Old Republic International (ORI) - 2024 Q4 - Annual Results

Financial Performance - Fourth quarter net income of $105.1 million, down from$ 190.6 million in the same quarter last year, resulting in a diluted net income per share of $0.42 compared to$ 0.69[5][3] - Consolidated pretax operating income for the fourth quarter was $285.0 million, a 20.2% increase from$ 237.1 million in the previous year[2][5] - Total capital returned to shareholders was $733 million in the fourth quarter and$ 1,708 million for the full year[5] - The consolidated net income excluding investment gains for 2024 was $227.0 million, reflecting a 19.2% increase compared to$ 190.4 million in 2023[11] - The total consolidated income for 2024 was $7,310.8 million, a 9.0% increase from$ 6,707.7 million in 2023[11] Premiums and Fees - Net premiums and fees earned increased by 11.4% in the fourth quarter to $1,941.5 million, and by 9.0% for the full year to$ 7,310.8 million[5][8] - Specialty Insurance net premiums earned increased by 13.3% for Q4 2024 and 13.5% for the full year, reaching $1,237.2 million and$ 4,677.0 million respectively, driven by premium rate increases and high renewal retention ratios[14] - Title Insurance net premiums and fees earned increased by 8.7% for the quarter and 2.2% for the full year, with commercial premiums representing approximately 23% of net premiums earned in Q4 2024 compared to 21% in 2023[18] Investment Income - Net investment income rose by 9.8% in the fourth quarter to $170.3 million, and by 16.4% for the full year to$ 673.1 million[5][8] - The net investment income for the full year increased by 16.4% to $673.1 million, up from$ 578.3 million in 2023, primarily due to higher investment yields[11][15] - Net investment income rose to $16.0 million in Q4 2024, reflecting a 7.5% increase from$ 14.9 million in Q4 2023, and a full year increase of 10.8% to $63.2 million[18] Ratios and Performance Metrics - The consolidated combined ratio improved to 92.7% in the fourth quarter from 93.3% last year, while the full year ratio was 93.9%, slightly up from 92.6%[5][2] - The consolidated combined ratio improved to 92.7% for Q4 2024, down from 93.3% in Q4 2023, indicating better underwriting performance[11] - The loss ratio for Specialty Insurance improved to 64.1% for the full year 2024, compared to 65.1% in 2023, reflecting favorable prior year loss reserve development[14][16] - The expense ratio for Specialty Insurance was 27.7% for Q4 2024, slightly up from 26.9% in Q4 2023, reflecting costs incurred to start-up new underwriting subsidiaries[14][16] - The loss ratio for the current year improved to 3.3% in Q4 2024, compared to 3.4% in Q4 2023, indicating favorable claim trends[19] Shareholder Returns - Cash dividends declared on common stock increased to$ 2.265 per share in the fourth quarter from $0.245 last year[8] - Shareholders' equity per share decreased to$ 22.84 in Q4 2024, down 11.2% from $25.71 in Q4 2023, influenced by a special cash dividend of$ 2.00 per share[28] - Total capital returned to shareholders during the quarter was $733 million, comprising$ 558 million in dividends and $174 million in share repurchases[28] Segment Performance - The Specialty Insurance segment pretax operating income rose by 17.0% to$ 228.0 million for Q4 2024, compared to $194.8 million in Q4 2023[14] - Operating revenues for the Title Insurance segment reached$ 717.8 million in Q4 2024, an 8.7% increase from $660.5 million in Q4 2023, and$ 2,682.9 million for the full year, up 2.4% from $2,620.6 million[18] - Segment pretax operating income increased by 26.3% to$ 55.4 million in Q4 2024, and by 7.9% to $144.1 million for the full year[18] Market and Economic Factors - The company experienced a decline in transactional risk premiums, which produced$ 19.4 million of net premiums earned in 2024, due to market conditions[14] - Title Insurance results are affected by national and regional housing demand, mortgage loan availability, and employment trends[35] - Life and accident insurance earnings are impacted by employment levels, consumer spending, and health trends[35] Risk Management and Forward-Looking Statements - The company has a risk management framework that includes various risks outlined in its 2023 Form 10-K[36] - Forward-looking statements made by the company involve assumptions and uncertainties that may affect future performance[35] - Old Republic does not undertake any obligation to publicly update or revise forward-looking statements[37] Corporate Information - The company renamed its reportable segment from "General Insurance" to "Specialty Insurance" to better reflect its niche market strategy[10] - Old Republic International Corporation is one of the nation's 50 largest shareholder-owned insurance businesses and ranks third in the title insurance industry[32] - The company has scheduled a conference call to discuss its fourth quarter 2024 performance and major operating trends[33] - The long-term nature of the insurance business and various external factors can significantly impact future operating results[34]