Old Republic International (NYSE:ORI) reported lower second-quarter operating earnings as weaker specialty insurance underwriting results offset a stronger performance in its title insurance segment, management said on the company’s earnings call.
President and CEO Craig Smiddy said consolidated pre-tax operating income was $238 million in the second quarter of 2026, down from $268 million in the prior-year period. The consolidated combined ratio was 95.3%, compared with 93.6% a year earlier. The company’s annualized operating return on beginning equity was 12.1%, while book value per share, including dividends, increased 7.2% during the first six months of the year.
Specialty Insurance Results Weaken on Reserve Strengthening
Old Republic’s specialty insurance segment produced $199 million of pre-tax operating income, down from $254 million a year earlier. Net premiums earned increased 2.3% from the second quarter of 2025, while net premiums written rose 1.6% after excluding what Smiddy described as “noise” related to an auto warranty business written in the company’s auto warranty operating company.
The specialty insurance combined ratio rose to 95.5% from 90.7% a year earlier. Smiddy said the segment’s loss ratio was 65.9%, including 0.3 percentage points of unfavorable prior-year loss reserve development. That compared with a 62.5% loss ratio in the prior-year quarter, which included 2.9 percentage points of favorable development.
Sodaro said the company’s runoff transactional risk business had “poor claims experience,” which led to $40 million of reserve strengthening in the quarter. He noted that Old Republic placed the business into runoff in 2024. Outside of that runoff business, Sodaro said property and commercial auto had significant favorable reserve development, workers’ compensation had favorable development that was “considerably lower” than the prior year, and general liability had a moderate level of unfavorable development.
Smiddy said the specialty insurance expense ratio was 29.6%, up from 28.2% a year earlier, with most of the increase tied to investments in new specialty operating companies, technology modernization, data analytics and artificial intelligence.
Commercial Auto Rates Rise, Workers’ Compensation Premiums Decline
In commercial auto, net premiums written rose 3.6% in the quarter, and the loss ratio was 69.4%, about 1 percentage point better than a year earlier. Smiddy said the improvement reflected a higher level of favorable prior-year reserve development, partially offset by a more conservative current accident-year loss ratio.
Rate increases in commercial auto were in the high teens and were higher than in the first quarter, Smiddy said, adding that the increases were greater than current loss trends the company is observing. He also said commercial auto retention ratios improved as competitors began implementing higher rate increases in response to higher loss trends.
Workers’ compensation net premiums written fell 8.4% in the quarter. The loss ratio was 60.6%, compared with 48.5% in the second quarter of 2025, with most of the change tied to a larger amount of favorable prior-year reserve development in the year-ago quarter. Smiddy said Old Republic held workers’ compensation rates flat, severity loss trends remained consistent and frequency loss trends continued to decline.
Smiddy said the company is seeing “some top-line pressure stemming from generally a competitive marketplace” but remains focused on risk-adequate pricing. In response to an analyst question about property pricing, he said catastrophe-exposed property is not a large part of Old Republic’s portfolio and that total property rates were down about 7.5% for the company.
Title Insurance Revenue and Profitability Improve
Old Republic’s title insurance segment reported premium and fee revenue of $773 million, up 11% from the second quarter of 2025, according to Carolyn Monroe, president and CEO of Old Republic National Title Insurance Group. Smiddy said title premiums and fees increased 10%, while the segment generated $56 million of pre-tax operating income, up from $24 million a year earlier.
Monroe said residential transactions improved after a slow seasonal start, while commercial activity remained strong. Premiums produced in direct title operations increased 6%, while agency-produced premiums rose 12% and represented 78% of revenue, up from 77% in the prior-year quarter.
Commercial premiums increased and accounted for 25% of premiums earned, compared with 23% a year earlier. Monroe said the company saw “a wide mix of transactions across many segments of the commercial sector.” Asked about data center and infrastructure projects, she said data centers are large transactions that generally involve multiple title companies, and that Old Republic is also seeing activity in industrial projects and hospitality.
The title segment’s combined ratio improved to 95.1% from 99% a year earlier. Monroe said the expense ratio improved by 4 percentage points to 92.1%, with about half of the improvement tied to a one-time litigation settlement expense in the second quarter of 2025. The rest reflected operational efficiency, expense management and higher transaction volumes, partly offset by higher agent commissions due to a greater mix of agency business.
Monroe said Old Republic remains focused on improving operational efficiency and expanding margins, including through its partnership with Qualia and the rollout of a new operating system. Implementation began earlier this year and is expected to continue through the end of next year.
Investment Income, Buybacks and ECM Acquisition
Sodaro said net investment income increased just over 6% in the quarter, primarily due to a larger investment base from operating results and a debt issuance completed in May. The average rate on corporate bonds acquired during the quarter was 4.9%, compared with an average yield of about 4.2% on bonds rolling off. The bond portfolio’s book yield ended the quarter at 4.8%, slightly higher than at year-end.
Book value per share was $25.33 at quarter-end. During the quarter, Old Republic paid nearly $77 million in dividends and repurchased $61 million of shares, leaving about $640 million remaining under its current repurchase program.
Smiddy said the company continues to view share repurchases as a way to return capital to shareholders but will remain opportunistic and mindful of the impact on book value per share. He said Old Republic could also consider a special dividend near year-end if it believes it has excess capital.
Management also discussed the company’s acquisition of ECM. Sodaro said Old Republic expects to report a bargain purchase gain on the acquisition next quarter and expects ECM’s results to be accretive to earnings and book value this year. ECM reported direct premiums written of just under $220 million in 2025 and ended that year with estimated GAAP equity of $145 million.
Smiddy said ECM has the same combined ratio targets as Old Republic’s other companies, between 90% and 95% over time, and that ECM produced “very strong” combined ratios in the first two quarters of 2026. He said Old Republic has eliminated ECM’s external quota share effective July 1 and is working to include ECM in its corporate treaties.
In closing, Smiddy said the company feels good about its prospects for the third and fourth quarters, citing “very solid” fundamentals in specialty insurance and brighter prospects in title insurance.
About Old Republic International (NYSE:ORI)
Old Republic International Corporation, through its subsidiaries, engages in the insurance underwriting and related services business primarily in the United States and Canada. It operates through three segments: General Insurance, Title Insurance, and Republic Financial Indemnity Group Run-off Business. The General Insurance segment offers aviation, commercial auto, commercial multi-peril, commercial property, general liability, home and auto warranty, inland marine, travel accident, and workers' compensation insurance products; and financial indemnity products for specialty coverages, including errors and omissions, fidelity, directors and officers, and surety.
