OLD REPUBLIC INTERNATIONAL CORP [ORI] Filings

10-Q 1 ori-20240630.htm 10-Q ori-20240630



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM			10-Q


☒	Quarterly report pursuant to section 13 or 15(d) of the Security Exchange Act of 1934
	for the quarterly period ended:	June 30, 2024
or
☐	Transition report pursuant to section 13 or 15(d) of the Security Exchange Act of 1934


Commission File Number:			001-10607


OLD REPUBLIC INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)


Delaware						36-2678171
(State or other jurisdiction of						(IRS Employer Identification No.)
incorporation or organization)

307 North Michigan Avenue

Chicago

Illinois

60601

(Address of principal executive office)

(Zip Code)

Registrant's telephone number, including area code: 312-346-8100

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock / $1 par value

ORI

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes: ☒ No: ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes: ☒ No: ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).Yes: ☐ No: ☒

The number of shares of the Registrant's Common Stock outstanding at June 30, 2024 was 258,493,941.

There are 41 pages in this report


OLD REPUBLIC INTERNATIONAL CORPORATION

Report on Form 10-Q / June 30, 2024

INDEX



		PAGE NO.

PART I	FINANCIAL INFORMATION:

	CONSOLIDATED BALANCE SHEETS	3

	CONSOLIDATED STATEMENTS OF INCOME	4

	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	5

	CONSOLIDATED STATEMENTS OF PREFERRED STOCK AND COMMON
	SHAREHOLDERS' EQUITY	6

	CONSOLIDATED STATEMENTS OF CASH FLOWS	7

	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	8 - 17

	MANAGEMENT ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS	18 - 36

	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	37

	CONTROLS AND PROCEDURES	37

PART II	OTHER INFORMATION:

	ITEM 1 - LEGAL PROCEEDINGS	38

	ITEM 1A - RISK FACTORS	38

	ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	38

	ITEM 5 - OTHER INFORMATION	38

	ITEM 6 - EXHIBITS	39

SIGNATURE		40

EXHIBIT INDEX		41


Old Republic International Corporation and Subsidiaries
Consolidated Balance Sheets
($ in Millions, Except Share Data)
		(Unaudited)
		June 30,		December 31,
		2024		2023
Assets
Investments:
Fixed income securities (at fair value) (amortized cost: $12,118.0 and $12,263.0)		$	11,921.1	$	12,139.9
Short-term investments (at fair value which approximates cost)		1,605.1		1,032.6
Equity securities (at fair value) (cost: $1,413.3 and $1,511.9)		2,462.6		2,660.8
Other investments		34.1		34.3
Total investments		16,023.0		15,867.7
Cash		169.2		202.8
Accrued investment income		128.5		117.0
Accounts and notes receivable		2,626.0		2,201.4
Federal income tax recoverable: Current		35.4		21.8


Reinsurance balances and funds held		517.2		544.7
Reinsurance recoverable: Paid loss and loss adjustment expenses		201.5		175.4
Loss and loss adjustment expense reserves		5,256.7		4,977.7
Unearned premium and policy reserves		1,126.5		798.2
Deferred policy acquisition costs		456.5		417.8
Assets held-for-sale		—		194.8
Other assets		984.2		981.5
Total assets		$	27,525.2	$	26,501.4
Liabilities, Preferred Stock, and Common Shareholders' Equity
Liabilities:
Policy liabilities:
Loss and loss adjustment expense reserves		$	12,957.6	$	12,538.2
Unearned premiums		3,553.6		3,042.7
Other policyholders' benefits and funds held		156.9		150.3
Total policy liabilities		16,668.3		15,731.4
Commissions, expenses, fees, and taxes		457.2		533.8
Reinsurance balances and funds held		1,670.0		1,380.9

Federal income tax: Deferred		88.3		105.6
Debt		1,987.9		1,591.2
Liabilities held-for-sale		—		56.8
Other liabilities		626.6		690.6
Total liabilities		21,498.6		20,090.7
Preferred Stock	($0.01 par value; 75,000,000 shares authorized; none issued)	—		—
Common Shareholders' Equity:
Common stock ($1.00 par value; 500,000,000 shares authorized; 258,493,941 and 278,392,263 shares issued)(Class B - $1.00 par value; 100,000,000 shares authorized; none issued)		258.4		278.3
Additional paid-in capital		105.1		678.7
Retained earnings		5,912.3		5,644.3
Accumulated other comprehensive loss		(196.6)		(132.4)
Unallocated 401(k) plan shares (at cost)		(52.6)		(58.2)
Total common shareholders' equity		6,026.6		6,410.7
Total liabilities, preferred stock, and common shareholders' equity		$	27,525.2	$	26,501.4

See accompanying Notes to Consolidated Financial Statements.


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
($ in Millions, Except Share Data)
	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenues:


Net premiums earned	$	1,725.9	$	1,577.4	$	3,300.5	$	3,073.7
Title, escrow, and other fees	71.5		71.2		139.5		130.2
Total premiums and fees	1,797.4		1,648.7		3,440.1		3,203.9
Net investment income	167.4		139.4		331.6		277.2
Other income	47.3		40.6		89.2		80.1
Total operating revenues	2,012.2		1,828.8		3,861.0		3,561.3
Net investment gains (losses):
Realized from actual transactions and impairments	(54.1)		2.1		126.2		30.3
Unrealized from changes in fair value of
equity securities	(86.3)		(32.6)		(99.6)		(34.6)
Total net investment gains (losses)	(140.5)		(30.4)		26.6		(4.2)
Total revenues	1,871.7		1,798.3		3,887.6		3,557.0

Expenses:
Loss and loss adjustment expenses	731.5		612.8		1,426.1		1,213.1
Dividends to policyholders	10.0		4.9		12.8		8.6
Underwriting, acquisition, and other expenses	994.5		962.9		1,897.8		1,851.5
Interest and other charges	22.2		20.7		38.7		37.6
Total expenses	1,758.3		1,601.4		3,375.5		3,110.9
Income before income taxes	113.3		196.9		512.1		446.1

Income Taxes (Credits):
Current	29.3		47.3		105.3		98.5
Deferred	(7.8)		(5.9)		(1.9)		(7.8)
Total	21.4		41.3		103.4		90.6

Net Income	$	91.8	$	155.5	$	408.6	$	355.4

Net Income Per Share:
Basic	$	0.35	$	0.55	$	1.53	$	1.23
Diluted	$	0.35	$	0.54	$	1.51	$	1.22

Average shares outstanding: Basic	260,796,757		285,426,801		266,341,589		288,744,341
Diluted	265,549,655		287,882,787		270,538,608		291,046,294

See accompanying Notes to Consolidated Financial Statements.


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Unaudited)
($ in Millions)
	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Net Income As Reported	$	91.8	$	155.5	$	408.6	$	355.4

Other comprehensive income (loss):
Unrealized gains (losses) on investments:
Unrealized gains (losses) before reclassifications	64.8		(156.5)		(5.4)		17.2
Amounts reclassified as realized investment (gains)
losses in the statements of income	(52.6)		34.7		(67.9)		37.8
Pretax unrealized gains (losses) on investments	12.1		(121.8)		(73.4)		55.0
Deferred income taxes (credits)	2.6		(25.4)		(15.3)		11.8
Net unrealized gains (losses) on investments	9.5		(96.3)		(58.0)		43.1











Foreign currency translation adjustment and other	(0.7)		5.3		(6.1)		5.7
Total other comprehensive income (loss)	8.8		(90.9)		(64.2)		48.9
Comprehensive Income	$	100.6	$	64.5	$	344.4	$	404.3

See accompanying Notes to Consolidated Financial Statements.


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Preferred Stock
and Common Shareholders' Equity (Unaudited)
($ in Millions)
	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Preferred Stock:
Balance, beginning and end of period	$	—	$	—	$	—	$	—

Common Stock:
Balance, beginning of period	$	271.8	$	292.7	$	278.3	$	296.9
Dividend reinvestment plan	—		—		—		—
Stock-based compensation	—		0.6		0.1		1.7
Treasury stock restored to unissued status	(13.4)		(8.7)		(20.0)		(14.0)
Balance, end of period	$	258.4	$	284.6	$	258.4	$	284.6

Additional Paid-in Capital:
Balance, beginning of period	$	500.7	$	1,033.5	$	678.7	$	1,141.8
Dividend reinvestment plan	0.3		0.3		0.6		0.6


Stock-based compensation	3.3		8.5		11.3		27.4
401(k) plan shares released	1.8		0.9		3.3		1.9
Treasury stock restored to unissued status	(401.0)		(211.4)		(588.8)		(339.9)

Balance, end of period	$	105.1	$	831.8	$	105.1	$	831.8

Retained Earnings:
Balance, beginning of period	$	5,889.3	$	5,450.3	$	5,644.3	$	5,321.8


Net income	91.8		155.5		408.6		355.4
Dividends on common shares	(68.9)		(69.7)		(140.7)		(141.1)
Balance, end of period	$	5,912.3	$	5,536.1	$	5,912.3	$	5,536.1

Accumulated Other Comprehensive Income (Loss):
Balance, beginning of period	$	(205.4)	$	(377.9)	$	(132.4)	$	(517.8)


Net unrealized gains (losses) on securities, net of tax	9.5		(96.3)		(58.0)		43.1




Foreign currency translation adjustment and other	(0.7)		5.3		(6.2)		5.6
Balance, end of period	$	(196.6)	$	(468.9)	$	(196.6)	$	(468.9)

Unallocated 401(k) Plan Shares:
Balance, beginning of period	$	(55.5)	$	(66.7)	$	(58.2)	$	(69.5)
401(k) plan shares released	2.8		2.8		5.5		5.6

Balance, end of period	$	(52.6)	$	(63.9)	$	(52.6)	$	(63.9)

Treasury Stock:
Balance, beginning of period	$	—	$	—	$	—	$	—
Common stock repurchases	(414.4)		(220.2)		(608.9)		(354.0)
Restored to unissued status	414.4		220.2		608.9		354.0
Balance, end of period	$	—	$	—	$	—	$	—

See accompanying Notes to Consolidated Financial Statements.


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
($ in Millions)
	Six Months Ended
	June 30,
	2024		2023
Cash flows from operating activities:
Net income	$	408.6	$	355.4
Adjustments to reconcile net income to
net cash provided by operating activities:
Deferred policy acquisition costs	(38.7)		(24.9)
Accounts and notes receivable	(424.5)		(406.8)
Loss and loss adjustment expense reserves	135.1		25.0
Unearned premiums and other policyholders' liabilities	190.0		96.7
Federal income taxes	(12.9)		(14.6)

Reinsurance balances and funds held	290.3		230.8
Realized investment gains from actual transactions and impairments	(126.2)		(30.3)
Unrealized investment losses from changes in fair value
of equity securities	99.6		34.6
Other - net	(124.3)		(18.6)
Total	396.9		247.2

Cash flows from investing activities:
Maturities and calls of fixed income securities	750.1		608.7
Sales of:
Fixed income securities	1,103.5		381.2
Equity securities	298.3		186.8
Other investments	2.8		5.8

Purchases of:
Fixed income securities	(1,729.7)		(879.0)
Equity securities	—		(11.8)
Other investments	(43.5)		(50.2)
Proceeds from sale of subsidiaries	136.6		—
Net (increase) decrease in short-term investments	(589.7)		7.8
Other - net	(1.2)		0.3
Total	(72.8)		249.8

Cash flows from financing activities:
Issuance of debentures and notes	395.9		—
Issuance of common shares	1.3		20.8
Redemption of debentures and notes	—		(5.3)


Dividends on common shares	(140.6)		(141.0)
Repurchase of common stock	(602.9)		(354.0)
Other - net	(8.0)		(2.2)
Total	(354.3)		(481.8)

Increase (decrease) in cash including balances classified as
held-for-sale:	(30.2)		15.2
Increase (decrease) in cash balances classified as held-for-sale (a)	(3.3)		—
Cash, beginning of period	202.8		81.0
Cash, end of period	$	169.2	$	96.3

Supplemental cash flow information:
Cash paid during the period for: Interest	$	32.9	$	33.1
Income taxes	$	115.9	$	108.1

_________

(a) The sale of the RFIG Run-off mortgage insurance business closed effective May 31, 2024. See Note 2 in the Notes to Consolidated Financial Statements for further discussion.

See accompanying Notes to Consolidated Financial Statements.


OLD REPUBLIC INTERNATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
($ in Millions, Except Share Data)

Old Republic International Corporation is a Chicago-based holding company engaged in the single business of insurance underwriting and related services. It conducts its operations through a number of regulated insurance company subsidiaries organized into two segments: General Insurance (property and liability insurance) and Title Insurance. References herein to such segments apply to the Company's subsidiaries engaged in these respective segments of business. The results of the Republic Financial Indemnity Group (RFIG) Run-off business, previously a reportable segment, are deemed immaterial and are reflected within the Corporate & Other caption of this report through the effective date of its sale of May 31, 2024, along with a small life and accident insurance business. Prior period amounts have been reclassified to reflect the change in reportable segments. "Old Republic" or "the Company" refers to Old Republic International Corporation and its subsidiaries as the context requires.

Note 1 - Summary of Significant Accounting Policies

Accounting Principles - The accompanying consolidated financial statements have been prepared in conformity with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) of accounting principles generally accepted in the United States of America (GAAP). These interim financial statements should be read in conjunction with these notes and those included in the Company's 2023 Annual Report on Form 10-K incorporated herein by reference. The financial accounting and reporting process relies on estimates and on the exercise of judgment. In the opinion of management all adjustments consisting only of normal recurring accruals necessary for a fair presentation of interim periods' results and financial position have been recorded. Pertinent accounting and disclosure pronouncements issued from time to time by the FASB are adopted by the Company as they become effective.

Statement Presentation - Amounts shown in the consolidated financial statements and applicable notes are stated (except as otherwise indicated and as to share data) in millions, which amounts may not add to totals shown due to truncation. Prior period amounts have been reclassified whenever appropriate to conform to the most current presentation.

Accounting Standards Pending Adoption – In November 2023, the FASB issued Accounting Standards Update (ASU) No. 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures. This guidance expands the breadth and frequency of segment disclosures, including additional disclosures about significant segment expenses. Among other requirements, the guidance:

•Introduces a new requirement to disclose certain significant segment expenses regularly provided to the chief operating decision maker (CODM),

•Extends certain annual disclosures to interim periods,

•Permits more than one measure of segment profit or loss to be reported under certain conditions, and

•Requires disclosure of the title and position of the CODM.

The ASU does not change how an entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The requirements are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company continues to evaluate the requirements of this guidance for inclusion in its 2024 Annual Report on Form 10-K.

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures which will require further disaggregation of existing disclosures for the effective tax rate reconciliation and income taxes paid. More specifically, the amendments will require entities to disclose:

•A tabular effective tax rate reconciliation, broken out into specific categories with certain reconciling items above a 5% threshold further broken out by nature and/or jurisdiction, and

•Income taxes paid (net of refunds received), broken out between federal, state and foreign, and net amounts paid to an individual jurisdiction that exceed 5% of the total.

The requirements are effective for fiscal years beginning after December 15, 2024. The Company continues to evaluate the requirements of this guidance.

Investments - The Company classifies its fixed income securities as those it either (1) has the intent and ability to hold until maturity, (2) has available for sale, or (3) has the intention of trading. The Company's entire fixed income portfolio is classified as available for sale.

Fixed income securities classified as available for sale are reported at fair value with changes in such values, net of deferred income taxes, reflected directly in shareholders' equity. Equity securities are reported at fair value with changes in such values reflected as unrealized investment gains (losses) in the consolidated statements of income. Fair values are based on quoted market prices or estimates using values obtained from recognized independent pricing services.

The status and fair value changes of fixed income investments are reviewed at least once per quarter to assess whether a decline in fair value of an investment below its cost basis is the result of a credit loss. Credit losses are

recorded through an allowance with the corresponding charge to realized investment gains (losses). If the Company intends to sell or is more likely than not required to sell a security, the asset is written down to fair value directly through realized investment gains (losses).

Investment income is reported net of allocated expenses and includes appropriate adjustments for amortization of premium and accretion of discount on fixed income securities acquired at other than par value. Dividends on equity securities are credited to income on the ex-dividend date. At June 30, 2024, the Company and its subsidiaries did not have significant amounts of non-income producing securities.

Investment gains and losses, which result from sales or write downs of securities, are reflected as revenues in the income statement and are determined on the basis of amortized cost at the date of sale for fixed income securities, and cost in regard to equity securities; such bases apply to the specific securities sold.

Revenue Recognition - Pursuant to GAAP applicable to the insurance industry, revenues are recognized as follows:

Substantially all General Insurance premiums pertain to annual policies and are reflected in income on a pro-rata basis in association with the related loss and loss adjustment expenses.

Title Insurance premium and fee revenues stemming from the Company's direct operations (which include branch offices of its title insurers and wholly-owned agency subsidiaries) are generally recognized as income at the transaction closing date which approximates the policy effective date. Fee income related to escrow and other closing services is recognized when the related services have been performed and completed. The remaining Title Insurance premium and fee revenues are produced by independent title agents. Rather than making estimates that could be subject to significant variance from actual premium and fee production, the Company recognizes revenues from those sources upon receipt. Such receipts can reflect a three to four month lag relative to the effective date of the underlying title policy, and are offset concurrently by production expenses and loss reserve provisions.

Assets Held-for-Sale - The Company classifies a business as held-for-sale when management has approved or received approval to sell the business, the sale is probable to occur during the next 12 months at a price that is reasonable in relation to its current estimated fair value, and certain other specific criteria are met. The business classified as held-for-sale is measured at the lower of the carrying value or estimated fair value, less costs to sell. If the carrying value of the business exceeds its estimated fair value, less costs to sell, a loss is recognized and reported in net investment gains (losses). Assets and liabilities related to the business classified as held-for-sale are separately reported in the Company's consolidated balance sheet in the period in which the business is classified as held-for-sale. See Note 2 for further discussion.

Loss and Loss Adjustment Expenses - The establishment of loss reserves by the Company's insurance subsidiaries is a reasonably complex and dynamic process influenced by a large variety of factors. These factors principally include past experience applicable to the anticipated costs of various types of claims, continually evolving and changing legal theories emanating from the judicial system, recurring accounting, statistical, and actuarial studies, the professional experience and expertise of the Company's claim departments' personnel or attorneys and independent claim adjusters, ongoing changes in claim frequency or severity patterns such as those caused by natural disasters, illnesses, accidents, work-related injuries, and changes in general and industry-specific economic conditions. Consequently, the reserves established are a reflection of: the opinions of a large number of persons; the application and interpretation of historical precedent and trends; expectations as to future developments; and management's judgment in interpreting all such factors. At any point in time, the Company is exposed to the possibility of higher or lower than anticipated loss costs due to all of these factors, and to the evolution, interpretation, and expansion of tort law, as well as the effects of unexpected jury verdicts.

All reserves are therefore based on estimates which are periodically reviewed and evaluated in light of emerging loss experience and changing circumstances. The resulting changes in estimates are recorded in operations of the periods during which they are made. Return and additional premiums and policyholders' dividends, all of which tend to be affected by development of losses in future years, may offset, in whole or in part, favorable or unfavorable loss developments for certain coverages such as workers' compensation, portions of which are written under loss sensitive programs that provide for such adjustments. Management believes that its overall reserving practices have been consistently applied over many years, and that its aggregate net reserves have generally resulted in reasonable approximations of the ultimate net costs of losses incurred. However, no representation is made nor is any guaranty given that ultimate net losses and related costs will not develop in future years to be significantly greater or lower than currently established reserve estimates.

The Company's accounting policy regarding the establishment of loss reserve estimates is described in Note 1 in the Notes to Consolidated Financial Statements included in Old Republic's 2023 Annual Report on Form 10-K.

Employee Benefit Plans - The Company has a closed pension plan (the Plan) for certain employees under which benefits were frozen as of December 31, 2013. The funded status of the Plan is recognized as a net pension asset or liability, as applicable, with offsetting entries reflected as a component of shareholders' equity in accumulated other comprehensive income, net of deferred taxes. The Company also provides short- and long-term incentive awards to certain employees.

Note 2 - Disposition of RMIC Companies, Inc. (RMICC)

On November 11, 2023, a definitive agreement was reached to sell RMIC Companies, Inc. and its wholly-owned mortgage insurance subsidiaries (collectively, "RMICC") to Arch U.S. MI Holdings Inc., a subsidiary of Arch Capital Group Ltd. The sale closed effective May 31, 2024 with cash proceeds totaling $136.6.

As of December 31, 2023, the Company reported the assets and liabilities of RMICC as held-for-sale in the consolidated balance sheet with results reported in continuing operations in the consolidated statement of income, and for segment reporting purposes, within Corporate & Other. The Company determined that the transaction did not meet the criteria to be classified as a discontinued operation as it did not represent a strategic shift that had a major effect on the Company's operations and financial results. As a result of the sale, the Company realized a total loss of $51.0, of which $2.4 and $5.4 were recorded in net investment gains (losses) during the second quarter and first six months of 2024, respectively. The incremental losses realized in 2024 were to offset RMICC's operating income given that the sale proceeds were based on their December 31, 2023 closing balance sheet.

The table below reflects the assets and liabilities transferred with the sale described above:


	(Unaudited)
	May 31,
	2024
Assets:
Investments:
Fixed income securities (at fair value)	$	16.8
Short-term investments (at fair value which approximates cost)	205.5


Total investments	222.4
Cash	4.1
Accrued investment income	0.1
Accounts and notes receivable	0.5

Federal income tax recoverable: Deferred	0.2





Other assets	0.8
Total assets	$	228.3

Liabilities:
Policy liabilities:
Loss and loss adjustment expense reserves	$	49.6
Unearned premiums	—

Total policy liabilities	49.7
Commissions, expenses, fees, and taxes	0.1

Federal income tax payable: Current	0.3



Other liabilities	0.3
Total liabilities	$	50.5

Note 3 - Investments

The amortized cost and fair values by type and contractual maturity of fixed income securities are shown in the following tables. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Fixed Income Securities by Type:
June 30, 2024:
Government & Agency	$	1,861.6	$	1.6	$	68.8	$	1,794.3
Municipal	684.6		—		9.9		674.6
Corporate	9,571.8		56.5		176.3		9,452.0
	$	12,118.0	$	58.2	$	255.1	$	11,921.1

December 31, 2023:
Government & Agency	$	1,920.3	$	3.2	$	64.6	$	1,858.9
Municipal	774.5		0.2		7.1		767.6
Corporate	9,568.1		135.5		190.3		9,513.3
	$	12,263.0	$	139.0	$	262.0	$	12,139.9


	Amortized Cost		Fair Value
Fixed Income Securities Stratified by Contractual Maturity at June 30, 2024:
Due in one year or less	$	1,680.0	$	1,663.4
Due after one year through five years	5,821.8		5,687.9
Due after five years through ten years	4,583.0		4,537.1
Due after ten years	33.1		32.5
	$	12,118.0	$	11,921.1

The following table reflects the Company's gross unrealized losses and fair value of fixed income securities, aggregated by category and length of time that individual securities have been in an unrealized loss position.


	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2024:
Fixed Income Securities:
Government & Agency	$	554.9	$	8.4	$	1,101.2	$	60.4	$	1,656.2	$	68.8
Municipal	36.9		0.4		625.2		9.5		662.2		9.9
Corporate	2,499.7		26.3		3,778.2		149.9		6,277.9		176.3
	$	3,091.6	$	35.2	$	5,504.7	$	219.9	$	8,596.4	$	255.1

December 31, 2023:
Fixed Income Securities:
Government & Agency	$	461.0	$	2.7	$	1,179.3	$	61.8	$	1,640.4	$	64.6
Municipal	173.1		0.8		554.7		6.2		727.9		7.1
Corporate	853.3		8.2		4,270.9		182.0		5,124.3		190.3
	$	1,487.6	$	11.8	$	6,005.1	$	250.2	$	7,492.7	$	262.0

In the above tables the unrealized losses on fixed income securities are deemed to reflect changes in the interest rate environment. As part of its assessment of credit losses, the Company considers whether it intends to sell or is more likely than not required to sell securities, principally in consideration of its asset and liability maturity matching objectives. No investment impairment losses were recorded in the second quarter or the six months ended June 30, 2024. Net realized investment gains (losses) in the second quarter and six months ended June 30, 2023 included impairment charges of $4.5 primarily related to the Company's intent to sell and subsequent disposal of fixed income securities to facilitate certain structural changes to a deferred compensation plan. The Company's allowance for credit losses was $1.6 as of both June 30, 2024 and December 31, 2023.

The following table shows cost and fair value information for equity securities:


	Equity Securities
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2024	$	1,413.3	$	1,074.2	$	24.9	$	2,462.6
December 31, 2023	$	1,511.9	$	1,164.7	$	15.7	$	2,660.8

For the quarter, changes in the fair value of equity securities still held at June 30, 2024 and 2023 were $(85.5) and $10.0, respectively. For the first six months, changes in the fair value of equity securities still held at June 30, 2024 and 2023 were $97.2 and $24.0, respectively.

Fair Value Measurements - Fair value is defined as the estimated price that is likely to be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date. A fair value hierarchy is established that prioritizes the sources (inputs) used to measure fair value into three broad levels:

•Level 1 inputs are based on quoted market prices in active markets;

•Level 2 observable inputs are based on corroboration with available market data;

•Level 3 unobservable inputs are based on uncorroborated market data or a reporting entity's own assumptions.

The following is a description of the valuation methodologies and general classification used for financial instruments measured at fair value.

The Company uses quoted values and other data provided by nationally recognized independent pricing sources as inputs into its quarterly process for determining fair values of fixed income and equity securities. To validate the techniques or models used by pricing sources, the Company's review process includes, but is not limited to: (i) initial and ongoing evaluation of methodologies used by outside parties to calculate fair value; and (ii) comparisons with other sources including the fair value estimates based on current market quotations, and with independent fair value estimates provided by the independent investment custodian. Independent pricing sources obtain market quotations and actual transaction prices for securities that have quoted prices in active markets and use their own proprietary method for determining the fair value of securities that are not actively traded. In general, these methods involve the use of "matrix pricing" in which the independent pricing source uses observable market inputs including, but not limited to, investment yields, credit risks and spreads, benchmarking of like securities, broker-dealer quotes, reported trades and sector groupings to determine a reasonable fair value.

Level 1 securities include U.S. and Canadian Treasury notes, publicly traded common stocks, mutual funds, and short-term investments in highly liquid money market instruments. Level 2 securities generally include corporate bonds, municipal bonds, and certain U.S. and Canadian government agency securities. Securities classified within Level 3 include non-publicly traded bonds and equity securities. There were no significant changes in the fair value of Level 3 assets as of June 30, 2024 and December 31, 2023.

The following tables show a summary of the fair value of financial assets segregated among the various input levels described above:


	Fair Value Measurements
As of June 30, 2024:	Level 1		Level 2		Level 3		Total
Fixed income securities:
Government & Agency	$	1,396.6	$	397.7	$	—	$	1,794.3
Municipal	—		674.6		—		674.6
Corporate	—		9,432.4		19.5		9,452.0
Short-term investments	1,605.1		—		—		1,605.1
Equity securities	$	2,455.6	$	—	$	7.0	$	2,462.6

As of December 31, 2023:
Fixed income securities:
Government & Agency	$	1,379.8	$	479.1	$	—	$	1,858.9
Municipal	—		767.6		—		767.6
Corporate	—		9,493.7		19.5		9,513.3
Short-term investments	1,032.6		—		—		1,032.6
Equity securities	$	2,653.8	$	—	$	7.0	$	2,660.8

There were no transfers between Levels 1, 2 or 3 during the quarter or six months ended June 30, 2024.

The following table reflects the composition of net investment income, net realized gains or losses, and the net change in unrealized investment gains or losses for each of the periods shown.


	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Net investment income:
Fixed income securities	$	128.3	$	105.9	$	254.7	$	209.7
Equity securities	19.2		23.7		40.0		49.2
Short-term investments	19.6		10.9		36.8		20.8
Other investments (a)	7.8		2.9		14.9		4.9
Gross investment income	175.1		143.5		346.6		284.8
Investment expenses (a)	7.6		4.0		14.9		7.5
Net investment income	$	167.4	$	139.4	$	331.6	$	277.2

Net investment gains (losses):
Realized from actual transactions:
Fixed income securities:
Gains	$	1.3	$	0.3	$	1.9	$	1.0
Losses	(53.9)		(29.7)		(69.9)		(33.4)
Net	(52.5)		(29.3)		(67.9)		(32.4)
Equity securities:
Gains	0.9		40.8		199.7		79.1
Losses	—		(3.9)		—		(10.9)
Net	0.9		36.8		199.7		68.1
Other investments, net	—		0.8		—		0.8
Total realized from actual transactions	(51.7)		8.3		131.7		36.6
From impairments (b)	(2.4)		(6.2)		(5.4)		(6.2)
From unrealized changes in fair value of equity securities	(86.3)		(32.6)		(99.6)		(34.6)
Total realized and unrealized investment gains (losses)	(140.5)		(30.4)		26.6		(4.2)
Current and deferred income taxes	(29.9)		(6.4)		5.2		(0.8)
Net of tax realized and unrealized investment gains (losses)	$	(110.6)	$	(24.0)	$	21.4	$	(3.3)

Changes in unrealized investment gains (losses)
reflected directly in shareholders' equity:
Fixed income securities	$	11.8	$	(125.7)	$	(73.8)	$	49.9
Less: Deferred income taxes (credits)	2.5		(26.3)		(15.4)		10.7
	9.2		(99.4)		(58.4)		39.2

Other investments	0.3		3.9		0.4		5.0
Less: Deferred income taxes	—		0.8		—		1.0
	0.2		3.1		0.3		3.9
Net changes in unrealized investment gains (losses),
net of tax	$	9.5	$	(96.3)	$	(58.0)	$	43.1

_________

(a) Includes interest on funds held.

(b) Includes additional loss on sale of RMICC as described in Note 2.

Note 4 - Loss and Loss Adjustment Expenses

The following table shows changes in aggregate reserves for the Company's loss and loss adjustment expenses:


	Six Months Ended
	June 30,
	2024		2023
Gross reserves at beginning of period	$	12,538.2	$	12,221.5
Less: Reinsurance losses recoverable	4,977.7		4,699.5
Net reserves at beginning of period:
General Insurance	6,955.2		6,824.8
Title Insurance	598.5		612.8
Other	6.6		84.2
Subtotal	7,560.4		7,521.9
Incurred loss and loss adjustment expenses:
Provisions for insured events of the current year:
General Insurance	1,453.9		1,301.6
Title Insurance	41.7		46.3
Other	3.5		10.6
Subtotal	1,499.1		1,358.7
Change in provision for insured events of prior years:
General Insurance	(55.8)		(113.4)
Title Insurance	(14.2)		(14.6)
Other	(0.8)		(16.6)
Subtotal	(71.0)		(144.7)
Total incurred loss and loss adjustment expenses	1,428.1		1,213.9
Payments:
Loss and loss adjustment expenses attributable to
insured events of the current year:
General Insurance	363.4		328.5
Title Insurance	2.2		3.1
Other	1.0		2.5
Subtotal	366.6		334.2
Loss and loss adjustment expenses attributable to
insured events of prior years:
General Insurance	889.5		817.4
Title Insurance	29.5		29.6
Other	1.8		7.5
Subtotal	921.0		854.6
Total payments	1,287.6		1,188.8
Net reserves at end of period:
General Insurance	7,100.3		6,867.1
Title Insurance	594.1		611.7
Other	6.4		68.1
Subtotal	7,700.8		7,546.9
Reinsurance losses recoverable	5,256.7		4,857.5
Gross reserves at end of period (a)	$	12,957.6	$	12,404.5

_________

(a) RFIG Run-off reserves were classified as held-for-sale as of December 31, 2023 in the consolidated balance sheet. As such, loss reserve activity for this business, which was immaterial for the six months ended June 30, 2024, is excluded from the 2024 column of the table above. See Note 2 for further discussion.

The changes from the prior periods reflect expected lower levels of favorable prior year loss reserve development. The favorable development experienced by General Insurance during the first six months of 2024 came predominantly from workers' compensation (accident years 2015-2019) and to a much lesser extent, commercial auto. The significant amount of favorable development was partially offset by a much lower amount of unfavorable development within general liability, half of which originated from accident years prior to 2014. Favorable development experienced by Title Insurance occurred largely within the 2019-2021 years.

Note 5 - Income Taxes

Tax positions taken or expected to be taken in a tax return by the Company are recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. To the best of management's knowledge there are no tax uncertainties that are expected to result in significant increases or decreases to unrecognized tax benefits within the next twelve month period. The Company views its income tax exposures as primarily consisting of timing differences whereby the ultimate deductibility of a taxable amount is highly certain but the timing of its deductibility is uncertain. The Company classifies interest and penalties, if any, as income tax expense in the consolidated statements of income. The Company is not currently under audit by the Internal Revenue Service (IRS), and 2020 and subsequent tax years remain open.

Note 6 - Net Income Per Share

Consolidated basic earnings per share excludes the dilutive effect of common stock equivalents and is computed by dividing net income available to common stockholders by the weighted-average number of common shares actually outstanding for the periods presented. Diluted earnings per share is similarly calculated with the inclusion of dilutive common stock equivalents. The following table provides a reconciliation of net income and the number of shares used in basic and diluted earnings per share calculations.


	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Numerator:
Net income	$	91.8	$	155.5	$	408.6	$	355.4



Denominator:
Basic weighted-average shares (a)	260,796,757		285,426,801		266,341,589		288,744,341
Effect of dilutive securities - stock-based
compensation awards	4,752,898		2,455,986		4,197,019		2,301,953
Diluted adjusted weighted-average shares (a)	265,549,655		287,882,787		270,538,608		291,046,294
Earnings per share: Basic	$	0.35	$	0.55	$	1.53	$	1.23
Diluted	$	0.35	$	0.54	$	1.51	$	1.22

Anti-dilutive common stock equivalents
excluded from earnings per share computations:
Stock-based compensation awards	—		5,559,885		1,317,779		5,559,885

__________

(a) In calculating earnings per share, accounting standards require that common shares owned by the ORI 401(k) Savings and Profit Sharing Plan that are unallocated to participants in the plan be excluded from the calculation. Such shares are issued and outstanding, and have the same voting and other rights applicable to all common shares.

Note 7 - Credit Losses

Credit losses on financial assets measured at amortized cost, primarily the Company's reinsurance recoverables and accounts and notes receivable, are recognized based on estimated losses expected to occur over the life of the asset. The expected credit losses, and subsequent adjustment to such losses, are recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the asset presented in the consolidated balance sheets.

The Company's credit allowance was comprised of $19.0 and $17.5 related to reinsurance recoverables as of June 30, 2024 and December 31, 2023, respectively, and $28.3 and $26.1 related to accounts and notes receivable as of June 30, 2024 and December 31, 2023, respectively.

The Company's evaluation of credit losses on available for sale securities is discussed further in Note 3. The Company is not exposed to material concentrations of credit risks as to any one issuer of investment securities.

Note 8 - Debt

Consolidated debt of Old Republic and its subsidiaries is summarized below:


	June 30, 2024				December 31, 2023
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes:
4.875% issued in 2014 and due 2024	$	399.8	$	399.0	$	399.5	$	397.0
3.875% issued in 2016 and due 2026	548.7		531.8		548.5		530.4
5.750% issued in 2024 and due 2034	396.0		398.0		—		—
3.850% issued in 2021 and due 2051	643.2		461.7		643.1		472.7

Total debt	$	1,987.9	$	1,790.7	$	1,591.2	$	1,400.3

On March 31, 2024, the Company completed a public offering of $400.0 aggregate principal amount of Senior Notes. The notes bear interest at a rate of 5.750% per year and mature on March 28, 2034. This issuance was completed in anticipation of the $400.0 of 4.875% senior notes maturing in October of this year.

Fair Value Measurements - The Company utilizes indicative market prices, which incorporate recent actual market transactions and current bid/ask quotations to estimate the fair value of outstanding debt all of which is classified within Level 2 of the fair value hierarchy described in Note 3.

Note 9 - Common Share Repurchases

On May 12, 2023, the Board of Directors authorized a $450.0 share repurchase program. This authorization was completed during the first quarter 2024. On March 1, 2024, the Board of Directors authorized a $1.1 billion share repurchase program.

Total share repurchases, inclusive of taxes and fees, under these programs for the second quarter and first six months of 2024 was 13.4 million shares for $414.4 (average price of $30.92) and 20.0 million shares for $608.9 (average price of $30.32), respectively. Following the close of the quarter and through August 1, 2024, the Company repurchased 3.0 million additional shares for $95.0 (average price of $31.37) leaving $479.1 remaining under the current authorization.

Note 10 - Commitments and Contingent Liabilities

Legal Proceedings - Legal proceedings against the Company and its subsidiaries routinely arise in the normal course of business and usually pertain to claim matters related to insurance policies and contracts issued by its insurance subsidiaries. At June 30, 2024, the Company had no material non-claim litigation exposures in its consolidated business.

Note 11 - Segment Information

The Company is engaged in the single business of insurance underwriting and related services. It conducts its operations through a number of regulated insurance company subsidiaries organized into two segments: General Insurance (property and liability insurance) and Title Insurance. The results of the RFIG Run-off business, previously a reportable segment, are deemed immaterial and reflected within the Corporate & Other caption of this report through the effective date of its sale of May 31, 2024, along with the results of a small life and accident insurance business. Prior period amounts have been reclassified to reflect the change in reportable segments.

Old Republic's business is managed for the long run. In this context management's key objectives are to achieve highly profitable operating results over the long term, and to ensure balance sheet strength for the primary needs of the insurance subsidiaries' underwriting and related services business. In this view, the evaluation of periodic and long-term results excludes consideration of net investment gains (losses). Under GAAP, however, net income, inclusive of net investment gains (losses), is the measure of total profitability.

In management's opinion, the focus on income excluding net investment gains (losses), also described herein as segment pretax operating income, provides a better way to analyze, evaluate, and establish accountability for the results of the insurance operations. The inclusion of realized investment gains (losses) in net income can mask trends in operating results, because such realizations are often highly discretionary. Similarly, the inclusion of unrealized investment gains (losses) in equity securities can further distort such operating results with significant period-to-period fluctuations.

The contributions of Old Republic's reportable segments to consolidated totals are shown in the following table.


	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
General Insurance:
Net premiums earned	$	1,129.6	$	992.8	$	2,221.3	$	1,958.0
Net investment income and other income	179.9		151.8		352.8		299.9
Total revenues excluding investment gains	$	1,309.6	$	1,144.7	$	2,574.1	$	2,257.9
Segment pretax operating income (a)	$	202.5	$	184.2	$	422.9	$	377.5


Title Insurance:
Net premiums earned	$	591.9	$	578.4	$	1,069.3	$	1,102.7
Title, escrow, and other fees	71.5		71.2		139.5		130.2
Subtotal	663.4		649.6		1,208.8		1,232.9
Net investment income and other income	15.8		14.4		31.6		28.3
Total revenues excluding investment gains	$	679.2	$	664.0	$	1,240.5	$	1,261.2
Segment pretax operating income	$	46.0	$	34.7	$	48.4	$	52.1


Consolidated Revenues:
Total revenues of reportable segments	$	1,988.8	$	1,808.8	$	3,814.7	$	3,519.1
Corporate & Other (b)	54.8		58.0		107.4		117.0
Consolidated investment gains (losses):
Realized from actual transactions and impairments	(54.1)		2.1		126.2		30.3
Unrealized from changes in fair value of equity securities	(86.3)		(32.6)		(99.6)		(34.6)
Total realized and unrealized investment gains (losses)	(140.5)		(30.4)		26.6		(4.2)
Consolidation elimination adjustments	(31.4)		(37.9)		(61.1)		(74.8)
Consolidated revenues	$	1,871.7	$	1,798.3	$	3,887.6	$	3,557.0

Consolidated Pretax Income:
Total segment pretax operating income of
reportable segments	$	248.6	$	219.0	$	471.4	$	429.7
Corporate & Other (b)	5.2		8.3		14.0		20.6
Consolidated investment gains (losses):
Realized from actual transactions and impairments	(54.1)		2.1		126.2		30.3
Unrealized from changes in fair value of equity securities	(86.3)		(32.6)		(99.6)		(34.6)
Total realized and unrealized investment gains (losses)	(140.5)		(30.4)		26.6		(4.2)

Consolidated income before income taxes	$	113.3	$	196.9	$	512.1	$	446.1


	June 30,		December 31,
	2024		2023
Consolidated Assets:
General Insurance	$	23,732.2	$	22,710.5
Title Insurance	1,904.7		1,948.2
Total assets of reportable segments	25,636.9		24,658.8
Corporate & Other (b)	2,022.8		2,145.8
Consolidation elimination adjustments	(134.5)		(303.2)
Consolidated assets	$	27,525.2	$	26,501.4

(a) Segment pretax operating income is reported net of interest charges on intercompany financing arrangements between Old Republic's holding company parent and General Insurance of $15.6 and $32.3 compared to $19.8 and $39.1 for the quarters and six months ended June 30, 2024 and 2023, respectively. The reduction in interest charges for both periods is due to note repayment activity.

(b) Includes amounts for a small life and accident insurance business, the RFIG Run-off business through the effective date of its sale of May 31, 2024, the parent holding company, and several internal corporate services subsidiaries.

OLD REPUBLIC INTERNATIONAL CORPORATION

MANAGEMENT ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

Six Months Ended June 30, 2024 and 2023

($ in Millions, Except Share Data)


OVERVIEW

This management analysis of financial position and results of operations pertains to the consolidated accounts of Old Republic International Corporation ("Old Republic", "ORI", or "the Company"). The Company conducts its operations through a number of regulated insurance company subsidiaries organized into two segments: General Insurance (property and liability insurance) and Title Insurance. A small life and accident insurance business and Republic Financial Indemnity Group (RFIG) Run-off through the effective date of its sale of May 31, 2024 (see Note 2 in the Notes to Consolidated Financial Statements for further discussion), accounting for 0.4% of consolidated operating revenues for the six months ended June 30, 2024 and 0.5% of consolidated assets as of that date, are included within the Corporate & Other caption of this report.

The consolidated accounts are presented in conformity with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) of accounting principles generally accepted in the United States of America (GAAP). As a publicly held company, Old Republic utilizes GAAP to comply with the financial reporting requirements of the Securities and Exchange Commission (SEC). From time to time the FASB and the SEC issue various releases, most of which require additional financial statement disclosures and provide related application guidance. Recent guidance issued by the FASB is summarized further in the Notes to Consolidated Financial Statements where applicable.

As a state regulated financial institution vested with the public interest, however, business of the Company's insurance subsidiaries is managed pursuant to the laws, regulations, and accounting practices of the various states in the U.S. and those of a small number of other jurisdictions outside the U.S. in which they operate. In comparison with GAAP, the statutory accounting practices generally reflect greater conservatism and comparability among insurers and are intended to address the primary financial security interests of policyholders and their beneficiaries. Additionally, these practices also affect a significant number of important factors such as product pricing, risk bearing capacity and capital adequacy, the determination of Federal income taxes payable currently among ORI's tax-consolidated entities, and the upstreaming of dividends and payment of interest and principal on surplus notes by insurance subsidiaries to the parent holding company. The major differences between these statutory accounting practices and GAAP are summarized in Note 1 in the Notes to Consolidated Financial Statements included in Old Republic's 2023 Annual Report on Form 10-K.

The insurance business is distinguished from most others in that the prices (premiums) charged for most products are set without knowing what the ultimate loss costs will be. The Company also cannot know exactly when claims will be paid, which may be many years after a policy was issued or expired. This casts Old Republic as a risk-taking enterprise managed for the long run. Old Republic therefore conducts its business with a primary focus on achieving favorable underwriting results over cycles, and on maintaining a sound financial condition to support its subsidiaries' long-term obligations to policyholders and their beneficiaries. To achieve these objectives, adherence to insurance risk management principles is stressed, and asset diversification and quality are emphasized. In addition, management engages in an ongoing assessment of operating risks, such as cybersecurity risks, that could adversely affect the Company's business and reputation.

In addition to income arising from Old Republic's basic underwriting and related services functions, significant investment income is earned from invested funds generated by those functions and from capital required to support the risk of the underlying business. Investment management aims for stability of income from interest and dividends, protection of capital, and for sufficiency of liquidity to meet insurance underwriting and other obligations as they become payable in the future. Securities trading and the realization of capital gains are not primary objectives. The investment philosophy is therefore best characterized as emphasizing value, credit quality, and relatively long-term holding periods. The Company's ability to hold both fixed income and equity securities for long periods of time is enabled by the scheduling of maturities in contemplation of an appropriate matching of assets and liabilities, and by investments in dividend paying, publicly traded, large capitalization, highly liquid equity securities.

In light of the above factors, the Company is managed for the long run and with little regard for quarterly or even annual reporting periods. These time frames are too short. Management believes results are best evaluated by looking at underwriting and overall operating performance trends over 10-year intervals. These likely include one or two economic and/or underwriting cycles. This provides enough time for these cycles to run their course, for premium rate changes and subsequent underwriting results to be reflected in financial statements, and for reserved loss costs to be quantified with greater certainty.

This management analysis should be read in conjunction with the consolidated financial statements and the footnotes appended to them.


EXECUTIVE SUMMARY

Old Republic International Corporation reported the following consolidated results:


OVERALL RESULTS

	Quarters Ended June 30,								Six Months Ended June 30,
	2024			2023			% Change		2024			2023			% Change
Pretax income	$	113.3		$	196.9				$	512.1		$	446.1
Pretax investment gains (losses)	(140.5)			(30.4)					26.6			(4.2)
Pretax income excluding investment gains (losses)	$	253.8		$	227.3		11.6	%	$	485.4		$	450.3		7.8	%

Net income	$	91.8		$	155.5				$	408.6		$	355.4
Net of tax investment gains (losses)	(110.6)			(24.0)					21.4			(3.3)
Net income excluding investment gains (losses)	$	202.4		$	179.6		12.7	%	$	387.2		$	358.8		7.9	%

Combined ratio	93.5		%	92.6		%			93.8		%	92.6		%

PER DILUTED SHARE

	Quarters Ended June 30,								Six Months Ended June 30,
	2024			2023			% Change		2024			2023			% Change
Net income	$	0.35		$	0.54				$	1.51		$	1.22
Net of tax investment gains (losses)	(0.41)			(0.08)					0.08			(0.01)
Net income excluding investment gains (losses)	$	0.76		$	0.62		22.6	%	$	1.43		$	1.23		16.3	%

SHAREHOLDERS' EQUITY (BOOK VALUE)

									June 30,			Dec. 31,
									2024			2023			% Change
Total									$	6,026.6		$	6,410.7		(6.0)	%
Per Common Share									$	23.59		$	23.31		1.2	%

The Company reported pretax income, excluding investment gains (losses) (pretax operating income), of $253.8 for the quarter and $485.4 for the first six months. General Insurance pretax operating income rose 9.9% for the quarter and 12.0% for the first six months. Title Insurance pretax operating income increased 32.5% for the quarter, partially offsetting the first quarter decline.

Summary of results for the quarter:

•Net operating income per diluted share of $0.76, up 22.6% over last year.

•Consolidated net premiums and fees earned increased 9.0%, from growth in both the General and Title Insurance segments.

•Net investment income increased 20.1%, driven by higher investment yields.

•Consolidated combined ratio of 93.5%, up 0.9 points over last year, reflecting more normalized levels of favorable loss reserve development.

•Favorable loss reserve development of 2.2 points, compared to 4.6 points last year.

•Total capital returned to shareholders during the quarter of $479, including repurchases of $410.

•Book value per share of $23.59, up 3.5% since year-end 2023, inclusive of dividends.

Old Republic's business is managed for the long run. In this context management's key objectives are to achieve highly profitable operating results over the long term, and to ensure balance sheet strength for the insurance underwriting subsidiaries' obligations. Therefore, the evaluation of periodic and long-term results excludes consideration of all investment gains (losses). Under Generally Accepted Accounting Principles (GAAP), however, net income, inclusive of investment gains (losses), is the measure of total profitability.

In management's opinion, the focus on income excluding investment gains (losses), also described herein as segment pretax operating income, provides a better way to analyze, evaluate, and establish accountability for the results of the insurance operations. The inclusion of realized investment gains (losses) in net income can mask trends in operating results, because such realizations are often highly discretionary. Similarly, the inclusion of unrealized investment gains (losses) in equity securities can further distort such operating results with significant period-to-period fluctuations.

FINANCIAL HIGHLIGHTS

Quarters Ended June 30,

Six Months Ended June 30,

SUMMARY INCOME STATEMENTS:

2024