Old Republic's Results for the Third Quarter and First Nine Months Benefit From Continued Strength of General Insurance Lines

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October 26, 2006 at 8:01 AM EDT

Old Republic's Results for the Third Quarter and First Nine Months Benefit From Continued Strength of General Insurance Lines

CHICAGO, Oct. 26 /PRNewswire-FirstCall/ -- Old Republic International Corporation (NYSE: ORI), today announced the following results for the third quarter and first nine months of 2006:

                             Financial Highlights

  (unaudited; amounts in millions except per share data and percentages; all
    per share amounts are shown on a diluted basis and have been restated
   retroactively to reflect the 25% stock dividend issued in December 2005)

                             Quarters Ended            Nine Months Ended
                             September 30,               September 30,
                         2006      2005   Change    2006      2005    Change
    Operating Revenues  $962.6    $951.0   1.2%   $2,838.8  $2,755.4    3.0%
    Net Operating
     Income             $114.7    $119.2  -3.8%     $348.5    $392.3* -11.2%
    Net Income          $116.1    $121.6  -4.5%     $360.2    $408.2* -11.8%
    Diluted Earnings Per Share:
     Net operating income:
      Before non-
       recurring tax
       benefit           $0.49     $0.51  -3.9%      $1.50     $1.49     .7%
      2005 non-recurring
       tax benefit           -         -                 -      0.20*
      Total               0.49      0.51  -3.9%      $1.50      1.69  -11.2%
     Net realized
      investment gains    0.01      0.01              0.05      0.07
     Net income          $0.50     $0.52  -3.8%      $1.55     $1.76* -11.9%

    * Includes non-recurring income tax and related accumulated interest
      recovery of $45.9 after tax, or 20 cents per share.

Old Republic's earnings for this year's third quarter benefited from the continued strength of its General Insurance segment, while the Company's Mortgage Guaranty operations produced slightly better results. Performance of the Title Insurance line, however, continued to be impacted adversely by a cyclical downturn in housing and related mortgage lending markets. For the first nine months of the year, General Insurance provided the greatest contribution to pretax operating earnings strength.

Results for 2006 and 2005 were affected differently by certain charges or credits. For this year's first nine months earnings were constrained by accelerated recognition of stock option expenses resulting in an incremental expense for the first nine months of 2006 of $3.9 million ($2.5 million after tax or one cent per diluted share). In accordance with the recently issued statement of Financial Accounting Standards No. 123R, these additional charges resulted from second quarter 2006 option grants to employees who meet certain age and service criteria, typically long-term employees who are ages 57 or older. On the other hand, 2005 earnings were enhanced by a non-recurring recovery of income taxes and related accumulated interest of $57.9 million ($45.9 million net of tax, or 20 cents per diluted share). The recovery stemmed from a favorable resolution of the Company's claim for a permanent Federal income tax refund applicable to the three years ended December 31, 1990.


    Consolidated Results - The major components of Old Republic's consolidated
operating revenues and income were as follows for the periods being reported
upon:

                                 ($ in millions, except share data)
                             Quarters Ended            Nine Months Ended
                             September 30,               September 30,
                         2006      2005   Change    2006      2005    Change
    Operating revenues:
     General insurance  $551.1    $510.7   7.9%   $1,599.6  $1,506.5    6.2%
     Mortgage guaranty   132.0     129.3   2.1%      394.3     386.6    2.0%
     Title insurance     254.5     288.6 -11.8%      768.7     795.3   -3.3%
     Corporate and other  24.9      22.3              76.0      66.8
      Total             $962.6    $951.0   1.2%   $2,838.8  $2,755.4    3.0%
    Pretax operating income (loss):
     General insurance   $96.0     $87.5   9.7%     $298.3    $258.8   15.2%
     Mortgage guaranty    58.1      55.9   3.9%      182.0     188.5   -3.4%
     Title insurance      10.9      30.7 -64.6%       30.6      66.4  -53.8%
     Corporate and other   1.8       1.8              (1.5)     (2.4)
      Sub-total          166.8     176.1  -5.2%      509.5     511.3    -.4%
    Realized investment gains (losses):

     From sales            2.2       4.9              17.9      31.0
     From impairments        -      (1.2)                -      (6.5)
      Net realized
       investment gains    2.2       3.7              17.9      24.5
    Consolidated pretax
     income              169.1     179.8  -6.0%      527.4     535.9   -1.6%
     Income taxes         52.9      58.1  -9.0%      167.2     127.6   31.1%
    Net income          $116.1    $121.6  -4.5%     $360.2    $408.2  -11.8%
    Consolidated underwriting ratio:
     Benefits and
      claims ratio        46.2%     43.5%             44.6%     43.7%
     Expense ratio        43.9%     44.6%             44.7%     44.4%
      Composite ratio     90.1%     88.1%             89.3%     88.1%
    Components of diluted
     net income per share:
     Net operating income:
      Before non-recurring
       tax benefit       $0.49     $0.51  -3.9%      $1.50     $1.49     .7%
      2005 non-recurring
       tax benefit           -         -                 -      0.20
      Total               0.49      0.51  -3.9%       1.50      1.69  -11.2%
     Net realized
      investment gains    0.01      0.01              0.05      0.07
     Net income          $0.50     $0.52  -3.8%      $1.55     $1.76  -11.9%

The above table presents consolidated results in terms of both operating and net income to highlight the effects of investment gain or loss recognition and non-recurring items on period-to-period comparisons. The recognition of 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 pertaining to the direction of securities markets or the future prospects of individual investees or industry sectors. Similarly, non-recurring items such as the income tax recovery described above, can distort the comparability of the Company's operating performance from period-to-period. Accordingly, management employs these non-GAAP financial measures and comparisons to further evaluate current operating performance, and believes their use enhances the understanding of Old Republic's operations by highlighting the underlying profitability of the business. Net operating income, however, does not replace net income per share computed in accordance with Generally Accepted Accounting Principles ("GAAP") as a measure of total profitability.


    General Insurance Results - The General Insurance Group continued to post
highly favorable operating results in the latest quarter and year-to-date
periods.  Key indicators of that performance follow:

                                          ($ in millions)
                             Quarters Ended            Nine Months Ended
                             September 30,               September 30,
                         2006      2005   Change    2006      2005    Change
    Net premiums earned $492.7    $457.4   7.7%  $1,425.7   $1,349.9    5.6%
    Net investment
     income               55.1      49.1  12.3%     161.8      144.8   11.7%
    Pretax operating
     income              $96.0     $87.5   9.7%    $298.3     $258.8   15.2%

    Claims ratio          67.3%     67.0%            65.8%      67.1%
    Expense ratio         24.3%     24.5%            24.5%      24.3%
     Composite ratio      91.6%     91.5%            90.3%      91.4%

General Insurance premiums earned grew at a moderately faster rate of 7.7 percent in this year's third quarter, and registered 5.6 percent growth for the first nine months of 2006. The largest production increase stemmed from trucking insurance and home warranty coverages. Most other insurance lines reflected low single digit growth rates. Loss costs remained at very acceptable levels for most major coverages, benefiting from favorable overall loss developments and reasonably contained inflationary pressures on claim settlement costs. Production and general operating expenses remained well aligned with premium growth. The composite underwriting ratio represents the most widely accepted indicator of underwriting performance in the industry. Old Republic has now registered a favorable general insurance composite ratio below 100 percent for 18 consecutive quarters.

2006 General Insurance net investment income rose on the combined strength of higher market yields and a greater invested asset base.

Mortgage Guaranty Results - Old Republic's Mortgage Guaranty operations grew more profitable in this year's third quarter. Key indicators of the Group's performance are shown below:

                                          ($ in millions)
                             Quarters Ended            Nine Months Ended
                             September 30,               September 30,
                         2006      2005   Change    2006      2005    Change
    Net premiums earned $110.7    $107.6   2.9%    $330.0    $321.5    2.6%
    Net investment
     income               18.4      17.2   7.5%      55.3      52.2    5.9%
    Pretax operating
     income              $58.1     $55.9   3.9%    $182.0    $188.5   -3.4%

    Claims ratio          42.5%     42.4%            39.0%     35.4%
    Expense ratio         21.7%     21.6%            22.6%     22.2%
     Composite ratio      64.2%     64.0%            61.6%     57.6%

Growth in Mortgage Guaranty pretax operating income for this year's third quarter reflected greater contributions from both underwriting/service operations and net investment income. For the first nine months of the year, however, net investment income growth was insufficient to offset a moderate decline in underwriting/service profitability.

For the latest quarterly and year-to-date periods, premium revenue trends responded to a combination of improving persistency, lower overall mortgage originations, and varying levels of bulk insurance production. The claims ratio, driven mostly by paid claims trends and estimates of claim frequencies and ultimate cure rates, was flat in this year's third quarter and increased by 3.6 percentage points compared to last year's nine month period. Production and administrative expenses remained largely within an approximate range of 21.5 percent to 22.5 percent for the periods reported upon. In concert with higher market yield trends in Old Republic's overall business, Mortgage Guaranty net investment income reached higher levels during 2006 even though the invested asset base has remained relatively flat due to greater shareholder dividend payments by the Group.


    Title Insurance Results - Old Republic's Title Insurance segment
registered a substantial drop in profitability for the 2006 periods reported
upon.  Key indicators of that performance follow:

                                          ($ in millions)
                             Quarters Ended            Nine Months Ended
                             September 30,               September 30,
                         2006      2005   Change    2006      2005    Change
    Net premiums and
     fees earned        $247.8    $282.0  -12.2%   $748.5    $775.5    -3.5%
    Net investment
     income                6.5       6.3    3.7%     19.9      19.1     4.0%
    Pretax operating
     income              $10.9     $30.7  -64.6%    $30.6     $66.4   -53.8%

    Claims ratio           6.0%      5.9%             6.0%      5.9%
    Expense ratio         92.2%     85.4%            92.4%     87.9%
     Composite ratio      98.2%     91.3%            98.4%     93.8%

Title premium and fee revenues dropped by 12.2 percent in this year's third quarter and by 3.5 percent for the first nine months of 2006. For both 2006 periods, profit margins from underwriting/service operations deteriorated significantly. Substantially all the margin compression occurred in the segment's direct operations, most of which are concentrated in the Western United States. Revenues in that region alone dropped by 37.1 percent in this year's third quarter and by 29.8 percent in the first nine months of this year. The resulting production levels in those states have been lower than necessary to support the fixed portion of the operating expense structure. Largely as a consequence of these factors, the segment posted the higher 2006 composite underwriting ratios shown in the previous table. Investment income growth was insufficient to offset the substantial reduction in underwriting/service profitability.

Corporate and Other Operations - Old Republic's small life and health business, and the net costs of the parent holding company and its corporate services subsidiaries produced pretax income of $1.8 million in the third quarters of 2006 and 2005. For the first nine months of 2006, a loss of $1.5 million was registered compared to a loss of $2.4 million in 2005. Period-to- period variability in the results of these relatively minor elements of Old Republic's operations usually stems from the volatility inherent to the Company's small scaled life and health business and fluctuations in the timing of expense recognition related to costs such as the aforementioned stock option expenses.


    Cash, Invested Assets and Shareholders = Equity - The following table
reflects the consolidated cash and invested assets as well as shareholders'
equity at the dates shown:

                                ($ in millions, except share data)
                                                              % Change
                   September    December    September    Sept '06/   Sept '06/
                     2006         2005         2005       Dec '05    Sept '05
    Cash and invested
     assets        $7,839.3     $7,394.1    $7,412.0        6.0%       5.8%
    Shareholders' equity:
     Total          4,311.6      4,024.0     4,128.5        7.1%       4.4%
     Per share       $18.71       $17.53      $18.03        6.7%       3.8%
    Composition of shareholders' equity per share:
     Equity before
      items below    $18.48       $17.31      $17.63        6.8%       4.8%
     Unrealized
      investment
      gains or
      losses
      and other
      accumulated
      comprehensive
      income           0.23         0.22        0.40
     Total           $18.71       $17.53      $18.03        6.7%       3.8%

The investment portfolio reflects a current allocation of approximately 80 percent to fixed-maturity securities, and 8 percent to equities most of which are committed to several indexed stock portfolios. As has been the case for many years, Old Republic's invested asset base is structured to address enterprise-wide risk management considerations, and to assure a solid funding of its subsidiaries' long-term obligations to insurance beneficiaries. Accordingly, it contains little or no exposure to real estate investments, mortgage-backed securities, derivatives, junk bonds, non-liquid private equity commitments, or mortgage loans.

The latest periods' changes in the shareholders' equity account reflect principally additions from earnings in excess of dividend payments and changes in the valuation of investment securities carried at market values.

Effective January 1, 2006, the Company reclassified its long-term investments in U.S. Treasury Tax and Loss Bonds held by its mortgage guaranty insurance subsidiaries. The reclassification is intended to conform to more common industry reporting practices and to better align such assets with the corresponding long-term deferred income tax liabilities to which they relate. As a result of this reclassification, invested asset balances have been reduced and the prepaid income tax asset has been increased, while periodic operating cash flow and cash flow from investing activities have been adjusted by the correspondingly identical amounts shown in the following tables. The reclassification has no effect on the financial position or net income of the Company, nor does it call for the receipt or disbursement of any additional cash resources. The following table shows the effect of these adjustments on pertinent financial statement performance indicators as of the balance sheet dates and for the periods shown.


                                               ($ in millions)
                                September 30,    December 31,  September 30,
                                     2006            2005          2005
    Cash and invested assets:
     Previous classification       $8,307.8        $7,939.9      $7,957.8
     After reclassification         7,839.3         7,394.1       7,412.0
     Change                          (468.4)         (545.7)       (545.7)
    Total other assets:
     Previous classification        3,805.3         3,603.2       3,384.7
     After reclassification         4,273.8         4,149.0       3,930.5
     Change                          $468.4          $545.7        $545.7


                                               ($ in millions)
                                  Nine Months Ended        Years Ended
                                   September 30,           December 31,
                                 2006        2005        2005          2004
    Cash flows from operating activities:
     Previous classification    $479.8      $655.8      $880.0        $828.3
     After reclassification      557.1       609.3       833.6         775.5
     Change                       77.3       (46.4)      (46.4)        (52.8)
    Cash flows from investing activities:
     Previous classification    (404.0)     (488.7)     (589.9)       (734.1)
     After reclassification     (481.3)     (442.3)     (543.5)       (681.3)
     Change                    $ (77.3)      $46.4       $46.4         $52.8

The 2006 year-to-date cash flows from operating activities of $557.1 million is approximately equivalent to the 2005 nine month operating cash flows after excluding the effect of the non-recurring income tax recovery previously discussed.

Conference Call Information

Old Republic has scheduled a conference call at 3:00 p.m. EDT (2:00 p.m. CDT) today to discuss its third quarter 2006 performance and review ongoing trends. To access this call, log on to www.oldrepublic.com 15 minutes before the call to download the necessary software. A replay will be available through this website for 30 days.

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 and liability, mortgage guaranty, and title insurance fields. One of the nation's 50 largest publicly owned insurance organizations, Old Republic has assets of approximately $12.1 billion and shareholders' equity of $4.3 billion or $18.71 per share. Its current stock market valuation is approximately $5.1 billion, or $22.44 per share.

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 statements made in this News Release and Company published reports, as well as oral statements or commentaries made by the Company's management in 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, commentaries, or inferences 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, most particularly, 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, also may 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.

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
                          International Corporation
                          Visit: www.oldrepublic.com


    Old Republic International Corporation


                     Old Republic International Corporation
                             FINANCIAL   HIGHLIGHTS
                       ($ in Millions, Except Share Data)

    FINANCIAL POSITION SUMMARY:            September   December    September
                                           30, 2006    31, 2005    30, 2005
    Assets:
    Cash and fixed maturity securities     $7,057.7    $6,675.4    $6,792.3
    Equity securities                         630.5       552.4       455.5
    Other invested assets                     151.1       166.3       164.1
           Cash and invested assets         7,839.3     7,394.1     7,412.0
    Accounts and premiums receivable          828.2       803.4       679.7
    Federal income tax recoverable:
     current                                    5.4          -           -
    Reinsurance balances recoverable        2,317.5     2,167.2     2,075.5
    Prepaid federal income taxes              468.4       545.7       545.7
    Sundry assets                             654.0       632.5       629.4
           Total                          $12,113.1   $11,543.2   $11,342.6
    Liabilities and Shareholders'
     Equity:
    Policy liabilities                     $1,349.1    $1,228.1    $1,169.7
    Benefit and claim reserves              5,240.0     4,939.8     4,838.3
    Federal income tax payable: current          -        129.3         5.0
                                deferred      459.8       421.6       551.6
    Debt                                      144.0       142.7       142.8
    Sundry liabilities                        608.4       657.4       506.4
    Shareholders' equity                    4,311.6     4,024.0     4,128.5
           Total                          $12,113.1   $11,543.2   $11,342.6


    INCOME STATEMENT SUMMARY:          Quarters Ended     Nine Months Ended
                                        September 30,        September 30,
                                       2006      2005      2006        2005
    Net premiums and fees earned      $869.2    $863.8  $2,561.5    $2,500.4
    Net investment income               85.6      78.0     250.9       229.3
    Net realized investment gains        2.2       3.7      17.9        24.5
    Other income                         7.7       9.0      26.2        25.6
          Total revenues               964.9     954.7   2,856.7     2,779.9
    Benefits and claims                401.9     376.0   1,141.3     1,091.8
    Sales and other expenses           393.8     398.8   1,187.8     1,152.1
          Total expenses               795.7     774.8   2,329.2     2,244.0
    Revenues, net of expenses          169.1     179.8     527.4       535.9
    Income taxes                        52.9      58.1     167.2       127.6
          Net income                  $116.1    $121.6    $360.2      $408.2

    COMMON STOCK STATISTICS (a):
    Net income: Basic                   $.50      $.53     $1.56       $1.78
                Diluted                 $.50      $.52     $1.55       $1.76
    Components of earnings per share:
       Basic, net operating income      $.49      $.52     $1.51       $1.71
       Realized investment gains         .01       .01       .05         .07
       Basic net income                 $.50      $.53     $1.56       $1.78
       Diluted, net operating income    $.49      $.51     $1.50       $1.69
       Realized investment gains         .01       .01       .05         .07
       Diluted net income               $.50      $.52     $1.55       $1.76

    Cash dividends on common stock:
       Regular                         $.150     $.136     $.440       $.376
       Special (b)                         -         -         -           -
       Total                           $.150     $.136     $.440       $.376
    Stock dividends                        - %       - %       - %         - %

    Book value per share
    Common shares outstanding:
       Average basic           230,470,356 229,021,348 230,456,409 229,003,361
       Average diluted         232,517,359 232,037,923 232,551,819 231,619,549
       Actual, end of period

    INCOME STATEMENT SUMMARY:                 Fiscal Twelve Months Ended
                                                    September 30,
                                                2006              2005
    Net premiums and fees earned              $3,448.0          $3,312.8
    Net investment income                        331.7             305.5
    Net realized investment gains                 58.3              49.7
    Other income                                  44.5              33.6
          Total revenues                       3,882.7           3,701.7
    Benefits and claims                        1,515.0           1,437.0
    Sales and other expenses                   1,628.7           1,575.5
          Total expenses                       3,143.7           3,012.6
    Revenues, net of expenses                    738.9             689.1
    Income taxes                                 235.6             180.3
          Net income                            $503.3            $508.7

    COMMON STOCK STATISTICS (a):
    Net income: Basic                            $2.18             $2.22
                Diluted                          $2.16             $2.19
    Components of earnings per share:
       Basic, net operating income               $2.02             $2.09
       Realized investment gains                   .16               .13
       Basic net income                          $2.18             $2.22
       Diluted, net operating income             $2.00             $2.06
       Realized investment gains                   .16               .13
       Diluted net income                        $2.16             $2.19

    Cash dividends on common stock:
       Regular                                   $.576             $.480
       Special (b)                                .800                -
       Total                                    $1.376             $.480
    Stock dividends                                 25%                - %

    Book value per share                        $18.71            $18.03
    Common shares outstanding:
       Average basic                       230,436,013       228,843,425
       Average diluted                     232,814,754       231,485,669
       Actual, end of period               230,480,228       229,031,809

    (a) All per share statistics herein have been adjusted to reflect all
        stock dividends or splits declared through September 30, 2006.
    (b) In December 2005, a special cash dividend of $.800 per share was
        declared and paid.


    Old Republic International Corporation

                    Old Republic International Corporation
                          SEGMENTED OPERATING SUMMARY
                                ($ in Millions)

                         Net
                       Premiums     Net
                        & Fees   Investment   Other   Operating   Benefits
         Segment        Earned     Income     Income   Revenues   & Claims
    Quarter Ended September 30, 2006
     General            $492.7     $55.1       $3.2     $551.1     $331.8
     Mortgage            110.7      18.4        2.8      132.0       47.0
     Title               247.8       6.5         .1      254.5       14.8
     Other                18.0       5.4        1.5       24.9        8.2
      Consolidated      $869.2     $85.6       $7.7     $962.6     $401.9

    Quarter Ended September 30, 2005
     General            $457.4     $49.1       $4.1     $510.7     $306.4
     Mortgage            107.6      17.2        4.4      129.3       45.6
     Title               282.0       6.3         .2      288.6       16.6
     Other                16.7       5.4         .1       22.3        7.2
      Consolidated      $863.8     $78.0       $9.0     $951.0     $376.0

    Nine Months Ended September 30, 2006
     General          $1,425.7    $161.8      $12.0   $1,599.6     $938.5
     Mortgage            330.0      55.3        8.9      394.3      128.5
     Title               748.5      19.9         .2      768.7       45.0
     Other                57.2      13.9        4.8       76.0       29.1
      Consolidated    $2,561.5    $250.9      $26.2   $2,838.8   $1,141.3

    Nine Months Ended September 30, 2005
     General          $1,349.9    $144.8      $11.7   $1,506.5     $905.8
     Mortgage            321.5      52.2       12.8      386.6      113.7
     Title               775.5      19.1         .6      795.3       45.8
     Other                53.3      13.1         .3       66.8       26.3
      Consolidated    $2,500.4    $229.3      $25.6   $2,755.4   $1,091.8

    Fiscal Twelve Months Ended September 30, 2006
     General          $1,881.0    $214.0      $15.6   $2,110.7   $1,239.6
     Mortgage            437.9      73.2       12.5      523.7      174.4
     Title             1,054.8      26.7         .4    1,082.0       64.0
     Other                74.2      17.6       15.8      107.7       36.8
      Consolidated    $3,448.0    $331.7      $44.5   $3,824.3   $1,515.0

    Fiscal Twelve Months Ended September 30, 2005
     General          $1,778.7    $193.0      $15.5   $1,987.3   $1,187.5
     Mortgage            423.2      69.7       16.8      509.8      153.3
     Title             1,040.9      25.7         .7    1,067.4       61.5
     Other                69.8      17.0         .5       87.4       34.6
      Consolidated    $3,312.8    $305.5      $33.6   $3,652.0   $1,437.0


                                                    Pretax
                            Sales                 Operating      Composite
                           & Other      Total       Income     Underwriting
         Segment           Expenses    Expenses     (Loss)        Ratios

    Quarter Ended September 30, 2006
     General                $123.3     $455.1        $96.0         91.6%
     Mortgage                 26.8       73.9         58.1         64.2%
     Title                   228.7      243.6         10.9         98.2%
     Other                    14.9       23.1          1.8            -
      Consolidated          $393.8     $795.7       $166.8         90.1%

    Quarter Ended September 30, 2005
     General                $116.7     $423.1        $87.5         91.5%
     Mortgage                 27.7       73.3         55.9         64.0%
     Title                   241.2      257.9         30.7         91.3%
     Other                    13.1       20.4          1.8            -
      Consolidated          $398.8     $774.8       $176.1         88.1%

    Nine Months Ended September 30, 2006
     General                $362.7   $1,301.3       $298.3         90.3%
     Mortgage                 83.7      212.3        182.0         61.6%
     Title                   692.9      738.0         30.6         98.4%
     Other                    48.4       77.5         (1.5)           -
      Consolidated        $1,187.8   $2,329.2       $509.5         89.3%

    Nine Months Ended September 30, 2005
     General                $341.8   $1,247.6       $258.8         91.4%
     Mortgage                 84.3      198.1        188.5         57.6%
     Title                   682.9      728.8         66.4         93.8%
     Other                    43.0       69.3         (2.4)           -
      Consolidated        $1,152.1   $2,244.0       $511.3         88.1%

    Fiscal Twelve Months Ended September 30, 2006
     General                $481.6   $1,721.2       $389.5         90.6%
     Mortgage                111.9      286.5        237.2         62.5%
     Title                   964.9    1,029.0         53.0         97.5%
     Other                    70.1      106.9           .8            -
      Consolidated        $1,628.7   $3,143.7       $680.6         89.3%

    Fiscal Twelve Months Ended September 30, 2005
     General                $452.7   $1,640.3       $346.9         91.3%
     Mortgage                114.1      267.4        242.3         59.2%
     Title                   942.3    1,003.8         63.5         96.3%
     Other                    66.2      100.9        (13.5)           -
      Consolidated        $1,575.5   $3,012.6       $639.3         89.3%


    Old Republic International Corporation

                     Old Republic International Corporation
                         SEGMENTED OPERATING STATISTICS
                                ($ in Millions)

                                       Quarters Ended     Nine Months Ended
                                        September 30,       September 30,
                                       2006      2005      2006       2005

    General Insurance:
          Benefits and claims ratio    67.3%     67.0%     65.8%      67.1%
          Expense ratio                24.3%     24.5%     24.5%      24.3%
             Composite ratio           91.6%     91.5%     90.3%      91.4%


    Mortgage Guaranty:
          New insurance written:
           Traditional Primary     $4,561.5  $5,553.0 $12,914.6  $15,585.5
           Bulk                     3,349.5   1,701.1   7,588.4    7,465.9
           Other                      379.3      19.8     520.1       63.2
           Total                   $8,290.4  $7,274.0 $21,023.2  $23,114.7

          Net risk in force:
           Traditional Primary
           Bulk
           Other
           Total

          Earned premiums: Direct      $130.8    $127.0     $389.6     $379.7
                           Net         $110.7    $107.6     $330.0     $321.5

          Persistency: Traditional
                        Primary

          Delinquency ratio:
                   Traditional Primary
                   Bulk

          Claims ratio                   42.5%     42.4%      39.0%      35.4%
          Expense ratio                  21.7%     21.6%      22.6%      22.2%
             Composite ratio             64.2%     64.0%      61.6%      57.6%


    Title Insurance:
          Direct orders opened         85,457   104,659    261,521    310,961
          Direct orders closed         68,107    89,293    206,077    253,639

          Claims ratio                    6.0%      5.9%       6.0%       5.9%
          Expense ratio                  92.2%     85.4%      92.4%      87.9%
             Composite ratio             98.2%     91.3%      98.4%      93.8%

    Consolidated:
          Benefits and claims ratio      46.2%     43.5%      44.6%      43.7%
          Expense ratio                  43.9%     44.6%      44.7%      44.4%
             Composite ratio             90.1%     88.1%      89.3%      88.1%


                                                   Fiscal Twelve Months Ended
                                                          September 30,
                                                      2006              2005

    General Insurance:
          Benefits and claims ratio                   65.9%             66.8%
          Expense ratio                               24.7%             24.5%
             Composite ratio                          90.6%             91.3%

    Mortgage Guaranty:
          New insurance written:
           Traditional Primary                   $17,883.6         $21,254.3
           Bulk                                   10,066.8           8,817.6
           Other                                     955.1             586.8
           Total                                 $28,905.6         $30,658.7

          Net risk in force:
           Traditional Primary                   $14,544.5         $14,882.4
            Bulk                                   1,986.3           1,482.2
            Other                                    595.0             575.8
            Total                                $17,125.8         $16,940.5

          Earned premiums: Direct                   $517.9            $502.5
                           Net                      $437.9            $423.2

          Persistency: Traditional Primary            71.0%             65.2%

          Delinquency ratio: Traditional Primary      4.28%             4.14%
                             Bulk                     3.48%             3.41%

          Claims ratio                                39.8%             36.2%
          Expense ratio                               22.7%             23.0%
             Composite ratio                          62.5%             59.2%

    Title Insurance:
          Direct orders opened                     344,654           401,262
          Direct orders closed                     280,677           333,530

          Claims ratio                                 6.1%              5.9%
          Expense ratio                               91.4%             90.4%
             Composite ratio                          97.5%             96.3%


    Consolidated:
          Benefits and claims ratio                   43.9%             43.4%
          Expense ratio                               45.4%             45.9%
             Composite ratio                          89.3%             89.3%
SOURCE Old Republic International Corporation

CONTACT: A.C. Zucaro, Chairman & CEO of Old Republic, +1-312-346-8100; Analysts/Investors: Leslie Loyet, +1-312-640-6672, lloyet@frbir.com, or Media Inquiries: Tim Grace, +1-312-640-6667, tgrace@frbir.com, both of Financial Relations Board