CHICAGO, Nov. 13,
2023 /PRNewswire/ -- Old Republic International
Corporation (NYSE: ORI) – today announced that it has
entered into a definitive agreement to sell its mortgage insurance
business to Arch Capital Group Ltd. In this transaction, Arch U.S.
MI Holdings Inc. will acquire all of the capital stock of Old
Republic's wholly-owned subsidiary, RMIC Companies, Inc., and its
wholly-owned subsidiaries that together comprise Old Republic's
run-off mortgage insurance business. Consideration is expected to
be approximately $140 million.
Additionally, Old Republic expects to receive a final
4th quarter dividend of $25
million. The transaction is subject to regulatory approval
and is expected to close in the first half of 2024.
Commenting on the transaction, Old Republic President & CEO,
Craig R. Smiddy, said "We are
pleased to announce this definitive exit from the mortgage
insurance business. Since placing this business in run-off in 2011,
we have been able to preserve significant value for shareholders
and we are grateful for the many years of hard work and dedication
of our RMIC associates. In the last five years our run-off reserves
have developed favorably, enabling us to receive over $398 million of dividends from these
subsidiaries, inclusive of the $25
million expected in the 4th quarter."
Insurance Advisory Partners LLC served as ORI's financial
advisor and Kirkland & Ellis served as ORI's legal advisor in
this transaction.
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.
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.
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
2022 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 Chief Executive Officer
|
Analysts/Investors: Joe
Calabrese 212/827-3772
|
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SOURCE Old Republic International Corporation