate & other
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2.4
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2.8
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-13.3
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Other income
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36.2
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36.3
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-0.1
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Subtotal
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1,948.7
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1,866.0
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4.4
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RFIG run-off
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6.5
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9.2
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-29.0
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Consolidated
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$ 1,955.2
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$ 1,875.2
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4.3 %
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B. Underwriting and
related services income (loss):
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General insurance
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$ 76.3
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$ 71.9
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6.2 %
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Title insurance
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70.2
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93.8
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-25.2
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Corporate & other
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(6.1)
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(6.0)
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-0.4
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Subtotal
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140.4
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159.7
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-12.0
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RFIG run-off
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7.7
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1.7
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N/M
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Consolidated
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$
148.2
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$
161.4
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-8.2 %
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C. Consolidated
underwriting ratio:
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Claim ratio:
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Current year
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34.1 %
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34.6 %
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Prior years
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(2.4)
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(1.8)
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Total
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31.7
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32.8
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Expense ratio
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60.2
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58.1
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Combined ratio
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91.9 %
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90.9 %
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D. Net investment
income:
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General insurance
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$ 82.4
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$ 84.8
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-2.8 %
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Title insurance
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11.3
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10.5
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7.6
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Corporate & other
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10.4
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5.7
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81.8
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Subtotal
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104.2
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101.1
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3.1
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RFIG run-off
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2.0
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3.2
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-36.2
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Consolidated
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$
106.2
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$
104.3
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1.8 %
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E. Interest and
other charges (credits):
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General insurance
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$ 16.3
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$ 16.0
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Title insurance
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0.5
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0.6
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Corporate & other (a)
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—
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(5.9)
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Subtotal
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16.9
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10.6
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RFIG run-off
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—
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—
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Consolidated
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$ 16.9
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$ 10.6
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59.0 %
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F. Segmented and
consolidated pretax income (loss)
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excluding investment gains (losses)(B+D-E):
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General insurance
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$
142.5
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$
140.8
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1.2 %
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Title insurance
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80.9
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103.7
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-21.9
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Corporate & other
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4.2
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5.6
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-24.6
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Subtotal
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227.7
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250.1
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-9.0
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RFIG run-off
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9.7
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4.9
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97.0
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Consolidated
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237.5
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255.1
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-6.9 %
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Income taxes (credits) on above (b)
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45.7
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48.8
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G. Net income (loss)
excluding
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investment gains (losses)
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191.7
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206.3
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-7.0 %
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H. Consolidated
pretax investment gains (losses):
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Realized from actual transactions
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65.2
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7.8
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Unrealized from changes in
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fair value of equity securities
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79.8
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367.5
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Total
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145.1
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375.4
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Income taxes (credits) on above
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30.5
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79.6
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Net
of tax investment gains (losses)
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114.5
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295.7
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I. Net income
(loss)
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$
306.3
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$
502.1
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J. Consolidated
operating cash flow
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$
278.4
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$
296.0
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(a) Includes
consolidation/elimination entries. (b) The effective tax rates
applicable to pretax income excluding investment gains (losses)
were 19.3% and 19.1% for the first quarter 2022 and 2021,
respectively.
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General Insurance
Segment Results
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General
Insurance
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Summary Operating
Results
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Quarters Ended March
31,
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2022
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2021
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% Change
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Net premiums
written
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$ 960.8
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$ 871.2
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10.3 %
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Net premiums
earned
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910.9
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859.1
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6.0
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Net investment
income
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82.4
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84.8
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-2.8
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Other income
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35.9
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36.0
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-0.2
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Operating revenues
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1,029.4
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|
980.0
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5.0
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Claim costs
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582.2
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567.3
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2.6
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Sales and general
expenses
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288.3
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255.8
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12.7
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Interest and other
charges
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16.3
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16.0
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2.0
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Operating expenses
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886.9
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839.2
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5.7
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Segment pretax
operating income (loss)
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$ 142.5
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$ 140.8
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1.2 %
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Claim ratio
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63.9 %
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66.0 %
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Expense
ratio
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27.7
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|
25.6
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Combined ratio
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91.6 %
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91.6 %
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General Insurance net premiums earned increased 6.0% for the
quarter, with rising premiums in commercial auto, financial
indemnity, and property lines of coverage. Strong premium rate
increases for most lines of coverage, other than workers'
compensation, high renewal retention ratios, and new business
production all contributed. Net investment income decreased
slightly in the quarter, reflecting lower investment yields earned,
partially offset by growth in the invested asset base.
The reported claim ratio for General Insurance improved in the
quarter, inclusive of favorable reserve development from prior
periods and a lower current period claim provision, attributable to
several years of premium rate increases, underwriting actions, and
a shift in the line of coverage mix.
The first quarter expense ratio was elevated compared to the
same quarter last year, generally reflecting the shift in line of
coverage mix, and an increase in employee costs, including the
timing of certain benefit accruals. Investments in new products and
geographies in recent years have diversified the General Insurance
business, resulting in shifts in the lines of coverage mix toward
lines with higher expense ratios and lower current period claim
ratios.
Together, these factors produced greater pretax operating income
for the period reported.
The following table shows recent annual and interim periods'
claim ratios and the effects of claim development trends:
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Effect of Prior
Periods'
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(Favorable)/
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Claim Ratio
Excluding
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Reported
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Unfavorable
Claim
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Prior Periods'
Claim
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Claim
Ratio
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Reserves
Development
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Reserves
Development
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2017
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71.8 %
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0.7 %
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71.1 %
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2018
|
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72.2
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—
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72.2
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2019
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71.8
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0.4
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71.4
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2020
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69.9
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(0.8)
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70.7
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2021
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64.8 %
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(3.8) %
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68.6 %
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1st Quarter
2021
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66.0 %
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(2.7) %
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68.7 %
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1st Quarter
2022
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63.9 %
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(3.2) %
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67.1 %
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Quarterly and annual claim ratios and trends may not be
indicative of future outcomes for a business with relatively long
claim payment patterns. We target combined ratios between 90% and
95%, and based on our historical line of coverage mix, a claim
ratio average in the high 60% to low 70% range, and an expense
ratio average of 25%. These components of the combined ratio will
continue to reflect the line of coverage mix.
Title Insurance
Segment Results
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Title
Insurance
|
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Summary Operating
Results
|
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Quarters Ended March
31,
|
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2022
|
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2021
|
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% Change
|
Net premiums and fees
earned
|
$ 998.9
|
|
$ 967.7
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3.2 %
|
Net investment
income
|
11.3
|
|
10.5
|
|
7.6
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Other income
|
0.2
|
|
0.2
|
|
-5.9
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Operating revenues
|
1,010.5
|
|
978.4
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|
3.3
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Claim costs
|
29.3
|
|
29.2
|
|
0.3
|
Sales and general
expenses
|
899.6
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|
844.8
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|
6.5
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Interest and other
charges
|
0.5
|
|
0.6
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|
-16.0
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Operating expenses
|
929.5
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|
874.7
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|
6.3
|
Segment pretax
operating income (loss)
|
$ 80.9
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|
$ 103.7
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-21.9 %
|
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Claim ratio
|
2.9 %
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3.0 %
|
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|
Expense
ratio
|
90.0
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|
87.3
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Combined ratio
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92.9 %
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90.3 %
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|
Title Insurance net premiums and fees earned grew by 3.2% in the
quarter. Agency revenues continued to increase over the prior
period although at a lower rate than in recent quarters. Revenue
from direct production channels declined in the quarter, and we
expect both directly produced and agency produced revenues to be
lower throughout the year when compared to prior year periods.
Increases in mortgage interest rates significantly reduced
refinance activity in the quarter and likely will for the remainder
of the year. Purchase order levels were in line with the prior
period and continue to benefit from strong housing prices. Ongoing
increases in mortgage interest rates may affect purchase activity
through the remainder of the year. Net investment income increased
slightly in the quarter, reflecting growth in the invested asset
base, offset by lower investment yields earned.
Title Insurance's claim ratios were relatively flat for the
quarter. The first quarter expense ratio was elevated compared to
the same quarter last year, generally reflecting the combination of
lower directly produced revenues that carry higher fixed expenses,
along with a greater proportion of agency produced revenues that
have a higher overall expense ratio.
Together, these factors produced lower pretax operating income
for the period reported.
The following table shows recent annual and interim periods'
claim ratios and the effects of claim development trends:
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|
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|
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Effect of Prior
Periods'
|
|
|
|
|
|
|
|
|
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(Favorable)/
|
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Claim Ratio
Excluding
|
|
Reported
|
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Unfavorable
Claim
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Prior Periods'
Claim
|
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Claim
Ratio
|
|
Reserves
Development
|
|
Reserves
Development
|
2017
|
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0.8 %
|
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|
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(3.0) %
|
|
|
|
3.8 %
|
|
2018
|
|
1.9
|
|
|
|
(1.8)
|
|
|
|
3.7
|
|
2019
|
|
2.5
|
|
|
|
(1.2)
|
|
|
|
3.7
|
|
2020
|
|
2.3
|
|
|
|
(1.3)
|
|
|
|
3.6
|
|
2021
|
|
2.6 %
|
|
|
|
(1.0) %
|
|
|
|
3.6 %
|
|
1st Quarter
2021
|
|
3.0 %
|
|
|
|
(0.6) %
|
|
|
|
3.6 %
|
|
1st Quarter
2022
|
|
2.9 %
|
|
|
|
(0.6) %
|
|
|
|
3.5 %
|
|
RFIG Run-off Segment
Results
|
|
|
RFIG
Run-off
|
|
Summary Operating
Results
|
|
Quarters Ended March
31,
|
|
2022
|
|
2021
|
|
% Change
|
Mortgage Insurance
(MI)
|
|
|
|
|
|
Net premiums
earned
|
$
6.5
|
|
$
9.2
|
|
-29.0 %
|
Net investment
income
|
2.0
|
|
3.2
|
|
-36.2
|
Claim costs
|
(4.2)
|
|
4.3
|
|
N/M
|
MI pretax operating
income (loss)
|
$
9.7
|
|
$
4.9
|
|
97.0 %
|
|
|
|
|
|
|
Claim ratio
|
-64.8 %
|
|
46.5 %
|
|
|
Expense
ratio
|
46.8
|
|
34.5
|
|
|
Combined ratio
|
-18.0 %
|
|
81.0 %
|
|
|
Pretax operating results of RFIG Run-off reflect the continuing
drop in net earned premiums in line with the declining risk in
force, and significantly lower claim costs compared to the 2021
period. Net investment income decreased in the quarter, reflecting
a declining invested asset base, and lower investment yields
earned. Extraordinary dividends of $35.0
million were paid to the parent company during the quarter.
Claim costs reflect significantly fewer newly reported
delinquencies along with improving trends in cure rates, influenced
by a relatively strong economy and real estate market.
Together, these factors produced significantly greater pretax
operating income for the period reported.
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
|
2017
|
|
57.6 %
|
|
|
|
(38.3) %
|
|
|
|
95.9 %
|
|
2018
|
|
43.2
|
|
|
|
(27.0)
|
|
|
|
70.2
|
|
2019
|
|
55.0
|
|
|
|
(12.5)
|
|
|
|
67.5
|
|
2020
|
|
81.7
|
|
|
|
(26.5)
|
|
|
|
108.2
|
|
2021
|
|
(5.3) %
|
|
|
|
(67.5) %
|
|
|
|
62.2 %
|
|
1st Quarter
2021
|
|
46.5 %
|
|
|
|
(13.5) %
|
|
|
|
60.0 %
|
|
1st Quarter
2022
|
|
(64.8) %
|
|
|
|
(131.1) %
|
|
|
|
66.3 %
|
|
Corporate &
Other Operating Results
|
|
|
|
Corporate &
Other
|
|
|
Summary Operating
Results
|
|
|
Quarters Ended March
31,
|
|
|
2022
|
|
2021
|
|
% Change
|
Net life and accident
premiums earned
|
|
$
2.4
|
|
$
2.8
|
|
-13.3 %
|
Net investment
income
|
|
10.4
|
|
5.7
|
|
81.8
|
Other operating
income
|
|
—
|
|
—
|
|
—
|
Operating revenues
|
|
12.9
|
|
8.5
|
|
50.8
|
Claim costs
|
|
0.6
|
|
2.4
|
|
-75.0
|
Insurance
expenses
|
|
0.9
|
|
0.8
|
|
8.7
|
Corporate, interest and
other expenses - net
|
|
7.1
|
|
(0.3)
|
|
N/M
|
Operating expenses
|
|
8.6
|
|
2.9
|
|
196.8
|
Corporate & other
pretax operating income (loss)
|
|
$
4.2
|
|
$
5.6
|
|
-24.6 %
|
This segment includes a small life and accident insurance
business and the net costs associated with the parent holding
company and several internal corporate services subsidiaries. The
segment tends to produce highly variable results stemming from
volatility inherent from the lack of scale. Interest expense
increased related to the issuance of $650
million of debt late in the second quarter of 2021,
partially offset by net investment income from a higher level of
investments.
Summary Consolidated
Balance Sheet
|
|
|
March 31,
|
|
December
31,
|
|
March 31,
|
|
2022
|
|
2021
|
|
2021
|
Assets:
|
|
|
|
|
|
Cash and fixed income
securities
|
$
11,571.2
|
|
$
11,399.6
|
|
$
11,177.3
|
Equity
securities
|
4,972.4
|
|
5,302.8
|
|
4,271.3
|
Other invested
assets
|
120.6
|
|
116.5
|
|
116.1
|
Cash and invested assets
|
16,664.3
|
|
16,818.9
|
|
15,564.7
|
Accounts and premiums
receivable
|
1,861.8
|
|
1,768.7
|
|
1,626.6
|
Federal income tax
recoverable: Current
|
—
|
|
11.8
|
|
—
|
Reinsurance balances
recoverable
|
5,066.9
|
|
4,943.4
|
|
4,477.2
|
Deferred policy
acquisition costs
|
358.9
|
|
350.4
|
|
334.9
|
Sundry
assets
|
1,166.6
|
|
1,088.4
|
|
1,045.6
|
Total assets
|
$
25,118.8
|
|
$
24,981.8
|
|
$
23,049.3
|
|
|
|
|
|
|
Liabilities and Shareholders'
Equity:
|
|
|
|
|
|
Policy
liabilities
|
$
2,869.7
|
|
$
2,752.0
|
|
$
2,641.2
|
Claim
reserves
|
11,569.1
|
|
11,425.5
|
|
10,853.3
|
Federal income tax
payable: Current
|
46.1
|
|
—
|
|
36.9
|
Deferred
|
157.2
|
|
249.5
|
|
165.0
|
Reinsurance balances
and funds
|
1,002.1
|
|
866.0
|
|
793.5
|
Debt
|
1,594.2
|
|
1,588.5
|
|
947.2
|
Sundry
liabilities
|
1,130.1
|
|
1,206.9
|
|
1,160.1
|
Total liabilities
|
18,368.6
|
|
18,088.6
|
|
16,597.4
|
Shareholders'
equity
|
6,750.1
|
|
6,893.2
|
|
6,451.8
|
Total liabilities and shareholders' equity
|
$
25,118.8
|
|
$
24,981.8
|
|
$
23,049.3
|
Cash, Invested
Assets, and Shareholders' Equity
|
|
|
|
Cash, Invested
Assets, and Shareholders' Equity
|
|
|
|
|
|
|
|
|
% Change
|
|
|
March 31,
|
|
Dec. 31,
|
|
March 31,
|
|
March '22/
|
|
March '22/
|
|
|
2022
|
|
2021
|
|
2021
|
|
Dec. '21
|
|
March '21
|
Cash and invested
assets:
|
|
|
|
|
|
|
|
|
|
|
Fixed income
securities, cash and other invested assets
|
$
11,691.9
|
|
$
11,516.1
|
|
$
11,293.4
|
|
1.5 %
|
|
3.5 %
|
|
Equity
securities
|
4,972.4
|
|
5,302.8
|
|
4,271.3
|
|
-6.2
|
|
16.4
|
|
Total per balance
sheet
|
$
16,664.3
|
|
$
16,818.9
|
|
$
15,564.7
|
|
-0.9 %
|
|
7.1 %
|
|
Total at cost for
all
|
$
15,320.0
|
|
$
15,045.8
|
|
$
14,054.8
|
|
1.8 %
|
|
9.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Composition of
shareholders' equity per share:
|
|
|
|
|
|
|
|
|
|
|
Equity before items
below
|
$
19.09
|
|
$
18.50
|
|
$
18.22
|
|
3.2 %
|
|
4.8 %
|
|
Unrealized investment
gains (losses) and other
|
|
|
|
|
|
|
|
|
|
|
|
accumulated
comprehensive income (loss)
|
3.14
|
|
4.26
|
|
3.37
|
|
|
|
|
|
|
|
Total
|
$
22.23
|
|
$
22.76
|
|
$
21.59
|
|
-2.3 %
|
|
3.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segmented
composition of
|
|
|
|
|
|
|
|
|
|
shareholders'
equity per share:
|
|
|
|
|
|
|
|
|
|
|
Excluding RFIG run-off
segment
|
$
21.06
|
|
$
21.47
|
|
$
20.13
|
|
-1.9 %
|
|
4.6 %
|
|
RFIG run-off
segment
|
1.17
|
|
1.29
|
|
1.46
|
|
|
|
|
|
|
|
Consolidated
total
|
$
22.23
|
|
$
22.76
|
|
$
21.59
|
|
-2.3 %
|
|
3.0 %
|
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 claim payment obligations to
policyholders and their beneficiaries, as well as the long-term
stability of the subsidiaries' capital base. For these reasons, the
investment portfolio does not contain high risk or illiquid asset
classes and has zero or extremely limited exposure to,
collateralized debt obligations (CDO's), credit default and
interest rate swaps, hybrid securities, asset-backed securities
(ABS), guaranteed investment contracts (GIC), structured investment
vehicles (SIV), auction rate variable short-term securities,
limited partnerships, derivatives, hedge funds or private equity
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 March 31, 2022, the consolidated investment portfolio
reflected an allocation of approximately 70% to fixed income (bonds
and notes) and short-term investments, and 30% to equity securities
(common stock). During the quarter, we modestly reduced our equity
holdings. The fixed income portfolio continues to be the anchor for
the insurance underwriting subsidiaries' obligations. The
maturities of our fixed income assets are matched to the expected
liabilities for claim payment obligations to policyholders and
their beneficiaries. The quality of the investment portfolio
remains at high levels.
In recent years, a significant portion of our investable funds
have been directed toward high-quality common stocks of U.S.
companies (currently limited to fewer than 100 issues). We favor
those with long-term records of reasonable earnings growth and
steadily increasing dividends. Pursuant to enterprise risk
management guidelines and controls, we perform regular stress tests
of the equities portfolio to gain reasonable assurance that
periodic downdrafts in market prices would not seriously undermine
our financial strength and the long-term continuity and prospects
of our insurance underwriting 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
|
|
March 31,
|
|
2022
|
|
2021
|
Beginning
balance
|
$
22.76
|
|
$
20.75
|
Changes in
shareholders' equity:
|
|
|
|
Net income (loss)
excluding net investment gains (losses)
|
0.63
|
|
0.69
|
Net of tax realized
investment gains (losses)
|
0.17
|
|
0.02
|
Net of tax unrealized
investment gains (losses):
|
|
|
|
Fixed income
securities
|
(1.33)
|
|
(0.64)
|
Equity
securities
|
0.21
|
|
0.97
|
Total net of tax
realized and unrealized
|
|
|
|
investment gains (losses)
|
(0.95)
|
|
0.35
|
Cash dividends
|
(0.23)
|
|
(0.22)
|
Other
|
0.02
|
|
0.02
|
Net change
|
(0.53)
|
|
0.84
|
Ending
balance
|
$
22.23
|
|
$
21.59
|
Percentage change for
the period
|
-2.3 %
|
|
4.0 %
|
Capitalization
|
|
|
Capitalization
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
2022
|
|
2021
|
|
2021
|
Debt:
|
|
|
|
|
|
4.875% Senior Notes due 2024
|
$
398.6
|
|
$
398.4
|
|
$
398.0
|
3.875% Senior Notes due 2026
|
547.5
|
|
547.3
|
|
546.9
|
3.850% Senior Notes due 2051
|
642.7
|
|
642.6
|
|
—
|
Other miscellaneous debt
|
5.3
|
|
—
|
|
2.2
|
Total debt
|
1,594.2
|
|
1,588.5
|
|
947.2
|
Common shareholders'
equity
|
6,750.1
|
|
6,893.2
|
|
6,451.8
|
Total
capitalization
|
$
8,344.3
|
|
$
8,481.7
|
|
$
7,399.0
|
|
|
|
|
|
|
Capitalization
ratios:
|
|
|
|
|
|
Debt
|
19.1 %
|
|
18.7 %
|
|
12.8 %
|
Common shareholders' equity
|
80.9
|
|
81.3
|
|
87.2
|
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 most products are set without
knowing what the ultimate claim costs will be. We also can't know
exactly when claims will be paid, which may be many years after a
policy was issued or expired. This casts Old Republic as a
risk-taking enterprise managed for the long run. Old Republic
therefore conducts the business with a primary focus on achieving
favorable underwriting results over cycles, and on maintaining a
sound financial condition to support our subsidiaries' long-term
obligations to policyholders and their beneficiaries.
The Company is managed for the long run and with little regard
for quarterly or even annual reporting periods. These time frames
are too short. Management believes results are best evaluated by
looking at underwriting and overall operating performance trends
over 10-year intervals. These likely include one or two economic
and/or underwriting cycles. This provides enough time for these
cycles to run their course, for underwriting and premium rate
changes to appear in financial results, and for reserved claim
costs to be quantified with greater certainty.
Accompanying Financial Data and Other Information:
- About Old Republic
- Conference Call Information
- 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. 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. Old Republic's general
insurance business ranks among the nation's 50 largest, while its
title insurance business is the third largest in its industry.
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 first quarter 2022 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 1-888-655-9638. Interested parties may
also listen to a replay of the call through May 9, 2022 by dialing 1-800-770-2030, passcode
4060501, or by accessing it on Old Republic International's website
through May 26, 2022.
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. It is possible that Old
Republic's operating results, business and financial condition
could be adversely affected in subsequent periods by future
economic disruptions caused by the COVID-19 pandemic and the
associated governmental responses.
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.
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.
General Insurance, Title Insurance, Corporate & Other, and
RFIG Run-off 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
2021 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.
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
|
|
At Old
Republic:
|
At Financial
Relations Board:
|
|
|
Craig R. Smiddy,
President and CEO
|
Analysts/Investors: Joe
Calabrese 212/827-3772
|
View original
content:https://www.prnewswire.com/news-releases/old-republic-reports-results-for-the-first-quarter-2022-301535266.html
SOURCE Old Republic International Corporation