10-Q 1 ori-20240331.htm 10-Q ori-20240331
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM10-Q
Quarterly report pursuant to section 13 or 15(d) of the Security Exchange Act of 1934
for the quarterly period ended:March 31, 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)
Delaware36-2678171
(State or other jurisdiction of(IRS Employer Identification No.)
incorporation or organization)
307 North Michigan AvenueChicagoIllinois60601
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock / $1 par valueORINew 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 March 31, 2024 was 271,833,079.

There are 41 pages in this report



OLD REPUBLIC INTERNATIONAL CORPORATION
Report on Form 10-Q / March 31, 2024
INDEX
PAGE NO.
PART IFINANCIAL INFORMATION:
CONSOLIDATED BALANCE SHEETS3
CONSOLIDATED STATEMENTS OF INCOME4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME5
CONSOLIDATED STATEMENTS OF PREFERRED STOCK AND COMMON
SHAREHOLDERS' EQUITY6
CONSOLIDATED STATEMENTS OF CASH FLOWS7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8 - 17
MANAGEMENT ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS
18 - 36
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK37
CONTROLS AND PROCEDURES37
PART IIOTHER INFORMATION:
ITEM 1 - LEGAL PROCEEDINGS38
ITEM 1A - RISK FACTORS38
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS38
ITEM 5 - OTHER INFORMATION
38
ITEM 6 - EXHIBITS39
SIGNATURE40
EXHIBIT INDEX41




2


Old Republic International Corporation and Subsidiaries
Consolidated Balance Sheets
($ in Millions, Except Share Data)
(Unaudited)
March 31,December 31,
20242023
Assets
Investments:
Fixed income securities (at fair value) (amortized cost: $12,610.8 and $12,263.0)$12,402.0 $12,139.9 
Short-term investments (at fair value which approximates cost)1,338.4 1,032.6 
Equity securities (at fair value) (cost: $1,414.0 and $1,511.9)2,549.6 2,660.8 
Other investments34.4 34.3 
Total investments
16,324.5 15,867.7 
Cash136.9 202.8 
Accrued investment income127.9 117.0 
Accounts and notes receivable2,304.3 2,201.4 
Federal income tax recoverable: Current 21.8 
Reinsurance balances and funds held537.7 544.7 
Reinsurance recoverable: Paid loss and loss adjustment expenses186.9 175.4 
 Loss and loss adjustment expense reserves4,951.7 4,977.7 
 Unearned premium and policy reserves
860.7 798.2 
Deferred policy acquisition costs435.8 417.8 
Assets held-for-sale191.8 194.8 
Other assets1,005.5 981.5 
Total assets
$27,064.3 $26,501.4 
Liabilities, Preferred Stock, and Common Shareholders' Equity
Liabilities:
Policy liabilities:
Loss and loss adjustment expense reserves$12,570.3 $12,538.2 
Unearned premiums3,169.7 3,042.7 
Other policyholders' benefits and funds held156.8 150.3 
Total policy liabilities15,897.0 15,731.4 
Commissions, expenses, fees, and taxes496.0 533.8 
Reinsurance balances and funds held1,453.0 1,380.9 
Federal income tax payable: Current45.0  
Federal income tax: Deferred93.8 105.6 
Debt1,987.6 1,591.2 
Liabilities held-for-sale53.8 56.8 
Other liabilities636.8 690.6 
Total liabilities
20,663.3 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; 271,833,079 and 278,392,263 shares issued)(Class B - $1.00 par value; 100,000,000 shares authorized; none issued)271.8 278.3 
Additional paid-in capital500.7 678.7 
Retained earnings5,889.3 5,644.3 
Accumulated other comprehensive loss
(205.4)(132.4)
Unallocated 401(k) plan shares (at cost)(55.5)(58.2)
Total common shareholders' equity
6,400.9 6,410.7 
Total liabilities, preferred stock and common shareholders' equity
$27,064.3 $26,501.4 


See accompanying Notes to Consolidated Financial Statements.

3


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
($ in Millions, Except Share Data)
Quarters Ended
March 31,
20242023
Revenues:
Net premiums earned$1,574.6 $1,496.2 
Title, escrow, and other fees68.0 58.9 
Total premiums and fees1,642.7 1,555.2 
Net investment income164.1 137.8 
Other income41.9 39.4 
Total operating revenues1,848.8 1,732.4 
Net investment gains (losses):
Realized from actual transactions and impairments180.4 28.2 
Unrealized from changes in fair value of equity securities(13.3)(2.0)
Total net investment gains
167.1 26.2 
Total revenues2,015.9 1,758.7 
Expenses:
Loss and loss adjustment expenses694.6 600.2 
Dividends to policyholders2.8 3.6 
Underwriting, acquisition, and other expenses903.3 888.6 
Interest and other charges16.4 16.9 
Total expenses1,617.2 1,509.5 
Income before income taxes
398.7 249.2 
Income Taxes (Credits):
Current76.0 51.2 
Deferred5.8 (1.9)
Total81.9 49.3 
Net Income
$316.7 $199.8 
Net Income Per Share:
Basic$1.17 $0.68 
Diluted$1.15 $0.68 
Average shares outstanding: Basic271,725,775291,945,750
Diluted275,432,461293,993,474

See accompanying Notes to Consolidated Financial Statements.

4


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Unaudited)
($ in Millions)
Quarters Ended
March 31,
20242023
Net Income As Reported
$316.7 $199.8 
Other comprehensive income (loss):
Unrealized gains (losses) on investments:
Unrealized gains (losses) before reclassifications(70.3)173.7 
Amounts reclassified as realized investment (gains)
losses in the statements of income(15.3)3.0 
Pretax unrealized gains (losses) on investments
(85.6)176.8 
Deferred income taxes (credits)(18.0)37.3 
Net unrealized gains (losses) on investments
(67.6)139.5 
Foreign currency translation adjustment and other(5.4)0.3 
Total other comprehensive income (loss)(73.0)139.8 
Comprehensive Income
$243.7 $339.7 


See accompanying Notes to Consolidated Financial Statements.

5


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Preferred Stock
and Common Shareholders' Equity (Unaudited)
($ in Millions)
Quarters Ended
March 31,
20242023
Preferred Stock:
Balance, beginning and end of period$ $ 
Common Stock:
Balance, beginning of period$278.3 $296.9 
Dividend reinvestment plan  
Stock-based compensation0.1 1.1 
Treasury stock restored to unissued status(6.6)(5.3)
Balance, end of period$271.8 $292.7 
Additional Paid-in Capital:
Balance, beginning of period$678.7 $1,141.8 
Dividend reinvestment plan 0.3 
Stock-based compensation8.2 18.8 
401(k) plan shares released1.5 0.9 
Treasury stock restored to unissued status(187.8)(128.4)
Balance, end of period$500.7 $1,033.5 
Retained Earnings:
Balance, beginning of period$5,644.3 $5,321.8 
Net income
316.7 199.8 
Dividends on common shares
(71.7)(71.3)
Balance, end of period$5,889.3 $5,450.3 
Accumulated Other Comprehensive Income (Loss):
Balance, beginning of period$(132.4)$(517.8)
Net unrealized gains (losses) on securities, net of tax(67.6)139.5 
Foreign currency translation adjustment and other(5.4)0.3 
Balance, end of period$(205.4)$(377.9)
Unallocated 401(k) Plan Shares:
Balance, beginning of period$(58.2)$(69.5)
401(k) plan shares released2.7 2.7 
Balance, end of period$(55.5)$(66.7)
Treasury Stock:
Balance, beginning of period$ $ 
Common stock repurchases
(194.4)(133.7)
Restored to unissued status194.4 133.7 
Balance, end of period$ $ 


See accompanying Notes to Consolidated Financial Statements.

6


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
($ in Millions)
Quarters Ended
March 31,
20242023
Cash flows from operating activities:
Net income$316.7 $199.8 
Adjustments to reconcile net income to
net cash provided by operating activities:
Deferred policy acquisition costs(17.9)(10.7)
Accounts and notes receivable(102.8)(92.8)
Loss and loss adjustment expense reserves55.6 26.2 
Unearned premiums and other policyholders' liabilities71.3 46.4 
Federal income taxes76.0 45.2 
Reinsurance balances and funds held67.5 (0.3)
Realized investment gains from actual transactions and impairments
(180.4)(28.2)
Unrealized investment losses from changes in fair value
of equity securities13.3 2.0 
Other - net
(138.9)(30.9)
Total160.4 156.6 
Cash flows from investing activities:
Maturities and calls of fixed income securities416.5 331.4 
Sales of:
Fixed income securities230.2 109.8 
Equity securities296.6 101.3 
Other investments1.5 3.0 
Purchases of:
Fixed income securities(956.1)(461.5)
Equity securities (11.8)
Other investments(18.7)(21.1)
Net (increase) decrease in short-term investments
(324.0)(2.2)
Other - net(1.2)0.3 
Total(355.2)49.3 
Cash flows from financing activities:
Issuance of debentures and notes396.0  
Issuance of common shares0.8 17.1 
Redemption of debentures and notes (5.3)
Dividends on common shares(71.5)(71.2)
Repurchase of common stock(194.4)(133.7)
Other - net(2.3)(0.2)
Total128.4 (193.3)
Increase (decrease) in cash including balances classified as
held-for-sale:(66.2)12.6 
Increase (decrease) in cash balances classified as held-for-sale (a)
0.4  
Cash, beginning of period202.8 81.0 
Cash, end of period$136.9 $93.7 
Supplemental cash flow information:
Cash paid during the period for: Interest$20.4 $20.5 
                                                        Income taxes$4.8 $4.1 
_________

(a)    At March 31, 2024, the Company classified its RFIG Run-off mortgage insurance business as held-for-sale in its consolidated balance sheet. See Note 2 in the Notes to Consolidated Financial Statements for further discussion.
See accompanying Notes to Consolidated Financial Statements.

7


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 now reflected within the Corporate & Other caption of this report 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 Standard Adoption - On January 1, 2023, the Company adopted FASB Accounting Standards Update (ASU) No. 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. The standard requires insurance companies with long-duration contracts to review and update the assumptions used to measure expected cash flows at least annually, with changes flowing through the income statement, update the discount rate assumption at each reporting date, with changes flowing through other comprehensive income, and enhance disclosures related to the liability. The standard most significantly impacts the discount rate used in estimating reserves for the Company’s life insurance business which is in run-off. The guidance was applied using a modified retrospective approach as of January 1, 2021, resulting in changes to other policyholders’ benefits and funds held, and a net of tax opening equity adjustment to retained earnings and accumulated other comprehensive income, neither of which had a material impact on the consolidated financial statements.

Accounting Standards Pending AdoptionIn November 2023, the FASB issued 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 is 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 new guidance.

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 new guidance.

8


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 March 31, 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.

9


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 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., for approximately $140. The transaction is expected to receive all necessary regulatory approvals and close in the second quarter of 2024.

As of both March 31, 2024 and December 31, 2023, the pending disposition met the criteria for held-for-sale accounting, but did not meet the criteria to be classified as a discontinued operation as it did not represent a strategic shift that has, or will have, a major effect on the Company's operations and financial results. As a result, the related assets and liabilities are included in the separate held-for-sale line items of the asset and liability sections of the consolidated balance sheets. In addition, operating results are reported in continuing operations in the consolidated statement of income, and for segment reporting purposes, within Corporate & Other. Per the definitive agreement, sale proceeds are determined based on RMICC's December 31, 2023 balance sheet. Accordingly, a realized gain or loss is recognized to offset operating results included in continuing operations. See Note 1 for information on accounting for held-for-sale classification.

The table below reflects the carrying amounts of assets and liabilities held-for-sale related to the pending disposition described above:

(Unaudited)
March 31,December 31,
20242023
Assets:
Investments:
Fixed income securities (at fair value)
$16.7 $29.8 
Short-term investments (at fair value which approximates cost)209.6 191.3 
Total investments226.4 221.2 
Cash0.4 0.8 
Accrued investment income0.7 0.9 
Accounts and notes receivable0.5 0.5 
Federal income tax recoverable: Current 2.2 
 Deferred0.2 0.2 
Other assets (a)
(36.4)(31.1)
Total assets
$191.8 $194.8 
Liabilities:
Policy liabilities:
Loss and loss adjustment expense reserves$52.4 $54.9 
Unearned premiums 0.1 
Total policy liabilities
52.5 55.0 
Commissions, expenses, fees, and taxes 1.2 
Federal income tax payable: Current0.7  
Other liabilities
0.4 0.5 
Total liabilities
$53.8 $56.8 
_________

(a) Other assets is presented net of a valuation allowance of $37.5 and $34.5 as of March 31, 2024 and December 31, 2023, respectively, recorded upon remeasurement of the disposal group to fair value.

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.
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Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Fixed Income Securities by Type:
March 31, 2024:
Government & Agency$1,748.5 $1.5 $72.8 $1,677.3 
Municipal737.3  10.8 726.5 
Corporate10,124.9 82.7 209.4 9,998.2 
$12,610.8 $84.3 $293.1 $12,402.0 
December 31, 2023:
Government & Agency$1,920.3 $3.2 $64.6 $1,858.9 
Municipal774.5 0.2 7.1 767.6 
Corporate9,568.1 135.5 190.3 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 March 31, 2024:
Due in one year or less$1,637.9 $1,620.2 
Due after one year through five years6,163.4 6,017.9 
Due after five years through ten years4,717.3 4,672.0 
Due after ten years92.1 91.8 
$12,610.8 $12,402.0 

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 Months12 Months or GreaterTotal
Fair
Value
Unrealized LossesFair
Value
Unrealized LossesFair
Value
Unrealized Losses
March 31, 2024:
Fixed Income Securities:
Government & Agency$493.4 $9.5 $1,044.9 $63.2 $1,538.4 $72.8 
Municipal148.1 1.7 566.0 9.0 714.2 10.8 
Corporate1,996.2 21.3 4,175.3 188.1 6,171.6 209.4 
$2,637.9 $32.6 $5,786.4 $260.4 $8,424.3 $293.1 
December 31, 2023:
Fixed Income Securities:
Government & Agency$461.0 $2.7 $1,179.3 $61.8 $1,640.4 $64.6 
Municipal173.1 0.8 554.7 6.2 727.9 7.1 
Corporate853.3 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 first quarter of 2024 or 2023. The Company's allowance for credit losses was $1.6 as of both March 31, 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
March 31, 2024$1,414.0 $1,152.7 $17.1 $2,549.6 
December 31, 2023$1,511.9 $1,164.7 $15.7 $2,660.8 

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Changes for the quarter in the fair value of equity securities still held at March 31, 2024 and 2023 were $182.9 and $19.9, 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 uses 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 March 31, 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 March 31, 2024:Level 1Level 2Level 3Total
Fixed income securities:
Government & Agency$1,267.4 $409.8 $ $1,677.3 
Municipal 726.5  726.5 
Corporate 9,978.5 19.6 9,998.2 
Short-term investments1,338.4   1,338.4 
Equity securities$2,542.6 $ $7.0 $2,549.6 
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 investments1,032.6   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 ended March 31, 2024.


12


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
March 31,
20242023
Net investment income:
Fixed income securities$126.3 $103.8 
Equity securities20.7 25.5 
Short-term investments17.2 9.8 
Other investments (a)
7.1 2.0 
Gross investment income171.5 141.3 
Investment expenses (a)
7.3 3.4 
Net investment income$164.1 $137.8 
Net investment gains (losses):
Realized from actual transactions:
Fixed income securities:
Gains$0.6 $0.6 
Losses(16.0)(3.7)
Net(15.3)(3.0)
Equity securities:
Gains198.8 38.3 
Losses (7.0)
Net198.8 31.3 
Total realized from actual transactions183.4 28.2 
From impairments (b)
(3.0) 
From unrealized changes in fair value of equity securities(13.3)(2.0)
Total realized and unrealized investment gains
167.1 26.2 
Current and deferred income taxes
35.1 5.5 
Net of tax realized and unrealized investment gains
$132.0 $20.6 
Changes in unrealized investment gains (losses)
reflected directly in shareholders' equity:
Fixed income securities$(85.7)$175.7 
Less: Deferred income taxes (credits)
(18.0)37.1 
(67.6)138.6 
Other investments 1.0 
Less: Deferred income taxes
 0.2 
 0.8 
Net changes in unrealized investment gains (losses),
net of tax$(67.6)$139.5 
_________

(a) Includes interest on funds held.
(b) Includes additional expected loss on pending sale of RMICC. See note 2 for further discussion.


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Note 4 - Loss and Loss Adjustment Expenses

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

Quarters Ended
March 31,
20242023
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 Insurance6,955.2 6,824.8 
Title Insurance598.5 612.8 
Other6.6 84.2 
Subtotal
7,560.4 7,521.9 
Incurred loss and loss adjustment expenses:
Provisions for insured events of the current year:
General Insurance708.6 642.0 
Title Insurance18.4 21.8 
Other2.0 6.1 
Subtotal
729.1 670.0 
Change in provision for insured events of prior years:
General Insurance(27.1)(53.4)
Title Insurance(6.3)(6.4)
Other(0.5)(9.2)
Subtotal
(34.0)(69.2)
Total incurred loss and loss adjustment expenses695.1 600.8 
Payments:
Loss and loss adjustment expenses attributable to
   insured events of the current year:
General Insurance124.1 114.7 
Title Insurance0.2 0.3 
Other0.4 1.1 
Subtotal
124.8 116.3 
Loss and loss adjustment expenses attributable to
   insured events of prior years:
General Insurance496.4 436.7 
Title Insurance14.2 17.5 
Other1.3 4.1 
Subtotal
512.1 458.4 
Total payments636.9 574.7 
Net reserves at end of period:
General Insurance7,016.0 6,861.9 
Title Insurance596.2 610.3 
Other6.3 75.7 
Subtotal
7,618.6 7,548.0 
Reinsurance losses recoverable4,951.7 4,588.0 
Gross reserves at end of period (a)
$12,570.3 $12,136.1 
_________

(a)     RFIG Run-off reserves are classified as held-for-sale as of December 31, 2023 and March 31, 2024 in the consolidated balance sheets. As such, loss reserve activity for this business, which was immaterial in both quarterly periods, is excluded from the 2024 column of the table above. See Note 2 for further discussion.

The favorable development experienced by General Insurance came predominantly from workers’ compensation and commercial auto, mostly from accident years 2015-2020, partially offset by unfavorable development within general liability. Approximately half of the unfavorable development in general liability originated from very old accident years with the other half from 2015-2021. Favorable development experienced by Title Insurance occurred largely within the 2019-2021 years.

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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 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
March 31,
20242023
Numerator:
Net income
$316.7 $199.8 
Denominator:
Basic weighted-average shares (a)271,725,775 291,945,750 
Effect of dilutive securities - stock-based
   compensation awards3,706,686 2,047,724 
Diluted adjusted weighted-average shares (a)275,432,461 293,993,474 
Earnings per share: Basic
$1.17 $0.68 
       Diluted
$1.15 $0.68 
Anti-dilutive common stock equivalents
excluded from earnings per share computations:
Stock-based compensation awards
1,325,379 3,298,750 
__________

(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 $18.0 and $17.5 related to reinsurance recoverables as of March 31, 2024 and December 31, 2023, respectively, and $27.1 and $26.1 related to accounts and notes receivable as of March 31, 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.

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Note 8 - Debt

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

March 31, 2024December 31, 2023
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Senior Notes:
4.875% issued in 2014 and due 2024$399.7 $398.2 $399.5 $397.0 
3.875% issued in 2016 and due 2026548.6 531.9 548.5 530.4 
5.750% issued in 2024 and due 2034396.0 402.4   
3.850% issued in 2021 and due 2051643.2 472.4 643.1 472.7 
Total debt$1,987.6 $1,805.1 $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.

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 first quarter 2024 was 6.6 million shares for $194.4 (average price of $29.12). Following the close of the quarter and through May 2, 2024, the Company repurchased 5.3 million additional shares for $161.7 (average price of $30.34).

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 March 31, 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 are now reflected within the Corporate & Other caption of this report 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.

16


Quarters Ended
March 31,
20242023
General Insurance:
Net premiums earned$1,091.6 $965.1 
Net investment income and other income172.8 148.0 
Total revenues excluding investment gains$1,264.5 $1,113.1 
Segment pretax operating income (a)$220.4 $193.2 
Title Insurance:
Net premiums earned$477.3 $524.3 
Title, escrow and other fees68.0 58.9 
Subtotal
545.4 583.2 
Net investment income and other income15.8 13.9 
Total revenues excluding investment gains$561.3 $597.1 
Segment pretax operating income
$2.3 $17.4 
Consolidated Revenues:
Total revenues of reportable segments
$1,825.8 $1,710.3 
Corporate & Other (b)
52.5 59.0 
Consolidated investment gains (losses):
Realized from actual transactions and impairments180.4 28.2 
Unrealized from changes in fair value of equity securities(13.3)(2.0)
Total realized and unrealized investment gains
167.1 26.2 
Consolidation elimination adjustments(29.6)(36.9)
Consolidated revenues$2,015.9 $1,758.7 
Consolidated Pretax Income:
Total segment pretax operating income of
reportable segments
$222.7 $210.6 
Corporate & Other (b)
8.8 12.3 
Consolidated investment gains (losses):
Realized from actual transactions and impairments180.4 28.2 
Unrealized from changes in fair value of equity securities(13.3)(2.0)
Total realized and unrealized investment losses
167.1 26.2 
Consolidated income before income taxes
$398.7 $249.2 

March 31,December 31,
20242023
Consolidated Assets:
General Insurance$22,832.4 $22,710.5 
Title Insurance1,968.5 1,948.2 
Total assets of reportable segments
24,800.9 24,658.8 
Corporate & Other (b)
2,393.4 2,145.8 
Consolidation elimination adjustments(130.0)(303.2)
Consolidated assets$27,064.3 $26,501.4 

(a) General Insurance segment pretax operating income is reported net of interest charges on intercompany financing arrangements with Old Republic's parent holding company of: $16.6 and $19.3 for the quarters ended March 31, 2024 and 2023, respectively.
(b)    Includes amounts for a small life and accident insurance business, the RFIG Run-off business, the parent holding company, and several internal corporate services subsidiaries.

17


OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS
Quarters Ended March 31, 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, accounting for 0.5% of consolidated operating revenues for the quarter ended March 31, 2024 and 1.3% of consolidated assets as of that date, are included within the Corporate & Other caption of this report. On November 11, 2023, a definitive agreement was reached to sell the RFIG Run-off mortgage insurance business to Arch U.S. MI Holdings Inc., a subsidiary of Arch Capital Group Ltd., with the sale expected to close upon receipt of all necessary regulatory approvals (see Note 2 in the Notes to Consolidated Financial Statements for further discussion).

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.

18


EXECUTIVE SUMMARY

Old Republic International Corporation reported the following consolidated results:

OVERALL RESULTS
Quarters Ended March 31,
20242023% Change
Pretax income$398.7 $249.2 
Pretax investment gains167.1 26.2 
Pretax income excluding investment gains$231.5 $222.9 3.9 %
Net income$316.7 $199.8 
Net of tax investment gains132.0 20.6 
Net income excluding investment gains$184.7 $179.2 3.1 %
Combined ratio94.3 %92.7 %
PER DILUTED SHARE
Quarters Ended March 31,
20242023% Change
Net income$1.15 $0.68 
Net of tax investment gains0.48 0.07 
Net income excluding investment gains$0.67 $0.61 9.8 %
SHAREHOLDERS' EQUITY (BOOK VALUE)
Mar. 31,Dec. 31,
20242023% Change
Total$6,400.9 $6,410.7 (0.2)%
Per Common Share$23.83 $23.31 2.2 %

The Company reported pretax income, excluding investment gains (pretax operating income), of $231.5, an increase of 3.9% compared to the first quarter of last year, reflecting strong growth in General Insurance pretax operating income, partially offset by a decline in Title Insurance.

Summary of results for the quarter:

Diluted net operating income per share of $0.67, up 9.8% over last year.
Consolidated combined ratio of 94.3%, up 1.6 points over last year.
Consolidated net premiums and fees earned of over $1.6 billion, up 5.6%, resulting from double digit growth in General Insurance partially offset by a decline in Title Insurance.
Net investment income of $164.1, up 19.1%, driven by higher investment yields.
Favorable loss reserve development of 2.3 points, compared to 4.5 points last year.
Total capital returned to shareholders during the quarter of $264, comprised of $72 in dividends, and $193 in share repurchases. Following the close of the quarter, an additional $160 was returned via share repurchases.
Book value per share of $23.83, up 3.4%, inclusive of dividends.

19


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

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

FINANCIAL HIGHLIGHTS
Quarters Ended March 31,
SUMMARY INCOME STATEMENTS:20242023% Change
Revenues:
Net premiums and fees earned$1,642.7 $1,555.2 5.6 %
Net investment income164.1 137.8 19.1 
Other income41.9 39.4 6.2 
Total operating revenues1,848.8 1,732.4 6.7 
Investment gains (losses):
Realized from actual transactions and impairments180.4 28.2 
Unrealized from changes in fair value of equity securities(13.3)(2.0)
Total investment gains167.1 26.2 
Total revenues2,015.9 1,758.7 
Operating expenses:
Loss and loss adjustment expenses697.4 603.9 15.5 
Sales and general expenses903.3 888.6 1.7 
Interest and other expenses16.4 16.9 (2.8)
Total operating expenses1,617.2 1,509.5 7.1 %
Pretax income398.7 249.2 
Income taxes81.9 49.3 
Net income$316.7 $199.8 
COMMON STOCK STATISTICS:
Components of net income per share:
Basic net income excluding investment gains$0.68 $0.61 11.5 %
Net investment gains (losses):
Realized investment gains0.53 0.08 
Unrealized from changes in fair value of equity securities(0.04)(0.01)
Basic net income$1.17 $0.68 
Diluted net income excluding investment gains$0.67 $0.61 9.8 %
Net investment gains (losses):
Realized investment gains0.52 0.08 
Unrealized from changes in fair value of equity securities(0.04)(0.01)
Diluted net income$1.15 $0.68 
Cash dividends on common stock$0.265 $0.245 
20


The information presented in the following table highlights the most meaningful indicators of ORI's segmented and consolidated financial performance. The information underscores the performance of the Company's insurance underwriting subsidiaries, as well as the sound investment of their capital and underwriting cash flows.

The results of the Republic Financial Indemnity Group (RFIG) Run-off business, previously a reportable segment, are deemed immaterial, and therefore are now included within Corporate & Other. Prior period amounts have been reclassified to reflect this change in reportable segments.
Sources of Consolidated Income
Quarters Ended March 31,
20242023% Change
Net premiums and fees earned:
General Insurance$1,091.6 $965.1 13.1 %
Title Insurance545.4 583.2 (6.5)
Corporate & Other5.5 6.8 (18.3)
Consolidated$1,642.7 $1,555.2 5.6 %
Underwriting and related services income (loss):
General Insurance$105.8 $103.8 1.9 %
Title Insurance(13.5)3.7 N/M
Corporate & Other(8.4)(5.4)(54.0)
Consolidated$83.8 $102.1 (17.9)%
Consolidated combined ratio:
Loss ratio:
Current year44.8 %43.3 %
Prior years(2.3)(4.5)
Total42.5 38.8 
Expense ratio51.8 53.9 
Combined ratio94.3 %92.7 %
Net investment income:
General Insurance$131.1 $108.7 20.6 %
Title Insurance15.7 13.7 14.3 
Corporate & Other17.3 15.2 13.5 
Consolidated$164.1 $137.8 19.1 %
Interest and other expenses (income):
General Insurance$16.5 $19.4 
Title Insurance(0.1)— 
Corporate & Other (a)0.1 (2.5)
Consolidated$16.4 $16.9 (2.8)%
Pretax income excluding investment gains:
General Insurance$220.4 $193.2 14.1 %
Title Insurance2.3 17.4 (86.4)
Corporate & Other8.8 12.3 (28.6)
Consolidated 231.5 222.9 3.9 %
Income taxes46.8 43.7 
Net income excluding investment
gains184.7 179.2 3.1 %
Consolidated pretax investment gains (losses):
Realized from actual transactions
and impairments180.4 28.2 
Unrealized from changes in
fair value of equity securities(13.3)(2.0)
Total167.1 26.2 
Income taxes35.1 5.5 
Net of tax investment gains132.0 20.6 
 Net income$316.7 $199.8 
(a) Includes consolidation/elimination entries.

21


General Insurance Segment Operating Results
Quarters Ended March 31,
20242023% Change
Net premiums written$1,157.1 $1,014.0 14.1 %
Net premiums earned1,091.6 965.1 13.1 
Net investment income131.1 108.7 20.6 
Other income41.7 39.2 6.3 
Operating revenues1,264.5 1,113.1 13.6 
Loss and loss adjustment expenses684.2 592.3 15.5 
Sales and general expenses343.3 308.1 11.4 
Interest and other expenses16.5 19.4 (15.0)
Operating expenses1,044.1 919.9 13.5 
Segment pretax operating income$220.4 $193.2 14.1 %
Loss ratio:
Current year65.2 %66.9 %
Prior years(2.5)(5.5)
Total62.7 61.4 
Expense ratio27.6 27.9 
Combined ratio90.3 %89.3 %

General Insurance net premiums earned of nearly $1.1 billion increased 13.1% for the quarter, driven by a combination of premium rate increases, high renewal retention ratios, and new business production, including contributions from recently established insurance underwriting subsidiaries. Premium growth occurred across most lines of coverage, but was most pronounced within commercial auto, property, and general liability. There were small declines in public D&O (included within financial indemnity) and home warranty, largely reflecting market conditions. While commercial auto, general liability, and property continue to achieve strong rate increases, rate declines continued in public D&O and workers' compensation.

The net investment income increase was largely due to higher investment yields earned.

The reported loss ratio for General Insurance reflects lower levels of favorable prior year reserve development and an improvement in the current year loss ratio. Favorable development of 2.5% came predominantly from workers' compensation and commercial auto, partially offset by unfavorable development within general liability. The improvement in the current year loss ratio was most pronounced within commercial auto and workers' compensation coverages. The reported expense ratio benefited from scale, partially offset by investments in new businesses and information technology. In recent years, the diversification of the General Insurance business has resulted in shifts in the lines of coverage mix toward lines with lower current period loss ratios and higher expense ratios.

Together, these factors produced highly profitable combined ratios and strong pretax operating income for the quarter. For General Insurance, we target combined ratios between 90% and 95% over a full underwriting cycle, recognizing that quarterly and annual ratios and trends may deviate from this range, particularly given the long claim payment patterns associated with the business.



22


Title Insurance Segment Operating Results
Quarters Ended March 31,
20242023% Change
Net premiums and fees earned$545.4 $583.2 (6.5)%
Net investment income15.7 13.7 14.3 
Other income0.1 0.1 7.9 
Operating revenues561.3 597.1 (6.0)
Loss and loss adjustment expenses12.1 15.3 (21.2)
Sales and general expenses546.9 564.2 (3.1)
Interest and other expenses (income)(0.1)— N/M
Operating expenses558.9 579.7 (3.6)
Segment pretax operating income$