Old Republic Q1 2021 Earnings Report
Key Takeaways
Old Republic International Corporation reported strong first-quarter results driven by solid underwriting results in the General Insurance and Title Insurance businesses. The company's consolidated combined ratio improved to 90.9%, and net income excluding investment gains increased by 46.5%.
Consolidated pretax income, excluding investment gains, showed strong growth in General Insurance and Title Insurance.
Solid underwriting results led to a consolidated combined ratio of 90.9%, compared to 95.1% in the first quarter of 2020.
Title Insurance experienced robust growth in premium and fee revenues due to low interest rates and a favorable real estate market.
Net investment income decreased due to lower investment yields, despite growth in the invested asset base.
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Old Republic Revenue by Segment
Forward Guidance
As the economy emerges from the impacts of the pandemic, premium and fee revenues in General Insurance could continue growing, especially compared to the 2020 periods where exposure levels were lower due to the effects of the pandemic on economic activity and employment levels. Title Insurance premium and fee revenues could remain strong as long as low interest rates and a favorable real estate market continue. In the RFIG Run-off business, future claims experience could depend upon the continued, mitigating effects of loan forbearance programs mandated by the Federal government, and the rate at which employment levels recover.
Positive Outlook
- Premium and fee revenues in General Insurance could continue growing as the economy recovers.
- Title Insurance premium and fee revenues could remain strong with low interest rates and a favorable real estate market.
- The Company’s strong financial condition will enable it to thrive as the economy recovers.
Challenges Ahead
- Future claims experience in the RFIG Run-off business depends on loan forbearance programs and employment recovery rates.
- Unspecified risks associated with economic disruptions caused by the COVID-19 pandemic and governmental responses.
- Market competition in the General Insurance segment could impact results.
- Changes in housing demand, values, mortgage loan availability, and employment trends could affect Title Insurance and RFIG Run-off results.
- Cyber risk.
Revenue & Expenses
Visualization of income flow from segment revenue to net income