ORI - Earnings call transcript Q4 2018 | Old Republic International Corporation

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Operator

Good day, and welcome to the Old Republic International Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. I would like to remind everyone that this conference is being recorded. to Group. conference like Meek to now MWW with would turn over the Marilynn I ahead. go Please

Marilynn Meek

as Thank advised you. statistical to everyone, a Chairman with SEC access other at Both of a Zucaro. the be XXXX afternoon’s meeting. Good like separate conference several afternoon, discussed to This copy Old updated us for associated call these supplements International senior statements call. are for Corporation, available results. release by this statistical over call this executive during Republic for of will to time, joining can filings. a and and This Old www.oldrepublic.com. this be Old conference and we we call morning, sir. planned in website, would discuss go press ahead, I quarter press that the and Zucaro, in the latest you is fourth seen distributed release At thank posted led have involve be and assume which Company’s may the as CEO Risks supplement, and/or Republic have which Republic's January turn forward-looking XX, otherwise call documents Al Please XXXX. Please members, found statements, the Al you the

Al Zucaro

said, ours. this just Okay. this visit Well, Marilynn in Old on update Republic's executives in got thank thank And that business Old participating as Republic you, and year-end participate for hello also to several everyone. of you will through XXXX. senior And we've

of Executive about Mueller, Insurance Company's discussion; Chairman financial part General our will will of Karl elements will our color the situation. our more some who in Yeager, provide CFO, cover Craig is Business, Smiddy, the important First, President Rande that cover of our Title and additional Insurance segment;

over is we the approaching conference has also And years, morning. the had in in calls to from release moreover, analysis our deal concurrently Republic quite that results in time other business financial should changes that year. In all as a that as bit, more, tax the assuming, the not and comparative posted I of get addressing to everyone as include that it the speak obviously the time that income be as makers the a to abundantly had that comparative made, Old information been and so seen referring it's this post-tax rule discussion, XXXX the since well always, our on performance And rates mandated of by clear challenging we've XXXX, when and we impact business. today's we're a some through -- supplement of comes their going activities So, with if have of fundamentals sifting accounting our changes statistical have earnings numbers insurance the of a bit this this we’ll particularly to to say, website to important this reported through our morning. on

months in done financial terms have past operating light I periods of and in the of job, discuss similar though key business XXXX components. say from between and a in a its financial pages myself, XXXX that reporting, and XX release. Generally two before, or performance before the news said review, reporting to of the and our critical elements apples-to-apples I that to comparison discussion clear go taken the provide this in and XXXX we in the has the yearend the over Karl thought of having CFO, be to So, Mueller, with of as release so pure I perspective challenge of of think particularly the changes, addressing speaking, as of and on might aberrations financial the so. three key say, place financial taxation And first respect even this we've we I highlights good been

over And the say, the So, as turn you words the to I numbers context Karl. me discussed in I'm release. and sure add let the we've as to discussion color you and can

It's all Okay. yours.

Karl Mueller

Good everyone. All afternoon, right.

highlighting Al well the said, me post as key both, of amounts. year-over-year income affect tax So, let the start that pre some by of comparisons as factors as

must First the became standard with in changes revenues is be Xst rather years. FASB. the come fair set every prior And forth statement in That values been the net than have they the XXXX. being that of taxes the of new in equity shareholders’ directly requires by accounting standard now effective the of portfolio recorded to included

rate lower Second effective income XXXX. is for the became federal of that XX%

income is XXXX finally, deferred a were of that statement lower revaluation as reflect the end comparative tax recorded And assets of number the of the to the of to liabilities results rate. the tax Third were related events anticipated by charges. and and affected XXXX non-recurring

some and as And included tables, evaluation X particular, results operating on the additional pages do So, quantify comparable those each of items. of mentioned includes that these this and narrative done of of an this the in A, X release in to on earlier news effect a morning's we've release, relatively basis. Al additional effort

of operating which losses exclude of the reflective that We on lower believe statement release. are investment unrealized achieved the of as this then periods income the in comparisons and presented well realized gains each example, effect an performance rate. basic for of as tax pretax measure page As the the X table is business the and of provides the impact most results

rise portfolio XXXX investment the common operating year. I per three speak shown which periods has the invested securities was due additional fact the on principal the slightly investment partially a ratios and XXXX. the and primary end the outstanding resulted throughout the year that debt totaled by shares decline of by of attributable portfolio convertible share reported of well share momentarily. was XXXX. common per stock offset pre-tax basis, the average this throughout periods up segments. due full-year Its several declined than at the on and year. morning's And of unrealized now. the to a the the our quality last XXXX to and income of of notes number particularly as additions by page from the Republic this well reserve for to the of higher security end into the past investments. dividend operating the a nearly pages contributing paying $X.XX most consolidated the the the $X.XX operating The assets market net of So, of quarter debt the during also a equity moving end the X maturity earlier. for income billion decrease the million out by largely $XX.X share claims end $XX.X market portfolio. shown of results These with dividend ratios simply Old was stemming and share was This as and Investments or years. stable primarily market ratio well Fixed for XXXX we $XX mentioned, makes a quarters rise elsewhere Old each fixed in per maturity investment make unrealized includes claim four decline XXXX balance Consolidate This appreciation conversion the remaining of lower along share securities remained income cash that XX of up Rande short-term during during financial for gains earlier slightly $X portfolio course dividend significant of XXXX. result And for realized to release. net rating in the This reserves cash disclose high the declared of dropped portfolio prior page show the by reflects more XXXX at occurred net due at consistent roughly factors January changes that trend book remained quarter in as the the X.X% amount per quality on favorably reductions course relatively composition an on million that billion conversion year-over-year On the total most for that's value relatively effect per on, to million XXXX and capitalization during over credit operating losses, that elimination share. of the also the XXXX The the special of from found year-end consistent compared investment were offset The reported a interest Total decline by per XXXX declined in a on investment from point key balance the basis as the cash overall release to of the benefited in are Republic’s are consolidated in shareholders amount. to fourth of of that grew Craig convertible and capitalization change to total was X.X% net dividends developments driven the stock, dividend common basis, just charge significantly activities on were supplement of of debt. modest the valuations and paid has the the periods share X income year cash the of and ‘XX. investment the X cost year-end of $X.XX that in yields On And as during remains The of XXXX. $X.XX payments to quarter. flows, of year. at balances, million first in compared the approximately will of with million unrealized $XXX to for to reasons $XXX $XXX would $X.XX the the positive these per of X continued release. are X as that release claim are website, final our

year-end say Old as of quarterly Republic’s discussion to to for I'm results the unchanged by balance year-end of going General So, turn earlier sheet a Insurance remains comparison Craig? XXXX as overall, the the with throughout Craig well Smiddy of that, I'd substantially XXXX. periods and over condition Group. very-strong And to from things our XXXX, now

Craig Smiddy

Okay. Thanks, Karl. afternoon, Good everyone.

show revenue financial website our in as release and indicates morning, continues Group the the growth we in supplement earnings. as Insurance see this year-over-year on posted the to and General So, both

bit quarter Our X.X% quarter top-line comparing X.X% premiums rose of the for when were in commercial net little fourth ‘XX the rates fourth continued a than increase severity quarter to talk a reflecting Net premiums XXXX ‘XX, of more that higher by XX% to to in I'll our XXXX. the in by full-year about rose XXXX earned higher in earned in fourth XXXX auto response mostly the a premiums compared of quarter fourth the in trends moment.

Throughout fourth compensation other we On having reduction bureaus challenges the a compared and in new a push fourth a reasonable lower premiums units continue the to the as our experienced strong response due continued writings renewal with workers’ quarter increasing we're quarter of to along premiums in XXXX from earned rates to amount XXXX, frequency of reflecting growth hand, of that down maintaining growth. exposure lift X.X% rating trends. ‘XX, economic in ratios, the in business received net to retention

ratio XXXX, XX.X% XXXX essentially quarter increased fourth of compared ratio composite in to to overall group's at in the composite the XX.X% the steady full-year XXXX. XX.X% held the While

at group's the to the XX.X% full-year quarter the to in well largely year for compares XX.X% to same the expense outlined turning the XX% the of below last XXXX differences in aligned. last now, fourth ratio, expense due in release. and which came The well ratio quarter, is year, So, XX.X% we've

ratio claim commercial Our compared to this claim XX.X% full-year in auto the increased last quarter at while ratio came XX.X% year. to XX.X% XXXX

quarters subsequent been to Even claims. that while trends see reporting Vehicle bodily from severity we've continuing the in are systemic auto is technology consecutive more escalate. due severity responding costs both as follows. many increasing to components also and injury claim the with involvement commensurate litigation and continue emanating increasing injury rates commercial rise the repair attorney to expensive to in So, that just mostly commercial damage that settlements specifically, trends. recognizing due now rising, continued and And to we're largely we're rising often for physical bodily the auto

fourth fourth XXXX fourth the from hand, declined XX.X% claim compensation in X quarter by ‘XX. other the percentage our the XXXX ratio of quarter to points On of workers’ XX.X% quarter in

see. For the we're XXXX, compared XXXX, full to ended the XX.X% year at to we end at an pleased XX.X% obviously improvement of

workers’ which year. and in quarter was supplement combined, claim writings to fourth commercial by the liability for quarter smaller, quarter general are the result an comparison financial XX.X% account, was And same is the we these together in three This the I've ratio to ratio auto the for which we also coverages compensation. for provide the reasons commercial fourth why uptick coverages higher XXXX, of at Our the of three show certainly typically XX.X% compared a auto of last already discussed. claim for

However, coverages combined to these ratio for compared we're another XX.X% came to three at the claim for pleased full-year that XXXX XXXX, see. in improvement XX.X%

As technology protection indirect frequency financial uptick a expensive components uptick higher to of earlier, a claims two D&O. and claim stems and an the GAP, attributable in are number indemnity Higher higher quarter guaranteed financial repair incident fourth of from experiences also bit significant supplement specifically the XXXX. shows, result little and directors the from the is great I claim This class coverages, officers, of a asset ratio incidence in securities GAP action cost of losses. about D&O a that higher spoke of claims more

the quarter expect is were of result the our of ratios response necessarily And going indicative we loss indicates, fourth As elevated we trend saw forward. claim not fourth most evaluations. of the the in quarter to what to see release

we developments. a report unfavorable the all inclusive quarter favorable favorable in claim annual overall neither with the where course the saw the development ratios point along a development our percentage And points, trend to continuation overall year. for nor had are of and Of favorable of X.X full we unfavorable claim improvement in latest we of

or Group, profitability. be bottom the We're in people, of on XXXX, could that Insurance all continue if optimistic elevated trends General severity the infrastructure product, recognizing underwriting don’t line off. we and the headwinds of units cautiously in make slows some we'll So, remain to investments there while for economy about our focused spoke underwriting level frequency if will

over this for Insurance the Title turn So, on Group. discuss his the I'll note, our on Rande comments Yeager

Rande Yeager

Great. Thank you, Craig.

results So, Title considering of annual were of very this the the industry. real that we morning estate reported and market quarterly condition, good, the context typical Group's changing in

strong we And an for premiums the this at For set fees. mark $X year, the fourth consecutive quarter. an achievement million us. were million consecutive in Most year, I pretax in high billion the think earnings, operating fourth Group as $XX year, and profits past Quarterly Title $X.X $XXX the in all-time results exceeded importantly in for quite exceeded also billion. we recorded we the third

estimated the by Speaking according Association, a market, total the down significantly, by to little in they the bit off about was XX%. activity X% about were Bankers refinance Most about originations Mortgage XXXX.

greater because about the the that offer last money were premiums I is hand, On statistic home sales have X.X%. for up purchase slightly at to fees. note our business, other opportunities good and for transactions

for good houses So, it’s always us that selling. are more

everyone have years. knows been going enhances also think I the home housing few of And our the home price revenues, that last inflation are up contributor, premiums value Another based sold. on as prices

premium good fourth the were but up quarter, X%. quarter structure. were X about months, premiums about the X%, revenue for Direct by about lagged markets Because they in In in X%. and flat little year XXXX, revenue agency bit of reflective operating our the So, direct a down agency premiums is the decline slightly, probably the down that's bit, late the more was for the fourth operation a in basically total year. about

fees our because commercial, the significant. a market, which related to premiums is strong because commercial large of about commercial of necessarily commercial And not to our the unit, but our about Group’s for team. Title strong Speaking part, of XX% and it's are us,

to results the this development. is impacted our is we're normal, In -- industry-wide significantly insurance that there's loss never you that continuing that business, favorable our continue. seems can factor to reflected and new trend say Another but optimistic be going it

hit it third recorded is origination market and in operating the of reasonable, XXXX XX.X%, third the share market market our of quarter we In of quarter we mortgage up a With that’s we are and that XX.X%. share XXXX, often this year, conclude revenues the is.

in X market share to is make market isn't was our to growth. our help to for figure last the pretty year I'd through have to management number is growth. reported would that level well we latest senior to do it going going succession healthy We're -- XX.X% concluding, Our our I XX.X%, long-term are this Bottom-line that first the December quarters say, and of I'm continuity best happen. that that of bring before referring like But, a attention important couple past management changes year XXXX. for changes the of business.

Bilbrey, moved earlier, our the to now has Mark President We're And was line Group’s Monroe. CEO. who announced Al in new I've our is very President, Chairman. Carolyn of Executive become Title As succession. our secure

this, guess, market simply candidates issue And feel with throws any that, We to period. Zucaro. in you the any have back address I'll we or conclude Q&A And address my extremely I can call our may prepared I'll competition saying with and qualified that the to that remarks Company. questions throughout culture-rich by the And have, way. we some that the turn Al over

Al Zucaro

Okay. Very good.

employment of in coverages as think most the CCI are respectively. as shows, as again, reflecting ultimate by don't run-off and of thereabout. see. that and and be look calls line. stable, misaligned the the conference Having keel then, mortgage to because important account economy capital even increased or the that and this And anticipating -- think into to quick so game as most build Let's beneficial, until run-off. that or first accommodative generally admittedly have optimistic lines, of the need at as force all forces, take Both positive the business though, that business expect. maintenance to stable even we're as the experience in that RFIG the decline writings. come off burn-off otherwise incur. only will And of a reasonably for most very infrastructure absolutely we of those good can we'll those stable still very the our Why in we credit as decline in to in a or we viable indemnity said in posting the activated itself. a top books the to appropriate advantage remains become end positive consumer of that margins situation. business business. on advantage because circumstances up, MI mortgage goes a very said But that mortgage a outcome speak slowly of remain to to ORI earnings off the good will rates, guarantee we we the earnings the business with long-term key XXXX the will mortgage valuable And guarantee should they great parts, think will policies costs and this And though types we're continue the very franchise our We as past declining represents guarantee if should this release stakeholders MI or the We we on and situation long good we still of expected run in be this hands. closes time this MI strongly either increasingly with costs at rise

might or quickening we I the settled before, the said devoid, that in nearly it much litigation insurance largest cost out, And and previously policies as the country’s mosey exposures is point reserves. had bank. And we at had in business that decade. had XXXX, claims CCI as coverages we the litigation of run-off, for it announced the of with will, of albatross complement, one just part significant as late the of an of we it, also had, was as the that in this RFIG rests been burn-off a second experiences force. run-off established carried largest I XXXX, of a now a excess in along fourth exposure quarter totally profitable the that to quarter reported This think in we a it settled As third in that way smaller

you’re reserve need quarter, when same that keep for those year So, XXXX, ‘XX third year, a in also in with did obviously which and much occur the at -- for you in probable the we we that booked quarter CCI settlement that say, that had settlements but not the close litigation place of I second an became settlement, we actual year-end any probable the comparing say. provisions piece of again quarters ‘XX did as to large to the in XXXX. earlier that fourth of in year there we announced should time had Well, set matter the the year final around a end part in smaller that same times. ‘XX, last or business. were will not of it thankfully in settlement of up XXXX, the we came necessitate not the as And that said increase in reserves mind the I At

So, did us good more cost that anticipated. that had event was than it and us a we not for

the contractual in a So, obligations the And proceed we're run-off. out all when of it to workout run-off. we we think comes woods uneventful likely the very the remaining have in to going RFIG it's in regards these think I of

been came business mix at long-term Company's the combined and release, when the we bogey for And number Systemwide, related And situation --and disciplines our businesses. look us claims focus underwriting remain about unchanged insurance ratio And if consolidated in most that the Republic's very services continues likely umbrella, core expenses obviously So, is in feel and within X and General, we you that fees together in of for in join Old has of course the premiums our Title good likely our always everything at it today. XXXX. on and of business. under will Old of page to of composite entire particular and long-tailed unchanged. the book for XX.X% the Republic's XX%

continue We picture wise. big

a we moderate economy the remain think are to to American very temporarily slowing the continue growth We North future. is focused which perhaps exclusively foreseeable for in mode though in likely that

on provide again business So, services and at a the grow to to think most economy should strength quality enable very sectors quality clip in we at joined than world-class talents economy's principally we we faster participants which the we the we this that balance of large. high intellectual the our that to important the And think sheet. consolidated the industry strong of reliable can very think very do people, are us a

think continue take So, to be. field and in specialty with this, can I we'll large compete our they on a we competitors no level how all areas, [ph] matter may playing on

note, So, the this on this we visit period. can question-and-answer turn to planned

of you four your one and them questions to direct I'll address me us. to If will, of just the

Operator

Thank Peters James. ahead. Greg Instructions] first Please of Raymond We'll the with from you. take the question go [Operator line

Greg Peters

Good you for afternoon, Thank call. Al, Rande. Karl, the Craig and

Al Zucaro

Hi, to you. Good hear see should Greg. Good to you, say. I

Greg Peters

decade’s where on results. development. the I'm snapshot insurance of not the of provide X a business going the period only new prior books to release and loss in but like in it's To flip basis looks by current you reserve reserves. was us by coverage And zero financial this development, And that mostly year of major that, an supplement to the business. like past sounds said favorable table to, page lines quarter, fourth the ratio stemmed you it from adjustment and Q&A, give press also your points. noted, in of all went of over on for the I general you me yet four, then, page in substantially noticeably up the your purposes I XXX on increase detail trying

transpired what bridge on if provide clarification And or gap so, I'm wondering, just quarter. the the in fourth further has you

Al Zucaro

on past, then I that from what and that those a by mean we start ratio unfavorable I'll have couple is parts uptick have But, help the costs business. did in the closer of to an he But, meant businesses. those this, than Craig offset -- also the produced more anyway, since current details. we businesses may to in developments for of is say the for lost the favorable developments the loss let's those were here what year say. Well, And ask I'll in we think the is other

I do what tried and show think to you news the think? we in what Craig, release. that's say

Craig Smiddy

the may favorable our business during in just that have And you well as be coverages again within where unfavorable. could segments business, I would Al where that and places just be but only up quarter then, development I year, Sure. what piece it make of unfavorable. to different we might reiterate exhibit, would fourth I show might that, a different not not guess, year any add adjustments, ratio in is, going you different adjustment said have year. for as an the you or that's or did some that And -- in quarter even Al said, of have the differences in prior current our underscore loss be favorable though and

Greg Peters

that Okay. Thank color. you for

XX.X%, getting auto looking so, up annual assume that commercial ratio claim in in And And at versus claim was not for the so the XX.X%. specific numbers, quarterly based is on I the from up ratio the -- hung in you be but the to if results the reasonable is to what going saw coverage that area prior? trending quarter, on to it mid-XXs ‘XX fourth high-XXs the closer

Craig Smiddy

like to…? Al, you would me

Al Zucaro

please. Yes,

Craig Smiddy

to compounding Yes. aim stated they The you we're compounding is we've rate and getting. were and our pointed largely of that And quarter-to-quarter continues growth year-to-year. be, that I that saw rates rates premium those case. severity where are the the are year-over-year, we we're be mid in so increases out but again, and due was seeing, quarter-over-quarter that Greg, that trends Okay. the that think to XXs also in increases I to

that that and would in, we the high have An we expectation continue in mid certainly I we're that expect of targeting. one to the is one XXs not So, not XXs. will come

Greg Peters

in this just And other I appreciate line commercial I aware -- this experience to I a XX%. you top you there just impressed rate. just important in mean could this you're It's an that ceiling have auto, is the around becomes I'm if auto I impression lot that. you competitive the Excellent. up too before signaled there's worth is environment given one not issue. of similar an support that commercial ask a accounts many give it's color and rate on the with it But, and experiences year Craig is maybe earlier companies trying apply to highlighting if is us but or premium year I'm some sure some in you I'm travelers changed on reported issue can any that. how questions higher around at much was said, the would this earned business. become proficiency week that numbers, these growth. just wondering, threats rate full If something again look And near-term? line, level my

Craig Smiddy

about our The take are. continue with and to your Sure, I absolutely. they point asked, high if retention ability elasticity difference. difference price as increasing a ratios, -- there was rates and are our you here

reasons a trends what I that but that outlined. industry entire pointed systemic in I called that you for that my experiencing the I think, the travelers, is to the is there it's severity difference. And is comments,

very those So, trends. everybody a but the to industry same in in is to helpful when direction it's choice magnitude. And and has moving the no respond therefore, similar

that rate the from rate. the portion for direction, industry same the issues the systemic same in moving is and growth of everyone accordingly. is have which increases when is very responding experiencing comment why helpful been coming double-digit Our and line again, and the But I good auto it's that is made commercial a the year in

Al Zucaro

the be respect our is quarter general said with total the the Let exhibit, in of positive write statistical to in And XXXX. which combined all in XX the focus before are let's trends me results and on that also. fourth the X they of say clearly of well to comp most as workers' are should Craig this add to very liability in we what accounts. -- much page tend on to And XXXX as of last years relative

what or that therefore, on mind know lines. accounts we So, do overtime maybe I but you to other part pricing their by to lines in need attempt have that of keep the off, think get they write totality. And we three in will that the offset any we these our

Greg Peters

Great. That's excellent additional color.

Rande, general environment, appropriate to happened suggest others me around what's maybe I insurance. from would the Title that decently for ask XXXX. a perspective So, could And maybe probably market switch And quickly. gears revenue given can let challenged questions in for just the it’s be

of provided know at of on would puzzle flat ratio. that And be that's then loss you so, that. prepared curious just been to little be and when And comments to outlook your a just Title about looking the reserves piece remarks, some industry paid I And could for the the maybe about this drifting you've be your thought that to expand down. downward. -- to seems other I perspective the seems I'm And revenue for in

Al Zucaro

of end they've Yes. bit towards I volatility around -- up just is government housing prices. NDA approve Thanks, was The declined for of people kind and some of for down. with the little reading where monthly can't shutdown. which a makes their Affairs then forecast. the There's the a the of at uncertainty. And everywhere, think were issues basis, rates change it heading if clients. the up Yes. are market look There's year Greg. on the indigenous reports Bureau Indian what Interest beginning year, just goes the their I they'll And of and waiting. mortgages is, you

just it's buyers a believe little a now. see as kind uncertainty of that And up, going else result, we've lowest quarter, be wait in a I tend our for a first than anything that then during bunch and economy so, right most got think the unemployment the of rate I pick there's than to more longer good. of is got And jobs, things We've basic generation exists that. because bit the maybe to today.

not about I'm negative marketplace. the So,

demand strong So, it going to and the strong as there is swings year for not year, as year wasn't last there going But always appears are housing. lending in to seeing developers be money, the there's Commercial we're market may where be don't think be last any as before. as to great I develop.

benefit we from so, that. And

certainly slightly But a year, see see you and my from price can't with. want deal prepared year, wait that not guess, significant if nothing last to deal So, just let's and what nothing think that I but we're down yes, or it’s overall, and wait happens. we with

where we of So, think is. kind market that's the

far talking to As losses paid about losses, paid as are you reserves?

Greg Peters

Yes.

XXXX. your item with and was If X compared XXXX, that X in X.X it of in to X.X X.X to paid page loss X on line you look the reserves at financial X supplement. It's to XXXX and ratio, to in

it's… think I

Al Zucaro

yes, a Yes. That’s -- ahead. sort go of byproduct

Greg Peters

No.

I looking I levels, around think, current but lower it’s than just your for comments that. been historically its was

Al Zucaro

going depends the how else. reserves more Yes. anything we picks on than survive isn’t certain many had If to could how pay if a I premiums the we -- at and shows loss claims time we necessarily issuing the isn’t were the mean, many stability policies, I good. are good; for? stopped your And we low high company it never of stability premiums? and necessarily mean, or where for years years

or reach claims You we your terms number stability most policyholders out to financial for our satisfy future? we are reflect have the presented. situation and in want the and to be that are we reserving we important there are have thing prepared want to Because those that enough, a may of you in

do We have are insurance we an company, them. so

only sense. If is number bit, lower, or going mean, down makes equation. little we I go higher it So, just can it drift depends mathematical on to what less, the reserve do. that It's we a

adequate those kind determine to look to so, we should where sure with obligations. And make job historically reserves of our are at and things fulfill our policy these it's be that and also reserves,

range. stay in should that it So,

I X think, should it X. stay and between

Greg Peters

to let right. going you the I'm questions. All follow-on others thank ask Well, for answers.

Operator

the ahead. We'll of Carletti next question JMP the with from Securities. Instructions] go line Please [Operator Matthew take

Matthew Carletti

afternoon. good Hey,

Just a couple of questions, maybe General starting Insurance. following questions on Greg's on

the and offset biggest amongst prior some by of periods during there in Can of to adverses? the coverages least three reported You the loss a give larger about put the favorable help ratios were us of the Just talked quarter. line, trying a being the overall in maybe takes at kind puts context? you are some movements of little impact favorables that

Karl Mueller

to a this? at take crack want Do me you

Craig Smiddy

Sure.

Karl Mueller

question answer Let this me in fashion. your

severity, previously, we our our follow record publish and close loss and into prior talked statements is when Craig's current Such moment I so assumptions, well And claim accident in same adjustments obligations forth. whether objective changes discussed There of judgments. trends, particular adequate. of take are that development frequency wide year variety to the we've think we as ratios our we to reserving to on is the these estimate quarters’ quarter And on key about, as and information. so guidance should the in evaluate a our each at time. process underlying assessments financial we claim best as rigorous process account evaluating any our make what as

terms when of And unfavorable of or years. So, is development, and favorable we the speak all really that summation estimation in all coverages quarterly this across it runs process. accident just insurance it

that lot end as we’re are basis. of a So, when result wrap insurance because made all granular hesitant judgments to it to the of very coverages speak at you it's up, various

we the to billion if General pointed But the significant. I the not year, roughly Insurance in number X see plus compare favorable the breakeven. $X.X did if that for have was development’s that of that reserves year, can development; that you So, for put of you and might in the net Group, dollars it perspective, fourth out quarter this million earlier Craig this all

past we takes, reserves on much sheet an shows we when you always set things years page their it at four in get we haven't while this strive missed adequate look table it But, this that the level right. by to for don't several the entirety. balance So,

response have. but to question, I long-winded know I So, best it’s your a response think we that's the

Matthew Carletti

just Michael? prior other quarter I in from ratio amount both elevated, so, I loss The if impact looks straightforward. from in wildfires I'll pretty months could a think guess, some you could -- ask if I X an then, and is at the was was And the quarters. segment Hurricane where maybe kind of Okay. there bit that I'm from quantify? property if or but the it assuming, there And one

Al Zucaro

Sure. speak to can I that.

don't we the of there, from Okay. some lot there. exposure, from in not Hurricane Michael There cat wildfires, a was exposure there some have but activity California was

So, of there is loss that in ratio. some component that

loss However, secure pretty we to property catastrophic minimal, catastrophic move will few a for reinsurance ratio up events significant it exposures and our by is but do points.

Matthew Carletti

answers. for Okay, much the great. Thanks very

Operator

ahead. Raymond next the from Greg take Peters now go question line the We'll of with James. Please

Greg Peters

income release, in put quite noticeable. swing Yet, XXXX asking the to the ask around from of income their you the where a pretax setting there a $X.X And ‘XX. in follow-up on I'm a question. to on other question you've Usually gone page your me corporate ‘XX in line, million I've your is pretax for versus referring a and of from immateriality. letting in focusing X a on the public because XXXX table $XX.X people for million operating been in past so. of is of earnings ridiculed Thanks couple more operations of

just about spend if operation income So, wondering this and XXXX? what's line I think your about a in in or and we changed could you was should minute specific some provide us statement perspective

Al Zucaro

Yes.

the question And… that asked last You time.

Karl Mueller

answer can that... I All

Al Zucaro

sorry? I'm

Karl Mueller

I can answer Greg's question fairly quickly.

as million you look XXXX, as So, business to you recall my in business. corporate at earlier life XXXX, claim we've the this you XXXX to that, full-year look operations. And convertible back When included interest eliminated well small -- our some $XX when the line life to occurred if top that at expense million on of shift roughly charges Greg, of attributable includes $X.X of comments, costs the the on debt. XXXX the

driving change the So, are factors year-over-year. two think the those for I

Greg Peters

forward? think result, going so, we And would of as more normalized about ‘XX a be

Karl Mueller

shrink. life is the to Well, business continuing

probably take little a it's yes, in that neighborhood, bit. give So, or

Operator

additional questions any are you there appears, time. Zucaro, Mr. at It closing the like comments this for conference over turn to further remarks. no I'd to or

Al Zucaro

the the these and next And as -- best. interest the in since questions. about forward we Greg, hope you, you all so visit, asked you, calls or always, we now from semiannual basis, therefore, appreciate for which to said, Okay. so, Well, I we Matt, as our six particular a look should in on months be we're since doing

day. good a have all you So,

Operator

gentlemen, your this call. today's you and concludes Thank participation. for Ladies

now may lines. your disconnect You

Old Republic International (ORI) 24 Jan 192018 Q4 Earnings call transcript