News Release

Old Republic Reports Results For The Third Quarter And First Nine Months Of 2016
Financial Highlights (a) |
|||||||||||||
Quarters Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||
Operating revenues: |
|||||||||||||
General insurance |
$ |
836.5 |
$ |
855.4 |
$ |
2,507.1 |
$ |
2,468.5 |
|||||
Title insurance |
597.7 |
575.9 |
1,615.2 |
1,523.7 |
|||||||||
Corporate and other |
8.1 |
10.5 |
22.7 |
27.1 |
|||||||||
Subtotal |
1,442.4 |
1,442.0 |
4,145.0 |
4,019.5 |
|||||||||
RFIG run-off business |
46.2 |
62.2 |
148.5 |
189.4 |
|||||||||
Total |
$ |
1,488.7 |
$ |
1,504.2 |
$ |
4,293.6 |
$ |
4,208.9 |
|||||
Pretax operating income (loss): |
|||||||||||||
General insurance |
$ |
75.9 |
$ |
97.0 |
$ |
243.1 |
$ |
264.1 |
|||||
Title insurance |
58.5 |
55.0 |
124.5 |
118.7 |
|||||||||
Corporate and other |
3.9 |
3.7 |
8.8 |
7.9 |
|||||||||
Subtotal |
138.3 |
155.8 |
376.6 |
390.8 |
|||||||||
RFIG run-off business |
18.4 |
(12.5) |
60.4 |
22.4 |
|||||||||
Total |
156.7 |
143.3 |
437.0 |
413.3 |
|||||||||
Realized investment gains (losses): |
|||||||||||||
From sales |
12.2 |
41.4 |
63.1 |
77.0 |
|||||||||
From impairments |
(4.9) |
- |
(4.9) |
- |
|||||||||
Net realized investment gains (losses) |
7.2 |
41.4 |
58.1 |
77.0 |
|||||||||
Consolidated pretax income (loss) |
164.0 |
184.7 |
495.2 |
490.3 |
|||||||||
Income taxes (credits) |
53.1 |
58.8 |
160.2 |
158.8 |
|||||||||
Net income (loss) |
$ |
110.9 |
$ |
125.9 |
$ |
335.0 |
$ |
331.4 |
|||||
Components of diluted earnings per share: |
|||||||||||||
Net operating income (loss): |
|||||||||||||
General insurance |
$ |
0.18 |
$ |
0.23 |
$ |
0.57 |
$ |
0.61 |
|||||
Title insurance |
0.13 |
0.12 |
0.27 |
0.26 |
|||||||||
Corporate and other |
0.02 |
0.03 |
0.07 |
0.07 |
|||||||||
Subtotal |
0.33 |
0.38 |
0.91 |
0.94 |
|||||||||
RFIG run-off business |
0.04 |
(0.03) |
0.13 |
0.05 |
|||||||||
Total |
0.37 |
0.35 |
1.04 |
0.99 |
|||||||||
Net realized investment gains (losses) |
0.02 |
0.09 |
0.13 |
0.17 |
|||||||||
Net income (loss) |
$ |
0.39 |
$ |
0.44 |
$ |
1.17 |
$ |
1.16 |
|||||
Cash dividends paid per share |
$ |
0.1875 |
$ |
0.1850 |
$ |
0.5625 |
$ |
0.5550 |
|||||
Ending book value per share |
$ |
17.13 |
$ |
14.95 |
|||||||||
(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 gains or losses on period-to-period earnings comparisons. Management uses operating income, a non-GAAP financial measure, to evaluate and better explain operating performance, believing that the measure enhances an understanding of
The recognition of realized investment gains or losses can be highly discretionary due to such factors as the timing of individual securities sales, the recording of estimated losses from write-downs of impaired securities, tax-planning considerations, and changes in investment management judgments regarding 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 some extent this strategy has led to a minimization of non-income producing or low-yielding securities. Proceeds from such securities' sales and maturities, as well as newly investable funds have largely been directed to purchases of higher yielding common shares of American companies with distinguished long-term records of earnings and dividend growth. More recently the Company has allotted greater investable funds to tax exempt issues which tend to generate pretax yields lower than those of fully taxable corporate or
General Insurance Results – The table below shows the major elements affecting this segment's performance for each of the periods reported upon. |
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General Insurance Group |
|||||||||||||||
Quarters Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2016 |
2015 |
Change |
2016 |
2015 |
Change |
||||||||||
Net premiums earned |
$ |
732.0 |
$ |
744.5 |
-1.7% |
$ |
2,192.8 |
$ |
2,157.2 |
1.7% |
|||||
Net investment income |
77.2 |
83.1 |
-7.0 |
233.6 |
231.6 |
0.9 |
|||||||||
Other income |
27.2 |
27.8 |
-2.1 |
80.6 |
79.7 |
1.1 |
|||||||||
Operating revenues |
836.5 |
855.4 |
-2.2 |
2,507.1 |
2,468.5 |
1.6 |
|||||||||
Benefits and claim costs |
538.3 |
549.4 |
-2.0 |
1,595.5 |
1,588.5 |
0.4 |
|||||||||
Sales and general expenses |
207.5 |
197.1 |
5.3 |
625.5 |
581.5 |
7.6 |
|||||||||
Interest and other costs |
14.6 |
11.8 |
23.9 |
42.8 |
34.3 |
24.9 |
|||||||||
Total operating expenses |
760.5 |
758.4 |
0.3 |
2,263.9 |
2,204.3 |
2.7 |
|||||||||
Pretax operating income (loss)(*) |
$ |
75.9 |
$ |
97.0 |
-21.7% |
$ |
243.1 |
$ |
264.1 |
-8.0% |
|||||
Benefit and claim ratio |
73.5% |
73.8% |
72.8% |
73.6% |
|||||||||||
Expense ratio |
24.6 |
22.7 |
24.9 |
23.3 |
|||||||||||
Composite underwriting ratio |
98.1% |
96.5% |
97.7% |
96.9% |
|||||||||||
(*) In connection with the run-off mortgage guaranty ("MI") and consumer credit indemnity ("CCI") combination, $5.1 and $26.3 of pretax operating losses for the third quarter and first nine months of 2016, and $12.4 and $37.4 of pretax operating losses for the respective periods of 2015, 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. |
Earned premium levels were basically flat year-over-year. For both 2016 periods, premium income was affected positively by gains in commercial automobile (trucking), in certain other coverages such as home and auto warranty, and by emerging premium production from a new underwriting facility established in early 2015. In total, however, premium growth in this year's interim periods was hindered by lower volume in a large account construction book of business facing a particularly competitive environment, and by reduced volume for various other products including those sold in the energy services field.
In management's opinion, quarterly or year-to-date fluctuations in reported benefit and claim ratios are not particularly meaningful in evaluating long-term trends in
Title Insurance Results – Year-over-year earnings edged up in this year's third quarter and first nine months continuing along the generally positive path set in recent years. |
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Title Insurance Group |
||||||||||||||||
Quarters Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2016 |
2015 |
Change |
2016 |
2015 |
Change |
|||||||||||
Net premiums and fees earned |
$ |
588.4 |
$ |
566.7 |
3.8% |
$ |
1,587.2 |
$ |
1,497.8 |
6.0% |
||||||
Net investment income |
8.9 |
8.9 |
- |
27.0 |
24.8 |
8.5 |
||||||||||
Other income |
0.2 |
0.2 |
19.3 |
1.0 |
1.0 |
-3.3 |
||||||||||
Operating revenues |
597.7 |
575.9 |
3.8 |
1,615.2 |
1,523.7 |
6.0 |
||||||||||
Claim costs |
30.5 |
31.9 |
-4.4 |
81.8 |
80.9 |
1.1 |
||||||||||
Sales and general expenses |
506.8 |
487.3 |
4.0 |
1,403.0 |
1,318.4 |
6.4 |
||||||||||
Interest and other costs |
1.7 |
1.6 |
8.1 |
5.7 |
5.6 |
1.8 |
||||||||||
Total operating expenses |
539.2 |
520.9 |
3.5 |
1,490.6 |
1,405.0 |
6.1 |
||||||||||
Pretax operating income (loss) |
$ |
58.5 |
$ |
55.0 |
6.3% |
$ |
124.5 |
$ |
118.7 |
4.9% |
||||||
Claim ratio |
5.2% |
5.6% |
5.2% |
5.4% |
||||||||||||
Expense ratio |
86.1 |
85.9 |
88.3 |
88.0 |
||||||||||||
Composite underwriting ratio |
91.3% |
91.5% |
93.5% |
93.4% |
||||||||||||
The continuation of a favorable mortgage rate environment and improving housing and commercial property markets have led to higher revenues from title premiums and fees in 2016. The improvements have been achieved in spite of the adverse effects that recently implemented government-imposed mortgage disclosure rules have had on the consummation of real estate transactions nationally.
As the above table shows, 2016 underwriting margins remained at healthy levels for the periods reported upon. Both claim and expense ratios were aligned with management expectations set early in the year. While a smaller component of title profitability, net investment income rose in both 2016 periods albeit at a slower pace than prevailed in the past two years or so.
(See next page for discussion of RFIG Run-off Business)
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. |
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RFIG Run-off Business |
|||||||||||||||
Quarters Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
2016 |
2015 |
Change |
2016 |
2015 |
Change |
||||||||||
A. MORTGAGE INSURANCE (MI) |
|||||||||||||||
Net premiums earned |
$ |
36.7 |
$ |
49.4 |
-25.8% |
$ |
119.8 |
$ |
152.2 |
-21.3% |
|||||
Net investment income |
5.4 |
6.2 |
-11.4 |
16.7 |
18.4 |
-9.4 |
|||||||||
Claim costs |
14.1 |
50.6 |
-72.0% |
34.1 |
94.7 |
-64.0 |
|||||||||
Pretax operating income (loss) |
$ |
23.8 |
$ |
0.3 |
N/M |
$ |
87.9 |
$ |
61.2 |
43.5% |
|||||
Claim ratio |
38.6% |
102.3% |
28.5% |
62.2% |
|||||||||||
Expense ratio |
11.4 |
9.4 |
12.1 |
9.6 |
|||||||||||
Composite underwriting ratio |
50.0% |
111.7% |
40.6% |
71.8% |
|||||||||||
B. CONSUMER CREDIT INSURANCE (CCI) |
|||||||||||||||
Net premiums earned |
$ |
3.7 |
$ |
6.3 |
-40.7% |
$ |
11.2 |
$ |
18.0 |
-37.9% |
|||||
Net investment income |
0.2 |
0.2 |
33.3 |
0.8 |
0.6 |
30.9 |
|||||||||
Benefits and claim costs |
8.9 |
18.9 |
-52.8 |
37.8 |
55.8 |
-32.3 |
|||||||||
Pretax operating income (loss)(*) |
$ |
(5.4) |
$ |
(12.9) |
57.9% |
$ |
(27.4) |
$ |
(38.7) |
29.3% |
|||||
Claim ratio |
238.1% |
298.8% |
337.3% |
309.4% |
|||||||||||
Expense ratio |
14.5 |
8.5 |
14.7 |
9.0 |
|||||||||||
Composite underwriting ratio |
252.6% |
307.3% |
352.0% |
318.4% |
|||||||||||
C. Total MI and CCI run-off business: |
|||||||||||||||
Net premiums earned |
$ |
40.4 |
$ |
55.8 |
-27.5% |
$ |
131.0 |
$ |
170.3 |
-23.1% |
|||||
Net investment income |
5.7 |
6.4 |
-9.8 |
17.5 |
19.0 |
-8.1 |
|||||||||
Benefits and claim costs |
23.1 |
69.6 |
-66.8 |
71.9 |
150.6 |
-52.2 |
|||||||||
Pretax operating income (loss) |
$ |
18.4 |
$ |
(12.5) |
246.5% |
$ |
60.4 |
$ |
22.4 |
168.9% |
|||||
Claim ratio |
57.2% |
124.7% |
54.9% |
88.4% |
|||||||||||
Expense ratio |
11.7 |
9.3 |
12.3 |
9.6 |
|||||||||||
Composite underwriting ratio |
68.9% |
134.0% |
67.2% |
98.0% |
|||||||||||
(*) In connection with the run-off mortgage guaranty ("MI") and consumer credit indemnity ("CCI") combination, $5.1 and $26.3 of pretax operating losses for the third quarter and first nine months of 2016, and $12.4 and $37.4 of pretax operating losses for the respective periods of 2015, 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. |
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 volumes and ongoing claim payments affected downward pressures 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 claim costs were less affected by litigation expense provisions that impacted adversely the 2015 claim ratio. Favorable developments of previously established claim reserves lowered claim ratios by 52.2 and 44.0 percentage points in the third quarter and first nine months of 2016, respectively. The reductions amounted to 56.5 and 72.7 percentage points for the respective periods of 2015.
The much smaller CCI run-off line reflected greater volatility in claim costs and resultant claim ratios. The latter were particularly impacted by ongoing costs pertaining to a near-eight-year long commercial dispute in litigation with
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 September 30, |
Nine Months Ended September 30, |
||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||
Net premiums earned |
$ |
4.4 |
$ |
5.0 |
$ |
14.0 |
$ |
14.7 |
|||
Net investment income |
3.7 |
5.7 |
8.8 |
13.3 |
|||||||
Other income |
- |
(0.2) |
(0.1) |
(0.8) |
|||||||
Operating revenues |
8.1 |
10.5 |
22.7 |
27.1 |
|||||||
Benefits and claim costs |
3.1 |
5.7 |
12.7 |
14.9 |
|||||||
Insurance expenses |
2.3 |
1.2 |
6.6 |
4.6 |
|||||||
Corporate, interest and other expenses - net |
(1.2) |
(0.2) |
(5.6) |
(0.3) |
|||||||
Total operating expenses |
4.2 |
6.8 |
13.8 |
19.2 |
|||||||
Pretax operating income (loss) |
$ |
3.9 |
$ |
3.7 |
$ |
8.8 |
$ |
7.9 |
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 September 30, |
Nine Months Ended September 30, |
||||||||||||||
2016 |
2015 |
Change |
2016 |
2015 |
Change |
||||||||||
Net premiums and fees earned |
$ |
1,365.4 |
$ |
1,372.1 |
-0.5% |
$ |
3,925.1 |
$ |
3,840.1 |
2.2% |
|||||
Net investment income |
95.7 |
104.2 |
-8.1 |
287.0 |
288.9 |
-0.6 |
|||||||||
Other income |
27.5 |
27.8 |
-1.2 |
81.4 |
79.8 |
2.0 |
|||||||||
Operating revenues |
1,488.7 |
1,504.2 |
-1.0 |
4,293.6 |
4,208.9 |
2.0 |
|||||||||
Benefits and claim costs |
595.2 |
656.7 |
-9.4 |
1,762.1 |
1,835.0 |
-4.0 |
|||||||||
Sales and general expenses |
724.0 |
693.9 |
4.3 |
2,060.3 |
1,929.5 |
6.8 |
|||||||||
Interest and other costs |
12.6 |
10.2 |
23.4 |
34.0 |
31.0 |
9.7 |
|||||||||
Total operating expenses |
1,331.9 |
1,360.9 |
-2.1 |
3,856.5 |
3,795.5 |
1.6 |
|||||||||
Pretax operating income (loss) |
156.7 |
143.3 |
9.4 |
437.0 |
413.3 |
5.7 |
|||||||||
Income taxes (credits) |
50.5 |
44.2 |
14.1 |
139.8 |
131.9 |
6.0 |
|||||||||
Net operating income (loss) |
106.2 |
99.0 |
7.3 |
297.2 |
281.4 |
5.6 |
|||||||||
Realized investment gains (losses) |
7.2 |
41.4 |
-82.4 |
58.1 |
77.0 |
-24.5 |
|||||||||
Income taxes (credits) on realized investment gains (losses) |
2.5 |
14.5 |
-82.4 |
20.3 |
26.9 |
-24.5 |
|||||||||
Net realized investment gains (losses) |
4.7 |
26.9 |
-82.4 |
37.7 |
50.0 |
-24.5 |
|||||||||
Net income (loss) |
$ |
110.9 |
$ |
125.9 |
-11.9% |
$ |
335.0 |
$ |
331.4 |
1.1% |
|||||
Claim ratio |
43.6% |
47.9% |
44.9% |
47.8% |
|||||||||||
Expense ratio |
50.8 |
48.3 |
50.2 |
47.9 |
|||||||||||
Composite underwriting ratio |
94.4% |
96.2% |
95.1% |
95.7% |
|||||||||||
Consolidated operating cash flow |
$ |
401.9 |
$ |
566.5 |
-29.0% |
Consolidated operating cash flow was additive to investable funds and other operating management needs in the amount of
The sum-total of
Quarters Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
Pretax operating income: |
2016 |
2015 |
Change |
2016 |
2015 |
Change |
|||||||||
Underwriting and related services: |
|||||||||||||||
All segments except RFIG |
$ |
61.0 |
$ |
68.2 |
-10.6% |
$ |
141.1 |
$ |
152.0 |
-7.2% |
|||||
RFIG run-off |
12.6 |
(18.9) |
166.4 |
42.9 |
3.4 |
N/M |
|||||||||
Subtotal |
73.6 |
49.2 |
49.4 |
184.0 |
155.4 |
18.4 |
|||||||||
Net investment income |
95.7 |
104.2 |
-8.1 |
287.0 |
288.9 |
-0.6 |
|||||||||
Interest and other costs |
(12.6) |
(10.2) |
23.4 |
(34.0) |
(31.0) |
9.7 |
|||||||||
Total |
156.7 |
143.3 |
9.4 |
437.0 |
413.3 |
5.7 |
|||||||||
Realized investment gains(losses) |
7.2 |
41.4 |
-82.4 |
58.1 |
77.0 |
-24.5 |
|||||||||
Consolidated pretax income |
$ |
164.0 |
$ |
184.7 |
-11.2% |
$ |
495.2 |
$ |
490.3 |
1.0% |
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 |
||||||||||||||
Sept. 30, |
Dec. 31, |
Sept. 30, |
Sept. '16/ |
Sept. '16/ |
||||||||||
2016 |
2015 |
2015 |
Dec. '15 |
Sept. '15 |
||||||||||
Cash and invested assets: |
||||||||||||||
Carried at fair value |
$ |
12,121.9 |
$ |
11,119.6 |
$ |
11,192.9 |
9.0% |
8.3% |
||||||
Carried at amortized cost |
748.5 |
355.8 |
195.6 |
110.4 |
282.7 |
|||||||||
Total per balance sheet |
$ |
12,870.5 |
$ |
11,475.5 |
$ |
11,388.6 |
12.2% |
13.0% |
||||||
Original cost basis of all |
$ |
12,146.1 |
$ |
11,284.5 |
$ |
11,157.1 |
7.6% |
8.9% |
||||||
Shareholders' equity: |
Total |
$ |
4,446.1 |
$ |
3,880.8 |
$ |
3,853.8 |
14.6% |
15.4% |
|||||
Per common share |
$ |
17.13 |
$ |
15.02 |
$ |
14.95 |
14.0% |
14.6% |
||||||
Composition of shareholders' equity per share: |
||||||||||||||
Equity before items below |
$ |
15.64 |
$ |
14.91 |
$ |
14.73 |
4.9% |
6.2% |
||||||
Unrealized investment gains (losses) and other accumulated comprehensive income (loss) |
1.49 |
0.11 |
0.22 |
|||||||||||
Total |
$ |
17.13 |
$ |
15.02 |
$ |
14.95 |
14.0% |
14.6% |
||||||
Segmented composition of shareholders' equity per share: |
||||||||||||||
Excluding run-off segment |
$ |
15.87 |
$ |
14.06 |
$ |
14.04 |
12.9% |
13.0% |
||||||
RFIG run-off segment |
1.26 |
0.96 |
0.91 |
|||||||||||
Total |
$ |
17.13 |
$ |
15.02 |
$ |
14.95 |
14.0% |
14.6% |
As of
Changes in shareholders' equity per share are shown in the following table. As indicated, these changes resulted mostly from net income, increased dividend payments to shareholders, and changes in the value of invested assets carried at fair value in the periods reported upon.
Shareholders' Equity Per Share |
||||||||||||
Quarter |
Year |
|||||||||||
Ended |
Nine Months Ended |
Ended |
||||||||||
Sept. 30, |
Sept. 30, |
Dec. 31, |
||||||||||
2016 |
2016 |
2015 |
2015 |
|||||||||
Beginning balance |
$ |
16.89 |
$ |
15.02 |
$ |
15.15 |
$ |
15.15 |
||||
Changes in shareholders' equity: |
||||||||||||
Net operating income (loss) |
0.41 |
1.15 |
1.09 |
1.40 |
||||||||
Net realized investment gains (losses): |
||||||||||||
From sales |
0.03 |
0.15 |
0.19 |
0.23 |
||||||||
From impairments |
(0.01) |
(0.01) |
- |
- |
||||||||
Subtotal |
0.02 |
0.14 |
0.19 |
0.23 |
||||||||
Net unrealized investment gains (losses) |
- |
1.35 |
(0.86) |
(0.96) |
||||||||
Total realized and unrealized investment gains (losses) |
0.02 |
1.49 |
(0.67) |
(0.73) |
||||||||
Cash dividends |
(0.19) |
(0.56) |
(0.56) |
(0.74) |
||||||||
Stock issuance, foreign exchange, and other transactions |
- |
0.03 |
(0.06) |
(0.06) |
||||||||
Net change |
0.24 |
2.11 |
(0.20) |
(0.13) |
||||||||
Ending balance |
$ |
17.13 |
$ |
17.13 |
$ |
14.95 |
$ |
15.02 |
||||
Percentage change for the period |
1.4% |
14.0% |
-1.3% |
-0.9% |
Capitalization – As the table below indicates, the 23.6% increase in Old Republic's capitalization for the nine months ended September 30, 2016 consisted of a 14.6% increase in the common shareholders' account and a 60.4% increase in total debt resulting from this year's third quarter successful issuance of a $550 million, ten-year senior debt security in the public markets. |
||||||||||
Capitalization (*) |
||||||||||
September 30, |
December 31, |
September 30, |
||||||||
2016 |
2015 |
2015 |
||||||||
Debt: |
||||||||||
3.75% Convertible Senior Notes due 2018 |
$ |
547.3 |
$ |
546.0 |
$ |
545.5 |
||||
4.875% Senior Notes due 2024 |
395.5 |
395.1 |
395.0 |
|||||||
3.875% Senior Notes due 2026 |
544.4 |
- |
- |
|||||||
ESSOP debt with an average yield of 4.0% |
8.1 |
11.7 |
11.7 |
|||||||
Other miscellaneous debt with an average yield of 1.8% |
32.4 |
- |
- |
|||||||
Total debt |
1,528.0 |
952.8 |
952.2 |
|||||||
Common shareholders' equity |
4,446.1 |
3,880.8 |
3,853.8 |
|||||||
Total capitalization |
$ |
5,974.1 |
$ |
4,833.7 |
$ |
4,806.1 |
||||
Capitalization ratios: |
||||||||||
Debt |
25.6% |
19.7% |
19.8% |
|||||||
Common shareholders' equity |
74.4 |
80.3 |
80.2 |
|||||||
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 Financial Accounting Standards Board. |
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 |
|||||||||||
SummaryFinancial Statements and Common Stock Statistics (Unaudited) |
|||||||||||
September 30, |
December 31, |
September 30, |
|||||||||
SUMMARY BALANCE SHEETS: |
2016 |
2015 |
2015 |
||||||||
Assets: |
|||||||||||
Cash and fixed maturity securities |
$ |
9,955.1 |
$ |
9,366.7 |
$ |
9,289.7 |
|||||
Equity securities |
2,787.4 |
1,987.8 |
1,976.2 |
||||||||
Other invested assets |
127.9 |
120.9 |
122.6 |
||||||||
Cash and invested assets |
12,870.5 |
11,475.5 |
11,388.6 |
||||||||
Accounts and premiums receivable |
1,508.6 |
1,310.2 |
1,433.4 |
||||||||
Federal income tax recoverable: |
Current |
27.2 |
26.5 |
- |
|||||||
Deferred |
- |
154.5 |
159.0 |
||||||||
Prepaid federal income taxes |
82.4 |
63.3 |
63.3 |
||||||||
Reinsurance balances recoverable |
3,423.6 |
3,183.6 |
3,387.0 |
||||||||
Sundry assets |
898.0 |
887.8 |
886.8 |
||||||||
Total |
$ |
18,810.6 |
$ |
17,101.6 |
$ |
17,318.3 |
|||||
Liabilities and Shareholders' Equity: |
|||||||||||
Policy liabilities |
$ |
2,162.0 |
$ |
1,945.1 |
$ |
2,085.3 |
|||||
Benefit and claim reserves |
9,247.0 |
9,120.2 |
9,159.2 |
||||||||
Federal income tax payable: |
Current |
- |
- |
7.2 |
|||||||
Deferred |
52.3 |
- |
- |
||||||||
Debt |
1,528.0 |
952.8 |
952.2 |
||||||||
Sundry liabilities |
1,375.0 |
1,202.5 |
1,260.5 |
||||||||
Shareholders' equity |
4,446.1 |
3,880.8 |
3,853.8 |
||||||||
Total |
$ |
18,810.6 |
$ |
17,101.6 |
$ |
17,318.3 |
|||||
Quarters Ended |
Nine Months Ended |
Fiscal Twelve Months Ended |
|||||||||||||||||
SUMMARY INCOME STATEMENTS: |
September 30, |
September 30, |
September 30, |
||||||||||||||||
2016 |
2015 |
2016 |
2015 |
2016 |
2015 |
||||||||||||||
Net premiums and fees earned |
$ |
1,365.4 |
$ |
1,372.1 |
$ |
3,925.1 |
$ |
3,840.1 |
$ |
5,264.3 |
$ |
5,089.3 |
|||||||
Net investment income |
95.7 |
104.2 |
287.0 |
288.9 |
386.8 |
380.0 |
|||||||||||||
Other income |
27.5 |
27.8 |
81.4 |
79.8 |
108.3 |
105.0 |
|||||||||||||
Net realized investment gains (losses) |
7.2 |
41.4 |
58.1 |
77.0 |
72.4 |
86.6 |
|||||||||||||
Total revenues |
1,496.0 |
1,545.7 |
4,351.7 |
4,285.9 |
5,832.0 |
5,661.0 |
|||||||||||||
Benefits and claims |
595.2 |
656.7 |
1,762.1 |
1,835.0 |
2,386.4 |
2,487.8 |
|||||||||||||
Sales and general expenses |
724.0 |
693.9 |
2,060.3 |
1,929.5 |
2,763.9 |
2,551.1 |
|||||||||||||
Interest and other costs |
12.6 |
10.2 |
34.0 |
31.0 |
44.9 |
40.2 |
|||||||||||||
Total expenses |
1,331.9 |
1,360.9 |
3,856.5 |
3,795.5 |
5,195.3 |
5,079.2 |
|||||||||||||
Pretax income (loss) |
164.0 |
184.7 |
495.2 |
490.3 |
636.6 |
581.8 |
|||||||||||||
Income taxes (credits) |
53.1 |
58.8 |
160.2 |
158.8 |
211.0 |
186.9 |
|||||||||||||
Net income (loss) |
$ |
110.9 |
$ |
125.9 |
$ |
335.0 |
$ |
331.4 |
$ |
425.6 |
$ |
394.8 |
|||||||
COMMON STOCK STATISTICS: |
|||||||||||||||||||
Net income (loss): |
Basic |
$ |
0.43 |
$ |
0.48 |
$ |
1.29 |
$ |
1.28 |
$ |
1.64 |
$ |
1.52 |
||||||
Diluted |
$ |
0.39 |
$ |
0.44 |
$ |
1.17 |
$ |
1.16 |
$ |
1.49 |
$ |
1.38 |
|||||||
Components of earnings per share: |
|||||||||||||||||||
Basic, net operating income (loss) |
$ |
0.41 |
$ |
0.38 |
$ |
1.15 |
$ |
1.09 |
$ |
1.46 |
$ |
1.31 |
|||||||
Realized investment gains (losses) |
0.02 |
0.10 |
0.14 |
0.19 |
0.18 |
0.21 |
|||||||||||||
Basic net income (loss) |
$ |
0.43 |
$ |
0.48 |
$ |
1.29 |
$ |
1.28 |
$ |
1.64 |
$ |
1.52 |
|||||||
Diluted, net operating income (loss) |
$ |
0.37 |
$ |
0.35 |
$ |
1.04 |
$ |
0.99 |
$ |
1.33 |
$ |
1.19 |
|||||||
Realized investment gains (losses) |
0.02 |
0.09 |
0.13 |
0.17 |
0.16 |
0.19 |
|||||||||||||
Diluted net income (loss) |
$ |
0.39 |
$ |
0.44 |
$ |
1.17 |
$ |
1.16 |
$ |
1.49 |
$ |
1.38 |
|||||||
Cash dividends on common stock |
$ |
0.1875 |
$ |
0.1850 |
$ |
0.5625 |
$ |
0.5550 |
$ |
0.7475 |
$ |
0.7375 |
|||||||
Book value per share |
$ |
17.13 |
$ |
14.95 |
|||||||||||||||
Common shares outstanding: |
|||||||||||||||||||
Average basic |
259,414,230 |
259,266,696 |
259,227,605 |
259,411,347 |
259,112,587 |
259,363,903 |
|||||||||||||
Average diluted |
296,444,432 |
295,868,117 |
296,193,090 |
295,930,527 |
296,104,442 |
295,837,982 |
|||||||||||||
Actual, end of period |
259,613,011 |
257,772,009 |
|||||||||||||||||
SUMMARY STATEMENTS OF COMPREHENSIVE INCOME (LOSS): |
|||||||||||||||||||
Net income (loss) as reported |
$ |
110.9 |
$ |
125.9 |
$ |
335.0 |
$ |
331.4 |
$ |
425.6 |
$ |
394.8 |
|||||||
Post-tax net unrealized gains (losses) |
0.1 |
(123.7) |
350.1 |
(222.5) |
323.7 |
(182.6) |
|||||||||||||
Other adjustments |
(0.4) |
(8.3) |
7.4 |
(14.0) |
7.2 |
(72.2) |
|||||||||||||
Net adjustments |
(0.2) |
(132.1) |
357.5 |
(236.5) |
331.0 |
(254.9) |
|||||||||||||
Comprehensive income (loss) |
$ |
110.7 |
$ |
(6.1) |
$ |
692.5 |
$ |
94.9 |
$ |
756.6 |
$ |
139.8 |
|||||||
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 888-329-8877.
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
Further Information Contacts: |
|
AT OLD REPUBLIC: |
AT FINANCIAL RELATIONS BOARD: |
A. C. Zucaro: Chairman & CEO |
Analysts/Investors: Marilynn Meek |
(312) 346-8100 |
(212) 827-3773 |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/old-republic-reports-results-for-the-third-quarter-and-first-nine-months-of-2016-300352495.html
SOURCE