Old Republic (ORI) Q4 2025 Earnings Transcript

Core Insights - The company reported a consolidated pretax operating income of $236 million for Q4 2025, down from $285 million in the previous year, with a combined ratio of 96% compared to 92.7% [3] - For the full year 2025, the consolidated pretax operating income reached $1 billion, with a combined ratio of 94.7% [3] - Specialty insurance net premiums earned grew by 10.9% for the full year, surpassing $5 billion for the first time, while the combined ratio for specialty insurance was 93.2% [2][3] - Title insurance reported a 12% increase in premium and fee revenue for Q4 2025, with a pretax operating income of $66 million, up from $55 million in the same quarter last year [15][18] Financial Performance - The company achieved a net operating income of $185 million for Q4 2025, down from $227 million year-over-year, with a per-share income of 74¢ compared to 90¢ [4] - The average reinvestment rate on corporate bonds was 4.6%, with a total bond portfolio book yield of 4.75% [4] - The company declared nearly $700 million in dividends and repurchased $56 million worth of shares, bringing total capital return for the year to just over $1 billion [6][7] Specialty Insurance Insights - Specialty insurance's pretax operating income for Q4 was $178 million, down from $228 million, with a combined ratio of 97.3% [2][8] - The loss ratio for specialty insurance was 67.6% for Q4, including 2.2 percentage points of favorable prior year loss reserve development [9] - The company noted strong rate increases in commercial auto and general liability, with net premiums written up 6.1% in Q4 [8][10] Title Insurance Insights - Title insurance's premium and fee revenue for Q4 was $789 million, marking a 12% increase from the previous year, with direct title operations premiums up 18% [15][16] - The combined ratio for title insurance improved to 94% in Q4, down from 94.4% [16][18] - The company plans to focus on technological solutions for title agents and operational efficiency in 2026 [18][19] Market Outlook - The company anticipates continued growth in specialty insurance, driven by new operating companies and a focus on underwriting excellence [13][19] - For 2026, the company expects commercial premiums to improve by about 20%, while residential premiums are projected to see single-digit growth [35] - The company remains committed to maintaining pricing discipline and managing loss trends effectively [24][46]