|
UNITED STATES
|
SECURITIES AND EXCHANGE COMMISSION
|
Washington, D. C. 20549
|
|
FORM 10-Q
|
[x]
|
Quarterly report pursuant to section 13 or 15(d) of the Security Exchange Act of 1934
|
|
for the quarterly period ended:
March 31, 2013
or
|
|
|
[ ]
|
Transition report pursuant to section 13 or 15(d) of the Security Exchange Act of 1934
|
Commission File Number:
|
001-10607
|
|
OLD REPUBLIC INTERNATIONAL CORPORATION
|
(Exact name of registrant as specified in its charter)
|
Delaware
|
|
No. 36-2678171
|
(State or other jurisdiction of
|
|
(IRS Employer Identification No.)
|
incorporation or organization)
|
|
|
307 North Michigan Avenue, Chicago, Illinois
|
|
60601
|
(Address of principal executive office)
|
|
(Zip Code)
|
Large accelerated filer
x
|
Accelerated filer
o
|
|
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
Class
|
|
Shares Outstanding
March 31, 2013
|
Common Stock / $1 par value
|
|
259,574,937
|
OLD REPUBLIC INTERNATIONAL CORPORATION
|
||
|
||
Report on Form 10-Q / March 31, 2013
|
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|
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INDEX
|
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PAGE NO.
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|
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|
|
PART I
|
FINANCIAL INFORMATION:
|
|
|
|
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CONSOLIDATED BALANCE SHEETS
|
3
|
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
4
|
|
|
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
5
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
6
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|
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
7 - 18
|
|
|
|
|
MANAGEMENT ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS
|
19 - 47
|
|
|
|
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
48
|
|
|
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|
CONTROLS AND PROCEDURES
|
48
|
|
|
|
PART II
|
OTHER INFORMATION:
|
|
|
|
|
|
ITEM 1 - LEGAL PROCEEDINGS
|
49
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|
|
|
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ITEM 1A - RISK FACTORS
|
49
|
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ITEM 6 - EXHIBITS
|
49
|
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|
SIGNATURE
|
50
|
|
|
|
|
EXHIBIT INDEX
|
51
|
Old Republic International Corporation and Subsidiaries
|
|||||||
Consolidated Balance Sheets
|
|||||||
($ in Millions, Except Share Data)
|
|||||||
|
(Unaudited)
|
|
|
||||
|
March 31,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Assets
|
|
|
|
||||
Investments:
|
|
|
|
||||
Available for sale:
|
|
|
|
||||
Fixed maturity securities (at fair value) (amortized cost: $8,125.8 and $7,993.1)
|
$
|
8,672.3
|
|
|
$
|
8,566.2
|
|
Equity securities (at fair value) (adjusted cost: $452.1 and $452.1)
|
873.2
|
|
|
739.7
|
|
||
Short‑term investments (at fair value which approximates cost)
|
1,199.8
|
|
|
1,264.9
|
|
||
Miscellaneous investments
|
18.3
|
|
|
29.6
|
|
||
Total
|
10,763.8
|
|
|
10,600.5
|
|
||
Other investments
|
5.3
|
|
|
8.2
|
|
||
Total investments
|
10,769.1
|
|
|
10,608.8
|
|
||
|
|
|
|
||||
Other Assets:
|
|
|
|
||||
Cash
|
122.6
|
|
|
101.2
|
|
||
Securities and indebtedness of related parties
|
12.6
|
|
|
12.7
|
|
||
Accrued investment income
|
94.7
|
|
|
90.4
|
|
||
Accounts and notes receivable
|
1,183.9
|
|
|
1,134.7
|
|
||
Federal income tax recoverable: Current
|
54.6
|
|
|
71.9
|
|
||
Deferred
|
78.5
|
|
|
148.1
|
|
||
Reinsurance balances and funds held
|
201.8
|
|
|
201.6
|
|
||
Reinsurance recoverable: Paid losses
|
110.9
|
|
|
103.7
|
|
||
Policy and claim reserves
|
3,162.2
|
|
|
3,133.3
|
|
||
Deferred policy acquisition costs
|
167.8
|
|
|
165.5
|
|
||
Sundry assets
|
451.6
|
|
|
454.2
|
|
||
Total Other Assets
|
5,641.5
|
|
|
5,618.0
|
|
||
Total Assets
|
$
|
16,410.7
|
|
|
$
|
16,226.8
|
|
|
|
|
|
||||
Liabilities, Preferred Stock, and Common Shareholders' Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Losses, claims, and settlement expenses
|
$
|
9,353.4
|
|
|
$
|
9,303.3
|
|
Unearned premiums
|
1,427.8
|
|
|
1,364.4
|
|
||
Other policyholders' benefits and funds
|
200.8
|
|
|
201.8
|
|
||
Total policy liabilities and accruals
|
10,982.2
|
|
|
10,869.6
|
|
||
Commissions, expenses, fees, and taxes
|
505.8
|
|
|
511.1
|
|
||
Reinsurance balances and funds
|
473.4
|
|
|
437.9
|
|
||
Debt
|
570.0
|
|
|
572.9
|
|
||
Sundry liabilities
|
205.7
|
|
|
238.8
|
|
||
Commitments and contingent liabilities
|
|
|
|
||||
Total Liabilities
|
12,737.3
|
|
|
12,630.6
|
|
||
|
|
|
|
||||
Preferred Stock
(1)
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Common Shareholders' Equity:
|
|
|
|
||||
Common stock (1)
|
259.5
|
|
|
259.4
|
|
||
Additional paid‑in capital
|
659.8
|
|
|
660.9
|
|
||
Retained earnings
|
2,232.4
|
|
|
2,222.3
|
|
||
Accumulated other comprehensive income (loss)
|
548.3
|
|
|
481.7
|
|
||
Unallocated ESSOP shares (at cost)
|
(26.9
|
)
|
|
(28.2
|
)
|
||
Total Common Shareholders' Equity
|
3,673.3
|
|
|
3,596.2
|
|
||
Total Liabilities, Preferred Stock and Common Shareholders' Equity
|
$
|
16,410.7
|
|
|
$
|
16,226.8
|
|
(1)
|
At
March 31, 2013
and
December 31, 2012
, there were
75,000,000
shares of
$0.01
par value preferred stock authorized, of which no shares were outstanding. As of the same dates, there were
500,000,000
shares of common stock,
$1.00
par value, authorized, of which
259,574,937
and
259,490,089
were issued as of
March 31, 2013
and
December 31, 2012
, respectively. At
March 31, 2013
and
December 31, 2012
, there were
100,000,000
shares of Class B Common Stock,
$1.00
par value, authorized, of which no shares were issued.
|
Old Republic International Corporation and Subsidiaries
|
|||||||||||
Consolidated Statements of Comprehensive Income
(Unaudited)
|
|||||||||||
($ in Millions)
|
|||||||||||
|
|
|
Quarters Ended
|
||||||||
|
|
|
March 31,
|
||||||||
|
|
|
|
|
2013
|
|
2012
|
||||
Net Income (Loss) As Reported
|
|
|
|
|
$
|
56.2
|
|
|
$
|
.4
|
|
|
|
|
|
|
|
|
|
||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||
Unrealized gains (losses) on securities:
|
|
|
|
|
|
|
|
||||
Unrealized gains (losses) on securities before
|
|
|
|
|
|
|
|
||||
reclassifications
|
|
|
|
|
109.0
|
|
|
60.4
|
|
||
Amounts reclassified as realized investment
|
|
|
|
|
|
|
|
||||
gains from sales in the statements of income
|
|
|
|
|
(4.5
|
)
|
|
(2.9
|
)
|
||
Pretax unrealized gains (losses) on securities
|
|
|
|
|
104.5
|
|
|
57.4
|
|
||
Deferred income taxes (credits)
|
|
|
|
|
36.6
|
|
|
20.0
|
|
||
Net unrealized gains (losses) on securities, net of tax
|
|
|
|
|
67.9
|
|
|
37.4
|
|
||
Defined benefit pension plans:
|
|
|
|
|
|
|
|
||||
Net pension adjustment before reclassifications
|
|
|
|
|
—
|
|
|
—
|
|
||
Amounts reclassified as underwriting, acquisition,
|
|
|
|
|
|
|
|
||||
and other expenses in the statements of income
|
|
|
|
|
2.9
|
|
|
2.6
|
|
||
Net adjustment related to defined benefit
|
|
|
|
|
|
|
|
||||
pension plans
|
|
|
|
|
2.9
|
|
|
2.6
|
|
||
Deferred income taxes (credits)
|
|
|
|
|
1.0
|
|
|
.9
|
|
||
Net adjustment related to defined benefit pension
|
|
|
|
|
|
|
|
||||
plans, net of tax
|
|
|
|
|
1.8
|
|
|
1.7
|
|
||
Foreign currency translation and other adjustments
|
|
|
|
|
(3.1
|
)
|
|
3.4
|
|
||
Net adjustments
|
|
|
|
|
66.6
|
|
|
42.6
|
|
||
Comprehensive Income (Loss)
|
|
|
|
|
$
|
122.8
|
|
|
$
|
43.1
|
|
Old Republic International Corporation and Subsidiaries
|
||||||||
Consolidated Statements of Cash Flows
(Unaudited)
|
||||||||
($ in Millions)
|
||||||||
|
|
Quarters Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
56.2
|
|
|
$
|
.4
|
|
Adjustments to reconcile net income (loss) to
|
|
|
|
|
||||
net cash provided by operating activities:
|
|
|
|
|
||||
Deferred policy acquisition costs
|
|
(2.5
|
)
|
|
7.8
|
|
||
Premiums and other receivables
|
|
(49.1
|
)
|
|
(66.2
|
)
|
||
Unpaid claims and related items
|
|
44.8
|
|
|
79.0
|
|
||
Unearned premiums and other policyholders' liabilities
|
|
39.4
|
|
|
36.3
|
|
||
Income taxes
|
|
46.4
|
|
|
(7.7
|
)
|
||
Reinsurance balances and funds
|
|
28.2
|
|
|
(5.8
|
)
|
||
Realized investment (gains) losses
|
|
(4.5
|
)
|
|
(2.9
|
)
|
||
Accounts payable, accrued expenses and other
|
|
(15.7
|
)
|
|
8.1
|
|
||
Total
|
|
143.2
|
|
|
49.0
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
||||
Fixed maturity securities:
|
|
|
|
|
||||
Maturities and early calls
|
|
279.1
|
|
|
190.9
|
|
||
Sales
|
|
15.8
|
|
|
30.0
|
|
||
Sales of:
|
|
|
|
|
||||
Equity securities
|
|
—
|
|
|
.5
|
|
||
Other - net
|
|
19.4
|
|
|
12.4
|
|
||
Purchases of:
|
|
|
|
|
||||
Fixed maturity securities
|
|
(441.7
|
)
|
|
(242.3
|
)
|
||
Equity securities
|
|
—
|
|
|
(.4
|
)
|
||
Other - net
|
|
(9.2
|
)
|
|
(8.2
|
)
|
||
Net decrease (increase) in short-term investments
|
|
64.9
|
|
|
41.0
|
|
||
Other‑net
|
|
(.4
|
)
|
|
(.4
|
)
|
||
Total
|
|
(72.1
|
)
|
|
23.4
|
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
||||
Issuance of common shares
|
|
.5
|
|
|
.3
|
|
||
Redemption of debentures and notes
|
|
(2.8
|
)
|
|
(2.6
|
)
|
||
Dividends on common shares
|
|
(46.0
|
)
|
|
(45.2
|
)
|
||
Other - net
|
|
(1.3
|
)
|
|
(.5
|
)
|
||
Total
|
|
(49.7
|
)
|
|
(48.2
|
)
|
||
|
|
|
|
|
||||
Increase (decrease) in cash:
|
|
21.3
|
|
|
24.3
|
|
||
Cash, beginning of period
|
|
101.2
|
|
|
93.0
|
|
||
Cash, end of period
|
|
$
|
122.6
|
|
|
$
|
117.4
|
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
|
||||
Cash paid (received) during the period for: Interest
|
|
$
|
10.4
|
|
|
$
|
10.9
|
|
Income taxes
|
|
$
|
(17.7
|
)
|
|
$
|
4.4
|
|
|
|
|
Quarters Ended
|
||||||||
|
|
|
March 31,
|
||||||||
|
|
|
|
|
2013
|
|
2012
|
||||
Numerator:
|
|
|
|
|
|
|
|
||||
Net income (loss)
|
|
|
|
|
$
|
56.2
|
|
|
$
|
.4
|
|
Numerator for basic earnings per share -
|
|
|
|
|
|
|
|
||||
income (loss) available to common stockholders
|
|
|
|
|
56.2
|
|
|
.4
|
|
||
Adjustment for interest expense incurred on
|
|
|
|
|
|
|
|
||||
assumed conversion of convertible notes
|
|
|
|
|
3.6
|
|
|
—
|
|
||
Numerator for diluted earnings per share -
|
|
|
|
|
|
|
|
||||
income (loss) available to common stockholders
|
|
|
|
|
|
|
|
||||
after assumed conversion of convertible notes
|
|
|
|
|
$
|
59.8
|
|
|
$
|
.4
|
|
|
|
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
|
|
|
|
||||
Denominator for basic earnings per share -
|
|
|
|
|
|
|
|
||||
weighted-average shares (a)
|
|
|
|
|
256,279,364
|
|
|
255,473,634
|
|
||
Effect of dilutive securities - stock based
|
|
|
|
|
|
|
|
||||
compensation awards
|
|
|
|
|
364,986
|
|
|
305,815
|
|
||
Effect of dilutive securities - convertible senior notes
|
|
|
|
|
35,437,435
|
|
|
—
|
|
||
Denominator for diluted earnings per share -
|
|
|
|
|
|
|
|
||||
adjusted weighted-average shares
|
|
|
|
|
|
|
|
||||
and assumed conversion of convertible notes (a)
|
|
|
|
|
292,081,785
|
|
|
255,779,449
|
|
||
Earnings per share: Basic
|
|
|
|
|
$
|
.22
|
|
|
$
|
—
|
|
Diluted
|
|
|
|
|
$
|
.21
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
Anti-dilutive common stock equivalents
|
|
|
|
|
|
|
|
||||
excluded from earning per share computations:
|
|
|
|
|
|
|
|
||||
Stock based compensation awards
|
|
|
|
|
12,066,638
|
|
|
14,865,927
|
|
||
Convertible senior notes
|
|
|
|
|
—
|
|
|
62,937,281
|
|
||
Total
|
|
|
|
|
12,066,638
|
|
|
77,803,208
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Fixed Maturity Securities by Type:
|
|
|
|
|
|
|
|
||||||||
March 31, 2013:
|
|
|
|
|
|
|
|
||||||||
U.S. & Canadian Governments
|
$
|
1,170.5
|
|
|
$
|
60.8
|
|
|
$
|
.3
|
|
|
$
|
1,231.0
|
|
Tax-exempt
|
331.6
|
|
|
9.2
|
|
|
—
|
|
|
340.7
|
|
||||
Corporate
|
6,623.6
|
|
|
483.0
|
|
|
6.2
|
|
|
7,100.4
|
|
||||
|
$
|
8,125.8
|
|
|
$
|
553.1
|
|
|
$
|
6.6
|
|
|
$
|
8,672.3
|
|
December 31, 2012:
|
|
|
|
|
|
|
|
||||||||
U.S. & Canadian Governments
|
$
|
1,151.2
|
|
|
$
|
65.9
|
|
|
$
|
.3
|
|
|
$
|
1,216.8
|
|
Tax-exempt
|
380.8
|
|
|
11.4
|
|
|
.1
|
|
|
392.2
|
|
||||
Corporate
|
6,461.0
|
|
|
502.1
|
|
|
6.0
|
|
|
6,957.1
|
|
||||
|
$
|
7,993.1
|
|
|
$
|
579.5
|
|
|
$
|
6.5
|
|
|
$
|
8,566.2
|
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
||||
Fixed Maturity Securities Stratified by Contractual Maturity at March 31, 2013:
|
|
|
|
||||
Due in one year or less
|
$
|
1,183.6
|
|
|
$
|
1,197.9
|
|
Due after one year through five years
|
3,558.1
|
|
|
3,782.5
|
|
||
Due after five years through ten years
|
3,182.9
|
|
|
3,474.5
|
|
||
Due after ten years
|
201.0
|
|
|
217.2
|
|
||
|
$
|
8,125.8
|
|
|
$
|
8,672.3
|
|
|
Adjusted
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Equity Securities:
|
|
|
|
|
|
|
|
||||||||
March 31, 2013
|
$
|
452.1
|
|
|
$
|
421.7
|
|
|
$
|
.5
|
|
|
$
|
873.2
|
|
December 31, 2012
|
$
|
452.1
|
|
|
$
|
290.5
|
|
|
$
|
2.9
|
|
|
$
|
739.7
|
|
|
12 Months or Less
|
|
Greater than 12 Months
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrealized Losses
|
|
Fair
Value
|
|
Unrealized Losses
|
|
Fair
Value
|
|
Unrealized Losses
|
||||||||||||
March 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed Maturity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. & Canadian Governments
|
$
|
57.2
|
|
|
$
|
.2
|
|
|
$
|
4.3
|
|
|
$
|
—
|
|
|
$
|
61.6
|
|
|
$
|
.3
|
|
Tax-exempt
|
5.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
|
—
|
|
||||||
Corporate
|
443.6
|
|
|
5.2
|
|
|
17.3
|
|
|
.9
|
|
|
460.9
|
|
|
6.2
|
|
||||||
Subtotal
|
506.7
|
|
|
5.6
|
|
|
21.7
|
|
|
.9
|
|
|
528.4
|
|
|
6.6
|
|
||||||
Equity Securities
|
15.4
|
|
|
.5
|
|
|
—
|
|
|
—
|
|
|
15.4
|
|
|
.5
|
|
||||||
Total
|
$
|
522.2
|
|
|
$
|
6.2
|
|
|
$
|
21.7
|
|
|
$
|
.9
|
|
|
$
|
543.9
|
|
|
$
|
7.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed Maturity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. & Canadian Governments
|
$
|
60.3
|
|
|
$
|
.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
60.3
|
|
|
$
|
.3
|
|
Tax-exempt
|
3.7
|
|
|
.1
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|
.1
|
|
||||||
Corporate
|
348.4
|
|
|
4.3
|
|
|
10.2
|
|
|
1.7
|
|
|
358.6
|
|
|
6.0
|
|
||||||
Subtotal
|
412.6
|
|
|
4.8
|
|
|
10.2
|
|
|
1.7
|
|
|
422.8
|
|
|
6.5
|
|
||||||
Equity Securities
|
78.9
|
|
|
2.9
|
|
|
—
|
|
|
—
|
|
|
78.9
|
|
|
2.9
|
|
||||||
Total
|
$
|
491.5
|
|
|
$
|
7.8
|
|
|
$
|
10.2
|
|
|
$
|
1.7
|
|
|
$
|
501.8
|
|
|
$
|
9.5
|
|
|
|
Fair Value Measurements
|
||||||||||||||
As of March 31, 2013:
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Available for sale:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. & Canadian Governments
|
|
$
|
579.7
|
|
|
$
|
651.3
|
|
|
$
|
—
|
|
|
$
|
1,231.0
|
|
Tax-exempt
|
|
—
|
|
|
340.7
|
|
|
—
|
|
|
340.7
|
|
||||
Corporate
|
|
—
|
|
|
7,069.6
|
|
|
30.7
|
|
|
7,100.4
|
|
||||
Equity securities
|
|
870.8
|
|
|
—
|
|
|
2.4
|
|
|
873.2
|
|
||||
Short-term investments
|
|
$
|
1,195.1
|
|
|
$
|
—
|
|
|
$
|
4.6
|
|
|
$
|
1,199.8
|
|
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2012:
|
|
|
|
|
|
|
|
|
||||||||
Available for sale:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. & Canadian Governments
|
|
$
|
570.9
|
|
|
$
|
645.9
|
|
|
$
|
—
|
|
|
$
|
1,216.8
|
|
Tax-exempt
|
|
—
|
|
|
392.2
|
|
|
—
|
|
|
392.2
|
|
||||
Corporate
|
|
—
|
|
|
6,926.3
|
|
|
30.7
|
|
|
6,957.1
|
|
||||
Equity securities
|
|
736.9
|
|
|
—
|
|
|
2.7
|
|
|
739.7
|
|
||||
Short-term investments
|
|
$
|
1,260.2
|
|
|
$
|
—
|
|
|
$
|
4.6
|
|
|
$
|
1,264.9
|
|
|
|
|
Quarters Ended
|
||||||||
|
|
|
March 31,
|
||||||||
|
|
|
|
|
2013
|
|
2012
|
||||
Investment income from:
|
|
|
|
|
|
|
|
||||
Fixed maturity securities
|
|
|
|
|
$
|
75.8
|
|
|
$
|
82.9
|
|
Equity securities
|
|
|
|
|
3.6
|
|
|
2.5
|
|
||
Short-term investments
|
|
|
|
|
.3
|
|
|
.6
|
|
||
Other sources
|
|
|
|
|
.8
|
|
|
1.0
|
|
||
Gross investment income
|
|
|
|
|
80.6
|
|
|
87.0
|
|
||
Investment expenses (a)
|
|
|
|
|
1.3
|
|
|
1.2
|
|
||
Net investment income
|
|
|
|
|
$
|
79.3
|
|
|
$
|
85.8
|
|
|
|
|
|
|
|
|
|
||||
Realized gains (losses) on:
|
|
|
|
|
|
|
|
||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
||||
Gains
|
|
|
|
|
$
|
.9
|
|
|
$
|
1.6
|
|
Losses
|
|
|
|
|
—
|
|
|
—
|
|
||
Net
|
|
|
|
|
.8
|
|
|
1.6
|
|
||
|
|
|
|
|
|
|
|
||||
Equity securities & other long-term investments
|
|
|
|
|
3.7
|
|
|
1.3
|
|
||
Total
|
|
|
|
|
4.5
|
|
|
2.9
|
|
||
Income taxes (credits)(b)
|
|
|
|
|
1.5
|
|
|
1.0
|
|
||
Net realized gains (losses)
|
|
|
|
|
$
|
2.9
|
|
|
$
|
1.8
|
|
Changes in unrealized investment gains (losses) on:
|
|
|
|
|
|
|
|
||||
Fixed maturity securities
|
|
|
|
|
$
|
(26.5
|
)
|
|
$
|
(4.5
|
)
|
Less: Deferred income taxes (credits)
|
|
|
|
|
(9.2
|
)
|
|
(1.6
|
)
|
||
Net changes in unrealized investment gains (losses)
|
|
|
|
|
$
|
(17.2
|
)
|
|
$
|
(2.9
|
)
|
|
|
|
|
|
|
|
|
||||
Equity securities & other long-term investments
|
|
|
|
|
$
|
131.1
|
|
|
$
|
62.0
|
|
Less: Deferred income taxes (credits)
|
|
|
|
|
45.8
|
|
|
21.6
|
|
||
Net changes in unrealized investment gains (losses)
|
|
|
|
|
$
|
85.2
|
|
|
$
|
40.4
|
|
(a)
|
Investment expenses consist of personnel costs and investment management and custody service fees, as well as interest incurred on funds held of
$.5
and
$.4
for the quarters ended
March 31, 2013
and
2012
, respectively.
|
(b)
|
Reflects primarily the combination of fully taxable realized investment gains or losses and judgments about the recoverability of deferred tax assets.
|
|
|
|
Quarters Ended
|
||||||||
|
|
|
March 31,
|
||||||||
|
|
|
|
|
2013
|
|
2012
|
||||
General Insurance:
|
|
|
|
|
|
|
|
||||
Prior to reclassification and including CCI run-off business:
|
|
|
|
|
|
|
|||||
Net premiums earned
|
|
|
|
|
$
|
608.0
|
|
|
$
|
561.0
|
|
Net investment income and other income
|
|
|
|
|
81.7
|
|
|
96.8
|
|
||
Total revenues before realized gains or losses
|
|
|
|
|
$
|
689.7
|
|
|
$
|
657.9
|
|
Income (loss) before taxes (credits) and
|
|
|
|
|
|
|
|
||||
realized investment gains or losses (a)
|
|
|
|
|
$
|
68.9
|
|
|
$
|
71.0
|
|
Income tax expense (credits) on above
|
|
|
|
|
$
|
22.7
|
|
|
$
|
22.6
|
|
|
|
|
|
|
|
|
|
||||
All CCI run-off business reclassification:
|
|
|
|
|
|
|
|||||
Net premiums earned
|
|
|
|
|
$
|
7.8
|
|
|
$
|
12.0
|
|
Net investment income and other income
|
|
|
|
|
—
|
|
|
—
|
|
||
Total revenues before realized gains or losses
|
|
|
|
|
$
|
7.9
|
|
|
$
|
12.0
|
|
Income (loss) before taxes (credits) and
|
|
|
|
|
|
|
|
||||
realized investment gains or losses (a)
|
|
|
|
|
$
|
(7.1
|
)
|
|
$
|
(9.4
|
)
|
Income tax expense (credits) on above
|
|
|
|
|
$
|
(2.5
|
)
|
|
$
|
(3.3
|
)
|
|
|
|
|
|
|
|
|
||||
After reclassification and total excluding all CCI run-off business:
|
|
|
|
|
|||||||
Net premiums earned
|
|
|
|
|
$
|
600.2
|
|
|
$
|
548.9
|
|
Net investment income and other income
|
|
|
|
|
81.6
|
|
|
96.8
|
|
||
Total revenues before realized gains or losses
|
|
|
|
|
$
|
681.8
|
|
|
$
|
645.8
|
|
Income (loss) before taxes (credits) and
|
|
|
|
|
|
|
|
||||
realized investment gains or losses (a)
|
|
|
|
|
$
|
76.0
|
|
|
$
|
80.5
|
|
Income tax expense (credits) on above
|
|
|
|
|
$
|
25.3
|
|
|
$
|
26.0
|
|
|
|
|
|
|
|
|
|
||||
Title Insurance:
|
|
|
|
|
|
|
|
||||
Net premiums earned
|
|
|
|
|
$
|
355.1
|
|
|
$
|
261.0
|
|
Title, escrow and other fees
|
|
|
|
|
105.4
|
|
|
93.9
|
|
||
Sub-total
|
|
|
|
|
460.5
|
|
|
355.0
|
|
||
Net investment income and other income
|
|
|
|
|
7.2
|
|
|
7.2
|
|
||
Total revenues before realized gains or losses
|
|
|
|
|
$
|
467.7
|
|
|
$
|
362.2
|
|
Income (loss) before taxes (credits) and
|
|
|
|
|
|
|
|
||||
realized investment gains or losses (a)
|
|
|
|
|
$
|
21.5
|
|
|
$
|
9.4
|
|
Income tax expense (credits) on above
|
|
|
|
|
$
|
7.6
|
|
|
$
|
3.3
|
|
|
|
|
|
|
|
|
|
||||
RFIG Run-off Business:
|
|
|
|
|
|
|
|
||||
Prior to reclassification and excluding CCI run-off business:
|
|
|
|
|
|
|
|||||
Net premiums earned
|
|
|
|
|
$
|
79.9
|
|
|
$
|
103.2
|
|
Net investment income and other income
|
|
|
|
|
9.0
|
|
|
10.7
|
|
||
Total revenues before realized gains or losses
|
|
|
|
|
$
|
89.0
|
|
|
$
|
113.9
|
|
Income (loss) before taxes (credits) and
|
|
|
|
|
|
|
|
||||
realized investment gains or losses (a)
|
|
|
|
|
$
|
(13.0
|
)
|
|
$
|
(81.8
|
)
|
Income tax expense (credits) on above
|
|
|
|
|
$
|
(4.5
|
)
|
|
$
|
(28.6
|
)
|
|
|
|
|
|
|
|
|
||||
All CCI run-off business reclassification:
|
|
|
|
|
|
|
|
||||
Net premiums earned
|
|
|
|
|
$
|
7.8
|
|
|
$
|
12.0
|
|
Net investment income and other income
|
|
|
|
|
—
|
|
|
—
|
|
||
Total revenues before realized gains or losses
|
|
|
|
|
$
|
7.9
|
|
|
$
|
12.0
|
|
Income (loss) before taxes (credits) and
|
|
|
|
|
|
|
|
||||
realized investment gains or losses (a)
|
|
|
|
|
$
|
(7.1
|
)
|
|
$
|
(9.4
|
)
|
Income tax expense (credits) on above
|
|
|
|
|
$
|
(2.5
|
)
|
|
$
|
(3.3
|
)
|
|
|
|
|
|
|
|
|
||||
After reclassification and total RFIG run-off MI and CCI business:
|
|
|
|
|
|||||||
Net premiums earned
|
|
|
|
|
$
|
87.7
|
|
|
$
|
115.3
|
|
Net investment income and other income
|
|
|
|
|
9.1
|
|
|
10.7
|
|
||
Total revenues before realized gains or losses
|
|
|
|
|
$
|
96.9
|
|
|
$
|
126.0
|
|
Income (loss) before taxes (credits) and
|
|
|
|
|
|
|
|
||||
realized investment gains or losses (a)
|
|
|
|
|
$
|
(20.2
|
)
|
|
$
|
(91.2
|
)
|
Income tax expense (credits) on above
|
|
|
|
|
$
|
(7.0
|
)
|
|
$
|
(31.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
||||||||
|
|
|
March 31,
|
||||||||
|
|
|
|
|
2013
|
|
2012
|
||||
Consolidated Revenues:
|
|
|
|
|
|
|
|
||||
Total revenues of above Company segments
|
|
|
|
|
$
|
1,246.5
|
|
|
$
|
1,134.1
|
|
Other sources (b)
|
|
|
|
|
33.5
|
|
|
37.1
|
|
||
Consolidated net realized investment gains (losses)
|
|
|
|
|
4.5
|
|
|
2.9
|
|
||
Consolidation elimination adjustments
|
|
|
|
|
(14.7
|
)
|
|
(16.2
|
)
|
||
Consolidated revenues
|
|
|
|
|
$
|
1,269.9
|
|
|
$
|
1,158.0
|
|
|
|
|
|
|
|
|
|
||||
Consolidated Income (Loss) Before Taxes (Credits):
|
|
|
|
|
|
|
|
||||
Total income (loss) before income taxes (credits)
|
|
|
|
|
|
|
|
||||
and realized investment gains or losses of
|
|
|
|
|
|
|
|
||||
above Company segments
|
|
|
|
|
$
|
77.3
|
|
|
$
|
(1.3
|
)
|
Other sources - net (b)
|
|
|
|
|
2.6
|
|
|
(4.2
|
)
|
||
Consolidated net realized investment gains (losses)
|
|
|
|
|
4.5
|
|
|
2.9
|
|
||
Consolidated income (loss) before income
|
|
|
|
|
|
|
|
||||
taxes (credits)
|
|
|
|
|
$
|
84.5
|
|
|
$
|
(2.6
|
)
|
|
|
|
|
|
|
|
|
||||
Consolidated Income Tax Expense (Credits):
|
|
|
|
|
|
|
|
||||
Total income tax expense (credits)
|
|
|
|
|
|
|
|
||||
for above Company segments
|
|
|
|
|
$
|
25.9
|
|
|
$
|
(2.5
|
)
|
Other sources - net (b)
|
|
|
|
|
.7
|
|
|
(1.6
|
)
|
||
Income tax expense (credits) on consolidated
|
|
|
|
|
|
|
|
||||
net realized investment gains (losses)
|
|
|
|
|
1.5
|
|
|
1.0
|
|
||
Consolidated income tax expense (credits)
|
|
|
|
|
$
|
28.3
|
|
|
$
|
(3.1
|
)
|
|
March 31,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Consolidated Assets:
|
|
|
|
||||
General Insurance
|
$
|
12,979.1
|
|
|
$
|
12,770.2
|
|
Title Insurance
|
1,104.0
|
|
|
1,076.5
|
|
||
RFIG Run-off Business
|
2,007.3
|
|
|
2,051.1
|
|
||
Total assets for the above company segments
|
16,090.5
|
|
|
15,897.9
|
|
||
Other assets (b)
|
615.4
|
|
|
626.2
|
|
||
Consolidation elimination adjustments
|
(295.2
|
)
|
|
(297.3
|
)
|
||
Consolidated assets
|
$
|
16,410.7
|
|
|
$
|
16,226.8
|
|
(a)
|
Income (loss) before taxes (credits) is reported net of interest charges on intercompany financing arrangements with Old Republic's holding company parent for the following segments: General -
$7.1
and
$6.9
for the quarters ended
March 31, 2013
and
2012
, respectively; Title -
$1.9
and
$2.0
for the quarters ended
March 31, 2013
and
2012
, respectively, and RFIG run-off -
$0
and
$2.0
for the quarters ended
March 31, 2013
and
2012
, respectively.
|
(b)
|
Represents amounts for Old Republic's holding company parent, minor corporate services subsidiaries, and a small life and accident insurance operation.
|
|
March 31, 2013
|
|
December 31, 2012
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
3.75% Convertible Senior Notes due 2018
|
$
|
550.0
|
|
|
$
|
612.5
|
|
|
$
|
550.0
|
|
|
$
|
568.5
|
|
ESSOP debt with an average yield of 3.71%
|
|
|
|
|
|
|
|
||||||||
and 3.74%, respectively
|
18.0
|
|
|
18.0
|
|
|
20.8
|
|
|
20.8
|
|
||||
Other miscellaneous debt
|
2.0
|
|
|
2.0
|
|
|
2.0
|
|
|
2.0
|
|
||||
Total debt
|
$
|
570.0
|
|
|
$
|
632.6
|
|
|
$
|
572.9
|
|
|
$
|
591.5
|
|
|
|
Carrying
|
|
Fair
|
|
|
||||||||||||||
|
|
Value
|
|
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
March 31, 2013
|
|
$
|
570.0
|
|
|
$
|
632.6
|
|
|
$
|
—
|
|
|
$
|
612.5
|
|
|
$
|
20.0
|
|
December 31, 2012
|
|
$
|
572.9
|
|
|
$
|
591.5
|
|
|
$
|
—
|
|
|
$
|
568.5
|
|
|
$
|
22.9
|
|
OVERVIEW
|
EXECUTIVE SUMMARY
|
|
|
|
|
|
|
|
|
|
|
Financial Highlights
|
|||||||||
|
|
|
|
Quarters Ended March 31,
|
|||||||||||||||
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
Change
|
|||||||
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Excluding run-off business
|
|
|
|
|
|
|
|
|
|
$
|
1,168.4
|
|
|
$
|
1,029.0
|
|
|
13.5
|
%
|
RFIG run-off business
|
|
|
|
|
|
|
|
|
|
|
96.9
|
|
|
|
126.0
|
|
|
(23.1
|
)
|
Total
|
|
|
|
|
|
|
|
|
|
$
|
1,265.4
|
|
|
$
|
1,155.1
|
|
|
9.5
|
%
|
Net Operating Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Excluding run-off business
|
|
|
|
|
|
|
|
|
|
$
|
66.4
|
|
|
$
|
57.9
|
|
|
14.7
|
%
|
RFIG run-off business
|
|
|
|
|
|
|
|
|
|
|
(13.1
|
)
|
|
|
(59.3
|
)
|
|
77.8
|
|
Total
|
|
|
|
|
|
|
|
|
|
$
|
53.2
|
|
|
$
|
(1.4
|
)
|
|
N/M %
|
|
Net Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Excluding run-off business
|
|
|
|
|
|
|
|
|
|
$
|
69.1
|
|
|
$
|
59.8
|
|
|
15.6
|
%
|
RFIG run-off business
|
|
|
|
|
|
|
|
|
|
|
(12.9
|
)
|
|
|
(59.3
|
)
|
|
78.3
|
|
Total
|
|
|
|
|
|
|
|
|
|
$
|
56.2
|
|
|
$
|
0.4
|
|
|
N/M %
|
|
Diluted Earnings Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Excluding run-off business
|
|
|
|
|
|
|
|
|
|
$
|
0.24
|
|
|
$
|
0.22
|
|
|
9.1
|
%
|
RFIG run-off business
|
|
|
|
|
|
|
|
|
|
|
(0.04
|
)
|
|
|
(0.23
|
)
|
|
82.6
|
|
Total
|
|
|
|
|
|
|
|
|
|
$
|
0.20
|
|
|
$
|
(0.01
|
)
|
|
N/M %
|
|
Net Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Excluding run-off business
|
|
|
|
|
|
|
|
|
|
$
|
0.25
|
|
|
$
|
0.23
|
|
|
8.7
|
%
|
RFIG run-off business
|
|
|
|
|
|
|
|
|
|
|
(0.04
|
)
|
|
|
(0.23
|
)
|
|
82.6
|
|
Total
|
|
|
|
|
|
|
|
|
|
$
|
0.21
|
|
|
$
|
—
|
|
|
N/M %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Cash Dividends Per Share
|
|
|
|
|
|
|
|
|
|
$
|
0.1800
|
|
|
$
|
0.1775
|
|
|
1.4
|
%
|
Ending Book Value Per Share
|
|
|
|
|
|
|
|
|
|
$
|
14.31
|
|
|
$
|
14.74
|
|
|
(2.9
|
)%
|
|
|
|
|
Quarters Ended March 31,
|
||||||||||
|
|
|
|
|
|
2013
|
|
2012
|
||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||
General insurance
|
|
|
|
|
|
|
|
$
|
681.8
|
|
|
$
|
645.8
|
|
Title insurance
|
|
|
|
|
|
|
|
|
467.7
|
|
|
|
362.2
|
|
Corporate and other
|
|
|
|
|
|
|
|
|
18.8
|
|
|
|
20.9
|
|
Subtotal
|
|
|
|
|
|
|
|
|
1,168.4
|
|
|
|
1,029.0
|
|
RFIG run-off business
|
|
|
|
|
|
|
|
|
96.9
|
|
|
|
126.0
|
|
Total
|
|
|
|
|
|
|
|
$
|
1,265.4
|
|
|
$
|
1,155.1
|
|
Pretax operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
||
General insurance
|
|
|
|
|
|
|
|
$
|
76.0
|
|
|
$
|
80.5
|
|
Title insurance
|
|
|
|
|
|
|
|
|
21.5
|
|
|
|
9.4
|
|
Corporate and other
|
|
|
|
|
|
|
|
|
2.6
|
|
|
|
(4.2
|
)
|
Subtotal
|
|
|
|
|
|
|
|
|
100.2
|
|
|
|
85.6
|
|
RFIG run-off business
|
|
|
|
|
|
|
|
|
(20.2
|
)
|
|
|
(91.2
|
)
|
Total
|
|
|
|
|
|
|
|
|
79.9
|
|
|
|
(5.6
|
)
|
Realized
investment
gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
||
From sales
|
|
|
|
|
|
|
|
|
4.5
|
|
|
|
2.9
|
|
From impairments
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Net realized investment gains (losses)
|
|
|
|
|
|
|
|
|
4.5
|
|
|
|
2.9
|
|
Consolidated pretax income
(loss)
|
|
|
|
|
|
|
|
|
84.5
|
|
|
|
(2.6
|
)
|
Income taxes (credits)
|
|
|
|
|
|
|
|
|
28.3
|
|
|
|
(3.1
|
)
|
Net income (loss)
|
|
|
|
|
|
|
|
$
|
56.2
|
|
|
$
|
0.4
|
|
Consolidated
underwriting ratio:
|
|
|
|
|
|
|
|
|
||
Including RFIG run-off business:
|
|
|
|
|
|
|
|
|
||
Benefits and claim ratio
|
|
|
|
|
|
50.1
|
%
|
|
59.4
|
%
|
Expense ratio
|
|
|
|
|
|
49.1
|
|
|
47.6
|
|
Composite ratio
|
|
|
|
|
|
99.2
|
%
|
|
107.0
|
%
|
Excluding RFIG run-off business:
|
|
|
|
|
|
|
|
|
||
Benefits and claim ratio
|
|
|
|
|
|
43.9
|
%
|
|
45.2
|
%
|
Expense ratio
|
|
|
|
|
|
52.6
|
|
|
51.9
|
|
Composite ratio
|
|
|
|
|
|
96.5
|
%
|
|
97.1
|
%
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net operating income (loss)
|
|
|
|
|
|
|
|
$
|
0.20
|
|
|
$
|
(0.01
|
)
|
Net realized investment gains (losses)
|
|
|
|
|
|
|
|
|
0.01
|
|
|
|
0.01
|
|
Net income (loss)
|
|
|
|
|
|
|
|
$
|
0.21
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cash dividends paid per share
|
|
|
|
|
|
|
|
$
|
0.1800
|
|
|
$
|
0.1775
|
|
Components of diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
||
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
||
General insurance
|
|
|
|
|
|
|
|
$
|
0.17
|
|
|
$
|
0.21
|
|
Title insurance
|
|
|
|
|
|
|
|
|
0.05
|
|
|
|
0.02
|
|
Corporate and other
|
|
|
|
|
|
|
|
|
0.02
|
|
|
|
(0.01
|
)
|
Subtotal
|
|
|
|
|
|
|
|
|
0.24
|
|
|
|
0.22
|
|
RFIG run-off business
|
|
|
|
|
|
|
|
|
(0.04
|
)
|
|
|
(0.23
|
)
|
Total
|
|
|
|
|
|
|
|
|
0.20
|
|
|
|
(0.01
|
)
|
Net realized investment gains (losses)
|
|
|
|
|
|
|
|
|
0.01
|
|
|
|
0.01
|
|
Net income (loss)
|
|
|
|
|
|
|
|
$
|
0.21
|
|
|
$
|
—
|
|
|
|
|
|
Quarters Ended
|
||||||||||
|
|
|
|
March 31,
|
||||||||||
|
|
|
|
|
|
2013
|
|
2012
|
||||||
Realized gains (losses) from sales of
|
|
|
|
|
|
|
|
|
|
|
|
|
||
previously impaired securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Actual tax basis (loss) on sales
|
|
|
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accounting adjustment for impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
||
charges taken in prior periods
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Net amount included herein
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Net realized gains from sales of all other securities
|
|
|
|
|
|
|
|
|
4.5
|
|
|
|
2.9
|
|
Net gain (loss) from actual sales
|
|
|
|
|
|
|
|
|
4.5
|
|
|
|
2.9
|
|
Net realized losses from impairments
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Net realized investment gains (losses) reported herein
|
|
|
|
|
|
|
|
$
|
4.5
|
|
|
$
|
2.9
|
|
|
|
|
|
|
|
|
|
|
|
General Insurance Group
|
|||||||||
|
|
|
|
Quarters Ended March 31,
|
|||||||||||||||
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
Change
|
|||||||
A. Prior to reclassification/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Including CCI run-off business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net premiums earned
|
|
|
|
|
|
|
|
|
|
$
|
608.0
|
|
|
$
|
561.0
|
|
|
8.4
|
%
|
Net investment income
|
|
|
|
|
|
|
|
|
|
|
62.3
|
|
|
|
66.6
|
|
|
(6.5
|
)
|
Benefits and claim costs
|
|
|
|
|
|
|
|
|
|
|
446.5
|
|
|
|
400.2
|
|
|
11.6
|
|
Pretax operating income (loss)
|
|
|
|
|
|
|
|
|
|
$
|
68.9
|
|
|
$
|
71.0
|
|
|
(3.0
|
)%
|
Claim ratio
|
|
|
|
|
|
|
|
73.4
|
%
|
|
71.3
|
%
|
|
|
Expense ratio
|
|
|
|
|
|
|
|
24.2
|
|
|
26.1
|
|
|
|
Composite ratio
|
|
|
|
|
|
|
|
97.6
|
%
|
|
97.4
|
%
|
|
|
B. All CCI run-off
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
business reclassification(*):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net premiums earned
|
|
|
|
|
|
|
|
|
|
$
|
7.8
|
|
|
$
|
12.0
|
|
|
(35.1
|
)%
|
Net investment income
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
Benefits and claim costs
|
|
|
|
|
|
|
|
|
|
|
15.1
|
|
|
|
20.2
|
|
|
(25.4
|
)
|
Pretax operating income (loss)
|
|
|
|
|
|
|
|
|
|
$
|
(7.1
|
)
|
|
$
|
(9.4
|
)
|
|
24.0
|
%
|
Claim ratio
|
|
|
|
|
|
|
|
192.6
|
%
|
|
167.6
|
%
|
|
|
Expense ratio
|
|
|
|
|
|
|
|
(0.1
|
)
|
|
10.5
|
|
|
|
Composite ratio
|
|
|
|
|
|
|
|
192.5
|
%
|
|
178.1
|
%
|
|
|
C. After reclassification/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total Excluding all CCI run-off business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net premiums earned
|
|
|
|
|
|
|
|
|
|
$
|
600.2
|
|
|
$
|
548.9
|
|
|
9.3
|
%
|
Net investment income
|
|
|
|
|
|
|
|
|
|
|
62.2
|
|
|
|
66.6
|
|
|
(6.6
|
)
|
Benefits and claim costs
|
|
|
|
|
|
|
|
|
|
|
431.4
|
|
|
|
379.9
|
|
|
13.6
|
|
Pretax operating income (loss)
|
|
|
|
|
|
|
|
|
|
$
|
76.0
|
|
|
$
|
80.5
|
|
|
(5.5
|
)%
|
Claim ratio
|
|
|
|
|
|
|
|
71.9
|
%
|
|
69.2
|
%
|
|
|
Expense ratio
|
|
|
|
|
|
|
|
24.5
|
|
|
26.5
|
|
|
|
Composite ratio
|
|
|
|
|
|
|
|
96.4
|
%
|
|
95.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Title Insurance Group
|
|||||||||
|
|
|
|
Quarters Ended March 31,
|
|||||||||||||||
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
Change
|
|||||||
Net premiums and fees earned
|
|
|
|
|
|
|
|
|
|
$
|
460.5
|
|
|
$
|
355.0
|
|
|
29.7
|
%
|
Net investment income
|
|
|
|
|
|
|
|
|
|
|
6.5
|
|
|
|
6.7
|
|
|
(3.9
|
)
|
Claim costs
|
|
|
|
|
|
|
|
|
|
|
31.5
|
|
|
|
25.6
|
|
|
22.9
|
|
Pretax operating income (loss)
|
|
|
|
|
|
|
|
|
|
$
|
21.5
|
|
|
$
|
9.4
|
|
|
128.4
|
%
|
Claim ratio
|
|
|
|
|
|
|
|
6.9
|
%
|
|
7.2
|
%
|
|
|
Expense ratio
|
|
|
|
|
|
|
|
89.5
|
|
|
91.5
|
|
|
|
Composite ratio
|
|
|
|
|
|
|
|
96.4
|
%
|
|
98.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
RFIG Run-off Business
|
||||||||||
|
|
|
Quarters Ended March 31,
|
||||||||||||||||
|
|
|
|
|
|
|
2013
|
|
2012
|
|
Change
|
||||||||
A. Prior to reclassification/
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding CCI run-off business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net premiums earned
|
|
|
|
|
|
|
|
|
|
$
|
79.9
|
|
|
$
|
103.2
|
|
|
(22.6
|
)%
|
Net investment income
|
|
|
|
|
|
|
|
|
|
|
9.0
|
|
|
|
10.3
|
|
|
(11.9
|
)
|
Claim costs
|
|
|
|
|
|
|
|
|
|
|
95.7
|
|
|
|
179.3
|
|
|
(46.6
|
)
|
Pretax operating income (loss)
|
|
|
|
|
|
|
|
|
|
$
|
(13.0
|
)
|
|
$
|
(81.8
|
)
|
|
84.1
|
%
|
Claim ratio
|
|
|
|
|
|
|
|
119.8
|
%
|
|
173.6
|
%
|
|
|
Expense ratio
|
|
|
|
|
|
|
|
7.9
|
|
|
13.6
|
|
|
|
Composite ratio
|
|
|
|
|
|
|
|
127.7
|
%
|
|
187.2
|
%
|
|
|
B. CCI run-off business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
reclassification(*):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net premiums earned
|
|
|
|
|
|
|
|
|
|
$
|
7.8
|
|
|
$
|
12.0
|
|
|
(35.1
|
)%
|
Net investment income
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
Claim costs
|
|
|
|
|
|
|
|
|
|
|
15.1
|
|
|
|
20.2
|
|
|
(25.4
|
)
|
Pretax operating income (loss)
|
|
|
|
|
|
|
|
|
|
$
|
(7.1
|
)
|
|
$
|
(9.4
|
)
|
|
24.0
|
%
|
Claim ratio
|
|
|
|
|
|
|
|
192.6
|
%
|
|
167.6
|
%
|
|
|
Expense ratio
|
|
|
|
|
|
|
|
(0.1
|
)
|
|
10.5
|
|
|
|
Composite ratio
|
|
|
|
|
|
|
|
192.5
|
%
|
|
178.1
|
%
|
|
|
Claim ratio
|
|
|
|
|
|
|
|
126.4
|
%
|
|
173.0
|
%
|
|
|
Expense ratio
|
|
|
|
|
|
|
|
7.1
|
|
|
13.3
|
|
|
|
Composite ratio
|
|
|
|
|
|
|
|
133.5
|
%
|
|
186.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other Operations
|
|||||||||
|
|
|
|
Quarters Ended March 31,
|
|||||||||||||||
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
Change
|
|||||||
Life & accident premiums earned
|
|
|
|
|
|
|
|
|
|
$
|
17.1
|
|
|
$
|
18.2
|
|
|
(6.3
|
)%
|
Net investment income
|
|
|
|
|
|
|
|
|
|
|
1.4
|
|
|
|
2.0
|
|
|
(32.7
|
)
|
Other income
|
|
|
|
|
|
|
|
|
|
|
.3
|
|
|
|
.5
|
|
|
(46.4
|
)
|
Benefits and claim costs
|
|
|
|
|
|
|
|
|
|
|
9.7
|
|
|
|
11.3
|
|
|
(14.0
|
)
|
Insurance expenses
|
|
|
|
|
|
|
|
|
|
|
7.6
|
|
|
|
8.0
|
|
|
(5.5
|
)
|
Corporate, interest, and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
other expenses-net
|
|
|
|
|
|
|
|
|
|
|
(1.1
|
)
|
|
|
5.7
|
|
|
(119.7
|
)
|
Pretax operating income (loss)
|
|
|
|
|
|
|
|
|
|
$
|
2.6
|
|
|
$
|
(4.2
|
)
|
|
161.6
|
%
|
|
|
Cash, Invested Assets, and Shareholders' Equity
|
||||||||||||||||||
|
|
|
|
|
|
|
|
% Change
|
||||||||||||
|
|
March 31,
|
|
Dec. 31,
|
|
March 31,
|
|
Mar. '13/
|
|
Mar. '13/
|
||||||||||
|
|
2013
|
|
2012
|
|
2012
|
|
Dec. '12
|
|
Mar. '12/
|
||||||||||
Cash and invested assets:
|
Fair value basis
|
|
$
|
10,986.5
|
|
|
$
|
10,800.6
|
|
|
$
|
10,739.0
|
|
|
1.7
|
%
|
|
2.3
|
%
|
|
|
Original cost basis
|
|
$
|
10,152.7
|
|
|
$
|
10,071.4
|
|
|
$
|
10,078.1
|
|
|
.8
|
%
|
|
.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Shareholders' equity:
|
Total
|
|
$
|
3,673.3
|
|
|
$
|
3,596.2
|
|
|
$
|
3,773.3
|
|
|
2.1
|
%
|
|
(2.6
|
)%
|
|
|
Per common share
|
|
$
|
14.31
|
|
|
$
|
14.03
|
|
|
$
|
14.74
|
|
|
2.0
|
%
|
|
(2.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Composition of shareholders' equity per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Equity before items below
|
|
$
|
12.18
|
|
|
$
|
12.15
|
|
|
$
|
12.95
|
|
|
.2
|
%
|
|
(5.9
|
)%
|
||
Unrealized investment gains (losses) and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
accumulated comprehensive income (loss)
|
|
|
2.13
|
|
|
|
1.88
|
|
|
|
1.79
|
|
|
13.3
|
%
|
|
19.0
|
%
|
||
Total
|
|
$
|
14.31
|
|
|
$
|
14.03
|
|
|
$
|
14.74
|
|
|
2.0
|
%
|
|
(2.9
|
)%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Segmented composition of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
shareholders' equity per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Excluding run-off segment
|
|
$
|
14.58
|
|
|
$
|
14.25
|
|
|
$
|
14.11
|
|
|
2.3
|
%
|
|
3.3
|
%
|
||
RFIG run-off segment
|
|
|
(0.27
|
)
|
|
|
(0.22
|
)
|
|
|
0.63
|
|
|
|
|
|
||||
Total
|
|
$
|
14.31
|
|
|
$
|
14.03
|
|
|
$
|
14.74
|
|
|
2.0
|
%
|
|
(2.9
|
)%
|
|
|
|
|
|
Shareholders' Equity Per Share
|
||||||
|
|
|
|
Quarters Ended March 31,
|
|||||||
|
|
|
|
2013
|
|
2012
|
|||||
Beginning balance
|
|
|
|
|
$
|
14.03
|
|
|
$
|
14.76
|
|
Changes in shareholders' equity:
|
|
|
|
|
|
|
|
|
|
||
Net operating income (loss)
|
|
|
|
|
|
0.21
|
|
|
|
(0.01
|
)
|
Net realized investment gains (losses):
|
|
|
|
|
|
|
|
|
|
||
From sales
|
|
|
|
|
|
0.01
|
|
|
|
0.01
|
|
From impairments
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Subtotal
|
|
|
|
|
|
0.01
|
|
|
|
0.01
|
|
Net unrealized investment gains (losses)
|
|
|
|
|
|
0.26
|
|
|
|
0.15
|
|
Total realized and unrealized investment gains (losses)
|
|
|
|
|
0.27
|
|
|
|
0.16
|
|
|
Cash dividends
|
|
|
|
|
|
(0.18
|
)
|
|
|
(0.18
|
)
|
Stock issuance, foreign exchange, and other transactions
|
|
|
|
|
(0.02
|
)
|
|
|
0.01
|
|
|
Net change
|
|
|
|
|
|
0.28
|
|
|
|
(0.02
|
)
|
Ending balance
|
|
|
|
|
$
|
14.31
|
|
|
$
|
14.74
|
|
|
DETAILED MANAGEMENT ANALYSIS
|
FINANCIAL ACCOUNTING AND REPORTING POLICIES
|
FINANCIAL POSITION
|
(a)
|
Credit quality ratings used are those assigned primarily by Moody's for U.S. Governments, Agencies and Corporate issuers and by Standard & Poor's ("S&P") for U.S. and Canadian Municipal issuers, which are converted to equivalent Moody's ratings classifications.
|
(b)
|
"All other" includes non-investment grade or non-rated issuers.
|
Gross Unrealized Losses Stratified by Industry Concentration for Non-Investment Grade Fixed Maturity Securities
|
|||||||||||
|
|
|
|
|
|
|
|
||||
March 31, 2013
|
|
Amortized
Cost
|
|
Gross
Unrealized
Losses
|
|
||||||
Fixed Maturity Securities by Industry Concentration:
|
|
|
|
|
|
||||||
|
Natural Gas
|
|
$
|
10.1
|
|
|
$
|
.3
|
|
|
|
|
Services
|
|
1.9
|
|
|
.1
|
|
|
|||
|
Industrial
|
|
3.7
|
|
|
—
|
|
|
|||
|
|
Total
|
|
$
|
15.8
|
|
(c)
|
$
|
.4
|
|
|
(c)
|
Represents .2% of the total fixed maturity securities portfolio.
|
Gross Unrealized Losses Stratified by Industry Concentration for Investment Grade Fixed Maturity Securities
|
|||||||||||
|
|
|
|
|
|
|
|
||||
March 31, 2013
|
|
Amortized
Cost
|
|
Gross
Unrealized
Losses
|
|
||||||
Fixed Maturity Securities by Industry Concentration:
|
|
|
|
|
|
||||||
|
Utilities
|
|
$
|
73.5
|
|
|
$
|
.8
|
|
|
|
|
Consumer Non Durables
|
|
30.6
|
|
|
.6
|
|
|
|||
|
Energy
|
|
69.1
|
|
|
.5
|
|
|
|||
|
Transportation
|
|
30.0
|
|
|
.5
|
|
|
|||
|
Other (includes 16 industry groups)
|
|
315.6
|
|
|
3.4
|
|
|
|||
|
|
Total
|
|
$
|
519.2
|
|
(d)
|
$
|
6.1
|
|
|
(d)
|
Represents 6.4% of the total fixed maturity securities portfolio.
|
Gross Unrealized Losses Stratified by Industry Concentration for Equity Securities
|
|||||||||||
|
|
|
|
|
|
|
|
||||
March 31, 2013
|
|
Adjusted
Cost
|
|
Gross
Unrealized
Losses
|
|
||||||
Equity Securities by Industry Concentration:
|
|
|
|
|
|
||||||
|
Technology
|
|
$
|
6.7
|
|
|
$
|
.3
|
|
|
|
|
Insurance
|
|
5.6
|
|
|
.2
|
|
|
|||
|
Utilities
|
|
3.7
|
|
|
—
|
|
|
|||
|
|
Total
|
|
$
|
16.0
|
|
(e)
|
$
|
.5
|
|
(f)
|
(e)
|
Represents 3.6% of the total equity securities portfolio.
|
(f)
|
Represents .1% of the cost of the total equity securities portfolio, while gross unrealized gains represent 93.3% of the portfolio.
|
Gross Unrealized Losses Stratified by Maturity Ranges for All Fixed Maturity Securities
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Amortized Cost
of Fixed Maturity Securities
|
|
Gross Unrealized Losses
|
|
||||||||||||
March 31, 2013
|
|
All
|
|
Non-
Investment
Grade Only
|
|
All
|
|
Non-
Investment
Grade Only
|
|
|||||||||
Maturity Ranges:
|
|
|
|
|
|
|
|
|
|
|||||||||
Due in one year or less
|
|
$
|
5.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Due after one year through five years
|
|
176.2
|
|
|
3.7
|
|
|
.7
|
|
|
—
|
|
|
|||||
Due after five years through ten years
|
|
344.4
|
|
|
10.1
|
|
|
5.1
|
|
|
.3
|
|
|
|||||
Due after ten years
|
|
8.7
|
|
|
1.9
|
|
|
.6
|
|
|
.1
|
|
|
|||||
|
Total
|
|
$
|
535.0
|
|
|
$
|
15.8
|
|
|
$
|
6.6
|
|
|
$
|
.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Unrealized Losses Stratified by Duration and Amount of Unrealized Losses
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
Amount of Gross Unrealized Losses
|
|
||||||||||||||
March 31, 2013
|
|
Less than
20% of
Cost
|
|
20% to
50%
of Cost
|
|
More than
50% of Cost
|
|
Total Gross
Unrealized
Loss
|
|
|||||||||||
Number of Months in Loss Position:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed Maturity Securities:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
One to six months
|
|
$
|
5.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.1
|
|
|
||
|
Seven to twelve months
|
|
.5
|
|
|
—
|
|
|
—
|
|
|
.5
|
|
|
||||||
|
More than twelve months
|
|
.6
|
|
|
.3
|
|
|
—
|
|
|
.9
|
|
|
||||||
|
|
Total
|
|
$
|
6.2
|
|
|
$
|
.3
|
|
|
$
|
—
|
|
|
$
|
6.6
|
|
|
|
Equity Securities:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
One to six months
|
|
$
|
.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
.2
|
|
|
||
|
Seven to twelve months
|
|
.3
|
|
|
—
|
|
|
—
|
|
|
.3
|
|
|
||||||
|
More than twelve months
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
|
Total
|
|
$
|
.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Number of Issues in Loss Position:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed Maturity Securities:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
One to six months
|
|
110
|
|
|
—
|
|
|
—
|
|
|
110
|
|
|
||||||
|
Seven to twelve months
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
||||||
|
More than twelve months
|
|
5
|
|
|
1
|
|
|
—
|
|
|
6
|
|
|
||||||
|
|
Total
|
|
123
|
|
|
1
|
|
|
—
|
|
|
124
|
|
(g)
|
|||||
Equity Securities:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
One to six months
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
||||||
|
Seven to twelve months
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
||||||
|
More than twelve months
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
||||||
|
|
Total
|
|
3
|
|
|
—
|
|
|
1
|
|
|
4
|
|
(g)
|
(g)
|
At
March 31, 2013
the number of issues in an unrealized loss position represent 7.0% as to fixed maturities, and 6.3% as to equity securities of the total number of such issues held by the Company.
|
Age Distribution of Fixed Maturity Securities
|
|||||||||
|
|
|
|
|
|
|
|
||
|
|
|
|
March 31,
|
|
December 31,
|
|
||
|
|
|
|
2013
|
|
2012
|
|
||
Maturity Ranges:
|
|
|
|
|
|||||
|
Due in one year or less
|
14.6
|
%
|
|
15.7
|
%
|
|
||
|
Due after one year through five years
|
43.8
|
|
|
41.6
|
|
|
||
|
Due after five years through ten years
|
39.2
|
|
|
40.1
|
|
|
||
|
Due after ten years through fifteen years
|
1.2
|
|
|
1.0
|
|
|
||
|
Due after fifteen years
|
1.2
|
|
|
1.6
|
|
|
||
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
||
Average Maturity in Years
|
4.7
|
|
|
4.7
|
|
|
|||
Duration (h)
|
4.0
|
|
|
4.1
|
|
|
(h)
|
Duration is used as a measure of bond price sensitivity to interest rate changes. A duration of 4.0 as of
March 31, 2013
implies that a 100 basis point parallel increase in interest rates from current levels would result in a possible decline in the fair value of the long-term fixed maturity investment portfolio of approximately 4.0%.
|
Composition of Unrealized Gains (Losses)
|
|||||||||||
|
|
|
|
|
|
|
|
||||
|
|
|
|
March 31,
|
|
December 31,
|
|
||||
|
|
|
|
2013
|
|
2012
|
|
||||
Fixed Maturity Securities:
|
|
|
|
|
|||||||
|
Amortized cost
|
$
|
8,125.8
|
|
|
$
|
7,993.1
|
|
|
||
|
Estimated fair value
|
8,672.3
|
|
|
8,566.2
|
|
|
||||
|
Gross unrealized gains
|
553.1
|
|
|
579.5
|
|
|
||||
|
Gross unrealized losses
|
(6.6
|
)
|
|
(6.5
|
)
|
|
||||
|
|
Net unrealized gains (losses)
|
$
|
546.5
|
|
|
$
|
573.0
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity Securities:
|
|
|
|
|
|||||||
|
Original cost
|
$
|
583.5
|
|
|
$
|
583.5
|
|
|
||
|
Adjusted cost(*)
|
452.1
|
|
|
452.1
|
|
|
||||
|
Estimated fair value
|
873.2
|
|
|
739.7
|
|
|
||||
|
Gross unrealized gains
|
421.7
|
|
|
290.5
|
|
|
||||
|
Gross unrealized losses
|
(.5
|
)
|
|
(2.9
|
)
|
|
||||
|
|
Net unrealized gains (losses)
|
$
|
421.1
|
|
|
$
|
287.5
|
|
|
RESULTS OF OPERATIONS
|
Revenues: Premiums & Fees
|
|
Earned Premiums and Fees
|
|||||||||||||||||||||
|
General
|
|
Title
|
|
RFIG Run-off
|
|
Other
|
|
Total
|
|
% Change
from prior
period
|
|||||||||||
Years Ended December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
2010
|
$
|
1,694.2
|
|
|
$
|
1,211.0
|
|
|
$
|
586.8
|
|
|
$
|
81.4
|
|
|
$
|
3,573.5
|
|
|
5.4
|
%
|
2011
|
2,109.4
|
|
|
1,362.4
|
|
|
503.2
|
|
|
74.9
|
|
|
4,050.1
|
|
|
13.3
|
|
|||||
2012
|
2,324.4
|
|
|
1,677.4
|
|
|
410.5
|
|
|
58.6
|
|
|
4,471.0
|
|
|
10.4
|
|
|||||
Quarters Ended March 31:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
2012
|
548.9
|
|
|
355.0
|
|
|
115.3
|
|
|
18.2
|
|
|
1,037.5
|
|
|
3.4
|
|
|||||
2013
|
$
|
600.2
|
|
|
$
|
460.5
|
|
|
$
|
87.7
|
|
|
$
|
17.1
|
|
|
$
|
1,165.6
|
|
|
12.3
|
%
|
|
General Insurance Earned Premiums by Type of Coverage
|
||||||||||||||||
|
Workers'
Compensation
|
|
Commercial
Automobile
(mostly
trucking)
|
|
Financial
Indemnity (a)
|
|
Inland
Marine
and
Property
|
|
General
Liability
|
|
Other
|
||||||
Years Ended December 31:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2010
|
26.5
|
%
|
|
40.0
|
%
|
|
6.6
|
%
|
|
9.4
|
%
|
|
6.7
|
%
|
|
10.8
|
%
|
2011
|
38.3
|
|
|
33.6
|
|
|
4.9
|
|
|
7.8
|
|
|
5.9
|
|
|
9.5
|
|
2012
|
39.7
|
|
|
33.0
|
|
|
4.2
|
|
|
7.6
|
|
|
6.2
|
|
|
9.3
|
|
Quarters Ended March 31:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2012
|
39.8
|
|
|
33.5
|
|
|
4.5
|
|
|
7.7
|
|
|
6.1
|
|
|
8.4
|
|
2013
|
40.4
|
%
|
|
32.8
|
%
|
|
3.9
|
%
|
|
8.0
|
%
|
|
6.2
|
%
|
|
8.7
|
%
|
|
Earned Premiums
|
|
Persistency
|
||||||||||
Premium and Persistency Trends by Type:
|
Direct
|
|
Net
|
|
Traditional
Primary
|
|
Bulk
|
||||||
Years Ended December 31:
|
|
|
|
|
|
|
|
||||||
2010
|
$
|
529.5
|
|
|
$
|
498.8
|
|
|
82.1
|
%
|
|
88.0
|
%
|
2011
|
468.1
|
|
|
444.9
|
|
|
83.2
|
|
|
85.3
|
|
||
2012
|
387.3
|
|
|
368.0
|
|
|
80.7
|
|
|
85.3
|
|
||
Quarters Ended March 31:
|
|
|
|
|
|
|
|
||||||
2012
|
108.2
|
|
|
103.2
|
|
|
82.8
|
|
|
86.1
|
|
||
2013
|
$
|
83.0
|
|
|
$
|
79.9
|
|
|
80.1
|
%
|
|
84.9
|
%
|
Net Risk in Force
|
|||||||||||||||
Net Risk in Force By Type:
|
Traditional
Primary
|
|
Bulk
|
|
Other
|
|
Total
|
||||||||
As of December 31:
|
|
|
|
|
|
|
|
||||||||
2010
|
$
|
16,557.4
|
|
|
$
|
1,187.0
|
|
|
$
|
256.1
|
|
|
$
|
18,000.6
|
|
2011
|
14,476.9
|
|
|
1,017.7
|
|
|
176.3
|
|
|
15,671.0
|
|
||||
2012
|
11,911.1
|
|
|
850.7
|
|
|
89.8
|
|
|
12,851.6
|
|
||||
As of March 31:
|
|
|
|
|
|
|
|
||||||||
2012
|
13,862.0
|
|
|
976.9
|
|
|
172.6
|
|
|
15,011.6
|
|
||||
2013
|
$
|
11,359.1
|
|
|
$
|
810.8
|
|
|
$
|
84.4
|
|
|
$
|
12,254.4
|
|
Analysis of Risk in Force
|
|||||||||||
Risk in Force Distribution By FICO Scores:
|
FICO less
than 620
|
|
FICO 620
to 680
|
|
FICO
Greater
than 680
|
|
Unscored/
Unavailable
|
||||
|
|
|
|
|
|
|
|
||||
Traditional Primary:
|
|
|
|
|
|
|
|
||||
As of December 31:
|
|
|
|
|
|
|
|
||||
2010
|
6.4
|
%
|
|
27.5
|
%
|
|
64.7
|
%
|
|
1.4
|
%
|
2011
|
6.2
|
|
|
26.8
|
|
|
65.7
|
|
|
1.3
|
|
2012
|
6.4
|
|
|
27.5
|
|
|
65.0
|
|
|
1.1
|
|
As of March 31:
|
|
|
|
|
|
|
|
||||
2012
|
6.3
|
|
|
26.9
|
|
|
65.6
|
|
|
1.2
|
|
2013
|
6.4
|
%
|
|
27.7
|
%
|
|
64.7
|
%
|
|
1.2
|
%
|
|
|
|
|
|
|
|
|
||||
Bulk(a):
|
|
|
|
|
|
|
|
||||
As of December 31:
|
|
|
|
|
|
|
|
||||
2010
|
23.2
|
%
|
|
32.1
|
%
|
|
44.6
|
%
|
|
.1
|
%
|
2011
|
24.0
|
|
|
32.2
|
|
|
43.7
|
|
|
.1
|
|
2012
|
24.0
|
|
|
32.5
|
|
|
43.3
|
|
|
.2
|
|
As of March 31:
|
|
|
|
|
|
|
|
||||
2012
|
24.1
|
|
|
32.3
|
|
|
43.5
|
|
|
.1
|
|
2013
|
23.7
|
%
|
|
32.7
|
%
|
|
43.4
|
%
|
|
.2
|
%
|
Risk in Force Distribution By Loan to Value ("LTV") Ratio:
|
LTV
85.0
and below
|
|
LTV
85.01
to 90.0
|
|
LTV
90.01
to 95.0
|
|
LTV
Greater
than 95.0
|
||||
|
|
|
|
|
|
|
|
||||
Traditional Primary(b):
|
|
|
|
|
|
|
|
||||
As of December 31:
|
|
|
|
|
|
|
|
||||
2010
|
5.3
|
%
|
|
37.0
|
%
|
|
31.9
|
%
|
|
25.8
|
%
|
2011
|
5.1
|
|
|
36.2
|
|
|
32.9
|
|
|
25.8
|
|
2012
|
4.6
|
|
|
35.2
|
|
|
32.9
|
|
|
27.3
|
|
As of March 31:
|
|
|
|
|
|
|
|
||||
2012
|
5.0
|
|
|
35.9
|
|
|
32.9
|
|
|
26.2
|
|
2013
|
4.5
|
%
|
|
34.9
|
%
|
|
32.8
|
%
|
|
27.8
|
%
|
|
|
|
|
|
|
|
|
||||
Bulk(a):
|
|
|
|
|
|
|
|
||||
As of December 31:
|
|
|
|
|
|
|
|
||||
2010
|
57.7
|
%
|
|
22.8
|
%
|
|
9.6
|
%
|
|
9.9
|
%
|
2011
|
57.1
|
|
|
22.9
|
|
|
9.8
|
|
|
10.2
|
|
2012
|
56.7
|
|
|
23.3
|
|
|
10.0
|
|
|
10.0
|
|
As of March 31:
|
|
|
|
|
|
|
|
||||
2012
|
57.2
|
|
|
22.9
|
|
|
9.9
|
|
|
10.0
|
|
2013
|
56.8
|
%
|
|
23.2
|
%
|
|
10.0
|
%
|
|
10.0
|
%
|
(a)
|
Bulk pool risk in-force, which represented
31.8%
of total bulk risk in-force at
March 31, 2013
, has been allocated pro-rata based on insurance in-force.
|
(b)
|
The LTV distribution reflects base LTV ratios which are determined prior to the impact of single premiums financed and paid at the time of loan origination. Prior to the second quarter of 2011, LTV distributions were presented on the basis of total LTV which included the financed single premium portion of the loan amount. Prior period data has been reclassified to conform to the current presentation.
|
|
|
|
Traditional Primary
|
||||||||||||||||||||||||||
|
TX
|
|
FL
|
|
GA
|
|
IL
|
|
CA
|
|
NC
|
|
PA
|
|
NJ
|
|
OH
|
|
VA
|
||||||||||
As of December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2010
|
8.7
|
%
|
|
7.5
|
%
|
|
5.2
|
%
|
|
5.0
|
%
|
|
5.1
|
%
|
|
4.7
|
%
|
|
4.2
|
%
|
|
3.1
|
%
|
|
3.3
|
%
|
|
2.9
|
%
|
2011
|
8.8
|
|
|
7.5
|
|
|
5.2
|
|
|
5.0
|
|
|
5.0
|
|
|
4.8
|
|
|
4.3
|
|
|
3.3
|
|
|
3.3
|
|
|
3.0
|
|
2012
|
8.6
|
|
|
7.7
|
|
|
5.3
|
|
|
5.1
|
|
|
5.0
|
|
|
4.8
|
|
|
4.3
|
|
|
3.5
|
|
|
3.3
|
|
|
3.1
|
|
As of March 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2012
|
8.8
|
|
|
7.5
|
|
|
5.2
|
|
|
5.0
|
|
|
4.9
|
|
|
4.8
|
|
|
4.3
|
|
|
3.3
|
|
|
3.3
|
|
|
3.0
|
|
2013
|
8.5
|
%
|
|
7.6
|
%
|
|
5.4
|
%
|
|
5.1
|
%
|
|
4.9
|
%
|
|
4.8
|
%
|
|
4.3
|
%
|
|
3.6
|
%
|
|
3.3
|
%
|
|
3.1
|
%
|
|
|
|
Bulk (a)
|
||||||||||||||||||||||||||
|
TX
|
|
FL
|
|
GA
|
|
IL
|
|
CA
|
|
CO
|
|
PA
|
|
NJ
|
|
OH
|
|
NY
|
||||||||||
As of December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2010
|
5.3
|
%
|
|
9.9
|
%
|
|
4.3
|
%
|
|
4.0
|
%
|
|
15.8
|
%
|
|
3.0
|
%
|
|
3.1
|
%
|
|
3.3
|
%
|
|
3.9
|
%
|
|
6.0
|
%
|
2011
|
5.4
|
|
|
9.9
|
|
|
4.3
|
|
|
4.0
|
|
|
14.9
|
|
|
3.0
|
|
|
3.1
|
|
|
3.5
|
|
|
3.9
|
|
|
6.5
|
|
2012
|
5.3
|
|
|
9.9
|
|
|
4.3
|
|
|
4.0
|
|
|
13.9
|
|
|
3.0
|
|
|
3.3
|
|
|
3.7
|
|
|
4.0
|
|
|
7.1
|
|
As of March 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2012
|
5.4
|
|
|
9.9
|
|
|
4.3
|
|
|
4.0
|
|
|
14.6
|
|
|
3.0
|
|
|
3.2
|
|
|
3.5
|
|
|
4.0
|
|
|
6.6
|
|
2013
|
5.3
|
%
|
|
9.7
|
%
|
|
4.3
|
%
|
|
4.0
|
%
|
|
13.8
|
%
|
|
3.0
|
%
|
|
3.3
|
%
|
|
3.8
|
%
|
|
4.0
|
%
|
|
7.4
|
%
|
Risk in Force Distribution By Level of Documentation:
|
Full
Documentation
|
|
Reduced
Documentation
|
||
Traditional Primary:
|
|
|
|
||
As of December 31:
|
|
|
|
||
2010
|
92.4
|
%
|
|
7.6
|
%
|
2011
|
92.8
|
|
|
7.2
|
|
2012
|
92.8
|
|
|
7.2
|
|
As of March 31:
|
|
|
|
||
2012
|
92.8
|
|
|
7.2
|
|
2013
|
92.7
|
%
|
|
7.3
|
%
|
|
|
|
|
||
Bulk (a):
|
|
|
|
||
As of December 31:
|
|
|
|
||
2010
|
57.7
|
%
|
|
42.3
|
%
|
2011
|
58.4
|
|
|
41.6
|
|
2012
|
58.2
|
|
|
41.8
|
|
As of March 31:
|
|
|
|
||
2012
|
58.6
|
|
|
41.4
|
|
2013
|
58.1
|
%
|
|
41.9
|
%
|
(a)
|
Bulk pool risk in-force, which represented
31.8%
of total bulk risk in-force at
March 31, 2013
, has been allocated pro-rata based on insurance in-force.
|
Risk in Force Distribution By Loan Type:
|
Fixed Rate
& ARMs
with Resets
>=5 Years
|
|
ARMs with
Resets <5
years
|
||
Traditional Primary:
|
|
|
|
||
As of December 31:
|
|
|
|
||
2010
|
96.8
|
%
|
|
3.2
|
%
|
2011
|
97.0
|
|
|
3.0
|
|
2012
|
97.1
|
|
|
2.9
|
|
As of March 31:
|
|
|
|
||
2012
|
97.0
|
|
|
3.0
|
|
2013
|
97.1
|
%
|
|
2.9
|
%
|
|
|
|
|
||
Bulk (a):
|
|
|
|
||
As of December 31:
|
|
|
|
||
2010
|
69.6
|
%
|
|
30.4
|
%
|
2011
|
71.0
|
|
|
29.0
|
|
2012
|
72.6
|
|
|
27.4
|
|
As of March 31:
|
|
|
|
||
2012
|
71.7
|
|
|
28.3
|
|
2013
|
73.2
|
%
|
|
26.8
|
%
|
(a)
|
Bulk pool risk in-force, which represented
31.8%
of total bulk risk in-force at
March 31, 2013
, has been allocated pro-rata based on insurance in-force.
|
|
Net CCI Earned Premiums
|
|
Risk in
Force
|
||||
Years Ended December 31:
|
|
|
|
||||
2010
|
$
|
87.9
|
|
|
$
|
1,518.6
|
|
2011
|
58.3
|
|
|
1,263.1
|
|
||
2012
|
42.4
|
|
|
1,141.6
|
|
||
Quarters Ended March 31:
|
|
|
|
||||
2012
|
12.0
|
|
|
1,225.8
|
|
||
2013
|
$
|
7.8
|
|
|
$
|
1,101.7
|
|
Revenues: Net Investment Income
|
|
Invested Assets at Adjusted Cost
|
|
Fair
Value
Adjust-
ment
|
|
Invested
Assets at
Fair
Value
|
||||||||||||||||||||||
|
General
|
|
Title
|
|
RFIG Run-off
|
|
Corporate
and Other
|
|
Total
|
|
|||||||||||||||||
As of December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2011
|
$
|
6,610.7
|
|
|
$
|
683.7
|
|
|
$
|
1,654.0
|
|
|
$
|
796.6
|
|
|
$
|
9,745.2
|
|
|
$
|
750.3
|
|
|
$
|
10,495.5
|
|
2012
|
6,742.7
|
|
|
785.7
|
|
|
1,766.3
|
|
|
450.1
|
|
|
9,744.9
|
|
|
863.8
|
|
|
10,608.8
|
|
|||||||
As of March 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2012
|
6,600.5
|
|
|
694.3
|
|
|
1,623.3
|
|
|
794.5
|
|
|
9,712.7
|
|
|
807.8
|
|
|
10,520.6
|
|
|||||||
2013
|
$
|
6,792.7
|
|
|
$
|
806.7
|
|
|
$
|
1,766.7
|
|
|
$
|
434.4
|
|
|
$
|
9,800.7
|
|
|
$
|
968.4
|
|
|
$
|
10,769.1
|
|
|
Net Investment Income
|
|
Yield at
|
||||||||||||||||||||||
|
General
|
|
Title
|
|
RFIG Run-off
|
|
Corporate
and Other
|
|
Total
|
|
Original
Cost
|
|
Fair
Value
|
||||||||||||
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2010
|
$
|
260.1
|
|
|
$
|
26.5
|
|
|
$
|
85.0
|
|
|
$
|
7.3
|
|
|
$
|
379.0
|
|
|
3.94
|
%
|
|
3.80
|
%
|
2011
|
270.5
|
|
|
27.3
|
|
|
59.3
|
|
|
7.4
|
|
|
364.6
|
|
|
3.71
|
|
|
3.51
|
|
|||||
2012
|
264.9
|
|
|
27.3
|
|
|
36.3
|
|
|
7.9
|
|
|
336.5
|
|
|
3.40
|
|
|
3.19
|
|
|||||
Quarters Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
March 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2012
|
66.6
|
|
|
6.7
|
|
|
10.3
|
|
|
2.0
|
|
|
85.8
|
|
|
3.48
|
|
|
3.27
|
|
|||||
2013
|
$
|
62.2
|
|
|
$
|
6.5
|
|
|
$
|
9.1
|
|
|
$
|
1.4
|
|
|
$
|
79.3
|
|
|
3.20
|
%
|
|
2.97
|
%
|
Revenues: Net Realized Gains (Losses)
|
|
Realized Gains (Losses) on
Disposition of Securities
|
|
Impairment Losses on Securities
|
||||||||||||||||||||||||
|
Fixed
maturity
securities
|
|
Equity
securities
and miscel-
laneous
investments
|
|
Total
|
|
Fixed
maturity
securities
|
|
Equity
securities
and miscel-
laneous
investments
|
|
Total
|
|
Net
realized
gains
(losses)
|
||||||||||||||
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2010
|
$
|
79.1
|
|
|
$
|
31.2
|
|
|
$
|
110.3
|
|
|
$
|
—
|
|
|
$
|
(1.2
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
109.1
|
|
2011
|
142.6
|
|
|
23.1
|
|
|
165.8
|
|
|
—
|
|
|
(50.2
|
)
|
|
(50.2
|
)
|
|
115.5
|
|
|||||||
2012
|
32.7
|
|
|
15.3
|
|
|
48.1
|
|
|
—
|
|
|
(.2
|
)
|
|
(.2
|
)
|
|
47.8
|
|
|||||||
Quarters Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
March 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2012
|
1.6
|
|
|
1.3
|
|
|
2.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|||||||
2013
|
$
|
.8
|
|
|
$
|
3.7
|
|
|
$
|
4.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.5
|
|
Expenses: Benefits and Claims
|
|
|
|
|
Claim and Loss Adjustment Expense Reserves
|
||||||||||||||
|
|
|
|
March 31, 2013
|
|
December 31, 2012
|
||||||||||||
|
|
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||||
|
|
|
|
|
|
|
|
|||||||||||
Workers' compensation
|
$
|
3,611.1
|
|
|
$
|
1,998.0
|
|
|
$
|
3,589.6
|
|
|
$
|
1,959.8
|
|
|||
General liability
|
1,399.3
|
|
|
646.8
|
|
|
1,384.3
|
|
|
643.0
|
|
|||||||
Commercial automobile (mostly trucking)
|
1,171.5
|
|
|
977.1
|
|
|
1,159.8
|
|
|
968.3
|
|
|||||||
Other coverages
|
529.9
|
|
|
335.6
|
|
|
527.3
|
|
|
335.2
|
|
|||||||
Unallocated loss adjustment expense reserves
|
178.5
|
|
|
141.6
|
|
|
175.6
|
|
|
142.4
|
|
|||||||
|
|
Total general insurance reserves
|
6,890.5
|
|
|
4,089.4
|
|
|
6,836.8
|
|
|
4,048.9
|
|
|||||
Title
|
415.0
|
|
|
415.0
|
|
|
396.4
|
|
|
396.4
|
|
|||||||
RFIG Run-off
|
2,027.5
|
|
|
1,979.2
|
|
|
2,051.0
|
|
|
1,994.8
|
|
|||||||
Life and accident
|
20.3
|
|
|
17.2
|
|
|
18.9
|
|
|
15.9
|
|
|||||||
|
|
Total claim and loss adjustment expense reserves
|
$
|
9,353.4
|
|
|
$
|
6,500.9
|
|
|
$
|
9,303.3
|
|
|
$
|
6,456.2
|
|
|
Asbestosis and environmental claim reserves included
|
|
|
|
|
|
|
|
|||||||||||
|
in the above general insurance reserves:
|
|
|
|
|
|
|
|
||||||||||
|
|
Amount
|
$
|
144.3
|
|
|
$
|
119.0
|
|
|
$
|
147.1
|
|
|
$
|
119.4
|
|
|
|
|
% of total general insurance reserves
|
2.1
|
%
|
|
2.9
|
%
|
|
2.2
|
%
|
|
2.9
|
%
|
|
|
|
Quarters Ended March 31,
|
||||||
|
|
|
2013
|
|
2012
|
||||
Net reserve increase(decrease):
|
|
|
|
|
|
||||
General Insurance
|
|
|
$
|
40.5
|
|
|
$
|
29.4
|
|
Title Insurance
|
|
|
18.5
|
|
|
11.7
|
|
||
RFIG Run-off
|
|
|
(15.6
|
)
|
|
(56.2
|
)
|
||
Other
|
|
|
1.2
|
|
|
1.5
|
|
||
Total
|
|
|
$
|
44.6
|
|
|
$
|
(13.5
|
)
|
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
|
2013
|
|
2012
|
||||
General Insurance
|
|
|
$
|
2,001.9
|
|
|
$
|
1,947.0
|
|
Title Insurance
|
|
|
359.9
|
|
|
336.9
|
|
||
RFIG Run-off
|
|
|
140.8
|
|
|
147.5
|
|
||
Other
|
|
|
4.7
|
|
|
4.6
|
|
||
Total
|
|
|
$
|
2,507.6
|
|
|
$
|
2,436.1
|
|
|
March 31,
|
|
March 31,
|
|
December 31,
|
|
December 31,
|
||||||||
|
2013
|
|
2012
|
|
2012
|
|
2011
|
||||||||
Estimated reduction in beginning reserve
|
$
|
174.9
|
|
|
$
|
313.2
|
|
|
$
|
313.2
|
|
|
$
|
710.3
|
|
Total incurred claims and settlement expenses
|
|
|
|
|
|
|
|
||||||||
reduced (increased) by changes in
|
|
|
|
|
|
|
|
||||||||
estimated rescissions:
|
|
|
|
|
|
|
|
||||||||
Current year
|
21.1
|
|
|
39.1
|
|
|
111.7
|
|
|
223.1
|
|
||||
Prior year
|
32.0
|
|
|
(36.1
|
)
|
|
12.2
|
|
|
(340.8
|
)
|
||||
Sub-total
|
53.2
|
|
|
3.0
|
|
|
124.0
|
|
|
(117.6
|
)
|
||||
Estimated rescission reduction in settled claims
|
(61.2
|
)
|
|
(50.9
|
)
|
|
(262.3
|
)
|
|
(279.5
|
)
|
||||
Estimated reduction in ending reserve
|
$
|
166.9
|
|
|
$
|
265.3
|
|
|
$
|
174.9
|
|
|
$
|
313.2
|
|
|
General
|
|
Title
|
|
RFIG Run-off
|
|
Consolidated
|
||||
Years Ended December 31:
|
|
|
|
|
|
|
|
||||
2010
|
67.8
|
%
|
|
8.0
|
%
|
|
169.0
|
%
|
|
63.8
|
%
|
2011
|
69.2
|
|
|
7.8
|
|
|
230.5
|
|
|
68.3
|
|
2012
|
73.0
|
|
|
7.2
|
|
|
221.8
|
|
|
61.9
|
|
Quarters Ended March 31:
|
|
|
|
|
|
|
|
||||
2012
|
69.2
|
|
|
7.2
|
|
|
173.0
|
|
|
59.4
|
|
2013
|
71.9
|
%
|
|
6.9
|
%
|
|
126.4
|
%
|
|
50.1
|
%
|
|
General Insurance Claim Ratios by Type of Coverage
|
|||||||||||||||||||
|
All
Coverages (a)
|
|
Commercial
Automobile
(mostly
trucking)
|
|
Workers'
Compen-sation
|
|
Financial
Indemnity (a)
|
|
Inland
Marine
and
Property
|
|
General
Liability
|
|
Other
|
|||||||
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
2010
|
67.8
|
%
|
|
73.0
|
%
|
|
70.7
|
%
|
|
36.7
|
%
|
|
62.8
|
%
|
|
64.6
|
%
|
|
67.1
|
%
|
2011
|
69.2
|
|
|
71.9
|
|
|
72.3
|
|
|
39.2
|
|
|
70.4
|
|
|
64.6
|
|
|
62.8
|
|
2012
|
73.0
|
|
|
75.3
|
|
|
78.6
|
|
|
29.6
|
|
|
71.6
|
|
|
63.8
|
|
|
65.6
|
|
Quarters Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
March 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
2012
|
69.2
|
|
|
74.1
|
|
|
74.1
|
|
|
36.0
|
|
|
77.1
|
|
|
44.8
|
|
|
64.5
|
|
2013
|
71.9
|
%
|
|
79.0
|
%
|
|
77.0
|
%
|
|
38.3
|
%
|
|
62.0
|
%
|
|
63.9
|
%
|
|
66.7
|
%
|
|
|
All
|
|
Financial
|
||
|
|
Coverages
|
|
Indemnity
|
||
Years Ended December 31:
|
|
|
|
|
||
2010
|
|
77.1
|
%
|
|
133.3
|
%
|
2011
|
|
72.1
|
|
|
88.4
|
|
2012
|
|
76.4
|
|
|
101.4
|
|
Quarters Ended
|
|
|
|
|
||
March 31:
|
|
|
|
|
||
2012
|
|
71.3
|
|
|
79.5
|
|
2013
|
|
73.4
|
%
|
|
77.1
|
%
|
|
Average Settled Claim Amount (a)
|
|
Reported Delinquency
Ratio at End of Period
|
|
Claims
Rescissions
and
Denials
|
||||||||||||
|
Traditional
Primary
|
|
Bulk
|
|
Traditional
Primary
|
|
Bulk
|
|
|||||||||
Years Ended December 31:
|
|
|
|
|
|
|
|
|
|
||||||||
2010
|
$
|
47,954
|
|
|
$
|
58,184
|
|
|
15.55
|
%
|
|
24.54
|
%
|
|
$
|
748.8
|
|
2011
|
48,254
|
|
|
54,956
|
|
|
14.89
|
|
|
21.90
|
|
|
279.5
|
|
|||
2012
|
46,376
|
|
|
53,221
|
|
|
14.70
|
|
|
21.57
|
|
|
262.3
|
|
|||
Quarters Ended March 31:
|
|
|
|
|
|
|
|
|
|
||||||||
2012
|
46,019
|
|
|
54,823
|
|
|
14.16
|
|
|
21.12
|
|
|
50.9
|
|
|||
2013
|
$
|
44,863
|
|
|
$
|
48,502
|
|
|
13.76
|
%
|
|
20.70
|
%
|
|
$
|
61.2
|
|
(a)
|
Amounts are in whole dollars.
|
(b)
|
As determined by risk in force as of
March 31, 2013
, these 10 states represent approximately 50.8%, 58.7%, and 51.0%, of traditional primary, bulk, and total risk in force, respectively.
|
|
|
|
|
|
|
|
|
|
Reported
Delinquency
Ratio at End
of Period
|
|
Claim
Rescissions
and Denials
|
|||||||||
|
CCI Claim Costs
|
|
|
|||||||||||||||||
|
Paid
|
|
Incurred
|
|
|
|||||||||||||||
|
Amount
|
|
Ratio (a)
|
|
Amount
|
|
Ratio (a)
|
|
|
|||||||||||
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2010
|
$
|
278.3
|
|
|
316.4
|
%
|
|
$
|
225.4
|
|
|
256.4
|
%
|
|
4.6
|
%
|
|
$
|
621.5
|
|
2011
|
111.8
|
|
|
191.7
|
|
|
102.9
|
|
|
176.5
|
|
|
4.4
|
|
|
166.1
|
|
|||
2012
|
73.8
|
|
|
173.9
|
|
|
112.8
|
|
|
265.7
|
|
|
3.9
|
|
|
98.1
|
|
|||
Quarter Ended
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
March 31:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2012
|
26.1
|
|
|
215.9
|
|
|
20.2
|
|
|
167.6
|
|
|
4.3
|
|
|
30.7
|
|
|||
2013
|
$
|
14.3
|
|
|
182.3
|
%
|
|
$
|
15.1
|
|
|
192.6
|
%
|
|
3.8
|
%
|
|
$
|
17.4
|
|
(a)
|
Percent of net CCI earned premiums. CCI claims ratios include only those costs actually or expected to be paid by the Company and exclude claims not paid by virtue of coverage rescissions and claims denials as well as unsubstantiated claim submissions. Certain claim rescissions and denials may from time to time become the subject of disagreements between the Company and certain individual insureds. Possible future reversals of such rescissions and denials, however, may not necessarily affect the adequacy of previously established claim reserve levels nor fully impact operating results. These effects could be fully or partially negated by the imposition of additional retrospective premiums and/or the limiting effects of maximum policy limits.
|
Expenses: Underwriting Acquisition and Other Expenses
|
|
General
|
|
Title
|
|
RFIG Run-off
|
|
Consolidated
|
||||
Years Ended December 31:
|
|
|
|
|
|
|
|
||||
2010
|
26.9
|
%
|
|
93.0
|
%
|
|
13.3
|
%
|
|
47.6
|
%
|
2011
|
25.2
|
|
|
91.2
|
|
|
22.1
|
|
|
47.5
|
|
2012
|
25.7
|
|
|
89.6
|
|
|
10.4
|
|
|
48.5
|
|
Quarters Ended March 31:
|
|
|
|
|
|
|
|
||||
2012
|
26.5
|
|
|
91.5
|
|
|
13.3
|
|
|
47.6
|
|
2013
|
24.5
|
%
|
|
89.5
|
%
|
|
7.1
|
%
|
|
49.1
|
%
|
Expenses: Total
|
|
General
|
|
Title
|
|
RFIG Run-off
|
|
Consolidated
|
||||
Years Ended December 31:
|
|
|
|
|
|
|
|
||||
2010
|
94.7
|
%
|
|
101.0
|
%
|
|
182.3
|
%
|
|
111.4
|
%
|
2011
|
94.4
|
|
|
99.0
|
|
|
252.6
|
|
|
115.8
|
|
2012
|
98.7
|
|
|
96.8
|
|
|
232.2
|
|
|
110.4
|
|
Quarters Ended March 31:
|
|
|
|
|
|
|
|
||||
2012
|
95.7
|
|
|
98.7
|
|
|
186.3
|
|
|
107.0
|
|
2013
|
96.4
|
%
|
|
96.4
|
%
|
|
133.5
|
%
|
|
99.2
|
%
|
Expenses: Income Taxes
|
OTHER INFORMATION
|
|
|
Item 3 - Quantitative and Qualitative Disclosure About Market Risk
|
10 (a)
|
|
|
Form of Tax Sharing Agreement between Old Republic International Corporation and each of its
|
|
|
subsidiary companies.
|
|
|
|
|
|
31.1
|
|
|
Certification by Aldo C. Zucaro, Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as
|
|
|
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
31.2
|
|
|
Certification by Karl W. Mueller, Chief Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as
|
|
|
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
32.1
|
|
|
Certification by Aldo C. Zucaro, Chief Executive Officer, pursuant to Section 1350, Chapter 63 of Title 18,
|
|
|
United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
32.2
|
|
|
Certification by Karl W. Mueller, Chief Financial Officer, pursuant to Section 1350, Chapter 63 of Title 18,
|
|
|
United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
Old Republic International Corporation
|
|
|
|
(Registrant)
|
Date:
|
May 9, 2013
|
|
|
|
|
|
|
|
|
|
/s/ Karl W. Mueller
|
|
|
|
|
|
|
|
Karl W. Mueller
Senior Vice President,
Chief Financial Officer, and
Principal Accounting Officer
|
Exhibit
|
|
|
|
No.
|
|
Description
|
|
|
|
|
|
10 (a)
|
|
|
Form of Tax Sharing Agreement between Old Republic International Corporation and each of its
|
|
|
subsidiary companies.
|
|
|
|
|
|
31.1
|
|
|
Certification by Aldo C. Zucaro, Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as
|
|
|
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
31.2
|
|
|
Certification by Karl W. Mueller, Chief Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as
|
|
|
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
32.1
|
|
|
Certification by Aldo C. Zucaro, Chief Executive Officer, pursuant to Section 1350, Chapter 63 of Title 18,
|
|
|
United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
32.2
|
|
|
Certification by Karl W. Mueller, Chief Financial Officer, pursuant to Section 1350, Chapter 63 of Title 18,
|
|
|
United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
1.
|
A consolidated United States income tax return (the “Return”) shall be filed by ORI for each taxable year this Agreement is in effect and for which the Affiliated Group is required or permitted to file a consolidated tax return. Each Subsidiary shall execute and file such consent, elections, and other documents that may be required or appropriate for the proper filing of such Returns.
|
2.
|
The terms used in this Agreement shall have the same meaning as defined in the Code or the Regulations thereunder. If any term used in this Agreement is not defined in the Code or Regulations, its meaning shall be the meaning ascribed to it by generally accepted accounting principles. All other terms shall be interpreted using their plain meanings.
|
3.
|
For each tax period, each member of the Affiliated Group shall compute its separate tax liability as if it had filed a separate tax return and shall pay such amount to ORI. For purposes of this Agreement, any liability for alternative minimum tax shall be treated as part of the member’s separate tax liability. The separate return tax liability for each member shall be computed in a manner consistent with the provisions of Regulation § 1.1552-1(a)(2)(ii), provided that the carryover of any tax attribute from a prior tax year, and the carryback of any tax attribute from a subsequent tax year, that is not available in determining the consolidated tax liability of the group for such taxable period shall be disregarded. If the sum of the amounts payable to ORI in this manner exceeds the consolidated tax liability for the year, ORI shall allocate the excess to those members whose excess losses and tax credits are absorbed in the consolidated Return in a manner that reasonably reflects the absorption of such tax attributes, and ORI shall pay to each such member its allocable portion of such excess amount within 45 days after the date of filing of the consolidated Return for such period.
|
4.
|
Each subsidiary will be required to fund ORI for all estimated, extension and final tax payments to be made to the Internal Revenue Service (the “IRS”). Estimated and extension tax payments will be based on quarterly estimates of income and interim tax return computations. Such funding will also be required to be paid to ORI within five days prior to the due date for estimated, extension and final payments to be made by ORI to the IRS, but in no event later than the due date for each such payment. Any amounts paid by a Subsidiary on account of a separate Return or separate estimated tax payments that are credited against the consolidated tax liability of the Affiliated Group shall be included in determining the payments due from such Subsidiary. Any overpayment of estimated tax should be refunded to the Subsidiary within 30 days of receipt of a refund from the IRS.
|
5.
|
If adjustments made to a Return in which ORI and a Subsidiary are included result in a final deficiency or overpayment that would have required a larger or smaller payment by ORI to a Subsidiary or by a Subsidiary to ORI, ORI shall pay to the Subsidiary or the Subsidiary shall pay to ORI, an appropriate amount proportionate to the Subsidiary’s overpayment or deficiency. Such payment shall reflect a proportionate adjustment concerning the overpayment or deficiency of the original Return. ORI shall notify each affected Subsidiary of any such deficiency or overpayment: (a) in the case of a deficiency, within 45 days of the date of final determination of the deficiency; and (b) in the case of an overpayment, within 45 days of receipt by ORI of refund of the overpayment or a notice of credit of the overpayment to another tax year or tax. ORI’s notice will advise the Subsidiary of the increase or decrease in its share of the consolidated tax liability under this Agreement. If the Subsidiary’s share decreases, ORI will pay the amount of the
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6.
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In the event any taxes payable on the Return are not timely paid and such failure to pay results in a levy by the IRS on the assets of Subsidiary for unpaid taxes, ORI shall indemnify and reimburse Subsidiary for the amount of any such levy. Further, ORI shall indemnify and hold Subsidiary harmless for the payment of any tax ORI pays or becomes obligated to pay which is in excess of the tax payable by Subsidiary under the computations made pursuant to this Agreement.
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7.
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ORI and each subsidiary shall retain copies of all tax Returns, related schedules and work papers and all material records and other documents generated by them, respectively, or in their respective possession, until the expiration of the statute of limitations, including any extensions.
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8.
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This Agreement may be amended only in writing signed by ORI and the Subsidiaries. Together with the Addenda signed or to be signed by the Subsidiaries, it contains the entire Agreement of the parties on this subject matter. It shall be construed according to the law of the State of Illinois. It shall be applicable with respect to a Subsidiary only for periods which ORI and each Subsidiary are members of the same Affiliated Group filing a consolidated Return. No adjustments shall be made with respect to a Subsidiary for periods which ORI or the Subsidiary has filed or files a separate Return or is a member of another Affiliated Group filing a separate Return.
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9.
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The parties agree that additional members of the Affiliated Group, including companies that are not now members of the Affiliated Group or that do not now exist, may become parties to this Agreement in the future by executing the attached Addendum. It shall not be necessary for the existing parties to resign the Agreement, but the new party and ORI may simply sign the Addendum and it will be effective as if the existing members had resigned.
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10.
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This Agreement contains the entire understanding between the parties with respect to the subject matter hereof and supersedes any prior written or oral understandings or agreements between them respecting such matter.
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based upon our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based upon our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(1)
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the quarterly report on Form 10-Q of the Company for the quarter ended March 31, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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(2)
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the information contained in the Report fairly presents the financial condition and results of operations of the Company.
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