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Item 2 — Management's Discussion and Analysis
Old Republic International Corp · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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Six Months Ended June 30, 2026 and 2025
($ in Millions, Except Per Share Data)
OVERVIEW
This management discussion and analysis of financial condition and results of operations pertains to the consolidated accounts of Old Republic International Corporation, its subsidiaries, and any variable interest entities that meet the requirements for consolidation (collectively, "Old Republic" or "the Company"). The Company conducts its business through a number of operating companies, which utilize one or more insurance company subsidiaries to issue their policies, and is organized into two segments: Specialty Insurance and Title Insurance. A small life and accident insurance business, accounting for 0.1% of consolidated operating revenues for the six months ended June 30, 2026 and 0.3% of consolidated assets as of that date, is included within the Corporate & Other caption of this report.
The consolidated accounts are presented in conformity with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) of accounting principles generally accepted in the United States of America (GAAP). As a publicly held company, Old Republic utilizes GAAP to comply with the financial reporting requirements of the Securities and Exchange Commission (SEC). The FASB and SEC periodically issue various releases, most of which require additional financial statement disclosures and provide related application guidance. Recent guidance issued by the FASB is summarized further in the Notes to Consolidated Financial Statements where applicable.
As a state-regulated financial institution vested with the public interest, however, business of the Company's insurance subsidiaries is managed pursuant to the laws, regulations, and accounting practices of the various states in the U.S. and those of a small number of other jurisdictions outside the U.S. in which they operate. In comparison with GAAP, the statutory accounting practices generally reflect greater conservatism and comparability among insurers and are intended to address the primary financial security interests of policyholders and their beneficiaries. Additionally, these practices also affect a significant number of important factors such as product pricing, risk bearing capacity and capital adequacy, the determination of federal income taxes payable currently among Old Republic's tax-consolidated entities, and the upstreaming of dividends and payment of interest and principal on surplus notes by insurance subsidiaries to the parent holding company. The major differences between these statutory accounting practices and GAAP are summarized in Note 1 in the Notes to Consolidated Financial Statements included in Old Republic's 2025 Annual Report on Form 10-K.
The insurance business is distinguished from most others in that the prices (premiums) charged for most products are set without knowing what the ultimate loss costs will be. The Company also cannot know exactly when claims will be paid, which may be many years after a policy was issued or expired. This casts Old Republic as a risk-taking enterprise managed for the long run. Old Republic therefore conducts its business with a primary focus on achieving favorable underwriting results over cycles, and on maintaining a sound financial condition to support its long-term obligations to policyholders and their beneficiaries. To achieve these objectives, adherence to insurance risk management principles is stressed, and asset diversification and quality are emphasized. In addition, management engages in an ongoing assessment of operating risks that could adversely affect the Company's business and reputation.
In addition to income arising from Old Republic's basic underwriting and related services functions, significant investment income is earned from invested funds generated by those functions and from capital required to support the risk of the underlying business. Investment management aims for stability of income from interest and dividends, protection of capital, and for sufficiency of liquidity to meet insurance underwriting and other obligations as they become payable in the future. Securities trading and the realization of capital gains are not primary objectives. The investment philosophy is therefore best characterized as emphasizing value, credit quality, and relatively long-term holding periods. The Company's ability to hold both fixed income and equity securities for long periods of time is enabled by the scheduling of maturities in contemplation of an appropriate matching of assets and liabilities, and by investments in dividend-paying, publicly traded, large capitalization, highly liquid equity securities.
In light of the above factors, the Company is managed for the long run and with little regard to quarterly or even annual reporting periods. These time frames are too short. Management believes results are best evaluated by looking at underwriting and overall operating performance trends over 10-year intervals. These likely include one or two economic and/or underwriting cycles. This provides enough time for these cycles to run their course, for premium rate changes and subsequent underwriting results to be reflected in financial statements, and for reserved loss costs to be quantified with greater certainty.
This management discussion and analysis should be read in conjunction with the consolidated financial statements and the accompanying footnotes.
This section of this Form 10-Q generally includes a discussion primarily focused on quarter-to-quarter comparisons between 2026 and 2025. Detailed discussions of year-to-year comparisons between annual periods presented can be found in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's Annual Reports on Form 10-K.
22
OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
EXECUTIVE SUMMARY
Old Republic International Corporation reported the following results for the second quarter 2026:
•Net income of $322.3, compared to $204.4 last year.
•Net income excluding investment gains (net operating income) of $186.0, compared to $209.2 last year.
•Net operating income per diluted share of $0.76, compared to $0.83 last year.
•Consolidated net premiums and fees earned of nearly $2.1 billion, compared to nearly $2.0 billion last year.
•Net investment income of $182.0, compared to $171.5 last year.
•Consolidated combined ratio of 95.3%, compared to 93.6% last year.
•Favorable loss reserve development of 0.1 points, compared to 2.1 points last year.
•Book value per share of $25.33, inclusive of dividends declared, up 7.2% since year-end 2025.
•Annualized operating return on equity of 12.1%.
•Total capital returned to shareholders of $137.4.
OVERALL RESULTS ATTRIBUTABLE TO SHAREHOLDERS
Quarters Ended June 30, Six Months Ended June 30,
2026 2025 % Change 2026 2025 % Change
Net income $ 322.3 $ 204.4 $ 652.4 $ 449.5
Net of tax investment gains (losses) 136.2 (4.7) 295.7 38.5
Net income excluding investment gains (losses) $ 186.0 $ 209.2 (11.1) % $ 356.6 $ 410.9 (13.2) %
Combined ratio 95.3 % 93.6 % 96.0 % 93.7 %
PER DILUTED SHARE ATTRIBUTABLE TO SHAREHOLDERS
Quarters Ended June 30, Six Months Ended June 30,
2026 2025 % Change 2026 2025 % Change
Net income $ 1.31 $ 0.81 $ 2.63 $ 1.79
Net of tax investment gains (losses) 0.55 (0.02) 1.19 0.15
Net income excluding investment gains (losses) $ 0.76 $ 0.83 (9.3) % $ 1.44 $ 1.64 (12.3) %
SHAREHOLDERS' EQUITY (BOOK VALUE)
June 30, Dec. 31,
2026 2025 % Change
Total $ 6,072.8 $ 5,914.0 2.7 %
Per common share $ 25.33 $ 24.21 4.6 %
23
OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Old Republic's business is managed for the long run. In this context, management's key objectives are to achieve highly profitable operating results over the long term, and to ensure balance sheet strength for the Company's obligations. Although Generally Accepted Accounting Principles (GAAP) uses net income as the measure of total profitability, management uses net income excluding net investment gains (losses) (net operating income), a non-GAAP financial measure, in its evaluation of periodic and long-term results.
In management's opinion, excluding investment gains (losses) from income provides a better way to analyze, evaluate, and establish accountability for the results of the insurance operations. The inclusion of realized investment gains (losses) in net income can mask trends in operating results because such realizations are often highly discretionary. Similarly, the inclusion of unrealized investment gains (losses) in equity securities can further distort such operating results with significant period-to-period fluctuations that are unrelated to the insurance operations. Net operating income, however, does not replace GAAP net income as a measure of total profitability.
FINANCIAL HIGHLIGHTS
Quarters Ended June 30, Six Months Ended June 30,
SUMMARY INCOME STATEMENTS: 2026 2025 % Change 2026 2025 % Change
Revenues:
Net premiums and fees earned $ 2,097.8 $ 1,994.6 5.2 % $ 4,070.0 $ 3,835.7 6.1 %
Net investment income 182.0 171.5 6.1 360.1 342.2 5.2
Other income 51.4 49.6 3.7 98.8 96.8 2.0
Total operating revenues 2,331.3 2,215.8 5.2 4,528.9 4,274.9 5.9
Net investment gains (losses):
Realized from actual transactions and
impairments 38.1 (2.4) 123.5 34.9
Unrealized from changes in fair value of
equity securities 134.2 (4.9) 250.7 12.7
Total net investment gains (losses) 172.4 (7.3) 374.3 47.7
Total revenues 2,503.8 2,208.5 4,903.3 4,322.6
Operating expenses:
Loss and loss adjustment expenses 896.7 830.6 8.0 1,737.0 1,608.4 8.0
Underwriting, acquisition, and other expenses 1,170.2 1,099.9 6.4 2,298.2 2,110.7 8.9
Interest and other charges 26.5 17.6 50.3 44.3 35.5 24.8
Total expenses 2,093.6 1,948.3 7.5 % 4,079.6 3,754.6 8.7 %
Pretax income 410.2 260.1 823.6 567.9
Income taxes 85.7 51.7 169.6 113.3
Total net income 324.4 208.4 653.9 454.5
Net income attributable to noncontrolling interests 2.0 3.9 1.5 5.0
Net income attributable to shareholders $ 322.3 $ 204.4 $ 652.4 $ 449.5
COMMON STOCK STATISTICS:
Components of net income per share:
Basic net income excluding investment gains (losses) $ 0.78 $ 0.85 (9.2) % $ 1.48 $ 1.68 (12.2) %
Net investment gains (losses):
Realized investment gains (losses) 0.12 (0.01) 0.40 0.11
Unrealized from changes in fair value of
equity securities 0.44 (0.01) 0.82 0.05
Basic net income $ 1.34 $ 0.83 $ 2.70 $ 1.84
Diluted net income excluding investment gains (losses) $ 0.76 $ 0.83 (9.3) % $ 1.44 $ 1.64 (12.3) %
Net investment gains (losses):
Realized investment gains (losses) 0.12 (0.01) 0.39 0.11
Unrealized from changes in fair value of
equity securities 0.43 (0.01) 0.80 0.04
Diluted net income $ 1.31 $ 0.81 $ 2.63 $ 1.79
Dividends declared on common stock $ 0.315 $ 0.290 8.6 % $ 0.630 $ 0.580 8.6 %
24
OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
The information presented in the following table highlights the most meaningful indicators of Old Republic's segmented and consolidated financial performance. The information underscores the Company's performance, as well as the sound investment of their capital and underwriting cash flows.
Sources of Consolidated Income
Quarters Ended June 30, Six Months Ended June 30,
2026 2025 % Change 2026 2025 % Change
Net premiums and fees earned:
Specialty Insurance $ 1,323.8 $ 1,294.5 2.3 % $ 2,615.7 $ 2,528.1 3.5 %
Title Insurance 772.6 697.8 10.7 1,450.5 1,302.9 11.3
Corporate & Other 1.2 2.3 (45.6) 3.7 4.6 (19.2)
Consolidated $ 2,097.8 $ 1,994.6 5.2 % $ 4,070.0 $ 3,835.7 6.1 %
Underwriting income (loss): (a)
Specialty Insurance $ 59.3 $ 119.9 (50.5) % $ 126.5 $ 246.1 (48.6) %
Title Insurance 37.6 6.9 N/M 37.0 (5.2) N/M
Corporate & Other (14.7) (13.3) (10.6) (30.1) (27.4) (10.0)
Consolidated $ 82.2 $ 113.6 (27.6) % $ 133.5 $ 213.4 (37.5) %
Net investment income:
Specialty Insurance $ 159.5 $ 149.9 6.4 % $ 317.6 $ 299.9 5.9 %
Title Insurance 18.3 17.3 5.8 35.8 34.0 5.1
Corporate & Other 4.1 4.2 (2.3) 6.6 8.2 (19.5)
Consolidated $ 182.0 $ 171.5 6.1 % $ 360.1 $ 342.2 5.2 %
Interest and other charges:
Specialty Insurance $ 20.2 $ 16.1 $ 36.5 $ 32.1
Title Insurance — — 0.1 0.1
Corporate & Other (b) 6.2 1.5 7.6 3.2
Consolidated $ 26.5 $ 17.6 50.3 % $ 44.3 $ 35.5 24.8 %
Pretax income (loss) excluding investment
gains (losses):
Specialty Insurance $ 198.6 $ 253.7 (21.7) % $ 407.6 $ 513.9 (20.7) %
Title Insurance 55.9 24.2 130.5 72.7 28.6 153.9
Corporate & Other (16.8) (10.5) (59.2) (31.1) (22.3) (39.1)
Consolidated 237.7 267.5 (11.1) % 449.3 520.2 (13.6) %
Income taxes 49.5 54.3 91.0 104.1
Net income excluding investment
gains (losses) 188.1 213.2 (11.7) % 358.2 416.0 (13.9) %
Consolidated pretax investment gains (losses):
Realized from actual transactions
and impairments 38.1 (2.4) 123.5 34.9
Unrealized from changes in
fair value of equity securities 134.2 (4.9) 250.7 12.7
Total 172.4 (7.3) 374.3 47.7
Income taxes (credits) 36.2 (2.6) 78.6 9.1
Net of tax investment gains (losses) 136.2 (4.7) 295.7 38.5
Total net income 324.4 208.4 653.9 454.5
Net income attributable to
noncontrolling interests 2.0 3.9 1.5 5.0
Net income attributable to shareholders $ 322.3 $ 204.4 $ 652.4 $ 449.5
(a) Includes related services.
(b) Includes consolidation/elimination entries.
25
OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Specialty Insurance Segment Operating Results
Quarters Ended June 30, Six Months Ended June 30,
2026 2025 % Change 2026 2025 % Change
Revenues:
Net premiums written $ 1,483.2 $ 1,361.0 9.0 % $ 2,822.6 $ 2,633.1 7.2 %
Net premiums earned 1,323.8 1,294.5 2.3 2,615.7 2,528.1 3.5
Other income 51.2 49.3 3.8 98.4 96.4 2.1
Expenses:
Loss and loss adjustment expenses 872.8 809.6 7.8 1,694.7 1,570.7 7.9
Underwriting, acquisition, and other expenses 442.9 414.2 6.9 892.8 807.7 10.5
Segment underwriting income 59.3 119.9 (50.5) 126.5 246.1 (48.6)
Add: Net investment income 159.5 149.9 6.4 317.6 299.9 5.9
Less: Interest and other charges 20.2 16.1 25.7 36.5 32.1 13.7
Segment pretax operating income $ 198.6 $ 253.7 (21.7) % $ 407.6 $ 513.9 (20.7) %
Loss ratio:
Current year 65.6 % 65.4 % 65.4 % 65.2 %
Prior years 0.3 (2.9) (0.6) (3.1)
Total 65.9 62.5 64.8 62.1
Expense ratio 29.6 28.2 30.4 28.1
Combined ratio 95.5 % 90.7 % 95.2 % 90.2 %
Specialty Insurance net premiums written reflects significant growth in a large auto warranty program which requires net premiums written to include the retail selling price of the service contract. Excluding the write-up to retail pricing from all auto warranty programs, net premiums written increased 1.6% and 2.2% for the quarter and first six months, respectively.
Net premiums earned increased 2.3% for the quarter and 3.5% for the first six months. Growth in the quarter was driven by a combination of premium rate increases and new business production, including an increasing contribution from new operating companies, partially offset by a decline in renewal retention ratios compared to last year. Commercial auto renewal retention improved slightly compared to the first quarter of 2026, while Specialty Insurance continued to prioritize rate. Earned premium growth was most pronounced within commercial auto, accident & health, general liability, property, and auto warranty coverages while workers' compensation and Canadian travel accident and trucking declined.
The increase in net investment income was primarily driven by a higher invested asset base.
The Specialty Insurance loss ratio increase was largely due to changes in prior year loss reserve development, while the current year loss ratio remained consistent. In the quarter, Specialty Insurance experienced unfavorable development of approximately $40 (3.0 points) from its run-off transactional risk business reported in financial indemnity. This unfavorable development was mostly offset by significant favorable development from commercial auto and property.
The expense ratio remains elevated due to continued investments in start-up operating companies which are not at scale, information technology modernization, data and analytics, and artificial intelligence, including the additional personnel costs to manage all of these key initiatives. Several of the information technology modernization efforts are entering a phase in which costs are being amortized while the systems being replaced are not yet decommissioned.
Together, these factors produced a profitable combined ratio and strong pretax operating income for the quarter and first six months. For Specialty Insurance, combined ratios between 90% and 95% are targeted over a full underwriting cycle, recognizing that quarterly and annual ratios and trends may deviate from this range, particularly with long-tailed lines of coverage.
Old Republic’s previously announced acquisition of Everett Cash Mutual Insurance Co. (ECM) and affiliated companies following its conversion to a stock company in a sponsored demutualization transaction closed effective July 1, 2026. ECM will be included in the Specialty Insurance segment beginning in the third quarter of 2026. Specialty Insurance expects to report a gain on the acquisition of approximately $125 subject to final valuations as of the closing date, and for the business to be accretive to earnings in 2026.
26
OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Title Insurance Segment Operating Results
Quarters Ended June 30, Six Months Ended June 30,
2026 2025 % Change 2026 2025 % Change
Revenues:
Net premiums earned $ 699.3 $ 629.8 11.0 % $ 1,318.2 $ 1,176.8 12.0 %
Title, escrow, and other fees 73.3 67.9 7.9 132.2 126.1 4.9
Net premiums and fees earned 772.6 697.8 10.7 1,450.5 1,302.9 11.3
Other income 0.2 0.1 15.3 0.3 0.3 21.0
Expenses:
Loss and loss adjustment expenses 23.4 20.3 15.2 40.8 36.3 12.4
Underwriting, acquisition, and other expenses 711.8 670.7 6.1 1,372.9 1,272.1 7.9
Segment underwriting income (loss) 37.6 6.9 N/M 37.0 (5.2) N/M
Add: Net investment income 18.3 17.3 5.8 35.8 34.0 5.1
Less: Interest and other charges — — N/M 0.1 0.1 (14.2)
Segment pretax operating income $ 55.9 $ 24.2 130.5 % $ 72.7 $ 28.6 153.9 %
Loss ratio:
Current year 3.7 % 3.5 % 3.7 % 3.5 %
Prior years (0.7) (0.6) (0.9) (0.7)
Total 3.0 2.9 2.8 2.8
Expense ratio 92.1 96.1 94.6 97.6
Combined ratio 95.1 % 99.0 % 97.4 % 100.4 %
Title Insurance net premiums and fees earned increased 10.7% for the quarter and 11.3% for the first six months. Both agency and directly produced premiums experienced solid growth and continued strong commercial business production. Commercial premiums represented 25.4% of net premiums earned compared to 23.0% in the second quarter of last year.
Net investment income increased, reflecting a slightly higher invested asset base.
The Title Insurance loss ratio remained consistent with last year, reflecting a slightly higher level of favorable prior year loss reserve development offset by slightly higher current year losses. The second quarter and first half of 2025 expense ratios included approximately $15 (2.1 and 1.1 points, respectively) in litigation settlement expenses. Excluding that impact, the expense ratios for both 2026 periods improved as a result of expense management and scale, partially offset by a higher amount of agent commissions as a result of increased agency business compared to the direct operation.
Together, these factors produced higher pretax operating income for the quarter and first six months. For Title Insurance, combined ratios between 90% to 95% are targeted over a full underwriting cycle, recognizing that quarterly and annual ratios and trends may deviate from this range. Although Title Insurance has been navigating a difficult real estate environment over the last few years resulting in ratios in excess of this range, they continue to strive to come into range in the near term.
27
OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Corporate & Other Operating Results
Quarters Ended June 30, Six Months Ended June 30,
2026 2025 % Change 2026 2025 % Change
Net premiums earned $ 1.2 $ 2.3 (45.6) % $ 3.7 $ 4.6 (19.2) %
Net investment income (a) 4.1 4.2 (2.3) 6.6 8.2 (19.5)
Operating revenues 5.4 6.6 (18.6) 10.3 12.8 (20.0)
Operating expenses 22.2 17.2 29.1 41.4 35.2 17.5
Corporate & Other pretax operating loss $ (16.8) $ (10.5) (59.2) % $ (31.1) $ (22.3) (39.1) %
(a) Net of elimination entries.
Corporate & Other includes a small life and accident insurance business, the parent holding company, and several internal corporate services subsidiaries. Net investment income was impacted by a lower portfolio yield and invested asset base due to the return of capital to shareholders, partially offset by proceeds from the May 2026 debt issuance. The Company issued $700 in Senior Notes in anticipation of the August 2026 maturity of the existing $550 Senior Notes. Operating expenses for both 2026 periods reflect the increased interest costs associated with the debt issuance.
Investments
As of June 30, 2026, the consolidated investment portfolio reflected an allocation of approximately 84% to fixed income securities (bonds and notes) and short-term investments, and 16% to equity securities (common and preferred stocks). The investment management process remains focused on retaining quality investments that produce consistent streams of investment income, while monitoring concentration limits among the operating companies. The equity portfolio consists of high-quality common stocks of U.S. companies with long-term records of reasonable earnings growth and steadily increasing dividends.
The investment portfolio has extremely limited exposure to high risk or illiquid asset classes such as limited partnerships, derivatives, hedge funds or private equity investments. In addition, the Company does not engage in hedging or securities lending transactions, nor does it invest in securities with values predicated on non-regulated financial instruments with unfunded counterparty risk attributes.
Shareholders' Equity Per Share
Changes in shareholders' equity per share are reflected in the following table. These changes resulted mostly from net operating income, realized and unrealized investment gains (losses), and dividends to shareholders declared during the period.
Quarter Year
Ended Ended
June 30, Six Months Ended June 30, Dec. 31,
2026 2026 2025 2025
Beginning balance $ 24.53 $ 24.21 $ 22.84 $ 22.84
Changes in shareholders' equity:
Net income excluding net investment gains (losses) 0.78 1.48 1.68 3.23
Net of tax realized investment gains 0.12 0.40 0.11 0.65
Net of tax unrealized investment gains (losses):
Fixed income securities (0.14) (0.61) 0.75 1.02
Equity securities 0.44 0.82 0.05 (0.06)
Total net of tax realized and unrealized investment gains 0.42 0.61 0.91 1.61
Dividends declared (0.315) (0.630) (0.580) (3.660)
Other – net (0.09) (0.34) 0.29 0.19
Net change 0.80 1.12 2.30 1.37
Ending balance $ 25.33 $ 25.33 $ 25.14 $ 24.21
Change for the period 3.3 % 4.6 % 10.1 % 6.0 %
Change for the period, inclusive of dividends declared 4.5 % 7.2 % 12.6 % 22.0 %
Total capital returned to shareholders during the quarter was $137.4, comprised of $76.6 in dividends and $60.7 in share repurchases. For the first six months, total capital returned was $374.9, comprised of $153.3 in dividends and $221.5 in share repurchases.
28
OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
DETAILED MANAGEMENT DISCUSSION AND ANALYSIS
This section of Management's Discussion and Analysis of Financial Condition and Results of Operations is additive to and should be read in conjunction with the Executive Summary which precedes it.
RESULTS OF OPERATIONS
Consolidated Overview
Premiums and Fees
The major sources of Old Republic's consolidated net earned premiums and fees for the periods shown were as follows:
Net Earned Premiums and Fees
Quarters Ended Six Months Ended
June 30, June 30, Years Ended December 31,
2026 2025 2026 2025 2025 2024 2023
Specialty Insurance $ 1,323.8 $ 1,294.5 $ 2,615.7 $ 2,528.1 $ 5,184.8 $ 4,677.0 $ 4,119.2
Title Insurance 772.6 697.8 1,450.5 1,302.9 2,858.6 2,619.1 2,562.8
Corporate & Other 1.2 2.3 3.7 4.6 9.4 14.6 25.6
Total $ 2,097.8 $ 1,994.6 $ 4,070.0 $ 3,835.7 $ 8,052.9 $ 7,310.8 $ 6,707.7
Percentage change from prior period 5.2 % 6.1 % 10.1 % 9.0 %
Consolidated net premiums and fees earned increased 5.2% and 6.1% for the second quarter and first six months of 2026, respectively, resulting from modest growth in Specialty Insurance and strong growth in Title Insurance.
Net Investment Income
The following tables reflect the invested asset bases as of the indicated dates, the investment income earned, and resulting yields on such assets.
As of June 30, As of December 31,
2026 2025 2025 2024
Invested assets at book value $ 15,685.9 $ 14,878.1 $ 15,498.0 $ 15,035.1
Fair value adjustment 1,405.2 1,291.3 1,341.0 1,043.8
Invested assets at fair value $ 17,091.2 $ 16,169.5 $ 16,839.0 $ 16,079.0
Quarters Ended Six Months Ended
June 30, June 30, Years Ended December 31,
2026 2025 2026 2025 2025 2024 2023
Net investment income $ 182.0 $ 171.5 $ 360.1 $ 342.2 $ 708.7 $ 673.1 $ 578.3
Yield at book value 4.73 % 4.64 % 4.62 % 4.58 % 4.64 % 4.47 % 3.82 %
Yield at fair value 4.35 % 4.28 % 4.25 % 4.24 % 4.31 % 4.18 % 3.62 %
The Company has little control over fair values, therefore management evaluates yields on the basis of investment income earned in relation to the book value of the underlying invested assets. Net investment income increased 6.1% and 5.2% for the second quarter and first six months of 2026, respectively, driven by a higher average invested asset base as a result of strong operating results and proceeds from the May 2026 debt issuance. While the portfolio yield was flat in the quarter, there was a notable shift. Short-term investments increased considerably while the yields on those investments dropped, offsetting the yields earned on long-term fixed income securities. The total fixed income portfolio book yield ended the second quarter 2026 at 4.79%, up slightly from the end of 2025.
During the second quarter 2026, the Company purchased $393.7 of investment grade corporate bonds with an
29
OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
average maturity of 6.5 years and an average yield of 4.89%. In addition, the Company purchased $9.9 of government securities (primarily U.S. Treasury Notes) with an average yield of 3.77% and $46.3 of blue-chip equities with a dividend yield of 3.42%. The Company primarily owns U.S. Treasury Notes to place on deposit with the states its insurance companies are licensed to conduct business.
Loss and Loss Adjustment Expenses
The following table shows gross and net of reinsurance loss reserve estimates for major types of insurance coverages as of June 30, 2026 and December 31, 2025:
Loss and Loss Adjustment Expense Reserves
June 30, 2026 December 31, 2025
Gross Net Gross Net
Workers' compensation $ 4,608.5 $ 2,582.6 $ 4,698.7 $ 2,642.8
Commercial auto 5,237.0 2,294.9 4,768.9 2,205.2
General liability 2,465.6 1,302.5 2,403.5 1,245.4
Financial indemnity 1,014.9 784.7 979.9 735.0
Other coverages 1,116.1 722.1 1,047.6 673.4
Unallocated loss adjustment expense reserves 328.7 328.7 324.6 324.6
Total Specialty Insurance reserves 14,771.1 8,015.7 14,223.5 7,826.6
Title Insurance 550.4 550.4 545.7 545.7
Life and accident 5.4 2.7 6.4 4.1
Total loss and loss adjustment expense reserves $ 15,326.9 $ 8,568.9 $ 14,775.7 $ 8,376.5
Asbestosis and environmental loss reserves included
in the above Specialty Insurance reserves:
Amount $ 154.6 $ 96.5 $ 162.7 $ 101.3
% of total Specialty Insurance reserves 1.0 % 1.2 % 1.1 % 1.3 %
Total loss costs are affected by the amount of paid claims and the adequacy of reserve estimates established for current and prior years' claim occurrences at each balance sheet date. A summary of changes in aggregate reserves for loss and loss adjustment expenses is included in Note 3 of the Notes to Consolidated Financial Statements.
Net loss and loss adjustment expenses incurred as a percentage of premiums and related fee revenues of the Company's two segments and for its consolidated operations were as follows:
Quarters Ended Six Months Ended
June 30, June 30, Years Ended December 31,
2026 2025 2026 2025 2025 2024 2023
Specialty Insurance 65.9 % 62.5 % 64.8 % 62.1 % 63.9 % 64.1 % 62.0 %
Title Insurance 3.0 2.9 2.8 2.8 2.2 1.8 1.9
Consolidated loss ratio 42.7 % 41.6 % 42.7 % 41.9 % 41.9 % 41.7 % 38.7 %
Reconciliation of consolidated loss ratio:
Current year 42.8 % 43.7 % 43.4 % 44.2 % 44.3 % 43.9 % 43.3 %
Prior year net favorable development (0.1) (2.1) (0.7) (2.3) (2.4) (2.2) (4.6)
Consolidated loss ratio 42.7 % 41.6 % 42.7 % 41.9 % 41.9 % 41.7 % 38.7 %
The Company's reserve for loss and loss adjustment expenses represents the accumulation of estimates of ultimate losses payable, including incurred but not reported (IBNR). The establishment of loss reserves is a reasonably complex and dynamic process influenced by a large variety of factors. Consequently, reserves established are a reflection of: the opinions of a large number of persons; the application and interpretation of historical precedent and trends; expectations as to future developments; and management's judgment in interpreting all such factors. At any point in time, the Company is exposed to the possibility of higher or lower than anticipated loss costs and the resulting changes in estimates are recorded in operations of the periods during which they are made.
Changes to the consolidated loss ratios tend to be driven by mix changes between Specialty Insurance (with loss ratios in the mid- to low-60% range) and Title Insurance (with loss ratios in the 2% range). In the second quarter 2026,
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RESULTS OF OPERATIONS (continued)
the consolidated loss ratio included an amount of favorable development that was lower than 2025, with net favorable development from Title Insurance offset by a small amount of net unfavorable development from Specialty Insurance.
Management believes that its overall reserving practices have been consistently applied over many years, and that its aggregate net reserves have generally resulted in reasonable approximations of the ultimate net costs of losses incurred. Management maintains hold periods that vary primarily by line of business. However, reserves may be increased within a holding period if the initial expected loss ratio is estimated to be inadequate. Conversely, in certain cases, reserves may be released within a holding period when the redundancies are expected to exceed the upper end of the actuarially determined range, or if an increase to an initial expected loss ratio within a hold period is subsequently deemed to be excessive. No representation is made nor is any guaranty given that ultimate net losses and related costs will not develop in future years to be significantly greater or lower than currently established reserve estimates. In management's opinion, such changes in net losses and related costs are not likely to have a material effect on the Company's consolidated financial condition, although it could materially affect its consolidated results of operations for any one annual or interim reporting period. See further discussion in the Company's 2025 Annual Report on Form 10-K under Item 1A - Risk Factors.
Underwriting, Acquisition, and Other Expenses
Expenses incurred as a percentage of premiums and related fee revenues of the Company's two segments and for its consolidated operations were as follows:
Quarters Ended Six Months Ended
June 30, June 30, Years Ended December 31,
2026 2025 2026 2025 2025 2024 2023
Specialty Insurance 29.6 % 28.2 % 30.4 % 28.1 % 29.3 % 28.1 % 28.2 %
Title Insurance 92.1 96.1 94.6 97.6 95.4 95.2 95.2
Consolidated 52.6 % 52.0 % 53.3 % 51.8 % 52.8 % 52.2 % 53.9 %
Changes to the consolidated expense ratios tend to be driven by mix changes between Specialty Insurance (with expense ratios in 30% range) and Title Insurance (with expense ratios in low- to mid-90% range). Variations in the Company's consolidated expense ratios also reflect a continually changing mix of coverages sold and costs of producing business within the segments. To a significant degree, expense ratios for both the Specialty and Title Insurance segments are reflective of variable costs, such as commissions or similar charges, that rise or decline along with corresponding changes in premium and fee income and can fluctuate with line of coverage mix. General operating expenses are routinely subject to timing as well as investments in business expansion and information technology. The consolidated current period expense ratio is elevated given the start-up costs of new operating companies within Specialty Insurance, continued investments in information technology modernization, including investments in data and analytics (D&A) and artificial intelligence (AI), and related personnel to manage these key initiatives.
Combined Ratios
The combined ratios resulting from the above summarized net loss and loss adjustment expenses and underwriting expenses are as follows:
Quarters Ended Six Months Ended
June 30, June 30, Years Ended December 31,
2026 2025 2026 2025 2025 2024 2023
Specialty Insurance 95.5 % 90.7 % 95.2 % 90.2 % 93.2 % 92.2 % 90.2 %
Title Insurance 95.1 99.0 97.4 100.4 97.6 97.0 97.1
Consolidated 95.3 % 93.6 % 96.0 % 93.7 % 94.7 % 93.9 % 92.6 %
Net Investment Gains (Losses)
The Company's investment policies are designed to produce a stable source of income from interest and dividends, support the protection of capital, and provide sufficient liquidity to meet insurance underwriting and other obligations as they become payable in the future.
The composition of net investment gains or losses was as follows:
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RESULTS OF OPERATIONS (continued)
Quarters Ended Six Months Ended
June 30, June 30, Years Ended December 31,
2026 2025 2026 2025 2025 2024 2023
Realized investment gains (losses)
from actual transactions:
Fixed income $ (4.3) $ (2.6) $ (1.8) $ (3.6) $ (3.9) $ (112.1) $ (180.7)
Equity securities and other 46.3 0.1 139.1 38.6 209.7 206.5 165.5
Total 42.0 (2.4) 137.3 34.9 205.8 94.3 (15.2)
Impairment losses (3.8) — (13.8) — (3.8) (5.4) (51.8)
Unrealized gains (losses) from
changes in fair value of equity
securities:
Unrealized gains recognized
in the period 162.2 0.6 337.4 61.2 105.8 184.0 28.2
Reclassified to realized gains
upon disposition (28.0) (5.5) (86.7) (48.5) (128.1) (202.9) (152.2)
Total 134.2 (4.9) 250.7 12.7 (22.3) (18.9) (123.9)
Total investment gains (losses) $ 172.4 $ (7.3) $ 374.3 $ 47.7 $ 179.7 $ 69.9 $ (190.9)
The realization of investment gains or losses can be highly discretionary and can be affected by such factors as the timing of individual securities sales, the recording of estimated credit losses from write-downs of impaired securities, tax-planning and tax-rate change considerations, and modifications of investment management judgments regarding the direction of securities markets or the future prospects of individual investees or industry sectors.
Dispositions of fixed income securities from scheduled maturities and early calls were 47.8% and 61.5% of total fixed income dispositions occurring in the first six months of 2026 and 2025, respectively. Realized gain (loss) activity in 2026 was primarily related to the sale of fixed income and equity securities to fund the Company's return of capital through share repurchases and a special dividend, as well as routine portfolio management.
Income Taxes
The effective consolidated income tax rate was 20.9% and 20.6% in the second quarter and first six months of 2026, respectively, compared to 19.9% and 20.0% in the second quarter and first six months of 2025, respectively. Changes in the effective tax rate reflect primarily the varying proportions of pretax operating income derived from partially tax-preferred investment income (principally dividend income).
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RESULTS OF OPERATIONS (continued)
Segment Underwriting Overview
Specialty Insurance
Summary Underwriting Results
Quarters Ended Six Months Ended
June 30, June 30, Years Ended December 31,
2026 2025 2026 2025 2025 2024 2023
Revenues:
Net premiums written $ 1,483.2 $ 1,361.0 $ 2,822.6 $ 2,633.1 $ 5,430.1 $ 5,030.5 $ 4,356.3
Net premiums earned 1,323.8 1,294.5 2,615.7 2,528.1 5,184.8 4,677.0 4,119.2
Other income 51.2 49.3 98.4 96.4 194.4 177.0 162.2
Expenses:
Loss and loss adjustment expenses 868.4 805.5 1,685.7 1,561.0 3,295.6 2,975.6 2,536.7
Dividends to policyholders 4.3 4.1 9.0 9.7 16.2 23.5 16.5
Underwriting, acquisition, and
other expenses:
Commissions 151.9 148.4 290.6 288.0 622.2 546.8 465.3
Insurance taxes, licenses,
and fees 53.9 50.1 106.9 92.8 203.0 172.7 159.8
Subtotal 205.8 198.5 397.5 380.8 825.2 719.6 625.2
General expenses 237.1 215.6 495.3 426.8 889.4 771.1 697.0
Total underwriting, acquisition,
and other expenses 442.9 414.2 892.8 807.7 1,714.7 1,490.8 1,322.2
Segment underwriting income $ 59.3 $ 119.9 $ 126.5 $ 246.1 $ 352.6 $ 364.0 $ 406.0
Loss ratio:
Current year 65.6 % 65.4 % 65.4 % 65.2 % 66.8 % 66.4 % 67.7 %
Prior years 0.3 (2.9) (0.6) (3.1) (2.9) (2.3) (5.7)
Total 65.9 62.5 64.8 62.1 63.9 64.1 62.0
Expense ratio 29.6 28.2 30.4 28.1 29.3 28.1 28.2
Combined ratio 95.5 % 90.7 % 95.2 % 90.2 % 93.2 % 92.2 % 90.2 %
Specialty Insurance continued to produce growth and profitability, reflecting the success of the Company’s specialty strategy and operational excellence initiatives. Growth included increasing contributions from new specialty operating companies. Additionally, on April 6, 2026, the Company announced the formation of its new property insurance company that will underwrite specialized property insurance products through a national retail broker distribution network. Seven Specialty Insurance operating companies continue to expand their writings of surplus lines business for property, general liability, and financial indemnity solutions. Several of the new operating companies also target the wholesale distribution channel, where excess & surplus solutions are prevalent.
Recently, a number of the Specialty Insurance lines of coverage have experienced elevated loss costs, requiring an increase in premium rates. Consistent with management's philosophy of managing for the long run, Specialty Insurance expects top line and the expense ratio to be pressured while the focus is on rate adequacy.
Following the Company’s strategy to add operating companies narrow and deep in their specialty niche, Old Republic closed on its previously announced acquisition of ECM following its conversion to a stock company in a sponsored demutualization transaction. Effective July 1, 2026, ECM results will be included in the Specialty Insurance segment. Specialty Insurance expects to report a gain on the acquisition of approximately $125 subject to final valuations as of the closing date, and for the business to be accretive to earnings in 2026.
Premiums & Fees
Specialty Insurance net premiums written increased 9.0% and 7.2% for the second quarter and first six months of 2026, respectively. This reflects significant growth in a large auto warranty program which requires net premiums written to include the retail selling price of the service contract, with an offsetting commission amount resulting in no bottom-line impact. Excluding the write-up to retail pricing from all auto warranty programs, net premiums written
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RESULTS OF OPERATIONS (continued)
increased 1.6% and 2.2% for the quarter and first six months, respectively.
The percentage of net earned premiums for major insurance coverages in the Specialty Insurance segment was as follows:
Specialty Insurance Net Earned Premiums by Type of Coverage
Quarters Ended Six Months Ended
June 30, June 30, Years Ended December 31,
2026 2025 2026 2025 2025 2024 2023
Commercial auto 42.6 % 41.7 % 42.5 % 41.8 % 42.1 % 41.9 % 41.0 %
Workers' compensation 15.4 17.5 16.0 17.5 17.0 17.9 19.5
Property 11.1 10.7 11.5 10.9 11.0 10.4 9.1
General liability 11.0 10.6 11.0 10.5 10.9 10.2 8.5
Financial indemnity 6.4 7.5 6.4 7.4 6.9 6.9 8.4
Home and auto warranty 6.6 6.1 6.3 6.4 6.5 6.7 7.6
Other coverages 6.9 % 5.9 % 6.3 % 5.5 % 5.6 % 6.0 % 5.9 %
Specialty Insurance net premiums earned increased 2.3% and 3.5% for the second quarter and first six months of 2026, respectively. Growth was driven by a combination of premium rate increases and new business production, including an increasing contribution from new operating companies, partially offset by a decline in renewal retention ratios compared to last year. Commercial auto renewal retention improved slightly compared to the first quarter of 2026, while Specialty Insurance continued to prioritize rate, an indication that competitors started to implement higher rate increases. Earned premium growth was most pronounced within commercial auto, accident & health, general liability, property, and auto warranty coverages while workers' compensation and Canadian travel accident and trucking declined. Commercial auto and general liability continued to achieve rate increases.
Loss and Loss Adjustment Expenses
The percentage of net loss and loss adjustment expenses measured against premiums earned by major types of insurance coverage were as follows:
Specialty Insurance Loss Ratios by Type of Coverage
Quarters Ended Six Months Ended
June 30, June 30, Years Ended December 31,
2026 2025 2026 2025 2025 2024 2023
Commercial auto 69.4 % 70.3 % 69.9 % 70.3 % 72.3 % 72.4 % 71.5 %
Workers' compensation 60.6 48.5 61.5 53.5 59.0 48.0 41.4
Property 41.4 46.9 43.0 47.8 52.0 49.9 60.4
General liability 64.1 73.9 64.2 66.4 62.0 71.6 72.5
Financial indemnity 101.2 56.4 77.0 54.0 48.0 63.9 48.2
Home and auto warranty 57.8 60.9 55.4 55.9 54.9 58.2 65.5
Other coverages 73.4 67.1 76.7 65.6 71.7 73.1 65.9
All coverages 65.9 % 62.5 % 64.8 % 62.1 % 63.9 % 64.1 % 62.0 %
Overall, the 2026 loss ratios for Specialty Insurance reflect lower levels of favorable prior year loss reserve development and consistent current year losses. The loss ratios for the second quarter and first six months of 2026 include the impact of unfavorable development due to reserve strengthening of approximately $40 (3.0 points and 1.5 points, respectively) related to run-off transactional risk business reported in financial indemnity.
Net reserve development in the quarter came primarily from:
•Workers’ compensation with favorable development in most years outside of the hold periods (predominantly from accident years 2018 through 2021), partially offset by unfavorable development in more recent years within the hold periods (primarily 2022 and 2025). While the reserving fundamentals remain solid, there is always the possibility of an isolated large loss emerging in a given quarter.
•Commercial auto with favorable development predominantly from accident years 2020 through 2023, partially offset by unfavorable development from accident year 2024 from non-trucking exposures. The reserves set for the liability portion of long-haul trucking for accident year 2025 are holding as paid claims and case reserve development were within expectations.
•Property with a strong level of favorable development that was higher than last year, predominantly from accident years 2022 through 2025.
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•General liability with a smaller level of unfavorable development compared to last year. Unfavorable development in 2022 through 2024 was partially offset by favorable development in 2020, 2021, and 2025.
•Financial indemnity with unfavorable development in 2021 through 2023 and 2025 due to reserve strengthening of approximately $40 related to run-off transactional risk business that was exited in the fourth quarter of 2024. Transactional risk claims activity tends to be low in frequency and high in severity, accordingly, a relatively low number of claims led to this development.
Sales and General Expenses
The current period expense ratio remains elevated due to continued investments in start-up operating companies which are not at scale, information technology modernization, D&A, and AI, including the additional personnel costs to manage all of these key initiatives. Specialty Insurance has started up seven new operating companies in the last five years that are not yet at full scale. Depending on the operating company, it can take three to five years before scale is achieved, and the operating company becomes accretive to earnings.
In addition, Specialty Insurance is investing in modernizing core systems (policy administration, claims, billing, and data warehouse) at several operating companies. Several of these information technology modernization efforts are entering a phase in which costs are being amortized while the systems being replaced are not yet decommissioned. The Company expects some level of these redundant costs to exist over the next few years, at which time expenses should decrease as the old systems are fully decommissioned. To give perspective, over half of Old Republic’s mature operating companies have modernization efforts underway for their core IT systems. These are all multi-year, complex projects that introduce a relatively unique situation where the ultimate cost, timing of expense recognition, and length of the project are extremely difficult to determine.
Old Republic continues to make significant investments in D&A and AI. D&A is a more mature initiative, however, that investment has been increasing recently. AI is in the beginning stages of having dedicated resources that are orchestrating a meaningful company-wide approach. To date, the Company has invested significant executive time creating an AI strategy, and several projects are just beginning.
Finally, growth in auto warranty business that requires the inclusion of the retail write-up in net premiums written with an offset to commission expense is beginning to contribute to a higher expense ratio as the net premiums written is earned (typically over a four to seven-year period). The impact is expected to increase due to anticipated continued growth in this business.
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RESULTS OF OPERATIONS (continued)
Title Insurance
Summary Underwriting Results
Quarters Ended Six Months Ended
June 30, June 30, Years Ended December 31,
2026 2025 2026 2025 2025 2024 2023
Revenues:
Net premiums earned $ 699.3 $ 629.8 $ 1,318.2 $ 1,176.8 $ 2,594.4 $ 2,334.6 $ 2,300.9
Title, escrow, and other fees 73.3 67.9 132.2 126.1 264.1 284.4 261.8
Total premiums and fees 772.6 697.8 1,450.5 1,302.9 2,858.6 2,619.1 2,562.8
Other income 0.2 0.1 0.3 0.3 0.6 0.6 0.7
Expenses:
Loss and loss adjustment expenses 23.4 20.3 40.8 36.3 62.2 46.1 48.7
Underwriting, acquisition, and
other expenses:
Commissions 484.7 429.0 920.1 805.5 1,784.8 1,601.2 1,608.1
Insurance taxes, licenses,
and fees 11.6 9.6 22.0 18.6 45.0 37.5 18.7
Subtotal 496.3 438.6 942.1 824.1 1,829.9 1,638.7 1,626.8
General expenses 215.4 232.0 430.8 448.0 897.1 855.1 812.4
Total underwriting, acquisition,
and other expenses 711.8 670.7 1,372.9 1,272.1 2,727.0 2,493.8 2,439.3
Segment underwriting
income (loss) $ 37.6 $ 6.9 $ 37.0 $ (5.2) $ 69.9 $ 79.7 $ 75.4
Loss ratio:
Current year 3.7 % 3.5 % 3.7 % 3.5 % 3.4 % 3.4 % 3.7 %
Prior years (0.7) (0.6) (0.9) (0.7) (1.2) (1.6) (1.8)
Total 3.0 2.9 2.8 2.8 2.2 1.8 1.9
Expense ratio 92.1 96.1 94.6 97.6 95.4 95.2 95.2
Combined ratio 95.1 % 99.0 % 97.4 % 100.4 % 97.6 % 97.0 % 97.1 %
__________
(a) Title loss, expense, and combined ratios are calculated on the basis of combined net premiums and fees earned.
Title Insurance experienced increased profitability in both the second quarter and first six months of 2026 compared to last year, driven by double-digit growth in net premiums and fees earned, continued strength in commercial business, higher net investment income, and improved operating leverage from expense management and increased scale. While loss ratios remained generally consistent with last year and higher agency production relative to direct business resulted in increased commission expense as a percentage of premium, Title Insurance continued to make progress toward its targeted combined ratio range despite ongoing challenges in the real estate market and seasonal nature of this business.
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RESULTS OF OPERATIONS (continued)
Premiums & Fees
The following table shows the percentage distribution of Title Insurance premium and fee revenues by production sources:
Premium and Fee Production by Source
Quarters Ended Six Months Ended
June 30, June 30, Years Ended December 31,
2026 2025 2026 2025 2025 2024 2023
Direct Operations 22.0 % 22.8 % 21.3 % 22.5 % 21.9 % 23.0 % 21.0 %
Independent Title Agents 78.0 % 77.2 % 78.7 % 77.5 % 78.1 % 77.0 % 79.0 %
Title Insurance net premiums and fees earned increased 10.7% and 11.3% for the second quarter and first six months of 2026, respectively, continuing to reflect strong activity across many segments of the commercial sector and an increase in refinance activity. Both agency and directly produced premiums experienced solid growth and strong commercial business production. Commercial premiums represented 25% of net premiums earned in the second quarter 2026 compared to 23% in the second quarter 2025. Whereas data centers have resulted in commercial premium growth, a mix of several other industries have also contributed.
Loss and Loss Adjustment Expenses
Title Insurance loss ratios have remained in the low single digits for a number of years due to a continuation of favorable trends in claims frequency and severity. The loss ratios for Title Insurance in the second quarter and first six months of 2026 remained consistent with last year, reflecting a slightly higher level of favorable prior year loss reserve development offset by slightly higher current year losses. The favorable development in the second quarter 2026, primarily from years 2019, 2021, and 2022, was partially offset by unfavorable development from 2020 and 2024.
Sales and General Expenses
The second quarter and first half of 2025 expense ratios included approximately $15 (2.1 and 1.1 points, respectively) in litigation settlement expenses. Excluding that impact, the expense ratios for both 2026 periods improved as a result of the continued focus on operational efficiency, expense management, and scale, partially offset by a higher amount of agent commissions as a result of increased agency business compared to the direct operation.
FINANCIAL CONDITION
The resiliency of Old Republic’s business model rests on the 21 different operating companies within both Specialty Insurance and Title Insurance. Each operating company is a specialist, narrow and deep in their specialty niche, with a keen focus on service, including distribution, claims, underwriting, and risk control. They operate with autonomy and accountability, with the attendant benefits of diversification to manage risk. The portfolio of diverse specialty businesses is supported by a strong balance sheet, conservatively managed and reflected by an A+ rating from A.M. Best. Old Republic’s ongoing profitability and strong balance sheet has enabled the return of a record amount of capital to shareholders in recent years. With 7.8% insider ownership, Old Republic’s employees, officers, and directors are directly aligned with shareholder value creation.
Balance Sheet Metrics and Performance Statistics
June 30, December 31,
2026 2025
Total investments $ 17,091.2 $ 16,839.0
Total assets 31,592.4 29,862.7
Long-term debt 2,284.0 1,589.9
Total liabilities 25,504.5 23,934.2
Total shareholders' equity 6,072.8 5,914.0
Book value per share 25.33 24.21
Debt-to-equity ratio 37.6 % 26.9 %
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OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Total assets at June 30, 2026 increased 5.8% from year-end 2025, including an increase of 1.5% in total investments from strong operating cash flows, slightly higher investment valuations, and proceeds from the May 2026 debt issuance, partially offset by the return of excess capital including the $615.2 special dividend paid during the first quarter 2026. Total liabilities increased 6.6% from year-end 2025 largely due to the May 2026 debt issuance. Shareholders’ equity increased 2.7%. The debt-to-equity ratio increased from 26.9% at year-end 2025 to 37.6% as a result of the $700.0 debt issuance. This ratio is expected to return to a normalized level when the $550.0 in Senior Notes mature in August 2026. The net impact of these transactions will increase total capital by $150.0.
Old Republic’s growth in book value per share including dividends is one of the various markers of performance and strength, calculated as the sum of the annual change in book value per share plus dividends declared. As shown in the tables below, this amounts to 7.2% for the first six months of 2026, compared with 12.6% for the same period in 2025. The primary drivers and total of Old Republic’s growth in book value are shown in the tables below.
Drivers of Growth in Book Value Including Dividends
Six Months Ended
June 30,
2026 2025
Net operating income 6.1 % 7.4 %
Realized investment gains 1.7 0.5
Unrealized from changes in fair value 0.9 3.5
Other (1.4) 1.3
Total 7.2 % 12.6 %
The growth in book value for the first six months of 2026 was driven by net operating income and net investment gains, partially offset by the dilutive effect of share repurchase activity. Repurchasing shares at valuations above book value per share has an immediate dilutive impact with the accretive effects coming from sharing future income with fewer shareholders. Management considers this balance, among other factors, when making return of capital decisions.
Growth in Book Value Including Dividends
Six Months Ended
June 30,
2026 2025
End of period book value $ 25.33 $ 25.14
Less beginning of period book value 24.21 22.84
Change in book value 1.12 2.30
Dividend declared to shareholders (0.63) (0.58)
Total $ 1.75 $ 2.88
Total from change in book value 4.6 % 10.1 %
Total from dividends declared to shareholders 2.6 2.5
Total growth in book value including dividends 7.2 % 12.6 %
Investment Portfolio
Old Republic continues to adhere to its long-term policy of investing primarily in investment grade, marketable securities. At both June 30, 2026 and December 31, 2025, nearly all of the Company's investments consisted of marketable securities. The investment portfolio has extremely limited exposure to high risk or illiquid asset classes such as limited partnerships, derivatives, hedge funds, or private equity investments. In addition, the Company does not engage in hedging or securities lending transactions, nor does it invest in securities with values predicated on non-regulated financial instruments with unfunded counterparty risk attributes. At June 30, 2026, the Company had no fixed income securities in default as to principal and/or interest.
The fixed income portfolio continues to be the anchor for the operating companies' obligations. The maturities of the fixed income securities are generally matched to the expected liabilities for claim payment obligations to policyholders and their beneficiaries.
Old Republic’s investment portfolio is focused on ensuring solid funding of the operating companies' obligations to policyholders and their beneficiaries, as well as the long-term stability of the subsidiaries’ capital base. For these
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
reasons, the Company performs regular stress tests of the investment portfolio to gain reasonable assurance that periodic downdrafts in market prices do not undermine the Company's financial strength.
The following tables show certain information relating to the Company's fixed income and equity portfolios as of the dates shown.
Fixed Income Securities Stratified by Credit Quality (a)
June 30, December 31,
2026 2025
Aaa 0.8 % 1.1 %
Aa 23.2 23.1
A 42.5 42.5
Baa 32.7 32.3
Total investment grade 99.2 99.0
Non-investment grade or non-rated issuers 0.8 1.0
Total 100.0 % 100.0 %
__________
(a) Credit quality ratings referred to herein are a blend of those assigned by the major credit rating agencies for U.S. and Canadian Governments, Agencies, and Corporate issuers.
With approximately 99% of the Company's fixed income securities considered investment grade at June 30, 2026 and December 31, 2025, tight credit spreads have resulted in a preference toward purchases of higher-rated securities in recent years.
Gross Unrealized Gains and Losses Stratified by Industry Concentration for Fixed Income Securities
June 30, 2026 Amortized Cost GrossUnrealizedGains Gross Unrealized Losses Fair Value
Non-Investment Grade Fixed Income Securities by Industry Concentration:
Basic Materials $ 43.7 $ 0.7 $ 0.1 $ 44.3
Industrial 16.8 — 0.4 16.4
Consumer, Cyclical 13.2 — 0.2 13.0
Energy 8.8 — — 8.8
Other (includes two industry groups) 11.8 0.7 0.1 12.4
Total $ 94.5 $ 1.5 $ 1.0 $ 95.0
Investment Grade Fixed Income Securities by Industry Concentration:
Utilities $ 2,323.4 $ 25.4 $ 14.5 $ 2,334.3
Consumer, Non-cyclical 2,241.6 25.3 8.8 2,258.1
Government 1,691.3 2.5 33.1 1,660.7
Financial 1,530.6 18.0 3.9 1,544.8
Industrial 1,512.8 20.2 5.5 1,527.5
Consumer, Cyclical 834.8 11.1 2.1 843.8
Energy 744.7 8.4 3.2 749.9
Other (includes four industry groups) 1,142.2 10.5 6.1 1,146.6
Total $ 12,021.9 $ 121.7 $ 77.5 $ 12,066.1
In the above tables, the unrealized losses on fixed income securities are primarily deemed to reflect changes in the interest rate environment and not indicative of a deterioration of credit quality. Consistent with a higher interest rate environment, gross unrealized gains have decreased while gross unrealized losses have increased.
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OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Gross Unrealized Gains and Losses Stratified by Industry Concentration for Equity Securities
June 30, 2026 Cost GrossUnrealizedGains Gross Unrealized Losses Fair Value
Equity Securities by Industry Concentration:
Consumer, Non-cyclical $ 459.2 $ 263.3 $ 16.0 $ 706.4
Utilities 380.3 229.2 0.9 608.6
Industrial 169.8 431.1 0.6 600.3
Energy 97.6 116.0 — 213.7
Consumer, Cyclical 70.6 79.6 — 150.3
Financial 52.4 96.6 — 149.0
Other (includes five industry groups) 88.0 164.5 2.1 250.4
Total $ 1,318.2 $ 1,380.6 $ 19.8 $ 2,679.0
The Company's equity portfolio consists primarily of high-quality common stocks of U.S. companies with long-term records of reasonable earnings growth and steadily increasing dividends. The Company's invested asset base in equity securities has remained relatively consistent in recent years. In relation to the S&P 500 index, the portfolio is overweight in utilities, industrial, consumer non-cyclical, and energy, while being underweight in technology, communications, and financial. Net unrealized gains have increased during the quarter as a result of favorable market value changes.
Gross Unrealized Losses Stratified by Maturity Ranges for All Fixed Income Securities
Amortized Cost Gross Unrealized Losses
June 30, 2026 All Non- Investment Grade Only All Non- Investment Grade Only
Maturity Ranges:
Due in one year or less $ 510.2 $ 18.6 $ 2.4 $ 0.2
Due after one year through five years 2,210.0 18.4 40.1 0.4
Due after five years through ten years 2,121.6 17.5 34.0 0.2
Due after ten years 149.8 — 1.9 —
Total $ 4,991.7 $ 54.6 $ 78.5 $ 1.0
Total gross unrealized losses on all fixed income securities increased from year-end 2025. This increase is evident across all maturity categories, with the most pronounced impact reflected in fixed income securities with maturities of greater than five years. This aligns with the duration profile of the portfolio, where longer-dated securities are typically more sensitive to changes in interest rates.
Actual maturities may differ from contractual maturities due to rights to call or prepay obligations.
Gross Unrealized Losses Stratified by Duration and Amount of Unrealized Losses for All Fixed Income Securities
Amount of Gross Unrealized Losses
June 30, 2026 Less than 20% of Cost 20% to 50% of Cost More than 50% of Cost Total Gross Unrealized Loss
Number of Months in Unrealized Loss Position:
Fixed Income Securities:
One to six months $ 41.2 $ — $ — $ 41.2
Seven to twelve months 2.3 — — 2.3
More than twelve months 34.9 — — 34.9
Total $ 78.5 $ — $ — $ 78.5
In the above tables, the unrealized losses on fixed income securities are primarily deemed to reflect changes in the interest rate environment and not indicative of a deterioration of credit quality.
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OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Age Distribution of Fixed Income Securities
June 30, December 31,
2026 2025
Maturity Ranges:
Due in one year or less 10.7 % 10.9 %
Due after one year through five years 48.0 46.6
Due after five years through ten years 38.9 38.9
Due after ten years through fifteen years 2.3 3.5
Due after fifteen years 0.1 0.1
Total 100.0 % 100.0 %
Average Maturity in Years 4.6 4.6
Duration 3.9 3.9
The slight shift to fixed income securities with mid-range maturities from longer maturities is a result of investing opportunistically with consideration given to asset-liability matching. Average maturity in years provides insight into the duration profile of the fixed income portfolio by measuring the weighted-average time until principal is repaid. Average maturity remained relatively unchanged from year-end 2025, indicating that reinvestment activity continued to focus on securities with similar maturities.
Duration is used as a measure of bond price sensitivity to interest rate changes. A duration of 3.9 as of June 30, 2026 implies that a 100-basis point parallel increase in interest rates from current levels would result in a decline in the fair value of the fixed income investment portfolio of approximately 3.9%.
Liquidity and Capital Resources
The parent holding company meets its liquidity and capital needs principally through dividends and interest on intercompany financing arrangements paid by its subsidiaries. The insurance subsidiaries' ability to pay dividends and interest to the parent company is generally restricted by law or subject to approval of the insurance regulatory authorities. Based on year-end 2025 data, the maximum amount of dividends that can be paid to the parent company by its insurance and a small number of non-insurance company subsidiaries during 2026 without prior approval of appropriate regulatory authorities is approximately $984.8, of which $347.5 has been received through June 30, 2026. The liquidity achievable through such permitted dividend payments is sufficient to cover the parent holding company's currently expected regularly recurring cash outflows represented mostly by interest, anticipated dividend payments to shareholders, operating expenses, and the near-term capital needs of its operations.
Old Republic's total capitalization of $8,356.9 at June 30, 2026 consisted of debt of $2,284.0 and shareholders' equity of $6,072.8. Changes in the shareholders' equity account reflect primarily net operating income, realized and unrealized gains (losses), dividend payments to shareholders, and share repurchases for the period then ended. At June 30, 2026, the Company's consolidated debt-to-equity ratio was 37.6%. This ratio is temporarily elevated due to the May 2026 issuance of $700.0 Senior Notes, the proceeds of which will be used to retire the $550.0 Senior Notes maturing in August 2026.
Old Republic has paid a regular dividend without interruption since 1942 (85 years), and it has raised the regular annual dividend for each of the past 45 years. The dividend amount is reviewed and approved by the Board of Directors quarterly and annually. In establishing each year's regular dividend, the Company does not follow a strict formulaic approach, and favors an increasing dividend amount largely reflective of long-term consolidated operating earnings trends. Accordingly, each year's regular dividend is set judgmentally in consideration of such key factors as the dividend-paying capacity of the Company's insurance subsidiaries, the trends in average annual earnings for the five to ten most recent calendar years, the amount of stock repurchases, and management's long-term expectations for the Company's consolidated business.
During the quarter, the Company returned total capital to shareholders of $137.4, comprised of $76.6 in dividends and $60.7 in share repurchases (1.4 million shares at an average price of $41.45 per share). During the first six months, the Company returned total capital to shareholders of $374.9, comprised of $153.3 in dividends and $221.5 in share repurchases (5.4 million shares at an average price of $40.85 per share). Following the close of the quarter and through July 29, 2026, the Company repurchased $4.0 of additional shares (91.8 thousand shares at an average price of $43.95 per share), leaving $631.1 remaining under the current authorization.
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OLD REPUBLIC INTERNATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Other Assets
Substantially all of the Company's receivables are current. Reinsurance recoverable balances on paid or estimated unpaid losses are deemed recoverable from solvent reinsurers or have otherwise been reduced by allowances for estimated credit losses. Deferred policy acquisition costs are estimated by taking into account the direct costs relating to the successful acquisition of new or renewal insurance contracts and evaluating their recoverability on the basis of recent trends in loss costs.
Reinsurance Programs
In order to maintain premium production within its capacity and limit maximum losses for which it might become liable under its policies, Old Republic, as is common practice in the insurance industry, may cede a portion or all of its premiums and related liabilities on certain classes of insurance, individual policies, or blocks of business to other insurers and reinsurers. Further discussion of the Company's reinsurance programs can be found in Part 1 of the Company's 2025 Annual Report on Form 10-K.
CRITICAL ACCOUNTING ESTIMATES
The Company's annual and interim financial statements incorporate a large number and types of estimates relative to matters which are highly uncertain at the time the estimates are made. The estimation process required of an insurance enterprise such as Old Republic is by its very nature highly dynamic because it necessitates a continuous evaluation, analysis, and quantification of factual data as it becomes known to the Company. As a result, actual experienced outcomes can differ from the estimates made at any point in time and thus affect future periods' reported revenues, expenses, net income or loss, and financial condition.
Old Republic believes that its most critical accounting estimate relates to the establishment of reserves for losses and loss adjustment expenses. The major assumptions and methods used in setting this estimate are summarized in the Company's 2025 Annual Report on Form 10-K.
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OLD REPUBLIC INTERNATIONAL CORPORATION
FORWARD-LOOKING STATEMENTS
Reference is here made to "Segment Information" appearing elsewhere herein.
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. These forward-looking statements generally include words such as "expect," "predict," "estimate," "will," "should," "anticipate," "believe," and similar expressions. Any such forward-looking statements involve assumptions, uncertainties, and risks that may affect the Company's future performance.
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.
Old Republic's Specialty Insurance segment results can be affected by the level of market competition, which is typically a function of available capital and expected returns on such capital among competitors; general economic considerations, including the levels of investment yields, inflation rates, and the impacts of tariffs; periodic changes in claim frequency and severity patterns caused by natural disasters, weather conditions, accidents, illnesses, and work-related injuries; claims development and the impact on loss reserves; adequacy and availability of reinsurance; uncertainties in underwriting and pricing risks; and unanticipated external events. Old Republic's Title Insurance segment 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, and employment trends. 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, the levels of investments held, and period-to-period variations in the costs of administering the Company's widespread operations. In addition, results could be particularly affected by technology and security breaches or failures, including cybersecurity incidents.
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 2025 Form 10-K, and the various risks, uncertainties, and other factors that are included from time to time in other Securities and Exchange Commission filings.
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.
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OLD REPUBLIC INTERNATIONAL CORPORATION