Overview

• US specialty insurer's Q2 net premiums and fees earned rose 5.2% yr/yr

• Net operating income and EPS excluding investment gains declined from last year

• Company returned $137.4 mln to shareholders via dividends and buybacks

Outlook

• Old Republic targets combined ratios of 90% to 95% for Specialty Insurance over a full cycle

• Company expects ECM acquisition to be accretive to earnings in 2026

• Old Republic targets combined ratios of 90% to 95% for Title Insurance over a full cycle

Result Drivers

• SPECIALTY INSURANCE PRESSURES - Modest net premiums earned growth was offset by a sharp decline in underwriting income due to higher loss and expense ratios; unfavorable development in run-off transactional risk was partly offset by favorable development in commercial auto and property

• TITLE INSURANCE GROWTH - Double-digit increase in net premiums and fees earned and improved underwriting income, with expense ratios benefiting from lower litigation costs and scale, partly offset by higher agent commissions

• HIGHER INVESTMENT INCOME - Net investment income rose due to a larger invested asset base

Company press release: ID:nPnFTjrba

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 Net Income		$322.30 mln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the property & casualty insurance peer group is "buy"

• Wall Street's median 12-month price target for Old Republic International Corp is $40.00, about 3.8% below its July 22 closing price of $41.60

• The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 12 three months ago

Reuters Recommended Reads

• July 22 - First American Financial Q2 revenue rises 15%, beats estimates

• July 22 - Stewart Information Q2 revenue beats, helped by data center transactions

• July 21 - Insurer Chubb posts higher second-quarter profit on strong underwriting business

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