Old Republic Reports Results For The Fourth Quarter And Full Year 2016
|
Financial Highlights (a) |
|||||||||||||
|
Quarters Ended |
Years Ended |
||||||||||||
|
2016 |
2015 |
2016 |
2015 |
||||||||||
|
Operating revenues: |
|||||||||||||
|
General insurance |
$ |
847.6 |
$ |
844.7 |
$ |
3,354.7 |
$ |
3,313.3 |
|||||
|
Title insurance |
628.9 |
556.9 |
2,244.1 |
2,080.7 |
|||||||||
|
Corporate and other |
12.7 |
8.6 |
35.4 |
35.8 |
|||||||||
|
Subtotal |
1,489.3 |
1,410.2 |
5,634.3 |
5,429.8 |
|||||||||
|
RFIG run-off business |
44.6 |
55.6 |
193.2 |
245.0 |
|||||||||
|
Total |
$ |
1,533.9 |
$ |
1,465.9 |
$ |
5,827.6 |
$ |
5,674.8 |
|||||
|
Pretax operating income (loss): |
|||||||||||||
|
General insurance |
$ |
76.8 |
$ |
72.2 |
$ |
319.9 |
$ |
336.4 |
|||||
|
Title insurance |
85.6 |
48.1 |
210.2 |
166.8 |
|||||||||
|
Corporate and other |
4.1 |
(0.2) |
13.0 |
7.6 |
|||||||||
|
Subtotal |
166.7 |
120.1 |
543.3 |
511.0 |
|||||||||
|
RFIG run-off business |
9.3 |
6.9 |
69.8 |
29.4 |
|||||||||
|
Total |
176.0 |
127.1 |
613.1 |
540.4 |
|||||||||
|
Realized investment gains (losses): |
|||||||||||||
|
From sales |
14.7 |
14.2 |
77.8 |
91.3 |
|||||||||
|
From impairments |
- |
- |
(4.9) |
- |
|||||||||
|
Net realized investment gains (losses) |
14.7 |
14.2 |
72.8 |
91.3 |
|||||||||
|
Consolidated pretax income (loss) |
190.7 |
141.4 |
686.0 |
631.8 |
|||||||||
|
Income taxes (credits) |
58.7 |
50.7 |
219.0 |
209.6 |
|||||||||
|
Net income (loss) |
$ |
131.9 |
$ |
90.6 |
$ |
466.9 |
$ |
422.1 |
|||||
|
Components of diluted earnings per share: |
|||||||||||||
|
Net operating income (loss): |
|||||||||||||
|
General insurance |
$ |
0.19 |
$ |
0.15 |
$ |
0.76 |
$ |
0.76 |
|||||
|
Title insurance |
0.19 |
0.11 |
0.46 |
0.37 |
|||||||||
|
Corporate and other |
0.03 |
0.01 |
0.09 |
0.08 |
|||||||||
|
Subtotal |
0.41 |
0.27 |
1.31 |
1.21 |
|||||||||
|
RFIG run-off business |
0.02 |
0.02 |
0.15 |
0.07 |
|||||||||
|
Total |
0.43 |
0.29 |
1.46 |
1.28 |
|||||||||
|
Net realized investment gains (losses) |
0.03 |
0.03 |
0.16 |
0.20 |
|||||||||
|
Net income (loss) |
$ |
0.46 |
$ |
0.32 |
$ |
1.62 |
$ |
1.48 |
|||||
|
Cash dividends paid per share |
$ |
0.1875 |
$ |
0.1850 |
$ |
0.7500 |
$ |
0.7400 |
|||||
|
Ending book value per share |
$ |
17.20 |
$ |
15.02 |
|||||||||
|
(a) Unaudited; All amounts in this report are stated in millions except per share data and percentages. |
|||||||||||||
The preceding table shows both operating and net income to highlight the effects of realized investment gains or losses on period-to-period earnings comparisons. Management uses operating income, a non-GAAP financial measure, to evaluate and better explain operating performance, believing that the measure enhances an understanding of
The recognition of realized investment gains or losses can be highly discretionary due to such factors as the timing of individual securities sales, the recording of estimated losses from write-downs of impaired securities, tax-planning considerations, and changes in investment management judgments regarding the direction of securities markets or the future prospects of individual investees or industry sectors. In recent years, asset management operations have in part been reoriented toward an enhancement of income from interest and dividends. This strategy has led to a minimization of non-income producing or low-yielding securities. Proceeds from such securities' sales and maturities, as well as newly investable funds have largely been directed to purchases of higher yielding common shares of American companies with distinguished long-term records of earnings and dividend growth. More recently the Company has allotted greater investable funds to tax exempt issues which tend to generate pretax yields lower than those of fully taxable corporate or
|
General Insurance Results – The table below shows the major elements effecting general insurance performance for the periods reported upon. |
|
|
|||||||||||||||
|
Quarters Ended |
Years Ended |
||||||||||||||
|
2016 |
2015 |
Change |
2016 |
2015 |
Change |
||||||||||
|
Net premiums earned |
$ |
743.5 |
$ |
737.4 |
0.8% |
$ |
2,936.3 |
$ |
2,894.7 |
1.4% |
|||||
|
Net investment income |
78.5 |
80.5 |
-2.5 |
312.1 |
312.1 |
- |
|||||||||
|
Other income |
25.6 |
26.6 |
-4.0 |
106.2 |
106.3 |
-0.1 |
|||||||||
|
Operating revenues |
847.6 |
844.7 |
0.3 |
3,354.7 |
3,313.3 |
1.3 |
|||||||||
|
Benefits and claim costs |
547.5 |
555.0 |
-1.3 |
2,143.1 |
2,143.5 |
- |
|||||||||
|
Sales and general expenses |
208.3 |
205.1 |
1.6 |
833.9 |
786.6 |
6.0 |
|||||||||
|
Interest and other costs |
14.8 |
12.3 |
20.5 |
57.6 |
46.6 |
23.7 |
|||||||||
|
Total operating expenses |
770.7 |
772.4 |
-0.2 |
3,034.7 |
2,976.8 |
1.9 |
|||||||||
|
Pretax operating income (loss) (*) |
$ |
76.8 |
$ |
72.2 |
6.4% |
$ |
319.9 |
$ |
336.4 |
-4.9% |
|||||
|
Benefit and claim ratio |
73.6% |
75.3% |
73.0% |
74.1% |
|||||||||||
|
Expense ratio |
24.6 |
24.2 |
24.8 |
23.5 |
|||||||||||
|
Composite underwriting ratio |
98.2% |
99.5% |
97.8% |
97.6% |
|||||||||||
|
(*) In connection with the run-off mortgage guaranty ("MI") and consumer credit indemnity ("CCI") combination, |
|||||||||||||||
General insurance pretax operating earnings for 2016 and the final quarter of the year were marked by reasonably stable underwriting and investment income contributions.
2016 earned premiums were basically level with the preceding year's production with trends unevenly distributed among various insurance coverages. Low to mid-single digit gains were experienced in commercial automobile (trucking) and national accounts, as well as other coverages such as home warranty. Premium volume from a new underwriting facility established in early 2015 also added measurably to earned premiums in 2016. In other regards, 2016 premium levels were hindered by lower volume in a large account contractors book of business operating in a particularly competitive environment, and by reduced production in the energy services field.
Consolidated general insurance benefit and claim costs were reasonably stable during 2016. Unfavorable developments of reserves established in prior years nonetheless added 1.7 and 0.3 percentage points to the benefit and claim ratio of the final quarter and all of 2016, respectively. By contrast, claim ratios for 2015 were inclusive of 3.0 and 1.5 percentage point additions arising from unfavorable developments in the final quarter and year, respectively. Slightly higher sales and general expense ratios in 2016 resulted mostly from greater costs incurred in the above-noted underwriting facility, additional litigation cost provisions in the year's second quarter, and by a slightly different premium mix and attendant production costs associated with the business' responses to recurring changes in insurance market conditions and opportunities.
In management's opinion, quarterly or year-to-date fluctuations in reported benefit and claim ratios are not particularly meaningful in evaluating trends in
|
Title Insurance Results – The table below shows the major operating elements effecting this segment's posting of all-time earnings records in the final quarter and full year 2016. |
|
|
||||||||||||||||
|
Quarters Ended |
Years Ended |
|||||||||||||||
|
2016 |
2015 |
Change |
2016 |
2015 |
Change |
|||||||||||
|
Net premiums and fees earned |
$ |
619.4 |
$ |
547.4 |
13.2% |
$ |
2,206.6 |
$ |
2,045.3 |
7.9% |
||||||
|
Net investment income |
9.2 |
9.1 |
0.3 |
36.2 |
34.0 |
6.3 |
||||||||||
|
Other income |
0.2 |
0.2 |
-23.8 |
1.2 |
1.3 |
-7.8 |
||||||||||
|
Operating revenues |
628.9 |
556.9 |
12.9 |
2,244.1 |
2,080.7 |
7.9 |
||||||||||
|
Claim costs |
2.5 |
18.3 |
-86.2 |
84.3 |
99.2 |
-15.0 |
||||||||||
|
Sales and general expenses |
538.8 |
488.5 |
10.3 |
1,941.8 |
1,807.0 |
7.5 |
||||||||||
|
Interest and other costs |
1.8 |
1.8 |
1.6 |
7.6 |
7.5 |
1.8 |
||||||||||
|
Total operating expenses |
543.2 |
508.7 |
6.8 |
2,033.8 |
1,913.8 |
6.3 |
||||||||||
|
Pretax operating income (loss) |
$ |
85.6 |
$ |
48.1 |
77.9% |
$ |
210.2 |
$ |
166.8 |
26.0% |
||||||
|
Claim ratio |
0.4% |
3.4% |
3.8% |
4.9% |
||||||||||||
|
Expense ratio |
86.9 |
89.2 |
87.9 |
88.3 |
||||||||||||
|
Composite underwriting ratio |
87.3% |
92.6% |
91.7% |
93.2% |
||||||||||||
The continuation of a favorable mortgage rate environment and generally improving housing and commercial property markets led to higher revenues from title premiums and fees in 2016. This was achieved in spite of the adverse effects that government-imposed mortgage disclosure rules, implemented during the last quarter of 2015, have had on the consummation of real estate transactions nationally.
As the above table shows, 2016 operations registered a further expansion of underwriting margins. Claim ratios trended down in the face of declining claims activity since the Great Recession years and from favorable developments of reserves established in prior years. These developments lowered 2016 claim ratios by 3.8 and 1.1 percentage points in the fourth quarter and entire year, respectively. For the same periods of 2015 these reductions amounted to 1.8 and 0.6 percentage points, respectively. The operating expense ratio for these periods remained generally aligned with premiums and fees levels.
Please see next page for the continuing report
|
RFIG Run-off Business Results – The table below shows the key operating elements of this run-off book of business and their contributions to combined MI and CCI results. |
|
RFIG Run-off Business |
|||||||||||||||
|
Quarters Ended |
Years Ended |
||||||||||||||
|
2016 |
2015 |
Change |
2016 |
2015 |
Change |
||||||||||
|
A. |
|||||||||||||||
|
Net premiums earned |
$ |
34.3 |
$ |
43.6 |
-21.4% |
$ |
154.1 |
$ |
195.9 |
-21.3% |
|||||
|
Net investment income |
5.3 |
5.8 |
-7.2 |
22.0 |
24.2 |
-8.9 |
|||||||||
|
Claim costs |
18.4 |
15.7 |
17.1 |
52.5 |
110.5 |
-52.4 |
|||||||||
|
Pretax operating income (loss) |
$ |
17.1 |
$ |
28.6 |
-40.1% |
$ |
105.0 |
$ |
89.9 |
16.8% |
|||||
|
Claim ratio |
53.7% |
36.0% |
34.1% |
56.4% |
|||||||||||
|
Expense ratio |
12.0 |
11.6 |
12.0 |
10.1 |
|||||||||||
|
Composite underwriting ratio |
65.7% |
47.6% |
46.1% |
66.5% |
|||||||||||
|
B. |
|||||||||||||||
|
Net premiums earned |
$ |
4.6 |
$ |
5.9 |
-21.5% |
$ |
15.8 |
$ |
23.9 |
-33.8% |
|||||
|
Net investment income |
0.3 |
0.2 |
32.2 |
1.1 |
0.8 |
31.3 |
|||||||||
|
Benefits and claim costs |
12.2 |
27.2 |
-55.1 |
50.0 |
83.0 |
-39.8 |
|||||||||
|
Pretax operating income (loss) (*) |
$ |
(7.8) |
$ |
(21.6) |
63.8% |
$ |
(35.2) |
$ |
(60.4) |
41.7% |
|||||
|
Claim ratio |
264.0% |
461.5% |
315.9% |
346.9% |
|||||||||||
|
Expense ratio |
11.9 |
9.7 |
13.9 |
9.2 |
|||||||||||
|
Composite underwriting ratio |
275.9% |
471.2% |
329.8% |
356.1% |
|||||||||||
|
C. Total MI and CCI run-off business: |
|||||||||||||||
|
Net premiums earned |
$ |
38.9 |
$ |
49.6 |
-21.4% |
$ |
170.0 |
$ |
219.9 |
-22.7% |
|||||
|
Net investment income |
5.6 |
6.0 |
-5.7 |
23.2 |
25.1 |
-7.5 |
|||||||||
|
Benefits and claim costs |
30.6 |
43.0 |
-28.6 |
102.6 |
193.6 |
-47.0 |
|||||||||
|
Pretax operating income (loss) |
$ |
9.3 |
$ |
6.9 |
33.8% |
$ |
69.8 |
$ |
29.4 |
136.9% |
|||||
|
Claim ratio |
78.7% |
86.7% |
60.4% |
88.0% |
|||||||||||
|
Expense ratio |
12.0 |
11.4 |
12.2 |
10.0 |
|||||||||||
|
Composite underwriting ratio |
90.7% |
98.1% |
72.6% |
98.0% |
|||||||||||
|
(*) In connection with the run-off mortgage guaranty ("MI") and consumer credit indemnity ("CCI") combination, |
|||||||||||||||
Consistent with a run-off operating mode, further declines of earned premiums were posted by the MI and CCI lines. MI investment income was also lower as reduced premium volumes and ongoing claim payments affected downward pressures on the invested asset base.
Continued declines in reported delinquencies and the higher rates at which reported mortgage loan defaults are cured or otherwise resolved without payment have led to generally declining claim costs and the related ratios to earned premiums for the past four years. On a quarterly basis, these costs can be affected by the fortuity of claim litigation costs and by uneven occurrences of prior years' claim developments. In the latter regard favorable developments of previously established claim reserves lowered claim ratios by 24.7 and 39.8 percentage points in the final quarter and all of 2016, respectively. For the same periods of 2015, the percentage point reductions were 38.4 and 65.0, respectively.
In addition to a quickly declining premium base, operating results for the much smaller CCI run-off line portray greater quarter-to-quarter and annual volatility in claim costs and related ratios. In 2016 and several prior years, the latter have been particularly impacted by ongoing costs of a near-eight-year long commercial dispute being litigated with Bank of America and its acquired Countrywide mortgage banking subsidiaries.
|
Corporate and Other Operations – The combination of a small life and accident insurance business and the net costs associated with operations of the parent holding company and its internal services subsidiaries usually produce highly variable results. Earnings variations posted by these relatively minor elements of |
|
Corporate and Other Operations |
|||||||||||
|
Quarters Ended |
Years Ended |
||||||||||
|
2016 |
2015 |
2016 |
2015 |
||||||||
|
Net premiums earned |
$ |
6.1 |
$ |
4.7 |
$ |
20.1 |
$ |
19.4 |
|||
|
Net investment income |
6.5 |
3.9 |
15.4 |
17.2 |
|||||||
|
Other income |
- |
- |
(0.1) |
(0.9) |
|||||||
|
Operating revenues |
12.7 |
8.6 |
35.4 |
35.8 |
|||||||
|
Benefits and claim costs |
4.9 |
7.9 |
17.7 |
22.8 |
|||||||
|
Insurance expenses |
1.2 |
1.7 |
7.8 |
6.3 |
|||||||
|
Corporate, interest and other expenses - net |
2.3 |
(0.7) |
(3.2) |
(1.1) |
|||||||
|
Total operating expenses |
8.5 |
8.8 |
22.4 |
28.1 |
|||||||
|
Pretax operating income (loss) |
$ |
4.1 |
$ |
(0.2) |
$ |
13.0 |
$ |
7.6 |
|||
|
Consolidated Results – The consolidated changes and occurrences in |
|
ORI Consolidated |
|||||||||||||||
|
Quarters Ended |
Years Ended |
||||||||||||||
|
2016 |
2015 |
Change |
2016 |
2015 |
Change |
||||||||||
|
Net premiums and fees earned |
$ |
1,408.1 |
$ |
1,339.2 |
5.1% |
$ |
5,333.2 |
$ |
5,179.4 |
3.0% |
|||||
|
Net investment income |
100.0 |
99.7 |
0.2 |
387.0 |
388.6 |
-0.4 |
|||||||||
|
Other income |
25.8 |
26.8 |
-3.9 |
107.3 |
106.7 |
0.5 |
|||||||||
|
Operating revenues |
1,533.9 |
1,465.9 |
4.6 |
5,827.6 |
5,674.8 |
2.7 |
|||||||||
|
Benefits and claim costs |
585.7 |
624.3 |
-6.2 |
2,347.9 |
2,459.3 |
-4.5 |
|||||||||
|
Sales and general expenses |
755.9 |
703.5 |
7.5 |
2,816.3 |
2,633.0 |
7.0 |
|||||||||
|
Interest and other costs |
16.2 |
10.9 |
48.4 |
50.2 |
41.9 |
19.8 |
|||||||||
|
Total operating expenses |
1,357.9 |
1,338.7 |
1.4 |
5,214.5 |
5,134.3 |
1.6 |
|||||||||
|
Pretax operating income (loss) |
176.0 |
127.1 |
38.4 |
613.1 |
540.4 |
13.4 |
|||||||||
|
Income taxes (credits) |
53.6 |
45.8 |
17.1 |
193.5 |
177.7 |
8.9 |
|||||||||
|
Net operating income (loss) |
122.3 |
81.3 |
50.4 |
419.6 |
362.7 |
15.7 |
|||||||||
|
Realized investment gains (losses) |
14.7 |
14.2 |
3.2 |
72.8 |
91.3 |
-20.2 |
|||||||||
|
Income taxes (credits) on realized investment gains (losses) |
5.1 |
4.9 |
3.4 |
25.5 |
31.9 |
-20.2 |
|||||||||
|
Net realized investment gains (losses) |
9.5 |
9.2 |
3.1 |
47.3 |
59.3 |
-20.2 |
|||||||||
|
Net income (loss) |
$ |
131.9 |
$ |
90.6 |
45.6% |
$ |
466.9 |
$ |
422.1 |
10.6% |
|||||
|
Claim ratio |
41.6% |
46.6% |
44.0% |
47.5% |
|||||||||||
|
Expense ratio |
51.6 |
50.3 |
50.6 |
48.5 |
|||||||||||
|
Composite underwriting ratio |
93.2% |
96.9% |
94.6% |
96.0% |
|||||||||||
|
Consolidated operating cash flow |
$ |
637.3 |
$ |
688.2 |
-7.4% |
||||||||||
Consolidated operating cash flow was additive to investable funds and operating needs in the amount of
The sum-total of
|
Quarters Ended |
Years Ended |
||||||||||||||
|
Pretax operating income: |
2016 |
2015 |
Change |
2016 |
2015 |
Change |
|||||||||
|
Underwriting and related services: |
|||||||||||||||
|
All segments except RFIG |
$ |
88.6 |
$ |
37.3 |
137.1% |
$ |
229.7 |
$ |
189.4 |
21.3% |
|||||
|
RFIG run-off |
3.6 |
0.9 |
N/M |
46.6 |
4.3 |
N/M |
|||||||||
|
Subtotal |
92.2 |
38.3 |
140.8 |
276.3 |
193.7 |
42.6 |
|||||||||
|
Net investment income |
100.0 |
99.7 |
0.2 |
387.0 |
388.6 |
-0.4 |
|||||||||
|
Interest and other costs |
(16.2) |
(10.9) |
48.4 |
(50.2) |
(41.9) |
19.8 |
|||||||||
|
Total |
176.0 |
127.1 |
38.4 |
613.1 |
540.4 |
13.4 |
|||||||||
|
Realized investment gains(losses) |
14.7 |
14.2 |
3.2 |
72.8 |
91.3 |
-20.2 |
|||||||||
|
Consolidated pretax income |
$ |
190.7 |
$ |
141.4 |
34.9% |
$ |
686.0 |
$ |
631.8 |
8.6% |
|||||
|
Cash, Invested Assets, and Shareholders' Equity – The table below shows |
|
Cash, Invested Assets, and Shareholders' Equity |
||||||||||||||
|
% Change |
||||||||||||||
|
|
Dec. '16/ |
Dec. '15/ |
||||||||||||
|
2016 |
2015 |
2014 |
Dec. '15 |
Dec. '14 |
||||||||||
|
Cash and invested assets: |
||||||||||||||
|
Available for sale carried at fair value |
$ |
12,021.0 |
$ |
11,119.6 |
$ |
11,291.6 |
8.1% |
-1.5% |
||||||
|
Held to maturity carried at amortized cost |
974.8 |
355.8 |
- |
173.9% |
N/A |
|||||||||
|
Total per balance sheet |
$ |
12,995.8 |
$ |
11,475.5 |
$ |
11,291.6 |
13.2% |
1.6% |
||||||
|
Original cost basis of all |
$ |
12,360.3 |
$ |
11,284.5 |
$ |
10,717.9 |
9.5% |
5.3% |
||||||
|
Shareholders' equity: |
Total |
$ |
4,471.6 |
$ |
3,880.8 |
$ |
3,924.0 |
15.2% |
-1.1% |
|||||
|
Per common share |
$ |
17.20 |
$ |
15.02 |
$ |
15.15 |
14.5% |
-0.9% |
||||||
|
Composition of shareholders' equity per share: |
||||||||||||||
|
Equity before items below |
$ |
15.96 |
$ |
14.91 |
$ |
14.02 |
7.0% |
6.3% |
||||||
|
Unrealized investment gains (losses) and other |
||||||||||||||
|
accumulated comprehensive income (loss) |
1.24 |
0.11 |
1.13 |
|||||||||||
|
Total |
$ |
17.20 |
$ |
15.02 |
$ |
15.15 |
14.5% |
-0.9% |
||||||
|
Segmented composition of shareholders' equity per share: |
||||||||||||||
|
Excluding run-off segment |
$ |
15.93 |
$ |
14.06 |
$ |
14.35 |
13.3% |
-2.0% |
||||||
|
RFIG run-off segment |
1.27 |
0.96 |
0.80 |
|||||||||||
|
Consolidated total |
$ |
17.20 |
$ |
15.02 |
$ |
15.15 |
14.5% |
-0.9% |
||||||
As of
Changes in shareholders' equity per share are shown in the following table. As indicated, these resulted mostly from net income, dividend payments to shareholders, and changes in the value of invested assets carried at fair value in the periods reported upon.
|
Shareholders' Equity Per Share |
|||||||||
|
|
|||||||||
|
2016 |
2015 |
2014 |
|||||||
|
Beginning balance |
$ |
15.02 |
$ |
15.15 |
$ |
14.64 |
|||
|
Changes in shareholders' equity: |
|||||||||
|
Net operating income (loss) |
1.62 |
1.40 |
0.90 |
||||||
|
Net realized investment gains (losses): |
|||||||||
|
From sales |
0.19 |
0.23 |
0.68 |
||||||
|
From impairments |
(0.01) |
- |
- |
||||||
|
Subtotal |
0.18 |
0.23 |
0.68 |
||||||
|
Net unrealized investment gains (losses) |
1.12 |
(0.96) |
(0.08) |
||||||
|
Total realized and unrealized investment gains (losses) |
1.30 |
(0.73) |
0.60 |
||||||
|
Cash dividends |
(0.75) |
(0.74) |
(0.73) |
||||||
|
Stock issuance, foreign exchange, and other transactions |
0.01 |
(0.06) |
(0.26) |
||||||
|
Net change |
2.18 |
(0.13) |
0.51 |
||||||
|
Ending balance |
$ |
17.20 |
$ |
15.02 |
$ |
15.15 |
|||
|
Percentage change for the period |
14.5% |
-0.9% |
3.5% |
||||||
|
Capitalization – As shown in the following table, |
|
Capitalization (*) |
|||||||||
|
|
|||||||||
|
2016 |
2015 |
2014 |
|||||||
|
Debt: |
|||||||||
|
3.75% Convertible Senior Notes due 2018 |
$ |
547.8 |
$ |
546.0 |
$ |
544.1 |
|||
|
4.875% Senior Notes due 2024 |
395.6 |
395.1 |
394.5 |
||||||
|
3.875% Senior Notes due 2026 |
544.6 |
- |
- |
||||||
|
ESSOP debt with an average yield of 4.0% |
8.1 |
11.7 |
15.0 |
||||||
|
Other miscellaneous debt with an average yield of 1.9% |
32.4 |
- |
- |
||||||
|
Total debt |
1,528.7 |
952.8 |
953.7 |
||||||
|
Common shareholders' equity |
4,471.6 |
3,880.8 |
3,924.0 |
||||||
|
Total capitalization |
$ |
6,000.4 |
$ |
4,833.7 |
$ |
4,877.8 |
|||
|
Capitalization ratios: |
|||||||||
|
Debt |
25.5% |
19.7% |
19.7% |
||||||
|
Common shareholders' equity |
74.5 |
80.3 |
80.3 |
||||||
|
Total |
100.0% |
100.0% |
100.0% |
||||||
|
(*) Certain debt amounts have been reduced due to the reclassification of relatively immaterial debt issuance costs previously classified as deferred assets, in order to comply with a 2015 pronouncement by the |
|||||||||
|
Managing Old Republic's Insurance Business for the Long-Run |
The insurance business is distinguished from most others in that the prices (premiums) charged for various insurance products are set without certainty of the ultimate benefit and claim costs that will emerge or be incurred, often many years after issuance and expiration of a policy.
In this light, the Company's affairs are managed for the long run and without significant regard to the arbitrary strictures of quarterly or even annual reporting periods that American industry must observe. In
Accompanying Financial Data:
- Summary Financial Statements and Common Stock Statistics
- About
Old Republic - Safe Harbor Statement
Financial Supplement
A financial supplement to this news release is available on the Company's website.
|
|
|||||||||||||||
|
SummaryFinancial Statements and Common Stock Statistics (Unaudited) |
|||||||||||||||
|
|
|||||||||||||||
|
SUMMARY BALANCE SHEETS: |
2016 |
2015 |
|||||||||||||
|
Assets: |
|||||||||||||||
|
Cash and fixed maturity securities |
$ |
9,973.1 |
$ |
9,366.7 |
|||||||||||
|
Equity securities |
2,896.1 |
1,987.8 |
|||||||||||||
|
Other invested assets |
126.5 |
120.9 |
|||||||||||||
|
Cash and invested assets |
12,995.8 |
11,475.5 |
|||||||||||||
|
Accounts and premiums receivable |
1,390.2 |
1,310.2 |
|||||||||||||
|
Federal income tax recoverable: |
Current |
14.9 |
26.5 |
||||||||||||
|
Deferred |
- |
154.5 |
|||||||||||||
|
Prepaid federal income taxes |
82.4 |
63.3 |
|||||||||||||
|
Reinsurance balances recoverable |
3,231.5 |
3,183.6 |
|||||||||||||
|
Sundry assets |
876.5 |
887.8 |
|||||||||||||
|
Total |
$ |
18,591.6 |
$ |
17,101.6 |
|||||||||||
|
Liabilities and Shareholders' Equity: |
|||||||||||||||
|
Policy liabilities |
$ |
2,035.0 |
$ |
1,945.1 |
|||||||||||
|
Benefit and claim reserves |
9,206.0 |
9,120.2 |
|||||||||||||
|
Federal income tax payable: |
Deferred |
42.6 |
- |
||||||||||||
|
Debt |
1,528.7 |
952.8 |
|||||||||||||
|
Sundry liabilities |
1,307.4 |
1,202.5 |
|||||||||||||
|
Shareholders' equity |
4,471.6 |
3,880.8 |
|||||||||||||
|
Total |
$ |
18,591.6 |
$ |
17,101.6 |
|||||||||||
|
SUMMARY INCOME STATEMENTS: |
Quarters Ended |
Years Ended |
|||||||||||
|
2016 |
2015 |
2016 |
2015 |
||||||||||
|
Net premiums and fees earned |
$ |
1,408.1 |
$ |
1,339.2 |
$ |
5,333.2 |
$ |
5,179.4 |
|||||
|
Net investment income |
100.0 |
99.7 |
387.0 |
388.6 |
|||||||||
|
Other income |
25.8 |
26.8 |
107.3 |
106.7 |
|||||||||
|
Net realized investment gains (losses) |
14.7 |
14.2 |
72.8 |
91.3 |
|||||||||
|
Total revenues |
1,548.7 |
1,480.2 |
5,900.5 |
5,766.1 |
|||||||||
|
Benefits and claims |
585.7 |
624.3 |
2,347.9 |
2,459.3 |
|||||||||
|
Sales and general expenses |
755.9 |
703.5 |
2,816.3 |
2,633.0 |
|||||||||
|
Interest and other costs |
16.2 |
10.9 |
50.2 |
41.9 |
|||||||||
|
Total expenses |
1,357.9 |
1,338.7 |
5,214.5 |
5,134.3 |
|||||||||
|
Pretax income (loss) |
190.7 |
141.4 |
686.0 |
631.8 |
|||||||||
|
Income taxes (credits) |
58.7 |
50.7 |
219.0 |
209.6 |
|||||||||
|
Net income (loss) |
$ |
131.9 |
$ |
90.6 |
$ |
466.9 |
$ |
422.1 |
|||||
|
COMMON STOCK STATISTICS: |
|||||||||||||
|
Net income (loss): |
Basic |
$ |
.51 |
$ |
.35 |
$ |
1.80 |
$ |
1.63 |
||||
|
Diluted |
$ |
.46 |
$ |
.32 |
$ |
1.62 |
$ |
1.48 |
|||||
|
Components of earnings per share: |
|||||||||||||
|
Basic, net operating income (loss) |
$ |
.47 |
$ |
.31 |
$ |
1.62 |
$ |
1.40 |
|||||
|
Realized investment gains (losses) |
.04 |
.04 |
.18 |
.23 |
|||||||||
|
Basic net income (loss) |
$ |
.51 |
$ |
.35 |
$ |
1.80 |
$ |
1.63 |
|||||
|
Diluted, net operating income (loss) |
$ |
.43 |
$ |
.29 |
$ |
1.46 |
$ |
1.28 |
|||||
|
Realized investment gains (losses) |
.03 |
.03 |
.16 |
.20 |
|||||||||
|
Diluted net income (loss) |
$ |
.46 |
$ |
.32 |
$ |
1.62 |
$ |
1.48 |
|||||
|
Cash dividends on common stock |
$ |
.1875 |
$ |
.1850 |
$ |
.7500 |
$ |
.7400 |
|||||
|
Book value per share |
$ |
17.20 |
$ |
15.02 |
|||||||||
|
Common shares outstanding: |
|||||||||||||
|
Average basic |
259,711,126 |
258,257,224 |
259,429,298 |
259,502,067 |
|||||||||
|
Average diluted |
296,583,195 |
295,206,909 |
296,379,251 |
296,088,963 |
|||||||||
|
Actual, end of period |
259,906,378 |
258,459,827 |
|||||||||||
|
SUMMARY STATEMENTS OF COMPREHENSIVE INCOME (LOSS): |
|||||||||||||
|
Net income (loss) as reported |
$ |
131.9 |
$ |
90.6 |
$ |
466.9 |
$ |
422.1 |
|||||
|
Post-tax net unrealized gains (losses) |
(57.9) |
(26.3) |
292.1 |
(248.9) |
|||||||||
|
Other adjustments |
(5.2) |
(.1) |
2.2 |
(14.2) |
|||||||||
|
Net adjustments |
(63.1) |
(26.5) |
294.4 |
(263.1) |
|||||||||
|
Comprehensive income (loss) |
$ |
68.8 |
$ |
64.0 |
$ |
761.4 |
$ |
159.0 |
|||||
About
The Company is organized as an insurance holding company whose subsidiaries actively market, underwrite, and provide risk management services for a wide variety of coverages mostly in the general and title insurance fields. A long-term interest in mortgage guaranty and consumer credit indemnity lines has devolved to a run-off operating mode in recent years.
The nature of
Conference Call Information
- Log on to the Company's website at www.oldrepublic.com 15 minutes before the call to download the necessary software, or, alternatively
- The call can also be accessed by phone at 888-428-9473.
Interested parties may also listen to a replay of the call through
Safe Harbor Statement
Historical data pertaining to the operating results, liquidity, and other performance indicators applicable to an insurance enterprise such as
Some of the oral or written statements made in the Company's reports, press releases, and conference calls following earnings releases, can constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Of necessity, any such forward-looking statements involve assumptions, uncertainties, and risks that may affect the Company's future performance. With regard to
A more detailed listing and discussion of the risks and other factors which affect the Company's risk-taking insurance business are included in Part I, Item 1A - Risk Factors, of the Company's 2015 Form 10-K Annual Report and Part II, Item 1A - Risk Factors, of the Company's recent Form 10-Q filings to the
Any forward-looking statements or commentaries speak only as of their dates.
For the latest news releases and other corporate documents on
Investor Relations
312-346-8100
or visit us at www.oldrepublic.com
|
Further Information Contacts: |
|
|
AT OLD REPUBLIC: |
AT FINANCIAL RELATIONS BOARD: |
|
|
Analysts/Investors: |
|
(312) 346-8100 |
(212) 827-3773 |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/old-republic-reports-results-for-the-fourth-quarter-and-full-year-2016-300397252.html
SOURCE



Philips and Bon Secours Charity Health System announce $180 million, long-term strategic partnership to support transformation of patient care and build healthier communities
Advisor News
- The modern advisor: Merging income, insurance, and investments
- Financial shocks, caregiving gaps and inflation pressures persist
- Americans unprepared for increased longevity
- More investors will seek comprehensive financial planning
- Midlife planning for women: why it matters and how advisors should adapt
More Advisor NewsAnnuity News
- LIMRA: Annuity sales notch 10th consecutive $100B+ quarter
- AIG to sell remaining shares in Corebridge Financial
- Corebridge Financial, Equitable Holdings post Q1 earnings as merger looms
- AM Best Assigns Credit Ratings to Calix Re Limited
- Transamerica introduces new RILA with optional income features
More Annuity NewsHealth/Employee Benefits News
- GOVERNOR SIGNS BIOMARKER TESTING COVERAGE BILL
- REGULATION OF AI IN PRIOR AUTHORIZATION AND CLAIMS REVIEW: A LOOK AT FEDERAL AND STATE CONSUMER PROTECTIONS
- LEADING HEALTH ORGANIZATIONS URGE NC LAWMAKERS TO RECONSIDER PROPOSAL IMPLEMENTING MEDICAID CUTS
- Tracing the decline of health care in America
- HUNTER MOVES TO ELIMINATE DISCRIMINATORY LIMITS FOR DISABILITY INSURANCE
More Health/Employee Benefits NewsLife Insurance News
- AM Best Assigns Credit Ratings to Tokio Marine Newa Insurance Co., Ltd.
- Earnings roundup: Prudential works to save ‘unique’ Japanese market
- How life insurance became a living-benefits strategy
- Financial Focus : Keep your beneficiary choices up to date
- Equitable-Corebridge merger casts shadow over life insurance earnings
More Life Insurance News