Old Republic Reports Fourth Quarter and Full Year 2009 Financial Results
CHICAGO, Jan. 28 /PRNewswire-FirstCall/ -- Old Republic International Corporation (NYSE: ORI), today reported the following results for the fourth quarter and full year 2009:
Financial Highlights
(Millions, except per share data and percentages in all tables)
Quarters Ended December 31, Years Ended December 31,
2009 2008 Change 2009 2008 Change
Operating
Revenues $965.2 $899.7 7.3% $3,797.2 $3,724.2 2.0%
Net Operating
Income (Loss) (41.2) (73.1) 43.6 (157.2) (188.1) 16.4
Net Income
(Loss) $(36.7) $(126.5) 70.9% $(99.1) $(558.3) 82.2%
Diluted
Earnings
Per Share:
Net Operating
Income
(Loss) $(0.17) $(0.31) 45.2% $(0.67) $(0.81) 17.3%
Net Income
(Loss) $(0.15) $(0.54) 72.2% $(0.42) $(2.41) 82.6%
Cash Dividends
Per Share $0.17 $0.17 -% $0.68 $0.67 1.5%
Ending Book
Value Per
Share $16.49 $15.91 3.6%
Old Republic experienced further operating difficulties in the quarter and year ended December 31, 2009. Since mid-year 2007, the most significant declines in operating income have been due to the Company's mortgage guaranty and other insurance coverages linked to the housing and consumer credit fields.
Full year 2009 mortgage guaranty and consolidated operating results benefited from a GAAP accounting requirement that premiums received for certain, largely non-recurring reinsurance contract terminations ("commutations"), be recognized immediately as income. As a consequence, 2009 pretax operating earnings benefited by $76.3 million ($49.6 million after tax or $0.21 per share) from such premiums. Substantially all of these premiums will likely be absorbed by loss costs related to the future years' risk exposures they are designed to cover. General insurance performance declined due to a reduction of underwriting profitability among several coverages. At the same time, title operations returned to profitability due to an increase in real estate transactions, growth in market share, and expense control management.
The net loss for 2009's final quarter was reduced by post-tax realized investment gains of $4.4 million ($0.02 per share). For all of 2009, these investment gains, amounting to $58.1 million ($0.25 per share), are related principally to tax credits which could not be recognized previously due to the application of certain accounting rules. Those rules pertain to the tax treatment of losses from other-than-temporary impairments of investments, most of which originated in the second quarter of 2008.
Consolidated Results – The major components of Old Republic's consolidated results and other data for the periods reported upon are shown below:
Quarters Ended December 31, Years Ended December 31,
2009 2008 Change 2009 2008 Change
Operating
revenues:
General
insurance $507.4 $547.2 -7.3% $2,052.7 $2,255.9 -9.0%
Mortgage
guaranty 161.0 171.1 -5.9 746.1 690.0 8.1
Title
insurance 275.0 160.1 71.8 914.1 681.3 34.2
Corporate
and other 21.7 21.1 2.6 84.3 96.8 -12.9
Total $965.2 $899.7 7.3% $3,797.2 $3,724.2 2.0%
Pretax
operating
income (loss):
General
insurance $51.7 $71.1 -27.2% $200.1 $294.3 -32.0%
Mortgage
guaranty (125.9) (178.3) 29.4 (486.4) (594.3) 18.2
Title
insurance 1.5 (19.3) 108.1 2.1 (46.3) 104.7
Corporate
and other (.2) 2.1 -112.9 4.0 13.5 -70.1
Sub-total (72.9) (124.4) 41.4 (279.9) (332.7) 15.9
Realized
investment
gains (losses):
From sales 14.9 (30.2) 15.9 (4.1)
From
impairments (8.0) (33.3) (9.5) (482.3)
Net realized
investment
gains
(losses) 6.9 (63.5) 110.9 6.3 (486.4) 101.3
Consolidated
pretax
income
(loss) (65.9) (188.0) 64.9 (273.6) (819.2) 66.6
Income
taxes
(credits) (29.2) (61.5) 52.5 (174.4) (260.8) 33.1
Net income
(loss) $(36.7) $(126.5) 70.9% $(99.1) $(558.3) 82.2%
Consolidated
underwriting
ratio:
Benefits
and claim
ratio 73.9% 87.3% 76.7% 81.8%
Expense
ratio 44.7 39.6 41.8 39.1
Composite
ratio 118.6% 126.9% 118.5% 120.9%
Components
of diluted
earnings
per share:
Net
operating
income
(loss) $(0.17) $(0.31) 45.2% $(0.67) $(0.81) 17.3%
Net
realized
investment
gains
(losses) 0.02 (0.23) 0.25 (1.60)
Net income
(loss) $(0.15) $(0.54) 72.2% $(0.42) $(2.41) 82.6%
Cash
dividends
paid
per share $0.17 $0.17 -% $0.68 $0.67 1.5%
The above table shows both operating and net income (loss) to highlight the effects of realized investment gain or loss recognition and any non-recurring items on period-to-period comparisons. Operating income, however, does not replace net income computed in accordance with the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") of generally accepted accounting principles ("GAAP") as a measure of total profitability.
The recognition of realized investment gains or losses can be highly discretionary and arbitrary due to such factors as the timing of individual securities sales, recognition of estimated losses from write-downs for 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. Likewise, unusual items which may emerge from time to time can distort the comparability of the Company's results from period to period. Accordingly, management uses net operating income, a non-GAAP financial measure, to evaluate and better explain operating performance, and believes its use enhances an understanding of Old Republic's basic business results.
General Insurance Results – Pretax operating earnings for the periods reported upon were affected mostly by reduced premium volume and moderately higher claim and expense ratios. The following table shows these effects:
General Insurance Group
Quarters Ended December 31, Years Ended December 31,
2009 2008 Change 2009 2008 Change
Net premiums
earned $437.6 $481.8 -9.2% $1,782.5 $1,989.3 -10.4%
Net investment
income 67.1 64.4 4.2 258.9 253.6 2.1
Pretax
operating
income
(loss) $51.7 $71.1 -27.2% $200.1 $294.3 -32.0%
Claim ratio 77.1% 73.7% 76.3% 73.0%
Expense ratio 25.0 24.1 25.8 24.2
Composite
ratio 102.1% 97.8% 102.1% 97.2%
Earned premiums for the large majority of insurance coverages continued to trend lower throughout 2009. As in the recent past, premium growth has been constrained by the combination of a moderately declining rate environment during the past three years or so, and by recessionary economic conditions. These conditions affect such factors as sales and employment levels, both of which are important elements upon which premiums are based.
General insurance investment income trends benefited from greater invested asset balances.
Overall claim ratios continued to trend moderately higher in 2009's fourth quarter and for the year as a whole. 2009 claim experience for the consumer credit indemnity ("CCI") coverage in particular remained at high levels, adding approximately 7.9 and 7.3 percentage points to the above claim ratios for the fourth quarter and year 2009, respectively. By comparison, CCI claim experience in the same quarter and year 2008 raised general insurance claim ratios by 4.1 and 6.1 percentage points, respectively. Aggregate claim experience for other coverages, however, remained relatively consistent. Production and general operating expenses edged up slightly in 2009 as the expense reduction lagged a larger drop in earned premiums.
Mortgage Guaranty Results – 2009 mortgage guaranty operating results benefited from the non-recurring captive reinsurance premiums receipts noted above. Key indicators of this segment's evolving performance are shown in the following table:
Mortgage Guaranty Group
Quarters Ended December 31, Years Ended December 31,
2009 2008 Change 2009 2008 Change
Net premiums
earned $136.0 $147.2 -7.6% $644.5 $592.5 8.8%
Net investment
income 23.5 21.8 7.5 92.0 86.8 5.9
Pretax operating
income
(loss) $(125.9) $(178.3) 29.4% $(486.4) $(594.3) 18.2%
Claim ratio 195.8% 220.5% 176.0% 199.3%
Expense ratio 12.8 15.4 12.6 15.7
Composite
ratio 208.6% 235.9% 188.6% 215.0%
Absent the aforementioned effect of the reinsurance commutations, mortgage guaranty earned premiums declined in each of this year's quarterly periods. The lower premium levels resulted mostly from the more selective underwriting criteria applied since late 2007, from an overall decline in the industry's business penetration, and from higher premium refunds related to claim rescissions. These factors were attenuated somewhat by relatively high persistency levels for business produced in prior years, and by a continuing decline in premiums ceded to lender-owned (captive) reinsurance companies.
During 2009's third quarter, Old Republic's Mortgage Guaranty Group entered into reinsurance termination agreements ("commutations") with four lender-owned captive reinsurers. As part of the transactions, the Company received reinsurance premiums of $82.5 million to cover losses expected to occur after the contract termination date. Under GAAP, these reinsurance commutations have been treated as the termination of risk transfer reinsurance arrangements rather than transactions in which the Company takes on new or additional insurance risk. As a result of this GAAP characterization, the premiums received have been booked as current income rather than being deferred and subsequently recognized in the future periods during which the related risk will exist and expected claims will occur. The Company estimates that substantially all of these premiums will likely be absorbed by related claim costs thus negating the current appearance of a gain from the transactions. In the above table, the up front recognition of the $82.5 million of premiums also has the effect of portraying an increase in 2009's net premiums earned of 8.8%, whereas their exclusion through deferral to future at risk periods would have shown an actual 4.1% decline. As a further consequence of this GAAP premium recognition methodology the 2009 loss ratio dropped from 199.6% to 176.0%, and the 2009 pretax operating loss was reduced from $562.7 million to $486.4 million. Excluding these premium recognition effects, quarterly claim ratios throughout 2009 averaged 199.7% versus a comparable average of 199.3% for 2008. Greater claim rescissions and a moderate decline in expected claim severity during 2009 offset to some degree the impact on claim reserve provisions of a continued uptrend in reported delinquent loans. The components of incurred mortgage guaranty claim ratios are shown in the following table.
Mortgage Guaranty Group
Quarters Ended Years Ended
December 31, December 31,
2009 2008 2009 2008
Incurred claim ratio from:
Paid claims 110.7% 99.5% 97.0% 74.8%
Claim reserve provisions 76.5 121.0 102.6 124.5
Effect of commutations 8.6 - -23.6 -
Total 195.8% 220.5% 176.0% 199.3%
Production and operating expense ratios for all periods reported upon reflect continued success in expense management. Net investment income trended up throughout 2009 as a result of an invested asset base enhanced by positive operating cash flow generated primarily by income tax related asset recoveries and funds received in the above noted reinsurance commutations.
Title Insurance Results – In 2009 Old Republic's title insurance business turned slightly profitable for the first time since 2006. Key operating performance indicators are shown in the following table:
Title Insurance Group
Quarters Ended December 31, Years Ended December 31,
2009 2008 Change 2009 2008 Change
Net premiums
and fees
earned $267.8 $154.0 73.9% $888.4 $656.1 35.4%
Net investment
income 6.9 6.0 14.4 25.2 25.1 0.2
Pretax
operating
income (loss) $1.5 $(19.3) 108.1% $2.1 $(46.3) 104.7%
Claim ratio 8.6% 7.0% 7.9% 7.0%
Expense ratio 92.5 109.1 93.8 103.6
Composite
ratio 101.1% 116.1% 101.7% 110.6%
Growth in title premiums and fees for 2009 resulted mostly from greater refinance transactions earlier in the year and from market share gains taken from title industry dislocations and consolidations. Claim costs rose at a quicker pace, however, as the Company added moderately to reserve provisions in consideration of recent claim emergence trends. Production and general operating expenses, while relatively lower as a percentage of premium and fees revenues, rose dollar-wise in reflection of greater personnel and other production costs related to the higher revenues attained and anticipated.
Corporate and Other Operations – The Company's small life and health insurance business and the net costs associated with the parent holding company and internal services subsidiaries produced a much lower operating gain in 2009. Period-to-period variations in the results of these relatively minor elements of Old Republic's operations usually stem from the volatility inherent to the small scale of its life and health business, fluctuations in the costs of external debt, and net interest on intra-system financing arrangements.
Cash, Invested Assets, and Shareholders' Equity – The following table reflects Old Republic's consolidated cash and invested assets as well as shareholders' equity at the dates shown:
December 31,
2009 2008 Change
Cash and invested assets: Fair value basis $9,879.0 $8,855.1 11.6%
Original cost basis $9,625.9 $9,210.0 4.5%
Shareholders' equity: Total $3,891.4 $3,740.3 4.0%
Per common share $16.49 $15.91 3.6%
Composition of shareholders' equity per share:
Equity before items below $14.99 $16.10 -6.9%
Unrealized investment gains (losses) and other
accumulated comprehensive income (loss) 1.50 (0.19)
Total $16.49 $15.91 3.6%
Consolidated cash flow from operating activities amounted to $532.9 million for the year ended 2009 versus $565.6 million for 2008.
The investment portfolio reflects a current allocation of approximately 86 percent to fixed-maturity securities and 5 percent to equities. As has been the case for many years, Old Republic's invested assets are managed in consideration of enterprise-wide risk management objectives intended to assure solid funding of its subsidiaries' long-term obligations to insurance policyholders and other beneficiaries, and evaluations of their long-term effect on the stability of capital accounts. The portfolio contains little or no direct 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.
Substantially all changes in the shareholders' equity account reflect the Company's net income or loss, dividend payments to shareholders, and impairments or changes in market valuations of invested assets during the periods shown below:
Shareholders' Equity Per Share
Years Ended December 31,
2009 2008 2007
Beginning balance $15.91 $19.71 $18.91
Changes in shareholders' equity:
Net operating income (loss) (.67) (.81) .98
Net realized investment gains (losses):
From sales .04 (.01) .20
From impairments .21 (1.59) -
Subtotal .25 (1.60) .20
Net unrealized investment gains (losses) 1.59 (.33) .05
Total realized and unrealized investment
gains (losses) 1.84 (1.93) .25
Cash dividends (.68) (.67) (.63)
Stock issuance, foreign exchange, and
other transactions .09 (.39) .20
Net change .58 (3.80) .80
Ending balance $16.49 $15.91 $19.71
Old Republic's significant investments in the stocks of two leading publicly held mortgage guaranty ("MI") businesses (MGIC Investment Corp. and The PMI Group) account for a substantial portion of the 2008 realized and unrealized investment losses shown in the above and following tables. Unrealized losses, including losses on securities categorized as other-than-temporarily impaired ("OTTI"), represent the net difference between the most recently established cost and the fair values of the investments at each point in time. The aggregate original and impaired costs, fair value, and latest reported underlying equity values of the aforementioned two mortgage guaranty investments are shown below.
December 31,
2009 2008
Total value of the two MI investments: Original cost $416.4 $416.4
Impaired cost 106.8 106.8
Fair value 130.7 82.7
Underlying
equity(*) $303.2 $515.9
(*) Underlying equity based on latest reports (which may lag by one
quarter) issued by investees.
The above-noted mortgage guaranty holdings were acquired as passive long-term investment additions for a core segment of Old Republic's business in anticipation of a recovery of the MI industry in 2010. In management's judgment, the currently depressed market valuations of companies operating in the housing and mortgage-lending sectors of the American economy have been impacted significantly by the cyclical and macroeconomic conditions affecting these sectors, and by the recent dysfunctionality of the banking and mortgage lending industries. For external financial reporting purposes, however, Old Republic uses relatively short time frames in recognizing OTTI adjustments in its income statement. In this context, absent issuer-specific circumstances that would result in a contrary conclusion, all unrealized investment losses pertaining to any equity security reflecting a 20 percent or greater decline for a six month period is considered OTTI. Unrealized losses that are deemed temporary and all unrealized gains are recorded directly as a separate component of the shareholders' equity account and in the consolidated statement of comprehensive income. As a result of accounting idiosyncrasies, however, OTTI losses recorded in the income statement of one period can not be offset in the income statement of a subsequent period by fair value gains on the previously impaired securities unless the gains are realized through actual sales. Such unrealized fair value gains can only be recognized through direct credits in the shareholders' equity account and in the consolidated statement of comprehensive income.
2009 Capital Raise - Early in 2009's second quarter, the Company obtained gross proceeds of $316.25 million through a public offering of 8% convertible Senior Notes due in 2012. The funds were used mostly to enhance the capital base of the general and title insurance segments, and to repay a portion of commercial paper debt previously incurred to strengthen the capital of the mortgage guaranty segment as of year end 2008. Along with the growth oriented capital additions to businesses with good prospects for the long term, the new funds enhance the stability and resiliency of Old Republic's consolidated capitalization.
Conference Call Information
Old Republic has scheduled a conference call at 3:00 p.m. EST (2:00 p.m. CST) today, to discuss its fourth quarter and full year 2009 performance and to review major operating trends and business developments. To access this call, please log on to www.oldrepublic.com 15 minutes before the call to download the necessary software.
Investors may access a replay of the call by dialing 888-203-1112, passcode 4939212, which will be available through February 4, 2010. The replay will also be available on Old Republic International's website through February 28, 2010.
About Old Republic
Chicago-based Old Republic International Corporation is an insurance holding company whose subsidiaries market, underwrite and provide risk management services for a wide variety of coverages primarily in the property & liability, mortgage guaranty, and title insurance fields. One of the nation's 50 largest publicly owned insurance organizations, Old Republic has assets of approximately $14.19 billion and shareholders' equity of $3.89 billion or $16.49 per share. Its current stock market valuation is approximately $2.58 billion, or $10.75 per share.
The nature of Old Republic's business requires that it be managed for the long run. For the 25 years ended in 2009, the Company's total market return, with dividends reinvested, has grown at a compounded annual rate of 9.7 percent per share. For the same period, the total market return, with dividends reinvested, for the S&P 500 Index has grown at a 10.5 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 11.6 percent per share, and the regular cash dividend has grown at a 10.3 percent annual compound rate. According to the most recent edition of Mergent's Dividend Achievers, Old Republic is one of just 120 companies, out of 10,000-plus publicly held corporations, that have posted at least 25 consecutive years of annual dividend growth.
Accompanying Financial Data:
- Summary Financial Statements and Common Stock Statistics
- Segmented Operating Summary
- Segmented Operating Statistics
- Notes and Safe Harbor Statement
Old Republic International Corporation
Financial Summary (Unaudited)
December 31,
SUMMARY BALANCE SHEETS: 2009 2008
Assets:
Cash and fixed maturity
securities $9,230.9 $8,358.9
Equity securities 502.9 350.3
Other invested assets 145.2 145.8
Cash and invested
assets 9,879.0 8,855.1
Accounts and premiums
receivable 788.6 806.7
Federal income tax
recoverable: Current 7.3 41.0
Reinsurance balances
recoverable 2,558.0 2,448.0
Prepaid federal income
taxes 221.4 463.4
Sundry assets 735.4 651.7
Total $14,190.0 $13,266.0
Liabilities and
Shareholders' Equity:
Policy liabilities $1,223.4 $1,293.0
Benefit and claim
reserves 7,915.0 7,241.3
Federal income tax
payable: Deferred 47.5 77.3
Debt 346.7 233.0
Sundry liabilities 765.8 680.9
Shareholders' equity 3,891.4 3,740.3
Total $14,190.0 $13,266.0
Quarters Ended Years Ended
SUMMARY INCOME STATEMENTS: December 31, December 31,
2009 2008 2009 2008
Net premiums and fees
earned $860.9 $800.6 $3,388.9 $3,318.1
Net investment income 99.5 95.0 383.5 377.3
Other income 4.7 4.0 24.8 28.7
Net realized investment
gains (losses) 6.9 (63.5) 6.3 (486.4)
Total revenues 972.2 836.1 3,803.6 3,237.7
Benefits and claims 636.0 698.5 2,598.9 2,715.7
Sales and other expenses 402.1 325.5 1,478.3 1,341.2
Total expenses 1,038.2 1,024.1 4,077.2 4,056.9
Pretax income (loss) (65.9) (188.0) (273.6) (819.2)
Income taxes (credits) (29.2) (61.5) (174.4) (260.8)
Net income (loss) $(36.7) $(126.5) $(99.1) $(558.3)
COMMON STOCK STATISTICS (a):
Net income (loss): Basic $(.15) $(.54) $(.42) $(2.41)
Diluted $(.15) $(.54) $(.42) $(2.41)
Components of earnings per
share:
Basic, net operating
income (loss) $(.17) $(.31) $(.67) $(.81)
Realized investment gains
(losses) .02 (.23) .25 (1.60)
Basic net income (loss) $(.15) $(.54) $(.42) $(2.41)
Diluted, net operating
income (loss) $(.17) $(.31) $(.67) $(.81)
Realized investment gains
(losses) .02 (.23) .25 (1.60)
Diluted net income
(loss) $(.15) $(.54) $(.42) $(2.41)
Cash dividends on common
stock $.17 $.17 $.68 $.67
Book value per share $16.49 $15.91
Common shares
outstanding:
Average basic 235,913,036 233,763,723 235,657,425 231,484,083
Average diluted 235,913,036 233,763,723 235,657,425 231,484,083
Actual, end of
period 235,995,121 235,031,776
SUMMARY STATEMENTS OF
COMPREHENSIVE INCOME (LOSS):
Net income (loss) as
reported $(36.7) $(126.5) $(99.1) $(558.3)
Post-tax net unrealized
gains (losses) 8.3 7.1 376.1 (78.1)
Other adjustments 2.0 (49.6) 19.3 (56.9)
Net adjustments 10.3 (42.5) 395.4 (135.1)
Comprehensive income
(loss) $(26.3) $(169.0) $296.3 $(693.4)
Old Republic International Corporation
Segmented Operating Summary (Unaudited)
Net
Premiums Net
& Fees Investment Other Operating Benefits
Earned Income Income Revenues & Claims
Quarter Ended December 31, 2009
General $437.6 $67.1 $2.6 $507.4 $337.3
Mortgage 136.0 23.5 1.4 161.0 266.4
Title 267.8 6.9 .2 275.0 22.9
Other 19.3 1.9 .4 21.7 9.2
Consolidated $860.9 $99.5 $4.7 $965.2 $636.0
Quarter Ended December 31, 2008
General $481.8 $64.4 $0.9 $547.2 $355.3
Mortgage 147.2 21.8 1.9 171.1 324.8
Title 154.0 6.0 - 160.1 10.7
Other 17.3 2.6 1.1 21.1 7.6
Consolidated $800.6 $95.0 $4.0 $899.7 $698.5
Year Ended December 31, 2009
General $1,782.5 $258.9 $11.1 $2,052.7 $1,360.3
Mortgage 644.5 92.0 9.5 746.1 1,134.1
Title 888.4 25.2 .4 914.1 70.3
Other 73.3 7.2 3.6 84.3 34.1
Consolidated $3,388.9 $383.5 $24.8 $3,797.2 $2,598.9
Year Ended December 31, 2008
General $1,989.3 $253.6 $13.0 $2,255.9 $1,452.3
Mortgage 592.5 86.8 10.6 690.0 1,180.7
Title 656.1 25.1 - 681.3 45.6
Other 80.1 11.6 4.9 96.8 36.8
Consolidated $3,318.1 $377.3 $28.7 $3,724.2 $2,715.7
Pretax Composite
Sales & Operating Under-
Other Total Income writing
Expenses Expenses (Loss) Ratios
Quarter Ended December 31, 2009
General $118.3 $455.6 $51.7 102.1%
Mortgage 20.6 287.0 (125.9) 208.6
Title 250.5 273.4 1.5 101.1
Other 12.7 22.0 (.2) -
Consolidated $402.1 $1,038.2 $(72.9) 118.6%
Quarter Ended December 31, 2008
General $120.7 $476.1 $71.1 97.8%
Mortgage 24.6 349.5 (178.3) 235.9
Title 168.6 179.4 (19.3) 116.1
Other 11.4 19.0 2.1 -
Consolidated $325.5 $1,024.1 $(124.4) 126.9%
Year Ended December 31, 2009
General $492.1 $1,852.5 $200.1 102.1%
Mortgage 98.3 1,232.5 (486.4) 188.6
Title 841.6 911.9 2.1 101.7
Other 46.1 80.2 4.0 -
Consolidated $1,478.3 $4,077.2 $(279.9) 118.5%
Year Ended December 31, 2008
General $509.2 $1,961.5 $294.3 97.2%
Mortgage 103.6 1,284.4 (594.3) 215.0
Title 681.9 727.6 (46.3) 110.6
Other 46.3 83.2 13.5 -
Consolidated $1,341.2 $4,056.9 $(332.7) 120.9%
Old Republic International Corporation
Segmented Operating Statistics
Quarters Ended Years Ended
December 31, December 31,
2009 2008 2009 2008
General Insurance:
Benefits and claim ratio 77.1% 73.7% 76.3% 73.0%
Expense ratio 25.0 24.1 25.8 24.2
Composite ratio 102.1% 97.8% 102.1% 97.2%
Paid loss ratio 77.0% 74.8% 75.5% 69.9%
Mortgage Guaranty: (see additional Segmented Supplemental Operating Statistics)
Balance Sheet Leverage Ratios (b):
Risk to Capital Ratio -
Performing risk basis 23.1:1 18.8:1
Total Financial Resources
to Risk Ratio 13.0% 11.2%
Earned premiums:
Direct $152.5 $172.4 $648.6 $698.4
Net $136.0 $147.2 $644.5 $592.5
Claim ratio 195.8% 220.5% 176.0% 199.3%
Expense ratio 12.8 15.4 12.6 15.7
Composite ratio 208.6% 235.9% 188.6% 215.0%
Paid loss ratio 115.7% 99.5% 85.5% 74.8%
Title Insurance:
Direct orders opened 87,855 61,094 358,935 257,743
Direct orders closed 69,780 41,794 274,189 183,117
Reserves to paid losses ratio (b) 4.7:1 5.4:1
Claim ratio 8.6% 7.0% 7.9% 7.0%
Expense ratio 92.5 109.1 93.8 103.6
Composite ratio 101.1% 116.1% 101.7% 110.6%
Paid loss ratio 10.0% 14.7% 8.5% 9.2%
Consolidated:
Benefits and claim ratio 73.9% 87.3% 76.7% 81.8%
Expense ratio 44.7 39.6 41.8 39.1
Composite ratio 118.6% 126.9% 118.5% 120.9%
Paid loss ratio 61.1% 67.6% 59.2% 58.4%
Old Republic International Corporation
Supplemental Segmented Operating Statistics
Year-to-Date
2004 2005 2006 2007 2008
Mortgage Guaranty:
New insurance
written:
Traditional
Primary $24,749.4 $20,554.5 $17,187.0 $31,841.7 $20,861.9
Bulk 4,487.8 9,944.3 13,716.7 10,800.3 3.5
Other 7,324.7 498.2 583.7 901.6 1,123.5
Total $36,562.0 $30,997.1 $31,487.5 $43,543.7 $21,989.0
New Risk Written:
Traditional
Primary $6,100.2 $5,112.4 $4,246.8 $7,844.5 $4,815.0
Bulk 112.4 1,053.1 1,146.6 724.5 0.6
Other 89.9 11.7 12.2 15.2 11.8
Total $6,302.5 $6,177.4 $5,405.7 $8,584.4 $4,827.5
New Risk Written –
Traditional Primary
By FICO Score:
FICO less
than 620 9.4% 7.9% 9.1% 8.6% 1.4%
FICO 620 to 680 34.7 34.4 33.5 34.4 17.2
FICO greater
than 680 54.6 56.8 56.9 56.8 81.4
Unscored/
Unavailable 1.3 0.9 0.5 0.2 0.0
Total 100.0% 100.0% 100.0% 100.0% 100.0%
By Loan to Value:
LTV 85.0 and
below 5.8% 5.7% 5.1% 5.6% 8.9%
LTV 85.01 to 90.0 37.2 41.8 38.9 30.4 41.4
LTV 90.01 to 95.0 37.0 31.2 25.6 24.9 30.2
LTV greater
than 95.0 20.0 21.3 30.4 39.1 19.5
Total 100.0% 100.0% 100.0% 100.0% 100.0%
Full Documentation 88.6% 80.7% 81.9% 84.1% 95.8%
ARMS with
resets < 5 years 13.0% 13.8% 8.9% 4.0% 1.2%
Net Risk in Force:
Traditional
Primary $15,452.2 $14,711.2 $14,582.1 $18,808.5 $20,463.0
Bulk 834.8 1,758.8 2,471.1 2,539.9 2,055.0
Other 580.9 586.1 578.9 511.1 457.0
Total $16,868.0 $17,056.2 $17,632.2 $21,859.5 $22,975.1
Persistency:
Traditional
Primary 64.5% 65.5% 73.1% 77.6% 83.9%
Bulk 55.7% 59.5% 70.5% 73.7% 88.4%
Risk to Capital Ratio –
Performing Risk
Basis (b) 8.9:1 9.3:1 9.3:1 12.0:1 18.8:1
Total Financial
Resources to Risk
Ratio (b) 12.2% 11.8% 12.0% 11.1% 11.2%
2009
Year-to-
Q1 Q2 Q3 Q4 Date
Mortgage Guaranty:
New insurance
written:
Traditional
Primary $2,212.0 $2,573.2 $1,993.6 $1,120.3 $7,899.2
Bulk - - - - -
Other 0.5 - - - 0.5
Total $2,212.6 $2,573.2 $1,993.6 $1,120.3 $7,899.8
New Risk Written:
Traditional
Primary $468.4 $542.8 $428.1 $242.3 $1,681.7
Bulk - - - - -
Other - - - - -
Total $468.4 $542.8 $428.1 $242.3 $1,681.7
New Risk Written –
Traditional Primary
By FICO Score:
FICO less
than 620 0.0% 0.0% 0.0% 0.0% 0.0%
FICO 620 to 680 4.0 1.1 0.3 0.2 1.5
FICO greater
than 680 96.0 98.9 99.7 99.8 98.5
Unscored/
Unavailable 0.0 0.0 0.0 0.0 0.0
Total 100.0% 100.0% 100.0% 100.0% 100.0%
By Loan to Value:
LTV 85.0 and below 11.2% 11.5% 9.5% 7.7% 10.4%
LTV 85.01 to 90.0 50.2 51.1 53.4 53.4 51.7
LTV 90.01 to 95.0 36.8 36.4 36.1 37.3 36.6
LTV greater
than 95.0 1.8 1.0 1.0 1.6 1.3
Total 100.0% 100.0% 100.0% 100.0% 100.0%
Full Documentation 99.9% 100.0% 100.0% 100.0% 100.0%
ARMS with resets
< 5 years 0.4% 0.3% 0.5% 0.9% 0.5%
Net Risk in Force:
Traditional
Primary $19,809.1 $19,202.8 $19,279.6 $18,727.9
Bulk 2,006.8 1,941.5 1,849.1 1,776.7
Other 386.7 330.3 297.5 297.2
Total $22,202.7 $21,474.6 $21,426.4 $20,801.9
Persistency:
Traditional
Primary 83.3% 83.3% 83.4% 82.8%
Bulk 89.7% 90.8% 89.3% 88.3%
Risk to Capital
Ratio –
Performing Risk
Basis (b) 18.6:1 20.1:1 20.9:1 23.1:1
Total Financial
Resources to Risk
Ratio (b) 11.8% 12.0% 12.7% 13.0%
Old Republic International Corporation
Supplemental Segmented Operating Statistics
Year-to-Date
2004 2005 2006 2007 2008
Mortgage Guaranty:
Risk in Force by
FICO Scores:
Traditional Primary:
FICO less than 620 8.6% 8.3% 8.5% 8.5% 7.0%
FICO 620 to 680 31.1 31.8 32.6 33.6 30.5
FICO greater
than 680 51.4 53.1 54.6 55.1 60.5
Unscored/
Unavailable 8.9 6.8 4.3 2.8 2.0
Total 100.0% 100.0% 100.0% 100.0% 100.0%
Bulk (c):
FICO less than 620 11.5% 21.2% 24.1% 19.4% 18.2%
FICO 620 to 680 45.4 38.7 35.7 34.9 33.7
FICO greater
than 680 40.9 38.7 39.8 45.4 47.9
Unscored/
Unavailable 2.2 1.4 0.4 0.3 0.2
Total 100.0% 100.0% 100.0% 100.0% 100.0%
Risk in Force by
Original LTV Ratio:
Traditional Primary:
LTV 85.0 and below 5.7% 5.4% 5.0% 4.7% 5.1%
LTV 85.01 to 90.0 36.8 37.7 37.4 34.4 35.5
LTV 90.01 to 95.0 42.0 39.1 36.0 32.0 31.6
LTV greater
than 95.0 15.5 17.8 21.6 28.9 27.8
Total 100.0% 100.0% 100.0% 100.0% 100.0%
Bulk (c):
LTV 85.0 and below 66.4% 57.3% 63.4% 62.0% 63.5%
LTV 85.01 to 90.0 16.9 27.4 23.1 20.9 20.1
LTV 90.01 to 95.0 12.9 11.6 9.0 9.3 8.6
LTV greater
than 95.0 3.8 3.7 4.5 7.8 7.8
Total 100.0% 100.0% 100.0% 100.0% 100.0%
Risk in Force by:
Type of Loan
Documentation:
Traditional Primary:
Full
Documentation 93.2% 90.6% 89.4% 88.0% 90.0%
Reduced
Documentation 6.8% 9.4% 10.6% 12.0% 10.0%
Bulk (c):
Full Documentation 34.0% 51.9% 51.9% 49.6% 49.1%
Reduced
Documentation 66.0% 48.1% 48.1% 50.4% 50.9%
2009
Q1 Q2 Q3 Q4
Mortgage Guaranty:
Risk in Force by FICO Scores:
Traditional Primary:
FICO less than 620 6.8% 6.7% 6.6% 6.5%
FICO 620 to 680 30.2 29.7 29.1 28.8
FICO greater than 680 61.2 61.9 62.7 63.1
Unscored/Unavailable 1.8 1.7 1.6 1.6
Total 100.0% 100.0% 100.0% 100.0%
Bulk (c):
FICO less than 620 18.0% 17.8% 17.7% 17.6%
FICO 620 to 680 33.7 33.3 33.2 33.1
FICO greater than 680 48.1 48.7 48.9 49.2
Unscored/Unavailable 0.2 0.2 0.2 0.1
Total 100.0% 100.0% 100.0% 100.0%
Risk in Force by Original LTV Ratio:
Traditional Primary:
LTV 85.0 and below 5.2% 5.3% 5.3% 5.3%
LTV 85.01 to 90.0 35.8 36.1 36.4 36.4
LTV 90.01 to 95.0 31.4 31.4 31.5 31.6
LTV greater than 95.0 27.6 27.2 26.8 26.7
Total 100.0% 100.0% 100.0% 100.0%
Bulk (c):
LTV 85.0 and below 64.0% 65.6% 65.5% 65.9%
LTV 85.01 to 90.0 19.8 18.6 18.6 18.4
LTV 90.01 to 95.0 8.4 7.8 7.9 7.8
LTV greater than 95.0 7.8 8.0 8.0 7.9
Total 100.0% 100.0% 100.0% 100.0%
Risk in Force by:
Type of Loan Documentation:
Traditional Primary:
Full Documentation 90.1% 90.4% 90.8% 91.1%
Reduced Documentation 9.9% 9.6% 9.2% 8.9%
Bulk (c):
Full Documentation 49.0% 49.2% 49.5% 49.4%
Reduced Documentation 51.0% 50.8% 50.5% 50.6%
Old Republic International Corporation
Supplemental Segmented Operating Statistics
Year-to-Date
2004 2005 2006 2007 2008
Mortgage Guaranty:
Risk in Force by Loan Type:
Traditional Primary:
Fixed Rate & ARMS
with resets
>= 5 years 91.4% 90.9% 92.3% 94.4% 95.8%
ARMS with resets
< 5 years 8.6% 9.1% 7.7% 5.6% 4.2%
Bulk (c):
Fixed Rate & ARMS
with resets
>= 5 years 82.5% 64.6% 65.7% 70.9% 74.4%
ARMS with
resets < 5 years 17.5% 35.4% 34.3% 29.1% 25.6%
Risk in Force by
Policy Year:
Traditional Primary:
2003 and prior 67.0% 46.3% 33.9% 20.9% 15.6%
2004 33.0 25.3 18.6 11.3 8.8
2005 28.4 23.4 15.1 11.9
2006 24.1 16.4 13.0
2007 36.3 30.1
2008 20.6
2009
Total 100.0% 100.0% 100.0% 100.0% 100.0%
Bulk (c):
2003 and prior 87.8% 37.1% 22.5% 12.1% 7.4%
2004 12.2 9.9 6.4 6.1 7.4
2005 53.0 31.1 23.4 23.5
2006 40.0 40.7 43.3
2007 17.7 18.4
2008 0.0
Total 100.0% 100.0% 100.0% 100.0% 100.0%
2009
Q1 Q2 Q3 Q4
Mortgage Guaranty:
Risk in Force by Loan Type:
Traditional Primary:
Fixed Rate & ARMS
with resets >= 5 years 95.8% 95.9% 96.1% 96.3%
ARMS with resets < 5 years 4.2% 4.1% 3.9% 3.7%
Bulk (c):
Fixed Rate & ARMS
with resets >= 5 years 74.8% 75.3% 75.4% 75.4%
ARMS with resets < 5 years 25.2% 24.7% 24.6% 24.6%
Risk in Force by Policy Year:
Traditional Primary:
2003 and prior 14.1% 13.6% 13.2% 12.9%
2004 8.3 8.1 7.8 7.7
2005 11.6 11.4 11.1 11.0
2006 12.8 12.4 12.1 11.9
2007 30.1 29.4 28.7 28.3
2008 20.8 20.4 20.1 19.8
2009 2.3 4.7 7.0 8.4
Total 100.0% 100.0% 100.0% 100.0%
Bulk (c):
2003 and prior 7.3% 7.2% 5.9% 5.0%
2004 7.5 7.7 8.0 8.2
2005 23.6 23.6 23.9 23.9
2006 43.1 42.8 43.3 43.6
2007 18.5 18.7 18.9 19.3
2008 0.0 0.0 0.0 0.0
Total 100.0% 100.0% 100.0% 100.0%
Old Republic International Corporation
Supplemental Segmented Operating Statistics
Year-to-Date
2004 2005 2006 2007 2008
Mortgage Guaranty:
Risk in Force by State
(Top 10 States ranked
by risk in force as
of most recent quarter):
Traditional Primary:
Texas 6.6% 7.1% 7.5% 7.7% 8.1%
Florida 9.1% 9.0% 9.0% 8.9% 8.3%
California 3.9% 3.6% 3.1% 4.5% 5.5%
Georgia 6.6% 6.3% 5.8% 5.3% 5.2%
Illinois 5.5% 5.4% 5.4% 5.2% 5.2%
North Carolina 4.7% 4.7% 4.8% 4.5% 4.4%
Pennsylvania 3.6% 3.8% 4.0% 3.8% 3.8%
Ohio 3.7% 3.7% 3.7% 3.4% 3.2%
New Jersey 3.1% 3.1% 3.1% 3.1% 3.1%
Virginia 3.0% 2.8% 2.8% 2.8% 2.9%
Bulk (c):
California 18.9% 19.0% 17.7% 17.5% 18.2%
Florida 8.7% 8.3% 9.4% 9.3% 10.0%
Texas 4.8% 4.5% 4.8% 4.8% 4.6%
New York 12.5% 6.3% 4.6% 5.5% 5.4%
Illinois 3.1% 4.9% 4.5% 4.1% 3.9%
Arizona 3.0% 4.0% 4.4% 4.2% 4.3%
Georgia 3.3% 3.3% 3.6% 4.2% 4.0%
Ohio 2.1% 3.6% 3.4% 3.1% 3.1%
Colorado 2.3% 2.7% 2.8% 3.0% 2.9%
New Jersey 6.3% 3.8% 3.2% 3.4% 3.4%
Delinquent Loan Counts:
Traditional
Primary 21,737 22,852 20,729 29,749 57,879
Bulk 2,951 3,441 4,496 10,572 23,574
Other 513 816 603 567 769
Total 25,201 27,109 25,828 40,888 82,222
Delinquency Rates:
Traditional Primary 4.1% 4.7% 4.4% 5.5% 10.3%
Bulk 4.6% 3.7% 3.3% 6.9% 17.2%
Other 0.3% 0.5% 0.4% 0.7% 1.0%
Total 3.2% 3.6% 3.4% 5.2% 10.6%
2009
Q1 Q2 Q3 Q4
Mortgage Guaranty:
Risk in Force by State (Top 10
States ranked by risk in force
as of most recent quarter):
Traditional Primary:
Texas 8.1% 8.3% 8.4% 8.5%
Florida 8.3% 8.2% 8.1% 8.1%
California 5.7% 5.7% 5.6% 5.5%
Georgia 5.2% 5.2% 5.2% 5.2%
Illinois 5.1% 5.1% 5.1% 5.1%
North Carolina 4.3% 4.4% 4.5% 4.5%
Pennsylvania 3.9% 3.9% 3.9% 4.0%
Ohio 3.1% 3.1% 3.1% 3.2%
New Jersey 3.1% 3.1% 3.1% 3.1%
Virginia 2.9% 2.9% 2.9% 2.9%
Bulk (c):
California 18.2% 17.8% 17.8% 17.8%
Florida 10.1% 10.1% 10.3% 10.4%
Texas 4.6% 4.7% 4.7% 4.6%
New York 5.4% 5.5% 5.3% 5.4%
Illinois 3.9% 3.9% 4.0% 4.0%
Arizona 4.3% 4.2% 4.2% 4.1%
Georgia 4.0% 4.0% 4.0% 4.0%
Ohio 3.1% 3.2% 3.2% 3.2%
Colorado 3.0% 3.0% 3.0% 3.0%
New Jersey 3.5% 3.4% 3.4% 3.5%
Delinquent Loan Counts:
Traditional Primary 62,905 69,390 79,289 86,422
Bulk 28,832 31,744 34,648 37,518
Other 912 937 1,156 1,388
Total 92,649 102,071 115,093 125,328
Delinquency Rates:
Traditional Primary 11.5% 12.9% 15.0% 16.8%
Bulk 21.7% 24.6% 27.6% 30.8%
Other 1.4% 1.8% 3.0% 3.9%
Total 12.4% 14.2% 16.7% 18.7%
Old Republic International Corporation
Supplemental Segmented Operating Statistics
Year-to-Date
2004 2005 2006 2007 2008
Mortgage Guaranty:
Delinquency Rates by
State (Top 10 States
ranked by risk in
force as of most
recent quarter):
Traditional Primary:
Texas 5.0% 5.7% 4.5% 4.5% 7.1%
Florida 3.2% 3.1% 2.7% 7.7% 21.9%
California 2.1% 1.8% 2.9% 6.7% 19.8%
Georgia 5.6% 5.9% 6.1% 7.2% 11.1%
Illinois 3.8% 4.2% 4.5% 5.4% 10.8%
North Carolina 4.9% 4.9% 4.6% 4.8% 7.6%
Pennsylvania 4.4% 4.7% 4.8% 5.2% 7.7%
Ohio 7.6% 8.3% 7.8% 8.1% 11.0%
New Jersey 4.2% 4.1% 4.1% 5.4% 11.4%
Virginia 2.1% 2.2% 2.6% 4.1% 8.1%
Bulk:
California 1.3% 0.9% 1.6% 7.0% 22.4%
Florida 2.5% 1.9% 1.6% 7.8% 27.0%
Texas 6.1% 5.5% 4.0% 5.4% 10.2%
New York 4.9% 4.3% 4.4% 6.6% 13.8%
Illinois 5.2% 3.0% 4.2% 8.6% 19.1%
Arizona 3.6% 0.9% 1.0% 5.1% 18.2%
Georgia 7.0% 5.8% 4.4% 7.3% 16.3%
Ohio 13.3% 8.4% 9.3% 10.6% 17.1%
Colorado 7.1% 3.0% 3.3% 5.8% 9.8%
New Jersey 3.3% 3.7% 3.5% 6.6% 16.0%
Average Paid Claim
Amount (in whole $):
Traditional
Primary $23,920 $24,255 $25,989 $32,214 $43,532
Bulk $19,885 $20,639 $21,846 $34,951 $56,481
2009
Year-to-
Q1 Q2 Q3 Q4 Date
Mortgage Guaranty:
Delinquency Rates by
State (Top 10 States
ranked by risk in
force as of most
recent quarter):
Traditional Primary:
Texas 6.9% 7.7% 9.2% 10.6%
Florida 25.4% 27.9% 31.2% 34.1%
California 23.7% 25.3% 28.5% 30.5%
Georgia 12.1% 13.7% 16.2% 18.8%
Illinois 12.2% 14.2% 17.1% 19.5%
North Carolina 8.0% 9.0% 10.8% 12.3%
Pennsylvania 8.2% 9.1% 10.6% 11.6%
Ohio 11.4% 12.5% 14.7% 16.4%
New Jersey 13.9% 15.8% 18.9% 21.1%
Virginia 9.3% 10.7% 12.5% 13.9%
Bulk:
California 30.0% 34.2% 37.5% 41.3%
Florida 34.3% 38.5% 42.5% 46.5%
Texas 12.2% 13.0% 14.5% 16.3%
New York 18.0% 20.6% 23.7% 26.8%
Illinois 22.8% 27.0% 31.3% 35.7%
Arizona 25.1% 29.8% 34.0% 37.5%
Georgia 19.5% 20.8% 23.6% 27.6%
Ohio 19.1% 19.9% 21.1% 23.4%
Colorado 11.6% 13.1% 15.2% 17.0%
New Jersey 22.0% 25.8% 30.0% 33.3%
Average Paid Claim
Amount (in whole $):
Traditional
Primary $48,968 $50,212 $45,919 $48,779 $48,492
Bulk $61,806 $61,270 $59,640 $55,728 $59,386
Notes to Accompanying Financial Summaries |
||
($ in Millions, Except Share Data) |
||
(a) |
All per share statistics herein have been adjusted to reflect all stock dividends or splits declared through December 31, 2009. In calculating book value and earnings per share, accounting rules require that common shares owned by the Company's Employee Savings and Stock Ownership Plan that are as yet unallocated to participants in the plan be excluded from the calculation. Such shares are issued and outstanding, have the same voting and other rights applicable to all other common shares, and may be sold at any time by the plan. |
|
(b) |
Old Republic monitors certain balance sheet leverage and trends therein through these ratios with respect to its mortgage guaranty (b – 1 & 2) and title (b – 3) segments: |
|
1 - Risk to Capital Ratio – Performing risk basis: This ratio measures the Company's outstanding net risk in force only on those mortgage loans that are current as to principal and interest in relation to total statutory capital. This ratio therefore excludes non-performing risk exposures (i.e. the outstanding risk on reported loans in default) for which the expected ultimate loss cost has been recognized through the establishment of claim reserves. The Company believes this ratio better matches available statutory capital with the portion of the risk in force for which no claim reserves are required. |
||
2 - Total Financial Resources to Risk Ratio: This ratio measures all of the claim resources available to the Company, including statutory capital, and claim and unearned premium reserves in relation to total net risk in force. The Company believes this ratio is conceptually similar to a banking institution's capital to assets leverage ratio, whereby the non-balance sheet value of a mortgage guaranty insurer's net risk in force is related to total balance sheet resources available to meet estimated losses from outstanding risk exposures. |
||
3 - The Title Reserves to Paid Losses Ratio represents average paid losses for the most recent five years divided into claim reserves at the end of any one year or interim period. The higher this ratio, the greater is a title insurer's expected ability to meet obligations to its assureds. |
||
(c) |
Bulk pool risk in-force, which represented 46.8% of total bulk risk in-force at December 31, 2009, has been allocated pro-rata based on insurance in-force. |
|
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. Mortgage Guaranty and Title Insurance 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. Mortgage Guaranty results, in particular, may also be affected by various risk-sharing arrangements with business producers, as well as the risk management and pricing policies of government sponsored enterprises. Life and health 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 2008 Form 10-K annual report to the Securities and Exchange Commission, which Item is specifically incorporated herein by reference.
Any forward-looking statements or commentaries speak only as of their dates. Old Republic undertakes no obligation to publicly update or revise any and all such comments, whether as a result of new information, future events or otherwise, and accordingly they may not be unduly relied upon.
For the latest news releases and other corporate documents on Old Republic: |
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Please write to: |
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Investor Relations |
|
Old Republic International Corporation |
|
307 North Michigan Avenue |
|
Chicago, IL 60601 |
|
312-346-8100 |
|
or visit us at www.oldrepublic.com |
|
SOURCE Old Republic International Corporation
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