NYSE$ORI

Old Republic International Corp · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Old Republic reported results for the third quarter of 2020, showing growth in net income excluding investment gains, driven by greater profitability in General and Title Insurance segments.

Old Republic International Corporation reported increased net income, excluding investment gains, driven by higher profitability in the General and Title Insurance segments. The company's consolidated combined ratio improved, and book value per share rose. The COVID-19 pandemic continued to impact the U.S. economy, affecting premium and fee revenues in the General Insurance segment, while the Title Insurance segment experienced strong growth.

  • Net income, excluding investment gains, increased due to greater profitability in the General and Title Insurance segments.
  • Consolidated combined ratio improved to 92.0% for the third quarter.
  • Book value per share rose to $20.39 at September 30, 2020.
  • The Title Insurance segment experienced strong growth in premium and fee revenues.

Headline financials

Total Revenue

$1.8B

Previous: $1.71B+5.6%
EPS (adj)

$0.62

Previous: $0.51+21.6%
Consolidated Combined Ratio

92.0%

Previous: 94.4%-2.5%
General Insurance Combined

95.5%

Previous: 97.7%-2.3%
Title Insurance Combined

88.2%

Previous: 90.6%-2.6%
Net Income

$246M

Previous: $203M+21.3%
Operating Income

$307M

No prior period
Gross Profit

$1.88B

Previous: $1.77B+6.4%
Total Assets

$22.2B

Previous: $21.2B+5.0%

Revenue & EPS history

Old Republic · Revenue · Quarterly

$1.8B

Q3 2020+5.6%vs Q3 2019
Beat estimate in 14 of 16 quarters(88%)
ActualEstimate

Revenue by segment

Old Republic · $1.65B total across 2 segments · Q3 2020

  • Specialty Insurance
    $862M-1.0%
  • Title Insurance
    $789M+17.1%

Forward guidance

The economic impacts from the COVID-19 pandemic could affect future premium and fee revenues in the General Insurance and Title Insurance segments, and conversely underwriting expense ratios could rise. In the RFIG Run-off business, future claims experience could depend upon the continued, mitigating effects of loan forbearance programs mandated by the Federal government, and the rate at which employment levels recover. These outcomes notwithstanding, management firmly believes that the Company’s strong financial condition will enable it to weather these challenges, and most importantly allow its insurance subsidiaries to meet their obligations to customers, policyholders and their beneficiaries.

Tailwinds

  • Company’s strong financial condition will enable it to weather these challenges.
  • Insurance subsidiaries can meet their obligations to customers, policyholders and their beneficiaries.
  • Management's key objectives are to achieve a continuous, long-term improvement in operating results
  • Management's key objectives are to ensure balance sheet strength for the primary needs of the insurance subsidiaries' underwriting and related services business.
  • Business is managed for the long run.

Headwinds

  • Economic impacts from the COVID-19 pandemic could affect future premium and fee revenues in the General Insurance.
  • Economic impacts from the COVID-19 pandemic could affect future premium and fee revenues in the Title Insurance segments.
  • Underwriting expense ratios could rise.
  • Future claims experience could depend upon the continued, mitigating effects of loan forbearance programs mandated by the Federal government.
  • Future claims experience could depend on the rate at which employment levels recover.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2020

Historical avgQ3 2020

-0.4%

Avg return

Earnings day

+0.2%

Avg return

5 days after

+2.5%

Avg return

30 days after

51%

35 / 68 earnings

Positive

+9.2%

Q3 2018

Best reaction

-10.1%

Q3 2016

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-5.2%-4.5%-6.4%
Q4 2025-9.3%-10.3%-4.4%
Q3 2025-3.0%-6.3%+9.1%
Q2 2025-2.5%-0.8%+9.0%
Q1 2025+1.2%-0.6%-1.4%
Q4 2024+1.3%+2.6%+2.1%
Q3 2024-3.9%-1.8%+7.9%
Q1 2024-0.6%-1.5%+4.0%
Q4 2023-7.9%-7.0%-5.4%
Q3 2023+0.4%+2.0%+7.9%
Q2 2023+1.5%+1.8%+0.3%
Q1 2023+2.6%+3.5%+0.6%
Q4 2022+5.1%+6.8%+6.8%
Q3 2022+2.2%+1.5%+6.5%
Q2 2022+2.0%+0.1%+5.3%
Q1 2022-7.8%-5.6%-0.8%
Q4 2021+2.7%+4.6%+6.2%
Q3 2021+7.8%+8.3%+4.9%
Q2 2021-0.2%+0.4%+7.7%
Q1 2021+1.1%+2.7%+10.0%
Q4 2020+0.7%+5.1%+7.5%
Q3 2020+6.4%+0.3%+14.4%
Q2 2020-4.9%-6.3%-7.8%
Q1 2020-0.9%+5.6%-2.1%
Q4 2019+1.9%+0.6%+1.2%
Q3 2019-5.3%-6.1%-6.7%
Q2 2019-2.1%-1.8%-2.7%
Q1 2019+4.2%+5.5%+6.4%
Q4 2018-7.8%-7.9%-2.8%
Q3 2018+9.2%+10.8%+8.2%
Q2 2018+2.4%+4.3%+9.2%
Q1 2018-3.3%-3.6%+0.0%
Q4 2017+7.4%+7.8%-0.7%
Q3 2017+0.4%+4.4%+7.5%
Q2 2017-4.2%-2.2%-2.9%
Q1 2017+2.3%-0.3%-2.4%
Q4 2016+5.9%+6.3%+6.7%
Q3 2016-10.1%-8.6%-1.2%
Q2 2016-1.6%-2.1%-3.5%
Q1 2016+1.0%
Q4 2015+1.3%
Q3 2015+8.1%
Q2 2015+0.4%
Q1 2015+2.5%
Q4 2014-1.6%
Q3 2014-1.2%
Q2 2014-7.6%
Q1 2014-1.6%
Q4 2013-8.2%
Q3 2013+7.7%
Q2 2013+2.1%
Q1 2013+0.6%
Q4 2012-0.7%
Q3 2012-5.9%
Q2 2012+0.6%
Q1 2012-0.9%
Q4 2011+2.1%
Q3 2011-4.6%
Q2 2011-5.1%
Q1 2010-0.2%
Q1 2011+4.0%
Q4 2008-2.3%
Q4 2010-2.3%
Q3 2010+0.7%
Q2 2009+0.7%
Q3 2009+0.7%
Q2 2010-1.5%
Q4 2009-1.5%

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