CHICAGO, Jan. 25,
2024 /PRNewswire/ --
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OVERALL
RESULTS
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Quarters Ended December
31,
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Years Ended December
31,
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2023
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2022
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% Change
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2023
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2022
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% Change
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Pretax
income
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$
237.4
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$
649.0
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$
747.4
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$
857.4
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Pretax investment gains
(losses)
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0.2
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348.3
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(190.9)
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(201.1)
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Pretax income excluding
investment gains (losses)
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$
237.1
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$
300.6
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(21.1) %
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$
938.4
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$ 1,058.6
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(11.4) %
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Net income
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$
190.6
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$
512.1
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$
598.6
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$
686.4
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Net of tax investment
gains (losses)
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0.1
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275.2
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(150.8)
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(158.6)
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Net income excluding
investment gains (losses)
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$
190.4
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$
236.9
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(19.6) %
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$
749.5
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$
845.1
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(11.3) %
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Combined
ratio
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93.3 %
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89.6 %
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92.6 %
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91.0 %
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PER DILUTED
SHARE
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Quarters Ended December
31,
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Years Ended December
31,
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2023
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2022
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% Change
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2023
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2022
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% Change
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Net income
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$ 0.69
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$ 1.73
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$ 2.10
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$ 2.26
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Net of tax investment
gains (losses)
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—
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0.93
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(0.53)
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(0.53)
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Net income excluding
investment gains (losses)
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$ 0.69
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$ 0.80
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(13.8) %
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$ 2.63
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$ 2.79
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(5.7) %
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SHAREHOLDERS' EQUITY
(BOOK VALUE)
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Dec. 31,
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Dec. 31,
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2023
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2022
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% Change
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Total
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$ 6,410.7
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$ 6,173.2
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3.8 %
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Per Common
Share
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$
23.31
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$
21.07
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10.6 %
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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 losses (pretax
operating income), of $237.1 for the
quarter and $938.4 for the full year
2023. Title Insurance pretax operating income was relatively
consistent for the quarter, but declined for the full year. General
Insurance pretax operating income decreased for the quarter but was
higher for the full year.
Results for the quarter and full year are summarized as
follows:
- Consolidated combined ratios were 93.3% for the quarter and
92.6% for the full year.
- Consolidated net premiums and fees earned decreased 4.8% for
the quarter and 12.6% for the full year. The continued decline in
Title Insurance net premiums and fees earned was partially offset
by strong growth in General Insurance.
- Net investment income increased 19.1% for the quarter and 25.8%
for the full year driven by higher investment yields earned.
- Favorable loss reserve development improved the combined ratio
by 4.7 percentage points for the quarter and 4.6 percentage points
for the full year.
- Total capital returned to shareholders during the quarter was
$122, comprised of $67 in dividends, and $55 of share repurchases. For the year, total
capital returned was $806, comprised
of $276 in dividends, and
$530 of share repurchases.
- Book value per share grew to $23.31, a 15.3% increase for the full year,
inclusive of dividends.
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 insurance underwriting subsidiaries'
obligations. Therefore, 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, 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 December
31,
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Years Ended December
31,
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SUMMARY INCOME
STATEMENTS:
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2023
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2022
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% Change
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2023
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2022
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% Change
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Revenues:
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Net premiums and fees
earned
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$
1,743.6
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$
1,830.6
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(4.8) %
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$
6,707.7
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$
7,675.3
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(12.6) %
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Net investment
income
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155.1
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130.2
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19.1
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578.3
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459.5
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25.8
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Other
income
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42.0
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36.2
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16.1
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163.1
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149.9
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8.8
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Total operating
revenues
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1,940.8
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1,997.2
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(2.8)
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7,449.3
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8,284.9
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(10.1)
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Investment gains
(losses):
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Realized from actual
transactions and impairments
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(8.2)
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(30.0)
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(21.4)
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62.2
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Realized from pending
sale of mortgage insurance business
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(45.6)
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—
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(45.6)
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—
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Unrealized from
changes in fair value of equity securities
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54.1
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378.4
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(123.9)
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(263.4)
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Total investment gains
(losses)
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0.2
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348.3
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(190.9)
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(201.1)
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Total
revenues
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1,941.1
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2,345.5
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7,258.3
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8,083.7
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Operating
expenses:
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Loss and loss
adjustment expenses
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711.4
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565.0
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25.9
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2,596.6
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2,440.2
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6.4
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Sales and general
expenses
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975.7
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1,114.7
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(12.5)
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3,843.6
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4,719.2
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(18.6)
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Interest and other
charges
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16.4
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16.8
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(1.9)
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70.5
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66.7
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5.7
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Total operating
expenses
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1,703.6
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1,696.5
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0.4 %
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6,510.8
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7,226.3
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(9.9) %
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Pretax
income
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237.4
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649.0
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747.4
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857.4
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Income
taxes
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46.7
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136.8
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148.7
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170.9
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Net
income
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$ 190.6
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$ 512.1
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$ 598.6
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$ 686.4
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COMMON STOCK
STATISTICS:
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Components of net
income per share:
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Basic net
income excluding investment gains (losses)
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$
0.70
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$
0.80
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(12.5) %
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$
2.65
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$
2.80
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(5.4) %
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Net investment gains
(losses):
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Realized investment
gains (losses)
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(0.16)
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(0.08)
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(0.19)
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0.17
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Unrealized from
changes in fair value of equity securities
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0.16
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1.02
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(0.34)
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(0.69)
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Basic net
income
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$
0.70
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$
1.74
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$
2.12
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$
2.28
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Diluted net
income excluding investment gains (losses)
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$
0.69
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$
0.80
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(13.8) %
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$
2.63
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$
2.79
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(5.7) %
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Net investment gains
(losses):
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Realized investment
gains (losses)
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(0.15)
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(0.08)
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(0.19)
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0.16
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Unrealized from
changes in fair value of equity securities
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0.15
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1.01
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(0.34)
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(0.69)
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Diluted net
income
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$
0.69
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$
1.73
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$
2.10
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$
2.26
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Cash dividends on
common stock
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$ 0.245
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$ 0.230
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$ 0.980
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$ 1.920
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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 subsidiaries, as well as our sound
investment of their capital and underwriting cash flows.
Sources of
Consolidated Income
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Quarters Ended December
31,
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Years Ended December
31,
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2023
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2022
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% Change
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2023
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2022
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% Change
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Net premiums and
fees earned:
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General
insurance
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$ 1,091.5
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$
986.7
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10.6 %
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$ 4,119.2
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$ 3,808.6
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8.2 %
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Title
insurance
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645.4
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836.4
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(22.8)
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2,562.8
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3,833.8
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(33.2)
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RFIG
run-off
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3.6
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5.0
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(28.3)
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16.4
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23.2
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(29.2)
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Corporate &
other
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2.8
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2.3
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22.1
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9.1
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9.6
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(4.9)
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Consolidated
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$ 1,743.6
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$ 1,830.6
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(4.8) %
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$ 6,707.7
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$ 7,675.3
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(12.6) %
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Underwriting and
related services income (loss):
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General
insurance
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$ 87.4
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$
157.3
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(44.4) %
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$
406.0
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$
400.9
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1.3 %
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Title
insurance
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28.7
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31.2
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(8.0)
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75.4
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261.3
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(71.1)
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RFIG
run-off
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0.4
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2.3
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(81.6)
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14.9
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28.4
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(47.7)
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Corporate &
other
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(18.1)
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(3.7)
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N/M
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(65.8)
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(24.9)
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(163.2)
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Consolidated
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$ 98.5
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$
187.1
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(47.4) %
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$
430.6
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$
665.8
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(35.3) %
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Consolidated
underwriting ratio:
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Loss ratio:
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Current
year
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45.5 %
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38.3 %
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43.3 %
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35.5 %
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Prior years
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(4.7)
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(7.4)
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(4.6)
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(3.7)
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Total
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40.8
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30.9
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|
38.7
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31.8
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Expense
ratio
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52.5
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|
58.7
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53.9
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|
59.2
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Combined
ratio
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93.3 %
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|
89.6 %
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92.6 %
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|
91.0 %
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Net investment
income:
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|
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General
insurance
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$
124.6
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$
103.1
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20.9 %
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$
462.7
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$
358.0
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29.3 %
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Title
insurance
|
14.9
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|
13.6
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|
9.1
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|
57.0
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|
47.9
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|
18.9
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RFIG
run-off
|
1.9
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|
1.5
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|
26.5
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6.3
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6.7
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(6.8)
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Corporate &
other
|
13.5
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|
11.9
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13.8
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52.2
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|
46.8
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|
11.5
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Consolidated
|
$
155.1
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$
130.2
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19.1 %
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$
578.3
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$
459.5
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25.8 %
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Interest and other
charges (credits):
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General
insurance
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$ 17.3
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$ 18.8
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$ 80.9
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$ 69.1
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Title
insurance
|
(0.2)
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—
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(1.0)
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0.4
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Corporate & other
(a)
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(0.5)
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(1.9)
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(9.3)
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(2.8)
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Consolidated
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$ 16.4
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$ 16.8
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(1.9) %
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$ 70.5
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$ 66.7
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5.7 %
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Segmented and
consolidated pretax income
|
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(loss) excluding
investment gains (losses):
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General
insurance
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$
194.8
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$
241.6
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(19.4) %
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$
787.8
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$
689.8
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14.2 %
|
Title
insurance
|
43.9
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|
45.0
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(2.5)
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|
133.5
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|
308.8
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(56.7)
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RFIG
run-off
|
2.3
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3.9
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(39.0)
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|
21.2
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|
35.2
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(39.9)
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Corporate &
other
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(3.9)
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10.0
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(139.6)
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(4.2)
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|
24.6
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|
(117.3)
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Consolidated
|
237.1
|
|
300.6
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(21.1) %
|
|
938.4
|
|
1,058.6
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(11.4) %
|
Income taxes on
above
|
46.6
|
|
63.7
|
|
|
|
188.8
|
|
213.4
|
|
|
Net income excluding
investment
|
|
|
|
|
|
|
|
|
|
|
|
gains
(losses)
|
190.4
|
|
236.9
|
|
(19.6) %
|
|
749.5
|
|
845.1
|
|
(11.3) %
|
Consolidated pretax
investment gains (losses):
|
Realized from actual
transactions
|
|
|
|
|
|
|
|
|
|
|
|
and
impairments
|
(8.2)
|
|
(30.0)
|
|
|
|
(21.4)
|
|
62.2
|
|
|
Realized from pending
sale of
|
|
|
|
|
|
|
|
|
|
|
|
mortgage
insurance business
|
(45.6)
|
|
—
|
|
|
|
(45.6)
|
|
—
|
|
|
Unrealized from
changes in
|
|
|
|
|
|
|
|
|
|
|
|
fair value of equity
securities
|
54.1
|
|
378.4
|
|
|
|
(123.9)
|
|
(263.4)
|
|
|
Total
|
0.2
|
|
348.3
|
|
|
|
(190.9)
|
|
(201.1)
|
|
|
Income taxes (credits)
on above
|
—
|
|
73.1
|
|
|
|
(40.0)
|
|
(42.5)
|
|
|
Net of tax investment
gains (losses)
|
0.1
|
|
275.2
|
|
|
|
(150.8)
|
|
(158.6)
|
|
|
Net
income
|
$
190.6
|
|
$
512.1
|
|
|
|
$
598.6
|
|
$
686.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes
consolidation/elimination entries.
|
|
General Insurance
Segment Operating Results
|
|
|
Quarters Ended December
31,
|
|
Years Ended December
31,
|
|
2023
|
|
2022
|
|
% Change
|
|
2023
|
|
2022
|
|
% Change
|
Net premiums
written
|
$ 1,067.2
|
|
$
948.7
|
|
12.5 %
|
|
$ 4,356.3
|
|
$ 3,978.2
|
|
9.5 %
|
Net premiums
earned
|
1,091.5
|
|
986.7
|
|
10.6
|
|
4,119.2
|
|
3,808.6
|
|
8.2
|
Net investment
income
|
124.6
|
|
103.1
|
|
20.9
|
|
462.7
|
|
358.0
|
|
29.3
|
Other income
|
41.9
|
|
36.0
|
|
16.2
|
|
162.2
|
|
148.9
|
|
8.9
|
Operating
revenues
|
1,258.1
|
|
1,125.9
|
|
11.7
|
|
4,744.3
|
|
4,315.6
|
|
9.9
|
Loss and loss
adjustment expenses
|
710.5
|
|
559.6
|
|
27.0
|
|
2,553.3
|
|
2,364.6
|
|
8.0
|
Sales and general
expenses
|
335.4
|
|
305.8
|
|
9.7
|
|
1,322.2
|
|
1,192.0
|
|
10.9
|
Interest and other
charges
|
17.3
|
|
18.8
|
|
(7.9)
|
|
80.9
|
|
69.1
|
|
17.0
|
Operating
expenses
|
1,063.3
|
|
884.2
|
|
20.3
|
|
3,956.4
|
|
3,625.8
|
|
9.1
|
Segment pretax
operating income
|
$
194.8
|
|
$
241.6
|
|
(19.4) %
|
|
$
787.8
|
|
$
689.8
|
|
14.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio:
|
|
|
|
|
|
|
|
|
|
|
|
Current
year
|
70.2 %
|
|
66.9 %
|
|
|
|
67.7 %
|
|
67.2 %
|
|
|
Prior years
|
(5.1)
|
|
(10.2)
|
|
|
|
(5.7)
|
|
(5.1)
|
|
|
Total
|
65.1
|
|
56.7
|
|
|
|
62.0
|
|
62.1
|
|
|
Expense
ratio
|
26.9
|
|
27.3
|
|
|
|
28.2
|
|
27.4
|
|
|
Combined
ratio
|
92.0 %
|
|
84.0 %
|
|
|
|
90.2 %
|
|
89.5 %
|
|
|
General Insurance net premiums earned increased 10.6% and 8.2%
for the quarter and full year 2023, respectively, driven by a
combination of premium rate increases, high renewal retention
ratios, and new business production, including contributions from
recently established underwriting subsidiaries. Premium growth
occurred across most lines of coverage and was most pronounced
within commercial auto, property and general liability, partially
offset by declines in public D&O (included within financial
indemnity) and home warranty. Commercial auto, general liability
and property achieved strong rate increases while there were rate
declines in public D&O and workers' compensation. Net
investment income increased significantly in both 2023 periods,
driven largely by higher investment yields earned, and to a lesser
extent, a higher invested asset base.
The reported loss ratio for General Insurance increased for the
quarter and remained consistent for the full year. Favorable loss
reserve development remained at elevated levels, however was lower
in the fourth quarter. Favorable development for both periods came
predominantly from workers' compensation and commercial auto,
partially offset by unfavorable development within general
liability. The quarter's current year loss ratio includes an
increase for all four quarters of 2023, related to higher levels of
severity in commercial auto. Overall, the longer term trends in
current year loss and expense ratios reflect a shift in the line of
coverage mix. 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 lower current
period loss ratios and higher expense ratios.
Together, these factors produced highly profitable combined
ratios and strong pretax operating income for the periods reported.
For General Insurance, we target combined ratios between 90% and
95% over a full underwriting cycle, recognizing that quarterly and
annual ratios and trends may deviate from this range, particularly
given the long claim payment patterns associated with the
business.
|
Title Insurance
Segment Operating Results
|
|
|
Quarters Ended December
31,
|
|
Years Ended December
31,
|
|
2023
|
|
2022
|
|
% Change
|
|
2023
|
|
2022
|
|
% Change
|
Net premiums and fees
earned
|
$
645.4
|
|
$
836.4
|
|
(22.8) %
|
|
$ 2,562.8
|
|
$ 3,833.8
|
|
(33.2) %
|
Net investment
income
|
14.9
|
|
13.6
|
|
9.1
|
|
57.0
|
|
47.9
|
|
18.9
|
Other income
|
0.1
|
|
0.1
|
|
(1.9)
|
|
0.7
|
|
0.9
|
|
(15.4)
|
Operating
revenues
|
660.5
|
|
850.3
|
|
(22.3)
|
|
2,620.6
|
|
3,882.7
|
|
(32.5)
|
Loss and loss
adjustment expenses
|
(1.0)
|
|
4.4
|
|
(124.2)
|
|
48.7
|
|
89.1
|
|
(45.3)
|
Sales and general
expenses
|
617.9
|
|
800.9
|
|
(22.8)
|
|
2,439.3
|
|
3,484.2
|
|
(30.0)
|
Interest and other
charges
|
(0.2)
|
|
—
|
|
(141.9)
|
|
(1.0)
|
|
0.4
|
|
N/M
|
Operating
expenses
|
616.6
|
|
805.3
|
|
(23.4)
|
|
2,487.0
|
|
3,573.8
|
|
(30.4)
|
Segment pretax
operating income
|
$ 43.9
|
|
$ 45.0
|
|
(2.5) %
|
|
$
133.5
|
|
$
308.8
|
|
(56.7) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio:
|
|
|
|
|
|
|
|
|
|
|
|
Current
year
|
3.3 %
|
|
3.8 %
|
|
|
|
3.7 %
|
|
3.6 %
|
|
|
Prior years
|
(3.5)
|
|
(3.3)
|
|
|
|
(1.8)
|
|
(1.3)
|
|
|
Total
|
(0.2)
|
|
0.5
|
|
|
|
1.9
|
|
2.3
|
|
|
Expense
ratio
|
95.7
|
|
95.7
|
|
|
|
95.2
|
|
90.9
|
|
|
Combined
ratio
|
95.5 %
|
|
96.2 %
|
|
|
|
97.1 %
|
|
93.2 %
|
|
|
Title Insurance net premiums and fees earned decreased by 22.8%
and 33.2% for the quarter and full year 2023, respectively. Both
directly produced and agency produced revenues declined, driven by
a continued drop in mortgage originations attributable to higher
mortgage interest rates. Commercial premiums decreased
commensurately, and represent 21% and 22% of premiums earned in the
fourth quarter and full year of 2023, respectively. Net investment
income increased in both 2023 periods, reflecting higher investment
yields earned partially offset by a lower invested asset base.
The Title Insurance loss ratio decreased in both periods
reflecting higher levels of favorable development as a percentage
of premium.
Expense ratios reflect the impact of a $17.2 state sales tax assessment paid and
expensed in the fourth quarter of 2022 and subsequently recovered
in early 2023. The assessment increased the 2022 fourth quarter and
full year expense ratio by 2.1 and 0.5 percentage points,
respectively, and its recovery reduced the 2023 full year expense
ratio by 0.7 percentage points. Excluding the impacts of the sales
tax assessment, both period's expense ratios remain elevated,
generally reflecting lower directly produced revenues that carry
higher fixed expenses.
Together, these factors produced lower pretax operating income
for the periods reported.
|
RFIG Run-off Segment
Operating Results - Mortgage Insurance
|
|
|
Quarters Ended December
31,
|
|
Years Ended December
31,
|
|
2023
|
|
2022
|
|
% Change
|
|
2023
|
|
2022
|
|
% Change
|
Net premiums
earned
|
$
3.6
|
|
$
5.0
|
|
(28.3) %
|
|
$ 16.4
|
|
$ 23.2
|
|
(29.2) %
|
Net investment
income
|
1.9
|
|
1.5
|
|
26.5
|
|
6.3
|
|
6.7
|
|
(6.8)
|
Loss and loss
adjustment expenses
|
0.2
|
|
—
|
|
N/M
|
|
(11.0)
|
|
(17.5)
|
|
37.2
|
Pretax operating
income
|
$
2.3
|
|
$
3.9
|
|
(39.0) %
|
|
$ 21.2
|
|
$ 35.2
|
|
(39.9) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio:
|
|
|
|
|
|
|
|
|
|
|
|
Current
year
|
113.4 %
|
|
107.6 %
|
|
|
|
91.4 %
|
|
80.8 %
|
|
|
Prior years
|
(105.4)
|
|
(108.2)
|
|
|
|
(158.3)
|
|
(156.3)
|
|
|
Total
|
8.0
|
|
(0.6)
|
|
|
|
(66.9)
|
|
(75.5)
|
|
|
Expense
ratio
|
80.1
|
|
54.0
|
|
|
|
76.5
|
|
53.0
|
|
|
Combined
ratio
|
88.1 %
|
|
53.4 %
|
|
|
|
9.6 %
|
|
(22.5) %
|
|
|
Given the volatility inherent with a lack of scale, RFIG Run-off
is susceptible to produce highly variable results which have
recently benefited significantly from favorable loss reserve
development. Pretax operating income reflects the continuing drop
in net earned premiums offset by favorable loss reserve development
from higher levels of cure rates on reported defaults.
Extraordinary dividends of $25.0 and
$110.0 were paid to the parent
company during the fourth quarter and full year 2023,
respectively.
During the fourth quarter, a definitive agreement was reached to
sell the mortgage insurance business to Arch U.S. MI Holdings Inc.,
a subsidiary of Arch Capital Group Ltd. The transaction is subject
to regulatory approval and is expected to close in the first half
of 2024. An estimated loss on the pending sale, inclusive of
transaction costs, totaling $45.6 was
reflected as a realized investment loss during the fourth
quarter.
|
Corporate &
Other Operating Results
|
|
|
|
Quarters Ended December
31,
|
|
Years Ended December
31,
|
|
|
2023
|
|
2022
|
|
% Change
|
|
2023
|
|
2022
|
|
% Change
|
Net life and accident
premiums earned
|
|
$
2.8
|
|
$
2.3
|
|
22.1 %
|
|
$
9.1
|
|
$
9.6
|
|
(4.9) %
|
Net investment
income
|
|
13.5
|
|
11.9
|
|
13.8
|
|
52.2
|
|
46.8
|
|
11.5
|
Other operating
income
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Operating
revenues
|
|
16.5
|
|
14.3
|
|
15.3
|
|
61.4
|
|
56.5
|
|
8.7
|
Benefits and loss and
loss adjustment expenses
|
|
1.6
|
|
0.9
|
|
71.6
|
|
5.5
|
|
4.0
|
|
36.7
|
Insurance
expenses
|
|
0.9
|
|
0.8
|
|
5.6
|
|
3.5
|
|
3.3
|
|
5.7
|
Corporate, interest and
other expenses - net
|
|
17.8
|
|
2.4
|
|
N/M
|
|
56.6
|
|
24.4
|
|
131.7
|
Operating
expenses
|
|
20.4
|
|
4.2
|
|
N/M
|
|
65.7
|
|
31.8
|
|
106.3
|
Corporate & other
pretax operating income (loss)
|
|
$
(3.9)
|
|
$
10.0
|
|
(139.6) %
|
|
$
(4.2)
|
|
$
24.6
|
|
(117.3) %
|
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. Investment income in
both periods reflects a higher investment yield earned partially
offset by a lower invested asset base attributable to the return of
capital to shareholders. Corporate net operating expenses in both
periods reflect higher personnel related costs. In addition, full
year 2023 expenses include a one-time charge of $10.7 relating to changes in the structure of a
company benefit plan recorded in the third quarter.
|
Summary Consolidated
Balance Sheet
|
|
|
December 31,
|
|
December 31,
|
|
2023
|
|
2022
|
Assets:
|
|
|
|
Cash and fixed income
securities
|
$
13,375.4
|
|
$
12,688.7
|
Equity
securities
|
2,660.8
|
|
3,220.9
|
Other invested
assets
|
151.3
|
|
138.0
|
Cash and invested
assets
|
16,187.6
|
|
16,047.7
|
Accounts and notes
receivable
|
2,201.4
|
|
1,927.5
|
Federal income tax
assets
|
21.8
|
|
15.7
|
Reinsurance balances
recoverable
|
5,951.4
|
|
5,588.0
|
Deferred policy
acquisition costs
|
417.8
|
|
382.5
|
Other assets
|
1,721.2
|
|
1,197.9
|
Total
assets
|
$
26,501.4
|
|
$
25,159.4
|
|
|
|
|
Liabilities and
Shareholders' Equity:
|
|
|
|
Policy
liabilities
|
$
3,193.1
|
|
$
2,970.0
|
Loss and loss
adjustment expense reserves
|
12,538.2
|
|
12,221.5
|
Federal income tax
liabilities
|
105.6
|
|
42.7
|
Reinsurance balances
and funds held
|
1,380.9
|
|
1,079.4
|
Debt
|
1,591.2
|
|
1,597.0
|
Other
liabilities
|
1,281.4
|
|
1,075.3
|
Total
liabilities
|
20,090.7
|
|
18,986.2
|
Shareholders'
equity
|
6,410.7
|
|
6,173.2
|
Total liabilities and
shareholders' equity
|
$
26,501.4
|
|
$
25,159.4
|
|
Cash, Invested
Assets, and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|
December 31,
|
|
Dec. '23/
|
|
Dec. '22 /
|
|
|
2023
|
|
2022
|
|
2021
|
|
Dec. '22
|
|
Dec. '21
|
Cash and invested
assets:
|
|
|
|
|
|
|
|
|
|
|
Fixed income
securities, cash and other invested assets
|
$
13,526.7
|
|
$
12,826.7
|
|
$
11,516.1
|
|
5.5 %
|
|
11.4 %
|
|
Equity
securities
|
2,660.8
|
|
3,220.9
|
|
5,302.8
|
|
(17.4)
|
|
(39.3)
|
|
Total per balance
sheet
|
$
16,187.6
|
|
$
16,047.7
|
|
$
16,818.9
|
|
0.9 %
|
|
(4.6) %
|
|
Total at cost for
all
|
$
15,164.4
|
|
$
15,365.7
|
|
$
15,045.8
|
|
(1.3) %
|
|
2.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Composition of
shareholders' equity per share:
|
|
|
|
|
|
|
|
|
|
|
Equity before items
below
|
$
20.51
|
|
$
19.43
|
|
$
18.51
|
|
5.6 %
|
|
5.0 %
|
|
Unrealized investment
gains (losses) and other
|
|
|
|
|
|
|
|
|
|
|
|
accumulated
comprehensive income (loss)
|
2.80
|
|
1.64
|
|
4.26
|
|
|
|
|
|
|
|
Total
|
$
23.31
|
|
$
21.07
|
|
$
22.77
|
|
10.6 %
|
|
(7.5) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segmented
composition of
|
|
|
|
|
|
|
|
|
|
shareholders'
equity per share:
|
|
|
|
|
|
|
|
|
|
|
Excluding RFIG run-off
segment
|
$
22.72
|
|
$
20.17
|
|
$
21.48
|
|
12.6 %
|
|
(6.1) %
|
|
RFIG run-off
segment
|
0.59
|
|
0.90
|
|
1.29
|
|
|
|
|
|
|
|
Consolidated
total
|
$
23.31
|
|
$
21.07
|
|
$
22.77
|
|
10.6 %
|
|
(7.5) %
|
As of December 31, 2023, the consolidated investment
portfolio reflected an allocation of approximately 83% to fixed
income (bonds and notes) and short-term investments, and 17% to
equity securities (common stock). Our investment management process
remains focused on retaining quality investments that produce
consistent streams of investment income, and we continue to
evaluate the investment portfolio mix in light of the current
interest rate environment. 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. Our equity portfolio
consists of high-quality common stocks of U.S. companies with
long-term records of reasonable earnings growth and steadily
increasing dividends.
Old Republic's investment portfolio is directed in consideration
of enterprise-wide risk management objectives, intended to ensure
solid funding of our insurance underwriting subsidiaries'
obligations to policyholders and their beneficiaries, as well as
the long-term stability of these subsidiaries' capital base. For
these reasons, the investment portfolio does not contain high risk
or illiquid asset classes and has extremely limited exposure to
collateralized debt obligations (CDO), 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.
Pursuant to our enterprise risk management guidelines and controls,
we perform regular stress tests of our investment portfolio to gain
reasonable assurance that periodic downdrafts in market prices do
not seriously undermine our financial strength and the long-term
continuity and prospects of our insurance underwriting
subsidiaries.
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
|
|
|
Quarter
|
|
|
|
|
|
|
|
Ended
|
|
|
|
|
|
Dec. 31,
|
|
Years Ended December
31,
|
|
2023
|
|
2023
|
|
2022
|
|
2021
|
Beginning
balance
|
$
21.37
|
|
$
21.07
|
|
$
22.77
|
|
$
20.76
|
Changes in
shareholders' equity:
|
|
|
|
|
|
|
|
Net income excluding
net investment gains (losses)
|
0.70
|
|
2.65
|
|
2.80
|
|
3.10
|
Net of tax realized
investment gains (losses)
|
(0.16)
|
|
(0.19)
|
|
0.17
|
|
0.02
|
Net of tax unrealized
investment gains (losses):
|
|
|
|
|
|
|
|
Fixed income
securities
|
1.48
|
|
1.31
|
|
(2.18)
|
|
(0.97)
|
Equity
securities
|
0.16
|
|
(0.34)
|
|
(0.69)
|
|
1.96
|
Total net of tax
realized and unrealized
|
|
|
|
|
|
|
|
investment gains
(losses)
|
1.48
|
|
0.78
|
|
(2.70)
|
|
1.01
|
Cash
dividends
|
(0.245)
|
|
(0.98)
|
|
(1.92)
|
|
(2.38)
|
Other
|
—
|
|
(0.21)
|
|
0.12
|
|
0.28
|
Net change
|
1.94
|
|
2.24
|
|
(1.70)
|
|
2.01
|
Ending
balance
|
$
23.31
|
|
$
23.31
|
|
$
21.07
|
|
$
22.77
|
Percentage change for
the period
|
9.1 %
|
|
10.6 %
|
|
(7.5) %
|
|
9.7 %
|
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 loss 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 insurance underwriting
subsidiaries' 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 loss 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 fourth quarter 2023 performance and
to review major operating trends and business developments. The
call can be accessed live on Old Republic's website at
www.oldrepublic.com or by dialing 1-888-510-2411, passcode 4060501.
Interested parties may also listen to a replay of the call through
February 1, 2024 by dialing
1-800-770-2030, passcode 4060501, or by accessing it on Old
Republic International's website.
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 CEO
|
Analysts/Investors: Joe
Calabrese 212/827-3772
|
View original
content:https://www.prnewswire.com/news-releases/old-republic-reports-results-for-the-fourth-quarter-and-full-year-2023-302044149.html
SOURCE Old Republic International Corporation