CHICAGO, April 23, 2015 /PRNewswire/ -- Old Republic
International Corporation (NYSE: ORI) today reported financial
results for the first quarter of 2015. Pretax operating income rose
27.6 percent year-over-year as title insurance and the RFIG run-off
segment registered increases of 233.5 percent and 79.9 percent,
respectively. The general insurance segment's performance produced
nearly equal results year-over-year as underwriting profits lagged
slightly. Net income for the first three months of 2015 was much
lower when compared to the same period last year which benefitted
from substantially greater realized gains from sales of
securities.
The major components of consolidated results and related data
are summarized in the following table.
|
Financial
Highlights (a)
|
|
|
|
|
|
Quarters Ended March
31,
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
Operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
General
insurance
|
|
|
|
|
|
|
$
|
803.0
|
|
$
|
745.3
|
|
|
Title
insurance
|
|
|
|
|
|
|
|
436.6
|
|
|
401.8
|
|
|
Corporate and
other
|
|
|
|
|
|
|
7.1
|
(b)
|
|
18.2
|
|
|
Subtotal
|
|
|
|
|
|
|
|
1,246.8
|
|
|
1,165.3
|
|
|
RFIG run-off
business
|
|
|
|
|
|
|
64.4
|
|
|
73.9
|
|
|
Total
|
|
|
|
|
|
|
$
|
1,311.3
|
|
$
|
1,239.3
|
|
|
Pretax operating
income (loss):
|
|
|
|
|
|
|
|
|
|
General
insurance
|
|
|
|
|
|
$
|
82.0
|
|
$
|
81.8
|
|
|
Title
insurance
|
|
|
|
|
|
|
|
15.9
|
|
|
4.7
|
|
|
Corporate and
other
|
|
|
|
|
|
|
1.6
|
|
|
(0.5)
|
|
|
Subtotal
|
|
|
|
|
|
|
|
99.6
|
|
|
86.1
|
|
|
RFIG run-off
business
|
|
|
|
|
|
|
35.2
|
|
|
19.5
|
|
|
Total
|
|
|
|
|
|
|
|
134.8
|
|
|
105.7
|
|
|
Realized
investment gains (losses):
|
|
|
|
|
|
|
|
|
From sales
|
|
|
|
|
|
|
|
18.8
|
|
|
191.2
|
|
|
From
impairments
|
|
|
|
|
|
|
|
-
|
|
|
-
|
|
|
Net realized
investment gains (losses)
|
|
|
18.8
|
|
|
191.2
|
|
|
Consolidated
pretax income (loss)
|
|
|
|
153.7
|
|
|
296.9
|
|
|
Income taxes
(credits)
|
|
|
|
|
|
50.3
|
|
|
102.5
|
|
|
Net income
(loss)
|
|
|
|
|
|
|
$
|
103.4
|
|
$
|
194.4
|
|
|
Components of
diluted earnings per share:
|
|
|
|
|
|
|
|
Net operating income
(loss):
|
|
|
|
|
|
|
|
|
|
|
General
insurance
|
|
|
|
|
$
|
0.19
|
|
$
|
0.19
|
|
|
Title
insurance
|
|
|
|
|
|
|
|
0.03
|
|
|
0.01
|
|
|
Corporate and
other
|
|
|
|
|
|
|
0.02
|
|
|
0.01
|
|
|
Subtotal
|
|
|
|
|
|
|
|
0.24
|
|
|
0.21
|
|
|
RFIG run-off
business
|
|
|
|
|
|
0.08
|
|
|
0.04
|
|
|
Total
|
|
|
|
|
|
|
|
0.32
|
|
|
0.25
|
|
|
Net realized
investment gains (losses)
|
|
|
0.04
|
|
|
0.42
|
|
|
Net income
(loss)
|
|
|
|
|
|
|
$
|
0.36
|
|
$
|
0.67
|
|
|
Cash dividends
paid per share
|
|
|
|
$
|
0.1850
|
|
$
|
0.1825
|
|
|
Ending book value
per share
|
|
|
|
$
|
15.48
|
|
$
|
14.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Unaudited; All
amounts in this report are in millions except per share data and
percentages. (b)
Reflects the transfer of accident insurance business from a life
and accident subsidiary to a general insurance affiliate resulting
in a $10.4 reduction in premiums during the first quarter of
2015.
|
|
The preceding table shows both operating and net income to
highlight the effects of realized investment gain or loss
recognition on period-to-period earnings comparisons. Management
uses net operating income, a non-GAAP financial measure, to
evaluate and better explain operating performance, believing that
this measure enhances an understanding of Old Republic's core
business results. Operating income, however, does not replace net
income determined in accordance with GAAP as a measure of total
profitability.
The timing of realized investment gain or loss recognition can
be highly discretionary and arbitrary due to such factors as
individual securities sales, recording of estimated losses from
write-downs of impaired securities, tax-planning considerations,
and changes in investment management judgments relative to the
direction of securities markets or the future prospects of
individual investees or industry sectors. Since 2013, asset
management operations have in part been oriented toward an
enhancement of income from interest and dividends. To a large
extent, this strategy has led to sales of non-income producing or
low-yielding securities. Proceeds from these sales have largely
been reinvested in higher yielding common shares of American
companies with distinguished long-term records of earnings and
dividend growth.
General Insurance Results – The table below shows
the major elements of general insurance performance for the first
quarter of this and the preceding year.
|
|
|
General Insurance
Group
|
|
|
|
Quarters Ended March
31,
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
Change
|
Net premiums
earned
|
|
|
|
|
|
|
|
$
|
703.3
|
|
$
|
656.4
|
|
7.1%
|
Net investment
income
|
|
|
|
|
|
|
|
73.7
|
|
|
65.9
|
|
11.8
|
Benefits and claim
costs
|
|
|
|
|
|
|
|
518.8
|
|
|
477.4
|
|
8.7
|
Pretax operating
income (loss)(*)
|
|
|
|
|
$
|
82.0
|
|
$
|
81.8
|
|
0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claim
ratio
|
|
|
|
|
|
|
|
|
|
73.8%
|
|
|
72.7%
|
|
|
Expense
ratio
|
|
|
|
|
|
|
|
|
|
23.5
|
|
|
23.5
|
|
|
Composite underwriting
ratio
|
|
|
|
|
|
97.3%
|
|
|
96.2%
|
|
|
(*) In connection
with the run-off mortgage guaranty ("MI") and consumer credit
indemnity ("CCI") combination, $4.3 and $16.4 of pretax operating
losses for the first quarter 2015 and 2014, respectively, are
retained by certain general insurance companies pursuant to various
quota share and stop loss reinsurance agreements. All of these
amounts, however, have been reclassified such that 100% of the CCI
run-off business is reported in the RFIG run-off
segment.
|
As the above table shows, consolidated general insurance results
were basically flat year-over-year. The latest quarter's net
premium growth of 7.1 percent was essentially unchanged from the
percentage increase posted in last year's final quarter. The
composite ratio of 97.3 percent for the first three months of 2015
was a bit higher than 2014's first quarter leading to a slight
reduction in underwriting income. This was largely due to higher
claim costs in commercial automobile insurance by virtue of greater
frequency and severity of claims. Claim ratios in workers'
compensation and general liability insurance subsided somewhat from
last year's higher levels. Prior years' loss development in the
first three months of 2015 was slightly deficient by comparison to
modest favorable development in the same 2014 period.
The relatively small decline in underwriting profitability from
all these factors was more than offset by an 11.8 percent rise in
investment income. This reflects both a larger invested asset base
and a continuing yield improvement from dividends on high quality
common stock investments.
Title Insurance Results – Earnings for this year's first
quarter continued in a highly positive vein as indicated in the
comparative table which follows.
|
|
|
Title Insurance
Group
|
|
|
|
Quarters Ended March
31,
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
Change
|
Net premiums and fees
earned
|
|
|
|
|
|
$
|
428.3
|
|
$
|
393.8
|
|
8.7%
|
Net investment
income
|
|
|
|
|
|
|
|
7.9
|
|
|
7.1
|
|
12.0
|
Claim
costs
|
|
|
|
|
|
|
|
|
|
23.8
|
|
|
23.8
|
|
0.1
|
Pretax operating
income (loss)
|
|
|
|
|
|
$
|
15.9
|
|
$
|
4.7
|
|
233.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claim
ratio
|
|
|
|
|
|
|
|
|
|
5.6%
|
|
|
6.1%
|
|
|
Expense
ratio
|
|
|
|
|
|
|
|
|
|
92.1
|
|
|
94.0
|
|
|
Composite underwriting
ratio
|
|
|
|
|
|
97.7%
|
|
|
100.1%
|
|
|
The latest quarter's substantial bottom line improvement in
comparison with the same quarter of 2014 was largely the result of
much improved performance from the basic underwriting and related
services functions of the business. Compared with the small
underwriting/service loss in 2014, this year's operations rose to
profitability as both claim and operating costs declined relative
to premiums and fees revenues. Stronger housing and commercial
property transactions, as well as continued market share strength
led to an 8.7 percent year-over-year gain in premiums and fees
revenues. Net investment income growth of 12.0 percent reflected
greater yields from a larger invested asset portfolio.
RFIG Run-off Business Results – The tables below show
RFIG's comparative results with and without the combination of
run-off mortgage guaranty ("MI") and consumer credit indemnity
("CCI") coverages.
|
|
|
RFIG Run-off
Business
|
|
|
|
Quarters Ended March
31,
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
Change
|
A.
MI:
|
|
|
|
|
|
|
|
|
Net premiums
earned
|
|
|
|
|
|
|
|
$
|
52.6
|
|
$
|
58.8
|
|
-10.5%
|
Net investment
income
|
|
|
|
|
|
|
|
6.1
|
|
|
8.1
|
|
-24.7
|
Claim
costs
|
|
|
|
|
|
|
|
|
|
13.5
|
|
|
22.9
|
|
-40.8
|
Pretax operating
income (loss)
|
|
|
|
|
|
$
|
40.0
|
|
$
|
36.8
|
|
8.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claim
ratio
|
|
|
|
|
|
|
|
|
|
25.8%
|
|
|
39.0%
|
|
|
Expense
ratio
|
|
|
|
|
|
|
|
|
|
9.8
|
|
|
12.2
|
|
|
Composite underwriting
ratio
|
|
|
|
|
|
35.6%
|
|
|
51.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B.
CCI(*):
|
|
|
|
|
|
|
|
|
Net premiums
earned
|
|
|
|
|
|
|
$
|
5.4
|
|
$
|
6.8
|
|
-19.8%
|
Net investment
income
|
|
|
|
|
|
|
|
0.1
|
|
|
0.1
|
|
44.5
|
Benefits and claim
costs
|
|
|
|
|
|
|
|
9.9
|
|
|
23.4
|
|
-57.5
|
Pretax operating
income (loss)
|
|
|
|
|
|
$
|
(4.7)
|
|
$
|
(17.2)
|
|
72.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claim
ratio
|
|
|
|
|
|
|
|
|
|
181.7%
|
|
|
343.0%
|
|
|
Expense
ratio
|
|
|
|
|
|
|
|
|
|
9.3
|
|
|
10.8
|
|
|
Composite underwriting
ratio
|
|
|
|
|
|
191.0%
|
|
|
353.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. Total MI and
CCI business run-off:
|
|
|
|
|
|
|
|
|
Net premiums
earned
|
|
|
|
|
|
|
$
|
58.1
|
|
$
|
65.6
|
|
-11.5%
|
Net investment
income
|
|
|
|
|
|
|
|
6.3
|
|
|
8.3
|
|
-23.5
|
Benefits and claim
costs
|
|
|
|
|
|
|
|
23.5
|
|
|
46.4
|
|
-49.3
|
Pretax operating
income (loss)
|
|
|
|
|
|
$
|
35.2
|
|
$
|
19.5
|
|
79.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claim
ratio
|
|
|
|
|
|
|
|
|
|
40.5%
|
|
|
70.7%
|
|
|
Expense
ratio
|
|
|
|
|
|
|
|
|
|
9.7
|
|
|
12.1
|
|
|
Composite underwriting
ratio
|
|
|
|
|
|
50.2%
|
|
|
82.8%
|
|
|
(*)
In connection with the run-off MI and CCI combination, $4.3 and
$16.4 of pretax operating losses for the first quarter 2015 and
2014, respectively, are retained by certain general insurance
companies pursuant to various quota share and stop loss reinsurance
agreements. All of these amounts, however, have been reclassified
and are included for segment reporting purposes such that section
(B) in the above table incorporates 100% of the CCI run-off
business results.
|
Consistent with a run-off operating mode, the MI and CCI lines
posted further declines in earned premiums. MI net investment
income was also much lower due to a substantial reduction in
investable assets since mid-year 2014. This reflects a July 2014 payment of approximately $657 for previously deferred claim settlements
held in reserve and subsequently paid following regulatory
approval.
The resumed profitability of mortgage guaranty operations since
2013's second quarter reflects much lower claim provisions. Key
factors driving this outcome relate mostly to the continued decline
in reported delinquencies and higher rates at which previously
reported defaults are cured or otherwise resolved without payment.
The improved cure rates are a reflection of gradually improving
trends in home prices, foreclosures, and real estate activity in
general. Since year-end 2012, these factors have led to favorable
developments of prior year-end claim reserves. For the first
quarters of 2015 and 2014, these positive outcomes have contributed
to a lowering of claim ratios by 80.6 and 124.0 percentage points,
respectively.
CCI results were much improved in this year's first quarter.
This reflected lower litigation-related and normal claim costs, as
well as reduced administrative expenses.
Corporate and Other Operations – The combination of a
small life and accident insurance business and the net costs
associated with operations of the parent holding company and its
internal services subsidiaries usually produce highly variable
results. Earnings variations posted by these relatively minor
elements of Old Republic's business stem from volatility inherent
to the small scale of life and accident insurance operations, and
net interest costs pertaining to external and intra-system
financing arrangements. For this year's first quarter, the much
lower life & accident premium volume reflects the transfer of
accident insurance premiums from a life and accident subsidiary to
a general insurance group affiliate; the effect on pretax operating
income (loss) was negligible. The interplay of these various
operating elements is summarized in the following table:
|
|
|
Corporate and
Other Operations
|
|
|
|
Quarters Ended March
31,
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
Change
|
Life & accident
premiums earned
|
|
|
|
$
|
4.6
|
|
$
|
16.7
|
|
-72.2%
|
Net investment
income
|
|
|
|
|
3.3
|
|
|
1.3
|
|
143.4
|
Other
income
|
|
|
|
|
(0.8)
|
|
|
-
|
|
N/M
|
Benefits and claim
costs
|
|
|
|
|
3.8
|
|
|
12.3
|
|
-68.5
|
Insurance
expenses
|
|
|
|
|
2.2
|
|
|
7.6
|
|
-71.3
|
Corporate, interest,
and other expenses-net
|
|
|
|
|
(0.5)
|
|
|
(1.2)
|
|
56.2%
|
Pretax operating
income (loss)
|
|
|
|
$
|
1.6
|
|
$
|
(0.5)
|
|
N/M
|
Consolidated Results – The combination of all of the
above changes and events in Old Republic's business segments
contributed to the following consolidated results:
|
|
|
ORI
Consolidated
|
|
|
|
Quarters Ended March
31,
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
Change
|
Net premiums and fees
earned
|
|
|
|
|
$
|
1,194.4
|
|
$
|
1,132.7
|
|
5.4%
|
Net investment
income
|
|
|
|
|
|
91.4
|
|
|
82.8
|
|
10.4
|
Other
income
|
|
|
|
|
|
25.4
|
|
|
23.8
|
|
6.8
|
Operating
revenues
|
|
|
|
|
|
1,311.3
|
|
|
1,239.3
|
|
5.8
|
Benefits and
claims
|
|
|
|
|
|
570.1
|
|
|
560.0
|
|
1.8
|
Sales and general
expenses
|
|
|
|
|
|
595.7
|
|
|
567.8
|
|
4.9
|
Interest and other
costs
|
|
|
|
|
|
10.5
|
|
|
5.7
|
|
84.0
|
Total operating
expenses
|
|
|
|
|
|
1,176.4
|
|
|
1,133.6
|
|
3.8
|
Pretax operating
income (loss)
|
|
|
|
|
|
134.8
|
|
|
105.7
|
|
27.6
|
Income taxes
(credits)
|
|
|
|
|
|
43.6
|
|
|
35.5
|
|
22.8
|
Net operating income
(loss)
|
|
|
|
|
|
91.1
|
|
|
70.1
|
|
30.0
|
Realized investment
gains (losses)
|
|
|
|
|
18.8
|
|
|
191.2
|
|
-90.1
|
Income taxes
(credits) on realized investment gains (losses)
|
|
6.6
|
|
|
66.9
|
|
|
Net realized
investment gains (losses)
|
|
|
|
12.2
|
|
|
124.3
|
|
-90.1
|
Net income
(loss)
|
|
|
|
|
|
$
|
103.4
|
|
$
|
194.4
|
|
-46.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
operating cash flow
|
|
|
|
$
|
190.8
|
|
$
|
135.4
|
|
40.8%
|
|
|
|
|
|
|
|
|
|
|
|
Claim
ratio
|
|
|
|
|
47.7%
|
|
|
49.4%
|
|
|
Expense
ratio
|
|
|
|
|
47.5
|
|
|
47.7
|
|
|
Composite underwriting
ratio
|
|
|
|
|
95.2%
|
|
|
97.1%
|
|
|
Consolidated operating cash flow contributed positively to
investable funds by $190.8 and
$135.4 in the first three months of
2015 and 2014, respectively. Excluding the MI and CCI operating
cash flows, these amounts would be $223.6 and $133.3,
respectively.
Cash, Invested Assets, and Shareholders' Equity – The
table below reflects Old Republic's consolidated cash and invested
asset balances as well as the shareholders' equity account at the
dates shown.
|
|
Cash, Invested
Assets, and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|
March 31,
|
|
Dec. 31,
|
|
March 31,
|
|
March '15/
|
|
March '15/
|
|
|
2015
|
|
2014
|
|
2014
|
|
Dec. '14
|
|
March '14
|
Cash and invested
assets:
|
Fair value
basis
|
|
$
|
11,489.9
|
|
$
|
11,291.6
|
|
$
|
11,286.3
|
|
1.8%
|
|
1.8%
|
|
Original cost
basis
|
|
$
|
10,861.2
|
|
$
|
10,717.9
|
|
$
|
10,765.8
|
|
1.3%
|
|
0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
Total
|
|
$
|
4,014.2
|
|
$
|
3,924.0
|
|
$
|
3,865.8
|
|
2.3%
|
|
3.8%
|
|
Per common
share
|
|
$
|
15.48
|
|
$
|
15.15
|
|
$
|
14.97
|
|
2.2%
|
|
3.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Composition of
shareholders' equity per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity before items
below
|
|
$
|
14.24
|
|
$
|
14.02
|
|
$
|
13.74
|
|
1.6%
|
|
3.6%
|
Unrealized investment
gains (losses) and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
accumulated
comprehensive income (loss)
|
|
|
1.24
|
|
|
1.13
|
|
|
1.23
|
|
|
|
|
Total
|
|
$
|
15.48
|
|
$
|
15.15
|
|
$
|
14.97
|
|
2.2%
|
|
3.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segmented
composition of
shareholders' equity per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding run-off
segment
|
|
$
|
14.56
|
|
$
|
14.35
|
|
$
|
14.89
|
|
1.5%
|
|
-2.2%
|
RFIG run-off
segment
|
|
|
0.92
|
|
|
0.80
|
|
|
0.08
|
|
|
|
|
Total
|
|
$
|
15.48
|
|
$
|
15.15
|
|
$
|
14.97
|
|
2.2%
|
|
3.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Old Republic's invested assets are managed in consideration of
enterprise-wide risk management objectives. Most importantly, these
are intended to ensure solid funding of insurance subsidiaries'
long-term obligations to policyholders and other beneficiaries, and
the necessary long-term stability of their capital accounts. As a
result, the investment portfolio contains no significant insurance
risk-correlated asset exposures to real estate, mortgage-backed
securities, collateralized debt obligations ("CDO's"), derivatives,
junk bonds, hybrid securities, or illiquid private equity
investments. In a similar vein, the Company does not engage in
hedging or securities lending transactions, nor does it invest in
securities whose values are predicated on non-regulated financial
instruments exhibiting amorphous or unfunded counter-party risk
attributes.
As of March 31, 2015 the
consolidated investment portfolio reflected a current allocation of
approximately 82 percent to fixed-maturity and short-term
investments, and 18 percent to equities. Exposure to high quality
dividend-paying equity securities has been emphasized since 2013.
Asset quality of the fixed maturity portfolio has remained at high
levels.
Changes in shareholders' equity per share are reflected in the
following table. As indicated, the changes resulted mostly from
each year's net income or loss, increased dividend payments to
shareholders, and changes in the value of invested assets carried
at fair value.
|
|
|
|
Shareholders'
Equity Per Share
|
|
|
|
|
Quarters Ended March
31,
|
|
|
|
|
2015
|
|
2014
|
Beginning
balance
|
|
|
|
|
$
|
15.15
|
|
$
|
14.64
|
Changes in
shareholders' equity:
|
|
|
|
|
|
|
|
|
|
Net operating income
(loss)
|
|
|
|
|
|
0.35
|
|
|
0.27
|
Net realized
investment gains (losses):
|
|
|
|
|
|
|
|
|
|
From sales
|
|
|
|
|
|
0.05
|
|
|
0.48
|
From
impairments
|
|
|
|
|
|
-
|
|
|
-
|
Subtotal
|
|
|
|
|
|
0.05
|
|
|
0.48
|
Net unrealized
investment gains (losses)
|
|
|
|
|
|
0.14
|
|
|
(0.21)
|
Total realized and
unrealized investment gains (losses)
|
|
|
|
|
|
0.19
|
|
|
0.27
|
Cash
dividends
|
|
|
|
|
|
(0.19)
|
|
|
(0.18)
|
Stock issuance,
foreign exchange, and other transactions
|
|
|
|
|
|
(0.02)
|
|
|
(0.03)
|
Net change
|
|
|
|
|
|
0.33
|
|
|
0.33
|
Ending
balance
|
|
|
|
|
$
|
15.48
|
|
$
|
14.97
|
Capitalization – In last year's third quarter the Company
raised $400 through a public offering
of 10-year notes. Since then no changes other than those noted
immediately above have occurred in Old Republic's consolidated debt
and equity capitalizations.
|
|
Capitalization
|
|
|
March 31,
|
|
December
31,
|
|
March 31,
|
|
|
2015
|
|
2014
|
|
2014
|
Debt:
|
|
|
|
|
|
|
|
|
|
3.75% Convertible
Senior Notes due 2018
|
|
$
|
550.0
|
|
$
|
550.0
|
|
$
|
550.0
|
4.875% Senior Notes
due 2024
|
|
|
400.0
|
|
|
400.0
|
|
|
-
|
ESSOP debt with an
average yield of approximately 3.7%
|
|
|
11.7
|
|
|
15.0
|
|
|
15.0
|
Other miscellaneous
debt
|
|
|
-
|
|
|
-
|
|
|
1.2
|
Total debt
|
|
|
961.7
|
|
|
965.0
|
|
|
566.2
|
Common shareholders'
equity
|
|
|
4,014.2
|
|
|
3,924.0
|
|
|
3,865.8
|
Total
capitalization
|
|
$
|
4,975.9
|
|
$
|
4,889.1
|
|
$
|
4,432.0
|
|
|
|
|
|
|
|
|
|
|
Capitalization
ratios:
|
|
|
|
|
|
|
|
|
|
Debt
|
|
|
19.3%
|
|
|
19.7%
|
|
|
12.8%
|
Common shareholders'
equity
|
|
|
80.7
|
|
|
80.3
|
|
|
87.2
|
Total
|
|
|
100.0%
|
|
|
100.0%
|
|
|
100.0%
|
|
Conference Call Information
Old Republic has scheduled a conference call at 3:00 p.m. ET (2:00 p.m.
CT) today, to discuss its first quarter 2015 performance and
to review major operating trends and business developments. To
access this call live in listen-only mode:
- Log on to the Company's website at www.oldrepublic.com
15 minutes before the call to download the necessary software,
or, alternatively
- the call can also be accessed by phone at
888-572-7034.
Interested parties may also listen to a replay of the
call through April 30, 2015 by
dialing 877-870-5176, passcode 9817021, or by accessing it on Old
Republic International's website through May
23, 2015.
About Old Republic
Chicago-based Old Republic
International Corporation is one of the nation's 50 largest
publicly held insurance organizations. Its most recent financial
statements reflect consolidated assets of approximately
$17.20 billion and common
shareholders' equity of $4.01
billion, or $15.48 per share.
Its current stock market valuation is approximately $3.97 billion, or $15.21 per share.
The Company is organized as an insurance holding company whose
subsidiaries actively market, underwrite, and provide risk
management services for a wide variety of coverages mostly in the
general and title insurance fields. A long-term interest in
mortgage guaranty and consumer credit indemnity lines has devolved
to a run-off operating mode in recent years.
The nature of Old Republic's business requires that it be
managed for the long run. For the 25 years ended in 2014, the
Company's total market return, with dividends reinvested, has grown
at a compounded annual rate of 11.0 percent per share. For the same
period, the total market return, with dividends reinvested, for the
S&P 500 Index has grown at a 9.6 percent annual compound rate.
During those years, Old Republic's shareholders' equity account,
inclusive of cash dividends, has risen at an average annual rate of
9.7 percent per share, and the regular cash dividend has grown at a
9.5 percent annual compound rate. According to the most recent
edition of Mergent's Dividend Achievers, Old Republic is one
of just 98 qualifying companies, out of thousands considered, that
have posted at least 25 consecutive years of annual dividend
growth.
Accompanying Financial Data:
- Summary Financial Statements and Common Stock Statistics
- Safe Harbor Statement
Financial Supplement
A financial supplement to this news release is available on the
Company's website.
Old Republic
International Corporation
|
|
|
|
|
|
|
SummaryFinancial Statements and Common
Stock Statistics (Unaudited)
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
March 31,
|
SUMMARY BALANCE
SHEETS:
|
|
2015
|
|
2014
|
|
2014
|
Assets:
|
|
|
|
|
|
|
|
|
|
Cash and fixed maturity
securities
|
|
$
|
9,310.8
|
|
$
|
9,163.4
|
|
$
|
9,976.4
|
Equity
securities
|
|
|
2,057.5
|
|
|
2,011.7
|
|
|
1,190.0
|
Other invested
assets
|
|
|
121.5
|
|
|
116.4
|
|
|
119.8
|
Cash and invested
assets
|
|
|
11,489.9
|
|
|
11,291.6
|
|
|
11,286.3
|
Accounts and premiums
receivable
|
|
|
1,335.7
|
|
|
1,287.6
|
|
|
1,288.0
|
Federal income tax
recoverable:
|
Current
|
|
|
-
|
|
|
29.2
|
|
|
9.2
|
|
Deferred
|
|
|
16.8
|
|
|
37.0
|
|
|
78.3
|
Prepaid federal income
taxes
|
|
|
53.5
|
|
|
45.7
|
|
|
20.1
|
Reinsurance balances
recoverable
|
|
|
3,430.1
|
|
|
3,422.5
|
|
|
3,270.3
|
Sundry
assets
|
|
|
875.1
|
|
|
874.2
|
|
|
858.5
|
Total
|
|
$
|
17,201.3
|
|
$
|
16,988.1
|
|
$
|
16,811.0
|
Liabilities and
Shareholders' Equity:
|
|
|
|
|
|
|
|
|
|
Policy
liabilities
|
|
$
|
1,877.3
|
|
$
|
1,832.7
|
|
$
|
1,782.8
|
Benefit and claim
reserves
|
|
|
9,132.8
|
|
|
9,122.0
|
|
|
9,498.0
|
Federal income tax
payable: Current
|
|
|
18.7
|
|
|
-
|
|
|
-
|
Debt
|
|
|
961.7
|
|
|
965.0
|
|
|
566.2
|
Sundry
liabilities
|
|
|
1,196.4
|
|
|
1,144.2
|
|
|
1,098.1
|
Shareholders'
equity
|
|
|
4,014.2
|
|
|
3,924.0
|
|
|
3,865.8
|
Total
|
|
$
|
17,201.3
|
|
$
|
16,988.1
|
|
$
|
16,811.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
Fiscal Twelve Months
Ended
|
SUMMARY INCOME
STATEMENTS:
|
|
March
31,
|
|
March
31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net premiums and fees
earned
|
|
$
|
1,194.4
|
|
$
|
1,132.7
|
|
$
|
4,872.8
|
|
$
|
4,852.7
|
Net investment
income
|
|
|
91.4
|
|
|
82.8
|
|
|
354.1
|
|
|
322.2
|
Other income
|
|
|
25.4
|
|
|
23.8
|
|
|
103.2
|
|
|
93.5
|
Net realized investment
gains (losses)
|
|
|
18.8
|
|
|
191.2
|
|
|
99.9
|
|
|
334.8
|
Total
revenues
|
|
|
1,330.2
|
|
|
1,430.6
|
|
|
5,430.2
|
|
|
5,603.3
|
Benefits and
claims
|
|
|
570.1
|
|
|
560.0
|
|
|
2,524.6
|
|
|
2,214.7
|
Sales and general
expenses
|
|
|
595.7
|
|
|
567.8
|
|
|
2,408.9
|
|
|
2,481.6
|
Interest and other
costs
|
|
|
10.5
|
|
|
5.7
|
|
|
30.4
|
|
|
21.5
|
Total
expenses
|
|
|
1,176.4
|
|
|
1,133.6
|
|
|
4,964.0
|
|
|
4,717.9
|
Pretax income
(loss)
|
|
|
153.7
|
|
|
296.9
|
|
|
466.2
|
|
|
885.3
|
Income taxes
(credits)
|
|
|
50.3
|
|
|
102.5
|
|
|
147.4
|
|
|
299.3
|
Net income
(loss)
|
|
$
|
103.4
|
|
$
|
194.4
|
|
$
|
318.7
|
|
$
|
586.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON STOCK
STATISTICS:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss):
|
Basic
|
|
$
|
0.40
|
|
$
|
0.75
|
|
$
|
1.23
|
|
$
|
2.27
|
|
Diluted
|
|
$
|
0.36
|
|
$
|
0.67
|
|
$
|
1.13
|
|
$
|
2.04
|
Components of earnings
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic, net operating
income (loss)
|
|
$
|
0.35
|
|
$
|
0.27
|
|
$
|
0.98
|
|
$
|
1.43
|
Realized investment
gains (losses)
|
|
|
0.05
|
|
|
0.48
|
|
|
0.25
|
|
|
0.84
|
Basic net income
(loss)
|
|
$
|
0.40
|
|
$
|
0.75
|
|
$
|
1.23
|
|
$
|
2.27
|
Diluted, net operating
income (loss)
|
|
$
|
0.32
|
|
$
|
0.25
|
|
$
|
0.91
|
|
$
|
1.30
|
Realized investment
gains (losses)
|
|
|
0.04
|
|
|
0.42
|
|
|
0.22
|
|
|
0.74
|
Diluted net income
(loss)
|
|
$
|
0.36
|
|
$
|
0.67
|
|
$
|
1.13
|
|
$
|
2.04
|
Cash dividends on
common stock
|
|
$
|
.1850
|
|
$
|
.1825
|
|
$
|
.7325
|
|
$
|
.7225
|
Book value per
share
|
|
|
|
|
|
|
|
$
|
15.48
|
|
$
|
14.97
|
Common shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
basic
|
|
|
259,118,634
|
|
|
257,933,928
|
|
|
258,868,456
|
|
|
257,690,189
|
Average
diluted
|
|
|
295,547,223
|
|
|
294,513,903
|
|
|
295,352,039
|
|
|
294,150,269
|
Actual, end of
period
|
|
|
|
|
|
|
|
|
259,381,563
|
|
|
258,168,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUMMARY STATEMENTS
OF COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) as
reported
|
|
$
|
103.4
|
|
$
|
194.4
|
|
$
|
318.7
|
|
$
|
586.0
|
Post-tax net unrealized
gains (losses)
|
|
|
35.9
|
|
|
(55.1)
|
|
|
70.5
|
|
|
(289.2)
|
Other
adjustments
|
|
|
(7.4)
|
|
|
(3.5)
|
|
|
(69.2)
|
|
|
60.4
|
Net
adjustments
|
|
|
28.4
|
|
|
(58.7)
|
|
|
1.3
|
|
|
(228.8)
|
Comprehensive income
(loss)
|
|
$
|
131.8
|
|
$
|
135.7
|
|
$
|
320.0
|
|
$
|
357.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Safe Harbor Statement
Historical data pertaining to the operating results, liquidity,
and other performance indicators applicable to an insurance
enterprise such as Old Republic are not necessarily indicative of
results to be achieved in succeeding years. In addition to the
factors cited below, the long-term nature of the insurance
business, seasonal and annual patterns in premium production and
incidence of claims, changes in yields obtained on invested assets,
changes in government policies and free markets affecting inflation
rates and general economic conditions, and changes in legal
precedents or the application of law affecting the settlement of
disputed and other claims can have a bearing on period-to-period
comparisons and future operating results.
Some of the oral or written statements made in the Company's
reports, press releases, and conference calls following earnings
releases, can constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Of
necessity, any such forward-looking statements involve assumptions,
uncertainties, and risks that may affect the Company's future
performance. With regard to Old Republic's General Insurance
segment, its results can be affected, in particular, by the level
of market competition, which is typically a function of available
capital and expected returns on such capital among competitors, the
levels of interest and inflation rates, and periodic changes in
claim frequency and severity patterns caused by natural disasters,
weather conditions, accidents, illnesses, work-related injuries,
and unanticipated external events. Title Insurance and RFIG run-off
results can be affected by similar factors, and by changes in
national and regional housing demand and values, the availability
and cost of mortgage loans, employment trends, and default rates on
mortgage loans. Life and accident insurance earnings can be
affected by the levels of employment and consumer spending,
variations in mortality and health trends, and changes in policy
lapsation rates. At the parent holding company level, operating
earnings or losses are generally reflective of the amount of debt
outstanding and its cost, interest income on temporary holdings of
short-term investments, and period-to-period variations in the
costs of administering the Company's widespread operations.
A more detailed listing and discussion of the risks and other
factors which affect the Company's risk-taking insurance business
are included in Part I, Item 1A - Risk Factors, of the Company's
2014 Form 10-K Annual Report and Part II, Item 1A - Risk Factors,
of the Company's recent Form 10-Q filings to the Securities and
Exchange Commission, which Items are specifically incorporated
herein by reference.
Any forward-looking statements or commentaries speak only as of
their dates. Old Republic undertakes no obligation to publicly
update or revise any and all such comments, whether as a result of
new information, future events or otherwise, and accordingly they
may not be unduly relied upon.
For the latest news releases and other
corporate documents on Old Republic:
Please write
to:
Investor Relations
Old Republic
International Corporation
307 North Michigan
Avenue
Chicago,
IL 60601
312-346-8100
or visit us at
www.oldrepublic.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/old-republic-reports-results-for-the-first-quarter-2015-300070868.html
SOURCE Old Republic International Corporation