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Sep 30, 2020
Old Republic Q3 2020 Earnings Report
Old Republic reported results for the third quarter of 2020, showing growth in net income excluding investment gains, driven by greater profitability in General and Title Insurance segments.
Key Takeaways
Old Republic International Corporation reported increased net income, excluding investment gains, driven by higher profitability in the General and Title Insurance segments. The company's consolidated combined ratio improved, and book value per share rose. The COVID-19 pandemic continued to impact the U.S. economy, affecting premium and fee revenues in the General Insurance segment, while the Title Insurance segment experienced strong growth.
Net income, excluding investment gains, increased due to greater profitability in the General and Title Insurance segments.
Consolidated combined ratio improved to 92.0% for the third quarter.
Book value per share rose to $20.39 at September 30, 2020.
The Title Insurance segment experienced strong growth in premium and fee revenues.
Old Republic
Old Republic
Old Republic Revenue by Segment
Revenue by Segment
Specialty Insurance Revenue
CapyFin.comTitle Insurance Revenue
CapyFin.com Forward Guidance
The economic impacts from the COVID-19 pandemic could affect future premium and fee revenues in the General Insurance and Title Insurance segments, and conversely underwriting expense ratios could rise. 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. These outcomes notwithstanding, management firmly believes that the Company’s strong financial condition will enable it to weather these challenges, and most importantly allow its insurance subsidiaries to meet their obligations to customers, policyholders and their beneficiaries.
Positive Outlook
- Company’s strong financial condition will enable it to weather these challenges.
- Insurance subsidiaries can meet their obligations to customers, policyholders and their beneficiaries.
- Management's key objectives are to achieve a continuous, long-term improvement in operating results
- Management's key objectives are to ensure balance sheet strength for the primary needs of the insurance subsidiaries' underwriting and related services business.
- Business is managed for the long run.
Challenges Ahead
- Economic impacts from the COVID-19 pandemic could affect future premium and fee revenues in the General Insurance.
- Economic impacts from the COVID-19 pandemic could affect future premium and fee revenues in the Title Insurance segments.
- Underwriting expense ratios could rise.
- Future claims experience could depend upon the continued, mitigating effects of loan forbearance programs mandated by the Federal government.
- Future claims experience could depend on the rate at which employment levels recover.
Revenue & Expenses
Visualization of income flow from segment revenue to net income