OLD REPUBLIC INTERNATIONAL CORP
For the period ended Dec 31, 2024. Filed Feb 27, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 27, 2025
ORI$39.61-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-28.
0000074260-24-000021
Item 7. Management Analysis of Financial Position and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-27.
0000074260-25-000042
Item 7. Management Analysis of Financial Position and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 38 previous paragraphs and 188 current paragraphs.
12 unchanged; 15 reworded; 158 added; 10 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 7 previous and 29 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (158)
Current report
•Net income per diluted share of $3.24, compared to $2.10 last year.
Current report
•Net operating income (net income excluding investment gains or losses) per diluted share of $3.03, compared to $2.63 last year.
Current report
•Consolidated pretax operating income of $999.8, compared to $938.4 last year.
Current report
•Consolidated net premiums and fees earned increased 9.0%.
Current report
•Net investment income increased 16.4%.
Current report
•Consolidated combined ratio of 93.9%, compared to 92.6% last year.
Current report
•Favorable loss reserve development of 2.2 points, compared to 4.6 points last year.
Current report
•Book value per share of $22.84, which inclusive of dividends declared (including a special cash dividend of $2.00 per share), was up 11.1% since year-end 2023.
Current report
(a) Includes insurance-related services.
Current report
Specialty Insurance Segment Operating Results
Current report
Specialty Insurance net premiums earned increased 13.5% in 2024, driven by a combination of premium rate increases, high renewal retention ratios, and new business production. The growth includes contributions from recently established insurance underwriting subsidiaries, including Old Republic Accident & Health's first premium production coming in the fourth quarter. Premium growth was most pronounced within commercial auto, property, and general liability. Public directors and officers (D&O) and transactional risk premiums (included within financial indemnity) declined throughout the year, largely due to market conditions and exiting the transactional risk business that produced $19.4 of net premiums earned in 2024. Commercial auto, general liability, and property continued to achieve strong rate increases, while rate declines continued in public D&O and workers' compensation.
Current report
Overall, the 2024 loss ratios for Specialty Insurance reflect favorable prior year loss reserve development coming predominately from workers' compensation, commercial auto, and property coverages, however to a lesser degree than the levels experienced in 2023 and 2022. The 2024 favorable development was partially offset by unfavorable development from general liability and transactional risk. The current year loss ratio improved due primarily to favorable trends in workers' compensation and commercial auto. The expense ratios are in line with expectations and generally reflect the benefit from scale, offset by costs incurred to start-up new underwriting subsidiaries and invest in information technology.
Current report
Title Insurance net premiums and fees earned increased by 2.2% in 2024. Directly produced revenues grew in 2024, while agency produced revenues, which are reported on a lag, came in relatively flat for 2024. Commercial premiums were generally flat for 2024, and represent approximately 22% of net premiums earned in 2024 and 2023.
Current report
The loss ratios for Title Insurance reflect relatively consistent levels of favorable prior year loss reserve development in 2024 and 2023. For 2024, the current year loss ratio improved, driven by favorable claim trends.
Current report
Investments
Current report
As of December 31, 2024, the consolidated investment portfolio reflected an allocation of approximately 84% to fixed income securities (bonds and notes) and short-term investments, and 16% to equity securities (common and preferred stock). The investment management process remains focused on retaining quality investments that produce consistent streams of investment income, while monitoring concentration limits among the insurance underwriting subsidiaries. The realized investment gains recognized during 2024 are reflective of these initiatives, along with tax planning and interest rate environment considerations. The fixed income portfolio continues to be the anchor for the insurance underwriting subsidiaries' obligations. The maturities of the fixed income securities are matched to the expected liabilities for claim payment obligations to policyholders and their beneficiaries. The equity portfolio consists of high-quality common stocks of U.S. companies with long-term records of reasonable earnings growth and steadily increasing dividends.
Current report
Old Republic’s investment portfolio is focused on ensuring solid funding of the insurance underwriting subsidiaries' obligations to policyholders and their beneficiaries, as well as the long-term stability of the subsidiaries’ capital base. For these reasons, the investment portfolio has extremely limited exposure to high risk or illiquid asset classes such as limited partnerships, derivatives, hedge funds or private equity investments. In addition, the Company does not engage in hedging or securities lending transactions, nor does it invest in securities with values predicated on non-regulated financial instruments with unfunded counter-party risk attributes. Old Republic performs regular stress tests of the investment portfolio to gain reasonable assurance that periodic downdrafts in market prices do not undermine the Company's financial strength.
Current report
Shareholders' Equity Per Share
Current report
Changes in shareholders' equity per share are reflected in the following table. As shown, these changes resulted mostly from net operating income, realized and unrealized investment gains (losses), and dividends to shareholders declared during the year.
Current report
Total capital returned to shareholders during 2024 was $1,708, comprised of $766 in dividends, and $942 in share repurchases. Changes in shareholders' equity per share for 2024 and 2022 include the impact of special cash dividends of $2.00 per share in December 2024 (paid on January 15, 2025) and $1.00 per share in August 2022 (paid on September 15, 2022).
Current report
DETAILED MANAGEMENT ANALYSIS
Current report
This section of the Management Analysis of Financial Position and Results of Operations is additive to and should be read in conjunction with the Executive Summary which precedes it.
Current report
RESULTS OF OPERATIONS
Current report
Consolidated Overview
Current report
Premiums & Fees
Current report
The major sources of Old Republic's consolidated net earned premiums and fees for the periods shown were as follows:
Current report
Net Investment Income
Current report
The following tables reflect the invested asset bases as of the indicated dates, the investment income earned and resulting yields on such assets. Because the Company can exercise little control over fair values, management evaluates yields on the basis of investment income earned in relation to the book value of the underlying invested assets.
Current report
Net investment income increased 16.4% in 2024 and 25.8% in 2023, driven by higher investment yields. During 2024, the Company reinvested in corporate fixed income securities with an average yield of 4.8% compared to an average book yield on disposals of 3.5%.
Current report
Loss and Loss Adjustment Expenses
Current report
Total loss costs are affected by the amount of paid claims and the adequacy of reserve estimates established for current and prior years' claim occurrences at each balance sheet date.
Current report
The following table shows a breakdown of gross and net of reinsurance loss reserve estimates for major types of insurance coverages as of December 31, 2024 and 2023:
Current report
A summary of changes in aggregate reserves for loss and loss adjustment expenses is included in Note 5 in the Notes to Consolidated Financial Statements.
Current report
The percentage of net loss and loss adjustment expenses incurred as a percentage of premiums and related fee revenues of the Company's two reportable segments and for its consolidated operations were as follows:
Current report
The increases in the consolidated loss and loss adjustment expense ratios for the periods presented above are impacted by the shift in mix with Specialty Insurance contributing more to the total in more recent periods. Additionally, the 2024 ratios were also affected by improving current year loss ratios that were more than offset by lower levels of favorable prior year loss reserve development within Specialty Insurance.
Current report
For the three most recent calendar years, the above table indicates that the one-year development of consolidated reserves at the beginning of each year produced favorable developments in 2024, 2023, and 2022, which on average decreased the consolidated loss ratio by 3.5 percentage points. Specialty Insurance experienced favorable development in 2024, but to a lesser degree than the high levels experienced in 2023 and 2022. Favorable development in Specialty Insurance continues within workers’ compensation, commercial auto, and property lines of coverage. Title Insurance experienced relatively consistent levels of favorable development as a percentage of net premiums and fees earned in 2024 compared to 2023.
Current report
Management believes that its overall reserving practices have been consistently applied over many years, and that its aggregate net reserves have generally resulted in reasonable approximations of the ultimate net costs of losses incurred. Management maintains hold periods that vary primarily by line of business. However, reserves may be increased within a holding period if the initial expected loss ratio may be inadequate. Conversely, in certain cases, reserves may be released within a holding period when the redundancies are expected to exceed the upper end of the actuarially determined range, or if an increase to an initial expected loss ratio within a hold period is subsequently deemed to be excessive. No representation is made nor is any guaranty given that ultimate net losses and related costs will not develop in future years to be significantly greater or lower than currently established reserve estimates. In management's opinion, such changes in net losses and related costs are not likely to have a material effect on the Company's consolidated financial position, although it could materially affect its consolidated results of operations for any one annual or interim reporting period. See further discussion in this Annual Report on Form 10-K under Item 1A - Risk Factors.
Current report
Underwriting Acquisition and Other Expenses
Current report
The following table sets forth the expense ratios registered by each reportable segment and in consolidation for the periods shown:
Current report
Variations in the Company's consolidated expense ratios reflect a continually changing mix of coverages sold and costs of producing business. To a significant degree, expense ratios for both the Specialty and Title Insurance segments are mostly reflective of variable costs, such as commissions or similar charges, that rise or decline along with corresponding changes in premium and fee income and can fluctuate with line of coverage mix. General operating expenses are routinely subject to timing as well as investments in business expansion and information technology. The decreases in the consolidated expense ratios for the periods presented in the table above are impacted by the shift in mix with Specialty Insurance contributing more to the total. The ratios also reflect the benefit from scale, offset by costs incurred to start-up new underwriting subsidiaries and invest in information technology.
Showing the first 40 of 158 passages. Open the source sections for the rest.
Removed paragraphs (10)
Previous report
The Company reported pretax income, excluding investment losses (pretax operating income), of $938.4 for 2023. Title Insurance pretax operating income declined for the full year, while General Insurance pretax operating income was higher.
Previous report
•The consolidated combined ratio was 92.6%.
Previous report
•Favorable loss reserve development improved the combined ratio by 4.6 percentage points.
Previous report
•Book value per share grew to $23.31, a 15.3% increase, inclusive of dividends.
Previous report
General Insurance Segment Operating Results
Previous report
The reported loss ratio for General Insurance remained consistent in 2023 as compared to the prior year. Favorable development came predominantly from workers' compensation and commercial auto, partially offset by unfavorable development within general liability. 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 a shift in the line of coverage mix toward lines with lower current period loss ratios and higher expense ratios.
Previous report
The Title Insurance loss ratio decreased reflecting higher levels of favorable development as a percentage of premium.
Previous report
RFIG Run-off Segment Operating Results - Mortgage Insurance
Previous report
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 $110.0 were paid to the parent company during 2023.
Previous report
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. See Note 2 in the Notes to Consolidated Financial Statements for further discussion.
Reworded paragraphs (15)
Previous wording
This management analysis of financial position and results of operations pertains to the consolidated accounts of Old Republic International Corporation ("Old Republic", "ORI", or "the Company"). The Company conducts its operations through a number of regulated insurance company subsidiaries organized into three segments: General Insurance (property and liability insurance), Title Insurance, and Republic Financial Indemnity Group (RFIG) Run-off. On November 11, 2023, a definitive agreement was reached to sell the RFIG Run-off mortgage insurance business to Arch U.S. MI Holdings Inc., a subsidiary of Arch Capital Group Ltd., with the sale expected to close in the first half of 2024 (see Note 2 in the Notes to Consolidated Financial Statements for further discussion). A small life and accident insurance business, accounting for 0.2% of consolidated operating revenues for the year ended December 31, 2023, and 0.4% of consolidated assets as of that date, is included within the Corporate & Other caption of this report.
Current wording
This management analysis of financial position and results of operations pertains to the consolidated accounts of Old Republic International Corporation ("Old Republic", "ORI", or "the Company"). The Company conducts its operations through a number of regulated insurance company subsidiaries organized into two reportable segments: Specialty Insurance (formerly referred to as General Insurance) and Title Insurance. Effective as of year-end 2024, the Company renamed its reportable segment formerly referred to as "General Insurance" to "Specialty Insurance." Management believes this name more appropriately reflects Old Republic's specialty P&C strategy, with 17 underwriting businesses focused on unique niche markets with specialized distribution, underwriting, claims, and risk control models. The Republic Financial Indemnity Group (RFIG) Run-off business through the effective date of its sale of May 31, 2024 (see Note 2 in the Notes to Consolidated Financial Statements for further discussion) and a small life and accident insurance business together accounting for 0.3% of consolidated operating revenues for the year ended December 31, 2024, and 0.5% of consolidated assets as of that date, are included within the Corporate & Other caption of this report.
Previous wording
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. The Company also cannot 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 its business with a primary focus on achieving favorable underwriting results over cycles, and on maintaining a sound financial condition to support its subsidiaries' long-term obligations to policyholders and their beneficiaries. To achieve these objectives, adherence to insurance risk management principles is stressed, and asset diversification and quality are emphasized. In addition, management engages in an ongoing assessment of operating risks, such as cybersecurity risks, that could adversely affect the Company's business and reputation.
Current wording
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. The Company also cannot 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 its business with a primary focus on achieving favorable underwriting results over cycles, and on maintaining a sound financial condition to support its subsidiaries' long-term obligations to policyholders and their beneficiaries. To achieve these objectives, adherence to insurance risk management principles is stressed, and asset diversification and quality are emphasized. In addition, management engages in an ongoing assessment of operating risks that could adversely affect the Company's business and reputation.
Previous wording
In light of the above factors, 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 premium rate changes and subsequent underwriting results to be reflected in financial statements, and for reserved loss costs to be quantified with greater certainty.
Current wording
In light of the above factors, the Company is managed for the long run and with little regard to 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 premium rate changes and subsequent underwriting results to be reflected in financial statements, and for reserved loss costs to be quantified with greater certainty.
Previous wording
This management analysis should be read in conjunction with the consolidated financial statements and the footnotes appended to them.
Current wording
This management analysis should be read in conjunction with the consolidated financial statements and the accompanying footnotes.
Previous wording
Old Republic International Corporation reported the following consolidated results:
Current wording
Old Republic International Corporation reported the following consolidated results for the year ended December 31, 2024:
Previous wording
•Total capital returned to shareholders was $806, comprised of $276 in dividends, and $530 of share repurchases.
Current wording
•Total capital returned to shareholders of $1,708.
Previous wording
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.
Current wording
In management's opinion, the focus on income excluding investment gains (losses), also described herein as 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.
Previous wording
•Net investment income increased 25.8% driven by higher investment yields earned.
Current wording
The net investment income increase was primarily driven by higher investment yields earned, along with contributions from a higher invested asset base.
Previous wording
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.
Current wording
Together, these factors produced highly profitable combined ratios and strong pretax operating income for 2024. For Specialty 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.
Previous wording
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 and taken into income in 2023. The assessment increased the 2022 expense ratio by 0.5 percentage points, and its recovery reduced the 2023 expense ratio by 0.7 percentage points. Excluding the impacts of the sales tax assessment, the expense ratio remain elevated, generally reflecting lower directly produced revenues that carry higher fixed expenses.
Current wording
Title Insurance 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 and taken into income in 2023. The assessment increased the 2022 expense ratio by 0.5 percentage points, and its recovery reduced the 2023 expense ratio by 0.7 percentage points. Excluding the impacts of the sales tax assessment, the expense ratios improved as a result of expense management and scale, most notably in the segment's direct operations.
Previous wording
Together, these factors produced lower pretax operating income for the periods reported.
Current wording
Together, these factors produced higher pretax operating income for 2024.
Previous wording
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 2023 and 2022 reflects the impact of higher investment yields earned. Whereas the average invested asset base was lower in 2023 due to the return of capital to shareholders, the 2022 invested asset base was higher, reflecting the proceeds from the $650 debt issuance in late 2021. Corporate net operating expenses in 2023 reflect higher personnel related costs and a one-time charge of $10.7 relating to changes in the structure of a company benefit plan. Interest expense in both 2023 and 2022 increased over 2021 due to the aforementioned debt issuance.
Current wording
Corporate & Other includes the RFIG Run-off business through the effective date of its sale of May 31, 2024, a small life and accident insurance business, the parent holding company, several internal corporate services subsidiaries, and consolidation elimination adjustments. Corporate & Other tends to produce highly variable results stemming from volatility inherent in the lack of scale. Net investment income in 2024 reflects the impact of higher investment yields earned, offset slightly by a declining invested asset base which was impacted by share repurchase activity, the sale of the RFIG Run-off business, and the timing of debt issuance and repayment activity. Corporate expenses in 2024 reflect an increase in interest costs associated with the 5.750% Senior Notes issued in March 2024. In addition, 2023 expenses include a one-time charge of $10.7 relating to changes in the structure of a company benefit plan.
Previous wording
•Consolidated net premiums and fees earned decreased 12.6%. The continued decline in Title Insurance net premiums and fees earned was partially offset by strong growth in General Insurance.
Current wording
For 2024, consolidated net premiums and fees earned increased 9.0%, resulting from strong growth in Specialty Insurance, and growth in Title Insurance. For 2023, consolidated net premiums and fees earned decreased 12.6% due to a decline in Title Insurance net premiums and fees partially offset by strong growth in Specialty Insurance.
Previous wording
General Insurance net premiums earned increased 8.2% in 2023, 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 for the year, driven largely by higher investment yields earned, and to a lesser extent, a higher invested asset base.
Current wording
Specialty Insurance net premiums earned increased 8.2% for 2023, also driven by a combination of premium rate increases, high renewal retention ratios, and new business production. 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 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.
Previous wording
Title Insurance net premiums and fees earned decreased by 33.2% in 2023. 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 22% of premiums earned in 2023. Net investment income increased, reflecting higher investment yields earned partially offset by a lower invested asset base.
Current wording
Title Insurance net premiums and fees earned increased by 2.2% in 2024. Directly produced revenues grew in 2024, while agency produced revenues, which are reported on a lag, came in relatively flat for 2024. Commercial premiums were generally flat for 2024, and represent approximately 22% of premiums earned in 2024 and 2023. For 2023, net premiums and fees earned declined by 33.2%, driven by a continued drop in mortgage originations attributable to higher mortgage interest rates.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Net investment income increased, reflecting higher investment yields earned partially offset by a lower invested asset base.
Current report — wording carried from elsewhere
The Company's investment policies are designed to produce a stable source of income from interest and dividends, support the protection of capital, and provide sufficient liquidity to meet insurance underwriting and other obligations as they become payable in the future.
Current report — wording carried from elsewhere
Sales and general expenses for 2023 were impacted by the recovery of a $17.2 state sales tax assessment paid and expensed in the fourth quarter of 2022. The assessment increased the 2022 expense ratio by 0.5 percentage points and its recovery reduced the 2023 expense ratio by 0.7 percentage points. Excluding the impact of the sales tax assessment on the 2023 expense ratio, the expense ratio for 2024 improved as a result of expense management and scale, most notably in the segment's direct operations. The 2023 expense ratio also reflects the impact of lower directly produced revenues that carry higher expenses.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Results for the year ended December 31, 2023 are summarized as follows: