Old Republic International Corporation 2026 Q2 Earnings Call

Review the key takeaways and the transcript of this earnings call.

PeriodQ2 2026Duration35 minParticipants8

Key takeaways

Old Republic reported consolidated pre-tax operating income of $238 million for the second quarter of 2026, compared to $268 million in the same period last year.
The consolidated combined ratio was 95.3, up from 93.6 in the prior year quarter.
Annualized operating return on equity was 12.1%, with book value per share growth including dividends at 7.2% for the first six months of 2026.
Specialty insurance net premiums earned grew 2.3% year over year, producing $199 million of pre-tax operating income compared to $254 million last year, with a combined ratio of 95.5 versus 90.7.
Title insurance premiums and fees increased 10% over the prior year quarter, generating $56 million of pre-tax operating income compared to $24 million, and a combined ratio improvement to 95.1 from 99.
Net operating income was $186 million for the quarter, down from $209 million last year, with earnings per share of $0.76 versus $0.83.
Net investment income rose over 6% due to a larger investment base and new debt issuance, with the total bond portfolio book yield at 4.8%.
Loss reserves showed slight favorable development overall, driven by title insurance gains partially offset by unfavorable development in specialty insurance, including a $40 million reserve strengthening in the runoff transactional risk business.
The company paid nearly $77 million in dividends and repurchased $61 million of shares, with approximately $640 million remaining in the current repurchase program.
ECM acquisition is expected to be accretive to earnings and book value in 2026, with ECM reporting direct premiums written of just under $220 million in 2025 and GAAP equity of $145 million.
Specialty insurance net premiums written increased 1.6% excluding auto warranty retail premium adjustments, with commercial auto premiums up 3.6% and workers compensation premiums down 8.4%.
Specialty insurance combined ratio was 95.5, with a loss ratio of 65.9% including 0.3 points of unfavorable prior year loss reserve development.
Expense ratio increased to 29.6% from 28.2% last year, primarily due to investments in new specialty operating companies, technology modernization, data analytics, and AI.
Commercial auto loss ratio improved to 69.4% from the prior year, aided by favorable prior year reserve development and rate increases in the high teens.
Workers compensation loss ratio rose to 60.6% from 48.5% last year, reflecting lower favorable prior year reserve development, with flat rates and consistent severity and declining frequency loss trends.
Title insurance premium and fee revenue was $773 million, up 11% year over year, with direct title premiums up 6% and agency premiums up 12%.
Commercial premiums in title insurance increased to 25% of premiums earned from 23% last year, with a combined ratio of 95.1 and year-to-date combined ratio of 97.4%.
Title insurance expense ratio improved by four points to 92.1%, driven by operational efficiencies, expense management, and higher transaction volumes, partially offset by higher agent commissions.
Title insurance pre-tax operating income was $56 million, up from $24 million in the prior year quarter.
Management highlighted ongoing investments in technology and AI as necessary for future success, with early benefits seen especially in title insurance through partnerships like Qualia.
The company expects continued growth in specialty insurance from new operating companies and the ECM acquisition in the second half of 2026.
Management noted that property insurance rates declined about 7.5%, but their newer property entities are not yet writing premium, so they are not currently impacted by competitive rate pressures in catastrophic property.
The auto warranty business is expected to continue growing and contributing to specialty insurance net premiums, with strong profitability and some noise in reported growth due to retail premium markups.
Management remains opportunistic on share repurchases, mindful of book value per share dilution, and may consider special dividends if excess capital remains at year-end.
ECM is expected to have combined ratio targets between 90 and 95, consistent with other specialty companies, and has produced strong combined ratios in the first two quarters of 2026.

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Transcript

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Operator0:00

안녕하세요, 여러분. 올드 리퍼블릭 인터내셔널 2분기 실적 컨퍼런스 콜에 오신 것을 환영합니다. 오늘 콜은 녹음되고 있음을 알려드립니다. 이제 조 칼라브레즈 씨에게 마이크를 넘기겠습니다.

Joe CalabreseSenior VP0:11

말씀해 주십시오, 감사합니다, 리사.

Joe CalabreseSenior VP0:15

여러분, 안녕하세요. 올드 리퍼블릭 2026년 2분기 실적을 논의하기 위한 컨퍼런스 콜에 참석해 주셔서 감사합니다. 오늘 아침 보도자료 사본과 별도의 재무 보충 자료를 배포했습니다. 두 문서 모두 올드 리퍼블릭 웹사이트 oldrepublic.com에서 확인하실 수 있습니다. 이번 콜에는 2026년 7월 23일자 보도자료에 언급된 바와 같이 미래 예측 진술이 포함될 수 있음을 알려드립니다. 가정, 불확실성 및 위험 요소가 존재하여 결과가 이러한 미래 예측 진술과 크게 다를 수 있습니다. 이러한 가정, 불확실성 및 위험에 관한 자세한 내용은 보도자료의 미래 예측 진술 부분과 회사의 최근 SEC 제출 서류, 그리고 최신 Form 10-K 및 기타 SEC 제출 서류에 기재된 위험 요소를 참조해 주시기 바랍니다.

Joe CalabreseSenior VP1:05

또한 발언이나 질의응답에서 순투자이익을 제외한 순이익 또는 비-GAAP 재무지표인 순영업이익을 언급할 수 있습니다. GAAP 조정 내역은 보도자료에 포함되어 있습니다. 오늘 컨퍼런스 콜에는 크레이그 스미디 사장 겸 CEO, 프랭크 소다로 최고재무책임자, 그리고 올드 리퍼블릭 내셔널 타이틀 인슈어런스 그룹의 사장 겸 CEO인 캐롤린 먼로가 참석합니다. 경영진이 개회사를 한 후 질문을 받겠습니다. 이제 크레이그에게 마이크를 넘기겠습니다. 말씀해 주십시오, 조.

Craig SmiddyPresident and CEO1:44

감사합니다. 여러분, 안녕하세요. 다시 한 번 올드 리퍼블릭 2026년 2분기 실적 콜에 오신 것을 환영합니다. 이번 분기 당사는 세전 통합 영업이익 2억 3,800만 달러를 기록했으며, 이는 이전 2억 6,800만 달러와 비교됩니다. 통합 결합비율은 95.3%로, 이전 93.6%와 비교됩니다. 기초 자기자본 대비 연환산 영업수익률은 12.1%이며, 배당금을 포함한 올해 상반기 주당 장부가치 성장률은 7.2%입니다. 특수 보험은 2025년 2분기 대비 순수료 수입이 2.3% 증가했으며, 세전 영업이익은 1억 9,900만 달러로 이전 2억 5,400만 달러와 비교됩니다. 특수 보험의 결합비율은 95.5%로 이전 90.7%와 비교됩니다. 타이틀 보험에서는 2025년 2분기 대비 보험료와 수수료가 10% 증가했으며, 세전 영업이익은 5,600만 달러로 이전 2,400만 달러와 비교됩니다. 타이틀 보험의 결합비율은 95.1%로 이전 99%와 비교됩니다.

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