ORI - Earnings call transcript Q4 2021 | Old Republic International Corporation

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Operator

Good afternoon. My name is David, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Old Republic International Fourth Quarter 2021 Earnings Conference Call. Today’s conference is being recorded. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers’ the will question-and-answer be After [Operator you. Instructions] Thank Board, the now with Calabrese you Financial Joe Relations may conference. begin your

Joe Calabrese

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

Craig Smiddy

me that we're XX% billion earnings Both results. With in eclipsing time, business. same General prior and the year. Welcome the a Monroe, and year. to time consolidated year. the up combined mark $X The ORI over $X.X Insurance to pleased increased earned Net well premiums a million increased At for point the for new over and call. this and XX% again Title very third the pre-tax Insurance increased by Carolyn That's $X the of the are quarter Joe. you, the everyone the CFO; and produced by over XX% $XXX our another our year, increased setting prior X.X for operating prior as Insurance over as over Republic's $X improvement best year. XX.X% and General year, the the for the outstanding quarter afternoon year. Title the billion income over Insurance year. to for up the Good quarter, XX% improved premiums and billion earned Title to fourth ratio Old premiums for fees posted consecutive segments, and major prior to first quarter terrific Thank earned fees record report President for billion Frank Well, and quarter wishes and net to prior year. Sodaro, today X% net year,

Title growth we results. General in and strong our of exceptional So diverse products Insurance specialty continue clear profitability deliver both demonstrated as and to think portfolio it's that Insurance by these

Q&A. turn things and Insurance, now discussion business, I'll open will to Title our the up and by me to over followed Frank, Frank Carolyn, will the Insurance we'll cover General back discuss then So who to conversation to then turn

Frank? So

Frank Sodaro

excluding Thank good and and net you, quarter fourth of losses, This reported everyone. million, increase. XX% income, investment Craig, afternoon, year-over-year a we morning, $XXX gains

runoff regulatory with in group and to In increased year numbers year. in total, earnings $XXX and cure now dividends, was per million, rates on higher increasing decline Shareholders' When reported year percentage a year value valuations. and to consolidated and as $XXX turn or Claims the reflect operating prior Subject little already adding the the three above of yields by X.X million versus at Shifting from X.X relatively to of Net dividend the portfolio and On the reserve million. for General dividend more XX% loans Improved Premiums quarter newly approval, comparable severity income substantial for year lower up was investment the later. over in claims about just year, compared for higher percentage $XXX And new end, level increase in flat paid by million basis, on and equity level. expect to our in resulting the million GAAP during all to $X.XX resulting affected Title from the investment strong for in going claim companies by nearly an of parent, to of home XX% quarter, purchases addition underwriting large mortgage profitability you're share $X.X the rated year highly investments points by both with and versus line $XXX billion, the $X.XX value values. XXXX bringing fair costs book and share driven year, XX% for figure default lower cap equity periods the the over portfolio investments, remaining for at benefited is ended bond a defaults favorable quarter yields market our full total equity at allocated short-term this value portfolio million $XX.XX. book were shareholders' stocks. years ended the claim force that to Insurance the presented. to with for in back operating XX%. expectations. results for continued we comprised per average periods. quarter X.X in The and ratio significant and in this risk on year. development. segments. the recognized was hear in bonds book of dividend investment reduction $XX Insurance another year-over-year Total reserve claim growth segments mortgage X.X%. $X.XX The full the same increased approximately driven in For $XXX the for X.X development just operations. this a $X.XX the our and The to were points I'll The year. respectively and X.X paying a ago. the periods year to and both maturity investment the the All

of remarks, XXth capped quarter in XX a outstanding performance. year my annual year shareholders. of returned paid the paid a an this years, five for the wrap-up years. each We dividend We our billion straight of dividend special to to So, increased $X.XX. we've and last the last have dividend over financial And $X.X

Our balance sheet is in excellent shape.

over positioned discussion We profitable our for are turn are I'll growth. a continued well-capitalized businesses back of Craig call General the and Insurance. now to for

Craig Smiddy

thank Frank, Okay. you.

X% net year. earned For increased X% for premiums Insurance, for the quarter and this General by

of than new business production increases coming lines retention very renewal improved overall and ratios to for of X workers' points inclusive rose combined achieve to continue most points reported the improved were quarter quarter strong. XX%. The points and on primarily X.X from XX% prior for ratio for X.X period to the ratios while the year over development strong quarter Claim We rate ratios. points XX% for compensation, XX%, year, operating the over remain and year. the for for favorable claim income X coverage and Pretax the of other by

XX% X% Rate Claim we commercial grew that premiums liability auto in increase, auto, the claim a double-digit improved for and Turning to was year. claim slower to observed, by the was continuing and frequency the quarter pace. Net in for quite range. not the specifically. for the The quarter XX% are for at X% earned increases year. back to ratio we prepandemic while it levels, severity saw auto although low continue to commercial

we trends, that into continue to So and frequency consideration the we're staying rates severity think we taking ahead of overall achieve.

and XX% turning Now XX% workers' workers' lower compensation. to for comp the the for the year. The premiums claim was earned for ratio quarter were and Net by XX% the year. quarter for X%

levels severity slightly comp is up. were the far. Rate will that levels, while continue to below range, remain adequate, we maintain us underwriting and but very claim we frequency we low claim for have decreases workers' is slightly our the Here, think single-digit so discipline in pre-pandemic still in rate

Our over for for favorable year. we the XX% and indemnity, and ratio since XXXX, came XX% an our obtain XX% in ratio of These other overall liability the and lines and the grew our improved in Insurance. of up claim them rate underwriting reflects financial enhance prior That's in list claim improvement to at XXXX. continue coverage by margins. And year. diversify financial and produce to In of as to general over in ratios claim workers' are aggregated we lines contributing commercial strong which points X noteworthy, coverage coverages, quarter General auto, XX% the increases efforts lines these property our our comp supplement,

and precision, continued levels, underwriting segmentation, continue ultimately, think focus excellence strong ratios, years ago, as we in to the high improved several we quarters, talked began retention profitability. business our adequate prior about we rate off clearly better efforts on these and paying production, selection, support new is underwriting risk which pricing hone that So will initiative we

So that remarks General Insurance's Title Insurance who for quarter now group, year. Carolyn, turn is discussion Carolyn? to concludes anxious report the over on know I'll eager my outstanding I and to and the and

Carolyn Monroe

Craig. Thank you,

for this group premium year increase year $X.X and set the operating high the all-time billion fee the approximately Title surpassed time reported for the quarterly over of full for Total second year of of Premium reported in morning, record quarter prior a XXXX. fee the quarter. XX% results quarterly from quarter the for trailed was $X fourth XX% up only and the As mark ever, an profits underwriting billion posted first while revenue, revenue the revenue XXXX.

$XXX all-time all-time Commercial pre-tax over year. the or operating premiums up XX% income and total and full fourth quarter Our in XX.X% XXXX the XXXX an Year-to-date, The last group. year the period our $XXX for year record Title of million Full income and premiums for for XX% million XX%. pre-tax XXXX. over set in annual of XX% million exceeds $XXX operating by figures Commercial compared the both full million for $XXX for results quarter highs. our XXXX XXXX. up approximately XXXX represent of pre-tax the operating were fourth same income to represented year premiums quarterly quarter

across quarter, consumer. family company. Pavaso's I broader industry includes within our e-recording introduced digital platform, our of integrating will integration will companies. This second a provide healthy digital RamQuest continue counts a the the over While year of purchase close refinance closings, result decline to we which have portfolio, in improvements transactions, a sector, year. help market delivering adoption. out slowdown leveraging we ready close to fee our Supermarket. technology new file, experience portal seen are the This for the of the to secure in the the closing order as and Title per Last technology the value and of software end-to-end the our capabilities, an In remained Pavaso, higher Recognizing EPN, our half leader those in our settlement generate in

road our anything, interconnected With the with platform with agent agents performing external business our in variety workflow. place. with integration, exchange partners partners of throughout of entire is a real-time and requests goal to products with of with and integrate interact technology an to a will it live Supermarket the map information Supermarket that service provide services growth will, initial access a to one-stop partners. in technologies

While We the turn And simultaneously investing enhancements on Building in on of agents landscape. we to our current improve expanding the in investments I are and back and make employees technology. will we internal to environment. while our are continuing Craig. agents, automate These recognition business evolving services our our with will XXXX to constantly assist piloting now digital processes. over optical RPA, successful machine delivering digital character learning to use actively began future, it use our of to

Craig Smiddy

produce for terrific record-setting a specialty of a this and Insurance General in congratulations Carolyn, Insurance, Okay, our Well, think shareholders. and with reflect third operating year. quarter we're value and these us of on to enabling our pleased results Title year very results. again, success We strategy terrific significant

to this remarks your our open Frank will up the and I or we'll Q&A prepared concludes questions So, respond. discussion answer Carolyn where or to now ask I'll

Operator

Greg We'll with Peters from take first Instructions] James. our Raymond question [Operator

Greg Peters

expense prior year afternoon, for I'm everyone. on and component, the to I ratio. General development guess going Insurance Good the focus

color look lines supplement statistical to more the was getting I from First, and change going, wondering development with accident on last the on the definitely you're prior And if development, us at which there? the which you what's you year if and favorable outlook a could several years relative years. give

Craig Smiddy

here. Craig it's Greg, Hi

I'll think that anything if and address Frank then I chime there's in add. I'll ask to to

Frank Sodaro

Okay.

story. the comp similar on through is very a have coming workers' auto. Europe XXXX. XXXX in quarter the those through development So, coming from and commercial the favorable favorable are And vast All years contributing The development. is majority predominantly to

last to and story just quarter a it's it. a So similar continuation of

Greg Peters

it. Got

jury And as industry rate been that commercial relates that severity, the about it near so on getting everyone's finally it is as auto. this inflation follow-up hearing you've infer that in themes mean, line relates that to just as that I Should to social I of from a in adequacy answer. of in one especially achieved book? verdicts business your maybe

Craig Smiddy

and our of rate we're And in quarterly of a cautious labor conservative indications based about you're that's these and we the that know, X you the of assumption, through auto development all lot particular, increases it or years and those X I of We've we of unlike come Clearly, peers, seeing ratio talked seems wait, lines. one for – releasing are our X be finally picks from on every as fair X, think compounding double-digit years. prior I seeing favorable loss that reserves when that for we still liability, are year, that a fruits increases. X liability. on auto we'll But years speaking, workers' know, years all in the We compensation, compounding commercial the about, calls, in we've on set longer rate our generally the had tail conservative. Greg.

play back reserve back what's remain we some that want that prior those years, those And clear, out inflation that inflation again, those strong So And look to in of years to be any at take look I we have that we happening when still that out, on social have years. conservative them, claims to settle have into appreciate when impacts general. still position is we're at we some in can starting that, and too, seeing levels with given consideration -- and unsettled. very

and the are So we a up likewise, sure reserves that we mind. on our those have in take conservative make view adequate years

Greg Peters

Got you it. Thank there. color for the

just effect about here, the previous like something can think year if should at mix the points ratio, towards or expense running, that. certainly, business basis XX were full surety expense average, definitely looking the XX-year On and ratio about skewing an going we But what, year, obviously, basis higher your than higher than points the have like more how XXX you forward?

Craig Smiddy

are good particularly that there why there there, Greg, a Definitely, reasons quarter. the is in fourth change

there's can me let try Frank up me back So anything add. and for I have pick to to in, fill if then

Frank Sodaro

of because on dramatic obviously, on quarter impact, that on that. Greg, it. there's some so also focus the you from an just hit And quarter. year I'll the It's more in the

is bit workers' there a a little change mix -- of happening, tends make a talked So part we've lower that rate. with have and total, that to comp a commission the about comprising and smaller

they lines level. to coverage’s So, ratios, these other have And therefore, expense the lower higher then expected underwriting but we're have that expense slightly actually margins. better are adding

some that expense had equal this, ratio. the way just happen those is we of and We a much true-ups that of there's in the miscellaneous pretty same expect in some part of all this, the the recur. So an bit a to plan quarter go little don't seeing But benefit trade-off part we're quarter. there an charges that in accumulation to of another

those you So but in more also are that the the impacting it's see -- quarter, year.

Greg Peters

it. Got

Craig Smiddy

that, same you these as of stated, group to that for And lines, a We Greg, moving growing General the we about more If portfolio target. -- for that or stated lines, other a particularly the ratio. lines decreasing, the And as along, that mix these If portion workers' as the that in recognize property a impact saying, have with is diversify. trend that Frank bit primarily the this in keep by not deliberately commission of and we double talked we mentioned. then at above a had Frank the lower that other because we're target about, financial ratio. below just lines. as and said, go we're we lines coverage time, we're And compensation Insurance towards is that I consistently I'll items indemnity continues Frank have and release expense talked our wrap to those quarter's the up do XX% we

you as take double long-term or now, trends hit of mix, target And anomaly said, fourth remains those going an still as there. So we of XXXX. target. our to in right below. predictor Frank XX% whammy be And of quarter that bit a is where not a we're and to may But a a have the at look if it in that continue

Greg Peters

XXXX Got on the it. open, orders year-over-year basis, the Carolyn, year curious the an for closed for in piece. there orders XXXX look relative at a trending XXXX. the sneeze or be numbers the Thank to the Therefore, but results, XXXX, we're your always not seems perspective is -- want XXXX erosion if the your outstanding down. just Pivot, that at. some direct to about on could outlook to to XX I And Title on you. be forward-looking. I it combined quarter -- like results ratio as I'm But could are direct relative don't you diminish the for anything

Carolyn Monroe

matter able now. dependent we thing what and also is happens, perform. strong like forever a them. rates, XXXX. we're I Well, good the be interest higher us. purchase the strong hot And one is down, right drop of estate still really very positioned strong. any We're hot in we market profile We a on still real mix, orders feel inventory, after though economy. the to feel business. last resale orders are the But market in don't And in recognize no are the Commercial refi while is And for still orders about market. understand we're the a that that markets difficult And really we'll drop fee because mainly change refi can

Greg Peters

Okay.

through some is And of for that's I know your annualized think is generating you example, us business, General financial earned than about observation, lot of for But rather a runoff only Insurance steeped would $XX detail couple so detail premium. probably in business provide that for extra say, now see I it's a become your small. supplement, an around, business going Just the more it -- rather business pages a legacy. of your runoff of million

you for Just pointing sure Anyways are I'm that something of. thanks well aware out your answers. guys

Craig Smiddy

noticed to have our we supplements. you to public to Thank we've comment. in discussed business, estate look And our real less continue give your at review tried And the you, Greg. runoff financial take information, appreciate and we releases, might as other in those it. have annual a And and we'll

So, we estate note and runoff and real that deemphasize give go time. to and our in continue it business we eye less it on and as near we'll keep less we'll along it

Greg Peters

Yes. Got it. Yes. right.

Operator

to Instructions] JMP with you. Carletti Thank we'll [Operator Next, Securities. go Matt

Matt Carletti

Hey thanks. Good afternoon.

Craig Smiddy

Matt. Hello

Matt Carletti

only Greg covered ground Greg of a lot there, last really have lot -- hey of a I questions kind so I left. hello. one think two title covered

us, remind resi for like, XXXX, book -- was of, was given what purchase So, say, specifically, title us you've mix looks hoping I I know resi you hoping and the refi, of commercial. I this could the but to then

Carolyn Monroe

the So was our to fourth was for XX.X%. And XX%-XX%. purchase the refi commercial year, for full quarter, XXXX, then about closer it of was XX% XX%. the revenue, for our full year, it is, represented In

Matt Carletti

you rise. refi obviously, seen about any then now kind time. Got the we weeks about, negative talk positive think lot point orders shaking Have off been might to talked an been on is little mortgage you doing that, something what started it bit of that and then, has an bench past the in this some Have at have of or that a observed it. have obviously, that that? realizing observation you the you or a impact I of Great. purchases? more How be people and And theory anything, thinking on mean, should There's here, like a as about several about happens? open look volumes. question, impact a just rates at of

Carolyn Monroe

Yes.

the -- it, for through We it, couple the vacation finally off really business we've us. we picking last getting noticed probably into got purchase have observed the started Once up and back it. people weeks, of got

Matt Carletti

Very Great. year. a for helpful. congrats quarter color and you and the on Thank nice

Carolyn Monroe

you. Thank

Craig Smiddy

Thank you, Matt.

Operator

And for I'll back it that does or to management additional remarks. conclude any today's over closing turn question-and-answer session.

Craig Smiddy

or and our look and Title Well, not in Okay. when great for us. for you Republic and of of thank a challenging International feel And as we to sits the you where forward as Insurance, for today. good case, support all to year another good seems now, I questions there's year XXXX. the conference have to a two stated quarter very Old we your with right best, key our a it this, like we, I General be earlier, lot difficult Insurance and listening wish good productive and businesses, call about

very you much. in So thank

Operator

conference today's concludes this And call.

now disconnect. may You

Old Republic International (ORI) 27 Jan 222021 Q4 Earnings call transcript