Old Republic Intl (NYSE:ORI) released first-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.
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The full earnings call is available at https://events.q4inc.com/attendee/731300872
Summary
Old Republic Intl reported a consolidated pre-tax operating income of $211.5 million, down from $252.7 million in the previous year, with a combined ratio of 96.6.
Specialty insurance saw a 4.7% increase in net premiums earned, with pre-tax operating income dropping to $209 million from $260 million. Title insurance premiums grew 12%, leading to a pre-tax operating income of $16.7 million, up from $4.3 million.
The company emphasized ongoing investments in new specialty operating companies, technology, and AI, which are impacting expense ratios but expected to yield long-term benefits.
Net investment income increased by over 4% due to a larger investment base and higher bond yields. The company repurchased $161 million worth of shares in the quarter.
Management pointed to challenges in commercial auto retention rates due to competitive pressures but remains committed to maintaining underwriting discipline.
The company announced the formation of Old Republic Property and rebranded Lodestar Claims and Risk Services, with expectations of closing the ECM acquisition by July 1.
Title insurance reported strong commercial activity and improved loss and expense ratios, supported by a new excess of loss reinsurance agreement.
Full Transcript
OPERATOR
Thank you for standing by and welcome to the Old Republic Intl first quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press Star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press star one. Thank you. I would now like to turn the call over to Joe Calabrese with the Financial Relations Board. You may begin.
Joe Calabrese (Operator)
Thank you, Rob. Good afternoon everyone and thank you for joining us for the Old Republic conference call to discuss first quarter 2026 results. This morning we distributed copies of the press release and posted a separate financial supplement. Both of the documents are available on Old Republic’s website at oldrepublic.com Please be advised that this call may involve forward looking statements as discussed in the press release dated April 23, 2026. Assumptions, uncertainties and risks exist that may cause results to differ materially from those set forth in these forward looking statements. For more information on these assumptions, uncertainties and risks, please refer to the forward-looking statements discussion in the press release and the company’s other recent SEC filings and the risk factors discussed in the company’s Most recent form 10K and other recent SEC filings. We may also include references to net income excluding net investment gains or net operating income, a non GAAP financial measure, and our remarks are in response to questions. GAAP reconciliation are included in the press release. Presenting on today’s conference call will be Craig Smiddy, President and CEO, Carolyn Monroe, President, Frank Zadara, Chief Financial Officer and Carolyn Monroe, President and CEO, Carolyn Monroe, President of Old Republic’s National Title Insurance Group. Management will make some opening remarks and then we’ll open the line for your questions. At this time I’d like to turn the call over to Craig, please. Go ahead, sir.
Craig Smiddy
Okay, Joe. Thank you very much. Good afternoon everyone and welcome again to Old Republic Intl’s first quarter 2026 earnings call. In the quarter we produced $211.5 million of consolidated pre tax operating income compared to $252.7 million and our consolidated combined ratio was 96.6 compared to 93.7 for the quarter. Our operating return on beginning equity was 11.5% and growth in book value per share including dividends was 2.6%. Specialty insurance grew net premiums earned by 4.7% over 1Q25 produced 209 million of pre tax operating income compared to 260 million specialties combined ratio was 94.8 compared to 89.8. Title insurance group premiums and fees increased by 12% over 1Q25 and produced $16.7 million of pre tax operating income compared To $4.3 million. Title’s combined ratio was 100 compared to 102. Our conservative reserving practices continue to produce favorable prior year loss development in both specialty insurance and title insurance and Frank will provide more details on that topic. So with that Frank, I will turn the discussion over to you and then you can turn it back to me to cover specialty insurance and we’ll have Carolyn cover Title Insurance thank you Craig
Frank Zadara (Chief Financial Officer)
and good afternoon everyone. In this morning’s release we reported net operating income of $171 million for the quarter compared to $202 million last year on a per share basis. Comparable quarter over quarter results were $0.68 compared to $0.81 per share. So starting with investments, net investment income increased just over 4% in the quarter, primarily as a result of a larger investment base and higher yields on the bond portfolio. While our average rate on corporate bonds acquired during the quarter was 4.7% compared to the average yield rolling off of about 3.8%, the total bond portfolio book yield held fairly steady with year end at about 4.75%. With the current interest rate environment, we expect net investment income growth to remain in the low to mid single digits throughout the rest of 2026. Turning now to loss reserves, both specialty and title insurance recognized favorable development in the quarter, leading to a 1.5 percentage point benefit, the consolidated loss ratio compared to 2.6 points of benefit last year. While this level of favorable development was lower than we had experienced in recent years, it is within our expectations for specialty insurance. Property continued to have favorable development and led the way this quarter with a slightly higher level than last year. Commercial auto and workers camp had solid favorable development in the quarter. However, both were at lower levels than last year and General Liability had a moderate amount of unfavorable development that spanned several more recent accident years. It was partially offset by favorable development in older years. We ended the quarter with book value per share of $24.53, which inclusive of the regular dividend equated to an increase of 2.6% since year end, resulting primarily from our operating earnings. In the quarter we paid nearly $77 million in dividends and repurchased $$161 million worth of our shares. Since the end of the quarter we repurchased another $$52 million worth of shares which leaves us with about $640 million remaining in our current repurchase program. I’ll now turn the call back over to Craig for a discussion of specialty insurance.
Craig Smiddy
Thanks Frank. So Specialty insurance net premiums written were up 3.4% during the quarter coming from strong rate increases on commercial auto and general liability., some new business writings and increasing premium in our newer specialty operating companies partially offset by a decline in our renewal retention ratios. And as we continue to prioritize rate in certain lines of coverage within our portfolio, we appear to be leading the market specifically within commercial auto by driving mid teen rate increases. As mentioned in my opening remarks, in the quarter specialty insurance pre tax operating income was $209 million while the combined ratio was 94.8. The loss ratio for the quarter was 63.6 and that included 1.6 percentage points of favorable prior year reserve development and that compares to a 61.7% loss ratio in the first quarter last year and that included 3.3 points of favorable development. The expense ratio for the quarter was 31.2 and that compares to 28.1 in the first quarter last year. Our continued investments into new specialty operating companies, technology modernization, data and analytics and AI placed some strain on on the expense ratio this quarter, but we remain confident that all of these investments will provide significant long term upside. Turning to commercial auto, net premiums written were up just over 1% in the quarter while the loss ratio came in relatively flat with the first quarter of last year at 70. As I referred earlier, rate increases remained steady with the fourth quarter that we reported and that is at a 16% rate increase level which is in line with loss trends Workers comp. On the other hand, net written premiums were also up just over 1% in the quarter while the loss ratio came in at 62.3% compared to 58.7% in the first quarter last year and most of that difference is due to the difference in the level of favorable prior year loss reserve development rate decreases for work computer were about 2% and here too that’s in line with loss trends with severity remaining relatively consistent and frequency continuing its downward trend. So while we’re seeing some top line pressure along with some pressure on the expense ratio, we remain confident that our underwriting approach to focus on risk adequate rates will continue to produce profitable combined ratios which is really the foremost priority for us. We also expect to see continuing growth in top line contributions from our newer specialty operating companies. A couple of other things additionally in the quarter we announced the formation of another new operating company Old Republic Property, led by Patrick Haggerty, who has assembled a highly respected team of underwriters that will specialize in very selective property placements. Just this week, the executive team here at the holding company in Chicago met with Patrick and his team and they’re currently focused …
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