ORI - Earnings call transcript Q1 2024 | Old Republic International Corporation

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Operator

Good afternoon. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Old Republic International First Quarter 2024 Earnings Conference Call. Today's conference is being recorded.

[Operator Instructions] At this time, I would like to turn the conference over to Joe Calabrese with the Financial Relations Board. ahead. go Please

Joe Calabrese

of XXXX. afternoon, for Good first Both thank for documents a press you XXXX statements, forward-looking a XX, and Thank at financial separate Old everyone Republic us copy distributed dated as we in the This discuss the are supplement. press conference and joining release results. posted you. morning, and the call Old is financial which April quarter involve website, of call be Please may these release supplement www.oldrepublic.com. advised available Republic's that this discussed to

with Corporation, can conference company's call associated several members, executive and of Smiddy, for found afternoon's latest led be in CEO by Craig other meeting. senior Risks the these planned statements will President as This International SEC this Republic filing. and be Old

the At over this call ahead, to Craig to I'd sir. like Please go time, turn Smiddy.

Craig Smiddy

afternoon Republic's is Earnings and our thank everyone, welcome of you. Joe, President Sodaro, and our Old Frank With Good Call. and CFO Insurance of CEO to Carolyn Okay. business. Title ORI, XXXX Monroe, again, me Quarter our First today

the up despite during in $XXX.X income. of operating consolidated in first That's that insurance. $XXX.X Title XXXX, we'll quarter pretax produced Well, we XXXX talk that the million seeing challenges million about from of we're

Title that's ratio consolidated primarily, higher XX.X% of because the seeing Insurance. And combined was year. the in Our ratio XX.X%, a than bit last higher combined we're

the underwriting income, combined year-over-year. Insurance strong quarter. Insurance's into The producing increase and in operating was General continued XX% pretax XX.X% ratio XXXX, a million $XXX results that's of General

quarter. challenges, pretax that presented and of XXX-point mortgage million operating us and XXX.X% in led a to In with slow real interest lower the higher ratio estate combined rates Title -- a $X income much market and some Insurance,

and more. Insurance, practices that reserving little produce both we'll bit a to in Title talk and conservative General development prior-year continued favorable reserve Insurance about Our

through shareholders share capital remains we repurchases. sheet while strong both Our dividends returned to balance and

the as long we investing term, and for in as General are technology, well our that in Insurance on goes new subsidiaries Insurance. General Focused and Title Insurance underwriting both

introductory now will over and followed General for will turn to with turn things me So by the And to I cover to discuss back Frank will conversation Frank Carolyn, then Insurance, up those open discussion Insurance. then Title the usual, as who Q&A. Sodaro, we'll comments,

Frank, So turn the you. over with I discussion to that,

Francis Sodaro

reported to last Thank million you, and net everyone. $XXX Craig, million This we income $XXX good compared afternoon, of morning, operating year.

investment up income yields. was higher XX% On a from nearly, net was that quarter last in the $X.XX quarter, year. another basis, per XX% by operating in driven share the Net income and increased

bonds on average yield Our corporate while on X%, reinvestment was rate bonds the X.X%. was book of disposed corporate comparable

X% compared at end year. last Total to at of yield X.X% bond book stands portfolio the

remained mix was quarter. very portfolio in to quality last XX% maturity the at investment consistent average with investment-grade also remained With high and the Our regard securities, years. portfolio, the X.X consistent bond with

value approximately decreased position in valuation year-end of $X.X Much million just by rates, we ended over with [ quarter $XXX our increased million, driven an interest the the the During the so unrealized in our portfolio realized quarter, higher was of about portfolio billion. last while the by of by value stock gain increased bond of $XXX ]. consistent

of quarter, and points Insurance X.X a From last Title of the X.X recognized loss ratio. to favorable the to both to favorable development leading in This development a points compares benefit loss reserve perspective, year. General percentage consolidated

bottom due consolidated Activity no line. from results impact immaterial this on has to operation our longer sale, are on second still We run-off the expecting an is to pending the sale during to the and our of insurance close our mortgage operation quarter.

of share and to $XX.XX, the We an a ended $XXX per investment our we higher the operating of our of quarter, from and valuations. which book dividends shareholders. million worth million of repurchased over $XX of resulted strong for equated total increase shares paid earnings just that to inclusive in and quarter dividends $XXX In X.X%, with value million returned

Now quarter, repurchased repurchase of us since in another worth million about shares, $XXX the million end leaving our the of current with remaining $XXX [ program. we ]

over I'll a now for General turn the Craig to Insurance. of call discussion back

Craig Smiddy

with compensation in, ratios, thanks of coverage, Insurance in increases decreases. And up net workers' about on D&O where written rate in little to workers' and most talk business strong bit a coverage, Frank, we of the our for General discuss new that growth do underwriting I continue premium new when retention production I'll are that. the were quarter compensation. lines rate kicking Okay. XX% subsidiaries. premiums lines renewal see and more

Insurance As mentioned combined the remarks, and XX.X%. million, ratio in was my $XXX operating opening General pretax income was

loss ratio that excuse for and favorable million, So a ratio points was General quarter XX.X. in steady we grow -- level continue The included XX to the The at very at me, of reserve Insurance. development. $XX.X expense profitable X.X was

and largest favorable from of prior grew continue of line years XX.X% the XX% to to than in auto while Turning came in in we development two commercial more our quarter, compared coverage, lines loss at the this by to written experience XX.X% last coverage. net ratio premiums year,

loss and net quarter, came the range, ratio to in ] XX% commensurate while the that that last increased trend XX.X year. compared X.X% be Workers' written XX% premiums with the in in at Rate observing. loss the [ increases we're to by were compensation continues

the workers' the loss relatively stable. trend trend downward, remains too, development. while here, for compensation experience long favorable And severity we continue ] prior-year continues [ year's to Frequency

as with think approximately the base, is our payroll, compensation. our trend rate even remain of So workers' a given higher levels for adequate X% rating decreases we reminder, which in rate

underwriting We General growth XXXX, of our continue our expect and profitability in the subsidiaries. success strategy, solid our to throughout initiatives reflecting Insurance and specialty excellence new

over Carolyn to Carolyn? discussion to the report Insurance. turn Title now I'll on So

Carolyn Monroe

revenues premium first down from decrease Thank quarter you, a $XXX Group XXXX, million. and fee quarter Directly XXXX, and fees while of were the represents premium first This X% premiums from XX%. agency-produced were produced Craig. X% The up quarter Title of for reported

bulk reported As a on generally reminder, quarter compared business business. X lag represents the about a business of our direct and agency-produced to is

our win compared in market nationwide group first with this premiums XX% XXXX. quarter this Commercial team, to Commercial quarter our transformed of quarter [ first rebounds. our quarter expanded commercial premiums footprint the of XX% agency earned decreased premiums the XXXX. positions, well to along ] of compared were to XX% us and services of commercial The the

second our seasonally order counts, rate believe with the signals in and conditions our market as we quarter a challenging market trends we While revenues interest uncertainties begins, active uptick period. head produced in the more along positive modest as into or the persist directly

Our of income compared XXXX. pretax $X to million [ operating quarter million first $XX in ]

And of to million the year of first a the the [ recovery tax a impacted XXXX. as XXX.X% compared quarter ratio in first ] of state last sales $XX of quarter assessment. XX.X% combined Our reminder, results were by

was favorable this the income of expense quarter operating Excluding in quarter our impact, XXXX. first ratio roughly pretax for with line and the

diligently to our We continue expenses. manage

slower of pace ratio expense costs at However, in than nature drop fixed reflects the certain remains a our and decreasing revenues. elevated the

to leadership calls, driving edge is discussing stay been of focused the technology. our on plan leading and executing on team on strategic our past have we need As the

our around built is plan agents and strategic our people. Our

focus is of enables agents. that the our the of success plan One innovation of cornerstones a on the

offering through As agents payoff collaborative with a address includes and a secure the continue and closings process single, streamlining fraud ] assist our this we on hybrid and platform emphasize, to closing approach fully [ help comprehensive to verification. digital executed wire

We internal will streamline are advantage us We in teams the solutions and market tools agents state-of-the-art and provide improves. also with modernize believe to an our production operations. the this cloud-based providing transaction to best providing in title market management when and

regarding we change of certain that One few Insurance include received pays how is last the place changes attorney Title because in of recently for item waivers at Title opinion transactions. federal and proposals to even a for letters level These in Title Insurance have who could transacted. the or Insurance use questions

these that time, these developments We significant implications not for do any are this would and to developments considering debate press, the early recent subject stage still we lobbying. But business. our and at anticipate we tracking note to as characterize and much wanted

Thank turn I'll the now and call you, back to Craig.

Craig Smiddy

you, Thank Carolyn.

growth optimistic Title of rate the real we a profitable continuation face lower So mitigating profit levels in of Insurance, continue Insurance, to estate we Insurance XXXX, and for General interest and we marketplace while XXXX Insurance. Title challenges. the rest that And enter remain for General view revenue mortgage, the with in will of remain

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

Operator

first We'll from Citizens JMP. Instructions] [Operator take Carletti our Matt question at

Matthew Carletti

with just but agency to help of off how title I where you some start couldn't notice you shrink, showed direct then -- -- and lag of noted The the there's and growth, but maybe guess the there. continued kind a left kind commentary I'll on

you're flatten in despite going market growth seeing stickiness expect in and kind even two return on seeing direct? just the first or those a of where shift different? else would that keeps a it of rates acting agency of you you is something out Are kind little there Or mortgage to the kind to there of

Craig Smiddy

order earlier about little a well as observing what could as count our operations? you Carolyn, in bit if we're direct comments perhaps there embellish our you the made in on

Carolyn Monroe

so Sure. agents also because on same out as market with their We direct months. bellwether of agency X always report -- of because in premiums our about for the a going what's they're to lag use the us all on operations a kind agents the our

because should second that orders direct. our about just see we see the our uptick in also the that the lag it we in has should starting quarter, are the revenue and same agency increased, from the Does business that in normal to as like feel we We -- an agents, uptick help? see our direct

Matthew Carletti

as it was And be, you the of it it Was it you -- for a that as Or bit a up? build kind did X% the guess, well, quarter? for more of little number, Was trying kind month -- just it let's pulled get particular -- it. a to say, of does. cadence the throughout And of follow-up kind direct. QX I would

Carolyn Monroe

progressed, same and Yes. build of it seeing quiet the throughout Yes, in we're sort every pretty the as month quarter. April. trend month would was and January definitely

Matthew Carletti

Okay. other just results. in on Wonderful. the favorable is then question General Insurance, the development my And

little that at or commercial a auto, was general then You comp, put you pretty particular a or numbers years on particularly in just favorable offset was orders And those least [ it noted well of magnitude? by GL, spread the bit of just on adverse the ] favorable Can accident liability. out?

Craig Smiddy

Frank, do comment to that? on want you

Francis Sodaro

majority our the came of pretty commercial was The give development our are a how Commercial like I'll coming we'll lot comp, workers' magnitude. our this from That's fourth with of auto. -- start from years -- loss auto picks, out are and and our quarter widespread some that you're from we probably -- it's Sure. you -- years. coming years. held of order coming familiar than it's

years So that it's favorably are the most. developing those

is a than GL that for bit the few then kind two just was commercial maybe around auto, programs half offset About of more little an a And years, about been -- it from that's very buckets. have comparable, is a coming old split And of while. into some favorable.

of guess the what through businesses. is very and fairly 'XX. line is coming of kind from the things years a a I of it's about And I in our lot to one out. 'XX of other spread It's then written I'd small like us, -- for say this half, And the about

of it's development kind So throughout. just adverse shock to businesses, any scattered our but it's material a was one scattered. was little of that of no There just

So color. you hopefully, that gives enough

Operator

next Peters We'll James. Gregory Raymond move to at

Charles Peters

liability. on in some and So pretty comp and segments, seeing the was pretty results of I growth going your and General And workers' property some business. smaller looking growth in the first question, Insurance for focus explanatory. commercial the at auto are good to general think line the I'm we're I top But

you I'm new then the said initiatives. Craig, you -- business triangulate, to trying talked And because about

some those of inside other are in some seeing business new those maybe about segments, of growth but I'm So just some of these initiatives segments. curious other the we're

Craig Smiddy

right. Sure, your inclination Greg. Well, is

Republic E&S, Republic, then As Old Old a lastly, subsidiaries, Marine, Lawyers X ]and [ Old reminder, underwriting A&H. relatively we Republic Republic have Old Professional new Inland

supplement. with general clip the And and starting the come in business the we're bucket on right, to Inland decent point at as premiums on And see and out, lot liability bucket through you're a you fairly of E&S business marine that supplement the a business. property is

say hand, to new on workers' compensation. of safe that those contributing writing it's what underwriting subsidiaries to seeing you're those none new other So And are X underwriting are subsidiaries the there.

is there entities. So nothing those attributable to

Charles Peters

it a of it's steady-state that, that Just the as be expectation point to through it a those for answer, and thanks accelerating just move on Is of is both? the that, of your Craig. combination clarification year? is opportunistic businesses going growth or maybe Or we

Craig Smiddy

I accelerating the Marine E&S. premium in the be incline and profit of it is mode, in Inland than They underwriting. that still produced would We're on all less a ramp-up say a little a answer. And year is last last perhaps but entities. on mode in ramp-up produced clear those year a are would

first have efforts there's the new distribution greatly incline, very into quarter -- E&S produced and decent and a out move we E&S even has steeper a enhanced the partners. too second And but year, in quarter last with production -- market there. as they been our distribution premium

So accelerate. to continue that will

as line be the last rest then business very in A&H comes steep they as XXXX. out And early fairly go their were lawyers there, the and of we therefore, two, business and they're our ramp-up stages. will through in And the

Charles Peters

A&H. Okay. Inland niches bucket, big clarification bucket, those Fair pretty Marine a These a correct? lawyers can categories, pretty a targeted And is just specific be inside are because very enough. big

Craig Smiddy

bucket on that Inland thank specialty pointing with Yes, that within geography, They are Marine. of and large of for to fairly niches we Marine is very Greg, are very the and you class, writing Inland indeed, size that regard targeted focused business certain out.

And [ large that relationships is too, sponsor It bar fairly associations, in fairly Lawyers is there, state ] are mentioned with where the bucket; a business. bucket. developing a but that's for you they Professional us, marketplace tight the is we

those with lawyers for And associations accounts of most within policies. and low smaller number of is of tends very the to insurance business be those sticky a each

state So small it's through lawyers very on targeted. a state-by-state associations bar basis, so

Charles Peters

Excellent.

the area, revenue Carolyn, Title appreciate some giving that. attention the again. your nature to is other just lag my I So down comments about business. of The

the was that that. idea anomalies some through -- going us expense gave was You ratio some there

to ex Is as expense changed? your expectation it range the year your for that last Title the the was going be anomaly happened, sort is it year? ratio this that for this in view Or business has of that same on

Craig Smiddy

further would happening year. the assuming as especially Greg's think and Carolyn. with I hard But I'll the the Greg, let that flat rates it's think estate out know be question, year, in that real business Carolyn I'll question, answer probably toward revenues would do hand Yes. answer the to that, should if And we end I is to Carolyn, interest what's question. market, I we last your -- which it of you, context think, with be get we and the

Carolyn Monroe

Yes, that's correct.

are depend the We did reach to ratio our combined we expenses really to in going trying just that year. on same revenues. We've got It's the line. last

kind just right last we to And -- coming at believe least beginning we at start of the half we of year. we to were back And a year, and kind can trends we're like now what don't need we feel aim glass just for we just we really the of full sort -- they so what of -- did revenues we're the last year. group. And seeing the

Operator

at to Sandler. go Piper Newsome We'll next Paul

Craig Smiddy

there? you Are Paul. Hello,

Operator

muted. line your have may you Paul,

Jon Paul Newsome

recall, maybe if I guy reserve some Okay. GL this has a be about looks GL. auto, quarter commercial to was How talk good quarter, bit a but it wasn't turned context the I little this? last a business. to this It quarter. quarter. negativity with little want auto The -- the Last It about commercial with

is thoughts I that right? So very unless guess, that -- of quarterly And the you remembering fair usually assessment? a have I variation, sort Am it's small.

Craig Smiddy

Well, refer on back quarter. that our me comment and to let last comments

having still auto commercial were year. development we So throughout on reserve favorable last

of was where at loss -- you're move I the about wanted year I decided back a current was we on that to auto ratio end accident last it the in for that that little to our to think what end-of-the-year commercial referring results, spoke seeing XXXX. call bit after we the

it So didn't deteriorate.

of matter But a a better. I we're And thinking to the at was year, our think that of of bit end back the to Because where into nature, the for it it went As lower. us still year. of said, percentage XXXX. whole we we points going we back go said year be and was it conservative let's in set a would few just the little fact,

So not got development there approach, is And to last by conservative for. conservative approach. again, we -- that had years several and bit year, said, loss year strive let's on we commercial We of bouncing that for cushion have make of to that just development our any sure because we around demonstrated little accident favorable the auto accident our the was stretch. a end we favorable the uptick ratio

wasn't year, And quarter. started with development X year. a in that ratio the the conservative so auto, simply last lower approach before. coming more the loss There's was in than year quarter, it unfavorable was that development we the still bit it bit that's prior little year from favorable another at we was took what on It end was no -- years. taking in a happened unfavorable of anything a but It commercial

within this happened. And therefore, when commercial we what expectations. So first auto favorable quarter, come that's saw that was through our again

Jon Paul Newsome

the of the on it's I not GL, part And big get business. to a

don't is is quite growth has perspective. Is I the sort relatively of of organically sort think [ maybe different And businesses. the been really happening ] of from because of concerned -- of sort just and a spread they to sort GL this of lot the always right that Or of going our One you in in company spoke say? it's think of what's said I a priority? to business be investors is a it to a part business? Because fair and as you fast-growing

Craig Smiddy

I to understand back Greg E&S operation, when on type very very the is our tell it from of that the the in with gave I'll majority he question, I comments is exposure. low-hazard you of to is that small Paul. And which you're policies growth what liability coming GL, asked The that I general tie seeing would about growth. that focused

you and and in GL, as unfavorable And the we small add where you look if line saw other us; a piece would for that I though out, at that is look liability between X even been it's back years development as the the point loss you XX% and supplement general the at and show ratio go you it's those XX%. as there, we low

XX% years. so really this the X almost of that the is we those -- But quarter last dab in saw smack middle

nothing. it's So

For us, that jumps out.

the We in new from that Old take the we're that looks the nothing and business that writing we're we're today where like line. did has development in our E&S, older years, different writing adding. business we that those that expect was complexion Republic some in unfavorable very than And volatility a business business

Jon Paul Newsome

maybe that Great. like or squeeze that what can And I The do or thoughts Title Title what of essentially your if don't majority you ] of not it would biggest get for know depends. ] Any refinancing. just on on refinancing business? I the question. to considering do refinancing that? [ is sort [ Title pushback And is any And I sense of eliminated one Insurance is is

Craig Smiddy

on opening you and Yes. things touched then remarks, really have federal we it on in Carolyn, emerged kick and touched the Carolyn, level. I'll three there. can different her take that at off, from

business. you going it I we impact, tell we materially all we straightforward, that to if was it see really Carolyn you we And And we very as is. And tell like as know, it an would think that. are were have said, concerned it our affecting don't and

the with which we it of working because the of whether for have depending may something, of at as one pays very issues change -- on those these But closely reasons day, of for American Title on about, looked Land or the it's all Association at lender. but borrower a -- the views. you're who And different talking team, their things end

need materially to day, mortgage to of end going order a the Carolyn, they're it impacting for in business color, I'll the we Insurance. more But don't turn market, because at And you it can. to see the in if to Title the sell a you add lender secondary

Carolyn Monroe

Sure.

thing And happens into they the is GSEs behind that's with insurance it's other lender. wants Title companies, what The turn this Insurance. one don't and get no any if the to same

association story. we So that's title about will diligent why trade telling follow has our this, and the been

homes. Title really affordability, we all on because we Insurance preventive, there goes claim. right like a to isn't all sure and this more help that just stopping education do make feel back the Insurance isn't about is the really Title And and work to should this now affordability what's in

that thing to you into do GSEs So company. Insurance or I that's don't lender the a a -- And just is Title happening. last want the see turn

flip Now is of refinancers side the business. are large not Old part a Republic's

agents. a lot attorney have We of

concerned, something we happen. So while should that it's always deal with would able we're be it to

Operator

I session. And management for our will to Q&A conclude now turn remarks. the closing conference back that over does

Craig Smiddy

Well, and and feel interest think And term, we have don't in things pointed about optimistic momentum And you XXXX, in initial positive. General any started hopefully Okay. will we've estate long though that we're be the there's Carolyn Insurance. real we predict demand. have way out, pent-up as because markets indications rates where even we're could to Title turn good cautious we

to talking we you again to your thank your and and So you forward support quarter. after Thank very look all much. for second you our interest

Operator

today's That for conference your does thank participation. you conclude call, and

now may You disconnect.

Old Republic International (ORI) 25 Apr 242024 Q1 Earnings call transcript