News Release

Old Republic Reports Results For The Second Quarter And First Half Of 2016
Financial Highlights (a) |
|||||||||||||
Quarters Ended June 30, |
Six Months Ended June 30, |
||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||
Operating revenues: |
|||||||||||||
General insurance |
$ |
845.8 |
$ |
810.1 |
$ |
1,670.5 |
$ |
1,613.1 |
|||||
Title insurance |
533.8 |
511.1 |
1,017.5 |
947.8 |
|||||||||
Corporate and other |
7.2 |
9.4 |
14.5 |
16.5 |
|||||||||
Subtotal |
1,386.9 |
1,330.6 |
2,702.6 |
2,577.5 |
|||||||||
RFIG run-off business |
48.5 |
62.6 |
102.3 |
127.1 |
|||||||||
Total |
$ |
1,435.5 |
$ |
1,393.3 |
$ |
2,804.9 |
$ |
2,704.6 |
|||||
Pretax operating income (loss): |
|||||||||||||
General insurance |
$ |
80.0 |
$ |
85.1 |
$ |
167.1 |
$ |
167.1 |
|||||
Title insurance |
44.6 |
47.7 |
66.0 |
63.6 |
|||||||||
Corporate and other |
3.0 |
2.5 |
4.9 |
4.1 |
|||||||||
Subtotal |
127.7 |
135.3 |
238.2 |
234.9 |
|||||||||
RFIG run-off business |
14.3 |
(0.1) |
42.0 |
35.0 |
|||||||||
Total |
142.1 |
135.1 |
280.3 |
270.0 |
|||||||||
Realized investment gains (losses): |
|||||||||||||
From sales |
6.6 |
16.6 |
50.8 |
35.5 |
|||||||||
From impairments |
- |
- |
- |
- |
|||||||||
Net realized investment gains (losses) |
6.6 |
16.6 |
50.8 |
35.5 |
|||||||||
Consolidated pretax income (loss) |
148.8 |
151.8 |
331.1 |
305.6 |
|||||||||
Income taxes (credits) |
47.7 |
49.7 |
107.1 |
100.0 |
|||||||||
Net income (loss) |
$ |
101.0 |
$ |
102.0 |
$ |
224.0 |
$ |
205.5 |
|||||
Components of diluted earnings per share: |
|||||||||||||
Net operating income (loss): |
|||||||||||||
General insurance |
$ |
0.19 |
$ |
0.19 |
$ |
0.39 |
$ |
0.38 |
|||||
Title insurance |
0.10 |
0.11 |
0.15 |
0.14 |
|||||||||
Corporate and other |
0.02 |
0.02 |
0.04 |
0.04 |
|||||||||
Subtotal |
0.31 |
0.32 |
0.58 |
0.56 |
|||||||||
RFIG run-off business |
0.03 |
- |
0.09 |
0.08 |
|||||||||
Total |
0.34 |
0.32 |
0.67 |
0.64 |
|||||||||
Net realized investment gains (losses) |
0.01 |
0.04 |
0.11 |
0.08 |
|||||||||
Net income (loss) |
$ |
0.35 |
$ |
0.36 |
$ |
0.78 |
$ |
0.72 |
|||||
Cash dividends paid per share |
$ |
0.1875 |
$ |
0.1850 |
$ |
0.3750 |
$ |
0.3700 |
|||||
Ending book value per share |
$ |
16.89 |
$ |
15.16 |
|||||||||
(a) Unaudited; All amounts in this report are stated in millions except per share data and percentages.
|
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 operating income, a non-GAAP financial measure, to evaluate and better explain operating performance, believing that this measure enhances an understanding of
The timing of realized investment gain or loss recognition can be highly discretionary 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 affecting this segment's performance for each of the periods reported upon. |
|||||||||||||||
General Insurance Group |
|||||||||||||||
Quarters Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2016 |
2015 |
Change |
2016 |
2015 |
Change |
||||||||||
Net premiums earned |
$ |
741.8 |
$ |
709.3 |
4.6% |
$ |
1,460.8 |
$ |
1,412.7 |
3.4% |
|||||
Net investment income |
77.7 |
74.7 |
4.0 |
156.3 |
148.5 |
5.3 |
|||||||||
Other income |
26.2 |
25.9 |
1.0 |
53.3 |
51.8 |
2.9 |
|||||||||
Operating revenues |
845.8 |
810.1 |
4.4 |
1,670.5 |
1,613.1 |
3.6 |
|||||||||
Benefits and claim costs |
532.3 |
520.2 |
2.3 |
1,057.2 |
1,039.1 |
1.7 |
|||||||||
Sales and general expenses |
218.9 |
193.4 |
13.2 |
417.9 |
384.3 |
8.7 |
|||||||||
Interest and other costs |
14.5 |
11.3 |
28.6 |
28.1 |
22.4 |
25.4 |
|||||||||
Total operating expenses |
765.8 |
724.9 |
5.6 |
1,503.3 |
1,445.9 |
4.0 |
|||||||||
Pretax operating income (loss)(*) |
$ |
80.0 |
$ |
85.1 |
-5.9% |
$ |
167.1 |
$ |
167.1 |
- % |
|||||
Benefit and claim ratio |
71.8% |
73.3% |
72.4% |
73.6% |
|||||||||||
Expense ratio |
26.0 |
23.6 |
25.0 |
23.5 |
|||||||||||
Composite underwriting ratio |
97.8% |
96.9% |
97.4% |
97.1% |
|||||||||||
(*) In connection with the run-off mortgage guaranty ("MI") and consumer credit indemnity ("CCI") combination,
Low single digit earned premium growth prevailed for the latest quarter and year-to-date periods. Premium trends for both 2016 periods were most positively affected by gains in commercial automobile (trucking), in certain other coverages such as home and auto warranty, and by the emerging premium production of a new underwriting facility established in early 2015. Growth was somewhat hindered in the 2016 interim periods due to declining volume in a large account construction book of business, operating in a very competitive environment.
Quarterly or year-to-date fluctuations in the reported benefits and claims ratio trends are not particularly meaningful in evaluating
Title Insurance Results – Year-over-year earnings edged down in this year's second quarter while first half results continued along the positive path set in recent years. |
||||||||||||||||
Title Insurance Group |
||||||||||||||||
Quarters Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2016 |
2015 |
Change |
2016 |
2015 |
Change |
|||||||||||
Net premiums and fees earned |
$ |
524.5 |
$ |
502.7 |
4.3% |
$ |
998.7 |
$ |
931.0 |
7.3% |
||||||
Net investment income |
8.9 |
7.9 |
12.5 |
18.0 |
15.9 |
13.3 |
||||||||||
Other income |
0.3 |
0.4 |
-6.2 |
0.7 |
0.8 |
-10.2 |
||||||||||
Operating revenues |
533.8 |
511.1 |
4.5 |
1,017.5 |
947.8 |
7.4 |
||||||||||
Claim costs |
26.8 |
25.1 |
6.9 |
51.2 |
48.9 |
4.7 |
||||||||||
Sales and general expenses |
460.4 |
436.4 |
5.5 |
896.1 |
831.1 |
7.8 |
||||||||||
Interest and other costs |
1.9 |
1.8 |
1.9 |
4.0 |
4.0 |
-0.7 |
||||||||||
Total operating expenses |
489.2 |
463.4 |
5.6 |
951.4 |
884.1 |
7.6 |
||||||||||
Pretax operating income (loss) |
$ |
44.6 |
$ |
47.7 |
-6.4% |
$ |
66.0 |
$ |
63.6 |
3.8% |
||||||
Claim ratio |
5.1% |
5.0% |
5.1% |
5.3% |
||||||||||||
Expense ratio |
87.7 |
86.7 |
89.7 |
89.2 |
||||||||||||
Composite underwriting ratio |
92.8% |
91.7% |
94.8% |
94.5% |
The continuation of a favorable mortgage rate environment and improving housing and commercial property markets led to higher revenues from title premiums and fees in this year's second quarter and first six months. The improvements were achieved in spite of adverse effects that recently implemented mortgage disclosure rules are having on the consummation of real estate transactions.
As the above table shows, 2016 underwriting margins were compressed to a relatively small degree. Claims ratios were essentially unchanged, but expense ratios climbed slightly as operating costs rose at a faster pace than title premiums and fees revenues. While a smaller component of title profitability, net investment income rose in both periods as it benefitted from moderately higher yields on a larger bond and common stock investment portfolio.
RFIG Run-off Business Results – The table below shows the operating components of this run-off book of business and their contributions to combined results. |
|||||||||||||||
RFIG Run-off Business |
|||||||||||||||
Quarters Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2016 |
2015 |
Change |
2016 |
2015 |
Change |
||||||||||
A. MI: |
|||||||||||||||
Net premiums earned |
$ |
38.7 |
$ |
50.1 |
-22.7% |
$ |
83.1 |
$ |
102.7 |
-19.1% |
|||||
Net investment income |
5.5 |
6.0 |
-9.3 |
11.2 |
12.2 |
-8.4 |
|||||||||
Claim costs |
9.3 |
30.5 |
-69.5 |
19.9 |
44.1 |
-54.7 |
|||||||||
Pretax operating income (loss) |
$ |
29.9 |
$ |
20.8 |
43.6% |
$ |
64.0 |
$ |
60.9 |
5.2% |
|||||
Claim ratio |
24.0% |
60.9% |
24.0% |
42.9% |
|||||||||||
Expense ratio |
13.0 |
9.6 |
12.4 |
9.7 |
|||||||||||
Composite underwriting ratio |
37.0% |
70.5% |
36.4% |
52.6% |
|||||||||||
B. CCI(*): |
|||||||||||||||
Net premiums earned |
$ |
4.0 |
$ |
6.2 |
-35.5% |
$ |
7.4 |
$ |
11.6 |
-36.3% |
|||||
Net investment income |
0.2 |
0.2 |
28.6 |
0.5 |
0.4 |
29.6 |
|||||||||
Benefits and claim costs |
19.3 |
26.8 |
-28.0 |
28.8 |
36.8 |
-21.7 |
|||||||||
Pretax operating income (loss) |
$ |
(15.6) |
$ |
(21.0) |
25.8% |
$ |
(21.9) |
$ |
(25.8) |
15.0% |
|||||
Claim ratio |
484.0% |
433.2% |
387.5% |
315.1% |
|||||||||||
Expense ratio |
12.9 |
9.4 |
14.8 |
9.3 |
|||||||||||
Composite underwriting ratio |
496.9% |
442.6% |
402.3% |
324.4% |
|||||||||||
C. Total MI and CCI run-off business: |
|||||||||||||||
Net premiums earned |
$ |
42.7 |
$ |
56.3 |
-24.1% |
$ |
90.5 |
$ |
114.4 |
-20.9% |
|||||
Net investment income |
5.7 |
6.3 |
-8.0 |
11.7 |
12.6 |
-7.2 |
|||||||||
Benefits and claim costs |
28.6 |
57.4 |
-50.1% |
48.8 |
80.9 |
-39.7 |
|||||||||
Pretax operating income (loss) |
$ |
14.3 |
$ |
(0.1) |
N/M |
$ |
42.0 |
$ |
35.0 |
20.1% |
|||||
Claim ratio |
67.1% |
101.9% |
53.9% |
70.8% |
|||||||||||
Expense ratio |
13.0 |
9.6 |
12.6 |
9.7 |
|||||||||||
Composite underwriting ratio |
80.1% |
111.5% |
66.5% |
80.5% |
|||||||||||
(*) In connection with the run-off mortgage guaranty ("MI") and consumer credit indemnity ("CCI") combination,
Consistent with a run-off operating mode, further declines in earned premiums were posted by the MI and CCI lines. Investment income for MI was also lower as reduced premium volume and ongoing claim payments created downward pressure on the invested asset base.
Year-over-year comparisons of the MI claim ratio were positive. The lower ratios for both 2016 periods were attributable to continued declines in reported delinquencies and higher rates at which reported defaults are cured or otherwise resolved without payment. Moreover, 2016 MI claims costs were less affected by litigation costs that impacted adversely last year's claim ratio. Additionally, favorable developments of previously established claim reserves lowered claim ratios by 41.9 and 40.5 percentage points in the second quarter and first half of 2016, respectively. For 2015, the reductions amounted to 80.6 percentage points for both periods.
Year-to-year comparisons of the much smaller CCI run-off line reflected similarly negative trends in earned premiums, but much greater volatility in claims costs and the resultant claim ratios. The latter were particularly impacted by changes in estimates of ongoing litigation costs.
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. The interplay of these various operating elements is summarized in the following table: |
|||||||||||
Corporate and Other Operations |
|||||||||||
Quarters Ended June 30, |
Six Months Ended June 30, |
||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||
Net premiums earned |
$ |
4.7 |
$ |
5.0 |
$ |
9.5 |
$ |
9.7 |
|||
Net investment income |
2.4 |
4.1 |
5.1 |
7.5 |
|||||||
Other income |
- |
0.1 |
(0.1) |
(0.6) |
|||||||
Operating revenues |
7.2 |
9.4 |
14.5 |
16.5 |
|||||||
Benefits and claim costs |
4.9 |
5.3 |
9.5 |
9.2 |
|||||||
Insurance expenses |
2.1 |
1.1 |
4.3 |
3.3 |
|||||||
Corporate, interest and other expenses - net |
(2.9) |
0.4 |
(4.3) |
(0.1) |
|||||||
Total operating expenses |
4.1 |
6.8 |
9.5 |
12.4 |
|||||||
Pretax operating income (loss) |
$ |
3.0 |
$ |
2.5 |
$ |
4.9 |
$ |
4.1 |
Consolidated Results – The consolidated changes and occurrences in Old Republic's segmented business for the most recent interim periods are shown in the following table: |
|||||||||||||||
ORI Consolidated |
|||||||||||||||
Quarters Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2016 |
2015 |
Change |
2016 |
2015 |
Change |
||||||||||
Net premiums and fees earned |
$ |
1,313.9 |
$ |
1,273.5 |
3.2% |
$ |
2,559.6 |
$ |
2,467.9 |
3.7% |
|||||
Net investment income |
94.9 |
93.1 |
1.9 |
191.2 |
184.6 |
3.6 |
|||||||||
Other income |
26.6 |
26.5 |
0.2 |
53.9 |
52.0 |
3.7 |
|||||||||
Operating revenues |
1,435.5 |
1,393.3 |
3.0 |
2,804.9 |
2,704.6 |
3.7 |
|||||||||
Benefits and claim costs |
592.8 |
608.1 |
-2.5 |
1,166.9 |
1,178.3 |
-1.0 |
|||||||||
Sales and general expenses |
689.9 |
639.7 |
7.8 |
1,336.3 |
1,235.5 |
8.2 |
|||||||||
Interest and other costs |
10.6 |
10.2 |
4.0 |
21.3 |
20.7 |
3.0 |
|||||||||
Total operating expenses |
1,293.4 |
1,258.1 |
2.8 |
2,524.6 |
2,434.6 |
3.7 |
|||||||||
Pretax operating income (loss) |
142.1 |
135.1 |
5.1 |
280.3 |
270.0 |
3.8 |
|||||||||
Income taxes (credits) |
45.3 |
43.9 |
3.3 |
89.3 |
87.6 |
1.9 |
|||||||||
Net operating income (loss) |
96.7 |
91.2 |
6.0 |
190.9 |
182.4 |
4.7 |
|||||||||
Realized investment gains (losses) |
6.6 |
16.6 |
-59.9 |
50.8 |
35.5 |
43.0 |
|||||||||
Income taxes (credits) on realized investment gains (losses) |
2.3 |
5.8 |
-59.9 |
17.8 |
12.4 |
42.9 |
|||||||||
Net realized investment gains (losses) |
4.3 |
10.8 |
-59.9 |
33.0 |
23.1 |
43.0 |
|||||||||
Net income (loss) |
$ |
101.0 |
$ |
102.0 |
-1.0% |
$ |
224.0 |
$ |
205.5 |
9.0% |
|||||
Claim ratio |
45.1% |
47.8% |
45.6% |
47.7% |
|||||||||||
Expense ratio |
50.3 |
47.9 |
49.8 |
47.7 |
|||||||||||
Composite underwriting ratio |
95.4% |
95.7% |
95.4% |
95.4% |
|||||||||||
Consolidated operating cash flow |
$ |
163.8 |
$ |
303.7 |
-46.1% |
Consolidated operating cash flow was additive to investable funds in the amount of
The sum total of
Quarters Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
Pretax operating income: |
2016 |
2015 |
Change |
2016 |
2015 |
Change |
|||||||||
Underwriting and related services: |
|||||||||||||||
All segments except RFIG |
$ |
49.2 |
$ |
58.7 |
-16.1% |
$ |
80.0 |
$ |
83.7 |
-4.4% |
|||||
RFIG run-off |
8.5 |
(6.4) |
231.7 |
30.3 |
22.3 |
35.5 |
|||||||||
Subtotal |
57.8 |
52.2 |
10.7 |
110.4 |
106.1 |
4.0 |
|||||||||
Net investment income |
94.9 |
93.1 |
1.9 |
191.2 |
184.6 |
3.6 |
|||||||||
Interest and other costs |
(10.6) |
(10.2) |
4.0 |
(21.3) |
(20.7) |
3.0 |
|||||||||
Total |
142.1 |
135.1 |
5.1 |
280.3 |
270.0 |
3.8 |
|||||||||
Realized investment gains(losses) |
6.6 |
16.6 |
-59.9 |
50.8 |
35.5 |
43.0 |
|||||||||
Consolidated pretax income |
$ |
148.8 |
$ |
151.8 |
-2.0% |
$ |
331.1 |
$ |
305.6 |
8.4% |
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 |
||||||||||||||
June 30, |
Dec. 31, |
June 30, |
June '16/ |
June '16/ |
||||||||||
2016 |
2015 |
2015 |
Dec. '15 |
June '15 |
||||||||||
Cash and invested assets: |
||||||||||||||
Carried at fair value |
$ |
11,509.5 |
$ |
11,119.6 |
$ |
11,286.4 |
3.5% |
2.0% |
||||||
Carried at amortized cost |
629.2 |
355.8 |
62.4 |
76.8 |
N/M |
|||||||||
Total per balance sheet |
$ |
12,138.7 |
$ |
11,475.5 |
$ |
11,348.8 |
5.8% |
7.0% |
||||||
Cost basis |
$ |
11,409.6 |
$ |
11,284.5 |
$ |
10,927.3 |
1.1% |
4.4% |
||||||
Shareholders' equity: |
Total |
$ |
4,378.0 |
$ |
3,880.8 |
$ |
3,937.4 |
12.8% |
11.2% |
|||||
Per common share |
$ |
16.89 |
$ |
15.02 |
$ |
15.16 |
12.5% |
11.4% |
||||||
Composition of shareholders' equity per share: |
||||||||||||||
Equity before items below |
$ |
15.40 |
$ |
14.91 |
$ |
14.44 |
3.3% |
6.6% |
||||||
Unrealized investment gains (losses) and other |
||||||||||||||
accumulated comprehensive income (loss) |
1.49 |
0.11 |
0.72 |
|||||||||||
Total |
$ |
16.89 |
$ |
15.02 |
$ |
15.16 |
12.5% |
11.4% |
||||||
Segmented composition of shareholders' equity per share: |
||||||||||||||
Excluding run-off segment |
$ |
15.70 |
$ |
14.06 |
$ |
14.22 |
11.7% |
10.4% |
||||||
RFIG run-off segment |
1.19 |
0.96 |
0.94 |
|||||||||||
Total |
$ |
16.89 |
$ |
15.02 |
$ |
15.16 |
12.5% |
11.4% |
As of
Changes in shareholders' equity per share are shown in the following table. As indicated, the changes resulted mostly from each period's net income, increased dividend payments to shareholders, and changes in the value of invested assets carried at fair value.
Shareholders' Equity Per Share |
|||||||||||
Quarter |
Year |
||||||||||
Ended |
Six Months Ended |
Ended |
|||||||||
June 30, |
June 30, |
Dec. 31, |
|||||||||
2016 |
2016 |
2015 |
2015 |
||||||||
Beginning balance |
$ |
16.00 |
$ |
15.02 |
$ |
15.15 |
$ |
15.15 |
|||
Changes in shareholders' equity: |
|||||||||||
Net operating income (loss) |
0.37 |
0.74 |
0.70 |
1.40 |
|||||||
Net realized investment gains (losses): |
|||||||||||
From sales |
0.02 |
0.13 |
0.09 |
0.23 |
|||||||
From impairments |
- |
- |
- |
- |
|||||||
Subtotal |
0.02 |
0.13 |
0.09 |
0.23 |
|||||||
Net unrealized investment gains (losses) |
0.68 |
1.35 |
(0.38) |
(0.96) |
|||||||
Total realized and unrealized investment gains (losses) |
0.70 |
1.48 |
(0.29) |
(0.73) |
|||||||
Cash dividends |
(0.19) |
(0.38) |
(0.37) |
(0.74) |
|||||||
Stock issuance, foreign exchange, and other transactions |
0.01 |
0.03 |
(0.03) |
(0.06) |
|||||||
Net change |
0.89 |
1.87 |
0.01 |
(0.13) |
|||||||
Ending balance |
$ |
16.89 |
$ |
16.89 |
$ |
15.16 |
$ |
15.02 |
|||
Percentage change for the period |
5.6% |
12.5% |
0.1% |
-0.9% |
Capitalization – As the table below indicates, the major change in Old Republic's capitalization in the six months ended June 30, 2016 consisted of a 12.8% increase in the common shareholders' account. |
||||||||||
Capitalization(*) |
||||||||||
June 30, |
December 31, |
June 30, |
||||||||
2016 |
2015 |
2015 |
||||||||
Debt: |
||||||||||
3.75% Convertible Senior Notes due 2018 |
$ |
546.9 |
$ |
546.0 |
$ |
545.0 |
||||
4.875% Senior Notes due 2024 |
395.4 |
395.1 |
394.8 |
|||||||
ESSOP debt with an average yield of 3.9% |
8.1 |
11.7 |
11.7 |
|||||||
Other miscellaneous debt with an average yield of 1.8% |
32.4 |
- |
- |
|||||||
Total debt |
982.9 |
952.8 |
951.6 |
|||||||
Common shareholders' equity |
4,378.0 |
3,880.8 |
3,937.4 |
|||||||
Total capitalization |
$ |
5,361.0 |
$ |
4,833.7 |
$ |
4,889.1 |
||||
Capitalization ratios: |
||||||||||
Debt |
18.3% |
19.7% |
19.5% |
|||||||
Common shareholders' equity |
81.7 |
80.3 |
80.5 |
|||||||
Total |
100.0% |
100.0% |
100.0% |
|||||||
(*) Certain debt amounts have been reduced due to the reclassification of relatively immaterial debt issuance costs previously classified as deferred assets, in order to comply with a 2015 pronouncement by the
The changes in common shareholders' equity stem primarily from each periods net income, dividend payments to shareholders and changes in the value of invested assets carried at fair value.
Managing Old Republic's Insurance Business for the Long-Run |
The insurance business is distinguished from most others in that the prices (premiums) charged for various insurance products are set without certainty of the ultimate benefit and claim costs that will emerge or be incurred, often many years after issuance and expiration of a policy.
In this light, the Company's affairs are managed for the long run and without significant regard to the arbitrary strictures of quarterly or even annual reporting periods that American industry must observe. In
Accompanying Financial Data:
- Summary Financial Statements and Common Stock Statistics
- About
Old Republic - Safe Harbor Statement
Financial Supplement
A financial supplement to this news release is available on the Company's website.
Old Republic International Corporation |
|||||||||
Summary Financial Statements and Common Stock Statistics (Unaudited) |
|||||||||
June 30, |
December 31, |
June 30, |
|||||||
SUMMARY BALANCE SHEETS: |
2016 |
2015 |
2015 |
||||||
Assets: |
|||||||||
Cash and fixed maturity securities |
$ |
9,684.1 |
$ |
9,366.7 |
$ |
9,276.3 |
|||
Equity securities |
2,333.4 |
1,987.8 |
1,956.1 |
||||||
Other invested assets |
121.1 |
120.9 |
116.2 |
||||||
Cash and invested assets |
12,138.7 |
11,475.5 |
11,348.8 |
||||||
Accounts and premiums receivable |
1,519.1 |
1,310.2 |
1,405.2 |
||||||
Federal income tax recoverable: |
Current |
34.3 |
26.5 |
16.6 |
|||||
Deferred |
- |
154.5 |
83.5 |
||||||
Prepaid federal income taxes |
82.4 |
63.3 |
63.3 |
||||||
Reinsurance balances recoverable |
3,328.3 |
3,183.6 |
3,459.3 |
||||||
Sundry assets |
888.2 |
887.8 |
890.1 |
||||||
Total |
$ |
17,991.2 |
$ |
17,101.6 |
$ |
17,267.0 |
|||
Liabilities and Shareholders' Equity: |
|||||||||
Policy liabilities |
$ |
2,112.7 |
$ |
1,945.1 |
$ |
2,001.5 |
|||
Benefit and claim reserves |
9,126.6 |
9,120.2 |
9,131.6 |
||||||
Federal income tax payable: Deferred |
48.6 |
- |
- |
||||||
Debt |
982.9 |
952.8 |
951.6 |
||||||
Sundry liabilities |
1,342.2 |
1,202.5 |
1,244.6 |
||||||
Shareholders' equity |
4,378.0 |
3,880.8 |
3,937.4 |
||||||
Total |
$ |
17,991.2 |
$ |
17,101.6 |
$ |
17,267.0 |
|||
Quarters Ended |
Six Months Ended |
Fiscal Twelve Months Ended |
||||||||||||||||
SUMMARY INCOME STATEMENTS: |
June 30, |
June 30, |
June 30, |
|||||||||||||||
2016 |
2015 |
2016 |
2015 |
2016 |
2015 |
|||||||||||||
Net premiums and fees earned |
$ |
1,313.90 |
$ |
1,273.50 |
$ |
2,559.60 |
$ |
2,467.90 |
$ |
5,271.10 |
$ |
4,973.70 |
||||||
Net investment income |
94.9 |
93.1 |
191.2 |
184.6 |
395.3 |
361.9 |
||||||||||||
Other income |
26.6 |
26.5 |
53.9 |
52 |
108.6 |
103.9 |
||||||||||||
Net realized investment gains (losses) |
6.6 |
16.6 |
50.8 |
35.5 |
106.6 |
66.7 |
||||||||||||
Total revenues |
1,442.20 |
1,410.00 |
2,855.70 |
2,740.20 |
5,881.70 |
5,506.30 |
||||||||||||
Benefits and claims |
592.8 |
608.1 |
1,166.90 |
1,178.30 |
2,447.90 |
2,477.50 |
||||||||||||
Sales and general expenses |
689.9 |
639.7 |
1,336.30 |
1,235.50 |
2,733.80 |
2,475.10 |
||||||||||||
Interest and other costs |
10.6 |
10.2 |
21.3 |
20.7 |
42.5 |
35.1 |
||||||||||||
Total expenses |
1,293.40 |
1,258.10 |
2,524.60 |
2,434.60 |
5,224.30 |
4,987.90 |
||||||||||||
Pretax income (loss) |
148.8 |
151.8 |
331.1 |
305.6 |
657.3 |
518.4 |
||||||||||||
Income taxes (credits) |
47.7 |
49.7 |
107.1 |
100 |
216.7 |
163.6 |
||||||||||||
Net income (loss) |
$ |
101 |
$ |
102 |
$ |
224 |
$ |
205.5 |
$ |
440.6 |
$ |
354.7 |
||||||
COMMON STOCK STATISTICS: |
||||||||||||||||||
Net income (loss): |
Basic |
$ |
0.39 |
$ |
0.39 |
$ |
0.87 |
$ |
0.79 |
$ |
1.7 |
$ |
1.37 |
|||||
Diluted |
$ |
0.35 |
$ |
0.36 |
$ |
0.78 |
$ |
0.72 |
$ |
1.54 |
$ |
1.25 |
||||||
Components of earnings per share: |
||||||||||||||||||
Basic, net operating income (loss) |
$ |
0.37 |
$ |
0.35 |
$ |
0.74 |
$ |
0.7 |
$ |
1.43 |
$ |
1.2 |
||||||
Realized investment gains (losses) |
0.02 |
0.04 |
0.13 |
0.09 |
0.27 |
0.17 |
||||||||||||
Basic net income (loss) |
$ |
0.39 |
$ |
0.39 |
$ |
0.87 |
$ |
0.79 |
$ |
1.7 |
$ |
1.37 |
||||||
Diluted, net operating income (loss) |
$ |
0.34 |
$ |
0.32 |
$ |
0.67 |
$ |
0.64 |
$ |
1.3 |
$ |
1.1 |
||||||
Realized investment gains (losses) |
0.01 |
0.04 |
0.11 |
0.08 |
0.24 |
0.15 |
||||||||||||
Diluted net income (loss) |
$ |
0.35 |
$ |
0.36 |
$ |
0.78 |
$ |
0.72 |
$ |
1.54 |
$ |
1.25 |
||||||
Cash dividends on common stock |
$ |
0.1875 |
$ |
0.185 |
$ |
0.375 |
$ |
0.37 |
$ |
0.745 |
$ |
0.735 |
||||||
Book value per share |
$ |
16.89 |
$ |
15.16 |
||||||||||||||
Common shares outstanding: |
||||||||||||||||||
Average basic |
259,093,314 |
259,468,711 |
258,998,523 |
259,371,887 |
259,197,915 |
259,198,845 |
||||||||||||
Average diluted |
296,069,028 |
295,987,501 |
295,923,078 |
295,852,949 |
296,064,182 |
295,629,170 |
||||||||||||
Actual, end of period |
259,284,593 |
259,678,854 |
||||||||||||||||
SUMMARY STATEMENTS OF COMPREHENSIVE INCOME (LOSS): |
||||||||||||||||||
Net income (loss) as reported |
$ |
101 |
$ |
102 |
$ |
224 |
$ |
205.5 |
$ |
440.6 |
$ |
354.7 |
||||||
Post-tax net unrealized gains (losses) |
175.4 |
-134.6 |
349.9 |
-98.7 |
199.7 |
-126 |
||||||||||||
Other adjustments |
1.4 |
1.7 |
7.9 |
-5.6 |
-0.6 |
-69.3 |
||||||||||||
Net adjustments |
176.8 |
-132.9 |
357.8 |
-104.4 |
199.1 |
-195.4 |
||||||||||||
Comprehensive income (loss) |
$ |
277.9 |
$ |
-30.8 |
$ |
581.8 |
$ |
101.1 |
$ |
639.8 |
$ |
159.3 |
About
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
Conference Call Information
- 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 888-505-4375.
Interested parties may also listen to a replay of the call through
Safe Harbor Statement
Historical data pertaining to the operating results, liquidity, and other performance indicators applicable to an insurance enterprise such as
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
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 2015 Form 10-K Annual Report and Part II, Item 1A - Risk Factors, of the Company's recent Form 10-Q filings to the
Any forward-looking statements or commentaries speak only as of their dates.
For the latest news releases and other corporate documents on
Investor Relations
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-second-quarter-and-first-half-of-2016-300305494.html
SOURCE
AT OLD REPUBLIC, A. C. Zucaro: Chairman & CEO, (312) 346-8100; or AT FINANCIAL RELATIONS BOARD, Analysts/Investors: Marilynn Meek, (212) 827-3773