Old Republic Special Dividend Letter To The Shareholders

Rhea-AI Summary

On December 18, 2020, Old Republic International Corporation (NYSE: ORI) announced a special cash dividend of $1.00 per share, set for payment on January 15, 2021. Shareholders must be on record by January 5, 2021 to qualify. This decision reflects the Board of Directors' assessment of the company's financial health and aims to enhance shareholder value. The details are further explained in a letter to shareholders available on the company’s website.

Positive

• Declared a special cash dividend of $1.00 per share, enhancing shareholder returns.

Negative

• None.

CHICAGO, Jan. 6, 2021 /PRNewswire/ -- On December 18, 2020, the Board of Directors of Old Republic International Corporation (NYSE: ORI) declared a special, one-time cash dividend of $1.00 per share payable on January 15, 2021 to shareholders of record on January 5, 2021.  The attached letter to shareholders provides further background and context to the Board's evaluation relative to this special dividend.  The letter has also been posted to the ORI website.

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. A long-term interest in mortgage guaranty and consumer credit indemnity coverages has devolved to a run-off operating mode in recent years. Old Republic's general insurance business ranks among the nation's 50 largest, while its title insurance operations are the third largest in its industry.

The nature of Old Republic's business requires that it be managed for the long run, and its cash dividend policy reflects this long-term orientation. Here's a summary of recent years' total book and market returns, which includes the addition and reinvestment of cash dividend payments, in comparison with the financial performance of three selected indices similarly developed.

 

	ORI			Selected Indices' Compounded
	Annual		Annual	Total Annual Returns
	Book Value		Market Value	Nominal		S & P
	Compounded		Compounded	Gross	S & P	P&C
	Total		Total	Domestic	500	Insurance
	Return		Return	Product	Index	Index
Ten Years 2000 - 2009	9.5%		7.4%	4.1%	-1.0%	4.7%
Ten Years 2010 - 2019	7.7%		14.8%	4.0%	13.6%	14.5%
Twenty Years 2000 - 2019	8.6%		11.0%	4.1%	6.1%	9.5%

 

According to the most recent edition of Mergent's Dividend Achievers, Old Republic is listed in 58th place among just 113 qualifying publicly held companies, out of thousands considered, that have posted at least 25 consecutive years of annual dividend growth.

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

January 6, 2021

Dear Shareholders:

On January 15, 2021, all shareholders of record on January 5 will receive a one-time special cash dividend of $1.00 per share.  As this year begins, it seems a good time to tell you more about why we decided to return this significant amount of capital to investors.

Why the Board of Directors Declared this Special Dividend

Near the end of each year, Directors evaluate Old Republic's capital position in relation to the business's long-term strategy.

Nearly all of ORI's capital is allocated and managed through 26 regulated insurance companies. Each focuses on offering many insurance and related products to core industries in the North American economy. State insurance regulations define the types of coverages our separately chartered companies may underwrite. We observe these regulatory distinctions and accounting conventions in our financial reports.

However, we manage the business as a whole. This means we consider two key factors. First: each subsidiary's underwriting disciplines and the balance sheet leverage that reflects its risk profile. Second: the risk management aspects of the entire enterprise. Here is some useful background and tables that describe how we do this.

We Have Sound Capital Allocation

Table A reflects the past several years' capital allocation trends for each of the regulatory groupings of insurance underwriting subsidiaries.

The Board and Senior Management use a number of Enterprise Risk Management tools and controls to evaluate our operations. These consider such important matters as maintaining high financial ratings, plus the financial and business expectations of each subsidiary's customer base. As a result, we determined ORI has enough appropriately allocated capital in all regards, including a reasonable cushion.

In addition, several years of favorable operating results for most subsidiaries enabled them to safely raise their dividend payments to the ORI holding company. The funds have been used principally to 1) pay regular cash dividends to our shareholders, and 2) add equity capital to several startups or long-operating subsidiaries in periodic need of capital support.

These dividend receipts exceeded those outlays and generated excess funds. These favorable results and the current evaluation of capital levels enabled Directors to declare the additional special dividend.

It's worth noting the table shows a continuing commitment of capital to a previously active operation-the RMIC mortgage guaranty group of companies. This was placed in run-off mode in 2012, and the business remains highly capitalized, at $435 million. As we've reported in the past, our objective is to manage RMIC in an economically efficient and rewarding manner by: 1) selling the business to a cash buyer interested in its re-activation, or 2) holding it for a few years until nearly all of the insurance risk in force dissipates. We're confident that either scenario will allow us to recoup cash equal to any accumulated capital balance, plus more for a variety of meaningful intangible values. With necessary regulatory approvals, we expect to gradually extract and repurpose the capital it generates.

We Specialize in Major Industries

Table B shows an average 91% of consolidated premium and fee revenue comes from three industry groupings. These account for nearly 55% of the nation's GDP. Most major subsidiaries in the regulatory reporting segments contribute to the largest of those three industry groups (see Tables C and D).

Concentrating on industries we know well is at the core of our long-term strategy. Our primary goal is to achieve underwriting profitability over industry and economic cycles. Experience has shown that a greater possibility of long-term success rests on the following approaches to enterprise-wide, insurance risk management:

• Select insurance coverages that are more counter-cyclical in product demand and market-pricing sensitivity
• Select industries that tend to be counter-cyclical to achieve greater stability of revenue and profit
• Combine industry specialization with expertise in selecting and pricing insurance coverages in which we have strong competencies

Our Approach to Underwriting Balances Profitability Over Cycles

Table C shows the positive and steadying impact these underwriting approaches have on balancing our profitability over cycles. Together with the underlying strength of ORI's balance sheet, our focused underwriting helped us weather many economic downturns, including the Great Recession. During those years and their aftermath (2008 to 2012), our balance sheet stood strong. This shows the necessity of a diversified book of business that advances ORI's long-term objectives in the best interests of our shareholders and other stakeholders.

Table D also shows the complementary and usually positive effects that the general economy and specific markets' cyclical differences can have on overall underwriting profitability (see the first three columns in this table). ORI's consolidated management of invested assets, corporate taxation, and capital resources is highly sensitive and responsive to those outcomes. They are primarily geared to individual underwriting subsidiaries' needs and reliance on capital stability and growth to achieve their objectives in the interest of the entire enterprise.

We maintain a certain amount of permanent or debt capital for acquiring or starting new businesses. Our deep and continually updated knowledge of the insurance landscape gives us an edge in this regard. Lately, we have not seen any opportunities to purchase businesses that fit our competencies and culture. This means we're largely focused on organic growth. We believe there are very good opportunities to: 1) retain our currently balanced, diversified book of underwriting exposures, 2) gain market share, and 3) participate in the growth of the industries we serve.

We Manage Our Business for the Long Run

In our many years' stewardship, we have steadfastly managed our business for the long run. This recognizes its nature as a long-term undertaking that sustains resources essential to our business.  As a publicly traded company, however, we are keenly aware of the common and varying interests of our investors: individuals and large to small fiduciary institutions.

Throughout the years we have believed—and shown—that a meaningful measure of Old Republic's stock performance is its total market return over five- to 10- year periods. This measure includes price appreciation, and intangible values that free markets may attribute at any point. We also measure our financial performance by calculating the total book return based on the actual, measurable results we can effect and achieve as business managers. The total book return calculation combines all cash dividends with the change in shareholders' equity.

Table E shows the 52 years since ORI became a publicly traded company. You can see the total market returns to shareholders exceeded those of generally accepted baseline indices most of the time. The returns have greatly benefitted all shareholders.  These include ORI's intellectual capital providers who—together and through the Company's Employees Savings and Stock Ownership Plan and other benefit plans, and the direct holdings of our senior officers and Board members—represent 8.9% of outstanding shares. For the group as a whole, these aggregate holdings of 27 million shares place them as the second largest shareholder group. This follows Black Rock, Inc., the world's biggest money management institution and our largest stockholder.

We hope this letter provides timely and pertinent context to the thinking that led to the declaration of this latest special cash dividend.

Sincerely,
On behalf of Old Republic's Board of Directors,                                                      

Craig R. Smiddy	Aldo C. Zucaro
President and Chief Executive Officer	Chairman of the Board

														Table A
Capital Management: Trends and Objectives
Old Republic's blended capital allocation process is principally driven by enterprise risk management considerations based on the attained and prospective growth of regulated insurance underwriting subsidiaries and the ensuing balance sheet leverage.
		Capital Allocation Percentages by Regulatory Insurance Groups
Actual as of December 31,*		General		Title		Subtotal		Life & Accident		Other		RFIG  Run-off		Consolidated
2006		59.5%		8.6%		68.1%		2.2%		0.1%		29.6%		100.0%
2007		61.3%		8.8%		70.1%		2.4%		-0.1%		27.6%		100.0%
2008		62.7%		9.7%		72.4%		2.4%		0.3%		24.9%		100.0%
2009		68.3%		10.3%		78.6%		2.5%		1.3%		17.6%		100.0%
2010		71.0%		10.2%		81.2%		2.4%		3.0%		13.4%		100.0%
2011		80.0%		11.1%		91.1%		2.4%		2.0%		4.5%		100.0%
2012		83.7%		13.3%		97.0%		2.4%		2.0%		-1.4%		100.0%
2013		82.2%		13.7%		95.9%		2.1%		2.3%		-0.3%		100.0%
2014		78.0%		13.6%		91.6%		1.7%		2.3%		4.4%		100.0%
2015		78.2%		13.7%		91.9%		1.2%		1.6%		5.3%		100.0%
2016		78.0%		13.9%		91.9%		1.1%		0.5%		6.5%		100.0%
2017		76.5%		13.3%		89.8%		0.8%		1.8%		7.6%		100.0%
2018		76.5%		13.8%		90.3%		0.7%		0.9%		8.1%		100.0%
2019		75.5%		13.8%		89.3%		0.7%		2.4%		7.6%		100.0%
2020 - Nine Months		76.4%		14.8%		91.2%		0.8%		1.1%		6.9%		100.0%
Current Long-Term Objectives		82.5%		15.0%		N/A		1.0%		1.5%		0.0%		100.0%
* Percentages are inclusive of all capital instruments.

 

																		Table B
Insurance Underwriting Long-Focused on Industry Specialization
In addition to its insurance coverage concentrations (see Table D), Old Republic's long-term underwriting success in its single business of insurance is most significantly due to its long history of specialization in cyclically heterogeneous industries that are at the core of the North American economy.
		Percent of Premiums and Fees Volume by Industry Groupings Underlying Specialization
						General				Natural
		Banking,				Manufacturing				Energy
		Construction,				& Services,				Resources
		Finance,				Retail &		Subtotal		(Coal, Gas, Oil,
Years Ended		Housing &		Air, Land & Sea		Wholesale		Top 3		Utlities, Wind		Education &
December 31,		Real Estate		Transportation		Trade		Industries		& Turbines)		Government		Health Care		All Other		Total
2006		53.6%		27.6%		8.0%		89.2%		4.0%		2.2%		0.2%		4.4%		100.0%
2007		54.8%		24.9%		9.9%		89.6%		3.7%		2.0%		0.2%		4.5%		100.0%
2008		53.5%		24.7%		12.8%		91.0%		4.0%		0.3%		0.2%		4.5%		100.0%
2009		54.7%		23.9%		13.5%		92.1%		3.4%		0.4%		0.5%		3.6%		100.0%
2010		55.5%		24.6%		11.9%		92.0%		2.9%		0.4%		0.8%		3.9%		100.0%
2011		51.6%		22.4%		16.4%		90.4%		2.7%		1.2%		2.4%		3.3%		100.0%
2012		52.5%		22.8%		14.9%		90.2%		2.7%		1.8%		2.4%		2.9%		100.0%
2013		54.0%		22.0%		15.2%		91.2%		2.6%		1.4%		2.2%		2.6%		100.0%
2014		49.7%		23.3%		17.5%		90.5%		3.0%		1.3%		2.5%		2.7%		100.0%
2015		50.9%		23.6%		17.4%		91.9%		2.5%		1.0%		2.4%		2.2%		100.0%
2016		50.3%		24.2%		17.0%		91.5%		2.2%		1.1%		2.1%		3.1%		100.0%
2017		48.5%		24.4%		18.6%		91.5%		2.2%		0.8%		1.8%		3.7%		100.0%
2018		47.7%		24.8%		18.8%		91.3%		2.4%		1.0%		1.6%		3.7%		100.0%
2019		47.6%		25.3%		18.5%		91.4%		2.3%		1.5%		1.3%		3.5%		100.0%
2020 *
Average
2006-2019		51.8%		24.2%		15.0%		91.0%		2.9%		1.2%		1.5%		3.5%		100.0%
Most Recent
GDP Industry
Distributions**		23.9%		3.6%		27.3%		54.8%		2.9%		11.8%		6.9%		23.6%		100.0%
* Full year 2020 data not available but is not expected to reflect any significant departure from that of 2019.
** Derived from data published by the U.S. Department of Commerce at https://apps.bea.gov/iTable/iTable.cfm?reqid=150&step=2&isuri=1&categories=ugdpxind.

 

										Table C
Specialized Balance of Business:
Leads to Greater Stability of Long-Term Operating Margins*
The long-term success of Old Republic's single business of insurance underwriting has been due to the sale of insurance products delivered through four groups of state-regulated insurance underwriting subsidiaries (see Tables B and D for industry specialization and insurance coverages sold).
								RFIG
Years Ended December 31,		General (**)		Title		Subtotal		Run-off (**)		Consolidated
2006		19.9%		3.2%		14.0%		49.1%		19.4%
2007		21.1%		-1.7%		14.2%		-14.8%		8.6%
2008		20.3%		-7.1%		13.0%		-83.2%		-10.0%
2009		18.7%		0.2%		12.3%		-78.0%		-8.3%
2010		18.7%		0.8%		11.2%		-69.0%		-2.3%
2011		16.8%		2.7%		11.2%		-144.6%		-8.7%
2012		11.2%		4.4%		8.4%		-123.9%		-3.9%
2013		11.5%		6.2%		9.1%		34.8%		10.7%
2014		8.1%		5.7%		7.1%		4.0%		7.0%
2015		11.6%		8.2%		10.2%		13.4%		10.4%
2016		10.9%		9.5%		10.3%		41.1%		11.5%
2017		10.9%		10.4%		10.7%		-59.8%		9.3%
2018		11.1%		9.4%		10.4%		65.7%		11.8%
2019		10.8%		9.3%		10.1%		51.2%		11.4%
2020 - Nine Months		12.0%		10.2%		11.2%		22.8%		11.9%
Latest 5 Years' Average		11.1%		9.3%		10.3%		22.3%		10.9%
Latest 10 Years' Average		12.2%		6.6%		9.9%		-18.7%		5.7%
OBJECTIVES 2020 - 2024		11.0% - 13.0%		7.0% - 11.0%		10.0% - 12.0%		N/A		10.0 - 12.0%
* Pretax operating income (loss) as a percentage of net premiums and fees earned.
** Effective July 1, 2019, immaterial results of the Consumer Credit Indemnity (CCI) run-off business have been classified within the General Insurance Group for all future periods.

 

 

										Table D
Insurance Underwriting: Long-Focused on Selected Insurance Coverages Offered through 26 Regulated Insurers Assigned to Four Regulatory Defined Segments
The long-term success of Old Republic's single business of insurance underwriting has resulted from the blending of industry specialization (see Table B), types of insurance coverages (see Tables C and D), and a capital allocation process that maximizes utilization among regulated insurance underwriting subsidiaries to promote greater operating returns (see Table C).
		Combined Underwriting Ratios*
								RFIG
Years Ended December 31,		General		Title		Subtotal		Run-off		Consolidated
2006		92.4%		99.5%		95.5%		64.2%		90.0%
2007		91.3%		104.7%		95.4%		126.0%		101.5%
2008		93.1%		110.6%		97.8%		194.1%		120.9%
2009		95.6%		101.7%		97.7%		189.1%		118.5%
2010		94.7%		101.0%		97.5%		182.3%		111.4%
2011		94.4%		99.0%		96.2%		252.6%		115.8%
2012		98.7%		96.8%		97.9%		232.2%		110.4%
2013		97.3%		94.7%		96.1%		76.9%		95.0%
2014		100.8%		95.6%		98.8%		106.7%		99.4%
2015		97.6%		93.2%		95.7%		98.0%		96.0%
2016		97.8%		91.7%		95.2%		72.6%		94.6%
2017		97.3%		90.9%		94.6%		177.5%		96.7%
2018		97.2%		92.1%		95.1%		60.9%		94.7%
2019		97.5%		92.2%		95.3%		78.5%		95.1%
2020 - Nine Months		96.5%		91.2%		94.0%		110.7%		94.2%
Average 2015 - 2020		97.3%		91.9%		95.0%		99.7%		95.2%
Average 2006 - 2020		96.1%		97.0%		96.2%		134.8%		102.3%
Long-Term Objectives		90.0% - 95.0%		90.0% - 95.0%		90.0% - 95.0%		N/A		90.0% - 95.0%
* Represents the sum of the ratio of claims & claim expenses and the ratio of general expenses, both taken as percentages of premiums and fees revenues.

 

 

									Table E
Total Returns Compared to Nominal GDP & Selected S&P Indices' Returns
	Old Republic International Corporation (1)						Nominal Gross Domestic Product (GDP)(2)	S&P 500 Index (3)	S&P P&C Insurance Index (3)
Year	Year End Book Value	Year End Market Price	Annual Cash Dividend Declared		Total Book Value Annual & Compounded Return	Total Market Annual & Compounded Return	Total Annual & Compounded Return	Total Annual & Compounded Return	Total Annual & Compounded Return
1968	$0.280	$0.472	$0.007		18.2%	41.8%	9.4%	11.0%
1969	0.312	0.336	0.010		15.1%	-26.6%	8.2%	-8.4%
1970	0.360	0.528	0.012		19.2%	60.7%	5.5%	3.9%
1971	0.472	0.840	0.014		34.9%	61.7%	8.5%	14.3%
1972	0.480	1.240	0.016		5.1%	49.5%	9.8%	19.0%
1973	0.472	0.456	0.018		2.2%	-61.7%	11.4%	-14.7%
1974	0.376	0.408	0.020		-16.1%	-6.1%	8.4%	-26.5%
1975	0.288	0.440	0.020		-18.1%	12.7%	9.0%	37.2%
1976	0.560	0.624	0.011		98.3%	44.4%	11.2%	23.9%
1977	0.792	0.792	0.022		45.3%	30.4%	11.1%	-7.2%
1978	0.976	0.976	0.033		27.4%	27.4%	13.0%	6.6%
1979	1.080	1.112	0.052		16.0%	19.3%	11.7%	18.6%
10 Year Annual Compound Growth Rate					17.6%	16.2%	9.9%	5.9%
1980	1.224	0.888	0.054		18.3%	-15.3%	8.8%	32.5%
1981	1.392	1.144	0.054		18.1%	34.9%	12.2%	-4.9%
1982	1.648	1.456	0.056		22.4%	32.2%	4.3%	21.6%
1983	1.888	2.353	0.058		18.1%	65.6%	8.7%	22.6%
1984	2.208	2.039	0.059		20.1%	-11.2%	11.1%	6.3%
1985	2.304	3.014	0.062		7.1%	51.4%	7.5%	31.7%
1986	2.528	2.316	0.065		12.5%	-21.0%	5.5%	18.7%
1987	2.952	1.861	0.068		19.5%	-16.7%	6.0%	5.3%
1988	3.152	2.345	0.071		9.2%	29.8%	7.9%	16.6%
1989	3.544	2.604	0.076		14.8%	14.3%	7.7%	31.7%
10 Year Annual Compound Growth Rate					15.9%	12.6%	7.9%	17.6%
1990	3.920	2.465	0.081		12.9%	-2.2%	5.7%	-3.1%	-2.3%
1991	4.456	4.207	0.086		15.9%	-74.2%	3.3%	30.5%	25.3%
1992	5.072	5.896	0.094		15.9%	42.7%	5.9%	7.6%	17.2%
1993	5.744	5.363	0.102		15.3%	-7.3%	5.2%	10.1%	-1.8%
1994	6.112	5.037	0.111		8.3%	-4.0%	6.3%	1.3%	4.8%
1995	7.248	8.415	0.121		20.6%	70.1%	4.8%	37.6%	35.4%
1996	7.768	9.511	0.148		9.2%	15.1%	5.7%	23.0%	21.5%
1997	8.312	13.222	0.178		9.3%	41.2%	6.2%	33.4%	45.5%
1998	9.216	12.000	0.206		13.4%	-7.8%	5.7%	28.6%	-6.6%
1999	9.590	7.267	0.262		6.9%	-37.5%	6.3%	21.0%	-25.5%
10 Year Annual Compound Growth Rate					12.7%	13.1%	5.5%	18.2%	10.8%
2000	11.000	17.066	0.294		17.8%	142.1%	6.5%	-9.1%	55.9%
2001	12.480	14.938	0.314		16.3%	-10.6%	3.2%	-11.9%	-8.1%
2002	13.960	14.934	0.336		14.6%	2.0%	3.4%	-22.1%	-11.0%
2003	15.650	20.288	0.890	*	18.5%	42.4%	4.8%	28.7%	26.4%
2004	16.940	20.240	0.403		10.8%	1.9%	6.6%	10.9%	10.4%
2005	17.530	21.008	1.312	*	11.2%	10.5%	6.7%	4.9%	15.1%
2006	18.910	23.280	0.590		11.2%	13.9%	6.0%	15.8%	12.8%
2007	19.710	15.410	0.630		7.6%	-31.5%	4.6%	5.6%	-14.0%
2008	15.910	11.920	0.670		-15.9%	-18.0%	1.8%	-37.0%	-29.4%
2009	16.490	10.040	0.680		7.9%	-10.1%	-1.8%	26.5%	12.4%
10 Year Annual Compound Growth Rate					9.5%	7.4%	4.1%	-1.0%	4.7%
2010	16.160	13.630	0.690		2.2%	43.4%	3.8%	15.1%	8.9%
2011	14.760	8.920	0.700		-4.3%	-27.2%	3.7%	2.1%	-0.3%
2012	14.030	10.650	0.710		-0.1%	23.4%	4.2%	16.0%	20.1%
2013	14.640	17.270	0.720		9.5%	70.7%	3.6%	32.4%	38.3%
2014	15.150	14.630	0.730		8.5%	-11.2%	4.4%	13.7%	15.7%
2015	14.980	18.630	0.740		3.8%	33.4%	4.0%	1.4%	9.5%
2016	17.160	19.000	0.750		19.6%	6.2%	2.7%	11.9%	15.7%
2017	17.720	21.380	1.760	*	13.5%	16.9%	4.3%	21.8%	22.4%
2018	17.230	20.570	0.780		1.6%	4.8%	5.4%	-4.4%	-4.7%
2019	$19.980	$22.370	$1.800	*	26.4%	17.8%	4.0%	31.5%	25.9%
10 Year Annual Compound Growth Rate					7.7%	14.8%	4.0%	13.6%	14.5%
52 Year Annual Compound Growth Rate					12.8%	12.4%	6.4%	10.2%	9.5%
Note: (*) Includes special cash dividends of $1.000, $1.000, $0.800, and $0.534 per share at September 2019 and December 2017, 2005, and 2003, respectively.
Sources: (1) Old Republic Database / (2) Nominal Gross Domestic Product from Federal Reserve Bank St. Louis. / (3) Standard & Poor's Indices from S&P Global Market Intelligence LLC. Data for years 1989 and prior is not available for the S&P P&C Insurance Index.

 

Safe Harbor Statement

Historical data pertaining to the operating results, liquidity, and other performance indicators applicable to an insurance enterprise such as Old Republic are not necessarily indicative of results to be achieved in succeeding years. In addition to the factors cited below, the long-term nature of the insurance business, seasonal and annual patterns in premium production and incidence of claims, changes in yields obtained on invested assets, changes in government policies and free markets affecting inflation rates and general economic conditions, and changes in legal precedents or the application of law affecting the settlement of disputed and other claims can have a bearing on period-to-period comparisons and future operating results. Furthermore, due to the financial market and economic disruptions caused by the COVID-19 pandemic and the associated governmental responses, it is therefore possible that Old Republic's operating results, business and financial condition could be adversely affected in subsequent periods depending on the length and severity of these disruptions.

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 Old Republic's General Insurance segment, its results can be particularly affected by the level of market competition, which is typically a function of available capital and expected returns on such capital among competitors, the levels of investment yields and inflation rates, and periodic changes in claim frequency and severity patterns caused by natural disasters, weather conditions, accidents, illnesses, work-related injuries, and unanticipated external events. Title Insurance and RFIG Run-off results can be affected by similar factors, and by changes in national and regional housing demand and values, the availability and cost of mortgage loans, employment trends, and default rates on mortgage loans. Life and accident insurance earnings can be affected by the levels of employment and consumer spending, changes in mortality and health trends, and alterations in policy lapsation rates. At the parent holding company level, operating earnings or losses are generally reflective of the amount of debt outstanding and its cost, interest income on temporary holdings of short-term investments, and period-to-period variations in the costs of administering the Company's widespread operations.

The General Insurance, Title Insurance, Corporate and Other Segments, and the RFIG Run-off business maintain customer information and rely upon technology platforms to conduct their business. As a result, each of them and the Company are exposed to cyber risk. Many of the Company's operating subsidiaries maintain separate IT systems which are deemed to reduce enterprise-wide risks of potential cybersecurity incidents. However, given the potential magnitude of a significant breach, the Company continually evaluates on an enterprise-wide basis its IT hardware, security infrastructure and business practices to respond to these risks and to detect and remediate in a timely manner significant cybersecurity incidents or business process interruptions.

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 2019 Form 10-K Annual Report filing to the Securities and Exchange Commission, which is specifically incorporated herein by reference.

Any forward-looking statements or commentaries speak only as of their dates. Old Republic undertakes no obligation to publicly update or revise any and all such comments, whether as a result of new information, future events or otherwise, and accordingly they may not be unduly relied upon.  

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

 

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SOURCE Old Republic International Corporation