OLD REPUBLIC INTERNATIONAL CORP

OLD REPUBLIC INTERNATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

($ in Millions, Except Per Share Data)

Old Republic International Corporation is a Chicago-based holding company engaged in the business of insurance underwriting and related services. It conducts its operations primarily through a number of regulated insurance company subsidiaries organized into two segments: Specialty Insurance and Title Insurance. References herein to such segments apply to the Company's subsidiaries engaged in these respective segments of business. The results of the Republic Financial Indemnity Group (RFIG) Run-off business, previously a reportable segment, are deemed immaterial and reflected within the Corporate & Other caption of this report through the effective date of its sale of May 31, 2024, along with the results of a small life and accident insurance business. Prior period amounts have been reclassified whenever appropriate to reflect the change in reportable segments. "Old Republic" or "the Company" refers to Old Republic International Corporation, its subsidiaries, and any variable interest entities that meet the requirements for consolidation, as the context requires.

Note 1 -Summary of Significant Accounting Policies

Accounting Principles - The accompanying consolidated financial statements have been prepared in conformity with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) of accounting principles generally accepted in the United States of America (GAAP). These interim financial statements should be read in conjunction with these notes and those included in the Company's 2024 Annual Report on Form 10-K incorporated herein by reference. The financial accounting and reporting process relies on estimates and on the exercise of judgment. In the opinion of management all adjustments consisting only of normal recurring accruals necessary for a fair presentation of interim periods' results and financial condition have been recorded. Pertinent accounting and disclosure pronouncements issued by the FASB are adopted by the Company as they become effective.

Statement Presentation - Amounts shown in the consolidated financial statements and applicable notes are stated (except as otherwise indicated and as to per share data) in millions, which amounts may not add to totals shown due to truncation. Prior period amounts have been reclassified whenever appropriate to conform to the most current presentation.

Accounting Standards Pending Adoption- In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures which will require further disaggregation of existing disclosures for the effective tax rate reconciliation and income taxes paid. The amendments will require entities to disclose:

•A tabular effective tax rate reconciliation, broken out into specific categories with certain reconciling items above a 5% threshold further broken out by nature and/or jurisdiction, and

•Income taxes paid (net of refunds received), broken out between federal, state, and foreign, and net amounts paid to an individual jurisdiction that exceed 5% of the total.

The requirements are effective for fiscal years beginning after December 15, 2024. The Company plans to adopt these annual disclosure-only requirements with the filing of its 2025 Annual Report on Form 10-K.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses which will require additional disclosure as to the nature of expenses included in the income statement. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement, such as employee compensation, depreciation, and intangible asset amortization. The guidance does not change the requirements for the presentation of expenses on the face of the income statement.

The requirements are effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027 and will be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of this disclosure-only guidance.

Investments - The Company classifies its fixed income securities as those it either (1) has the intent and ability to hold until maturity, (2) has available for sale, or (3) has the intention of trading. The Company's fixed income portfolio is classified as available for sale as of June 30, 2025 and December 31, 2024.

Fixed income securities classified as available for sale are reported at fair value with changes in such values, net of deferred income taxes, reflected directly in shareholders' equity. Equity securities are reported at fair value with changes in such values reflected as unrealized investment gains (losses) in the consolidated statements of income. Fair values are based on quoted market prices or estimates using values obtained from recognized independent pricing services.

The status and fair value changes of fixed income securities are reviewed at least once per quarter to assess whether a decline in fair value of a security below its cost basis is the result of a credit loss. Credit losses are recorded through an allowance with the corresponding charge to realized investment gains (losses). If the Company intends to sell or is more likely than not required to sell a security, the asset is written down to fair value directly through realized investment gains (losses).

Investment income is reported net of allocated expenses and includes appropriate adjustments for amortization of premium and accretion of discount on fixed income securities acquired at other than par value. Dividends on equity securities are credited to income on the ex-dividend date. At June 30, 2025, the Company and its subsidiaries do not have significant amounts of non-income producing securities.

Investment gains and losses, which result from sales or write-downs of securities, are reflected as revenues in the income statement and are determined on the basis of amortized cost at the date of sale for fixed income securities, and cost for equity securities, with such bases applying to the specific securities sold.

Revenue Recognition - Pursuant to GAAP applicable to the insurance industry, revenues are recognized as follows:

Substantially all Specialty Insurance premiums pertain to annual policies and are reflected in income on a pro-rata basis in association with the related loss and loss adjustment expenses.

Title Insurance premium and fee revenues stemming from the Company's direct operations (which include branch offices of its title insurers and wholly-owned agency subsidiaries) are generally recognized as income at the transaction closing date which approximates the policy effective date. Fee income related to escrow and other closing services is recognized when the related services have been performed and completed. The remaining Title Insurance premium and fee revenues are produced by independent title agents. Rather than making estimates that could be subject to significant variance from actual premium and fee production, the Company recognizes revenues from those sources upon receipt. Such receipts can result in up to a four-month lag relative to the effective date of the underlying title policy, and are offset concurrently by production expenses and loss reserve provisions.

Loss and Loss Adjustment Expense Reserves - The establishment of loss reserves by the Company's insurance subsidiaries is a reasonably complex and dynamic process influenced by a large variety of factors. These factors principally include past experience applicable to the anticipated costs of various types of claims; continually evolving and changing legal theories from the judicial system; recurring accounting, statistical, and actuarial studies; the professional experience and expertise of the Company's claim departments' personnel, attorneys, and independent claim adjusters; ongoing changes in claim frequency or severity patterns such as those caused by natural disasters, illnesses, accidents, and work-related injuries; and changes in general and industry-specific economic conditions. Consequently, the reserves established are a reflection of: the opinions of a large number of persons; the application and interpretation of historical precedent and trends; expectations as to future developments; and management's judgment in interpreting all such factors. At any point in time, the Company is exposed to the possibility of higher or lower than anticipated loss costs due to all of these factors, and to the evolution, interpretation, and expansion of tort law, as well as the effects of unexpected jury verdicts.

All reserves are therefore based on estimates which are periodically reviewed and evaluated in light of emerging loss experience and changing circumstances. The resulting changes in estimates are recorded in operations of the periods during which they are made. Return and additional premiums and policyholders' dividends, all of which tend to be affected by development of losses in future years, may offset, in whole or in part, favorable or unfavorable loss developments for certain coverages such as workers' compensation, portions of which are written under loss sharing programs that provide for such adjustments. 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. However, 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.

The Company's accounting policy regarding the establishment of loss reserve estimates is described in Note 1 in the Notes to Consolidated Financial Statements included in Old Republic's 2024 Annual Report on Form 10-K.

Employee Benefit Plans- The Company has a closed pension plan (the Plan) for certain employees under which benefits were frozen as of December 31, 2013. The funded status of the Plan is recognized as a net pension asset or liability, as applicable, with offsetting entries reflected as a component of shareholders' equity in accumulated other comprehensive income, net of deferred taxes. The Company also provides long-term incentive awards to certain employees.

Additional Paid-in Capital- Additional paid-in capital is comprised of the cumulative cash received by the Company in excess of the par value associated with shares issued, less the cumulative cash paid in excess of the par value of shares repurchased.

Treasury Stock- Treasury stock represents the Company’s previously issued shares of stock which have been repurchased by the Company. These shares are accounted for at the cost at which they were acquired. Treasury stock is typically impacted by repurchases of shares under the Board of Directors approved share repurchase programs.

Common Share Repurchases - Common shares acquired under share repurchase programs are generally retired, restoring them to authorized, unissued status. Repurchases above par value are first charged to additional paid-in capital, with any excess charged to retained earnings.

Variable Interest Entities - A variable interest entity (VIE) is a legal entity that:

•Lacks sufficient equity at risk to finance its own activities without additional subordinated financial support, or

•Is structured such that equity investors do not have the ability to make significant decisions relating to the entity's operations through voting rights, or

•Does not substantively participate in the gains and losses of the entity.

The Company determines whether it is the primary beneficiary of a VIE subject to consolidation based on a qualitative assessment of:

•The VIE’s capital structure, contractual terms, nature of operations, and purpose,

•The Company’s relative exposure to the related risks of the VIE, and

•The breadth of the Company’s decision-making ability and ability to influence activities that significantly affect the economic performance of the VIE.

Old Republic consolidates VIEs in which it is determined to have the controlling financial interest (primary beneficiary) as a result of having both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE.

Noncontrolling Interests - Noncontrolling interests represent the portions of equity not attributable, directly or indirectly, to a parent.

Note 2 -Investments

The amortized cost and fair values by type and contractual maturity of fixed income securities are shown in the following tables. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The following table reflects the Company's gross unrealized losses and fair value of fixed income securities, aggregated by category and length of time that individual securities have been in an unrealized loss position.

In the above tables, the unrealized losses on fixed income securities are deemed to reflect changes in the interest rate environment. As part of its assessment of credit losses, the Company considers whether it intends to sell or is more likely than not required to sell securities, principally in consideration of its asset and liability maturity matching objectives. There were no impairment losses in the second quarter or first six months of 2025 or 2024. The Company's allowance for credit losses was $1.6 as of both June 30, 2025 and December 31, 2024.

The following table shows cost and fair value information for equity securities:

Fair Value Measurements - Fair value is defined as the estimated price that is likely to be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date. A fair value hierarchy is established that prioritizes the sources (inputs) used to measure fair value into three broad levels:

•Level 1 inputs are based on quoted market prices in active markets;

•Level 2 observable inputs are based on corroboration with available market data; and

•Level 3 unobservable inputs are based on uncorroborated market data or a reporting entity's own assumptions.

The following is a description of the valuation methodologies and general classification used for financial instruments measured at fair value.

The Company uses quoted values and other data provided by nationally recognized independent pricing sources as inputs into its quarterly process for determining fair values of fixed income and equity securities. To validate the techniques or models used by pricing sources, the Company's review process includes, but is not limited to: (i) initial and ongoing evaluation of methodologies used by outside parties to calculate fair value; and (ii) comparisons with other sources including the fair value estimates based on current market quotations, and with independent fair value estimates provided by the independent investment custodian. Independent pricing sources obtain market quotations and actual transaction prices for securities that have quoted prices in active markets and use their own proprietary method for determining the fair value of securities that are not actively traded. In general, these methods involve the use of "matrix pricing" in which the independent pricing source uses observable market inputs including, but not limited to, investment yields, credit risks and spreads, benchmarking of like securities, broker-dealer quotes, reported trades, and sector groupings to determine a reasonable fair value.

Level 1 securities include U.S. and Canadian Treasury notes, publicly traded common stocks, mutual funds, and short-term investments in highly liquid money market instruments. Level 2 securities generally include corporate bonds, municipal bonds, and certain U.S. and Canadian government agency securities. Securities classified within Level 3 include non-publicly traded bonds and equity securities. There were no significant changes in the fair value of Level 3 assets as of June 30, 2025 and December 31, 2024.

The following tables show a summary of the fair value of financial assets segregated among the various input levels described above:

There were no transfers between Levels 1, 2, or 3 during the quarter or six months ended June 30, 2025.

The following table reflects the composition of net investment income, net realized gains or losses, and the net change in unrealized investment gains or losses for each of the periods shown.

(a) Includes interest on funds held.

For the quarter, changes in the fair value of equity securities still held at June 30, 2025 and 2024 were $0.6 and $(85.5), respectively. For the first six months, changes in the fair value of equity securities still held at June 30, 2025 and 2024 were $61.2 and $97.2, respectively.

Note 3 - Loss and Loss Adjustment Expenses

The following table shows changes in aggregate reserves for the Company's loss and loss adjustment expenses:

The 2025 change in provision for insured events of prior years reflects favorable prior year loss reserve development for all groups shown. For the first six months of 2025, Specialty Insurance experienced net favorable development from accident years 2011 through 2020. This was partially offset by unfavorable development in accident years 2021 through 2023. Net favorable development came predominantly from workers' compensation, property, and commercial auto, partially offset by unfavorable development in general liability. For Title Insurance, favorable development experienced during the first six months of 2025 occurred largely within the 2020 to 2022 years.

The 2024 change in provision for insured events of prior years reflects favorable prior year loss reserve development for all groups shown. For the first six months of 2024, Specialty Insurance experienced net favorable development predominantly from workers' compensation and commercial auto, mostly from accident years 2015 through 2020, partially offset by unfavorable development within general liability. Approximately half of the unfavorable development in general liability originated from very old accident years with the other half from 2015 through 2021.

For Title Insurance, favorable development experienced during the first six months of 2024 occurred largely within the 2019 to 2021 years.

Note 4 -Income Taxes

Tax positions taken or expected to be taken in a tax return by the Company are recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. To the best of management's knowledge there are no tax uncertainties that are expected to result in significant increases or decreases to unrecognized tax benefits within the next twelve-month period. The Company views its income tax exposures as primarily consisting of timing differences whereby the ultimate deductibility of a taxable amount is highly certain but the timing of its deductibility is uncertain. The Company classifies interest and penalties as income tax expense in the consolidated statements of income. The Company is not currently under audit by the Internal Revenue Service (IRS) and 2021 and subsequent tax years remain open.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law, enacting a broad range of tax reform affecting corporations. These include, among other provisions, the permanent extension of certain provisions initially enacted under the 2017 Tax Cuts and Jobs Act, with some modification. The provisions expected to most significantly impact the Company are:

•Immediate deduction of the cost of qualified business property, and

•Immediate deduction of domestic research and experimental expenditures.

The Company is currently evaluating the changes resulting from the tax provisions in this legislation, and does not expect it to have a material impact on the Company’s results of operations.

Note 5 -Net Income Per Share

Consolidated basic earnings per share excludes the dilutive effect of common stock equivalents and is computed by dividing net income available to common stockholders by the weighted-average number of common shares actually outstanding for the periods presented. Diluted earnings per share is similarly calculated with the inclusion of dilutive common stock equivalents. The following table provides a reconciliation of net income and the number of shares used in basic and diluted earnings per share calculations.

(a) In calculating earnings per share, accounting standards require that common shares owned by the ORI 401(k) Savings and Profit Sharing Plan that are unallocated to participants in the plan be excluded from the calculation. Such shares are issued and outstanding, and have the same voting and other rights applicable to all other common shares.

Note 6 -Credit Losses

Credit losses on financial assets measured at amortized cost, primarily the Company's reinsurance recoverables and accounts and notes receivable, are recognized based on estimated losses expected to occur over the life of the asset. The expected credit losses, and subsequent adjustment to such losses, are recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the asset presented in the consolidated balance sheets.

The Company's credit allowance was comprised of $22.5 and $22.0 related to reinsurance recoverables as of June 30, 2025 and December 31, 2024, respectively, and $31.0 and $30.2 related to accounts and notes receivable as of June 30, 2025 and December 31, 2024, respectively.

The Company's evaluation of credit losses on available for sale fixed income securities is discussed further in Note 2. The Company is not exposed to material concentrations of credit risks as to any one issuer of fixed income securities. Refer to additional discussion of credit risk in the Company's 2024 Annual Report on Form 10-K under Item 1A - Risk Factors.

Note 7 -Debt

Consolidated debt of Old Republic and its subsidiaries is summarized below:

Fair Value Measurements - The Company utilizes indicative market prices, which incorporate recent actual market transactions and current bid/ask quotations to estimate the fair value of outstanding debt, all of which is classified within Level 2 of the fair value hierarchy described in Note 2.

Note 8 -Common Stock Repurchases

On March 1, 2024, the Company announced that the Board of Directors authorized a $1.1 billion share repurchase program. Total share repurchases, inclusive of taxes and fees, under this program for the quarter and first six months of 2025 were zero and 0.7 million shares, respectively, for $25.2 (average price of $34.11). Following the close of the quarter and through July 31, 2025, the Company repurchased 0.4 additional shares for $18.0 (average price of $36.47) leaving $188.1 remaining under the current authorization.

Note 9 -Commitments and Contingent Liabilities

Legal Proceedings - Legal proceedings against the Company and its subsidiaries routinely arise in the normal course of business and usually pertain to claim and related service matters associated with insurance policies and contracts issued by its insurance subsidiaries. At June 30, 2025, the Company had no material non-claim and related service litigation exposures in its consolidated business.

Note 10 -Segment Information

The Company is engaged in the business of insurance underwriting and related services. It conducts its operations primarily through a number of regulated insurance company subsidiaries organized intotwo segments: Specialty Insurance and Title Insurance. The Company's reportable segments are strategic business units that offer different types of insurance that are managed separately because the nature of each varies from a customer, distribution, and economic perspective. The results of the RFIG Run-off business, previously a reportable segment, are deemed immaterial and reflected within the Corporate & Other caption of this report through the effective date of its sale of May 31, 2024, along with the results of a small life and accident insurance business.

The Company does not derive over 10% of its consolidated revenues from any one customer. Revenues and assets connected with foreign operations are not significant in relation to consolidated totals.

Specialty Insurance provides property and liability insurance primarily to commercial clients. Old Republic does not have a significant exposure in personal insurance coverages. Commercial auto is the largest type of coverage underwritten by Specialty Insurance, accounting for 41.7% and 41.8% of the segment's net premiums earned in the second quarter and first six months of 2025, respectively. The remaining premiums written by Specialty Insurance are derived largely from a wide variety of coverages, including workers' compensation, property, general liability, general aviation, directors' and officers' indemnity, fidelity and surety indemnities, and home and auto warranties.

Title Insurance consists primarily of the issuance of policies to real estate purchasers and investors based upon searches of the public records which contain information concerning interests in real property. The policies insure against losses arising out of defects, liens, and encumbrances affecting the insured title and not excluded or excepted from the coverage of the policy.

The accounting policies of the Specialty Insurance and Title Insurance segments are the same as those described in the summary of significant accounting policies in Note 1 in the Notes to Consolidated Financial Statements included in Old Republic's 2024 Annual Report on Form 10-K. Inter-segment income and expense, if any, is eliminated. Income taxes are calculated on the basis of the taxable income of the individual entities within each segment.

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. Although GAAP uses net income as the measure of total profitability, management uses net income excluding net investment gains (losses) (net operating income), a non-GAAP financial measure, in its evaluation of periodic and long-term results.

In management's opinion, excluding investment gains (losses) from 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 that are unrelated to the insurance operations. Net operating income, however, does not replace GAAP net income as a measure of total profitability. Furthermore, as described in more detail below, management considers the underwriting income component of segment operating income (alternatively measured via combined ratio results) to be the primary performance measure of the insurance operations within each segment.

The Company's chief operating decision maker (CODM) is its Chief Executive Officer. The CODM assesses performance for the Specialty Insurance and Title Insurance segments based primarily on underwriting results, as measured by each segment's combined ratio. The combined ratio measures the Company's overall profitability from its underwriting activities and is derived by dividing loss and loss adjustment expenses, dividends to policyholders, and underwriting, acquisition, and other expenses by total premiums and fees earned in the tables that follow.

The combined ratio is utilized to perform benchmarking analysis with respect to the Company’s internally set objectives as well as its peer group and competitors. The CODM considers these analyses to determine whether to deploy more capital to fund growth within the segments, or conversely, deploy less capital to focus on underwriting profitability improvements. Furthermore, the combined ratio is a significant component in the establishment of management’s incentive compensation.

The contributions of Old Republic's reportable segments to consolidated totals are shown in the following tables.

(a) Includes intercompany financing arrangements for which interest charges were $16.1 for the quarter ended June 30, 2025.

(b) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. There are no other segment expenses that are part of reported segment profit or loss amounts that are not included in one of the above categories.

(a) Includes intercompany financing arrangements for which interest charges were $15.6 for the quarter ended June 30, 2024.

(b) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. There are no other segment expenses that are part of reported segment profit or loss amounts that are not included in one of the above categories.

(a) Includes intercompany financing arrangements for which interest charges were $32.0 for the six months ended June 30, 2025.

(b) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. There are no other segment expenses that are part of reported segment profit or loss amounts that are not included in one of the above categories.

(a) Includes intercompany financing arrangements for which interest charges were $32.3 for the six months ended June 30, 2024.

(b) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. There are no other segment expenses that are part of reported segment profit or loss amounts that are not included in one of the above categories.

(a) Includes a small life and accident insurance business, the parent holding company, and several internal corporate services subsidiaries.

(b) Includes predominately intercompany debt and various reclassifications.

Note 11 -Subsequent Events

The Company evaluated subsequent events through the date the consolidated financial statements were issued. No subsequent events were identified that require adjustment or disclosure to the consolidated financial statements.