The following is a summary of the Old Republic International Corporation (ORI) Q1 2024 Earnings Call Transcript:
Financial Performance:
Old Republic's consolidated pretax operating income was $231.5 million, a YoY increase from $222.9 million.
General Insurance division witnessed a 14% YoY increase in pretax operating income to reach $220 million.
Title Insurance encountered reduced income of $2 million due to higher mortgage interest rates and a slower real estate market.
The company reported net operating income of $185 million, up from $179 million last year.
A 19% quarterly increase in net investment income was observed, influenced by higher yields.
The bond portfolio book yield stands at 4.1%, a modest increase from the end of the previous year.
At the end of the quarter, book value per share was $23.83, bolstered by 3.4% due to robust operating earnings and higher investment valuations.
The company returned $264 million to shareholders through dividends ($72 million) and share repurchases ($183 million).
Business Progress:
The company experienced a 14% increase in net written premiums in General Insurance with the retention ratios remaining strong, along with the commencement of new underwriting subsidiaries.
Workers Compensation net premiums saw a 4.5% uptick in the quarter despite a slowdown in Title Insurance, where a modest rise in direct revenues was nevertheless achieved.
Old Republic intends to continue the investment in technology to enhance operational efficiency and security for General as well as Title Insurance.
The insurance company monitors federal proposals that may alter Title Insurance handling, predicting no significant implications for the business currently.
The business continues to cultivate relationships with state bar associations while issuing insurance policies to smaller law firms.
Old Republic's strategy targets growth in small policies with low-hazard general liability types of exposure, relying heavily on its E&S operation.
In Q2 2024, momentum in General Insurance is expected to be maintained while expressing cautious optimism for the Title business due to a potential shift in the real estate market and interest rates.
More details: Old Republic International IR
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