OLD REPUBLIC ANNOUNCES SHARE REPURCHASE AUTHORIZATION

Rhea-AI Summary

Old Republic International Corporation (ORI) authorizes a $1.10 billion share repurchase program, following the completion of a $450 million program. The Board of Directors considered liquidity and capital needs before making the decision. Craig R. Smiddy, President and CEO, highlights the company's history of prudent capital management and confidence in the growth of its specialty insurance businesses.

Insights

Financial Analyst

The authorization of a $1.10 billion share repurchase program by Old Republic International Corporation signifies a substantial commitment to returning value to shareholders. Share repurchase programs are often implemented when a company believes its shares are undervalued and they want to invest in themselves. This move could be interpreted as a signal of confidence in the company's financial health and future prospects. It's also noteworthy that this follows a completed $450 million repurchase, suggesting a consistent strategy of capital return.

From a financial standpoint, the repurchase will likely reduce the number of outstanding shares, potentially increasing earnings per share (EPS) and the stock's market value, all else being equal. However, the decision to repurchase shares rather than invest in new projects or acquisitions could be questioned by some investors who prefer growth through business expansion. Additionally, the lack of a specified expiration date provides flexibility but also introduces uncertainty about the program's duration and impact.

Market Research Analyst

Old Republic's decision to initiate a share repurchase program must be viewed in the context of market conditions. The insurance industry is characterized by cycles of growth and consolidation and capital allocation decisions such as this one are critical. The company's diversified portfolio of specialty insurance businesses could insulate it from sector-specific downturns, making share repurchases an attractive option for capital deployment.

Furthermore, the announcement of an 8.2% increase in the regular cash dividend rate and a history of uninterrupted dividends for over eight decades reinforces the company's reputation for shareholder-friendly policies. This track record can be appealing to income-focused investors and may contribute to a more stable shareholder base. Analyzing peer companies' dividend and repurchase activities could provide additional context on the industry norms and Old Republic's competitive positioning.

Economist

Old Republic's share repurchase program reflects broader economic implications. In a macroeconomic environment where interest rates and inflation are key concerns, companies with strong balance sheets and ample liquidity, like Old Republic, are better positioned to implement such programs. The decision to return capital to shareholders rather than reinvest it internally suggests that the company might be experiencing a period of lower perceived investment opportunities, which could be indicative of the current economic cycle or industry-specific dynamics.

Moreover, the timing of the repurchase, market conditions and other considerations indicate that Old Republic is taking a strategic approach to capital management. The use of Rule 10b5-1 plans ensures that repurchases are executed in a non-discretionary manner, which can protect the company from potential legal scrutiny regarding insider trading, particularly in volatile market conditions.

CHICAGO, March 1, 2024 /PRNewswire/ -- Old Republic International Corporation (NYSE: ORI) – today announced that its Board of Directors has authorized a $1.10 billion share repurchase program. The Company recently completed its previously announced $450 million share repurchase program authorization.

Under the share repurchase program, Old Republic may purchase shares on a discretionary basis from time to time through open market purchases, private negotiated transactions or other means. The timing and amount of any transactions will be conducted subject to the discretion of Old Republic based upon valuation, market conditions and other considerations. Old Republic may also from time to time repurchase shares pursuant to written, pre-arranged Rule 10b5-1 plans, which will be established and conducted in accordance with applicable regulations. The repurchase program is intended to comply with Rule 10b-18 and has no expiration date, does not require the purchase of any minimum number of shares, and may be suspended, modified or discontinued at any time without prior notice.

In reaching its decision to authorize the share repurchase program, the Board of Directors evaluated such factors as the current and foreseeable liquidity and capital needs of the parent holding company and its insurance company subsidiaries.

Craig R. Smiddy, President and CEO, commented, "Today's announcement authorizing the return of $1.1 billion to shareholders continues a long history of prudent capital management. It reflects the strength of our balance sheet and continued confidence in the growth and earnings potential of our diversified portfolio of specialty insurance businesses."

Since December 31, 2018, Old Republic has returned over $3.5 billion to shareholders through regular and special cash dividends and share repurchases. As separately announced, the new annualized regular cash dividend rate of $1.06 per share, an 8.2% increase, marks the 43^rd consecutive year that Old Republic has increased its regular cash dividend and the 83^rd year of uninterrupted regular cash dividend payments.

About Old Republic

Chicago-based Old Republic International Corporation is one of the nation's 50 largest shareholder-owned insurance businesses. It is a member of the Fortune 500 listing of America's largest companies. 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. Old Republic's general insurance business ranks among the nation's 50 largest, while its title insurance business is the third largest in its industry.

For Old Republic's latest news releases and other corporate documents: Please visit us at www.oldrepublic.com
Alternatively, please write or call:  Investor Relations Old Republic International Corporation 307 North Michigan Avenue, Chicago, IL 60601  (312) 346-8100

 

At Old Republic:	At Financial Relations Board:
Craig R. Smiddy: President and Chief Executive Officer	Analysts/Investors: Joe Calabrese 212/827-3772

 

View original content:https://www.prnewswire.com/news-releases/old-republic-announces-share-repurchase-authorization-302076622.html

SOURCE Old Republic International Corporation

FAQ

What is the total amount authorized for Old Republic's share repurchase program?

Old Republic authorized a $1.10 billion share repurchase program.

What factors did the Board of Directors consider before authorizing the share repurchase program?

The Board evaluated factors such as the liquidity and capital needs of the parent holding company and its insurance subsidiaries.

Who commented on the share repurchase program authorization?

Craig R. Smiddy, President and CEO, commented on the authorization.

How much has Old Republic returned to shareholders since December 31, 2018?

Old Republic has returned over $3.5 billion to shareholders since December 31, 2018.

How many consecutive years has Old Republic increased its regular cash dividend?

Old Republic has increased its regular cash dividend for 43 consecutive years.

What is the new annualized regular cash dividend rate per share?

The new annualized regular cash dividend rate is $1.06 per share, an 8.2% increase.

What is the significance of the share repurchase program for Old Republic?

The program reflects the company's prudent capital management and confidence in the growth of its specialty insurance businesses.