Old Republic Posts Slower Premium Growth as Underwriting Profit Falls
GAAP net income climbed 57.7% to $322.3 million on investment gains.
Old Republic International (ORI), the specialty and title insurer, posted slower premium growth in the second quarter as weaker Specialty Insurance underwriting outweighed a recovery in Title Insurance.
Net premiums and fees earned rose 5.2% from a year earlier to $2.098 billion, easing from 7.1% growth in the first quarter and 9.8% in the final quarter of 2024. Premiums and fees increased 6.4% sequentially, while the consolidated combined ratio improved to 95.3% from 96.6% in the first quarter.
Net operating income fell 11.1% to $186.0 million, and diluted operating earnings declined to $0.76 a share from $0.84. Both measures improved sequentially. GAAP profit benefited from $136.2 million of after-tax investment gains, compared with a $4.7 million loss a year earlier.
Specialty Insurance net premiums written increased 9.0% to $1.483 billion, though growth was 1.6% after excluding a retail-price write-up required for auto-warranty programs. Earned premiums rose 2.3% as rate increases, new business and new operating companies offset some pressure from lower renewal retention.
The segment’s underwriting income dropped 50.5% to $59.3 million as its combined ratio deteriorated 4.8 percentage points to 95.5%. Old Republic recorded about $40 million of unfavorable prior-year development in its run-off transactional-risk business, equivalent to 3.0 loss-ratio points, with favorable development in commercial auto and property largely offsetting the charge.
Title Insurance provided the counterweight. Net premiums and fees earned rose 10.7% to $772.6 million, while underwriting income increased to $37.6 million from $6.9 million and the combined ratio improved to 95.1% from 99.0%. Commercial transactions accounted for 25.4% of net premiums earned, up from 23.0% a year earlier.
Consolidated underwriting income fell 27.6% to $82.2 million because Specialty’s $60.6 million decline exceeded Title’s $30.7 million improvement. Net investment income rose 6.1% to $182.0 million, while interest and other charges jumped 50.3% following a $700 million senior-notes issuance ahead of an August 2026 debt maturity.
Old Republic completed its acquisition of ECM and expects to recognize an acquisition gain of about $125 million. The company plans to include ECM in Specialty Insurance beginning in the third quarter and expects the transaction to add to earnings in 2026.