NEWS BULLETIN
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Old Republic International Corporation
307 North Michigan Avenue, Chicago, Illinois 60601-5382, 312/346-8100
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For Further Information:
AT OLD REPUBLIC: AT FINANCIAL RELATIONS BOARD:
A.C. Zucaro Leslie Loyet
Chairman & CEO Analysts/Investors
(312) 346-8100 (312) 640-6672
lloyet@financialrelationsboard.com
AT FINANCIAL RELATIONS BOARD:
Tim Grace
Media Inquiries
(312) 640-6667
tgrace@financialrelationsboard.com
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FOR IMMEDIATE RELEASE NYSE: ORI
THURSDAY, JULY 27, 2006
OLD REPUBLIC REPORTS SECOND QUARTER AND FIRST HALF RESULTS
SUPPORTED BY CONTINUED STRENGTH OF GENERAL INSURANCE LINES
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Chicago-July 27, 2006 - Old Republic International Corporation (NYSE:ORI), today
announced the following results for the second quarter and first half of 2006:
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Financial Highlights
(unaudited; amounts in millions except per share data and percentages; all per share amounts are shown on a
diluted basis and have been restated retroactively to reflect the 25% stock dividend issued in December 2005)
----------------------------------------------------------------------------------------------------------------------------------
Quarters Ended June 30, Six Months Ended June 30,
------------------------------------------ ------------------------------------------
2006 2005 Change 2006 2005 Change
------------ ------------ ------------ ------------ ------------ ------------
<s> <c> <c> <c> <c> <c> <c>
Operating Revenues $ 940.7 $ 932.1 .9% $ 1,876.1 $ 1,804.4 4.0%
Net Operating Income $ 121.3 $ 163.9* -26.0% $ 233.8 $ 273.0* -14.4%
Net Income $ 126.6 $ 172.3* -26.5% $ 244.0 $ 286.6* -14.8%
Diluted Earnings Per Share:
Net operating income:
Before non-recurring tax benefit $ 0.52 $ 0.51 2.0% $ 1.01 $ 0.98 3.1%
2005 non-recurring tax benefit - 0.20 - 0.20
------------ ------------ ------------ ------------
Total 0.52 0.71 -26.8% 1.01 1.18 -14.4%
Net realized investment gains 0.02 0.03 0.04 .06
------------ ------------ ------------ ------------
Net income $ 0.54 $ 0.74 -27.0% $ 1.05 $ 1.24 -15.3%
============ ============ ============ ============
* Includes non-recurring income tax and related accumulated interest recovery of $45.9 after tax.
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Second quarter and first half 2006 earnings were constrained by the accelerated
recognition of stock option expenses of $4.1 million ($2.6 million after tax or
one cent per diluted share). The additional charge stems from second quarter
option grants to employees who meet certain age and service criteria, typically
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long-term employees who are ages 57 or older. Under the recently issued
Statement of Financial Accounting Standards No. 123R, "Share-Based Payment", the
values attributed to such options must be expensed immediately.
On the other hand, second quarter and first half 2005 earnings were enhanced by
the posting of a non-recurring recovery of income taxes and related accumulated
interest of $57.9 million ($45.9 million net of tax, or 20 cents per diluted
share). The recovery stemmed from a favorable resolution of the Company's claim
for a permanent Federal income tax refund applicable to the three years ended
December 31, 1990.
Consolidated Results
The major components of Old Republic's consolidated operating revenues and
income were as follows for the periods being reported upon:
($ in millions, except share data)
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Quarters Ended June 30, Six Months Ended June 30,
------------------------------------------ ------------------------------------------
2006 2005 Change 2006 2005 Change
----------- ------------ ------------ ----------- ------------ -----------
<s> <c> <c> <c> <c> <c> <c>
Operating revenues:
General insurance $ 531.5 $ 513.2 3.6% $ 1,048.4 $ 995.8 5.3%
Mortgage guaranty 131.0 130.3 .6 262.3 257.3 1.9
Title insurance 253.8 268.2 -5.3 514.2 506.6 1.5
Corporate and other 24.2 20.3 51.0 44.5
----------- ------------ ------------ ----------- ------------ -----------
Total $ 940.7 $ 932.1 .9% $ 1,876.1 $ 1,804.4 4.0%
=========== ============ ============ =========== ============ ===========
Pretax operating income (loss):
General insurance $ 105.2 $ 86.4 21.7% $ 202.3 $ 171.3 18.1%
Mortgage guaranty 63.7 67.9 -6.1 123.8 132.5 -6.6
Title insurance 12.1 22.8 -46.8 19.7 35.6 -44.5
Corporate and other (2.9) (2.6) (3.3) (4.3)
----------- ------------ ------------ ----------- ------------ -----------
Sub total 178.2 174.6 2.0 342.6 335.2 2.2
----------- ------------ ------------ ----------- ------------ -----------
Realized investment gains (losses):
From sales 8.1 12.9 15.7 26.0
From impairments - (.1) - (5.2)
----------- ------------ ----------- ------------
Net realized investment gains 8.1 12.8 15.7 20.8
----------- ------------ ------------ ----------- ------------ -----------
Consolidated pretax income 186.4 187.5 -.6 358.3 356.0 .7
Income taxes 59.7 15.2 293.1 114.3 69.4 64.6
----------- ------------ ------------ ----------- ------------ -----------
Net income $ 126.6 $ 172.3 -26.5% $ 244.0 $ 286.6 -14.8%
=========== ============ ============ =========== ============ ===========
Consolidated underwriting ratio:
Benefits and claims ratio 44.1% 43.6% 43.7% 43.7%
Expense ratio 43.8 44.0 45.1 44.3
----------- ------------ ----------- ------------
Composite ratio 87.9% 87.6% 88.8% 88.0%
=========== ============ =========== ============
Components of diluted net income per share:
Net operating income:
Before non-recurring tax benefit $ 0.52 $ 0.51 2.0% $ 1.01 $ 0.98 3.1%
2005 non-recurring tax benefit - 0.20 - 0.20
----------- ------------ ------------ ----------- ------------ -----------
Total 0.52 0.71 -26.8 1.01 1.18 -14.4
Net realized investment gains 0.02 0.03 0.04 .06
----------- ------------ ------------ ----------- ------------ -----------
Net income $ 0.54 $ 0.74 -27.0% $ 1.05 $ 1.24 -15.3%
=========== ============ ============ =========== ============ ===========
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Consolidated results are provided in terms of both operating and net income to
highlight the effect of realized investment gain or loss recognition on
period-to-period comparisons. Recognition of such gains or losses can be highly
discretionary and arbitrary due to such factors as the timing of individual
securities sales, recognition of losses from write-downs of impaired securities,
tax-planning considerations, and changes in investment management judgments
relative to the direction of securities markets or the future prospects of
individual investees or industry sectors.
General Insurance Results
The General Insurance Group's operating performance continued at high levels for
the latest quarter and year-to-date periods. Key indicators of that performance
follow:
($ in millions)
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Quarters Ended June 30, Six Months Ended June 30,
-------------------------------------------- --------------------------------------------
2006 2005 Change 2006 2005 Change
------------ ------------ ------------ ------------ ------------ ------------
<s> <c> <c> <c> <c> <c> <c>
Net premiums earned $ 473.0 $ 461.3 2.5% $ 933.0 $ 892.4 4.5%
Net investment income 53.7 47.8 12.3 106.6 95.7 11.5
Pretax operating income $ 105.2 $ 86.4 21.7% $ 202.3 $ 171.3 18.1%
============ ============ ============ ============ ============ ============
Claims ratio 65.6% 67.5% 65.0% 67.2%
Expense ratio 23.4 24.0 24.6 24.2
------------ ------------ ------------ ------------
Composite ratio 89.0% 91.5% 89.6% 91.4%
============ ============ ============ ============
Earned premium growth of 2.5 percent in this year's second quarter fell short of
expectations. For the first half of the year, net premiums earned grew by 4.5
percent. For the first six months of 2006, the Company experienced double digit
premium growth among its trucking, and home and extended warranty coverages
while nearly all other lines reflected few or no increases. General insurance
underwriting margins, however, remained at highly satisfactory levels due to the
relative stability of overall claim and productions costs. Net investment income
climbed at low double digit rates, benefiting from the combination of a greater
invested asset base and rising yields on fixed maturity securities.
Mortgage Guaranty Results
Old Republic's Mortgage Guaranty Group posted moderately lower year-over-year
pretax operating earnings in the second quarter and first half of 2006. Key
indicators of this segment's performance follow:
($ in millions)
--------------------------------------------------------------------------------------------
Quarters Ended June 30, Six Months Ended June 30,
-------------------------------------------- --------------------------------------------
2006 2005 Change 2006 2005 Change
------------ ------------ ------------ ------------ ------------ ------------
<s> <c> <c> <c> <c> <c> <c>
Net premiums earned $ 110.2 $ 108.5 1.5% $ 219.2 $ 213.9 2.5%
Net investment income 17.6 17.4 1.2 36.8 35.0 5.2
Pretax operating income $ 63.7 $ 67.9 -6.1% $ 123.8 $ 132.5 -6.6%
============ ============ ============ ============ ============ ============
Claims ratio 35.6% 31.5% 37.2% 31.9%
Expense ratio 22.6 22.0 23.1 22.5
------------ ------------ ------------ ------------
Composite ratio 58.2% 53.5% 60.3% 54.4%
============ ============ ============ ============
Mortgage Guaranty premium revenue trends for this year's first half reflected
the combination of slightly improved business persistency, lower overall
mortgage originations, and a sharp decline in bulk insurance production. The
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higher composite underwriting ratio for 2006 periods was largely driven by
higher claim costs. The rise in claim costs stemmed primarily from higher paid
claims as well as expectations of greater claim frequency for the traditional
primary business. Lower underwriting profit margins evidenced by this year's
higher composite ratio were partially offset by a slight increase in net
investment income.
Title Insurance Results
Old Republic's Title Insurance segment registered significant drops in
profitability for the 2006 periods reported upon. Key indicators of that
performance follow:
($ in millions)
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Quarters Ended June 30, Six Months Ended June 30,
-------------------------------------------- --------------------------------------------
2006 2005 Change 2006 2005 Change
------------ ------------ ------------ ------------ ------------ ------------
<s> <c> <c> <c> <c> <c> <c>
Net premiums and fees earned $ 247.2 $ 261.7 -5.5% $ 500.7 $ 493.4 1.5%
Net investment income 6.5 6.4 1.7 13.3 12.7 4.2
Pretax operating income $ 12.1 $ 22.8 -46.8% $ 19.7 $ 35.6 -44.5%
============ ============ ============ ============ ============ ============
Claims ratio 5.9% 5.9% 6.0% 5.9%
Expense ratio 91.7 87.7 92.6 89.4
------------ ------------ ------------ ------------
Composite ratio 97.6% 93.6% 98.6% 95.3%
============ ============ ============ ============
Title premium and fee revenues dropped by 5.5% in this year's second quarter but
rose by 1.5% in the first half. For both 2006 periods, profit margins in
underwriting/service operations deteriorated significantly. Substantially all of
the margin compression occurred in the segment's direct operations, most of
which are concentrated in the Western United States. Revenues in that region
dropped by 26.6 percent in this year's second quarter and 25.1 percent in the
first half. The resulting production levels in that region have been much lower
than necessary to support the related operating expense structure. As a
consequence of the relatively greater expense load, the segment posted a much
higher composite underwriting ratio in this year's second quarter and first
half. Slight net investment income growth in this segment was insufficient to
offset the substantial reduction in underwriting/service profitability in 2006
to date.
Corporate and Other Operations
Old Republic's small life and health business, and the net corporate service
costs of the parent holding company and internal services subsidiaries produced
combined pretax losses of $2.9 million and $3.3 million in the second quarter
and first six months of 2006, respectively. Life and health pretax income was
affected adversely by greater life insurance claim costs in both periods of
2006. Overall net corporate expenses, however, were moderately lower
year-over-year.
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Cash, Invested Assets and Shareholders' Equity
The following table shows the changes in consolidated cash and invested assets
as well as shareholders' equity, as of the dates shown:
($ in millions, except share data)
---------------------------------------------------------------------
% Change
-------------------------
June December June June `06/ June `06/
2006 2005 2005 Dec `05 June `05
----------- ----------- ---------- ---------- ----------
<s> <c> <c> <c> <c> <c>
Cash and invested assets:
Total: As reported, with securities at market $ 7,512.9 $ 7,394.1 $ 7,216.4 1.6% 4.1%
With securities at cost 7,574.6 7,317.3 7,006.8 3.5 8.1
Per share: As reported, with securities at market 32.66 32.21 31.56 1.4 3.5
With securities at cost 32.93 31.87 30.65 3.3 7.4
Shareholders' equity:
Total: As reported, with securities at market 4,130.6 4,024.0 4,068.9 2.6 1.5
With securities at cost 4,170.4 3,973.9 3,932.6 4.9 6.0
Per share: As reported, with securities at market 17.96 17.53 17.80 2.5 .9
With securities at cost $ 18.13 $ 17.31 $ 17.20 4.7% 5.4%
=========== =========== ========== ========== ==========
The investment portfolio reflects a current allocation of approximately 85
percent in fixed-maturity securities and 8 percent in equities. As in the past,
it contains little or no exposure to real estate investments, mortgage-backed
securities, derivatives, junk bonds, private placements or mortgage loans. The
latest periods' changes in shareholders' equity, as reported, reflects
principally additions from earnings in excess of dividend payments, offset by a
decline in the value of investment securities carried at market values.
Effective January 1, 2006, the Company reclassified its long-term investments in
U.S. Treasury Tax and Loss Bonds held by its mortgage guaranty insurance
subsidiaries. The reclassification is intended to conform to more common
industry reporting practices and to better align such assets with the
corresponding long-term deferred income tax liabilities to which they relate. As
a result of this reclassification, invested asset balances have been reduced and
the prepaid income tax asset has been increased, while periodic operating cash
flow and cash flow from investing activities have been adjusted by
correspondingly identical amounts as shown in the following tables. The
reclassification has no effect on the financial position or net income of the
Company, nor does it call for the receipt or disbursement of any additional cash
resources. The following table shows the effect of these adjustments on
pertinent financial statement performance indicators as of the balance sheet
dates and for the periods shown.
($ in millions)
-------------------------------------------------------
June 30, December 31, June 30,
2006 2005 2005
--------------- --------------- ----------------
<s> <c> <c> <c>
Cash and invested assets:
Previous classification $ 7,981.4 $ 7,939.9 $ 7,762.2
After reclassification 7,512.9 7,394.1 7,216.4
Change (468.4) (545.7) (545.7)
Total other assets:
Previous classification 3,671.1 3,603.2 3,282.1
After reclassification 4,139.6 4,149.0 3,827.9
Change $ 468.4 $ 545.7 $ 545.7
=============== =============== ================
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($ in millions)
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Six Months Ended Years Ended
June 30, December 31,
---------------------------------- -----------------------------------
2006 2005 2005 2004
--------------- --------------- --------------- ----------------
<s> <c> <c> <c> <c>
Cash flows from operating activites:
Previous classification $ 248.2 $ 371.2 $ 880.0 $ 828.3
After reclassification 325.5 324.7 833.6 775.5
Change 77.3 (46.4) (46.4) (52.8)
Cash flows from investing activites:
Previous classification (195.0) (324.6) (589.9) (734.1)
After reclassification (272.3) (278.1) (543.5) (681.3)
Change $ (77.3) $ 46.4 $ 46.4 $ 52.8
=============== =============== =============== ================
Conference Call Information
Old Republic has scheduled a conference call at 3:00 p.m. EDT (2:00 p.m. CDT)
today to discuss its second quarter 2006 performance and review ongoing trends.
To access this call, log on to www.oldrepublic.com 15 minutes before the call to
download the necessary software. A replay will be available through this website
for 30 days.
About Old Republic
Chicago-based Old Republic International Corporation is an insurance holding
company whose subsidiaries market, underwrite and provide risk management
services for a wide variety of coverages primarily in the property and
liability, mortgage guaranty, and title insurance fields. One of the nation's 50
largest publicly owned insurance organizations, Old Republic has assets of
approximately $11.6 billion and shareholders' equity of $4.1 billion or $17.96
per share. Its current stock market valuation is approximately $5.0 billion, or
$21.75 per share.
Safe Harbor Statement
Historical data pertaining to the operating results, liquidity, and other
performance indicators applicable to an insurance enterprise such as Old
Republic are not necessarily indicative of results to be achieved in succeeding
years. In addition to the factors cited below, the long-term nature of the
insurance business, seasonal and annual patterns in premium production and
incidence of claims, changes in yields obtained on invested assets, changes in
government policies and free markets affecting inflation rates and general
economic conditions, and changes in legal precedents or the application of law
affecting the settlement of disputed and other claims can have a bearing on
period-to-period comparisons and future operating results.
Some of the statements made in this News Release and Company published reports,
as well as oral statements or commentaries made by the Company's management in
conference calls following earnings releases, can constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Of necessity, any such forward-looking statements, commentaries, or
inferences involve assumptions, uncertainties, and risks that may affect the
Company's future performance. With regard to Old Republic's General Insurance
segment, its results can be affected, in particular, by the level of market
competition, which is typically a function of available capital and expected
returns on such capital among competitors, the levels of interest and inflation
rates, and periodic changes in claim frequency and severity patterns caused by
natural disasters, weather conditions, accidents, illnesses, work-related
injuries, and unanticipated external events. Mortgage Guaranty and Title
insurance results can be affected by similar factors and, most particularly, by
changes in national and regional housing demand and values, the availability and
cost of mortgage loans, employment trends, and default rates on mortgage loans.
Mortgage guaranty results, in particular, also may be affected by various
risk-sharing arrangements with business producers as well as the risk management
and pricing policies of government sponsored enterprises. Life and health
insurance earnings can be affected by the levels of employment and consumer
spending, variations in mortality and health trends, and changes in policy
lapsation rates. At the parent holding company level, operating earnings or
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losses are generally reflective of the amount of debt outstanding and its cost,
interest income on temporary holdings of short-term investments, and
period-to-period variations in the costs of administering the Company's
widespread operations.
Any forward-looking statements or commentaries speak only as of their dates. Old
Republic undertakes no obligation to publicly update or revise any and all such
comments, whether as a result of new information, future events or otherwise,
and, accordingly, they may not be unduly relied upon.
For the latest news releases and other corporate documents on
Old Republic International Corporation
Visit: www.oldrepublic.com
Financial Tables Follow....
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Old Republic International Corporation
FINANCIAL HIGHLIGHTS (*)
($ in Millions, Except Share Data)
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Quarters Ended Six Months Ended
June 30, June 30,
---------------------------------- ----------------------------------
2006 2005 Change 2006 2005 Change
-------------------------------------------------- --------------------------------------------
<s> <c> <c> <c> <c> <c> <c>
NET INCOME:
Total $126.6 $172.3 -26.5% $244.0 $286.6 -14.8%
================ =============== =============== ================
Per Share: Basic $0.55 $0.75 -26.7% $1.06 $1.25 -15.2%
================ =============== =============== ================
Diluted $0.54 $0.74 -27.0% $1.05 $1.24 -15.3%
================ =============== =============== ================
Average number of shares outstanding:
Basic 230,013,892 228,629,783 230,007,372 228,616,296
================ =============== =============== ================
Diluted 232,240,816 231,190,413 232,233,930 231,142,306
================ =============== =============== ================
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COMPOSITION OF EARNINGS PER SHARE:
- ------------------------------------------------------------------------------------------------------------------------------------
Basic Earnings:
Net operating income $0.53 $0.72 -26.4% $1.02 $1.19 -14.3%
Realized investment gains 0.02 0.03 0.04 0.06
---------------- --------------- --------------- ----------------
Net income $0.55 $0.75 -26.7% $1.06 $1.25 -15.2%
================ =============== =============== ================
Diluted Earnings:
Net operating income $0.52 $0.71 -26.8% $1.01 $1.18 -14.4%
Realized investment gains 0.02 0.03 0.04 0.06
---------------- --------------- --------------- ----------------
Net income $0.54 $0.74 -27.0% $1.05 $1.24 -15.3%
================ =============== =============== ================
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FINANCIAL POSITION SUMMARY:
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June 30, December 31, June 30,
2006 2005 2005
---------------- --------------- ----------------
Assets:
Cash and fixed maturity securities $6,757.2 $6,675.4 $6,637.5
Equity securities 599.3 552.4 416.5
Other invested assets 156.4 166.3 162.4
---------------- --------------- ----------------
Cash and invested assets 7,512.9 7,394.1 7,216.4
Accounts and premiums receivable 796.3 803.4 620.2
Federal income tax recoverable: current 5.8 - 44.2
Reinsurance balances recoverable 2,233.1 2,167.2 2,008.9
Prepaid federal income taxes 468.4 545.7 545.7
Sundry assets 635.7 632.5 608.7
---------------- --------------- ----------------
Total $11,652.5 $11,543.2 $11,044.4
================ =============== ================
Liabilities and Shareholders' Equity:
Policy liabilities $1,259.4 $1,228.1 $1,094.4
Benefit and claim reserves 5,134.1 4,939.8 4,706.4
Federal income tax payable: current - 129.3 -
deferred 398.9 421.6 563.1
Debt 142.1 142.7 142.7
Sundry liabilities 587.2 657.4 468.6
Shareholders' equity 4,130.6 4,024.0 4,068.9
---------------- --------------- ----------------
Total $11,652.5 $11,543.2 $11,044.4
================ =============== ================
Number of shares outstanding 230,026,330 229,575,404 228,641,223
================ =============== ================
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(*) Per share data reflect adjustments for the 25% stock dividend issued in
December 2005.
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Old Republic International Corporation
SEGMENTED OPERATING SUMMARY
($ in Millions)
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Net Pretax
Premiums Net Sales Operating Composite
& Fees Investment Other Operating Benefits & Other Total Income Underwriting
Segment Earned Income Income Revenues & Claims Expenses Expenses (Loss) Ratios
- ------------ ------------ ------------ ------------ ------------ ------------ ----------- ------------ ------------ -----------
<s> <c> <c> <c> <c> <c> <c> <c> <c> <c>
Quarter Ended June 30, 2006
- ---------------------------
General $473.0 $53.7 $4.7 $531.5 $310.2 $115.9 $426.2 $105.2 89.0%
Mortgage 110.2 17.6 3.1 131.0 39.2 28.0 67.2 63.7 58.2%
Title 247.2 6.5 0.1 253.8 14.6 227.0 241.7 12.1 97.6%
Other 17.8 4.6 1.6 24.2 9.8 17.3 27.2 (2.9) ---
----------------------------------------------------------------------------------------------------------
Consolidated $848.4 $82.6 $9.6 $940.7 $373.9 $388.4 $762.4 $178.2 87.9%
========================================================================================================== ===========
Quarter Ended June 30, 2005
- ---------------------------
General $461.3 $47.8 $4.0 $513.2 $311.2 $115.4 $426.7 $86.4 91.5%
Mortgage 108.5 17.4 4.2 130.3 34.2 28.1 62.3 67.9 53.5%
Title 261.7 6.4 0.1 268.2 15.3 230.0 245.3 22.8 93.6%
Other 16.0 4.1 0.1 20.3 8.6 14.3 22.9 (2.6) ---
----------------------------------------------------------------------------------------------------------
Consolidated $847.6 $75.8 $8.5 $932.1 $369.4 $387.9 $757.4 $174.6 87.6%
========================================================================================================== ===========
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended June 30, 2006
- ------------------------------
General $933.0 $106.6 $8.7 $1,048.4 $606.7 $239.3 $846.1 $202.3 89.6%
Mortgage 219.2 36.8 6.1 262.3 81.5 56.8 138.4 123.8 60.3%
Title 500.7 13.3 0.1 514.2 30.2 464.2 494.4 19.7 98.6%
Other 39.2 8.4 3.3 51.0 20.8 33.5 54.3 (3.3) ---
----------------------------------------------------------------------------------------------------------
Consolidated $1,692.2 $165.3 $18.5 $1,876.1 $739.4 $794.0 $1,533.4 $342.6 88.8%
========================================================================================================== ===========
Six Months Ended June 30, 2005
- ------------------------------
General $892.4 $95.7 $7.6 $995.8 $599.4 $225.0 $824.4 $171.3 91.4%
Mortgage 213.9 35.0 8.3 257.3 68.1 56.5 124.7 132.5 54.4%
Title 493.4 12.7 0.3 506.6 29.1 441.7 470.9 35.6 95.3%
Other 36.6 7.6 0.2 44.5 19.0 29.8 48.9 (4.3) ---
----------------------------------------------------------------------------------------------------------
Consolidated $1,636.5 $151.2 $16.5 $1,804.4 $715.8 $753.2 $1,469.1 $335.2 88.0%
========================================================================================================== ===========
- ------------------------------------------------------------------------------------------------------------------------------------
Fiscal Twelve Months Ended June 30, 2006
- ----------------------------------------
General $1,845.7 $208.0 $16.5 $2,070.3 $1,214.2 $475.0 $1,689.2 $381.0 90.6%
Mortgage 434.8 71.9 14.2 521.0 173.0 112.9 285.9 235.0 62.5%
Title 1,089.1 26.5 0.5 1,116.2 65.8 977.4 1,043.3 72.8 95.7%
Other 72.9 17.6 14.5 105.1 35.8 68.3 104.2 0.8 ---
----------------------------------------------------------------------------------------------------------
Consolidated $3,442.6 $324.2 $45.8 $3,812.7 $1,489.0 $1,633.8 $3,122.8 $689.8 88.9%
========================================================================================================== ===========
Fiscal Twelve Months Ended June 30, 2005
- ----------------------------------------
General $1,742.6 $189.6 $15.4 $1,947.8 $1,159.5 $441.5 $1,601.1 $346.7 90.8%
Mortgage 418.0 69.4 16.8 504.3 150.1 113.9 264.1 240.1 59.1%
Title 1,015.8 25.8 0.6 1,042.3 59.6 928.7 988.4 53.9 97.2%
Other 68.7 15.3 0.5 84.6 36.2 65.7 102.0 (17.3) ---
----------------------------------------------------------------------------------------------------------
Consolidated $3,245.2 $300.3 $33.5 $3,579.1 $1,405.6 $1,550.0 $2,955.6 $623.4 89.3%
========================================================================================================== ===========
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Old Republic International Corporation
SEGMENTED OPERATING STATISTICS
($ in Millions)
- ------------------------------------------------------------------------------------------------------------------------------------
Quarters Ended Six Months Ended
June 30, June 30,
--------------------------------- ---------------------------------
2006 2005 2006 2005
--------------------------------- ---------------------------------
<s> <c> <c> <c> <c>
General Insurance:
Benefits and claims ratio 65.6% 67.5% 65.0% 67.2%
Expense ratio 23.4% 24.0% 24.6% 24.2%
--------------- --------------- --------------- ---------------
Composite ratio 89.0% 91.5% 89.6% 91.4%
=============== =============== =============== ===============
Paid loss ratio 52.7% 51.4% 50.4% 50.5%
=============== =============== =============== ===============
Mortgage Guaranty:
New insurance written: Traditional Primary $4,460.6 $5,326.8 $8,353.1 $10,032.4
Bulk 981.9 2,465.2 4,238.8 5,764.8
Other 89.4 3.5 140.7 43.4
--------------- --------------- --------------- ---------------
Total $5,532.0 $7,795.7 $12,732.8 $15,840.7
=============== =============== =============== ===============
Net risk in force: Traditional Primary $14,502.0 $15,126.5
Bulk 1,891.8 1,203.9
Other 587.8 576.2
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Total $16,981.7 $16,906.7
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Earned premiums: Direct $129.8 $128.1 $258.8 $252.7
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Net $110.2 $108.5 $219.2 $213.9
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Persistency/Traditional Primary 68.1% 66.6%
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Delinquency ratio: Traditional Primary 4.08% 3.82%
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Bulk 3.24% 3.25%
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Claims ratio 35.6% 31.5% 37.2% 31.9%
Expense ratio 22.6% 22.0% 23.1% 22.5%
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Composite ratio 58.2% 53.5% 60.3% 54.4%
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Paid loss ratio 36.7% 30.6% 34.9% 31.1%
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Title Insurance:
Direct orders opened 89,153 107,277 176,064 206,302
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Direct orders closed 69,861 87,228 137,970 164,346
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Claims ratio 5.9% 5.9% 6.0% 5.9%
Expense ratio 91.7% 87.7% 92.6% 89.4%
--------------- --------------- --------------- ---------------
Composite ratio 97.6% 93.6% 98.6% 95.3%
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Paid loss ratio 6.1% 5.2% 5.1% 5.1%
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