Old Republic International Corporation

Thank you, Regina. Good afternoon, everyone. Thank you for joining us for the Old Republic conference call to discuss fourth quarter 2024 results. This morning, we distributed a copy of the press release and posted a separate financial supplement. Both of the documents are available on Old Republic's website at www.oldrepublic.com. Please be advised that this call may involve forward-looking statements as discussed in the press release and financial supplement dated January 23rd, 2025. Risks associated with these statements can be found in the company's latest SEC filings. Presenting on today's conference call would be Craig Smitty, President and CEO, Frank Sidoro, Chief Financial Officer, and Carolyn Monroe, President and CEO 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.

Okay. Thank you, Joe. Good afternoon, and welcome again to Old Republic fourth quarter and year-end 2024 earnings call. So during the fourth quarter, we produced $285 million of consolidated pre-tax operating income, up from $237 million in 2023. Our consolidated combined ratio was 92.7, and that compares to 93.3 in the fourth quarter of last year. As we noted in the release, we've renamed our general insurance segment to specialty insurance. We believe specialty more appropriately reflects our specialty P&C strategy with 17 underwriting subsidiaries focused on unique specialty niche markets. So in specialty insurance, we grew net premiums earned by 13% in the fourth quarter and produced $228 million of pretax operating income. That's up from $195 million last year. The specialty insurance combined ratio was 91.8 in the quarter, and that compares to 92 last year. Despite the continuation of higher mortgage interest rates and a tight real estate market, title insurance grew premiums and fees by 9% in the fourth quarter and produced $55 million of pre-tax operating income, up from $44 million last year. The title insurance combined ratio was 94.4 in the quarter, and that compares to 95.5 last year. Our conservative reserving practices continue to produce both favorable prior year development in the specialty insurance and title insurance segments. And Frank will talk a little bit more about that as we get to his remarks. Our balance sheet remains strong even as we returned large amounts of capital to shareholders through both dividends and share repurchases. We declared a special dividend of $2 per share in the fourth quarter, which reduced our book value per share by that same $2 amount. While we continue to return excess capital to shareholders, we also continue to manage for the long run, investing in new specialty underwriting subsidiaries, technology, and talent. And on that front, you may have seen earlier this month we announced our latest new underwriting venture, Old Republic Cyber. So I'll now turn the discussion over to Frank, and then Frank will turn things back to me to cover specialty insurance, followed by Carolyn, who will discuss title insurance, and then we'll open it up for our usual Q&A and conversation. So with that, Frank, I hand it over to you.

Thank you, Craig, and good afternoon, everyone. This morning, we reported net operating income of $227 million for the quarter compared to $190 million last year. On a per share basis, comparable year-over-year results were $0.90 compared to $0.69 last year. Net investment income increased 10% and 16% in the quarter and year, respectively, driven by higher yields on the bond portfolio. Our average reinvestment rate on corporate bonds during the year was 4.8%, while the comparable book yield on corporate bonds disposed of was 3.5%. The total bond portfolio book yield now stands at 4.5% compared to 4% at the end of last year. During the quarter, the value of our total investment portfolio decreased by about $400 million. However, we ended the full year up over $100 million. Turning now to loss reserves. In the quarter, the consolidated loss ratios benefited from favorable development by 2.9 percentage points compared to 4.7 last year. As expected, the lower level in the quarter came primarily from specialty insurance and was consistent with the full year results. And I'll give some line of coverage details. Commercial auto and workers' comp continued to have strong favorable development, although lower than last year. Property also experienced strong favorable development and was higher than last year. The favorable development in these lines were partially offset by unfavorable development in general liability, which was spread across multiple subsidiaries and accident years, and in transactional risk, which is included within financial indemnity. This recent experience aided our decision to exit transactional risk, which contributed less than $20 million of premium in 2024. We ended the quarter with book value per share of $22.84, which inclusive of both the ordinary dividends and the $2 special dividend declared in the quarter, equated to an increase of 11% for the year, resulting primarily from our strong operating earnings. In the quarter, we declared nearly $560 million of dividends and repurchased $174 million worth of our shares, bringing the total capital return this year to just over $1.7 billion. Since the end of the quarter, we repurchased another $25 million worth of shares, leaving us with about $205 million remaining in our current repurchase program. And I'll turn the call back over to Craig for discussion of specialty insurance.