OLD REPUBLIC INTERNATIONAL CORP [ORI] Filings

10-Q 1 ori-20230930.htm 10-Q ori-20230930



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:	September 30, 2023
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 September 30, 2023 was 280,377,703.

There are 45 pages in this report


OLD REPUBLIC INTERNATIONAL CORPORATION

Report on Form 10-Q / September 30, 2023

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 - 40

	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	41

	CONTROLS AND PROCEDURES	41

PART II	OTHER INFORMATION:

	ITEM 1 - LEGAL PROCEEDINGS	42

	ITEM 1A - RISK FACTORS	42

	ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	42

	ITEM 5 - OTHER INFORMATION	42

	ITEM 6 - EXHIBITS	43

SIGNATURE		44

EXHIBIT INDEX		45


Old Republic International Corporation and Subsidiaries
Consolidated Balance Sheets
($ in Millions, Except Share Data)
	(Unaudited)
	September 30,		December 31,
	2023		2022
Assets
Investments:
Fixed income securities (at fair value) (amortized cost: $12,185.3 and $12,336.3)	$	11,547.4	$	11,746.7
Short-term investments (at fair value which approximates cost)	1,146.3		860.8
Equity securities (at fair value) (cost: $1,590.8 and $1,948.1)	2,685.6		3,220.9
Other investments	33.8		31.2
Total investments	15,413.2		15,859.9
Cash	152.1		81.0
Accrued investment income	116.5		106.7
Accounts and notes receivable	2,356.3		1,927.5
Federal income tax recoverable: Current	17.0		15.7
Deferred	8.7		—

Reinsurance balances and funds held	547.5		323.0
Reinsurance recoverable: Paid losses	140.4		119.4
Policy and loss reserves	6,182.9		5,468.5
Deferred policy acquisition costs	418.7		382.5
Other assets	1,046.7		874.8
Total assets	$	26,400.5	$	25,159.4
Liabilities, Preferred Stock, and Common Shareholders' Equity
Liabilities:
Policy liabilities:
Loss and loss adjustment expense reserves	$	12,811.2	$	12,221.5
Unearned premiums	3,234.3		2,787.8
Other policyholders' benefits and funds	148.7		182.2
Total policy liabilities	16,194.2		15,191.6
Commissions, expenses, fees, and taxes	486.5		514.8
Reinsurance balances and funds	1,467.9		1,079.4

Federal income tax: Deferred	—		42.7
Debt	1,590.9		1,597.0
Other liabilities	745.1		560.5
Total liabilities	20,484.8		18,986.2
Preferred Stock (1)	—		—
Common Shareholders' Equity:
Common stock (1)	280.3		296.9
Additional paid-in capital	726.5		1,141.8
Retained earnings	5,520.9		5,321.8
Accumulated other comprehensive loss	(551.1)		(517.8)
Unallocated 401(k) plan shares (at cost)	(61.1)		(69.5)
Total common shareholders' equity	5,915.6		6,173.2
Total liabilities, preferred stock and common shareholders' equity	$	26,400.5	$	25,159.4

________

(1) At September 30, 2023 and December 31, 2022, there were 75,000,000 shares of $0.01 par value preferred stock authorized, of which no shares were outstanding. As of the same dates, there were 500,000,000 shares of common stock, $1.00 par value, authorized, of which 280,377,703 and 296,932,316 were issued as of September 30, 2023 and December 31, 2022, respectively. At September 30, 2023 and December 31, 2022, there were 100,000,000 shares of Class B Common Stock, $1.00 par value, authorized, of which no shares were issued.

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				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenues:
Operating revenues:
Premiums and fees:
Net premiums earned	$	1,691.1	$	1,862.3	$	4,764.9	$	5,578.5
Title, escrow, and other fees	69.0		80.9		199.2		266.1
Total premiums and fees	1,760.1		1,943.3		4,964.1		5,844.6
Net investment income	145.9		115.1		423.1		329.2
Other income	40.9		39.7		121.0		113.7
Total operating revenues	1,947.0		2,098.2		5,508.4		6,287.7
Net investment gains (losses):
Realized from actual transactions and impairments	(43.5)		(26.2)		(13.1)		92.3
Unrealized from changes in fair value of
equity securities	(143.3)		(350.8)		(178.0)		(641.8)
Total net investment losses	(186.9)		(377.1)		(191.1)		(549.5)
Total revenues	1,760.1		1,721.0		5,317.2		5,738.1

Expenses:
Loss and loss adjustment expenses	657.4		624.3		1,870.5		1,864.4
Dividends to policyholders	5.9		4.2		14.6		10.8
Underwriting, acquisition, and other expenses	1,016.3		1,195.8		2,867.9		3,604.5
Interest and other charges	16.4		16.3		54.0		49.9
Total expenses	1,696.2		1,840.7		4,807.2		5,529.7
Income (loss) before income taxes (credits)	63.9		(119.6)		510.0		208.3

Income Taxes (Credits):
Current	46.6		79.5		145.2		202.8
Deferred	(35.3)		(107.3)		(43.2)		(168.7)
Total income taxes (credits)	11.3		(27.8)		102.0		34.0

Net Income (Loss)	$	52.6	$	(91.7)	$	408.0	$	174.3

Net Income (Loss) Per Share:
Basic	$	.19	$	(.31)	$	1.43	$	.57
Diluted	$	.19	$	(.31)	$	1.42	$	.57

Average shares outstanding: Basic	277,010,690		303,652,802		285,447,448		303,797,001
Diluted	279,924,410		303,652,802		287,978,197		305,381,348

See accompanying Notes to Consolidated Financial Statements.


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Unaudited)
($ in Millions)
	Quarters Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net Income (Loss) As Reported	$	52.6	$	(91.7)	$	408.0	$	174.3

Other comprehensive income (loss):
Unrealized losses on securities not included
in the statements of income:
Unrealized losses before reclassifications,
not included in the statements of income	(181.5)		(387.5)		(164.3)		(1,277.0)
Amounts reclassified as realized investment
losses in the statements of income	81.1		207.2		118.9		267.6
Pretax unrealized losses on securities not
included in the statements of income	(100.4)		(180.3)		(45.3)		(1,009.3)
Deferred income tax credits	(21.5)		(37.9)		(9.7)		(212.9)
Net unrealized losses on securities not included
in the statements of income, net of tax	(78.8)		(142.3)		(35.6)		(796.3)
Defined benefit pension plans:

Amounts reclassified as underwriting, acquisition,
and other expenses in the statements of income	—		.7		—		2.3
Pretax net adjustment related to defined benefit
pension plans	—		.7		.1		2.3
Deferred income taxes	—		.1		—		.4
Net adjustment related to defined benefit pension
plans, net of tax	—		.6		—		1.8


Foreign currency translation adjustment and other	(3.3)		(9.3)		2.3		(5.8)
Total other comprehensive loss	(82.1)		(151.1)		(33.2)		(800.4)
Comprehensive Income (Loss)	$	(29.5)	$	(242.9)	$	374.7	$	(626.0)

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				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Preferred Stock:
Balance, beginning and end of period	$	—	$	—	$	—	$	—

Common Stock:
Balance, beginning of period	$	284.6	$	308.9	$	296.9	$	307.5
Dividend reinvestment plan	—		—		—		—
Stock based compensation	.4		.1		2.2		1.5
Treasury stock restored to unissued status	(4.7)		(4.8)		(18.8)		(4.8)
Balance, end of period	$	280.3	$	304.3	$	280.3	$	304.3

Additional Paid-in Capital:
Balance, beginning of period	$	831.8	$	1,395.9	$	1,141.8	$	1,376.1
Dividend reinvestment plan	.3		1.3		.9		1.8


Stock based compensation	13.9		5.6		41.3		22.0
401(k) plan shares released	1.2		1.8		3.1		4.8
Treasury stock restored to unissued status	(120.7)		(99.9)		(460.6)		(99.9)
Other - net	—		(5.0)		—		(5.1)
Balance, end of period	$	726.5	$	1,299.7	$	726.5	$	1,299.7

Retained Earnings:
Balance, beginning of period	$	5,536.1	$	5,343.1	$	5,321.8	$	5,214.0
Adoption of new accounting principle (1)	—		—		—		2.0
Balance, beginning of period, as adjusted	5,536.1		5,343.1		5,321.8		5,216.1
Net income (loss)	52.6		(91.7)		408.0		174.3
Dividends on common shares (2)	(67.8)		(374.3)		(208.9)		(513.4)
Balance, end of period	$	5,520.9	$	4,877.0	$	5,520.9	$	4,877.0

Accumulated Other Comprehensive Income (Loss):
Balance, beginning of period	$	(468.9)	$	(571.7)	$	(517.8)	$	78.0
Adoption of new accounting principle (1)	—		—		—		(.5)
Balance, beginning of period, as adjusted	(468.9)		(571.7)		(517.8)		77.4
Net unrealized losses on securities not included in the
statements of income, net of tax	(78.8)		(142.3)		(35.6)		(796.3)
Net adjustment related to defined benefit pension plans,
net of tax	—		.6		—		1.8


Foreign currency translation adjustment and other	(3.3)		(9.3)		2.3		(5.8)
Balance, end of period	$	(551.1)	$	(722.9)	$	(551.1)	$	(722.9)

Unallocated 401(k) Plan Shares:
Balance, beginning of period	$	(63.9)	$	(76.6)	$	(69.5)	$	(82.5)
401(k) plan shares released	2.8		3.8		8.4		9.8

Balance, end of period	$	(61.1)	$	(72.7)	$	(61.1)	$	(72.7)

Treasury Stock:
Balance, beginning of period	$	—	$	—	$	—	$	—
Acquired during the period	(125.5)		(104.8)		(479.5)		(104.8)
Restored to unissued status	125.5		104.8		479.5		104.8
Balance, end of period	$	—	$	—	$	—	$	—

________

(1) Reflects the Company's adoption of a new accounting principle relating to long-duration contracts on January 1, 2023. Refer to additional discussion in Note 1 to the Consolidated Financial Statements.

(2) Cash dividends per common share of $.245 and $1.230 were declared for the quarters ended September 30, 2023 and 2022, respectively, and $.735 and $1.690 were declared for the comparative nine month periods.

See accompanying Notes to Consolidated Financial Statements.


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
($ in Millions)
	Nine Months Ended
	September 30,
	2023		2022
Cash flows from operating activities:
Net income	$	408.0	$	174.3
Adjustments to reconcile net income to
net cash provided by operating activities:
Deferred policy acquisition costs	(36.1)		(36.2)
Premiums and other receivables	(428.8)		(328.1)
Loss and loss adjustment expense reserves	69.1		265.0
Unearned premiums and other policyholders' liabilities	220.2		197.0
Income taxes	(43.4)		(150.6)

Reinsurance balances and funds	143.0		197.6
Realized investment (gains) losses from actual transactions	13.1		(92.3)
Unrealized investment losses from changes in fair value
of equity securities	178.0		641.8
Accounts payable, accrued expenses and other	73.7		34.7
Total	597.0		903.4

Cash flows from investing activities:
Maturities and calls of fixed income securities	1,006.5		1,128.6
Sales of:
Fixed income securities	848.7		810.6
Equity securities	483.0		2,011.5
Other investments	7.5		7.4

Purchases of:
Fixed income securities	(1,792.4)		(3,417.2)
Equity securities	(51.1)		(37.7)
Other investments	(78.5)		(39.4)
Net increase in short-term investments	(284.6)		(806.3)
Other - net	.3		(12.3)
Total	139.4		(354.7)

Cash flows from financing activities:

Issuance of common shares	31.3		19.0
Redemption of debentures and notes	(5.3)		—


Dividends on common shares	(208.6)		(512.5)
Treasury stock acquired	(479.5)		(104.8)
Other - net	(3.1)		(5.9)
Total	(665.3)		(604.3)

Increase (decrease) in cash	71.1		(55.7)
Cash, beginning of period	81.0		158.1
Cash, end of period	$	152.1	$	102.4

Supplemental cash flow information:
Cash paid during the period for: Interest	$	53.5	$	53.3
Income taxes	$	146.6	$	185.2

See accompanying Notes to Consolidated Financial Statements.


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

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's (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 2022 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. Reclassifications are made in prior periods' financial statements whenever appropriate to conform to the most current presentation.

Accounting Standard Adoption - On January 1, 2023, the Company adopted FASB's 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, and update the discount rate assumption at each reporting date, with changes flowing through other comprehensive income, as well as 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 runoff. The guidance was applied using a modified retrospective approach as of January 1, 2021, resulting in changes to other policyholders’ benefits and funds, 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.

Securities and Exchange Commission (SEC) Final Ruling - On July 26, 2023, the SEC published final rules on cybersecurity-related disclosures. The final rules will require registrants to disclose cybersecurity incidents within four business days after determining the incident to be material. Registrants will also be required to disclose within Part I, under Item 1C - Cybersecurity, in their annual report on Form 10-K:

•their processes for assessing, identifying, and managing material risks from cybersecurity threats,

•the material impacts of cybersecurity threats and previous cybersecurity incidents,

•the Board of Director’s oversight of risks posed by cybersecurity threats, and

•management’s role and expertise in assessing and managing material risks posed by cybersecurity threats.

The Company is in the process of evaluating the disclosure requirements required by the final rules which will be effective for 2023 annual reporting.

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 September 30, 2023, 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 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 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 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.

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, of the application and interpretation of historical precedent and trends, of expectations as to future developments, and of 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 the 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 to the consolidated financial statements included in Old Republic's 2022 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.

In March 2023, the Compensation Committee of the Company’s Board of Directors approved the Old Republic International Corporation 2023 Performance Recognition Plan (PRP), replacing the previous Key Employee Performance Recognition Plans, as a means of providing cash incentive compensation to named executive officers and certain other senior managers. The PRP is an objective performance-based program providing for annual payouts based on satisfaction of specified performance objectives and individual performance. Financial statement accruals established during the third quarter and nine months ended September 30, 2023 reflect a pro-rata share of the Company’s estimate of annual performance-based incentive awards under the PRP. During the third quarter of 2023, certain structural changes were made to the previously deferred awards made under the Key Employee Performance Recognition Plans, resulting in a one-time charge of $10.7, reflected within underwriting, acquisition, and other expenses in the consolidated statement of income.

Note 2 - Investments

The amortized cost and estimated fair values by type and contractual maturity of fixed income securities are shown in the following tables. Expected maturities will differ from contractual maturities since 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		Estimated Fair Value
Fixed Income Securities by Type:
September 30, 2023:
Government & Agency	$	2,015.4	$	—	$	116.7	$	1,898.6
Municipal	794.5		—		23.0		771.4
Corporate	9,375.3		4.3		502.4		8,877.3
	$	12,185.3	$	4.3	$	642.3	$	11,547.4

December 31, 2022:
Government & Agency	$	2,300.0	$	—	$	114.8	$	2,185.2
Municipal	896.9		.1		15.5		881.5
Corporate	9,139.3		20.3		479.6		8,680.0
	$	12,336.3	$	20.5	$	610.1	$	11,746.7


	Amortized Cost		Estimated Fair Value
Fixed Income Securities Stratified by Contractual Maturity at September 30, 2023:
Due in one year or less	$	1,599.6	$	1,577.3
Due after one year through five years	5,936.9		5,645.2
Due after five years through ten years	4,528.4		4,209.3
Due after ten years	120.3		115.5
	$	12,185.3	$	11,547.4

The following tables reflect the Company's gross unrealized losses and fair value, aggregated by category and length of time that individual securities have been in an unrealized loss position. Fair value and issuer's cost comparisons follow:


	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2023:

Fixed Income Securities:
Government & Agency	$	495.2	$	15.4	$	1,403.4	$	101.2	$	1,898.6	$	116.7
Municipal	205.2		5.8		559.5		17.2		764.7		23.0
Corporate	3,630.5		119.1		4,739.0		383.2		8,369.5		502.4
	$	4,331.0	$	140.5	$	6,701.9	$	501.7	$	11,033.0	$	642.3


December 31, 2022:

Fixed Income Securities:
Government & Agency	$	1,769.6	$	71.0	$	403.8	$	43.8	$	2,173.4	$	114.8
Municipal	845.6		13.0		9.8		2.5		855.5		15.5
Corporate	6,796.7		355.0		1,043.7		124.6		7,840.4		479.6
	$	9,412.0	$	439.1	$	1,457.4	$	170.9	$	10,869.5	$	610.1

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. While the Company recorded no impairment losses in the third quarter of 2023, net realized investment losses for the nine months ended September 30, 2023 include impairment charges of $6.2 which were primarily related to fixed income securities previously held in conjunction with a deferred compensation plan as well as a small credit loss. The third quarter and nine months ended September 30, 2022 included impairment losses of $120.9 and $123.5, respectively, also related to management's assessment of its intent to sell. The Company's allowance for credit losses was $1.6 and $- as of September 30, 2023 and December 31, 2022, respectively.

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


	Equity Securities
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
September 30, 2023	$	1,590.8	$	1,128.3	$	33.5	$	2,685.6
December 31, 2022	$	1,948.1	$	1,291.5	$	18.6	$	3,220.9

During the third quarter and first nine months of 2023 and 2022, the Company recognized pretax unrealized investment losses of $143.3 and $178.0, respectively for 2023, and $350.8 and $641.8, respectively, for 2022, emanating from changes in the fair value of equity securities in the consolidated statements of income. Changes in the fair value of equity securities still held at September 30, 2023 and 2022 were $(100.2) and $(69.9) for the quarter and first nine months of 2023, respectively, and $(215.8) and $(378.6) for the third quarter and first nine months of 2022, 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; and Level 3 unobservable inputs are based on uncorroborated market data or a reporting entity's own assumptions. 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 a nationally recognized independent pricing source 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. The independent pricing source obtains 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 September 30, 2023 and December 31, 2022.

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 September 30, 2023:	Level 1		Level 2		Level 3		Total
Fixed income securities:
Government & Agency	$	1,373.4	$	525.1	$	—	$	1,898.6
Municipal	—		771.4		—		771.4
Corporate	—		8,858.1		19.2		8,877.3
Short-term investments	1,146.3		—		—		1,146.3
Equity securities	$	2,678.6	$	—	$	6.9	$	2,685.6

As of December 31, 2022:
Fixed income securities:
Government & Agency	$	1,598.8	$	586.3	$	—	$	2,185.2
Municipal	—		881.5		—		881.5
Corporate	—		8,659.2		20.8		8,680.0
Short-term investments	860.8		—		—		860.8
Equity securities	$	3,219.1	$	—	$	1.7	$	3,220.9

There were no transfers between Levels 1, 2 or 3 during the quarter ended September 30, 2023.

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				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Investment income:
Fixed income securities	$	109.9	$	80.0	$	319.7	$	219.6
Equity securities	21.9		30.2		71.2		107.1
Short-term investments	14.6		6.0		35.4		7.3
Other investments (a)	4.8		1.2		9.8		2.1
Gross investment income	151.3		117.6		436.2		336.2
Investment expenses (a)	5.4		2.5		13.0		6.9
Net investment income	$	145.9	$	115.1	$	423.1	$	329.2

Net investment gains (losses):
Realized from actual transactions:
Fixed income securities:
Gains	$	.1	$	.6	$	1.1	$	.7
Losses	(81.1)		(86.9)		(114.6)		(146.2)
Net	(80.9)		(86.3)		(113.4)		(145.4)
Equity securities:
Gains	73.0		219.0		152.2		439.2
Losses	(35.4)		(38.1)		(46.4)		(79.2)
Net	37.6		180.9		105.7		359.9
Other investments, net	(.1)		—		.6		1.3
Total realized from actual transactions	(43.5)		94.7		(6.9)		215.8
From impairments	—		(120.9)		(6.2)		(123.5)
From unrealized changes in fair value of equity securities	(143.3)		(350.8)		(178.0)		(641.8)
Total realized and unrealized investment losses	(186.9)		(377.1)		(191.1)		(549.5)
Current and deferred income tax credits	(39.2)		(79.2)		(40.1)		(115.6)
Net of tax realized and unrealized investment losses	$	(147.6)	$	(297.9)	$	(151.0)	$	(433.8)

Changes in unrealized investment gains (losses)
reflected directly in shareholders' equity:
Fixed income securities	$	(99.8)	$	(177.8)	$	(49.9)	$	(999.8)
Less: Deferred income tax credits	(21.4)		(37.4)		(10.6)		(210.9)
	(78.4)		(140.4)		(39.2)		(788.8)

Other investments	(.5)		(2.4)		4.5		(9.5)
Less: Deferred income taxes (credits)	(.1)		(.5)		.9		(1.9)
	(.4)		(1.9)		3.5		(7.5)
Net changes in unrealized investment losses,
net of tax	$	(78.8)	$	(142.3)	$	(35.6)	$	(796.3)

_________

(a) Includes interest on funds held.

Note 3 - Loss and Loss Adjustment Expenses

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


	Nine Months Ended
	September 30,
	2023		2022
Gross reserves at beginning of period	$	12,221.5	$	11,425.5
Less: reinsurance losses recoverable	4,699.5		4,125.3
Net reserves at beginning of period:
General Insurance	6,824.8		6,587.0
Title Insurance	612.8		594.2
RFIG Run-off	77.9		111.2
Other	6.3		7.6
Sub-total	7,521.9		7,300.2
Incurred loss and loss adjustment expenses:
Provisions for insured events of the current year:
General Insurance	2,006.6		1,886.4
Title Insurance	72.1		107.6
RFIG Run-off	9.8		12.3
Other	6.5		6.8
Sub-total	2,095.2		2,013.3
Change in provision for insured events of prior years:
General Insurance	(178.5)		(92.2)
Title Insurance	(22.2)		(22.9)
RFIG Run-off	(21.1)		(29.8)
Other	(1.9)		(3.1)
Sub-total	(223.9)		(148.2)
Total incurred loss and loss adjustment expenses	1,871.2		1,865.1
Payments:
Loss and loss adjustment expenses attributable to
insured events of the current year:
General Insurance	606.0		550.1
Title Insurance	5.4		8.1
RFIG Run-off	—		.1
Other	3.9		3.7
Sub-total	615.4		562.2
Loss and loss adjustment expenses attributable to
insured events of prior years:
General Insurance	1,137.0		977.7
Title Insurance	38.7		47.1
RFIG Run-off	9.6		11.7
Other	1.3		1.1
Sub-total	1,186.7		1,037.7
Total payments	1,802.1		1,599.9
Net reserves at end of period:
General Insurance	6,909.8		6,853.4
Title Insurance	618.5		623.5
RFIG Run-off	56.9		81.9
Other	5.6		6.4
Sub-total	7,591.0		7,565.3
Reinsurance losses recoverable	5,220.1		4,609.3
Gross reserves at end of period	$	12,811.2	$	12,174.7

The favorable development experienced by General Insurance came predominantly from the workers’ compensation and to a lesser extent, commercial auto lines of coverage, with most accident years between 2010-2022 developing favorably, partially offset by unfavorable development from the general liability line of coverage. Favorable development experienced by Title Insurance occurred largely within the 2018-2020 accident years, while RFIG Run-off was driven by positive trends in delinquency cure rates.

Note 4 - 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 statement of income. The Company is not currently under audit by the IRS and 2020 and subsequent tax years remain open.

Note 5 - Net Income (Loss) Per Share

Consolidated basic earnings per share excludes the dilutive effect of common stock equivalents and is computed by dividing income available to common stockholders by the weighted-average number of common shares actually outstanding for the periods presented. Diluted earnings per share are 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				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Numerator:
Net income (loss)	$	52.6	$	(91.7)	$	408.0	$	174.3



Denominator:
Basic weighted-average shares (a)	277,010,690		303,652,802		285,447,448		303,797,001
Effect of dilutive securities - stock-based
compensation awards	2,913,720		—		2,530,749		1,584,347
Diluted adjusted weighted-average shares (a)	279,924,410		303,652,802		287,978,197		305,381,348
Earnings (loss) per share: Basic	$	.19	$	(.31)	$	1.43	$	.57
Diluted	$	.19	$	(.31)	$	1.42	$	.57

Anti-dilutive common stock equivalents
excluded from earnings per share computations:
Stock-based compensation awards	2,236,000		10,651,301		3,569,026		2,653,750

__________

(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 6 - 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 on the consolidated balance sheets.

The Company's credit allowance was comprised of $17.5 and $16.0 related to reinsurance recoverables as of September 30, 2023 and December 31, 2022, respectively, and $27.4 and $27.0 related to accounts and notes receivable, as of September 30, 2023 and December 31, 2022, respectively.

The Company's evaluation of credit losses on available for sale securities is discussed further in Note 2. The Company is not exposed to material concentrations of credit risks as to any one issuer of investment securities.

Note 7 - Debt

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


	September 30, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes:
4.875% issued in 2014 and due 2024	$	399.4	$	394.0	$	399.0	$	397.5
3.875% issued in 2016 and due 2026	548.3		519.7		547.9		522.1
3.850% issued in 2021 and due 2051	643.1		430.2		642.9		449.1
Other miscellaneous debt	—		—		7.1		7.1
Total debt	$	1,590.9	$	1,344.1	$	1,597.0	$	1,375.9

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 classified within Level 2 of the fair value hierarchy as presented below. The Company used an internally generated interest yield market matrix table, which incorporates maturity, coupon rate, credit quality, structure and current market conditions to estimate the fair value of its outstanding debt classified within Level 3.

The following table shows a summary of financial liabilities disclosed, but not carried at fair value, segregated among the various input levels described in Note 3 above:


	Carrying		Fair
	Value		Value		Level 1		Level 2		Level 3
Financial Liabilities:
Debt:
September 30, 2023	$	1,590.9	$	1,344.1	$	—	$	1,344.1	$	—
December 31, 2022	$	1,597.0	$	1,375.9	$	—	$	1,368.7	$	7.1

Note 8 - Common Share Repurchases

On August 18, 2022, the Board of Directors authorized a $450.0 share repurchase program. This authorization was completed during the second quarter 2023. On May 12, 2023, the Board of Directors authorized a share repurchase program for an additional $450.0.

Total share repurchases, inclusive of taxes and fees, under these programs for the quarter and first nine months of 2023, were 4.7 million shares for $125.5 (average price of $26.31) and 18.8 million shares for $479.5 (average price of $25.44), respectively. Following the close of the quarter and through November 1, 2023, the Company repurchased 2.0 million additional shares for $56.0 (average price of $27.14).

Note 9 - 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 September 30, 2023, the Company had no material non-claim litigation exposures in its consolidated business.

Note 10 - Information About Segments of Business

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 three major segments: General Insurance (property and liability insurance), Title Insurance and the Republic Financial Indemnity Group (RFIG) Run-off. The results of a small life and accident insurance business are included within the Corporate & Other caption of this report. 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 insurance industry segments to consolidated totals are shown in the following table.


	Quarters Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
General Insurance:
Net premiums earned	$	1,069.6	$	967.3	$	3,027.7	$	2,821.8
Net investment income and other income	158.5		128.3		458.5		367.8
Total revenues excluding investment gains	$	1,228.2	$	1,095.6	$	3,486.2	$	3,189.7
Segment pretax operating income (a)	$	215.5	$	167.6	$	593.0	$	448.1
Income tax expense	$	43.7	$	34.0	$	121.7	$	89.0

Title Insurance:
Net premiums earned	$	615.3	$	887.1	$	1,718.1	$	2,731.2
Title, escrow and other fees	69.0		80.9		199.2		266.1
Sub-total	684.4		968.1		1,917.3		2,997.3
Net investment income and other income	14.4		12.0		42.7		35.0
Total revenues excluding investment gains	$	698.8	$	980.1	$	1,960.0	$	3,032.3
Segment pretax operating income (a)	$	37.4	$	73.3	$	89.6	$	263.8
Income tax expense	$	7.8	$	16.1	$	18.3	$	56.2

RFIG Run-off:
Net premiums earned	$	3.8	$	5.5	$	12.8	$	18.1
Net investment income and other income	1.3		1.5		4.3		5.2
Total revenues excluding investment gains	$	5.2	$	7.1	$	17.1	$	23.3
Segment pretax operating income	$	4.5	$	9.2	$	18.8	$	31.3
Income tax expense	$	.9	$	1.9	$	3.9	$	6.4


Consolidated Revenues:
Total revenues of Company segments	$	1,932.3	$	2,083.0	$	5,463.4	$	6,245.4
Corporate & other (b)	51.6		53.2		156.8		146.9
Consolidated investment gains (losses):
Realized from actual transactions and impairments	(43.5)		(26.2)		(13.1)		92.3
Unrealized from changes in fair value of equity securities	(143.3)		(350.8)		(178.0)		(641.8)
Total realized and unrealized investment losses	(186.9)		(377.1)		(191.1)		(549.5)
Consolidation elimination adjustments	(36.9)		(37.9)		(111.8)		(104.6)
Consolidated revenues	$	1,760.1	$	1,721.0	$	5,317.2	$	5,738.1

Consolidated Pretax Income (Loss):
Total segment pretax operating income of
Company segments	$	257.5	$	250.2	$	701.5	$	743.3
Corporate & other (b)	(6.7)		7.2		(.2)		14.6
Consolidated investment gains (losses):
Realized from actual transactions and impairments	(43.5)		(26.2)		(13.1)		92.3
Unrealized from changes in fair value of equity securities	(143.3)		(350.8)		(178.0)		(641.8)
Total realized and unrealized investment losses	(186.9)		(377.1)		(191.1)		(549.5)

Consolidated income (loss) before income taxes (credits)	$	63.9	$	(119.6)	$	510.0	$	208.3





Consolidated Income Tax Expense (Credits):
Total income tax expense
of Company segments	$	52.4	$	52.0	$	144.0	$	151.8
Corporate & other (b)	(1.8)		(.7)		(1.9)		(2.0)
Income tax credits on consolidated realized
and unrealized investment losses	(39.2)		(79.2)		(40.1)		(115.6)
Consolidated income tax expense (credits)	$	11.3	$	(27.8)	$	102.0	$	34.0


	September 30,		December 31,
	2023		2022
Consolidated Assets:
General Insurance	$	22,813.3	$	21,227.9
Title Insurance	1,918.1		2,077.6
RFIG Run-off	255.8		344.2
Total assets of company segments	24,987.3		23,649.9
Corporate & other (b)