OLD REPUBLIC INTERNATIONAL CORP

Previous wording

Six Months Ended June 30, 2026 and 2025

Current wording

Nine Months Ended September 30, 2026 and 2025

Previous wording

This management discussion and analysis of financial condition and results of operations pertains to the consolidated accounts of Old Republic International Corporation, its subsidiaries, and any variable interest entities that meet the requirements for consolidation (collectively, "Old Republic" or "the Company"). The Company conducts its business through a number of operating companies, which utilize one or more insurance company subsidiaries to issue their policies, and is organized into two segments: Specialty Insurance and Title Insurance. A small life and accident insurance business, accounting for 0.1% of consolidated operating revenues for the six months ended June 30, 2026 and 0.3% of consolidated assets as of that date, is included within the Corporate & Other caption of this report.

Current wording

This management discussion and analysis of financial condition and results of operations pertains to the consolidated accounts of Old Republic International Corporation, its subsidiaries, and any variable interest entities that meet the requirements for consolidation (collectively, "Old Republic" or "the Company"). The Company conducts its business through a number of operating companies, which utilize one or more insurance company subsidiaries to issue their policies, and is organized into two segments: Specialty Insurance and Title Insurance. A small life and accident insurance business, accounting for 0.1% of consolidated operating revenues for the nine months ended September 30, 2026 and 0.3% of consolidated assets as of that date, is included within the Corporate & Other caption of this report.

Previous 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.

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. 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 Company's obligations. 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 section of this Form 10-Q generally includes a discussion primarily focused on quarter-to-quarter comparisons between 2026 and 2025. Detailed discussions of year-to-year comparisons between annual periods presented can be found in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's Annual Reports on Form 10-K.

Current wording

This management discussion and analysis, which should be read in conjunction with the consolidated financial statements and the accompanying footnotes, generally includes a discussion primarily focused on quarter-to-quarter comparisons between 2026 and 2025. Detailed discussions of year-to-year comparisons between annual periods presented can be found in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's Annual Reports on Form 10-K.

Previous wording

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 Company's obligations. Although Generally Accepted Accounting Principles (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.

Current wording

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

Previous wording

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.

Current wording

In management's opinion, excluding these gains and 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 sales are often highly discretionary, and changes in the value of equity securities can cause 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.

Previous wording

Old Republic International Corporation reported the following results for the second quarter 2026:

Current wording

Old Republic International Corporation reported the following results for the third quarter 2026:

Previous wording

•Net operating income per diluted share of $0.76, compared to $0.83 last year.

Current wording

•Net operating income per diluted share of $0.73, compared to $0.78 last year.

Previous wording

•Consolidated net premiums and fees earned of nearly $2.1 billion, compared to nearly $2.0 billion last year.

Current wording

•Consolidated net premiums and fees earned of nearly $2.3 billion, compared to nearly $2.1 billion last year.

Previous wording

•Consolidated combined ratio of 95.3%, compared to 93.6% last year.

Current wording

•Consolidated combined ratio of 96.1%, compared to 95.3% last year.

Previous wording

•Favorable loss reserve development of 0.1 points, compared to 2.1 points last year.

Current wording

•Favorable loss reserve development of 1.1 points, compared to 2.5 points last year.

Previous wording

•Book value per share of $25.33, inclusive of dividends declared, up 7.2% since year-end 2025.

Current wording

•Book value per share of $24.65, inclusive of dividends declared up 5.7% since year-end 2025.

Previous wording

•Total capital returned to shareholders of $137.4.

Current wording

•Total capital returned to shareholders of $190.2, including $113.8 in share repurchases.

Previous wording

The information presented in the following table highlights the most meaningful indicators of Old Republic's segmented and consolidated financial performance. The information underscores the Company's performance, as well as the sound investment of their capital and underwriting cash flows.

Current wording

The information presented in the following table highlights the most meaningful indicators of Old Republic's segmented and consolidated financial performance. The information underscores the performance of its operating companies, as well as the sound investment of their capital and underwriting cash flows.

Previous wording

The expense ratio remains elevated due to continued investments in start-up operating companies which are not at scale, information technology modernization, data and analytics, and artificial intelligence, including the additional personnel costs to manage all of these key initiatives. Several of the information technology modernization efforts are entering a phase in which costs are being amortized while the systems being replaced are not yet decommissioned.

Current wording

The expense ratio for the third quarter 2026 includes a $20 credit loss (1.4 points) from a guaranteed asset protection account. This was offset by lower acquisition costs from changes in mix, and the impact of a third quarter 2025 true-up of ceding commissions (0.9 points). In addition, the expense ratios continue to reflect investments in start-up operating companies which are not at scale, information technology modernization, data and analytics, and artificial intelligence, including the additional personnel costs to manage all of these key initiatives. Several of the information technology modernization efforts are entering a phase in which costs are being amortized while the systems being replaced are not yet decommissioned.

Previous wording

Together, these factors produced a profitable combined ratio and strong pretax operating income for the quarter and first six months. For Specialty Insurance, combined ratios between 90% and 95% are targeted over a full underwriting cycle, recognizing that quarterly and annual ratios and trends may deviate from this range, particularly with long-tailed lines of coverage.

Current wording

Together, these factors produced a profitable combined ratio and strong pretax operating income for the quarter and first nine months. For Specialty Insurance, combined ratios between 90% and 95% are targeted over a full underwriting cycle, recognizing that quarterly and annual ratios and trends may deviate from this range, particularly with long-tailed lines of coverage.

Previous wording

Title Insurance net premiums and fees earned increased 10.7% for the quarter and 11.3% for the first six months. Both agency and directly produced premiums experienced solid growth and continued strong commercial business production. Commercial premiums represented 25.4% of net premiums earned compared to 23.0% in the second quarter of last year.

Current wording

Title Insurance net premiums and fees earned increased 7.3% for the quarter and 9.8% for the first nine months. Agency premiums, which are reported on a lag relative to direct premiums, experienced strong growth, while directly produced premiums were relatively flat as a result of the interest rate environment. Commercial premiums represented 23.6% of net premiums earned compared to 26.4% in the third quarter of last year.

Previous wording

Together, these factors produced higher pretax operating income for the quarter and first six months. For Title Insurance, combined ratios between 90% to 95% are targeted over a full underwriting cycle, recognizing that quarterly and annual ratios and trends may deviate from this range. Although Title Insurance has been navigating a difficult real estate environment over the last few years resulting in ratios in excess of this range, they continue to strive to come into range in the near term.

Current wording

Together, these factors produced higher pretax operating income for the quarter and first nine months. For Title Insurance, combined ratios between 90% to 95% are targeted over a full underwriting cycle, recognizing that quarterly and annual ratios and trends may deviate from this range. Although Title Insurance has been navigating a difficult real estate environment over the last few years resulting in ratios in excess of this range, Title Insurance continues to strive to come into range in the near term.

Previous wording

Corporate & Other includes a small life and accident insurance business, the parent holding company, and several internal corporate services subsidiaries. Net investment income was impacted by a lower portfolio yield and invested asset base due to the return of capital to shareholders, partially offset by proceeds from the May 2026 debt issuance. The Company issued $700 in Senior Notes in anticipation of the August 2026 maturity of the existing $550 Senior Notes. Operating expenses for both 2026 periods reflect the increased interest costs associated with the debt issuance.

Current wording

Corporate & Other includes a small life and accident insurance business, the parent holding company, and several internal corporate services subsidiaries. Net investment income was impacted by a lower invested asset base due to the return of capital to shareholders and a higher allocation to short-term investments. Additionally, the Company's $550 Senior Notes matured in August 2026 and were repaid with proceeds from the $700 Senior Notes issued in May 2026. Operating expenses in 2026 include the increased interest costs associated with the May 2026 debt issuance and transaction costs associated with the closing of the ECM Insurance Group acquisition.

Previous wording

As of June 30, 2026, 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 stocks). The investment management process remains focused on retaining quality investments that produce consistent streams of investment income, while monitoring concentration limits among the operating companies. 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 wording

As of September 30, 2026, the consolidated investment portfolio reflected an allocation of approximately 86% to fixed income securities (bonds and notes) and short-term investments, and 14% to equity securities (common and preferred stocks). The investment management process remains focused on retaining quality investments that produce consistent streams of investment income, while monitoring concentration limits among the operating companies. 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.

Previous wording

Changes in shareholders' equity per share are reflected in the following table. These changes resulted mostly from net operating income, realized and unrealized investment gains (losses), and dividends to shareholders declared during the period.

Current wording

Changes in shareholders' equity per share are reflected in the following table. These changes resulted mostly from net operating income, realized and unrealized investment gains (losses), and dividends to shareholders declared during the year. Both 2026 periods are also impacted by the bargain purchase gain realized by the Company as a result of its July 1, 2026 acquisition of ECM Insurance Group.

Previous wording

Total capital returned to shareholders during the quarter was $137.4, comprised of $76.6 in dividends and $60.7 in share repurchases. For the first six months, total capital returned was $374.9, comprised of $153.3 in dividends and $221.5 in share repurchases.

Current wording

Total capital returned to shareholders during the quarter was $190.2, comprised of $76.3 in dividends and $113.8 in share repurchases. For the first nine months, total capital returned was $565.2, comprised of $229.7 in dividends and $335.4 in share repurchases.

Previous wording

Consolidated net premiums and fees earned increased 5.2% and 6.1% for the second quarter and first six months of 2026, respectively, resulting from modest growth in Specialty Insurance and strong growth in Title Insurance.

Current wording

Consolidated net premiums and fees earned increased 8.8% and 7.0% for the third quarter and first nine months of 2026, respectively, resulting from growth in both Specialty Insurance and Title Insurance.

Previous wording

The Company has little control over fair values, therefore management evaluates yields on the basis of investment income earned in relation to the book value of the underlying invested assets. Net investment income increased 6.1% and 5.2% for the second quarter and first six months of 2026, respectively, driven by a higher average invested asset base as a result of strong operating results and proceeds from the May 2026 debt issuance. While the portfolio yield was flat in the quarter, there was a notable shift. Short-term investments increased considerably while the yields on those investments dropped, offsetting the yields earned on long-term fixed income securities. The total fixed income portfolio book yield ended the second quarter 2026 at 4.79%, up slightly from the end of 2025.

Current wording

The Company has little control over fair values, therefore management evaluates yields on the basis of investment income earned in relation to the book value of the underlying invested assets. Net investment income increased 1.5% and 3.9% for the third quarter and first nine months of 2026, respectively. Other investment income decreased $6.3 in the quarter, with several changes to miscellaneous investment activity impacting both comparative periods.

Previous wording

During the second quarter 2026, the Company purchased $393.7 of investment grade corporate bonds with an average maturity of 6.5 years and an average yield of 4.89%. In addition, the Company purchased $9.9 of government securities (primarily U.S. Treasury Notes) with an average yield of 3.77% and $46.3 of blue-chip equities with a dividend yield of 3.42%. The Company primarily owns U.S. Treasury Notes to place on deposit with the states its insurance companies are licensed to conduct business.

Current wording

During the third quarter 2026, the Company purchased $1,147.1 of investment grade corporate bonds with an average maturity of 7.0 years and an average yield of 5.42%. In addition, the Company purchased $29.9 of government securities (primarily U.S. Treasury Notes) with an average yield of 4.80%. The Company primarily owns U.S. Treasury Notes to place on deposit with the states its insurance companies are licensed to conduct business.

Previous wording

Changes to the consolidated loss ratios tend to be driven by mix changes between Specialty Insurance (with loss ratios in the mid- to low-60% range) and Title Insurance (with loss ratios in the 2% range). In the second quarter 2026, the consolidated loss ratio included an amount of favorable development that was lower than 2025, with net favorable development from Title Insurance offset by a small amount of net unfavorable development from Specialty Insurance.

Current wording

Changes to the consolidated loss ratios tend to be driven by mix changes between Specialty Insurance (with loss ratios in the mid- to low-60% range) and Title Insurance (with loss ratios in the 2% range). Loss ratios for the third quarter and first nine months of 2026 included lower levels of favorable development from Specialty Insurance, partially offset by higher levels from Title Insurance, but remain within the range of management's expectation relative to its long-term target.

Previous wording

Changes to the consolidated expense ratios tend to be driven by mix changes between Specialty Insurance (with expense ratios in 30% range) and Title Insurance (with expense ratios in low- to mid-90% range). Variations in the Company's consolidated expense ratios also reflect a continually changing mix of coverages sold and costs of producing business within the segments. To a significant degree, expense ratios for both the Specialty and Title Insurance segments are 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 consolidated current period expense ratio is elevated given the start-up costs of new operating companies within Specialty Insurance, continued investments in information technology modernization, including investments in data and analytics (D&A) and artificial intelligence (AI), and related personnel to manage these key initiatives.

Current wording

Changes to the consolidated expense ratios tend to be driven by mix changes between Specialty Insurance (with expense ratios in 30% range) and Title Insurance (with expense ratios in low- to mid-90% range). Variations in the Company's consolidated expense ratios also reflect a continually changing mix of coverages sold and costs of producing business within the segments. To a significant degree, expense ratios for both the Specialty and Title Insurance segments are 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. In addition, Specialty Insurance expense ratios reflect the impact of the write-up to retail pricing on certain auto warranty programs. Refer to further discussion in the Segment Underwriting Overview for Specialty Insurance.

Previous wording

The composition of net investment gains or losses was as follows:

Current wording

The composition of net realized investment gains or losses was as follows:

Previous wording

The realization of investment gains or losses can be highly discretionary and can be affected by such factors as the timing of individual securities sales, the recording of estimated credit losses from write-downs of impaired securities, tax-planning and tax-rate change considerations, and modifications of investment management judgments regarding the direction of securities markets or the future prospects of individual investees or industry sectors.

Current wording

Investment gains or losses can be highly discretionary and affected by such factors as the timing of individual securities sales, the recording of estimated credit losses from write-downs of impaired securities, tax-planning and tax-rate change considerations, and modifications of investment management judgments regarding the direction of securities markets or the future prospects of individual investees or industry sectors.

Previous wording

Dispositions of fixed income securities from scheduled maturities and early calls were 47.8% and 61.5% of total fixed income dispositions occurring in the first six months of 2026 and 2025, respectively. Realized gain (loss) activity in 2026 was primarily related to the sale of fixed income and equity securities to fund the Company's return of capital through share repurchases and a special dividend, as well as routine portfolio management.

Current wording

Dispositions of fixed income securities from scheduled maturities and early calls were 45.3% and 62.2% of total fixed income dispositions occurring in the first nine months of 2026 and 2025, respectively. Realized investment gain (loss) activity in 2026 was primarily related to the sale of fixed income and equity securities to fund the Company's capital management initiatives (including share repurchases and a special dividend) as well as routine portfolio management.

Previous wording

Specialty Insurance continued to produce growth and profitability, reflecting the success of the Company’s specialty strategy and operational excellence initiatives. Growth included increasing contributions from new specialty operating companies. Additionally, on April 6, 2026, the Company announced the formation of its new property insurance company that will underwrite specialized property insurance products through a national retail broker distribution network. Seven Specialty Insurance operating companies continue to expand their writings of surplus lines business for property, general liability, and financial indemnity solutions. Several of the new operating companies also target the wholesale distribution channel, where excess & surplus solutions are prevalent.

Current wording

Specialty Insurance continued to produce growth and profitability, including an increasing contribution from start-up operating companies, reflecting the success of the Company’s specialty strategy and operational excellence initiatives. Seven Specialty Insurance operating companies continue to expand their writings of surplus lines business for property, general liability, and financial indemnity solutions. Several of the start-up operating companies also target the wholesale distribution channel, where excess & surplus solutions are prevalent.

Previous wording

Following the Company’s strategy to add operating companies narrow and deep in their specialty niche, Old Republic closed on its previously announced acquisition of ECM following its conversion to a stock company in a sponsored demutualization transaction. Effective July 1, 2026, ECM results will be included in the Specialty Insurance segment. Specialty Insurance expects to report a gain on the acquisition of approximately $125 subject to final valuations as of the closing date, and for the business to be accretive to earnings in 2026.

Current wording

Following the Company’s strategy to add operating companies narrow and deep in their specialty niche, Old Republic closed on its acquisition of ECM Insurance Group following conversion to a stock company in a sponsored demutualization transaction effective July 1, 2026. Specialty Insurance recognized a gain on the acquisition of $124.9 and ECM Insurance Group's current period results were accretive to this quarter's operating earnings.

Previous wording

Specialty Insurance net premiums written increased 9.0% and 7.2% for the second quarter and first six months of 2026, respectively. This reflects significant growth in a large auto warranty program which requires net premiums written to include the retail selling price of the service contract, with an offsetting commission amount resulting in no bottom-line impact. Excluding the write-up to retail pricing from all auto warranty programs, net premiums written increased 1.6% and 2.2% for the quarter and first six months, respectively.

Current wording

Specialty Insurance net premiums written increased 10.5% and 8.4% for the third quarter and first nine months of 2026, respectively. This reflects significant growth in the auto warranty program which, as previously discussed, requires a write-up to retail gross-up. Excluding the write-up to retail pricing, net premiums written increased 7.1% and 4.0% for the quarter and first nine months, respectively.

Previous wording

Net premiums earned increased 2.3% for the quarter and 3.5% for the first six months. Growth in the quarter was driven by a combination of premium rate increases and new business production, including an increasing contribution from new operating companies, partially offset by a decline in renewal retention ratios compared to last year. Commercial auto renewal retention improved slightly compared to the first quarter of 2026, while Specialty Insurance continued to prioritize rate. Earned premium growth was most pronounced within commercial auto, accident & health, general liability, property, and auto warranty coverages while workers' compensation and Canadian travel accident and trucking declined.

Current wording

Specialty Insurance net premiums earned increased 9.7% and 5.6% for the third quarter and first nine months of 2026, respectively, and 8.0% and 4.9% for the same periods when excluding the write-up to retail pricing. Growth was driven by a combination of premium rate increases and new business production (including an increasing contribution from start-up operating companies), and the acquisition of ECM Insurance Group. Earned premium growth rate was most pronounced within property and auto warranty coverages, while Canadian travel accident and trucking declined. Commercial auto and general liability continued to achieve rate increases.

Previous wording

Overall, the 2026 loss ratios for Specialty Insurance reflect lower levels of favorable prior year loss reserve development and consistent current year losses. The loss ratios for the second quarter and first six months of 2026 include the impact of unfavorable development due to reserve strengthening of approximately $40 (3.0 points and 1.5 points, respectively) related to run-off transactional risk business reported in financial indemnity.

Current wording

Overall, the 2026 loss ratios for Specialty Insurance reflect lower levels of favorable prior year loss reserve development partially offset by an improvement in current year losses.

Previous wording

•Commercial auto with favorable development predominantly from accident years 2020 through 2023, partially offset by unfavorable development from accident year 2024 from non-trucking exposures. The reserves set for the liability portion of long-haul trucking for accident year 2025 are holding as paid claims and case reserve development were within expectations.

Current wording

•Commercial auto with favorable development predominantly from accident years 2018 through 2023 and 2025, partially offset by unfavorable development from accident year 2024. The reserves set during 2025 for the liability portion of long-haul trucking for accident year 2025 are holding as paid claims and case reserve development were within expectations.

Previous wording

•Property with a strong level of favorable development that was higher than last year, predominantly from accident years 2022 through 2025.

Current wording

•Property with a strong level of favorable development that was significantly higher than last year, predominantly from accident years 2022, 2023, and 2025.

Previous wording

•General liability with a smaller level of unfavorable development compared to last year. Unfavorable development in 2022 through 2024 was partially offset by favorable development in 2020, 2021, and 2025.

Current wording

•General liability with unfavorable development predominantly from accident years 2022 through 2025, partially offset by favorable development in 2019 through 2021.

Previous wording

•Financial indemnity with unfavorable development in 2021 through 2023 and 2025 due to reserve strengthening of approximately $40 related to run-off transactional risk business that was exited in the fourth quarter of 2024. Transactional risk claims activity tends to be low in frequency and high in severity, accordingly, a relatively low number of claims led to this development.

Current wording

•Financial indemnity with unfavorable development predominantly from 2023 through 2025, partially offset by favorable development in 2019, 2020, and 2022.

Previous wording

Finally, growth in auto warranty business that requires the inclusion of the retail write-up in net premiums written with an offset to commission expense is beginning to contribute to a higher expense ratio as the net premiums written is earned (typically over a four to seven-year period). The impact is expected to increase due to anticipated continued growth in this business.

Current wording

Growth in auto warranty business that requires the inclusion of the retail write-up in net premiums written with a corresponding commission expense is contributing to a higher expense ratio as the net premiums written is earned (typically over a four- to seven-year period). The impact is expected to continue to increase due to anticipated growth in this business. Additionally, the expense ratio for the third quarter 2026 includes a $20 credit loss (1.4 points) from a guaranteed asset protection account. This was offset by lower acquisition costs from changes in mix, and the impact of a third quarter 2025 true-up of ceding commissions (0.9 points).