OLD REPUBLIC REPORTS RESULTS FOR THE FIRST QUARTER 2024
CHICAGO, April 25, 2024 /PRNewswire/ --
OVERALL RESULTS | ||||||
Quarters Ended March 31, | ||||||
2024 | 2023 | % Change | ||||
Pretax income | $ 398.7 | $ 249.2 | ||||
Pretax investment gains | 167.1 | 26.2 | ||||
Pretax income excluding investment gains | $ 231.5 | $ 222.9 | 3.9 % | |||
Net income | $ 316.7 | $ 199.8 | ||||
Net of tax investment gains | 132.0 | 20.6 | ||||
Net income excluding investment gains | $ 184.7 | $ 179.2 | 3.1 % | |||
Combined ratio | 94.3 % | 92.7 % | ||||
PER DILUTED SHARE | ||||||
Quarters Ended March 31, | ||||||
2024 | 2023 | % Change | ||||
Net income | $ 1.15 | $ 0.68 | ||||
Net of tax investment gains | 0.48 | 0.07 | ||||
Net income excluding investment gains | $ 0.67 | $ 0.61 | 9.8 % | |||
SHAREHOLDERS' EQUITY (BOOK VALUE) | ||||||
Mar. 31, | Dec. 31, | |||||
2024 | 2023 | % Change | ||||
Total | $ 6,400.9 | $ 6,410.7 | (0.2) % | |||
Per Common Share | $ 23.83 | $ 23.31 | 2.2 % | |||
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All amounts in this report are stated in millions except where noted, common stock data, and percentages. |
Old Republic International Corporation (NYSE: ORI) today reported pretax income, excluding investment gains (pretax operating income), of $231.5, an increase of 3.9% compared to the first quarter of last year, reflecting strong growth in General Insurance pretax operating income, partially offset by a decline in Title Insurance.
Summary of results for the quarter:
- Diluted net operating income per share of $0.67, up 9.8% over last year.
- Consolidated combined ratio of 94.3%, up 1.6 points over last year.
- Consolidated net premiums and fees earned of over $1.6 billion, up 5.6%, resulting from double digit growth in General Insurance partially offset by a decline in Title Insurance.
- Net investment income of $164.1, up 19.1%, driven by higher investment yields.
- Favorable loss reserve development of 2.3 points, compared to 4.5 points last year.
- Total capital returned to shareholders during the quarter of $264, comprised of $72 in dividends, and $193 in share repurchases. Following the close of the quarter, an additional $146 was returned via share repurchases.
- Book value per share of $23.83, up 3.4%, inclusive of dividends.
Old Republic's business is managed for the long run. In this context management's key objectives are to achieve highly profitable operating results over the long term, and to ensure balance sheet strength for the insurance underwriting subsidiaries' obligations. Therefore, the evaluation of periodic and long-term results excludes consideration of all investment gains (losses). Under Generally Accepted Accounting Principles (GAAP), however, net income, inclusive of investment gains (losses), is the measure of total profitability.
In management's opinion, the focus on income excluding investment gains (losses), also described herein as segment pretax operating income, provides a better way to analyze, evaluate, and establish accountability for the results of the insurance operations. The inclusion of realized investment gains (losses) in net income can mask trends in operating results, because such realizations are often highly discretionary. Similarly, the inclusion of unrealized investment gains (losses) in equity securities can further distort such operating results with significant period-to-period fluctuations.
FINANCIAL HIGHLIGHTS | |||||||
Quarters Ended March 31, | |||||||
SUMMARY INCOME STATEMENTS: | 2024 | 2023 | % Change | ||||
Revenues: | |||||||
Net premiums and fees earned | $ 1,642.7 | $ 1,555.2 | 5.6 % | ||||
Net investment income | 164.1 | 137.8 | 19.1 | ||||
Other income | 41.9 | 39.4 | 6.2 | ||||
Total operating revenues | 1,848.8 | 1,732.4 | 6.7 | ||||
Investment gains (losses): | |||||||
Realized from actual transactions and impairments | 180.4 | 28.2 | |||||
Unrealized from changes in fair value of equity securities | (13.3) | (2.0) | |||||
Total investment gains | 167.1 | 26.2 | |||||
Total revenues | 2,015.9 | 1,758.7 | |||||
Operating expenses: | |||||||
Loss and loss adjustment expenses | 697.4 | 603.9 | 15.5 | ||||
Sales and general expenses | 903.3 | 888.6 | 1.7 | ||||
Interest and other expenses | 16.4 | 16.9 | (2.8) | ||||
Total operating expenses | 1,617.2 | 1,509.5 | 7.1 % | ||||
Pretax income | 398.7 | 249.2 | |||||
Income taxes | 81.9 | 49.3 | |||||
Net income | $ 316.7 | $ 199.8 | |||||
COMMON STOCK STATISTICS: | |||||||
Components of net income per share: | |||||||
Basic net income excluding investment gains | $ 0.68 | $ 0.61 | 11.5 % | ||||
Net investment gains (losses): | |||||||
Realized investment gains | 0.53 | 0.08 | |||||
Unrealized from changes in fair value of equity securities | (0.04) | (0.01) | |||||
Basic net income | $ 1.17 | $ 0.68 | |||||
Diluted net income excluding investment gains | $ 0.67 | $ 0.61 | 9.8 % | ||||
Net investment gains (losses): | |||||||
Realized investment gains | 0.52 | 0.08 | |||||
Unrealized from changes in fair value of equity securities | (0.04) | (0.01) | |||||
Diluted net income | $ 1.15 | $ 0.68 | |||||
Cash dividends on common stock | $ 0.265 | $ 0.245 | |||||
The information presented in the following table highlights the most meaningful indicators of ORI's segmented and consolidated financial performance. The information underscores the performance of the Company's insurance underwriting subsidiaries, as well as the sound investment of their capital and underwriting cash flows.
The results of the Republic Financial Indemnity Group (RFIG) Run-off business, previously a reportable segment, are deemed immaterial, and therefore are now included within Corporate & Other. Prior period amounts have been reclassified to reflect this change in reportable segments.
Sources of Consolidated Income | |||||
Quarters Ended March 31, | |||||
2024 | 2023 | % Change | |||
Net premiums and fees earned: | |||||
General Insurance | $ 1,091.6 | $ 965.1 | 13.1 % | ||
Title Insurance | 545.4 | 583.2 | (6.5) | ||
Corporate & Other | 5.5 | 6.8 | (18.3) | ||
Consolidated | $ 1,642.7 | $ 1,555.2 | 5.6 % | ||
Underwriting and related services income (loss): | |||||
General Insurance | $ 105.8 | $ 103.8 | 1.9 % | ||
Title Insurance | (13.5) | 3.7 | N/M | ||
Corporate & Other | (8.4) | (5.4) | (54.0) | ||
Consolidated | $ 83.8 | $ 102.1 | (17.9) % | ||
Consolidated combined ratio: | |||||
Loss ratio: | |||||
Current year | 44.8 % | 43.3 % | |||
Prior years | (2.3) | (4.5) | |||
Total | 42.5 | 38.8 | |||
Expense ratio | 51.8 | 53.9 | |||
Combined ratio | 94.3 % | 92.7 % | |||
Net investment income: | |||||
General Insurance | $ 131.1 | $ 108.7 | 20.6 % | ||
Title Insurance | 15.7 | 13.7 | 14.3 | ||
Corporate & Other | 17.3 | 15.2 | 13.5 | ||
Consolidated
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