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)
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|
(Zip Code)
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Registrant's telephone number, including area code:
312‑346‑8100
|
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class
|
Name of Each Exchange on Which Registered
|
Common Stock/$1 par value
|
New York Stock Exchange
|
Title
|
Part
|
Proxy statement for the 2019 Annual Meeting of Shareholders
Exhibits as specified in exhibit index (page 112) |
III, Items 10, 11, 12, 13 and 14
IV, Item 15 |
•
|
Disciplined risk selection, evaluation, and pricing to reduce uncertainty and adverse selection;
|
•
|
Enhancing the predictability of expected outcomes through insurance of the largest number of homogeneous risks as to each type of coverage;
|
•
|
Reducing the insurance portfolio risk profile through:
|
•
|
diversification and spread of insured risks; and
|
•
|
assimilation of uncorrelated asset and liability exposures across economic sectors that tend to offset or counterbalance one another; and
|
•
|
Effective management of gross and net limits of liability through appropriate use of reinsurance.
|
Financial Information Relating to Segments of Business (a) ($ in Millions)
|
|||||||||||
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|
|
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|
||||||
Revenues (b)
|
|
||||||||||
Years Ended December 31:
|
2018
|
|
2017
|
|
2016
|
||||||
General
|
$
|
3,739.4
|
|
|
$
|
3,531.6
|
|
|
$
|
3,354.7
|
|
Title
|
2,375.4
|
|
|
2,325.0
|
|
|
2,244.1
|
|
|||
Corporate & Other - net (c)
|
46.3
|
|
|
50.1
|
|
|
35.4
|
|
|||
Subtotal
|
6,161.3
|
|
|
5,906.8
|
|
|
5,634.3
|
|
|||
RFIG Run-off
|
96.1
|
|
|
144.6
|
|
|
193.2
|
|
|||
Subtotal
|
6,257.4
|
|
|
6,051.5
|
|
|
5,827.6
|
|
|||
Consolidated investment gains (losses) (b)
|
(235.6
|
)
|
|
211.6
|
|
|
72.8
|
|
|||
Consolidated
|
$
|
6,021.8
|
|
|
$
|
6,263.1
|
|
|
$
|
5,900.5
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Pretax Income (Loss)
|
|
|
|
|
|
||||||
Years Ended December 31:
|
2018
|
|
2017
|
|
2016
|
||||||
General
|
$
|
363.9
|
|
|
$
|
340.3
|
|
|
$
|
319.9
|
|
Title
|
219.3
|
|
|
237.1
|
|
|
210.2
|
|
|||
Corporate & Other - net (c)
|
40.4
|
|
|
9.9
|
|
|
13.0
|
|
|||
Subtotal
|
623.8
|
|
|
587.3
|
|
|
543.3
|
|
|||
RFIG Run-off
|
49.9
|
|
|
(73.5
|
)
|
|
69.8
|
|
|||
Subtotal
|
673.7
|
|
|
513.8
|
|
|
613.1
|
|
|||
Consolidated investment gains (losses)
|
(235.6
|
)
|
|
211.6
|
|
|
72.8
|
|
|||
Consolidated
|
$
|
438.1
|
|
|
$
|
725.4
|
|
|
$
|
686.0
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
||||||
As of December 31:
|
2018
|
|
2017
|
|
2016
|
||||||
General
|
$
|
16,411.4
|
|
|
$
|
16,055.5
|
|
|
$
|
15,305.7
|
|
Title
|
1,452.2
|
|
|
1,466.0
|
|
|
1,423.0
|
|
|||
Corporate & Other - net (c)
|
726.7
|
|
|
1,076.8
|
|
|
957.9
|
|
|||
Subtotal
|
18,590.3
|
|
|
18,598.4
|
|
|
17,686.7
|
|
|||
RFIG Run-off
|
736.7
|
|
|
805.0
|
|
|
904.8
|
|
|||
Consolidated
|
$
|
19,327.1
|
|
|
$
|
19,403.5
|
|
|
$
|
18,591.6
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Shareholders' Equity (d)
|
|
|
|
|
|
||||||
As of December 31:
|
2018
|
|
2017
|
|
2016
|
||||||
General (d)
|
$
|
3,024.6
|
|
|
$
|
3,179.9
|
|
|
$
|
2,957.2
|
|
Title (d)
|
673.6
|
|
|
641.8
|
|
|
554.7
|
|
|||
Corporate & Other - net (c)
|
1,001.2
|
|
|
489.8
|
|
|
618.0
|
|
|||
Subtotal
|
4,699.5
|
|
|
4,311.7
|
|
|
4,130.0
|
|
|||
RFIG Run-off
|
446.7
|
|
|
421.6
|
|
|
330.6
|
|
|||
Consolidated
|
$
|
5,146.2
|
|
|
$
|
4,733.3
|
|
|
$
|
4,460.6
|
|
|
|
|
|
|
|
(a)
|
Reference is made to the table in Note 6 of the Notes to Consolidated Financial Statements, incorporated herein by reference, which shows the contribution of each subcategory to the consolidated revenues and pretax income (loss) of Old Republic's insurance industry segments.
|
(b)
|
Revenues consist of net premiums, fees, net investment and other income earned. Investment gains (losses) which effective January 1, 2018, include unrealized gains (losses) on equity securities, are shown on a consolidated basis since the investment portfolio is managed as a whole.
|
(c)
|
Includes amounts for a small life and accident insurance business as well as those of the parent holding company, its internal corporate services subsidiaries and consolidation elimination adjustments.
|
(d)
|
Shareholders' equity excludes intercompany financing arrangements for the following segments: General -
$1,222.1
,
$1,097.1
, and
$1,007.1
as of
December 31, 2018
,
2017
, and
2016
, respectively; Title -
$87.9
,
$97.9
, and
$143.9
as of
December 31, 2018
,
2017
, and
2016
, respectively.
|
General Insurance Group
|
Title Insurance Group
|
Republic Financial Indemnity Group (RFIG) Run-off Business
|
Corporate and Other Operations
|
Consolidated Underwriting Statistics
|
|
|
|
|
|
($ in Millions)
|
||||||||||
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
|||||||||
General Insurance Group:
|
|
|
|
|
|
|
|||||||||
|
Overall Experience: (d)
|
|
|
|
|
|
|
||||||||
|
|
Net Premiums Earned
|
|
$
|
3,277.1
|
|
|
$
|
3,110.8
|
|
|
$
|
2,936.3
|
|
|
|
|
Claim Ratio
|
|
72.2
|
%
|
|
71.8
|
%
|
|
73.0
|
%
|
||||
|
|
Expense Ratio
|
|
25.0
|
|
|
25.5
|
|
|
24.8
|
|
||||
|
|
Composite Ratio
|
|
97.2
|
%
|
|
97.3
|
%
|
|
97.8
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Experience by Major Coverages:
|
|
|
|
|
|
|
||||||||
|
Commercial Automobile (Principally Trucking):
|
|
|
|
|
|
|
||||||||
|
|
Net Premiums Earned
|
|
$
|
1,206.1
|
|
|
$
|
1,076.3
|
|
|
$
|
988.6
|
|
|
|
|
Claim Ratio
|
|
79.3
|
%
|
|
76.8
|
%
|
|
79.4
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Workers' Compensation:
|
|
|
|
|
|
|
||||||||
|
|
Net Premiums Earned
|
|
$
|
1,018.5
|
|
|
$
|
1,045.2
|
|
|
$
|
1,072.5
|
|
|
|
|
Claim Ratio
|
|
70.7
|
%
|
|
75.5
|
%
|
|
76.1
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
|
General Liability:
|
|
|
|
|
|
|
||||||||
|
|
Net Premiums Earned
|
|
$
|
203.6
|
|
|
$
|
195.2
|
|
|
$
|
163.3
|
|
|
|
|
Claim Ratio
|
|
68.9
|
%
|
|
73.1
|
%
|
|
77.5
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Three Above Coverages Combined:
|
|
|
|
|
|
|
||||||||
|
|
Net Premiums Earned
|
|
$
|
2,428.3
|
|
|
$
|
2,316.8
|
|
|
$
|
2,224.5
|
|
|
|
|
Claim Ratio
|
|
74.8
|
%
|
|
75.9
|
%
|
|
77.6
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Financial Indemnity: (a)(d)
|
|
|
|
|
|
|
||||||||
|
|
Net Premiums Earned
|
|
$
|
174.7
|
|
|
$
|
153.1
|
|
|
$
|
125.0
|
|
|
|
|
Claim Ratio
|
|
73.8
|
%
|
|
62.1
|
%
|
|
45.5
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Inland Marine and Commercial Multi-Peril:
|
|
|
|
|
|
|
||||||||
|
|
Net Premiums Earned
|
|
$
|
252.8
|
|
|
$
|
236.7
|
|
|
$
|
217.9
|
|
|
|
|
Claim Ratio
|
|
62.8
|
%
|
|
59.3
|
%
|
|
60.9
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Home and Automobile Warranty:
|
|
|
|
|
|
|
||||||||
|
|
Net Premiums Earned
|
|
$
|
297.5
|
|
|
$
|
294.9
|
|
|
$
|
274.6
|
|
|
|
|
Claim Ratio
|
|
63.5
|
%
|
|
60.5
|
%
|
|
65.3
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Other Coverages: (b)
|
|
|
|
|
|
|
||||||||
|
|
Net Premiums Earned
|
|
$
|
122.2
|
|
|
$
|
108.1
|
|
|
$
|
95.2
|
|
|
|
|
Claim Ratio
|
|
51.7
|
%
|
|
54.7
|
%
|
|
53.4
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Title Insurance Group: (c)
|
|
|
|
|
|
|
|||||||||
|
|
Net Premiums Earned
|
|
$
|
1,885.6
|
|
|
$
|
1,827.6
|
|
|
$
|
1,742.4
|
|
|
|
|
Combined Net Premiums & Fees Earned
|
|
$
|
2,336.1
|
|
|
$
|
2,287.2
|
|
|
$
|
2,206.6
|
|
|
|
|
Claim Ratio
|
|
2.1
|
%
|
|
.9
|
%
|
|
3.8
|
%
|
||||
|
|
Expense Ratio
|
|
90.0
|
|
|
90.0
|
|
|
87.9
|
|
||||
|
|
Composite Ratio
|
|
92.1
|
%
|
|
90.9
|
%
|
|
91.7
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
RFIG Run-off Business: (d)
|
|
|
|
|
|
|
|||||||||
|
|
Net Premiums Earned
|
|
$
|
75.9
|
|
|
$
|
122.9
|
|
|
$
|
170.0
|
|
|
|
|
Claim Ratio
|
|
39.4
|
%
|
|
160.9
|
%
|
|
60.4
|
%
|
||||
|
|
Expense Ratio
|
|
21.5
|
|
|
16.6
|
|
|
12.2
|
|
||||
|
|
Composite Ratio
|
|
60.9
|
%
|
|
177.5
|
%
|
|
72.6
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
All Coverages Consolidated:
|
|
|
|
|
|
|
|||||||||
|
|
Net Premiums & Fees Earned
|
|
$
|
5,703.9
|
|
|
$
|
5,539.7
|
|
|
$
|
5,333.2
|
|
|
|
|
Claim Ratio
|
|
43.1
|
%
|
|
44.7
|
%
|
|
44.0
|
%
|
||||
|
|
Expense Ratio
|
|
51.6
|
|
|
52.0
|
|
|
50.6
|
|
||||
|
|
Composite Ratio
|
|
94.7
|
%
|
|
96.7
|
%
|
|
94.6
|
%
|
(a)
|
Consists principally of fidelity, surety, executive indemnity (directors & officers and errors & omissions), and GAP coverages.
|
(b)
|
Consists principally of aviation and travel accident coverages.
|
(c)
|
Title claim, expense, and composite ratios are calculated on the basis of combined net premiums and fees earned.
|
(d)
|
Consumer credit indemnity coverages are reported within the RFIG Run-off segment and have been excluded from the General Insurance Group.
|
|
|
|
|
|
Effect of Prior Periods'
|
|
|
|
|
|||||
|
|
|
|
|
(Favorable)/
|
|
Claim Ratio Excluding
|
|||||||
|
Reported
|
|
Unfavorable Claim
|
|
Prior Periods' Claim
|
|||||||||
|
Claim Ratio
|
|
Reserves Development
|
|
Reserves Development
|
|||||||||
2014
|
|
77.9
|
%
|
|
|
|
3.9
|
%
|
|
|
|
74.0
|
%
|
|
2015
|
|
74.1
|
|
|
|
|
1.5
|
|
|
|
|
72.6
|
|
|
2016
|
|
73.0
|
|
|
|
|
0.3
|
|
|
|
|
72.7
|
|
|
2017
|
|
71.8
|
|
|
|
|
0.7
|
|
|
|
|
71.1
|
|
|
2018
|
|
72.2
|
%
|
|
|
|
—
|
%
|
|
|
|
72.2
|
%
|
|
|
|
|
|
|
Effect of Prior Periods'
|
|
|
|
|
|||||
|
|
|
|
|
(Favorable)/
|
|
Claim Ratio Excluding
|
|||||||
|
Reported
|
|
Unfavorable Claim
|
|
Prior Periods' Claim
|
|||||||||
|
Claim Ratio
|
|
Reserves Development
|
|
Reserves Development
|
|||||||||
2014
|
|
5.2
|
%
|
|
|
|
(0.8
|
)%
|
|
|
|
6.0
|
%
|
|
2015
|
|
4.9
|
|
|
|
|
(0.6
|
)
|
|
|
|
5.5
|
|
|
2016
|
|
3.8
|
|
|
|
|
(1.1
|
)
|
|
|
|
4.9
|
|
|
2017
|
|
0.9
|
|
|
|
|
(3.3
|
)
|
|
|
|
4.2
|
|
|
2018
|
|
2.1
|
%
|
|
|
|
(2.0
|
)%
|
|
|
|
4.1
|
%
|
|
Consolidated Investments
|
|||||||||||
($ in Millions)
|
|||||||||||
December 31:
|
|
2018
|
|
2017
|
|||||||
Available for Sale
|
|
|
|
|
|||||||
Fixed Maturity Securities:
|
|
|
|
|
|||||||
|
U.S. & Canadian Governments
|
|
$
|
1,524.4
|
|
|
$
|
1,552.2
|
|
||
|
Corporate
|
|
6,658.3
|
|
|
6,730.0
|
|
||||
|
|
|
|
|
8,182.8
|
|
|
8,282.3
|
|
||
Short-term Investments
|
|
354.9
|
|
|
670.1
|
|
|||||
|
Total available for sale
|
|
8,537.8
|
|
|
8,952.4
|
|
||||
Held to Maturity
|
|
|
|
|
|||||||
Fixed Maturity Securities:
|
|
|
|
|
|||||||
|
Tax-Exempt
|
|
1,044.8
|
|
|
1,067.4
|
|
||||
Equity Securities
|
|
3,380.9
|
|
|
3,265.5
|
|
|||||
Other Investments
|
|
31.0
|
|
|
32.5
|
|
|||||
|
Total Investments
|
|
$
|
12,994.6
|
|
|
$
|
13,318.0
|
|
Sources of Consolidated Investment Income
|
|||||||||||||||
($ in Millions)
|
|||||||||||||||
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
|||||||||
Fixed Maturity Securities:
|
|
|
|
|
|
|
|||||||||
|
Taxable Interest
|
|
$
|
278.4
|
|
|
$
|
272.7
|
|
|
$
|
285.0
|
|
||
|
Tax-Exempt Interest
|
|
20.7
|
|
|
20.4
|
|
|
11.5
|
|
|||||
|
|
|
|
|
299.2
|
|
|
293.2
|
|
|
296.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Equity Securities Dividends
|
|
124.0
|
|
|
110.9
|
|
|
88.2
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Other Investment Income:
|
|
|
|
|
|
|
|||||||||
|
Interest on Short-term Investments
|
|
9.8
|
|
|
5.4
|
|
|
2.1
|
|
|||||
|
Other Sources
|
|
4.9
|
|
|
4.5
|
|
|
3.9
|
|
|||||
|
|
|
|
|
14.8
|
|
|
9.9
|
|
|
6.0
|
|
|||
Gross Investment Income
|
|
438.1
|
|
|
414.1
|
|
|
390.9
|
|
||||||
|
Less: Investment Expenses (a)
|
|
6.2
|
|
|
4.6
|
|
|
3.8
|
|
|||||
Net Investment Income
|
|
$
|
431.8
|
|
|
$
|
409.4
|
|
|
$
|
387.0
|
|
|||
|
|
|
|
|
|
|
|
|
|
(a)
|
Investment expenses largely consist of personnel costs and investment management and custody service fees.
|
(b)
|
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, Corporates and Municipal issuers, which are converted to the above ratings classifications.
|
(c)
|
"All other" includes non-investment grade or non-rated issuers.
|
Age Distribution of Fixed Maturity Securities
|
|||||||||
December 31:
|
|
2018
|
|
2017
|
|||||
|
|
|
|
|
(% of total portfolio)
|
||||
|
Maturity Ranges:
|
|
|
|
|
||||
|
Due in one year or less
|
|
7.0
|
%
|
|
9.2
|
%
|
||
|
Due after one year through five years
|
|
51.6
|
|
|
45.5
|
|
||
|
Due after five years through ten years
|
|
40.7
|
|
|
44.1
|
|
||
|
Due after ten years through fifteen years
|
|
.6
|
|
|
1.0
|
|
||
|
Due after fifteen years
|
|
.1
|
|
|
.2
|
|
||
|
|
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||
|
Average Maturity in Years
|
|
4.5
|
|
4.7
|
|
Major General Insurance Balances Due from Reinsurers
|
||||||||||||||||||||
|
||||||||||||||||||||
|
|
|
|
|
|
|
($ in Millions)
|
|
% of Total
|
|||||||||||
|
|
|
|
|
A.M.
|
|
Reinsurance Recoverable
|
|
Total
|
|
Consolidated
|
|||||||||
|
|
|
|
|
Best
|
|
on Paid
|
|
on Claim
|
|
Exposure
|
|
Reinsured
|
|||||||
Reinsurer
|
|
Rating
|
|
Claims
|
|
Reserves
|
|
to Reinsurer
|
|
Liabilities
|
||||||||||
|
Munich Re America, Inc.
|
|
A+
|
|
$
|
9.1
|
|
|
$
|
321.1
|
|
|
$
|
330.3
|
|
|
10.9
|
%
|
||
|
Archway Insurance, Ltd.
|
|
Unrated
|
|
—
|
|
|
297.6
|
|
|
297.6
|
|
|
9.8
|
|
|||||
|
Hannover Ruckversicherungs
|
|
A+
|
|
2.8
|
|
|
211.0
|
|
|
213.8
|
|
|
7.1
|
|
|||||
|
Swiss Reinsurance America Corporation
|
|
A+
|
|
7.5
|
|
|
164.2
|
|
|
171.8
|
|
|
5.7
|
|
|||||
|
AXIS Reinsurance Company
|
|
A+
|
|
.2
|
|
|
120.6
|
|
|
120.8
|
|
|
4.0
|
|
|||||
|
Summit Insurance, Ltd.
|
|
Unrated
|
|
—
|
|
|
109.2
|
|
|
109.3
|
|
|
3.6
|
|
|||||
|
Global Vision II
|
|
Unrated
|
|
—
|
|
|
105.9
|
|
|
105.9
|
|
|
3.5
|
|
|||||
|
National WC Reinsurance Pool
|
|
Unrated
|
|
1.6
|
|
|
93.8
|
|
|
95.4
|
|
|
3.1
|
|
|||||
|
Endurance Assurance Corporation
|
|
A+
|
|
.1
|
|
|
88.6
|
|
|
88.8
|
|
|
2.9
|
|
|||||
|
Trabaja Reinsurance Company
|
|
Unrated
|
|
1.4
|
|
|
81.5
|
|
|
82.9
|
|
|
2.7
|
|
|||||
|
|
|
|
|
|
$
|
23.0
|
|
|
$
|
1,594.1
|
|
|
$
|
1,617.1
|
|
|
53.3
|
%
|
Parent Company
|
Risk Factors Common to the Company and its Insurance Subsidiaries
|
General Insurance Group
|
Title Insurance Group
|
RFIG Run-off Business
|
|
Dec 13
|
|
Dec 14
|
|
Dec 15
|
|
Dec 16
|
|
Dec 17
|
|
Dec 18
|
||||||||||||
ORI
|
$
|
100.00
|
|
|
$
|
88.85
|
|
|
$
|
118.44
|
|
|
$
|
125.65
|
|
|
$
|
146.81
|
|
|
$
|
153.39
|
|
S&P 500
|
100.00
|
|
|
113.69
|
|
|
115.26
|
|
|
129.05
|
|
|
157.22
|
|
|
150.33
|
|
||||||
Peer Group
|
100.00
|
|
|
113.38
|
|
|
123.49
|
|
|
139.31
|
|
|
155.21
|
|
|
132.29
|
|
(a)
|
Consists of cash, investments and accrued investment income.
|
(b)
|
Total capitalization consists of debt, preferred stock, and common shareholders' equity.
|
(c)
|
Effective January 1, 2018, includes unrealized gains and losses from changes in fair value of equity securities.
|
(d)
|
In late December 2017, the Board declared a special cash dividend of $1.00 per share payable on January 31, 2018.
|
OVERVIEW
|
EXECUTIVE SUMMARY
|
Years Ended December 31:
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Pretax income (loss)
|
|
|
$
|
438.1
|
|
|
$
|
725.4
|
|
|
$
|
686.0
|
|
Pretax investment gains (losses) included in pretax income (loss)
|
|
|
(235.6
|
)
|
|
211.6
|
|
|
72.8
|
|
|||
Pretax income (loss) excluding investment gains (losses)
|
|
|
$
|
673.7
|
|
|
$
|
513.8
|
|
|
$
|
613.1
|
|
|
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
|
$
|
370.5
|
|
|
$
|
560.5
|
|
|
$
|
466.9
|
|
Net of tax investment gains (losses) included in net income (loss)
|
|
|
(185.9
|
)
|
|
242.4
|
|
|
47.3
|
|
|||
Net income (loss) excluding investment gains (losses)
|
|
|
$
|
556.4
|
|
|
$
|
318.0
|
|
|
$
|
419.6
|
|
|
|
|
2017
|
|
|
||||||
Years Ended December 31:
|
2018
|
|
As Reported
|
|
As Adjusted*
|
|
2016
|
||||
Net income (loss)
|
15.4
|
%
|
|
22.7
|
%
|
|
31.4
|
%
|
|
31.9
|
%
|
Realized investment gains (losses)
|
21.1
|
%
|
|
(14.6
|
)%
|
|
35.0
|
%
|
|
35.0
|
%
|
Unrealized investment gains (losses)
|
(21.1
|
)%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Net income (loss) excluding investment gains (losses)
|
17.4
|
%
|
|
38.1
|
%
|
|
30.0
|
%
|
|
31.6
|
%
|
*
|
In the final quarter of 2017, deferred income tax adjustments were made as required to reflect the lower Federal income tax rates which took effect at the beginning of 2018. The adjustments amounted to a deferred income tax charge of $41.8 applied to income excluding investment gains or losses, and a deferred income tax credit of $104.9 applied to investment gains or losses. The 2017 As Adjusted effective income tax rates in the above table reflect the exclusion of such required adjustments.
|
|
|
|
Major Segmented and Consolidated
|
||||||||||||||||
|
|
|
Elements of Income (Loss)
|
||||||||||||||||
|
|
|
|
|
2018
|
|
2017
|
||||||||||||
Years Ended December 31:
|
|
|
2018
|
|
2017
|
|
2016
|
|
vs. 2017
|
|
vs. 2016
|
||||||||
Net premiums, fees, and other income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
General insurance
|
|
|
$
|
3,277.1
|
|
|
$
|
3,110.8
|
|
|
$
|
2,936.3
|
|
|
5.3
|
%
|
|
5.9
|
%
|
Title insurance
|
|
|
2,336.1
|
|
|
2,287.2
|
|
|
2,206.6
|
|
|
2.1
|
|
|
3.6
|
|
|||
Corporate and other
|
|
|
14.6
|
|
|
18.8
|
|
|
20.1
|
|
|
(22.0
|
)
|
|
(6.8
|
)
|
|||
Other income
|
|
|
121.6
|
|
|
102.2
|
|
|
107.3
|
|
|
18.9
|
|
|
(4.7
|
)
|
|||
Subtotal
|
|
|
5,749.5
|
|
|
5,519.1
|
|
|
5,270.5
|
|
|
4.2
|
|
|
4.7
|
|
|||
RFIG run-off business
|
|
|
75.9
|
|
|
122.9
|
|
|
170.0
|
|
|
(38.2
|
)
|
|
(27.7
|
)
|
|||
Consolidated total
|
|
|
$
|
5,825.5
|
|
|
$
|
5,642.0
|
|
|
$
|
5,440.5
|
|
|
3.3
|
%
|
|
3.7
|
%
|
Underwriting and related services income (loss):
|
|
|
|
|
|
|
|
|
|
|
|||||||||
General insurance
|
|
|
$
|
91.2
|
|
|
$
|
84.3
|
|
|
$
|
65.5
|
|
|
8.2
|
%
|
|
28.8
|
%
|
Title insurance
|
|
|
185.1
|
|
|
206.7
|
|
|
181.7
|
|
|
(10.5
|
)
|
|
13.8
|
|
|||
Corporate and other (a)
|
|
|
(21.9
|
)
|
|
(28.4
|
)
|
|
(17.5
|
)
|
|
22.7
|
|
|
(62.5
|
)
|
|||
Subtotal
|
|
|
254.3
|
|
|
262.6
|
|
|
229.7
|
|
|
(3.2
|
)
|
|
14.4
|
|
|||
RFIG run-off business
|
|
|
29.7
|
|
|
(95.2
|
)
|
|
46.6
|
|
|
131.2
|
|
|
N/M
|
||||
Consolidated total
|
|
|
$
|
284.0
|
|
|
$
|
167.3
|
|
|
$
|
276.3
|
|
|
69.7
|
%
|
|
(39.4
|
)%
|
Consolidated composite ratio:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Claim ratio
|
|
|
43.1
|
%
|
|
44.7
|
%
|
|
44.0
|
%
|
|
|
|
|
|||||
Expense ratio
|
|
|
51.6
|
|
|
52.0
|
|
|
50.6
|
|
|
|
|
|
|||||
Composite ratio
|
|
|
94.7
|
%
|
|
96.7
|
%
|
|
94.6
|
%
|
|
|
|
|
|||||
Net investment income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
General insurance
|
|
|
$
|
341.0
|
|
|
$
|
318.9
|
|
|
$
|
312.1
|
|
|
6.9
|
%
|
|
2.2
|
%
|
Title insurance
|
|
|
38.8
|
|
|
37.3
|
|
|
36.2
|
|
|
4.2
|
|
|
3.1
|
|
|||
Corporate and other
|
|
|
31.7
|
|
|
31.4
|
|
|
15.4
|
|
|
1.2
|
|
|
103.4
|
|
|||
Subtotal
|
|
|
411.7
|
|
|
387.7
|
|
|
363.8
|
|
|
6.2
|
|
|
6.6
|
|
|||
RFIG run-off business
|
|
|
20.1
|
|
|
21.7
|
|
|
23.2
|
|
|
(7.2
|
)
|
|
(6.4
|
)
|
|||
Consolidated total
|
|
|
$
|
431.8
|
|
|
$
|
409.4
|
|
|
$
|
387.0
|
|
|
5.5
|
%
|
|
5.8
|
%
|
Interest and other charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
General insurance
|
|
|
$
|
68.3
|
|
|
$
|
62.9
|
|
|
$
|
57.6
|
|
|
|
|
|
||
Title insurance
|
|
|
4.6
|
|
|
6.9
|
|
|
7.6
|
|
|
|
|
|
|||||
Corporate and other (b)
|
|
|
(30.6
|
)
|
|
(6.9
|
)
|
|
(15.0
|
)
|
|
|
|
|
|||||
Subtotal
|
|
|
42.2
|
|
|
63.0
|
|
|
50.2
|
|
|
|
|
|
|||||
RFIG run-off business
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||||
Consolidated total
|
|
|
$
|
42.2
|
|
|
$
|
63.0
|
|
|
$
|
50.2
|
|
|
(33.0
|
)%
|
|
25.5
|
%
|
Segmented and consolidated pretax income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(loss) excluding investment gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
General insurance
|
|
|
$
|
363.9
|
|
|
$
|
340.3
|
|
|
$
|
319.9
|
|
|
6.9
|
%
|
|
6.4
|
%
|
Title insurance
|
|
|
219.3
|
|
|
237.1
|
|
|
210.2
|
|
|
(7.5
|
)
|
|
12.8
|
|
|||
Corporate and other
|
|
|
40.4
|
|
|
9.9
|
|
|
13.0
|
|
|
N/M
|
|
(24.1
|
)
|
||||
Subtotal
|
|
|
623.8
|
|
|
587.3
|
|
|
543.3
|
|
|
6.2
|
|
|
8.1
|
|
|||
RFIG run-off business
|
|
|
49.9
|
|
|
(73.5
|
)
|
|
69.8
|
|
|
167.9
|
|
|
(205.4
|
)
|
|||
Consolidated pretax income (loss) excluding
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
investment gains (losses)
|
|
|
673.7
|
|
|
513.8
|
|
|
613.1
|
|
|
31.1
|
%
|
|
(16.2
|
)%
|
|||
Income taxes (credits) on above
(c)
|
|
|
117.2
|
|
|
195.7
|
|
|
193.5
|
|
|
|
|
|
|||||
Net income (loss) excluding
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
investment gains (losses)
|
|
|
556.4
|
|
|
318.0
|
|
|
419.6
|
|
|
|
|
|
|||||
Consolidated pretax investment gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Realized from actual transactions
|
|
|
58.2
|
|
|
211.6
|
|
|
77.8
|
|
|
|
|
|
|||||
Unrealized from changes in fair value of equity securities
|
|
(293.8
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
||||||
Realized from impairments
|
|
—
|
|
|
—
|
|
|
(4.9
|
)
|
|
|
|
|
||||||
Consolidated realized and unrealized
|
|
|
|
|
|
|
|
|
|
|
|||||||||
investment gains (losses)
|
|
(235.6
|
)
|
|
211.6
|
|
|
72.8
|
|
|
|
|
|
||||||
Income taxes (credits) on investment gains (losses)
(c)
|
|
(49.6
|
)
|
|
(30.8
|
)
|
|
25.5
|
|
|
|
|
|
||||||
Net of tax investment gains (losses)
|
|
|
(185.9
|
)
|
|
242.4
|
|
|
47.3
|
|
|
|
|
|
|||||
Net income (loss)
|
|
|
$
|
370.5
|
|
|
$
|
560.5
|
|
|
$
|
466.9
|
|
|
|
|
|
||
Net operating cash flows:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated
|
|
|
$
|
760.5
|
|
|
$
|
452.8
|
|
|
$
|
637.3
|
|
|
68.0
|
%
|
|
(29.0
|
)%
|
Exclusive of RFIG run-off business
|
|
|
$
|
837.0
|
|
|
$
|
765.3
|
|
|
$
|
739.8
|
|
|
9.4
|
%
|
|
3.4
|
%
|
General Insurance Segment Results -
The table below reflects the major elements affecting this segment’s financial performance for the periods shown.
|
|
|
|
General Insurance Business Segment
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
||||||||
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
|
vs. 2017
|
|
vs. 2016
|
|||||||||
Net premiums earned
|
|
$
|
3,277.1
|
|
|
$
|
3,110.8
|
|
|
$
|
2,936.3
|
|
|
5.3
|
%
|
|
5.9
|
%
|
|
Net investment income
|
|
341.0
|
|
|
318.9
|
|
|
312.1
|
|
|
6.9
|
|
|
2.2
|
|
||||
Other income
|
|
121.3
|
|
|
101.8
|
|
|
106.2
|
|
|
19.1
|
|
|
(4.1
|
)
|
||||
Operating revenues
|
|
3,739.4
|
|
|
3,531.6
|
|
|
3,354.7
|
|
|
5.9
|
|
|
5.3
|
|
||||
Claim costs (a)
|
|
2,365.8
|
|
|
2,234.4
|
|
|
2,143.1
|
|
|
5.9
|
|
|
4.3
|
|
||||
Sales and general expenses
|
|
941.3
|
|
|
893.8
|
|
|
833.9
|
|
|
5.3
|
|
|
7.2
|
|
||||
Interest and other costs
|
|
68.3
|
|
|
62.9
|
|
|
57.6
|
|
|
8.5
|
|
|
9.2
|
|
||||
Operating expenses
|
|
3,375.5
|
|
|
3,191.3
|
|
|
3,034.7
|
|
|
5.8
|
|
|
5.2
|
|
||||
Segmented pretax operating income (loss) (b)
|
|
$
|
363.9
|
|
|
$
|
340.3
|
|
|
$
|
319.9
|
|
|
6.9
|
%
|
|
6.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Claim ratio
|
|
72.2
|
%
|
|
71.8
|
%
|
|
73.0
|
%
|
|
|
|
|
|
|||||
Expense ratio
|
|
25.0
|
|
|
25.5
|
|
|
24.8
|
|
|
|
|
|
||||||
|
Composite ratio
|
|
97.2
|
%
|
|
97.3
|
%
|
|
97.8
|
%
|
|
|
|
|
(a)
|
General insurance pretax results for the year ended December 31, 2017 include hurricane-related claim costs of $8.0.
|
(b)
|
In connection with the run-off mortgage guaranty ("MI") and consumer credit indemnity ("CCI") combination, $3.8, ($121.1) and ($33.8) of pretax operating income (loss) for 2018, 2017, and 2016, respectively, were retained by certain general insurance companies pursuant to various quota share and stop loss reinsurance agreements. All of these amounts, however, have been reclassified such that 100% of the CCI run-off business is reported in the RFIG run-off segment.
|
|
|
|
|
|
Effect of Prior Periods'
|
|
|
|
|
|||||
|
|
|
|
|
(Favorable)/
|
|
Claim Ratio Excluding
|
|||||||
|
Reported
|
|
Unfavorable Claim
|
|
Prior Periods' Claim
|
|||||||||
|
Claim Ratio
|
|
Reserves Development
|
|
Reserves Development
|
|||||||||
2014
|
|
77.9
|
%
|
|
|
|
3.9
|
%
|
|
|
|
74.0
|
%
|
|
2015
|
|
74.1
|
|
|
|
|
1.5
|
|
|
|
|
72.6
|
|
|
2016
|
|
73.0
|
|
|
|
|
0.3
|
|
|
|
|
72.7
|
|
|
2017
|
|
71.8
|
|
|
|
|
0.7
|
|
|
|
|
71.1
|
|
|
2018
|
|
72.2
|
%
|
|
|
|
—
|
%
|
|
|
|
72.2
|
%
|
|
Title Insurance Segment Results -
The table below reflects the major elements affecting this segment’s financial performance for the periods shown.
|
|
|
Title Insurance Business Segment
|
||||||||||||||||
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
|
|
|
|
|
|
|
2018
|
|
2017
|
||||||||
Years Ended December 31:
|
2018
|
|
2017
|
|
2016
|
|
vs. 2017
|
|
vs. 2016
|
|||||||||
Net premiums and fees earned
|
$
|
2,336.1
|
|
|
$
|
2,287.2
|
|
|
$
|
2,206.6
|
|
|
2.1
|
%
|
|
3.6
|
%
|
|
Net investment income
|
38.8
|
|
|
37.3
|
|
|
36.2
|
|
|
4.2
|
|
|
3.1
|
|
||||
Other income
|
0.3
|
|
|
0.5
|
|
|
1.2
|
|
|
N/M
|
|
(56.4
|
)
|
|||||
Operating revenues
|
2,375.4
|
|
|
2,325.0
|
|
|
2,244.1
|
|
|
2.2
|
|
|
3.6
|
|
||||
Claim costs
|
48.3
|
|
|
20.8
|
|
|
84.3
|
|
|
131.7
|
|
|
(75.3
|
)
|
||||
Sales and general expenses
|
2,103.0
|
|
|
2,060.1
|
|
|
1,941.8
|
|
|
2.1
|
|
|
6.1
|
|
||||
Interest and other costs
|
4.6
|
|
|
6.9
|
|
|
7.6
|
|
|
(33.9
|
)
|
|
(8.6
|
)
|
||||
Operating expenses
|
2,156.0
|
|
|
2,087.9
|
|
|
2,033.8
|
|
|
3.3
|
|
|
2.7
|
|
||||
Segmented pretax operating income (loss)
|
$
|
219.3
|
|
|
$
|
237.1
|
|
|
$
|
210.2
|
|
|
(7.5
|
)%
|
|
12.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Claim ratio
|
2.1
|
%
|
|
0.9
|
%
|
|
3.8
|
%
|
|
|
|
|
||||||
Expense ratio
|
90.0
|
|
|
90.0
|
|
|
87.9
|
|
|
|
|
|
||||||
|
Composite ratio
|
92.1
|
%
|
|
90.9
|
%
|
|
91.7
|
%
|
|
|
|
|
|
|
|
|
|
Effect of Prior Periods'
|
|
|
|
|
|||||
|
|
|
|
|
(Favorable)/
|
|
Claim Ratio Excluding
|
|||||||
|
Reported
|
|
Unfavorable Claim
|
|
Prior Periods' Claim
|
|||||||||
|
Claim Ratio
|
|
Reserves Development
|
|
Reserves Development
|
|||||||||
2014
|
|
5.2
|
%
|
|
|
|
(0.8
|
)%
|
|
|
|
6.0
|
%
|
|
2015
|
|
4.9
|
|
|
|
|
(0.6
|
)
|
|
|
|
5.5
|
|
|
2016
|
|
3.8
|
|
|
|
|
(1.1
|
)
|
|
|
|
4.9
|
|
|
2017
|
|
0.9
|
|
|
|
|
(3.3
|
)
|
|
|
|
4.2
|
|
|
2018
|
|
2.1
|
%
|
|
|
|
(2.0
|
)%
|
|
|
|
4.1
|
%
|
|
RFIG Run-off Segment Results -
The table below reflects the major elements affecting this segment’s financial performance for the periods shown.
|
|
|
|
RFIG Run-off Business Segment
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
||||||||
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
|
vs. 2017
|
|
vs. 2016
|
|||||||||
A. Mortgage Insurance (MI)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net premiums earned
|
|
$
|
74.4
|
|
|
$
|
109.8
|
|
|
$
|
154.1
|
|
|
(32.3
|
)%
|
|
(28.7
|
)%
|
|
Net investment income
|
|
19.2
|
|
|
20.4
|
|
|
22.0
|
|
|
(5.9
|
)
|
|
(7.4
|
)
|
||||
Claim costs (a)
|
|
32.1
|
|
|
63.3
|
|
|
52.5
|
|
|
(49.2
|
)
|
|
20.4
|
|
||||
MI pretax operating income (loss)
|
|
$
|
46.7
|
|
|
$
|
48.9
|
|
|
$
|
105.0
|
|
|
(4.5
|
)%
|
|
(53.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Claim ratio (a)
|
|
43.2
|
%
|
|
57.6
|
%
|
|
34.1
|
%
|
|
|
|
|
||||||
Expense ratio
|
|
20.0
|
|
|
16.5
|
|
|
12.0
|
|
|
|
|
|
||||||
|
Composite ratio
|
|
63.2
|
%
|
|
74.1
|
%
|
|
46.1
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
B. Consumer Credit Insurance (CCI)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net premiums earned
|
|
$
|
1.5
|
|
|
$
|
13.0
|
|
|
$
|
15.8
|
|
|
(88.3
|
)%
|
|
(17.8
|
)%
|
|
Net investment income
|
|
0.8
|
|
|
1.2
|
|
|
1.1
|
|
|
(29.6
|
)
|
|
12.0
|
|
||||
Claim costs (a)
|
|
(2.2
|
)
|
|
134.5
|
|
|
50.0
|
|
|
(101.7
|
)
|
|
168.7
|
|
||||
CCI pretax operating income (loss) (b)
|
|
$
|
3.2
|
|
|
$
|
(122.4
|
)
|
|
$
|
(35.2
|
)
|
|
102.6
|
%
|
|
(247.1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Claim ratio (a)
|
|
N/M
|
|
|
N/M
|
|
|
315.9
|
%
|
|
|
|
|
||||||
Expense ratio
|
|
N/M
|
|
|
N/M
|
|
|
13.9
|
|
|
|
|
|
||||||
|
Composite ratio
|
|
N/M
|
|
|
N/M
|
|
|
329.8
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
C. Total MI and CCI run-off business
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net premiums earned
|
|
$
|
75.9
|
|
|
$
|
122.9
|
|
|
$
|
170.0
|
|
|
(38.2
|
)%
|
|
(27.7
|
)%
|
|
Net investment income
|
|
20.1
|
|
|
21.7
|
|
|
23.2
|
|
|
(7.2
|
)
|
|
(6.4
|
)
|
||||
Claim costs (a)
|
|
29.9
|
|
|
197.8
|
|
|
102.6
|
|
|
(84.9
|
)
|
|
92.7
|
|
||||
Segmented pretax operating income (loss) (b)
|
|
$
|
49.9
|
|
|
$
|
(73.5
|
)
|
|
$
|
69.8
|
|
|
167.9
|
%
|
|
(205.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Claim ratio (a)
|
|
39.4
|
%
|
|
160.9
|
%
|
|
60.4
|
%
|
|
|
|
|
||||||
Expense ratio
|
|
21.5
|
|
|
16.6
|
|
|
12.2
|
|
|
|
|
|
||||||
|
Composite ratio
|
|
60.9
|
%
|
|
177.5
|
%
|
|
72.6
|
%
|
|
|
|
|
(a)
|
RFIG run-off pretax results for the year ended December 31, 2017 include additional claim and related expense provisions of $130.0 applicable to the final settlements and probable dispositions of all known litigated and other claim costs incurred by the Company’s run-off Financial Indemnity business during the Great Recession years and their aftermath. Of the total charge, $23.0 related to mortgage guaranty claim costs, and $107.0 was attributable to additional claim provisions in the consumer credit indemnity run-off business.
|
(b)
|
In connection with the run-off mortgage guaranty ("MI") and consumer credit indemnity ("CCI") combination, $3.8, ($121.1), and ($33.8) of pretax operating income (loss) for 2018, 2017, and 2016, respectively, were retained by certain general insurance companies pursuant to various quota share and stop loss reinsurance agreements. All of these amounts, however, have been reclassified such that 100% of the CCI run-off business is reported in the RFIG run-off segment.
|
Corporate and Other Operating Results -
The combination of a small life and accident insurance business and the net costs associated with the parent holding company and its internal corporate services subsidiaries usually produce highly variable results. Earnings variations stem from volatility inherent to the small scale of the life and accident insurance line, net investment income, and net interest charges (credits) pertaining to external and intra-system financing arrangements. Full year 2018 results were enhanced by the elimination of interest costs related to outstanding external debt converted into ORI common stock in March 2018. Additionally, year-over-year comparisons were particularly affected by a charge of $9.5 resulting from a fourth quarter 2017 review and update of previously established estimates of future interest rates, mortality, and persistency in largely inactive life insurance products. The interplay of these various elements is summarized in the following table:
|
|
|
Corporate and Other Operations
|
||||||||||
Years Ended December 31:
|
2018
|
|
2017
|
|
2016
|
|||||||
Net life and accident premiums earned
|
$
|
14.6
|
|
|
$
|
18.8
|
|
|
$
|
20.1
|
|
|
Net investment income
|
31.7
|
|
|
31.4
|
|
|
15.4
|
|
||||
Other operating income
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Operating revenues
|
46.3
|
|
|
50.1
|
|
|
35.4
|
|
||||
Claim costs
|
16.7
|
|
|
25.8
|
|
|
17.7
|
|
||||
Insurance expenses
|
4.8
|
|
|
8.2
|
|
|
7.8
|
|
||||
Corporate, interest and other expenses - net
|
(15.6
|
)
|
|
6.1
|
|
|
(3.2
|
)
|
||||
Operating expenses
|
5.9
|
|
|
40.2
|
|
|
22.4
|
|
||||
Corporate and other pretax operating income
|
$
|
40.4
|
|
|
$
|
9.9
|
|
|
$
|
13.0
|
|
Summary Consolidated Balance Sheet -
The following table shows Old Republic's consolidated financial position at the dates shown.
|
|
|
|
December 31,
|
||||||
|
|
|
2018
|
|
2017
|
||||
Assets:
|
|
|
|
|
|
||||
Cash and fixed maturity securities
|
|
|
$
|
9,683.0
|
|
|
$
|
10,145.9
|
|
Equity securities
|
|
|
3,380.9
|
|
|
3,265.5
|
|
||
Other invested assets
|
|
|
123.4
|
|
|
124.9
|
|
||
Cash and invested assets
|
|
|
13,187.4
|
|
|
13,536.4
|
|
||
Accounts and premiums receivable
|
|
|
1,499.4
|
|
|
1,469.7
|
|
||
Federal income tax recoverable: Current
|
|
|
16.8
|
|
|
—
|
|
||
Prepaid federal income taxes
|
|
|
129.8
|
|
|
114.3
|
|
||
Reinsurance balances recoverable
|
|
|
3,484.5
|
|
|
3,371.8
|
|
||
Sundry assets
|
|
|
1,008.9
|
|
|
911.1
|
|
||
Total
|
|
|
$
|
19,327.1
|
|
|
$
|
19,403.5
|
|
Liabilities and Shareholders' Equity:
|
|
|
|
|
|
||||
Policy liabilities
|
|
|
$
|
2,303.5
|
|
|
$
|
2,176.3
|
|
Claim reserves
|
|
|
9,471.2
|
|
|
9,237.6
|
|
||
Federal income tax payable: Current
|
|
|
—
|
|
|
6.5
|
|
||
Deferred
|
|
|
10.3
|
|
|
100.5
|
|
||
Debt
|
|
|
981.4
|
|
|
1,448.7
|
|
||
Sundry liabilities
|
|
|
1,414.2
|
|
|
1,700.5
|
|
||
Shareholders' equity
|
|
|
5,146.2
|
|
(a)
|
4,733.3
|
|
||
Total
|
|
|
$
|
19,327.1
|
|
|
$
|
19,403.5
|
|
Cash, Invested Assets, and Shareholders' Equity -
The table below shows Old Republic's consolidated cash and invested assets as well as the shareholders' equity balance at the dates shown.
|
|
|
|
|
Cash, Invested Assets, and Shareholders' Equity
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
||||||||
As of December 31:
|
2018
|
|
2017
|
|
2016
|
|
vs. 2017
|
|
vs. 2016
|
|||||||||||
Cash and invested assets:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Available for sale fixed maturity securities, cash
|
|
|
|
|
|
|
|
|
|
||||||||||
|
and other invested assets, carried at fair value
|
$
|
8,761.7
|
|
|
$
|
9,203.4
|
|
|
$
|
9,124.9
|
|
|
(4.8
|
)%
|
|
0.9
|
%
|
||
|
Equity securities, carried at fair value
|
3,380.9
|
|
|
3,265.5
|
|
|
2,896.1
|
|
|
3.5
|
|
|
12.8
|
|
|||||
|
Held to maturity, carried at amortized cost
|
1,044.8
|
|
|
1,067.4
|
|
|
974.8
|
|
|
(2.1
|
)
|
|
9.5
|
|
|||||
|
Total per balance sheet
|
$
|
13,187.4
|
|
|
$
|
13,536.4
|
|
|
$
|
12,995.8
|
|
|
(2.6
|
)%
|
|
4.2
|
%
|
||
|
Total at original cost for all
|
$
|
12,950.6
|
|
|
$
|
12,783.4
|
|
|
$
|
12,360.3
|
|
|
1.3
|
%
|
|
3.4
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Shareholders' equity:
Total
|
$
|
5,146.2
|
|
|
$
|
4,733.3
|
|
|
$
|
4,460.6
|
|
|
8.7
|
%
|
|
6.1
|
%
|
|||
|
|
|
Per common share
|
$
|
17.23
|
|
|
$
|
17.72
|
|
|
$
|
17.16
|
|
|
(2.8
|
)%
|
|
3.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Composition of shareholders' equity per share:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Equity before items below
|
$
|
17.04
|
|
|
$
|
16.26
|
|
|
$
|
15.92
|
|
|
4.8
|
%
|
|
2.1
|
%
|
||
|
Unrealized investment gains (losses) and other
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
accumulated comprehensive income (loss)
|
0.19
|
|
|
1.46
|
|
|
1.24
|
|
|
|
|
|
||||||
|
|
|
Total
|
$
|
17.23
|
|
|
$
|
17.72
|
|
|
$
|
17.16
|
|
|
(2.8
|
)%
|
|
3.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Segmented composition of
|
|
|
|
|
|
|
|
|
|
|||||||||||
shareholders' equity per share:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Excluding run-off segment
|
$
|
15.73
|
|
|
$
|
16.14
|
|
|
$
|
15.89
|
|
|
(2.5
|
)%
|
|
1.6
|
%
|
||
|
RFIG run-off segment
|
1.50
|
|
|
1.58
|
|
|
1.27
|
|
|
|
|
|
|
|
|||||
|
|
|
Consolidated total
|
$
|
17.23
|
|
|
$
|
17.72
|
|
|
$
|
17.16
|
|
|
(2.8
|
)%
|
|
3.3
|
%
|
|
Shareholders' Equity Per Share
|
||||||||||
|
December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning balance
|
$
|
17.72
|
|
|
$
|
17.16
|
|
|
$
|
14.98
|
|
Changes in shareholders' equity:
|
|
|
|
|
|
||||||
Net income (loss) excluding net investment gains (losses)
|
1.89
|
|
|
1.21
|
|
|
1.62
|
|
|||
Net of tax realized investment gains (losses):
|
|
|
|
|
|
||||||
From actual transactions
|
0.16
|
|
|
0.53
|
|
|
0.19
|
|
|||
From impairments
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|||
From revaluation of deferred taxes
|
—
|
|
|
0.40
|
|
|
—
|
|
|||
Subtotal
|
0.16
|
|
|
0.93
|
|
|
0.18
|
|
|||
Net of tax unrealized investment gains (losses) on
|
|
|
|
|
|
||||||
securities carried at fair value:
|
|
|
|
|
|
||||||
Reported in net income (loss)
|
(0.79
|
)
|
|
—
|
|
|
—
|
|
|||
Reported as other comprehensive income (loss)
|
(0.59
|
)
|
|
0.28
|
|
|
1.12
|
|
|||
Subtotal
|
(1.38
|
)
|
|
0.28
|
|
|
1.12
|
|
|||
Total net of tax realized and unrealized
|
|
|
|
|
|
||||||
investment gains (losses)
|
(1.22
|
)
|
|
1.21
|
|
|
1.30
|
|
|||
Cash dividends (a)
|
(0.7800
|
)
|
|
(1.7600
|
)
|
|
(0.7500
|
)
|
|||
Debt conversion, stock issuance, and other transactions
|
(0.38
|
)
|
|
(0.10
|
)
|
|
0.01
|
|
|||
Net change
|
(0.49
|
)
|
|
0.56
|
|
|
2.18
|
|
|||
Ending balance
|
$
|
17.23
|
|
|
$
|
17.72
|
|
|
$
|
17.16
|
|
Percentage change for the period
|
(2.8
|
)%
|
|
3.3
|
%
|
|
14.6
|
%
|
(a)
|
Full year 2017 includes a special cash dividend of $1.00 per share.
|
Capitalization -
The following table shows the components of ORI’s total capitalization. The most significant change during the year ended December 31, 2018 pertains to the completed conversion of the 3.75% convertible senior notes into ORI common stock in March 2018.
|
|
|
Capitalization
|
||||||||||
|
|
December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Debt:
|
|
|
|
|
|
|
||||||
3.75% Convertible Senior Notes due 2018
|
|
$
|
—
|
|
|
$
|
470.6
|
|
|
$
|
547.8
|
|
4.875% Senior Notes due 2024
|
|
396.8
|
|
|
396.2
|
|
|
395.6
|
|
|||
3.875% Senior Notes due 2026
|
|
545.7
|
|
|
545.1
|
|
|
544.6
|
|
|||
ESSOP debt
|
|
—
|
|
|
4.2
|
|
|
8.1
|
|
|||
Other miscellaneous debt
|
|
38.8
|
|
|
32.4
|
|
|
32.4
|
|
|||
Total debt
|
|
981.4
|
|
|
1,448.7
|
|
|
1,528.7
|
|
|||
Common shareholders' equity
|
|
5,146.2
|
|
|
4,733.3
|
|
|
4,460.6
|
|
|||
Total capitalization
|
|
$
|
6,127.6
|
|
|
$
|
6,182.0
|
|
|
$
|
5,989.4
|
|
|
|
|
|
|
|
|
||||||
Capitalization ratios:
|
|
|
|
|
|
|
||||||
Debt
|
|
16.0
|
%
|
|
23.4
|
%
|
|
25.5
|
%
|
|||
Common shareholders' equity
|
|
84.0
|
|
|
76.6
|
|
|
74.5
|
|
|||
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
DETAILED MANAGEMENT ANALYSIS
|
CRITICAL ACCOUNTING ESTIMATES
|
•
|
The establishment of expected claim ratios for at least the two to five most recent accident years, particularly for so-called long-tail coverages as to which information about covered losses emerges and becomes more accurately quantifiable over long periods of time. Long-tail coverages generally include workers' compensation, commercial automobile (trucking) liability, general liability, errors and omissions and directors and officers' liability, as well as title insurance. Gross loss reserves related to such long-tail coverages ranged between
91.1%
and
95.0%
, and averaged
93.3%
of gross consolidated claim reserves as of the three most
|
•
|
Loss trend factors that are considered when establishing the above noted expected claim ratios. These factors take into account such variables as judgments and estimates relative to premium rate trends and adequacy, current and expected interest rates, current and expected social and economic inflation trends, and insurance industry statistical claim trends.
|
•
|
Loss development factors, expected claim rates and average claim costs, all of which are based on Company and/or industry statistics may also be used to project reported and unreported losses for each accounting period.
|
FINANCIAL POSITION
|
(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, Corporates and Municipal issuers, which are converted to the above ratings classifications.
|
(b)
|
"All other" includes non-investment grade or non-rated issuers.
|
(c)
|
Represents 5.1% of the total fixed maturity portfolio.
|
(d)
|
Represents 64.3% of the total fixed maturity portfolio.
|
Gross Unrealized Losses Stratified by Industry Concentration for Equity Securities
|
|||||||||||
|
|
|
|
|
|
|
|
||||
December 31, 2018
|
|
Cost
|
|
Gross
Unrealized
Losses
|
|
||||||
Equity Securities by Industry Concentration:
|
|
|
|
|
|
||||||
|
Energy
|
|
$
|
386.7
|
|
|
$
|
60.2
|
|
|
|
|
Consumer Non Durable
|
|
268.9
|
|
|
52.5
|
|
|
|||
|
Technology
|
|
76.6
|
|
|
19.8
|
|
|
|||
|
Telecom
|
|
135.8
|
|
|
18.9
|
|
|
|||
|
Other (includes 7 industry groups)
|
|
286.5
|
|
|
23.9
|
|
|
|||
|
|
Total
|
|
$
|
1,154.8
|
|
(e)
|
$
|
175.4
|
|
(f)
|
(e)
|
Represents 38.0% of the total equity portfolio.
|
(f)
|
Represents 5.8% of the cost of the total equity portfolio, while gross unrealized gains represent 17.0% of the equity portfolio.
|
Gross Unrealized Losses Stratified by Maturity Ranges for All Fixed Maturity Securities
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Amortized Cost
of Fixed Maturity Securities
|
|
Gross Unrealized Losses
|
|
||||||||||||
December 31, 2018
|
|
All
|
|
Non-Investment Grade Only
|
|
All
|
|
Non-
Investment
Grade Only
|
|
|||||||||
Maturity Ranges:
|
|
|
|
|
|
|
|
|
|
|||||||||
Due in one year or less
|
|
$
|
371.3
|
|
|
$
|
5.9
|
|
|
$
|
2.1
|
|
|
$
|
—
|
|
|
|
Due after one year through five years
|
|
3,219.3
|
|
|
273.3
|
|
|
61.0
|
|
|
14.6
|
|
|
|||||
Due after five years through ten years
|
|
2,859.3
|
|
|
188.4
|
|
|
88.4
|
|
|
18.6
|
|
|
|||||
Due after ten years
|
|
24.0
|
|
|
8.5
|
|
|
1.4
|
|
|
.8
|
|
|
|||||
|
Total
|
|
$
|
6,474.0
|
|
|
$
|
476.1
|
|
|
$
|
153.0
|
|
|
$
|
34.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Unrealized Losses Stratified by Duration and Amount of Unrealized Losses for All Fixed Maturity Securities
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
Amount of Gross Unrealized Losses
|
|
||||||||||||||
December 31, 2018
|
|
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 Maturity Securities:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
One to six months
|
|
$
|
46.8
|
|
|
$
|
5.2
|
|
|
$
|
—
|
|
|
$
|
52.0
|
|
|
||
|
Seven to twelve months
|
|
35.3
|
|
|
1.3
|
|
|
—
|
|
|
36.6
|
|
|
||||||
|
More than twelve months
|
|
58.1
|
|
|
6.1
|
|
|
—
|
|
|
64.3
|
|
|
||||||
|
|
Total
|
|
$
|
140.2
|
|
|
$
|
12.7
|
|
|
$
|
—
|
|
|
$
|
153.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Number of Issues in Unrealized Loss Position:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed Maturity Securities:
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
One to six months
|
|
530
|
|
|
2
|
|
|
—
|
|
|
532
|
|
|
||||||
|
Seven to twelve months
|
|
321
|
|
|
1
|
|
|
—
|
|
|
322
|
|
|
||||||
|
More than twelve months
|
|
478
|
|
|
2
|
|
|
—
|
|
|
480
|
|
|
||||||
|
|
Total
|
|
1,329
|
|
|
5
|
|
|
—
|
|
|
1,334
|
|
(g)
|
(g)
|
At
December 31, 2018
the number of issues in an unrealized loss position represent 68.1% of the total number of such fixed maturity issues held by the Company.
|
Age Distribution of Fixed Maturity Securities
|
||||||||||
|
|
|
|
|
|
|
|
|
||
December 31:
|
|
2018
|
|
2017
|
|
|||||
Maturity Ranges:
|
|
|
|
|
|
|||||
|
Due in one year or less
|
|
7.0
|
%
|
|
9.2
|
%
|
|
||
|
Due after one year through five years
|
|
51.6
|
|
|
45.5
|
|
|
||
|
Due after five years through ten years
|
|
40.7
|
|
|
44.1
|
|
|
||
|
Due after ten years through fifteen years
|
|
.6
|
|
|
1.0
|
|
|
||
|
Due after fifteen years
|
|
.1
|
|
|
.2
|
|
|
||
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||
Average Maturity in Years
|
|
4.5
|
|
|
4.7
|
|
|
|||
Duration (h)
|
|
4.1
|
|
|
4.2
|
|
|
(h)
|
Duration is used as a measure of bond price sensitivity to interest rate changes. A duration of
4.1
as of
December 31, 2018
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
4.1%
.
|
Composition of Unrealized Gains (Losses)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
||||
December 31:
|
|
2018
|
|
2017
|
|
||||||||
Available for Sale Fixed Maturity Securities:
|
|
|
|
|
|
||||||||
|
|
Amortized cost
|
|
$
|
8,285.0
|
|
|
$
|
8,162.2
|
|
|
||
|
|
Estimated fair value
|
|
8,182.8
|
|
|
8,282.3
|
|
|
||||
|
|
|
Net unrealized gains (losses)
|
|
$
|
(102.1
|
)
|
|
$
|
120.0
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Components of net unrealized gains (losses):
|
|
|
|
|
|
||||||
|
|
|
Gross unrealized gains
|
|
$
|
37.1
|
|
|
$
|
147.4
|
|
|
|
|
|
|
Gross unrealized losses
|
|
(139.2
|
)
|
|
(27.3
|
)
|
|
|||
|
|
|
|
Net unrealized gains (losses)
|
|
$
|
(102.1
|
)
|
|
$
|
120.0
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity Securities:
|
|
|
|
|
|
||||||||
|
|
Original cost
|
|
$
|
3,039.1
|
|
|
$
|
2,629.9
|
|
|
||
|
|
Estimated fair value
|
|
3,380.9
|
|
|
3,265.5
|
|
|
||||
|
|
|
Net unrealized gains (losses)(i)
|
|
$
|
341.8
|
|
|
$
|
635.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Components of net unrealized gains (losses):
|
|
|
|
|
|
||||||
|
|
|
Gross unrealized gains
|
|
$
|
517.3
|
|
|
$
|
658.8
|
|
|
|
|
|
|
Gross unrealized losses
|
|
(175.4
|
)
|
|
(23.2
|
)
|
|
|||
|
|
|
|
Net unrealized gains (losses)(i)
|
|
$
|
341.8
|
|
|
$
|
635.6
|
|
|
(i)
|
Effective January 1, 2018, unrealized gains and losses from changes in fair value of equity securities are included in total realized and unrealized investment gains (losses) in the consolidated statements of income.
|
|
2019
|
|
2020 and
2021
|
|
2022 and
2023
|
|
2024 and
After
|
|
Total
|
||||||||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt
|
$
|
8.5
|
|
|
$
|
30.3
|
|
|
$
|
—
|
|
|
$
|
950.0
|
|
|
$
|
988.8
|
|
Interest on Debt
|
41.8
|
|
|
82.5
|
|
|
81.6
|
|
|
83.4
|
|
|
289.4
|
|
|||||
Operating Leases
|
60.4
|
|
|
88.5
|
|
|
56.8
|
|
|
103.6
|
|
|
309.4
|
|
|||||
Pension Benefits Contributions (a)
|
6.5
|
|
|
23.5
|
|
|
24.5
|
|
|
7.6
|
|
|
62.1
|
|
|||||
Claim & Claim Expense Reserves (b)
|
2,464.6
|
|
|
2,410.8
|
|
|
1,094.4
|
|
|
3,501.2
|
|
|
9,471.2
|
|
|||||
Total
|
$
|
2,582.3
|
|
|
$
|
2,636.0
|
|
|
$
|
1,257.4
|
|
|
$
|
4,645.8
|
|
|
$
|
11,121.8
|
|
(a)
|
Represents estimated minimum funding of contributions for the Old Republic International Salaried Employees Retirement Plan. Funding of the plan is dependent on a number of factors including actual performance versus actuarial assumptions made at the time of the actuarial valuation, as well as the maintenance of certain funding levels relative to regulatory requirements.
|
(b)
|
Amounts are reported gross of reinsurance. As discussed herein with respect to the nature of loss reserves and the estimating process utilized in their establishment, the Company's loss reserves do not have a contractual maturity date. Estimated gross loss payments are based primarily on historical claim payment patterns, are subject to change due to a wide variety of factors, do not reflect anticipated recoveries under the terms of reinsurance contracts, and cannot be predicted with certainty. Actual future loss payments may differ materially from the current estimates shown in the table above.
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
2016
|
$
|
2,936.3
|
|
|
$
|
2,206.6
|
|
|
$
|
170.0
|
|
|
$
|
20.1
|
|
|
$
|
5,333.2
|
|
|
3.0
|
%
|
2017
|
3,110.8
|
|
|
2,287.2
|
|
|
122.9
|
|
|
18.8
|
|
|
5,539.7
|
|
|
3.9
|
|
|||||
2018
|
$
|
3,277.1
|
|
|
$
|
2,336.1
|
|
|
$
|
75.9
|
|
|
$
|
14.6
|
|
|
$
|
5,703.9
|
|
|
3.0
|
%
|
|
General Insurance Earned Premiums by Type of Coverage
|
||||||||||||||||
|
Commercial
Automobile (mostly trucking) |
|
Workers' Compensation
|
|
Financial
Indemnity
|
|
Inland
Marine
and
Property
|
|
General
Liability
|
|
Other
|
||||||
Years Ended December 31:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2016
|
33.7
|
%
|
|
36.5
|
%
|
|
4.3
|
%
|
|
7.4
|
%
|
|
5.6
|
%
|
|
12.5
|
%
|
2017
|
34.6
|
|
|
33.6
|
|
|
4.9
|
|
|
7.6
|
|
|
6.3
|
|
|
13.0
|
|
2018
|
36.8
|
%
|
|
31.1
|
%
|
|
5.3
|
%
|
|
7.7
|
%
|
|
6.2
|
%
|
|
12.9
|
%
|
|
Earned Premiums
|
|
Persistency
|
||||||||||
Premium and Persistency Trends by Type:
|
Direct
|
|
Net
|
|
Traditional
Primary
|
|
Bulk
|
||||||
Years Ended December 31:
|
|
|
|
|
|
|
|
||||||
2016
|
$
|
157.1
|
|
|
$
|
154.1
|
|
|
77.7
|
%
|
|
72.8
|
%
|
2017
|
110.4
|
|
|
109.8
|
|
|
77.9
|
|
|
78.2
|
|
||
2018
|
$
|
74.4
|
|
|
$
|
74.4
|
|
|
79.7
|
%
|
|
76.3
|
%
|
Net Risk in Force
|
|||||||||||||||
Net Risk in Force By Type:
|
Traditional
Primary
|
|
Bulk
|
|
Other
|
|
Total
|
||||||||
As of December 31:
|
|
|
|
|
|
|
|
||||||||
2016
|
$
|
4,987.9
|
|
|
$
|
359.5
|
|
|
$
|
20.5
|
|
|
$
|
5,367.9
|
|
2017
|
3,888.0
|
|
|
292.4
|
|
|
12.1
|
|
|
4,192.6
|
|
||||
2018
|
$
|
3,098.3
|
|
|
$
|
235.3
|
|
|
$
|
11.2
|
|
|
$
|
3,345.0
|
|
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:
|
|
|
|
|
|
|
|
||||
2016
|
7.2
|
%
|
|
30.5
|
%
|
|
61.5
|
%
|
|
.8
|
%
|
2017
|
7.5
|
|
|
31.5
|
|
|
60.2
|
|
|
.8
|
|
2018
|
7.9
|
%
|
|
32.2
|
%
|
|
59.1
|
%
|
|
.8
|
%
|
|
|
|
|
|
|
|
|
||||
Bulk(a):
|
|
|
|
|
|
|
|
||||
As of December 31:
|
|
|
|
|
|
|
|
||||
2016
|
29.9
|
%
|
|
32.0
|
%
|
|
38.0
|
%
|
|
.1
|
%
|
2017
|
31.8
|
|
|
31.7
|
|
|
36.3
|
|
|
.2
|
|
2018
|
33.6
|
%
|
|
31.5
|
%
|
|
34.8
|
%
|
|
.1
|
%
|
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:
|
|
|
|
|
|
|
|
||||
2016
|
3.8
|
%
|
|
32.1
|
%
|
|
30.6
|
%
|
|
33.5
|
%
|
2017
|
4.0
|
|
|
30.9
|
|
|
30.5
|
|
|
34.6
|
|
2018
|
4.1
|
%
|
|
30.7
|
%
|
|
29.7
|
%
|
|
35.5
|
%
|
|
|
|
|
|
|
|
|
||||
Bulk(a):
|
|
|
|
|
|
|
|
||||
As of December 31:
|
|
|
|
|
|
|
|
||||
2016
|
46.5
|
%
|
|
29.0
|
%
|
|
12.3
|
%
|
|
12.2
|
%
|
2017
|
45.3
|
|
|
29.9
|
|
|
12.6
|
|
|
12.2
|
|
2018
|
43.4
|
%
|
|
30.9
|
%
|
|
13.1
|
%
|
|
12.6
|
%
|
(a)
|
Bulk pool risk in-force, which represented
8.0%
of total bulk risk in-force at
December 31, 2018
, 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.
|
|
|
|
Traditional Primary
|
||||||||||||||||||||||||||
|
TX
|
|
FL
|
|
GA
|
|
IL
|
|
CA
|
|
NC
|
|
PA
|
|
NJ
|
|
VA
|
|
MD
|
||||||||||
As of December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
6.4
|
%
|
|
7.8
|
%
|
|
6.0
|
%
|
|
5.8
|
%
|
|
4.8
|
%
|
|
4.6
|
%
|
|
4.4
|
%
|
|
4.4
|
%
|
|
3.6
|
%
|
|
3.8
|
%
|
2017
|
5.9
|
|
|
8.1
|
|
|
6.0
|
|
|
6.1
|
|
|
4.8
|
|
|
4.4
|
|
|
4.3
|
|
|
4.6
|
|
|
3.7
|
|
|
4.2
|
|
2018
|
5.5
|
%
|
|
8.5
|
%
|
|
6.0
|
%
|
|
6.4
|
%
|
|
4.9
|
%
|
|
4.1
|
%
|
|
4.3
|
%
|
|
4.8
|
%
|
|
3.8
|
%
|
|
4.6
|
%
|
|
|
|
Bulk (a)
|
||||||||||||||||||||||||||
|
TX
|
|
FL
|
|
GA
|
|
IL
|
|
CA
|
|
NY
|
|
PA
|
|
NJ
|
|
OH
|
|
MD
|
||||||||||
As of December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
5.3
|
%
|
|
8.6
|
%
|
|
4.9
|
%
|
|
4.2
|
%
|
|
12.4
|
%
|
|
7.4
|
%
|
|
3.7
|
%
|
|
4.1
|
%
|
|
4.2
|
%
|
|
2.6
|
%
|
2017
|
5.4
|
|
|
8.3
|
|
|
5.1
|
|
|
4.4
|
|
|
12.4
|
|
|
7.8
|
|
|
3.8
|
|
|
3.4
|
|
|
4.4
|
|
|
2.7
|
|
2018
|
5.6
|
%
|
|
8.2
|
%
|
|
5.4
|
%
|
|
4.6
|
%
|
|
12.4
|
%
|
|
7.1
|
%
|
|
4.0
|
%
|
|
2.9
|
%
|
|
4.7
|
%
|
|
2.8
|
%
|
Risk in Force Distribution By Level of Documentation:
|
Full
Documentation
|
|
Reduced
Documentation
|
||
Traditional Primary:
|
|
|
|
||
As of December 31:
|
|
|
|
||
2016
|
92.4
|
%
|
|
7.6
|
%
|
2017
|
92.3
|
|
|
7.7
|
|
2018
|
92.2
|
%
|
|
7.8
|
%
|
|
|
|
|
||
Bulk (a):
|
|
|
|
||
As of December 31:
|
|
|
|
||
2016
|
68.0
|
%
|
|
32.0
|
%
|
2017
|
69.4
|
|
|
30.6
|
|
2018
|
71.8
|
%
|
|
28.2
|
%
|
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:
|
|
|
|
||
2016
|
97.2
|
%
|
|
2.8
|
%
|
2017
|
97.2
|
|
|
2.8
|
|
2018
|
97.2
|
%
|
|
2.8
|
%
|
|
|
|
|
||
Bulk (a):
|
|
|
|
||
As of December 31:
|
|
|
|
||
2016
|
71.3
|
%
|
|
28.7
|
%
|
2017
|
70.1
|
|
|
29.9
|
|
2018
|
68.6
|
%
|
|
31.4
|
%
|
(a)
|
Bulk pool risk in-force, which represented
8.0%
of total bulk risk in-force at
December 31, 2018
, has been allocated pro-rata based on insurance in-force.
|
|
Net CCI Earned Premiums
|
|
Risk in
Force
|
||||
Years Ended December 31:
|
|
|
|
||||
2016
|
$
|
15.8
|
|
|
$
|
699.7
|
|
2017
|
13.0
|
|
|
140.9
|
|
||
2018
|
$
|
1.5
|
|
|
$
|
70.1
|
|
Revenues: Net Investment Income
|
|
Invested Assets at Cost
|
|
Fair
Value
Adjust-
ment
|
|
Invested
Assets at
Fair
Value (a)
|
||||||||||||||||||||||
|
General
|
|
Title
|
|
RFIG Run-off
|
|
Corporate
and Other
|
|
Total
|
|
|||||||||||||||||
As of December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2017
|
$
|
9,702.7
|
|
|
$
|
1,106.2
|
|
|
$
|
545.9
|
|
|
$
|
1,206.9
|
|
|
$
|
12,561.9
|
|
|
$
|
756.1
|
|
|
$
|
13,318.0
|
|
2018
|
$
|
10,162.3
|
|
|
$
|
1,105.6
|
|
|
$
|
583.6
|
|
|
$
|
904.3
|
|
|
$
|
12,755.9
|
|
|
$
|
238.6
|
|
|
$
|
12,994.6
|
|
|
Net Investment Income
|
|
Yield at
|
||||||||||||||||||||||
|
General
|
|
Title
|
|
RFIG Run-off
|
|
Corporate
and Other
|
|
Total
|
|
Original
Cost
|
|
Fair
Value
|
||||||||||||
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2016
|
$
|
312.1
|
|
|
$
|
36.2
|
|
|
$
|
23.2
|
|
|
$
|
15.4
|
|
|
$
|
387.0
|
|
|
3.34
|
%
|
|
3.23
|
%
|
2017
|
318.9
|
|
|
37.3
|
|
|
21.7
|
|
|
31.4
|
|
|
409.4
|
|
|
3.32
|
|
|
3.14
|
|
|||||
2018
|
$
|
341.0
|
|
|
$
|
38.8
|
|
|
$
|
20.1
|
|
|
$
|
31.7
|
|
|
$
|
431.8
|
|
|
3.41
|
%
|
|
3.28
|
%
|
Revenues: Net Investment Gains (Losses)
|
|
Realized Investment Gains (Losses) from Actual Transactions
|
|
Impairment Losses on Securities
|
|
Unrealized Gains (Losses) from Changes in Fair Value of Equity Securities
|
|
|
||||||||||||||||||||||||
|
Fixed
Maturity
Securities
|
|
Equity
Securities
and Miscel-
laneous
Investments
|
|
Total
|
|
Fixed
Maturity
Securities
|
|
Equity
Securities
and Miscel-
laneous
Investments
|
|
Total
|
|
|
Total Investment
Gains
(Losses)
|
|||||||||||||||||
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
2016
|
$
|
7.8
|
|
|
$
|
69.9
|
|
|
$
|
77.8
|
|
|
$
|
(4.9
|
)
|
|
$
|
—
|
|
|
$
|
(4.9
|
)
|
|
$
|
—
|
|
|
$
|
72.8
|
|
2017
|
16.6
|
|
|
194.9
|
|
|
211.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
211.6
|
|
||||||||
2018
|
$
|
(4.8
|
)
|
|
$
|
63.1
|
|
|
$
|
58.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(293.8
|
)
|
|
$
|
(235.6
|
)
|
Expenses: Benefits and Claims
|
|
2018
|
|
2017
|
|
2016
|
||||||
Estimated reduction in beginning reserve
|
$
|
19.0
|
|
|
$
|
29.6
|
|
|
$
|
47.5
|
|
Total incurred claims and settlement expenses reduced
|
|
|
|
|
|
||||||
(increased) by changes in estimated rescissions:
|
|
|
|
|
|
||||||
Current year
|
.9
|
|
|
6.2
|
|
|
8.3
|
|
|||
Prior year
|
(12.3
|
)
|
|
(3.7
|
)
|
|
(24.8
|
)
|
|||
Sub-total
|
(11.4
|
)
|
|
2.5
|
|
|
(16.5
|
)
|
|||
Estimated rescission reduction in paid claims
|
(4.4
|
)
|
|
(13.1
|
)
|
|
(1.4
|
)
|
|||
Estimated reduction in ending reserve
|
$
|
3.2
|
|
|
$
|
19.0
|
|
|
$
|
29.6
|
|
Years Ended December 31:
|
2018
|
|
2017
|
|
2016
|
||||||||||
Gross reserves at beginning of year
|
$
|
9,237.6
|
|
|
$
|
9,206.0
|
|
|
$
|
9,120.1
|
|
||||
Less: reinsurance losses recoverable
|
2,921.1
|
|
|
2,766.1
|
|
|
2,732.5
|
|
|||||||
Net reserves at beginning of year:
|
|
|
|
|
|
||||||||||
|
|
|
General Insurance
|
5,471.5
|
|
|
5,249.9
|
|
|
5,053.1
|
|
||||
|
|
|
Title Insurance
|
559.7
|
|
|
602.0
|
|
|
580.8
|
|
||||
|
|
|
RFIG Run-off
|
271.7
|
|
|
574.0
|
|
|
736.7
|
|
||||
|
|
|
Other
|
13.5
|
|
|
13.8
|
|
|
16.9
|
|
||||
|
|
|
|
Sub-total
|
6,316.4
|
|
|
6,439.8
|
|
|
6,387.6
|
|
|||
Incurred claims and claim adjustment expenses:
|
|
|
|
|
|
||||||||||
|
Provisions for insured events of the current year:
|
|
|
|
|
|
|||||||||
|
|
|
General Insurance
|
2,346.2
|
|
|
2,192.1
|
|
|
2,115.1
|
|
||||
|
|
|
Title Insurance
|
96.1
|
|
|
95.2
|
|
|
107.7
|
|
||||
|
|
|
RFIG Run-off (a)
|
56.2
|
|
|
297.1
|
|
|
171.3
|
|
||||
|
|
|
Other
|
22.1
|
|
|
20.4
|
|
|
21.7
|
|
||||
|
|
|
|
Sub-total
|
2,520.7
|
|
|
2,604.9
|
|
|
2,416.0
|
|
|||
|
Change in provision for insured events of prior years:
|
|
|
|
|
|
|||||||||
|
|
|
General Insurance
|
(.2
|
)
|
|
22.7
|
|
|
9.9
|
|
||||
|
|
|
Title Insurance
|
(47.7
|
)
|
|
(74.3
|
)
|
|
(23.4
|
)
|
||||
|
|
|
RFIG Run-off (a)
|
(26.2
|
)
|
|
(99.2
|
)
|
|
(68.7
|
)
|
||||
|
|
|
Other
|
(3.5
|
)
|
|
(2.9
|
)
|
|
(3.8
|
)
|
||||
|
|
|
|
Sub-total
|
(77.8
|
)
|
|
(153.8
|
)
|
|
(86.1
|
)
|
|||
|
|
|
|
Total incurred claims and claim adjustment expenses (a)
|
2,442.9
|
|
|
2,451.0
|
|
|
2,329.9
|
|
|||
Payments:
|
|
|
|
|
|
||||||||||
|
Claims and claim adjustment expenses attributable to
|
|
|
|
|
|
|||||||||
|
|
insured events of the current year:
|
|
|
|
|
|
||||||||
|
|
|
General Insurance
|
813.2
|
|
|
765.8
|
|
|
723.5
|
|
||||
|
|
|
Title Insurance
|
9.1
|
|
|
5.0
|
|
|
4.4
|
|
||||
|
|
|
RFIG Run-off (b)
|
3.7
|
|
|
329.4
|
|
|
14.5
|
|
||||
|
|
|
Other
|
16.0
|
|
|
13.9
|
|
|
14.8
|
|
||||
|
|
|
|
Sub-total
|
842.2
|
|
|
1,114.3
|
|
|
757.4
|
|
|||
|
Claims and claim adjustment expenses attributable to
|
|
|
|
|
|
|||||||||
|
|
insured events of prior years:
|
|
|
|
|
|
||||||||
|
|
|
General Insurance
|
1,238.1
|
|
|
1,227.3
|
|
|
1,204.5
|
|
||||
|
|
|
Title Insurance
|
65.4
|
|
|
58.2
|
|
|
58.6
|
|
||||
|
|
|
RFIG Run-off (b)
|
143.3
|
|
|
170.6
|
|
|
250.8
|
|
||||
|
|
|
Other
|
5.2
|
|
|
3.9
|
|
|
6.1
|
|
||||
|
|
|
|
Sub-total
|
1,452.2
|
|
|
1,460.1
|
|
|
1,520.2
|
|
|||
|
|
|
|
Total payments (b)
|
2,294.5
|
|
|
2,574.4
|
|
|
2,277.6
|
|
|||
Amount of reserves for unpaid claims and claim adjustment expenses
|
|
|
|
|
|
||||||||||
|
at the end of each year, net of reinsurance losses recoverable:
|
|
|
|
|
|
|||||||||
|
|
|
General Insurance
|
5,766.1
|
|
|
5,471.5
|
|
|
5,249.9
|
|
||||
|
|
|
Title Insurance
|
533.4
|
|
|
559.7
|
|
|
602.0
|
|
||||
|
|
|
RFIG Run-off
|
154.5
|
|
|
271.7
|
|
|
574.0
|
|
||||
|
|
|
Other
|
10.8
|
|
|
13.5
|
|
|
13.8
|
|
||||
|
|
|
|
Sub-total
|
6,464.9
|
|
|
6,316.4
|
|
|
6,439.8
|
|
|||
Reinsurance losses recoverable
|
3,006.3
|
|
|
2,921.1
|
|
|
2,766.1
|
|
|||||||
Gross reserves at end of year
|
$
|
9,471.2
|
|
|
$
|
9,237.6
|
|
|
$
|
9,206.0
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Change in provision for incurred events of prior years:
|
|
|
|
|
|
||||||
|
General Insurance
|
$
|
(6.4
|
)
|
|
$
|
(34.5
|
)
|
|
$
|
2.5
|
|
|
RFIG Run-off (a)
|
(20.1
|
)
|
|
(42.0
|
)
|
|
(61.3
|
)
|
|||
|
|
|
|
|
|
|
||||||
|
Payment of claim and claim adjustment expenses attributable to
|
|
|
|
|
|
||||||
|
incurred events of the current and prior years:
|
|
|
|
|
|
||||||
|
General Insurance
|
2,083.0
|
|
|
2,297.5
|
|
|
1,939.9
|
|
|||
|
RFIG Run-off (b)
|
$
|
115.4
|
|
|
$
|
195.8
|
|
|
$
|
253.6
|
|
(a)
|
In common with all other insurance coverages, RFIG Run-off mortgage guaranty settled and incurred claim and claim adjustment expenses include only those costs actually or expected to be paid by the Company. As previously noted, changes in mortgage guaranty aggregate case, IBNR, and loss adjustment expense reserves shown below and entering into the determination of incurred claim costs, take into account, among a large number of variables, claim cost reductions for anticipated coverage rescissions and claims denials.
|
(b)
|
Rescissions reduced the Company's paid losses by an estimated
$4.4
,
$13.1
, and
$1.4
for
2018
,
2017
, and
2016
, respectively.
|
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
|||
General
|
|
72.2
|
%
|
|
71.8
|
%
|
|
73.0
|
%
|
Title
|
|
2.1
|
|
|
.9
|
|
|
3.8
|
|
RFIG Run-off
|
|
39.4
|
|
|
160.9
|
|
|
60.4
|
|
Consolidated claim ratio
|
|
43.1
|
%
|
|
44.7
|
%
|
|
44.0
|
%
|
|
|
|
|
|
|
|
|||
Reconciliation of consolidated ratio:
|
|
|
|
|
|
|
|||
Provision for insured events of the current year
|
|
44.5
|
%
|
|
47.5
|
%
|
|
45.6
|
%
|
Change in provision for insured events of prior years:
|
|
|
|
|
|
|
|||
net (favorable) unfavorable development
|
|
(1.4
|
)
|
|
(2.8
|
)
|
|
(1.6
|
)
|
Consolidated claim ratio
|
|
43.1
|
%
|
|
44.7
|
%
|
|
44.0
|
%
|
|
General Insurance Claim Ratios by Type of Coverage
|
|||||||||||||||||||
|
All
Coverages
|
|
Workers'
Compen-sation
|
|
Commercial
Automobile
(mostly
trucking)
|
|
General
Liability
|
|
Financial
Indemnity
|
|
Inland
Marine
and
Property
|
|
Other
|
|||||||
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
2016
|
73.0
|
%
|
|
76.1
|
%
|
|
79.4
|
%
|
|
77.5
|
%
|
|
45.5
|
%
|
|
60.9
|
%
|
|
62.2
|
%
|
2017
|
71.8
|
|
|
75.5
|
|
|
76.8
|
|
|
73.1
|
|
|
62.1
|
|
|
59.3
|
|
|
59.0
|
|
2018
|
72.2
|
%
|
|
70.7
|
%
|
|
79.3
|
%
|
|
68.9
|
%
|
|
73.8
|
%
|
|
62.8
|
%
|
|
60.1
|
%
|
December 31:
|
|
2018
|
|
2017
|
||||||||||||
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||||
Asbestos:
|
|
|
|
|
|
|
|
|
||||||||
Reserves at beginning of year
|
|
$
|
86.7
|
|
|
$
|
75.8
|
|
|
$
|
89.6
|
|
|
$
|
76.7
|
|
Loss and loss expenses incurred
|
|
(1.1
|
)
|
|
(12.2
|
)
|
|
18.3
|
|
|
13.5
|
|
||||
Claims and claim adjustment expenses paid
|
|
10.1
|
|
|
7.8
|
|
|
21.2
|
|
|
14.4
|
|
||||
Reserves at end of year
|
|
75.4
|
|
|
55.6
|
|
|
86.7
|
|
|
75.8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Environmental:
|
|
|
|
|
|
|
|
|
||||||||
Reserves at beginning of year
|
|
30.6
|
|
|
20.6
|
|
|
31.6
|
|
|
20.4
|
|
||||
Loss and loss expenses incurred
|
|
4.0
|
|
|
1.3
|
|
|
3.2
|
|
|
2.7
|
|
||||
Claims and claim adjustment expenses paid
|
|
4.3
|
|
|
3.1
|
|
|
4.1
|
|
|
2.4
|
|
||||
Reserves at end of year
|
|
30.3
|
|
|
18.8
|
|
|
30.6
|
|
|
20.6
|
|
||||
Total asbestos and environmental reserves
|
|
$
|
105.8
|
|
|
$
|
74.4
|
|
|
$
|
117.4
|
|
|
$
|
96.4
|
|
|
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:
|
|
|
|
|
|
|
|
|
|
||||||||
2016
|
$
|
45,478
|
|
|
$
|
48,158
|
|
|
10.53
|
%
|
|
25.78
|
%
|
|
$
|
1.4
|
|
2017
|
47,267
|
|
|
51,446
|
|
|
10.52
|
|
|
23.31
|
|
|
13.1
|
|
|||
2018
|
$
|
47,055
|
|
|
$
|
54,809
|
|
|
9.38
|
%
|
|
16.94
|
%
|
|
$
|
4.4
|
|
(a)
|
Amounts are in whole dollars.
|
(b)
|
As determined by risk in force as of
December 31, 2018
, these 10 states represent approximately 52.9%, 57.8%, and 52.8%, 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:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2016
|
$
|
11.7
|
|
|
74.0
|
%
|
|
$
|
50.0
|
|
|
315.9
|
%
|
|
2.0
|
%
|
|
$
|
10.1
|
|
2017
|
304.2
|
|
|
N/M
|
|
|
134.5
|
|
|
N/M
|
|
|
2.6
|
|
|
5.7
|
|
|||
2018
|
$
|
31.6
|
|
|
N/M
|
|
|
$
|
(2.2
|
)
|
|
N/M
|
|
|
1.7
|
%
|
|
$
|
.4
|
|
(a)
|
Percent of net CCI earned premiums. CCI claim 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 claim 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
|
Expenses: Total
|
|
General
|
|
Title
|
|
RFIG Run-off
|
|
Consolidated
|
||||
Years Ended December 31:
|
|
|
|
|
|
|
|
||||
2016
|
97.8
|
%
|
|
91.7
|
%
|
|
72.6
|
%
|
|
94.6
|
%
|
2017
|
97.3
|
|
|
90.9
|
|
|
177.5
|
|
|
96.7
|
|
2018
|
97.2
|
%
|
|
92.1
|
%
|
|
60.9
|
%
|
|
94.7
|
%
|
Expenses: Income Taxes
|
OTHER INFORMATION
|
Item 7A - Quantitative and Qualitative Disclosure About Market Risk
($ in Millions)
|
|
Estimated
Fair Value
|
Hypothetical Change in
Interest Rates or S&P 500
|
Estimated Fair Value
After Hypothetical Change in
Interest Rates or S&P 500
|
||||||||
Interest Rate Risk:
|
|
|
|
|
|
|
|||||
Fixed Maturities
|
$
|
9,217.4
|
|
100
|
|
basis point rate increase
|
|
$
|
8,844.1
|
|
|
|
|
200
|
|
basis point rate increase
|
|
8,470.8
|
|
|
|||
|
|
100
|
|
basis point rate decrease
|
|
9,590.7
|
|
|
|||
|
|
200
|
|
basis point rate decrease
|
|
$
|
9,964.0
|
|
|
||
|
|
|
|
|
|
|
|||||
Equity Price Risk:
|
|
|
|
|
|
|
|||||
Equity Securities
|
$
|
3,380.9
|
|
10
|
%
|
increase in the S&P 500
|
|
$
|
3,664.9
|
|
|
|
|
20
|
%
|
increase in the S&P 500
|
|
3,948.9
|
|
|
|||
|
|
10
|
%
|
decline in the S&P 500
|
|
3,096.9
|
|
|
|||
|
|
20
|
%
|
decline in the S&P 500
|
|
$
|
2,812.9
|
|
|
Item 8 - Financial Statements and Supplementary Data
|
|
Page No.
|
Consolidated Balance Sheets
|
61
|
Consolidated Statements of Income
|
62
|
Consolidated Statements of Comprehensive Income
|
63
|
Consolidated Statements of Preferred Stock and Common Shareholders' Equity
|
64
|
Consolidated Statements of Cash Flows
|
65
|
Notes to Consolidated Financial Statements
|
66 - 94
|
Report of Independent Registered Public Accounting Firm
|
95 - 96
|
Old Republic International Corporation and Subsidiaries
|
|||||||
Consolidated Balance Sheets
|
|||||||
($ in Millions, Except Share Data)
|
|||||||
|
|
||||||
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Investments:
|
|
|
|
||||
Available for sale:
|
|
|
|
||||
Fixed maturity securities (at fair value) (amortized cost: $8,285.0 and $8,162.2)
|
$
|
8,182.8
|
|
|
$
|
8,282.3
|
|
Short-term investments (at fair value which approximates cost)
|
354.9
|
|
|
670.1
|
|
||
Total
|
8,537.8
|
|
|
8,952.4
|
|
||
Held to maturity:
|
|
|
|
||||
Fixed maturity securities (at amortized cost) (fair value: $1,034.5 and $1,069.2)
|
1,044.8
|
|
|
1,067.4
|
|
||
Equity securities (at fair value) (cost: $3,039.1 and $2,629.9)
|
3,380.9
|
|
|
3,265.5
|
|
||
Other investments
|
31.0
|
|
|
32.5
|
|
||
Total investments
|
12,994.6
|
|
|
13,318.0
|
|
||
|
|
|
|
||||
Other Assets:
|
|
|
|
||||
Cash
|
100.3
|
|
|
125.9
|
|
||
Securities and indebtedness of related parties
|
28.4
|
|
|
12.8
|
|
||
Accrued investment income
|
92.4
|
|
|
92.4
|
|
||
Accounts and notes receivable
|
1,499.4
|
|
|
1,469.7
|
|
||
Federal income tax recoverable: Current
|
16.8
|
|
|
—
|
|
||
Prepaid federal income taxes
|
129.8
|
|
|
114.3
|
|
||
Reinsurance balances and funds held
|
166.2
|
|
|
141.6
|
|
||
Reinsurance recoverable: Paid losses
|
55.9
|
|
|
60.5
|
|
||
Policy and claim reserves
|
3,428.6
|
|
|
3,311.3
|
|
||
Deferred policy acquisition costs
|
316.3
|
|
|
297.8
|
|
||
Sundry assets
|
497.8
|
|
|
458.8
|
|
||
Total Other Assets
|
6,332.4
|
|
|
6,085.5
|
|
||
Total Assets
|
$
|
19,327.1
|
|
|
$
|
19,403.5
|
|
|
|
|
|
||||
Liabilities, Preferred Stock, and Common Shareholders' Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Losses, claims, and settlement expenses
|
$
|
9,471.2
|
|
|
$
|
9,237.6
|
|
Unearned premiums
|
2,104.9
|
|
|
1,971.5
|
|
||
Other policyholders' benefits and funds
|
198.6
|
|
|
204.7
|
|
||
Total policy liabilities and accruals
|
11,774.8
|
|
|
11,413.9
|
|
||
Commissions, expenses, fees, and taxes
|
525.4
|
|
|
547.7
|
|
||
Reinsurance balances and funds
|
600.4
|
|
|
566.9
|
|
||
Federal income tax payable: Current
|
—
|
|
|
6.5
|
|
||
Deferred
|
10.3
|
|
|
100.5
|
|
||
Debt
|
981.4
|
|
|
1,448.7
|
|
||
Sundry liabilities
|
288.3
|
|
|
585.8
|
|
||
Commitments and contingent liabilities
|
|
|
|
||||
Total Liabilities
|
14,180.8
|
|
|
14,670.2
|
|
||
|
|
|
|
||||
Preferred Stock
(1)
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Common Shareholders' Equity:
|
|
|
|
||||
Common stock (1)
|
302.7
|
|
|
269.2
|
|
||
Additional paid-in capital
|
1,277.6
|
|
|
815.2
|
|
||
Retained earnings
|
3,849.8
|
|
|
3,206.9
|
|
||
Accumulated other comprehensive income (loss)
|
(210.0
|
)
|
|
474.2
|
|
||
Unallocated ESSOP shares (at cost)
|
(73.9
|
)
|
|
(32.4
|
)
|
||
Total Common Shareholders' Equity
|
5,146.2
|
|
|
4,733.3
|
|
||
Total Liabilities, Preferred Stock and Common Shareholders' Equity
|
$
|
19,327.1
|
|
|
$
|
19,403.5
|
|
(1)
|
At
December 31, 2018
and
2017
, 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
302,714,502
and
269,238,727
were issued as of
December 31, 2018
and
2017
, respectively. At
December 31, 2018
and
2017
, there were
100,000,000
shares of Class B Common Stock,
$1.00
par value, authorized, of which no shares were issued.
|
Old Republic International Corporation and Subsidiaries
|
|||||||||||
Consolidated Statements of Comprehensive Income
|
|||||||||||
($ in Millions)
|
|||||||||||
|
|
|
|
||||||||
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net Income (Loss) As Reported
|
$
|
370.5
|
|
|
$
|
560.5
|
|
|
$
|
466.9
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Unrealized gains (losses) on securities:
|
|
|
|
|
|
||||||
Unrealized gains (losses) before reclassifications, not
|
|
|
|
|
|
||||||
included in the statements of income
|
(226.4
|
)
|
|
325.0
|
|
|
522.3
|
|
|||
Amounts reclassified as realized investment (gains)
|
|
|
|
|
|
||||||
losses in the statements of income
|
3.1
|
|
|
(211.6
|
)
|
|
(72.8
|
)
|
|||
Pretax unrealized gains (losses) on securities
|
(223.2
|
)
|
|
113.4
|
|
|
449.4
|
|
|||
Deferred income taxes (credits)
|
(46.9
|
)
|
|
39.5
|
|
|
157.2
|
|
|||
Net unrealized gains (losses) on securities, net of tax
|
(176.3
|
)
|
|
73.9
|
|
|
292.1
|
|
|||
Defined benefit pension plans:
|
|
|
|
|
|
||||||
Net pension adjustment before reclassifications
|
3.6
|
|
|
(28.2
|
)
|
|
(1.3
|
)
|
|||
Amounts reclassified as underwriting, acquisition,
|
|
|
|
|
|
||||||
and other expenses in the statements of income
|
3.2
|
|
|
.5
|
|
|
.6
|
|
|||
Net adjustment related to defined benefit
|
|
|
|
|
|
||||||
pension plans
|
6.9
|
|
|
(27.7
|
)
|
|
(.7
|
)
|
|||
Deferred income taxes (credits)
|
1.4
|
|
|
(9.7
|
)
|
|
(.2
|
)
|
|||
Net adjustment related to defined benefit pension
|
|
|
|
|
|
||||||
plans, net of tax
|
5.4
|
|
|
(18.0
|
)
|
|
(.4
|
)
|
|||
Foreign currency translation and other adjustments
|
(11.1
|
)
|
|
9.5
|
|
|
2.6
|
|
|||
Net adjustments
|
(182.0
|
)
|
|
65.4
|
|
|
294.4
|
|
|||
Comprehensive Income (Loss)
|
$
|
188.5
|
|
|
$
|
626.0
|
|
|
$
|
761.4
|
|
|
Shareholders' Equity
|
|
Net Income (Loss)
|
||||||||||||||||
|
December 31,
|
|
Years Ended December 31,
|
||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2016
|
||||||||||
Statutory totals of insurance
|
|
|
|
|
|
|
|
|
|
||||||||||
company subsidiaries (a):
|
|
|
|
|
|
|
|
|
|
||||||||||
General
|
$
|
3,847.3
|
|
|
$
|
3,903.7
|
|
|
$
|
290.5
|
|
|
$
|
348.9
|
|
|
$
|
270.3
|
|
Title
|
503.1
|
|
|
545.7
|
|
|
110.5
|
|
|
127.9
|
|
|
113.1
|
|
|||||
RFIG Run-off
|
88.0
|
|
|
86.6
|
|
|
44.9
|
|
|
50.5
|
|
|
100.9
|
|
|||||
Life & Accident
|
39.8
|
|
|
41.4
|
|
|
.9
|
|
|
1.8
|
|
|
2.3
|
|
|||||
Sub-total
|
4,478.2
|
|
|
4,577.4
|
|
|
446.8
|
|
|
529.1
|
|
|
486.6
|
|
|||||
GAAP totals of non-insurance company
|
|
|
|
|
|
|
|
|
|
||||||||||
subsidiaries and consolidation adjustments
|
715.8
|
|
|
283.4
|
|
|
8.8
|
|
|
(59.9
|
)
|
|
(.9
|
)
|
|||||
Unadjusted totals
|
5,194.0
|
|
|
4,860.8
|
|
|
455.6
|
|
|
469.2
|
|
|
485.7
|
|
|||||
Adjustments to conform to GAAP statements:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deferred policy acquisition costs
|
194.8
|
|
|
177.6
|
|
|
17.2
|
|
|
11.7
|
|
|
2.0
|
|
|||||
Investment adjustment
|
(65.5
|
)
|
|
124.3
|
|
|
(198.2
|
)
|
|
—
|
|
|
—
|
|
|||||
Non-admitted assets
|
111.1
|
|
|
80.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Deferred income taxes
|
(63.9
|
)
|
|
(92.3
|
)
|
|
38.7
|
|
|
34.7
|
|
|
(34.0
|
)
|
|||||
Mortgage contingency reserves
|
433.1
|
|
|
395.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Title insurance premium reserves
|
545.8
|
|
|
522.5
|
|
|
23.3
|
|
|
27.1
|
|
|
27.0
|
|
|||||
Loss reserves
|
(440.4
|
)
|
|
(478.8
|
)
|
|
38.3
|
|
|
40.5
|
|
|
(15.0
|
)
|
|||||
Surplus notes
|
(744.5
|
)
|
|
(839.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Sundry adjustments
|
(18.6
|
)
|
|
(18.2
|
)
|
|
(4.4
|
)
|
|
(22.9
|
)
|
|
1.2
|
|
|||||
Total adjustments
|
(48.2
|
)
|
|
(127.6
|
)
|
|
(85.0
|
)
|
|
91.0
|
|
|
(19.0
|
)
|
|||||
Consolidated GAAP totals
|
$
|
5,146.2
|
|
|
$
|
4,733.3
|
|
|
$
|
370.5
|
|
|
$
|
560.5
|
|
|
$
|
466.9
|
|
(a)
|
The insurance laws of the respective states in which the Company
’
s insurance subsidiaries are incorporated prescribe minimum capital and surplus requirements for the lines of business they are licensed to write. For domestic property and casualty and life and accident insurance companies the National Association of Insurance Commissioners also prescribes risk-based capital ("RBC") requirements. The RBC is a measure of statutory capital in relationship to a formula-driven definition of risk relative to a company
’
s balance sheet and mix of business. The combined RBC ratio of our primary General insurance subsidiaries was
657%
and
651%
of the company action level RBC at
December 31, 2018
and
2017
, respectively. The minimum capital requirements for the Company
’
s Title Insurance subsidiaries are established by statute in the respective states of domicile. The minimum regulatory capital requirements are not significant in relationship to the recorded statutory capital of the Company
’
s Title and Life & Accident insurance subsidiaries. At
December 31, 2018
and
2017
each of the Company
’
s General, Title, RFIG and Life and Accident insurance subsidiaries exceeded the minimum statutory capital and surplus requirements. Refer to Note 1(s) - Regulatory Matters for a discussion regarding the RFIG Run-off group.
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Cost and Fair Value of Fixed Maturity Securities by Type:
|
|
|
|
|
|
|
|
||||||||
December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Available for sale:
|
|
|
|
|
|
|
|
||||||||
U.S. & Canadian Governments
|
$
|
1,535.3
|
|
|
$
|
5.7
|
|
|
$
|
16.5
|
|
|
$
|
1,524.4
|
|
Corporate
|
6,749.6
|
|
|
31.4
|
|
|
122.7
|
|
|
6,658.3
|
|
||||
|
$
|
8,285.0
|
|
|
$
|
37.1
|
|
|
$
|
139.2
|
|
|
$
|
8,182.8
|
|
Held to maturity:
|
|
|
|
|
|
|
|
||||||||
Tax-exempt
|
$
|
1,044.8
|
|
|
$
|
3.5
|
|
|
$
|
13.7
|
|
|
$
|
1,034.5
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Available for sale:
|
|
|
|
|
|
|
|
||||||||
U.S. & Canadian Governments
|
$
|
1,554.3
|
|
|
$
|
6.5
|
|
|
$
|
8.7
|
|
|
$
|
1,552.2
|
|
Corporate
|
6,607.8
|
|
|
140.8
|
|
|
18.6
|
|
|
6,730.0
|
|
||||
|
$
|
8,162.2
|
|
|
$
|
147.4
|
|
|
$
|
27.3
|
|
|
$
|
8,282.3
|
|
Held to maturity:
|
|
|
|
|
|
|
|
||||||||
Tax-exempt
|
$
|
1,067.4
|
|
|
$
|
10.0
|
|
|
$
|
8.3
|
|
|
$
|
1,069.2
|
|
|
|
|
|
|
|
|
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
||||
Fixed Maturity Securities Stratified by Contractual Maturity at December 31, 2018:
|
|
|
|
||||
Available for sale:
|
|
|
|
||||
Due in one year or less
|
$
|
650.4
|
|
|
$
|
650.3
|
|
Due after one year through five years
|
4,643.4
|
|
|
4,604.3
|
|
||
Due after five years through ten years
|
2,921.7
|
|
|
2,856.3
|
|
||
Due after ten years
|
69.4
|
|
|
71.7
|
|
||
|
$
|
8,285.0
|
|
|
$
|
8,182.8
|
|
Held to maturity:
|
|
|
|
||||
Due in one year or less
|
$
|
—
|
|
|
$
|
—
|
|
Due after one year through five years
|
171.6
|
|
|
170.1
|
|
||
Due after five years through ten years
|
873.1
|
|
|
864.4
|
|
||
Due after ten years
|
—
|
|
|
—
|
|
||
|
$
|
1,044.8
|
|
|
$
|
1,034.5
|
|
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
Fair
Value
|
|
Unrealized Losses
|
|
Fair
Value
|
|
Unrealized Losses
|
|
Fair
Value
|
|
Unrealized Losses
|
||||||||||||
December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed Maturity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. & Canadian Governments
|
$
|
616.7
|
|
|
$
|
8.4
|
|
|
$
|
487.1
|
|
|
$
|
8.1
|
|
|
$
|
1,103.9
|
|
|
$
|
16.5
|
|
Corporate
|
3,440.8
|
|
|
77.9
|
|
|
1,096.4
|
|
|
44.7
|
|
|
4,537.3
|
|
|
122.7
|
|
||||||
|
$
|
4,057.6
|
|
|
$
|
86.4
|
|
|
$
|
1,583.6
|
|
|
$
|
52.8
|
|
|
$
|
5,641.2
|
|
|
$
|
139.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Number of available for sale
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
securities in unrealized
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
loss position
|
|
|
760
|
|
|
|
335
|
|
|
|
1,095
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tax-exempt
|
$
|
271.9
|
|
|
$
|
2.3
|
|
|
$
|
407.7
|
|
|
$
|
11.4
|
|
|
$
|
679.7
|
|
|
$
|
13.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Number of available for sale
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
securities in unrealized
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
loss position
|
|
|
94
|
|
|
|
|
145
|
|
|
|
239
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed Maturity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. & Canadian Governments
|
$
|
1,080.9
|
|
|
$
|
8.6
|
|
|
$
|
29.5
|
|
|
$
|
—
|
|
|
$
|
1,110.5
|
|
|
$
|
8.7
|
|
Corporate
|
1,660.9
|
|
|
15.0
|
|
|
145.9
|
|
|
3.6
|
|
|
1,806.9
|
|
|
18.6
|
|
||||||
|
$
|
2,741.9
|
|
|
$
|
23.6
|
|
|
$
|
175.5
|
|
|
$
|
3.7
|
|
|
$
|
2,917.4
|
|
|
$
|
27.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Number of held to maturity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
securities in unrealized
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
loss position
|
|
|
526
|
|
|
|
|
56
|
|
|
|
582
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tax-exempt
|
$
|
321.9
|
|
|
$
|
4.8
|
|
|
$
|
134.7
|
|
|
$
|
3.4
|
|
|
$
|
456.6
|
|
|
$
|
8.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Number of available for sale
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
securities in unrealized
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
loss position
|
|
|
112
|
|
|
|
48
|
|
|
|
160
|
|
Equity Securities
|
||||||||||||||
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
December 31, 2018
|
$
|
3,039.1
|
|
|
$
|
517.3
|
|
|
$
|
175.4
|
|
|
$
|
3,380.9
|
|
December 31, 2017
|
$
|
2,629.9
|
|
|
$
|
658.8
|
|
|
$
|
23.2
|
|
|
$
|
3,265.5
|
|
|
|
Fair Value Measurements
|
||||||||||||||
As of December 31, 2018:
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Available for sale:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. & Canadian Governments
|
|
$
|
714.0
|
|
|
$
|
810.3
|
|
|
$
|
—
|
|
|
$
|
1,524.4
|
|
Corporate
|
|
—
|
|
|
6,647.8
|
|
|
10.5
|
|
|
6,658.3
|
|
||||
Short-term investments
|
|
354.9
|
|
|
—
|
|
|
—
|
|
|
354.9
|
|
||||
Held to maturity:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
||||||||
Tax-exempt
|
|
—
|
|
|
1,034.5
|
|
|
—
|
|
|
1,034.5
|
|
||||
Equity securities
|
|
$
|
3,379.2
|
|
|
$
|
—
|
|
|
$
|
1.7
|
|
|
$
|
3,380.9
|
|
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Available for sale:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. & Canadian Governments
|
|
$
|
761.4
|
|
|
$
|
790.8
|
|
|
$
|
—
|
|
|
$
|
1,552.2
|
|
Corporate
|
|
—
|
|
|
6,719.5
|
|
|
10.5
|
|
|
6,730.0
|
|
||||
Short-term investments
|
|
670.1
|
|
|
—
|
|
|
—
|
|
|
670.1
|
|
||||
Held to maturity:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
||||||||
Tax-exempt
|
|
—
|
|
|
1,069.2
|
|
|
—
|
|
|
1,069.2
|
|
||||
Equity securities
|
|
$
|
3,264.4
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
3,265.5
|
|
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
||||||
Investment income from:
|
|
|
|
|
|
|
||||||
Fixed maturity securities
|
|
$
|
299.2
|
|
|
$
|
293.2
|
|
|
$
|
296.6
|
|
Equity securities
|
|
124.0
|
|
|
110.9
|
|
|
88.2
|
|
|||
Short-term investments
|
|
9.8
|
|
|
5.4
|
|
|
2.1
|
|
|||
Other sources
|
|
4.9
|
|
|
4.5
|
|
|
3.9
|
|
|||
Gross investment income
|
|
438.1
|
|
|
414.1
|
|
|
390.9
|
|
|||
Investment expenses (a)
|
|
6.2
|
|
|
4.6
|
|
|
3.8
|
|
|||
Net investment income
|
|
$
|
431.8
|
|
|
$
|
409.4
|
|
|
$
|
387.0
|
|
|
|
|
|
|
|
|
||||||
Investment gains (losses):
|
|
|
|
|
|
|
||||||
From actual transactions:
|
|
|
|
|
|
|
||||||
Fixed maturity securities:
|
|
|
|
|
|
|
||||||
Gains
|
|
$
|
2.4
|
|
|
$
|
22.1
|
|
|
$
|
15.3
|
|
Losses
|
|
(7.2
|
)
|
|
(5.4
|
)
|
|
(7.5
|
)
|
|||
Net
|
|
(4.8
|
)
|
|
16.6
|
|
|
7.8
|
|
|||
Equity securities:
|
|
|
|
|
|
|
||||||
Gains
|
|
71.9
|
|
|
217.8
|
|
|
95.1
|
|
|||
Losses
|
|
(10.4
|
)
|
|
(23.0
|
)
|
|
(25.4
|
)
|
|||
Net
|
|
61.4
|
|
|
194.7
|
|
|
69.7
|
|
|||
Other long-term investments, net
|
|
1.6
|
|
|
.1
|
|
|
.2
|
|
|||
Total from actual transactions
|
|
58.2
|
|
|
211.6
|
|
|
77.8
|
|
|||
From unrealized changes in fair value of equity securities
|
|
(293.8
|
)
|
|
—
|
|
|
—
|
|
|||
From impairments
|
|
—
|
|
|
—
|
|
|
(4.9
|
)
|
|||
Total realized and unrealized investment gains (losses)
|
|
(235.6
|
)
|
|
211.6
|
|
|
72.8
|
|
|||
Current and deferred income taxes (credits)(b)(c)
|
|
(49.6
|
)
|
|
(30.8
|
)
|
|
25.5
|
|
|||
Post tax realized and unrealized investment gains (losses)
|
|
$
|
(185.9
|
)
|
|
$
|
242.4
|
|
|
$
|
47.3
|
|
|
|
|
|
|
|
|
||||||
Changes in unrealized investment gains (losses)
|
|
|
|
|
|
|
||||||
reflected directly in shareholders' equity on:
|
|
|
|
|
|
|
||||||
Fixed maturity securities
|
|
$
|
(221.9
|
)
|
|
$
|
(31.2
|
)
|
|
$
|
119.4
|
|
Less: Deferred income taxes (credits)
|
|
(46.6
|
)
|
|
(10.7
|
)
|
|
41.9
|
|
|||
|
|
(175.2
|
)
|
|
(20.5
|
)
|
|
77.5
|
|
|||
|
|
|
|
|
|
|
||||||
Equity securities & other long-term investments
|
|
(1.3
|
)
|
|
144.7
|
|
|
330.0
|
|
|||
Less: Deferred income taxes (credits)
|
|
(.2
|
)
|
|
50.2
|
|
|
115.3
|
|
|||
|
|
(1.0
|
)
|
|
94.4
|
|
|
214.6
|
|
|||
Net changes in unrealized investment gains (losses)
|
|
$
|
(176.3
|
)
|
|
$
|
73.9
|
|
|
$
|
292.1
|
|
(a)
|
Investment expenses largely consist of personnel costs and investment management and custody service fees.
|
(b)
|
Reflects primarily the combination of fully taxable investment gains or losses and judgments about the recoverability of deferred tax assets.
|
(c)
|
Includes
$104.9
, for
2017
, of deferred income tax credits to adjust to the new
21%
tax rate of
2018
pertaining to unrealized gains (losses) as of
December 31, 2017
. Deferred income taxes on unrealized gains (losses) would normally be a part of the statement of comprehensive income rather than the income statement.
|
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
||||||
Deferred, beginning of year
|
|
$
|
297.8
|
|
|
$
|
274.0
|
|
|
$
|
255.4
|
|
Acquisition costs deferred:
|
|
|
|
|
|
|
||||||
Commissions - net of reinsurance
|
|
332.2
|
|
|
308.7
|
|
|
253.0
|
|
|||
Premium taxes
|
|
123.5
|
|
|
117.1
|
|
|
107.8
|
|
|||
Salaries and other underwriting expenses
|
|
52.3
|
|
|
51.9
|
|
|
51.4
|
|
|||
Sub-total
|
|
508.1
|
|
|
477.8
|
|
|
412.3
|
|
|||
Amortization charged to income
|
|
(489.6
|
)
|
|
(454.0
|
)
|
|
(393.7
|
)
|
|||
Change for the year
|
|
18.5
|
|
|
23.7
|
|
|
18.6
|
|
|||
Deferred, end of year
|
|
$
|
316.3
|
|
|
$
|
297.8
|
|
|
$
|
274.0
|
|
As of December 31:
|
|
2018
|
|
2017
|
||||
General Insurance Group
|
|
$
|
2,101.8
|
|
|
$
|
1,966.4
|
|
RFIG Run-off Business
|
|
3.0
|
|
|
5.1
|
|
||
Total
|
|
$
|
2,104.9
|
|
|
$
|
1,971.5
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Estimated reduction in beginning reserve
|
$
|
19.0
|
|
|
$
|
29.6
|
|
|
$
|
47.5
|
|
Total incurred claims and settlement expenses reduced
|
|
|
|
|
|
||||||
(increased) by changes in estimated rescissions:
|
|
|
|
|
|
||||||
Current year
|
.9
|
|
|
6.2
|
|
|
8.3
|
|
|||
Prior year
|
(12.3
|
)
|
|
(3.7
|
)
|
|
(24.8
|
)
|
|||
Sub-total
|
(11.4
|
)
|
|
2.5
|
|
|
(16.5
|
)
|
|||
Estimated rescission reduction in paid claims
|
(4.4
|
)
|
|
(13.1
|
)
|
|
(1.4
|
)
|
|||
Estimated reduction in ending reserve
|
$
|
3.2
|
|
|
$
|
19.0
|
|
|
$
|
29.6
|
|
Years Ended December 31:
|
2018
|
|
2017
|
|
2016
|
||||||
Gross reserves at beginning of year
|
$
|
9,237.6
|
|
|
$
|
9,206.0
|
|
|
$
|
9,120.1
|
|
Less: reinsurance losses recoverable
|
2,921.1
|
|
|
2,766.1
|
|
|
2,732.5
|
|
|||
Net reserves at beginning of year:
|
|
|
|
|
|
||||||
General Insurance
|
5,471.5
|
|
|
5,249.9
|
|
|
5,053.1
|
|
|||
Title Insurance
|
559.7
|
|
|
602.0
|
|
|
580.8
|
|
|||
RFIG Run-off
|
271.7
|
|
|
574.0
|
|
|
736.7
|
|
|||
Other
|
13.5
|
|
|
13.8
|
|
|
16.9
|
|
|||
Sub-total
|
6,316.4
|
|
|
6,439.8
|
|
|
6,387.6
|
|
|||
Incurred claims and claim adjustment expenses:
|
|
|
|
|
|
||||||
Provisions for insured events of the current year:
|
|
|
|
|
|
||||||
General Insurance
|
2,346.2
|
|
|
2,192.1
|
|
|
2,115.1
|
|
|||
Title Insurance
|
96.1
|
|
|
95.2
|
|
|
107.7
|
|
|||
RFIG Run-off (a)
|
56.2
|
|
|
297.1
|
|
|
171.3
|
|
|||
Other
|
22.1
|
|
|
20.4
|
|
|
21.7
|
|
|||
Sub-total
|
2,520.7
|
|
|
2,604.9
|
|
|
2,416.0
|
|
|||
Change in provision for insured events of prior years:
|
|
|
|
|
|
||||||
General Insurance
|
(.2
|
)
|
|
22.7
|
|
|
9.9
|
|
|||
Title Insurance
|
(47.7
|
)
|
|
(74.3
|
)
|
|
(23.4
|
)
|
|||
RFIG Run-off (a)
|
(26.2
|
)
|
|
(99.2
|
)
|
|
(68.7
|
)
|
|||
Other
|
(3.5
|
)
|
|
(2.9
|
)
|
|
(3.8
|
)
|
|||
Sub-total
|
(77.8
|
)
|
|
(153.8
|
)
|
|
(86.1
|
)
|
|||
Total incurred claims and claim adjustment expenses (a)
|
2,442.9
|
|
|
2,451.0
|
|
|
2,329.9
|
|
|||
Payments:
|
|
|
|
|
|
||||||
Claims and claim adjustment expenses attributable to
|
|
|
|
|
|
||||||
insured events of the current year:
|
|
|
|
|
|
||||||
General Insurance
|
813.2
|
|
|
765.8
|
|
|
723.5
|
|
|||
Title Insurance
|
9.1
|
|
|
5.0
|
|
|
4.4
|
|
|||
RFIG Run-off (b)
|
3.7
|
|
|
329.4
|
|
|
14.5
|
|
|||
Other
|
16.0
|
|
|
13.9
|
|
|
14.8
|
|
|||
Sub-total
|
842.2
|
|
|
1,114.3
|
|
|
757.4
|
|
|||
Claims and claim adjustment expenses attributable to
|
|
|
|
|
|
||||||
insured events of prior years:
|
|
|
|
|
|
||||||
General Insurance
|
1,238.1
|
|
|
1,227.3
|
|
|
1,204.5
|
|
|||
Title Insurance
|
65.4
|
|
|
58.2
|
|
|
58.6
|
|
|||
RFIG Run-off (b)
|
143.3
|
|
|
170.6
|
|
|
250.8
|
|
|||
Other
|
5.2
|
|
|
3.9
|
|
|
6.1
|
|
|||
Sub-total
|
1,452.2
|
|
|
1,460.1
|
|
|
1,520.2
|
|
|||
Total payments (b)
|
2,294.5
|
|
|
2,574.4
|
|
|
2,277.6
|
|
|||
Amount of reserves for unpaid claims and claim adjustment expenses
|
|
|
|
|
|
||||||
at the end of each year, net of reinsurance losses recoverable:
|
|
|
|
|
|
||||||
General Insurance
|
5,766.1
|
|
|
5,471.5
|
|
|
5,249.9
|
|
|||
Title Insurance
|
533.4
|
|
|
559.7
|
|
|
602.0
|
|
|||
RFIG Run-off
|
154.5
|
|
|
271.7
|
|
|
574.0
|
|
|||
Other
|
10.8
|
|
|
13.5
|
|
|
13.8
|
|
|||
Sub-total
|
6,464.9
|
|
|
6,316.4
|
|
|
6,439.8
|
|
|||
Reinsurance losses recoverable
|
3,006.3
|
|
|
2,921.1
|
|
|
2,766.1
|
|
|||
Gross reserves at end of year
|
$
|
9,471.2
|
|
|
$
|
9,237.6
|
|
|
$
|
9,206.0
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
Change in provision for incurred events of prior years:
|
|
|
|
|
|
||||||
|
General Insurance
|
$
|
(6.4
|
)
|
|
$
|
(34.5
|
)
|
|
$
|
2.5
|
|
|
RFIG Run-off (a)
|
(20.1
|
)
|
|
(42.0
|
)
|
|
(61.3
|
)
|
|||
|
|
|
|
|
|
|
||||||
|
Payment of claim and claim adjustment expenses attributable to
|
|
|
|
|
|
||||||
|
incurred events of the current and prior years:
|
|
|
|
|
|
||||||
|
General Insurance
|
2,083.0
|
|
|
2,297.5
|
|
|
1,939.9
|
|
|||
|
RFIG Run-off (b)
|
$
|
115.4
|
|
|
$
|
195.8
|
|
|
$
|
253.6
|
|
(a)
|
In common with all other insurance coverages, RFIG Run-off mortgage guaranty settled and incurred claim and claim adjustment expenses include only those costs actually or expected to be paid by the Company. As previously noted, changes in mortgage guaranty aggregate case, IBNR, and loss adjustment expense reserves shown below and entering into the determination of incurred claim costs, take into account, among a large number of variables, claim cost reductions for anticipated coverage rescissions and claims denials.
|
(b)
|
Rescissions reduced the Company's paid losses by an estimated
$4.4
,
$13.1
, and
$1.4
for
2018
,
2017
, and
2016
, respectively.
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Net claim and allocated loss adjustment expense reserves:
|
|
|
|
||||
Workers' compensation (a)
|
$
|
3,090.0
|
|
|
$
|
2,993.9
|
|
General liability
|
556.1
|
|
|
565.4
|
|
||
Commercial automobile
|
1,264.9
|
|
|
1,151.8
|
|
||
Three above coverages combined
|
4,911.1
|
|
|
4,711.2
|
|
||
Other short-duration insurance coverages
|
624.5
|
|
|
561.4
|
|
||
Subtotal
|
5,535.6
|
|
|
5,272.6
|
|
||
|
|
|
|
||||
Reinsurance recoverable on claim reserves:
|
|
|
|
||||
Workers' compensation
|
1,774.3
|
|
|
1,758.2
|
|
||
General liability
|
561.5
|
|
|
507.2
|
|
||
Commercial automobile
|
410.2
|
|
|
372.9
|
|
||
Three above coverages combined
|
2,746.2
|
|
|
2,638.4
|
|
||
Other short-duration insurance coverages
|
246.1
|
|
|
249.4
|
|
||
Subtotal
|
2,992.3
|
|
|
2,887.8
|
|
||
|
|
|
|
||||
Insurance coverages other than short-duration
|
660.5
|
|
|
764.8
|
|
||
Unallocated loss adjustment expense reserves
|
282.6
|
|
|
312.2
|
|
||
|
943.2
|
|
|
1,077.1
|
|
||
Gross claim and loss adjustment expense reserves
|
$
|
9,471.2
|
|
|
$
|
9,237.6
|
|
(a)
|
The amount of discount reflected in the year-end net reserves totaled
$216.5
and
$240.7
as of
December 31, 2018
and
2017
, respectively.
|
|
Supplementary Information (Unaudited)
|
|||||||||||||||||||
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Workers' compensation
|
16.1
|
%
|
23.3
|
%
|
14.2
|
%
|
9.3
|
%
|
6.3
|
%
|
3.7
|
%
|
2.4
|
%
|
2.1
|
%
|
1.8
|
%
|
1.2
|
%
|
General liability
|
4.9
|
%
|
10.3
|
%
|
15.7
|
%
|
16.7
|
%
|
16.3
|
%
|
11.1
|
%
|
7.6
|
%
|
5.0
|
%
|
3.5
|
%
|
4.8
|
%
|
Commercial automobile
|
39.5
|
%
|
23.3
|
%
|
15.2
|
%
|
10.0
|
%
|
5.1
|
%
|
2.2
|
%
|
1.1
|
%
|
.4
|
%
|
.2
|
%
|
—
|
%
|
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
|||
Statutory tax rate (credit)
|
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Tax rate increases (decreases):
|
|
|
|
|
|
|
|||
Tax-exempt interest
|
|
(.8
|
)
|
|
(.8
|
)
|
|
(.5
|
)
|
Dividends received exclusion
|
|
(2.4
|
)
|
|
(3.2
|
)
|
|
(2.6
|
)
|
Foreign income (loss) reattribution
|
|
(.1
|
)
|
|
(.1
|
)
|
|
(.1
|
)
|
Impact of tax rate change on deferred tax inventory
|
|
—
|
|
|
(8.7
|
)
|
|
—
|
|
Meals & entertainment
|
|
.5
|
|
|
.3
|
|
|
.3
|
|
Prior year adjustments
|
|
(2.4
|
)
|
|
—
|
|
|
(.3
|
)
|
Other items - net
|
|
(.4
|
)
|
|
.2
|
|
|
.1
|
|
Effective tax rate (credit)
|
|
15.4
|
%
|
|
22.7
|
%
|
|
31.9
|
%
|
December 31:
|
|
2018
|
|
2017
|
|
2016
|
||||||
Deferred Tax Assets:
|
|
|
|
|
|
|
||||||
Losses, claims, and settlement expenses
|
|
$
|
189.8
|
|
|
$
|
159.2
|
|
|
$
|
337.7
|
|
Pension and deferred compensation plans
|
|
47.8
|
|
|
49.1
|
|
|
71.5
|
|
|||
Impairment losses on investments
|
|
—
|
|
|
.2
|
|
|
1.7
|
|
|||
Net operating loss carryforward
|
|
15.8
|
|
|
17.9
|
|
|
33.3
|
|
|||
AMT credit carryforward
|
|
9.0
|
|
|
9.6
|
|
|
9.6
|
|
|||
Other temporary differences
|
|
18.0
|
|
|
18.2
|
|
|
33.6
|
|
|||
Total deferred tax assets
|
|
280.8
|
|
|
254.5
|
|
|
487.5
|
|
|||
Deferred Tax Liabilities:
|
|
|
|
|
|
|
||||||
Unearned premium reserves
|
|
33.4
|
|
|
30.5
|
|
|
48.5
|
|
|||
Deferred policy acquisition costs
|
|
62.6
|
|
|
59.5
|
|
|
91.7
|
|
|||
Mortgage guaranty insurers' contingency reserves
|
|
86.5
|
|
|
77.9
|
|
|
114.3
|
|
|||
Amortization of fixed maturity securities
|
|
2.6
|
|
|
3.0
|
|
|
5.8
|
|
|||
Net unrealized investment gains
|
|
57.4
|
|
|
164.2
|
|
|
232.6
|
|
|||
Title plants and records
|
|
2.9
|
|
|
2.9
|
|
|
4.9
|
|
|||
Tax reform transition adjustment on unpaid losses, claims and
|
|
|
|
|
|
|
||||||
settlement expenses
|
|
32.0
|
|
|
—
|
|
|
—
|
|
|||
Other temporary differences
|
|
13.4
|
|
|
16.9
|
|
|
31.9
|
|
|||
Total deferred tax liabilities
|
|
291.0
|
|
|
355.1
|
|
|
529.9
|
|
|||
Net deferred tax assets (liabilities)
|
|
$
|
(10.3
|
)
|
|
$
|
(100.5
|
)
|
|
$
|
(42.6
|
)
|
|
General
|
|
Title
|
|
RFIG Run-off
|
|
Other
|
|
Total
|
||||||||||
January 1, 2017
|
$
|
116.2
|
|
|
$
|
44.3
|
|
|
$
|
—
|
|
|
$
|
.1
|
|
|
$
|
160.7
|
|
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
December 31, 2017
|
116.2
|
|
|
44.3
|
|
|
—
|
|
|
.1
|
|
|
160.7
|
|
|||||
Acquisitions
|
—
|
|
|
13.2
|
|
|
—
|
|
|
—
|
|
|
13.2
|
|
|||||
Impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
December 31, 2018
|
$
|
116.2
|
|
|
$
|
57.5
|
|
|
$
|
—
|
|
|
$
|
.1
|
|
|
$
|
174.0
|
|
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
||||||
Projected Benefit Obligation
|
|
|
|
|
|
|
||||||
Projected benefit obligation at beginning of year
|
|
$
|
579.2
|
|
|
$
|
537.5
|
|
|
$
|
523.7
|
|
Increases (decreases) during the year attributable to:
|
|
|
|
|
|
|
||||||
Interest cost
|
|
20.8
|
|
|
22.5
|
|
|
23.2
|
|
|||
Actuarial (gains) losses
|
|
(44.4
|
)
|
|
42.0
|
|
|
12.5
|
|
|||
Benefits paid
|
|
(25.4
|
)
|
|
(22.8
|
)
|
|
(21.9
|
)
|
|||
Net increase (decrease) for the year
|
|
(49.1
|
)
|
|
41.6
|
|
|
13.7
|
|
|||
Projected benefit obligation at end of year
|
|
$
|
530.1
|
|
|
$
|
579.2
|
|
|
$
|
537.5
|
|
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
||||||
Fair Value of Net Assets Available for Plan Benefits
|
|
|
|
|
|
|
||||||
Fair value of net assets available for plan benefits
|
|
|
|
|
|
|
||||||
At beginning of the year
|
|
$
|
453.7
|
|
|
$
|
427.1
|
|
|
$
|
409.2
|
|
Increases (decreases) during the year attributable to:
|
|
|
|
|
|
|
||||||
Actual return on plan assets
|
|
(12.0
|
)
|
|
44.5
|
|
|
39.9
|
|
|||
Sponsor contributions
|
|
14.0
|
|
|
4.8
|
|
|
—
|
|
|||
Benefits paid
|
|
(25.4
|
)
|
|
(22.8
|
)
|
|
(21.9
|
)
|
|||
Net increase (decrease) for year
|
|
(23.5
|
)
|
|
26.6
|
|
|
17.9
|
|
|||
Fair value of net assets available for plan benefits
|
|
|
|
|
|
|
||||||
At end of the year
|
|
$
|
430.2
|
|
|
$
|
453.7
|
|
|
$
|
427.1
|
|
Funded Status
|
|
$
|
(99.8
|
)
|
|
$
|
(125.4
|
)
|
|
$
|
(110.3
|
)
|
Amounts recognized in accumulated other comprehensive income
|
|
$
|
(137.1
|
)
|
|
$
|
(142.0
|
)
|
|
$
|
(117.0
|
)
|
|
|
Projected Benefit Obligation
|
|
Net Periodic Benefit Cost
|
|||||||||||
As of December 31:
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2016
|
|||||
Settlement discount rates
|
|
4.40
|
%
|
|
3.70
|
%
|
|
3.70
|
%
|
|
4.30
|
%
|
|
4.55
|
%
|
Long-term rates of return on plans' assets
|
|
N/A
|
|
|
N/A
|
|
|
7.00
|
%
|
|
7.25
|
%
|
|
7.25
|
%
|
|
|
|
|
Investment Policy Asset
Allocation % Range Target
|
||||
As of December 31:
|
|
2018
|
|
2017
|
|
|||
Equity securities:
|
|
|
|
|
|
|
||
Common shares of Company stock
|
|
13.5
|
%
|
|
13.3
|
%
|
|
|
Other
|
|
67.7
|
|
|
70.9
|
|
|
|
Sub-total
|
|
81.2
|
|
|
84.2
|
|
|
40% to 80%
|
Fixed maturity securities
|
|
15.6
|
|
|
12.5
|
|
|
15% to 60%
|
Other
|
|
3.2
|
|
|
3.3
|
|
|
1% to 10%
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
Fair Value Measurements
|
||||||||||||||
As of December 31, 2018:
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Common shares of Company stock
|
|
$
|
58.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
58.2
|
|
Other
|
|
272.0
|
|
|
—
|
|
|
—
|
|
|
272.0
|
|
||||
Sub-total
|
|
330.2
|
|
|
—
|
|
|
—
|
|
|
330.2
|
|
||||
Fixed maturity securities
|
|
4.0
|
|
|
63.2
|
|
|
—
|
|
|
67.3
|
|
||||
Other
|
|
8.4
|
|
|
—
|
|
|
3.9
|
|
|
12.3
|
|
||||
Total at fair value
|
|
$
|
342.7
|
|
|
$
|
63.2
|
|
|
$
|
3.9
|
|
|
409.9
|
|
|
Securities at net asset value
|
|
|
|
|
|
|
|
20.3
|
|
|||||||
Total
|
|
|
|
|
|
|
|
$
|
430.2
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Common shares of Company stock
|
|
$
|
60.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
60.4
|
|
Other
|
|
306.6
|
|
|
—
|
|
|
—
|
|
|
306.6
|
|
||||
Sub-total
|
|
367.1
|
|
|
—
|
|
|
—
|
|
|
367.1
|
|
||||
Fixed maturity securities
|
|
4.0
|
|
|
52.5
|
|
|
—
|
|
|
56.6
|
|
||||
Other
|
|
9.0
|
|
|
—
|
|
|
3.0
|
|
|
12.0
|
|
||||
Total at fair value
|
|
$
|
380.2
|
|
|
$
|
52.5
|
|
|
$
|
3.0
|
|
|
435.8
|
|
|
Securities at net asset value
|
|
|
|
|
|
|
|
17.9
|
|
|||||||
Total
|
|
|
|
|
|
|
|
$
|
453.7
|
|
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
||||||
ESSOP
|
|
$
|
12.9
|
|
|
$
|
15.6
|
|
|
$
|
12.8
|
|
Other profit sharing plans
|
|
20.7
|
|
|
17.8
|
|
|
12.2
|
|
|||
Cash and deferred incentive compensation
|
|
$
|
46.7
|
|
|
$
|
68.5
|
|
|
$
|
36.8
|
|
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
370.5
|
|
|
$
|
560.5
|
|
|
$
|
466.9
|
|
Numerator for basic earnings per share -
|
|
|
|
|
|
|
||||||
income (loss) available to common stockholders
|
|
370.5
|
|
|
560.5
|
|
|
466.9
|
|
|||
Adjustment for interest expense incurred on
|
|
|
|
|
|
|
||||||
assumed conversion of convertible notes
|
|
3.1
|
|
|
14.0
|
|
|
14.6
|
|
|||
Numerator for diluted earnings per share -
|
|
|
|
|
|
|
||||||
income (loss) available to common stockholders
|
|
|
|
|
|
|
||||||
after assumed conversion of convertible notes
|
|
$
|
373.6
|
|
|
$
|
574.5
|
|
|
$
|
481.5
|
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
||||||
Denominator for basic earnings per share -
|
|
|
|
|
|
|
||||||
weighted-average shares (a)
|
|
294,248,871
|
|
|
262,114,533
|
|
|
259,429,298
|
|
|||
Effect of dilutive securities - stock based compensation awards
|
|
1,398,329
|
|
|
1,589,286
|
|
|
1,260,094
|
|
|||
Effect of dilutive securities - convertible notes
|
|
5,368,876
|
|
|
35,683,554
|
|
|
35,689,859
|
|
|||
Denominator for diluted earnings per share -
|
|
|
|
|
|
|
||||||
adjusted weighted-average shares
|
|
|
|
|
|
|
||||||
and assumed conversion of convertible notes (a)
|
|
301,016,076
|
|
299,387,373
|
|
|
296,379,251
|
|
||||
Earnings per share: Basic
|
|
$
|
1.26
|
|
|
$
|
2.14
|
|
|
$
|
1.80
|
|
Diluted
|
|
$
|
1.24
|
|
|
$
|
1.92
|
|
|
$
|
1.62
|
|
|
|
|
|
|
|
|
||||||
Anti-dilutive common stock equivalents
|
|
|
|
|
|
|
||||||
excluded from earning per share computations:
|
|
|
|
|
|
|
||||||
Stock based compensation awards
|
|
—
|
|
|
1,380,000
|
|
|
1,676,175
|
|
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
||||||
Stock based compensation expense
|
|
$
|
3.8
|
|
|
$
|
3.5
|
|
|
$
|
3.1
|
|
Income tax benefit
|
|
$
|
.8
|
|
|
$
|
1.2
|
|
|
$
|
1.0
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Expected volatility
|
.20
|
|
|
.22
|
|
|
.26
|
|
Expected dividends
|
4.03
|
%
|
|
3.97
|
%
|
|
4.32
|
%
|
Expected term (in years)
|
7
|
|
|
7
|
|
|
7
|
|
Risk-free rate
|
2.81
|
%
|
|
2.29
|
%
|
|
1.77
|
%
|
|
As of and for the Years Ended December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
||||||||||||
Outstanding at beginning of year
|
6,565,019
|
|
|
$
|
15.76
|
|
|
8,243,025
|
|
|
$
|
15.77
|
|
|
9,875,574
|
|
|
$
|
16.60
|
|
|||
Granted
|
1,539,500
|
|
|
20.98
|
|
|
1,403,500
|
|
|
19.98
|
|
|
1,230,050
|
|
|
18.14
|
|
||||||
Exercised
|
881,917
|
|
|
12.86
|
|
|
1,337,881
|
|
|
12.65
|
|
|
619,874
|
|
|
12.18
|
|
||||||
Forfeited and expired
|
59,035
|
|
|
16.54
|
|
|
1,743,625
|
|
|
21.60
|
|
|
2,242,725
|
|
|
21.71
|
|
||||||
Outstanding at end of year
|
7,163,567
|
|
|
17.24
|
|
|
6,565,019
|
|
|
15.76
|
|
|
8,243,025
|
|
|
15.77
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Exercisable at end of year
|
4,556,350
|
|
|
$
|
15.83
|
|
|
4,228,259
|
|
|
$
|
14.42
|
|
|
6,095,111
|
|
|
$
|
15.59
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average fair value of
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
options granted during the year (a)
|
$
|
2.71
|
|
|
per share
|
|
$
|
2.81
|
|
|
per share
|
|
$
|
2.77
|
|
|
per share
|
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
|
|
|
|
|
|
Weighted - Average
|
|
|
|
Weighted
Average
Exercise
Price
|
||||||||
Exercise Prices
|
|
Year(s)
of
Grant
|
|
Number
Out-
Standing
|
|
Remaining
Contractual
Life
|
|
Exercise
Price
|
|
Number
Exercisable
|
|
|||||||
$10.48
|
|
2009
|
|
79,220
|
|
|
0.25
|
|
$
|
10.48
|
|
|
79,220
|
|
|
$
|
10.48
|
|
$12.08
|
|
2010
|
|
161,340
|
|
|
1.25
|
|
12.08
|
|
|
161,340
|
|
|
12.08
|
|
||
$12.33
|
|
2011
|
|
346,980
|
|
|
2.25
|
|
12.33
|
|
|
346,980
|
|
|
12.33
|
|
||
$10.80
|
|
2012
|
|
386,063
|
|
|
3.25
|
|
10.80
|
|
|
386,063
|
|
|
10.80
|
|
||
$12.57
|
|
2013
|
|
510,047
|
|
|
4.25
|
|
12.57
|
|
|
510,047
|
|
|
12.57
|
|
||
$16.06
|
|
2014
|
|
795,470
|
|
|
5.25
|
|
16.06
|
|
|
795,470
|
|
|
16.06
|
|
||
$15.26
|
|
2015
|
|
835,264
|
|
|
6.25
|
|
15.26
|
|
|
624,521
|
|
|
15.26
|
|
||
$18.14
|
|
2016
|
|
1,159,218
|
|
|
7.25
|
|
18.14
|
|
|
668,390
|
|
|
18.14
|
|
||
$19.98
|
|
2017
|
|
1,354,665
|
|
|
8.25
|
|
19.98
|
|
|
571,503
|
|
|
19.98
|
|
||
$20.98
|
|
2018
|
|
1,535,300
|
|
|
9.25
|
|
20.98
|
|
|
412,816
|
|
|
20.98
|
|
||
Total
|
|
|
|
7,163,567
|
|
|
|
|
$
|
17.24
|
|
|
4,556,350
|
|
|
$
|
15.83
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash received from stock option exercise
|
$
|
11.3
|
|
|
$
|
16.9
|
|
|
$
|
7.5
|
|
Intrinsic value of stock options exercised
|
7.5
|
|
|
10.5
|
|
|
3.9
|
|
|||
Actual tax benefit realized for tax deductions
from stock options exercised
|
$
|
1.5
|
|
|
$
|
3.6
|
|
|
$
|
1.3
|
|
December 31:
|
|
2018
|
|
2017
|
||||||||||||
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
3.75% Convertible Senior Notes due 2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
470.6
|
|
|
$
|
652.2
|
|
4.875% Senior Notes due 2024
|
|
396.8
|
|
|
415.6
|
|
|
396.2
|
|
|
430.3
|
|
||||
3.875% Senior Notes due 2026
|
|
545.7
|
|
|
523.3
|
|
|
545.1
|
|
|
553.9
|
|
||||
ESSOP debt
|
|
—
|
|
|
—
|
|
|
4.2
|
|
|
4.2
|
|
||||
Other miscellaneous debt
|
|
38.8
|
|
|
38.8
|
|
|
32.4
|
|
|
32.5
|
|
||||
Total debt
|
|
$
|
981.4
|
|
|
$
|
977.9
|
|
|
$
|
1,448.7
|
|
|
$
|
1,673.2
|
|
|
|
Carrying
|
|
Fair
|
|
|
||||||||||||||
|
|
Value
|
|
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018
|
|
$
|
981.4
|
|
|
$
|
977.9
|
|
|
$
|
—
|
|
|
$
|
939.0
|
|
|
$
|
38.8
|
|
December 31, 2017
|
|
$
|
1,448.7
|
|
|
$
|
1,673.2
|
|
|
$
|
—
|
|
|
$
|
1,636.5
|
|
|
$
|
36.7
|
|
|
1st
Quarter
|
|
2nd
Quarter
|
|
3rd
Quarter
|
|
4th
Quarter
|
||||||||
Year Ended December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Operating Summary:
|
|
|
|
|
|
|
|
||||||||
Net premiums, fees, and other income
|
$
|
1,361.0
|
|
|
$
|
1,450.4
|
|
|
$
|
1,535.2
|
|
|
$
|
1,478.8
|
|
Net investment income and investment gains (losses)
|
(30.6
|
)
|
|
180.2
|
|
|
244.5
|
|
|
(197.9
|
)
|
||||
Total revenues
|
1,330.4
|
|
|
1,630.7
|
|
|
1,779.7
|
|
|
1,280.9
|
|
||||
Benefits, claims, and expenses
|
1,336.4
|
|
|
1,384.0
|
|
|
1,444.6
|
|
|
1,418.5
|
|
||||
Net income (loss)
|
$
|
4.0
|
|
|
$
|
197.7
|
|
|
$
|
275.2
|
|
|
$
|
(106.5
|
)
|
Net income (loss) per share:
Basic
|
$
|
.01
|
|
|
$
|
.66
|
|
|
$
|
.92
|
|
|
$
|
(.36
|
)
|
Diluted
|
$
|
.01
|
|
|
$
|
.66
|
|
|
$
|
.92
|
|
|
$
|
(.36
|
)
|
Average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
278,116,902
|
|
299,738,944
|
|
299,006,345
|
|
299,080,914
|
||||||||
Diluted
|
279,528,034
|
|
301,075,469
|
|
300,374,004
|
|
299,080,914
|
Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Operating Summary:
|
|
|
|
|
|
|
|
||||||||
Net premiums, fees, and other income
|
$
|
1,328.6
|
|
|
$
|
1,391.0
|
|
|
$
|
1,453.9
|
|
|
$
|
1,468.3
|
|
Net investment income and investment gains (losses)
|
116.1
|
|
|
107.9
|
|
|
139.1
|
|
|
257.8
|
|
||||
Total revenues
|
1,444.8
|
|
|
1,499.0
|
|
|
1,593.0
|
|
|
1,726.2
|
|
||||
Benefits, claims, and expenses
|
1,280.1
|
|
|
1,352.7
|
|
|
1,533.3
|
|
|
1,371.5
|
|
||||
Net income (loss)
|
$
|
113.1
|
|
|
$
|
101.6
|
|
|
$
|
46.1
|
|
|
$
|
299.6
|
|
Net income (loss) per share:
Basic
|
$
|
.43
|
|
|
$
|
.39
|
|
|
$
|
.18
|
|
|
$
|
1.13
|
|
Diluted
|
$
|
.39
|
|
|
$
|
.35
|
|
|
$
|
.17
|
|
|
$
|
1.01
|
|
Average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
260,784,905
|
|
|
261,080,770
|
|
|
261,380,896
|
|
|
264,041,834
|
|
||||
Diluted
|
298,239,349
|
|
|
298,313,246
|
|
|
298,529,626
|
|
|
300,846,014
|
|
Segmented and Consolidated Results
|
||||||||||||
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
||||||
General Insurance:
|
|
|
|
|
|
|
||||||
Net premiums earned
|
|
$
|
3,277.1
|
|
|
$
|
3,110.8
|
|
|
$
|
2,936.3
|
|
Net investment income and other income
|
|
462.3
|
|
|
420.8
|
|
|
418.4
|
|
|||
Total revenues excluding investment gains (losses)
|
|
$
|
3,739.4
|
|
|
$
|
3,531.6
|
|
|
$
|
3,354.7
|
|
Segment pretax operating income (loss) (a)(c)
|
|
$
|
363.9
|
|
|
$
|
340.3
|
|
|
$
|
319.9
|
|
Income tax expense (credits) on above
|
|
$
|
62.6
|
|
|
$
|
170.6
|
|
|
$
|
94.6
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Title Insurance:
|
|
|
|
|
|
|
||||||
Net premiums earned
|
|
$
|
1,885.6
|
|
|
$
|
1,827.6
|
|
|
$
|
1,742.4
|
|
Title, escrow and other fees
|
|
450.5
|
|
|
459.5
|
|
|
464.2
|
|
|||
Sub-total
|
|
2,336.1
|
|
|
2,287.2
|
|
|
2,206.6
|
|
|||
Net investment income and other income
|
|
39.2
|
|
|
37.8
|
|
|
37.4
|
|
|||
Total revenues excluding investment gains (losses)
|
|
$
|
2,375.4
|
|
|
$
|
2,325.0
|
|
|
$
|
2,244.1
|
|
Segment pretax operating income (loss) (a)
|
|
$
|
219.3
|
|
|
$
|
237.1
|
|
|
$
|
210.2
|
|
Income tax expense (credits) on above
|
|
$
|
46.2
|
|
|
$
|
79.7
|
|
|
$
|
74.3
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
RFIG Run-off Business:
|
|
|
|
|
|
|
||||||
Net premiums earned
|
|
$
|
75.9
|
|
|
$
|
122.9
|
|
|
$
|
170.0
|
|
Net investment income and other income
|
|
20.1
|
|
|
21.7
|
|
|
23.2
|
|
|||
Total revenues excluding investment gains (losses)
|
|
$
|
96.1
|
|
|
$
|
144.6
|
|
|
$
|
193.2
|
|
Segment pretax operating income (loss) (d)
|
|
$
|
49.9
|
|
|
$
|
(73.5
|
)
|
|
$
|
69.8
|
|
Income tax expense (credits) on above
|
|
$
|
10.1
|
|
|
$
|
(77.0
|
)
|
|
$
|
24.0
|
|
|
|
|
|
|
|
|
Consolidated Revenues:
|
|
|
|
|
|
|
||||||
Total revenues of above Company segments
|
|
$
|
6,211.0
|
|
|
$
|
6,001.4
|
|
|
$
|
5,792.1
|
|
Other sources (b)
|
|
169.1
|
|
|
170.3
|
|
|
130.4
|
|
|||
Consolidated investment gains (losses):
|
|
|
|
|
|
|
||||||
Realized from actual transactions
|
|
58.2
|
|
|
211.6
|
|
|
72.8
|
|
|||
Unrealized from changes in fair value of equity securities
|
|
(293.8
|
)
|
|
—
|
|
|
—
|
|
|||
Total realized and unrealized investment gains (losses)
|
|
(235.6
|
)
|
|
211.6
|
|
|
72.8
|
|
|||
Consolidation elimination adjustments
|
|
(122.7
|
)
|
|
(120.1
|
)
|
|
(94.9
|
)
|
|||
Consolidated revenues
|
|
$
|
6,021.8
|
|
|
$
|
6,263.1
|
|
|
$
|
5,900.5
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Consolidated Pretax Income (Loss):
|
|
|
|
|
|
|
||||||
Total segment pretax operating income (loss) of
|
|
|
|
|
|
|
||||||
above Company segments
|
|
$
|
633.2
|
|
|
$
|
503.9
|
|
|
$
|
600.0
|
|
Other sources - net (b)
|
|
40.4
|
|
|
9.9
|
|
|
13.0
|
|
|||
Consolidated investment gains (losses):
|
|
|
|
|
|
|
||||||
Realized from actual transactions
|
|
58.2
|
|
|
211.6
|
|
|
72.8
|
|
|||
Unrealized from changes in fair value of equity securities
|
|
(293.8
|
)
|
|
—
|
|
|
—
|
|
|||
Total realized and unrealized investment gains (losses)
|
|
(235.6
|
)
|
|
211.6
|
|
|
72.8
|
|
|||
Consolidated income (loss) before income taxes (credits)
|
|
$
|
438.1
|
|
|
$
|
725.4
|
|
|
$
|
686.0
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
December 31:
|
|
|
|
2018
|
|
2017
|
||||
Consolidated Assets:
|
|
|
|
|
|
|
||||
General Insurance
|
|
|
|
$
|
16,411.4
|
|
|
$
|
16,055.5
|
|
Title Insurance
|
|
|
|
1,452.2
|
|
|
1,466.0
|
|
||
RFIG Run-off Business
|
|
|
|
736.7
|
|
|
805.0
|
|
||
Total assets of above company segments
|
|
|
|
18,600.3
|
|
|
18,326.6
|
|
||
Other assets (b)
|
|
|
|
1,028.9
|
|
|
1,440.9
|
|
||
Consolidation elimination adjustments
|
|
|
|
(302.2
|
)
|
|
(364.0
|
)
|
||
Consolidated assets
|
|
|
|
$
|
19,327.1
|
|
|
$
|
19,403.5
|
|
(a)
|
Segment pretax operating income (loss) is reported net of interest charges on intercompany financing arrangements with Old Republic's holding company parent for the following segments: General -
$68.0
,
$57.2
and
$51.9
for the years ended
December 31, 2018
,
2017
, and
2016
, respectively; Title -
$6.1
,
$7.8
and
$8.4
for the years ended
December 31, 2018
,
2017
, and
2016
, respectively.
|
(b)
|
Includes amounts for a small life and accident insurance business as well as those of the parent holding company and its internal corporate services subsidiaries.
|
(c)
|
General Insurance income before taxes (credits) for 2017 includes hurricane-related claim costs of
$8.0
.
|
(d)
|
RFIG Run-off segment pretax operating income (loss) for 2017 include additional claim and related expense provisions of
$130.0
. These costs apply to the final settlements and probable dispositions of all known litigated and other claim costs incurred by the Company's run-off Financial Indemnity business during the Great Recession years and their aftermath.
|
|
|
Assumed from Old Republic
|
|
Ceded to Old Republic
|
||||||||||||||||||||
Years Ended December 31:
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Premiums earned
|
|
$
|
2.3
|
|
|
$
|
3.0
|
|
|
$
|
3.8
|
|
|
$
|
.4
|
|
|
$
|
.5
|
|
|
$
|
.6
|
|
Commissions and fees
|
|
.7
|
|
|
.6
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Losses and loss expenses
|
|
(2.3
|
)
|
|
2.0
|
|
|
4.5
|
|
|
(.5
|
)
|
|
.1
|
|
|
.8
|
|
||||||
Loss and loss expense reserves
|
|
11.9
|
|
|
15.0
|
|
|
15.3
|
|
|
4.0
|
|
|
4.9
|
|
|
5.2
|
|
||||||
Unearned premiums
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
.1
|
|
|
$
|
.1
|
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
Name
|
Age
|
Position
|
Charles S. Boone
|
65
|
Senior Vice President - Investments since August 2001.
|
|
|
|
John R. Heitkamp, Jr.
|
64
|
Senior Vice President, Secretary and General Counsel since July 2014.
|
|
|
|
Karl W. Mueller
|
59
|
Senior Vice President and Chief Financial Officer since October 2004.
|
|
|
|
R. Scott Rager
|
70
|
Executive Vice Chairman of the Board since June 2018; Senior Vice President - General Insurance since July 2006.
|
|
|
|
Craig R. Smiddy
|
54
|
President and Chief Operating Office since June 2018; President and Chief Operating Officer of Old Republic General Insurance Companies since August 2015 and August 2013, respectively. Prior to joining Old Republic, Mr. Smiddy was President of the Specialty Markets Division of Munich Reinsurance America, Inc.
|
|
|
|
Rande K. Yeager
|
70
|
Senior Vice President - Title Insurance since March 2003; Chairman and Chief Executive Officer of Old Republic Title Insurance Companies since July 2010 and March 2002 respectively.
|
|
|
|
Aldo C. Zucaro
|
79
|
Chairman of the Board, Chief Executive Officer, and Director since 1993, 1990 and 1976, respectively; Chairman and Chief Executive Officer of Republic Financial Indemnity Group, Inc. since December 2013.
|
By:
|
/s/ Aldo C. Zucaro
|
02/28/19
|
|
Aldo C. Zucaro, Chairman of the Board,
|
Date
|
|
Chief Executive Officer and Director
|
|
|
|
|
By:
|
/s/ Karl W. Mueller
|
02/28/19
|
|
Karl W. Mueller, Senior Vice President,
|
Date
|
|
Chief Financial Officer, and
|
|
|
Principal Accounting Officer
|
|
/s/ Steven J. Bateman
|
|
/s/ Glenn W. Reed
|
Steven J. Bateman, Director*
|
|
Glenn W. Reed, Director*
|
/s/ Harrington Bischof
|
|
/s/ Arnold L. Steiner
|
Harrington Bischof, Director*
|
|
Arnold L. Steiner, Director*
|
/s/ Jimmy A. Dew
|
|
/s/ Fredricka Taubitz
|
Jimmy A. Dew, Director*
|
|
Fredricka Taubitz, Director*
|
/s/ John M. Dixon
|
|
/s/ Charles F. Titterton
|
John M. Dixon, Director*
|
|
Charles F. Titterton, Director*
|
/s/ Charles J. Kovaleski
|
|
/s/ Dennis P. Van Mieghem
|
Charles J. Kovaleski, Director*
|
|
Dennis P. Van Mieghem, Director*
|
/s/ Spencer LeRoy, III
|
|
/s/ Steven Walker
|
Spencer LeRoy, III, Director*
|
|
Steven Walker, Director*
|
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES
|
||||||||||||
SCHEDULE I - SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES
|
||||||||||||
As of December 31, 2018
|
||||||||||||
($ in Millions)
|
||||||||||||
|
|
|
|
|
|
|
||||||
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
||||||
|
|
|
|
|
|
|
||||||
Type of investment
|
|
Cost (1)
|
|
Fair
Value
|
|
Amount at
which shown
in balance
sheet
|
||||||
|
|
|
|
|
|
|
||||||
Available for sale:
|
|
|
|
|
|
|
||||||
Fixed maturity securities:
|
|
|
|
|
|
|
||||||
United States Government and
|
|
|
|
|
|
|
||||||
government agencies and authorities
|
|
$
|
1,401.6
|
|
|
$
|
1,391.2
|
|
|
$
|
1,391.2
|
|
Foreign government
|
|
133.7
|
|
|
133.1
|
|
|
133.1
|
|
|||
Corporate, industrial and all other
|
|
6,749.6
|
|
|
6,658.3
|
|
|
6,658.3
|
|
|||
|
|
8,285.0
|
|
|
$
|
8,182.8
|
|
|
8,182.8
|
|
||
Short-term investments
|
|
354.9
|
|
|
|
|
|
354.9
|
|
|||
Total
|
|
8,639.9
|
|
|
|
|
8,537.8
|
|
||||
Equity securities:
|
|
|
|
|
|
|
||||||
Non-redeemable preferred stocks
|
|
.6
|
|
|
$
|
1.1
|
|
|
1.1
|
|
||
Common stocks:
|
|
|
|
|
|
|
||||||
Banks, trusts and insurance companies
|
|
127.7
|
|
|
186.2
|
|
|
186.2
|
|
|||
Industrial, miscellaneous and all other
|
|
2,910.8
|
|
|
3,193.5
|
|
|
3,193.5
|
|
|||
|
|
3,039.1
|
|
|
$
|
3,380.9
|
|
|
3,380.9
|
|
||
Held to maturity:
|
|
|
|
|
|
|
||||||
Fixed maturity securities:
|
|
|
|
|
|
|
||||||
States, municipalities and political subdivisions
|
|
1,044.8
|
|
|
|
|
1,044.8
|
|
||||
Other investments
|
|
31.0
|
|
|
|
|
31.0
|
|
||||
Total Investments
|
|
$
|
12,754.9
|
|
|
|
|
$
|
12,994.6
|
|
(1)
|
Represents original cost of equity securities, and as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premium or accrual of discount.
|
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES
|
|||||||
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
|
|||||||
BALANCE SHEETS
|
|||||||
OLD REPUBLIC INTERNATIONAL CORPORATION (PARENT COMPANY)
|
|||||||
($ in Millions)
|
|||||||
|
|
|
|
||||
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets:
|
|
|
|
|
|
||
Bonds and notes
|
$
|
10.5
|
|
|
$
|
10.5
|
|
Short-term investments
|
6.2
|
|
|
272.9
|
|
||
Cash
|
5.0
|
|
|
20.0
|
|
||
Investments in, and indebtedness of related parties
|
6,276.3
|
|
|
6,365.6
|
|
||
Other assets
|
86.0
|
|
|
88.1
|
|
||
Total Assets
|
$
|
6,384.2
|
|
|
$
|
6,757.3
|
|
|
|
|
|
||||
Liabilities and Common Shareholders' Equity:
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
150.2
|
|
|
$
|
473.3
|
|
Debt and debt equivalents
|
975.0
|
|
|
1,448.7
|
|
||
Indebtedness to affiliates and subsidiaries
|
112.7
|
|
|
101.9
|
|
||
Commitments and contingent liabilities
|
|
|
|
||||
Total Liabilities
|
1,238.0
|
|
|
2,024.0
|
|
||
|
|
|
|
||||
Common Shareholders' Equity:
|
|
|
|
||||
Common stock
|
302.7
|
|
|
269.2
|
|
||
Additional paid-in capital
|
1,277.6
|
|
|
815.2
|
|
||
Retained earnings
|
3,849.8
|
|
|
3,206.9
|
|
||
Accumulated other comprehensive income (loss)
|
(210.0
|
)
|
|
474.2
|
|
||
Unallocated ESSOP shares (at cost)
|
(73.9
|
)
|
|
(32.4
|
)
|
||
Total Common Shareholders' Equity
|
5,146.2
|
|
|
4,733.3
|
|
||
Total Liabilities and Common Shareholders' Equity
|
$
|
6,384.2
|
|
|
$
|
6,757.3
|
|
See accompanying Notes to Condensed Financial Statements.
|
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES
|
|||||||||||
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
|
|||||||||||
STATEMENTS OF INCOME
|
|||||||||||
OLD REPUBLIC INTERNATIONAL CORPORATION (PARENT COMPANY)
|
|||||||||||
($ in Millions)
|
|||||||||||
|
|
|
|
|
|
||||||
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Investment income from subsidiaries
|
$
|
101.7
|
|
|
$
|
100.1
|
|
|
$
|
76.3
|
|
Real estate and other income
|
5.0
|
|
|
4.8
|
|
|
4.7
|
|
|||
Other investment income
|
2.0
|
|
|
2.0
|
|
|
.7
|
|
|||
Total revenues
|
108.9
|
|
|
107.0
|
|
|
81.7
|
|
|||
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
||||||
Interest - subsidiaries
|
2.1
|
|
|
.4
|
|
|
.3
|
|
|||
Interest - other
|
47.0
|
|
|
64.5
|
|
|
50.9
|
|
|||
Real estate and other expenses
|
4.6
|
|
|
3.8
|
|
|
4.1
|
|
|||
General expenses, taxes and fees
|
15.3
|
|
|
12.6
|
|
|
11.5
|
|
|||
Total expenses
|
69.1
|
|
|
81.5
|
|
|
66.9
|
|
|||
Revenues, net of expenses
|
39.7
|
|
|
25.4
|
|
|
14.8
|
|
|||
|
|
|
|
|
|
||||||
Federal income taxes (credits)
|
1.5
|
|
|
34.1
|
|
|
4.4
|
|
|||
Income (loss) before equity in earnings (losses) of subsidiaries
|
38.2
|
|
|
(8.6
|
)
|
|
10.4
|
|
|||
|
|
|
|
|
|
||||||
Equity in Earnings (Losses) of Subsidiaries:
|
|
|
|
|
|
||||||
Dividends received
|
412.3
|
|
|
367.4
|
|
|
317.6
|
|
|||
Earnings (losses) in excess of dividends
|
(80.0
|
)
|
|
201.7
|
|
|
138.9
|
|
|||
|
|
|
|
|
|
||||||
Net Income (Loss)
|
$
|
370.5
|
|
|
$
|
560.5
|
|
|
$
|
466.9
|
|
See accompanying Notes to Condensed Financial Statements.
|
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES
|
|||||||||||
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
|
|||||||||||
STATEMENTS OF CASH FLOWS
|
|||||||||||
OLD REPUBLIC INTERNATIONAL CORPORATION (PARENT COMPANY)
|
|||||||||||
($ in Millions)
|
|||||||||||
|
|
|
|
|
|
||||||
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
370.5
|
|
|
$
|
560.5
|
|
|
$
|
466.9
|
|
Adjustments to reconcile net income (loss) to
|
|
|
|
|
|
||||||
net cash provided by operating activities:
|
|
|
|
|
|
||||||
Accounts receivable
|
.2
|
|
|
(.1
|
)
|
|
.2
|
|
|||
Income taxes - net
|
(23.4
|
)
|
|
41.9
|
|
|
(8.5
|
)
|
|||
Excess of equity in net (income) loss
|
|
|
|
|
|
||||||
of subsidiaries over cash dividends received
|
80.0
|
|
|
(201.9
|
)
|
|
(138.9
|
)
|
|||
Accounts payable, accrued expenses and other
|
2.2
|
|
|
7.9
|
|
|
12.3
|
|
|||
Total
|
429.6
|
|
|
408.2
|
|
|
332.1
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Sale of fixed assets for company use
|
—
|
|
|
—
|
|
|
.3
|
|
|||
Net repayment (issuance) of notes to related parties
|
(114.2
|
)
|
|
7.3
|
|
|
(665.2
|
)
|
|||
Net decrease (increase) in short-term investments
|
266.6
|
|
|
(69.0
|
)
|
|
(54.9
|
)
|
|||
Investment in, and indebtedness of related parties-net
|
(104.0
|
)
|
|
(178.7
|
)
|
|
2.6
|
|
|||
Total
|
48.3
|
|
|
(240.4
|
)
|
|
(717.1
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Issuance of debentures and notes
|
—
|
|
|
—
|
|
|
576.8
|
|
|||
Net receipt (repayment) of notes and loans from related parties
|
50.7
|
|
|
17.3
|
|
|
(2.7
|
)
|
|||
Issuance of common shares
|
13.1
|
|
|
17.8
|
|
|
8.4
|
|
|||
Redemption of debentures and notes
|
(4.7
|
)
|
|
(3.9
|
)
|
|
(3.5
|
)
|
|||
Purchase of unallocated ESSOP shares
|
(50.0
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends on common shares
|
(498.8
|
)
|
|
(198.8
|
)
|
|
(193.8
|
)
|
|||
Other - net
|
(3.1
|
)
|
|
(.2
|
)
|
|
(1.5
|
)
|
|||
Total
|
(492.8
|
)
|
|
(167.8
|
)
|
|
383.5
|
|
|||
|
|
|
|
|
|
||||||
Increase (decrease) in cash
|
(14.9
|
)
|
|
—
|
|
|
(1.5
|
)
|
|||
Cash, beginning of year
|
20.0
|
|
|
19.9
|
|
|
21.4
|
|
|||
Cash, end of year
|
$
|
5.0
|
|
|
$
|
20.0
|
|
|
$
|
19.9
|
|
See accompanying Notes to Condensed Financial Statements.
|
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES
|
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
|
NOTES TO CONDENSED FINANCIAL STATEMENTS
|
($ in Millions)
|
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION
|
||||||||||||||||||||
For the Years Ended December 31, 2018, 2017 and 2016
|
||||||||||||||||||||
($ in Millions)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
|
Column F
|
||||||||||
Segment
|
|
Deferred
Policy
Acquisition
Costs
|
|
Losses,
Claims and
Settlement
Expenses
|
|
Unearned
Premiums
|
|
Other
Policyholders'
Benefits and
Funds
|
|
Premium
Revenue
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Insurance Underwriting:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
General Insurance Group
|
|
$
|
314.1
|
|
|
$
|
5,766.1
|
|
|
$
|
1,696.4
|
|
|
$
|
130.8
|
|
|
$
|
3,277.1
|
|
Title Insurance Group
|
|
—
|
|
|
533.4
|
|
|
—
|
|
|
6.3
|
|
|
1,885.6
|
|
|||||
RFIG Run-off Business
|
|
—
|
|
|
154.5
|
|
|
3.0
|
|
|
—
|
|
|
75.9
|
|
|||||
Corporate & Other (1)
|
|
2.2
|
|
|
10.8
|
|
|
—
|
|
|
44.6
|
|
|
14.6
|
|
|||||
Reinsurance Recoverable (2)
|
|
—
|
|
|
3,006.3
|
|
|
405.4
|
|
|
16.8
|
|
|
—
|
|
|||||
Consolidated
|
|
$
|
316.3
|
|
|
$
|
9,471.2
|
|
|
$
|
2,104.9
|
|
|
$
|
198.6
|
|
|
$
|
5,253.4
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Insurance Underwriting:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
General Insurance Group
|
|
$
|
294.3
|
|
|
$
|
5,471.5
|
|
|
$
|
1,597.3
|
|
|
$
|
130.2
|
|
|
$
|
3,110.8
|
|
Title Insurance Group
|
|
—
|
|
|
559.7
|
|
|
—
|
|
|
6.8
|
|
|
1,827.6
|
|
|||||
RFIG Run-off Business
|
|
—
|
|
|
271.7
|
|
|
5.1
|
|
|
—
|
|
|
122.9
|
|
|||||
Corporate & Other (1)
|
|
3.4
|
|
|
13.5
|
|
|
—
|
|
|
46.4
|
|
|
18.8
|
|
|||||
Reinsurance Recoverable (2)
|
|
—
|
|
|
2,921.1
|
|
|
369.0
|
|
|
21.1
|
|
|
—
|
|
|||||
Consolidated
|
|
$
|
297.8
|
|
|
$
|
9,237.6
|
|
|
$
|
1,971.5
|
|
|
$
|
204.7
|
|
|
$
|
5,080.2
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Insurance Underwriting:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
General Insurance Group
|
|
$
|
266.4
|
|
|
$
|
5,249.9
|
|
|
$
|
1,455.8
|
|
|
$
|
123.1
|
|
|
$
|
2,936.3
|
|
Title Insurance Group
|
|
—
|
|
|
602.0
|
|
|
—
|
|
|
7.3
|
|
|
1,742.4
|
|
|||||
RFIG Run-off Business
|
|
—
|
|
|
574.0
|
|
|
8.6
|
|
|
—
|
|
|
170.0
|
|
|||||
Corporate & Other (1)
|
|
7.5
|
|
|
13.8
|
|
|
—
|
|
|
37.9
|
|
|
20.1
|
|
|||||
Reinsurance Recoverable (2)
|
|
—
|
|
|
2,766.1
|
|
|
378.4
|
|
|
23.5
|
|
|
—
|
|
|||||
Consolidated
|
|
$
|
274.0
|
|
|
$
|
9,206.0
|
|
|
$
|
1,842.9
|
|
|
$
|
192.0
|
|
|
$
|
4,868.9
|
|
(1)
|
Includes amounts for a small life and accident insurance business as well as those of the parent holding company, its internal corporate services subsidiaries and consolidation elimination adjustments.
|
(2)
|
In accordance with GAAP, reinsured losses and unearned premiums are to be reported as assets. Assets and liabilities were, as a result, increased by corresponding amounts of approximately
$3.4 billion
,
$3.3 billion
, and
$3.1 billion
at
December 31, 2018
,
2017
and
2016
, respectively. This accounting treatment does not have any effect on the Company's results of operations.
|
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION
|
||||||||||||||||||||
For the Years Ended December 31, 2018, 2017 and 2016
|
||||||||||||||||||||
($ in Millions)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Column A
|
|
Column G
|
|
Column H
|
|
Column I
|
|
Column J
|
|
Column K
|
||||||||||
Segment
|
|
Net
Investment
Income
|
|
Benefits,
Claims,
Losses and
Settlement
Expenses
|
|
Amortization
of Deferred
Policy
Acquisition
Costs
|
|
Other
Operating
Expenses
|
|
Premiums
Written
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Insurance Underwriting:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
General Insurance Group
|
|
$
|
341.0
|
|
|
$
|
2,365.8
|
|
|
$
|
488.4
|
|
|
$
|
521.2
|
|
|
$
|
3,380.4
|
|
Title Insurance Group
|
|
38.8
|
|
|
48.3
|
|
|
—
|
|
|
2,107.7
|
|
|
1,885.6
|
|
|||||
RFIG Run-off Business
|
|
20.1
|
|
|
29.9
|
|
|
—
|
|
|
16.3
|
|
|
73.9
|
|
|||||
Corporate & Other (1)
|
|
31.7
|
|
|
16.7
|
|
|
1.2
|
|
|
(12.0
|
)
|
|
14.6
|
|
|||||
Reinsurance Recoverable (2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Consolidated
|
|
$
|
431.8
|
|
|
$
|
2,460.7
|
|
|
$
|
489.6
|
|
|
$
|
2,633.2
|
|
|
$
|
5,354.7
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Insurance Underwriting:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
General Insurance Group
|
|
$
|
318.9
|
|
|
$
|
2,234.4
|
|
|
$
|
449.9
|
|
|
$
|
506.8
|
|
|
$
|
3,245.2
|
|
Title Insurance Group
|
|
37.3
|
|
|
20.8
|
|
|
—
|
|
|
2,067.0
|
|
|
1,827.6
|
|
|||||
RFIG Run-off Business
|
|
21.7
|
|
|
197.8
|
|
|
—
|
|
|
20.3
|
|
|
118.4
|
|
|||||
Corporate & Other (1)
|
|
31.4
|
|
|
25.7
|
|
|
4.1
|
|
|
10.3
|
|
|
18.8
|
|
|||||
Reinsurance Recoverable (2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Consolidated
|
|
$
|
409.4
|
|
|
$
|
2,478.8
|
|
|
$
|
454.0
|
|
|
$
|
2,604.7
|
|
|
$
|
5,210.1
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Insurance Underwriting:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
General Insurance Group
|
|
$
|
312.1
|
|
|
$
|
2,143.1
|
|
|
$
|
389.1
|
|
|
$
|
502.4
|
|
|
$
|
3,005.3
|
|
Title Insurance Group
|
|
36.2
|
|
|
84.3
|
|
|
—
|
|
|
1,949.4
|
|
|
1,742.4
|
|
|||||
RFIG Run-off Business
|
|
23.2
|
|
|
102.6
|
|
|
—
|
|
|
20.8
|
|
|
165.6
|
|
|||||
Corporate & Other (1)
|
|
15.4
|
|
|
17.7
|
|
|
4.6
|
|
|
—
|
|
|
20.1
|
|
|||||
Reinsurance Recoverable (2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Consolidated
|
|
$
|
387.0
|
|
|
$
|
2,347.9
|
|
|
$
|
393.7
|
|
|
$
|
2,472.8
|
|
|
$
|
4,933.6
|
|
(1)
|
Includes amounts for a small life and accident insurance business as well as those of the parent holding company, its internal corporate services subsidiaries and consolidation elimination adjustments.
|
(2)
|
In accordance with GAAP, reinsured losses and unearned premiums are to be reported as assets. Assets and liabilities were, as a result, increased by corresponding amounts of approximately
$3.4 billion
,
$3.3 billion
, and
$3.1 billion
at
December 31, 2018
,
2017
and
2016
, respectively. This accounting treatment does not have any effect on the Company's results of operations.
|
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||
SCHEDULE IV - REINSURANCE
|
||||||||||||||||||
For the years ended December 31, 2018, 2017 and 2016
|
||||||||||||||||||
($ in Millions)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Column A
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
|
Column F
|
|||||||||
|
Gross
amount
|
|
Ceded
to other
companies
|
|
Assumed
from other
companies
|
|
Net
amount
|
|
Percentage
of amount
assumed
to net
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Year Ended December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|||||||||
Life insurance in force
|
$
|
3,383.2
|
|
|
$
|
1,865.4
|
|
|
$
|
—
|
|
|
$
|
1,517.7
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Premium Revenues:
|
|
|
|
|
|
|
|
|
|
|||||||||
General Insurance
|
$
|
4,534.8
|
|
|
$
|
1,313.5
|
|
|
$
|
55.8
|
|
|
$
|
3,277.1
|
|
|
1.7
|
%
|
Title Insurance
|
1,883.3
|
|
|
—
|
|
|
2.3
|
|
|
1,885.6
|
|
|
.1
|
|
||||
RFIG Run-off
|
75.9
|
|
|
—
|
|
|
—
|
|
|
75.9
|
|
|
—
|
|
||||
Life and Health Insurance:
|
|
|
|
|
|
|
|
|
|
|||||||||
Life insurance
|
11.9
|
|
|
5.0
|
|
|
—
|
|
|
6.8
|
|
|
—
|
|
||||
Accident and health insurance
|
22.3
|
|
|
14.5
|
|
|
—
|
|
|
7.8
|
|
|
—
|
|
||||
Total Life & Health Insurance
|
34.3
|
|
|
19.6
|
|
|
—
|
|
|
14.6
|
|
|
—
|
|
||||
Consolidating adjustments
|
—
|
|
|
(3.4
|
)
|
|
(3.4
|
)
|
|
—
|
|
|
—
|
|
||||
Consolidated
|
$
|
6,528.4
|
|
|
$
|
1,329.7
|
|
|
$
|
54.6
|
|
|
$
|
5,253.4
|
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|||||||||
Life insurance in force
|
$
|
4,860.6
|
|
|
$
|
2,552.5
|
|
|
$
|
—
|
|
|
$
|
2,308.0
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Premium Revenues:
|
|
|
|
|
|
|
|
|
|
|||||||||
General Insurance
|
$
|
4,307.5
|
|
|
$
|
1,246.4
|
|
|
$
|
49.7
|
|
|
$
|
3,110.8
|
|
|
1.6
|
%
|
Title Insurance
|
1,825.7
|
|
|
.2
|
|
|
2.0
|
|
|
1,827.6
|
|
|
.1
|
|
||||
RFIG Run-off
|
123.5
|
|
|
.5
|
|
|
—
|
|
|
122.9
|
|
|
—
|
|
||||
Life and Health Insurance:
|
|
|
|
|
|
|
|
|
|
|||||||||
Life insurance
|
13.3
|
|
|
6.2
|
|
|
—
|
|
|
7.1
|
|
|
—
|
|
||||
Accident and health insurance
|
26.4
|
|
|
14.7
|
|
|
—
|
|
|
11.6
|
|
|
—
|
|
||||
Total Life & Health Insurance
|
39.8
|
|
|
20.9
|
|
|
—
|
|
|
18.8
|
|
|
—
|
|
||||
Consolidating adjustments
|
—
|
|
|
(3.7
|
)
|
|
(3.7
|
)
|
|
—
|
|
|
—
|
|
||||
Consolidated
|
$
|
6,296.6
|
|
|
$
|
1,264.5
|
|
|
$
|
48.1
|
|
|
$
|
5,080.2
|
|
|
.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|||||||||
Life insurance in force
|
$
|
5,825.9
|
|
|
$
|
3,005.6
|
|
|
$
|
—
|
|
|
$
|
2,820.3
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Premium Revenues:
|
|
|
|
|
|
|
|
|
|
|||||||||
General Insurance
|
$
|
4,005.3
|
|
|
$
|
1,119.8
|
|
|
$
|
50.8
|
|
|
$
|
2,936.3
|
|
|
1.7
|
%
|
Title Insurance
|
1,740.5
|
|
|
—
|
|
|
1.9
|
|
|
1,742.4
|
|
|
.1
|
|
||||
RFIG Run-off
|
173.0
|
|
|
2.9
|
|
|
—
|
|
|
170.0
|
|
|
—
|
|
||||
Life and Health Insurance:
|
|
|
|
|
|
|
|
|
|
|||||||||
Life insurance
|
15.8
|
|
|
5.0
|
|
|
—
|
|
|
10.8
|
|
|
—
|
|
||||
Accident and health insurance
|
31.9
|
|
|
22.5
|
|
|
—
|
|
|
9.3
|
|
|
—
|
|
||||
Total Life & Health Insurance
|
47.7
|
|
|
27.5
|
|
|
—
|
|
|
20.1
|
|
|
—
|
|
||||
Consolidating adjustments
|
—
|
|
|
(7.0
|
)
|
|
(7.0
|
)
|
|
—
|
|
|
—
|
|
||||
Consolidated
|
$
|
5,966.7
|
|
|
$
|
1,143.4
|
|
|
$
|
45.7
|
|
|
$
|
4,868.9
|
|
|
.9
|
%
|
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS
|
||||||||||||||||||||
For the years ended December 31, 2018, 2017 and 2016
|
||||||||||||||||||||
($ in Millions)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||||||
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
Description
|
|
Balance at
Beginning of
Period
|
|
Charged to
Costs and
Expenses
|
|
Charged
to Other
Accounts -
Describe
|
|
Deductions -
Describe
|
|
Balance at
End of
Period
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from Asset Accounts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reserve for unrecoverable
|
|
|
|
|
|
|
|
|
|
|
||||||||||
reinsurance (1)
|
|
$
|
15.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(15.9
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from Asset Accounts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reserve for unrecoverable
|
|
|
|
|
|
|
|
|
|
|
||||||||||
reinsurance
|
|
$
|
15.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15.9
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from Asset Accounts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reserve for unrecoverable
|
|
|
|
|
|
|
|
|
|
|
||||||||||
reinsurance
|
|
$
|
15.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15.9
|
|
(1)
|
Reflects the reduction of allowances for unrecoverable reinsurance no longer deemed necessary.
|
OLD REPUBLIC INTERNATIONAL CORPORATION AND SUBSIDIARIES
|
SCHEDULE VI - SUPPLEMENTAL INFORMATION CONCERNING
|
PROPERTY-CASUALTY INSURANCE OPERATIONS
|
For the years ended December 31, 2018, 2017 and 2016
|
($ in Millions)
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Affiliation With Registrant (1)
|
|
Deferred
Policy
Acquisition
Costs
|
|
Reserves
for Unpaid
Claims
and Claim
Adjustment
Expenses (2)
|
|
Discount,
If Any,
Deducted in
Column C
|
|
Unearned
Premiums (2)
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31:
|
|
|
|
|
|
|
|
|
||||||||
2018
|
|
$
|
314.1
|
|
|
$
|
5,756.0
|
|
|
$
|
216.5
|
|
|
$
|
1,696.4
|
|
2017
|
|
294.3
|
|
|
5,495.3
|
|
|
240.7
|
|
|
1,597.3
|
|
||||
2016
|
|
266.4
|
|
|
5,443.4
|
|
|
231.9
|
|
|
1,455.8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Column A
|
|
Column F
|
|
Column G
|
|
Column H
|
||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
Net
Investment
Income
|
|
Claims and Claim
Adjustment Expenses
Incurred Related to
|
||||||||||
Affiliation With Registrant (1)
|
|
Earned
Premiums
|
|
|
Current
Year
|
|
Prior
Years
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31:
|
|
|
|
|
|
|
|
|
||||||||
2018
|
|
$
|
3,278.6
|
|
|
$
|
341.9
|
|
|
$
|
2,350.2
|
|
|
$
|
(6.4
|
)
|
2017
|
|
3,123.8
|
|
|
320.2
|
|
|
2,383.8
|
|
|
(34.5
|
)
|
||||
2016
|
|
2,952.1
|
|
|
313.3
|
|
|
2,172.5
|
|
|
2.5
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Column A
|
|
Column I
|
|
Column J
|
|
Column K
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Affiliation With Registrant (1)
|
|
Amortization
of Deferred
Policy
Acquisition
Costs
|
|
Paid
Claims
and Claim
Adjustment
Expenses
|
|
Premiums
Written
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31:
|
|
|
|
|
|
|
|
|
||||||||
2018
|
|
$
|
488.4
|
|
|
$
|
2,083.0
|
|
|
$
|
3,382.0
|
|
|
|
||
2017
|
|
449.9
|
|
|
2,297.5
|
|
|
3,257.2
|
|
|
|
|||||
2016
|
|
389.1
|
|
|
1,939.9
|
|
|
3,021.8
|
|
|
|
(1)
|
Includes consolidated property-casualty entities. The amounts relating to the Company's unconsolidated property-casualty subsidiaries and the proportionate share of the registrant's and its subsidiaries' 50%-or-less owned property-casualty equity investees are immaterial and have, therefore, been omitted from this schedule.
|
(2)
|
See note (2) to Schedule III.
|
(31.1)
|
|
|
|
|
|
|
|
(31.2)
|
|
|
|
|
|
|
|
(32.1)
|
|
|
|
|
|
|
|
(32.2)
|
|
|
|
|
|
|
|
(101.INS)
|
|
|
XBRL Instance Document
|
|
|
|
|
(101.SCH)
|
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
(101.CAL)
|
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
(101.DEF)
|
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
|
(101.LAB)
|
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
(101.PRE)
|
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
*
|
Exhibit incorporated herein by reference.
|
**
|
Denotes a management or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 601 of Regulation S-K.
|
Completed
Years of Service |
To Be Paid (Vested Interest)
|
Less than One
|
0%
|
One
|
10%
|
Two
|
20%
|
Three
|
30%
|
Four
|
40%
|
Five
|
50%
|
Six
|
60%
|
Seven
|
70%
|
Eight
|
80%
|
Nine
|
90%
|
Ten
|
100%
|
|
|
|
|
Exhibit (21)
|
Subsidiaries of the registrant (As of December 31, 2018)
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
of Voting
|
|
|
|
|
Securities
|
|
|
|
|
Owned by
|
|
|
State of
|
|
Immediate
|
Name
|
|
Organization
|
|
Parent
|
OLD REPUBLIC INTERNATIONAL CORPORATION
|
|
Delaware
|
|
---
|
Old Republic General Insurance Group, Inc.
|
|
Delaware
|
|
100%
|
BITCO Corporation
|
|
Delaware
|
|
100%
|
BITCO General Insurance Corporation
|
|
Illinois
|
|
100%
|
BITCO National Insurance Company
|
|
Illinois
|
|
100%
|
Brummel Brothers, Inc.
|
|
Illinois
|
|
100%
|
Employers General Insurance Group, Inc.
|
|
Delaware
|
|
100%
|
National General Agency, Inc.
|
|
Texas
|
|
100%
|
Inter West Assurance, Ltd.
|
|
North Carolina
|
|
100%
|
Old Republic Aerospace, Inc.
|
|
Delaware
|
|
100%
|
ORI Great West Holding, Inc.
|
|
Delaware
|
|
100%
|
Great West Casualty Company
|
|
Nebraska
|
|
100%
|
Joe Morton & Sons, Inc.
|
|
Nebraska
|
|
100%
|
Old Republic Allied Management Company
|
|
Delaware
|
|
100%
|
Old Republic Contractors Insurance Group, Inc.
|
|
Delaware
|
|
100%
|
Old Republic Contractors Insurance Agency, Inc.
|
|
California
|
|
100%
|
Old Republic Contractors Insurance Agency of New York, Inc.
|
|
New York
|
|
100%
|
Old Republic Security Assurance Company
|
|
Illinois
|
|
100%
|
Old Republic General Insurance Corporation
|
|
Illinois
|
|
100%
|
ORHP Management Company
|
|
Illinois
|
|
100%
|
Old Republic Home Protection Company, Inc.
|
|
California
|
|
100%
|
Old Republic Home Protection Services, Inc.
|
|
Illinois
|
|
100%
|
Old Republic Insurance Company
|
|
Pennsylvania
|
|
100%
|
Old Republic Lloyds of Texas
|
|
Texas
|
|
100%
|
Old Republic Mercantile Insurance Company
|
|
Vermont
|
|
100%
|
Old Republic Professional Liability, Inc.
|
|
Delaware
|
|
100%
|
Old Republic Residual Market Services, Inc.
|
|
Delaware
|
|
100%
|
Old Republic Risk Management, Inc.
|
|
Delaware
|
|
100%
|
Old Republic Security Holdings, Inc.
|
|
Delaware
|
|
100%
|
Old Republic Insured Automotive Services, Inc.
|
|
Oklahoma
|
|
100%
|
Minnehoma Automobile Association, Inc.
|
|
Florida
|
|
100%
|
Old Republic Specialty Insurance Underwriters, Inc.
|
|
Delaware
|
|
90%
|
Old Republic Specialty Insurance Company, IC
|
|
Vermont
|
|
100%
|
Old Republic Surety Group, Inc.
|
|
Delaware
|
|
100%
|
Old Republic Surety Company
|
|
Wisconsin
|
|
100%
|
Old Republic Union Insurance Company
|
|
Illinois
|
|
100%
|
PMA Companies, Inc.
|
|
Pennsylvania
|
|
100%
|
Pennsylvania Manufacturers Association Insurance Company
|
|
Pennsylvania
|
|
100%
|
Pennsylvania Manufacturers Indemnity Company
|
|
Pennsylvania
|
|
100%
|
Manufacturers Alliance Insurance Company
|
|
Pennsylvania
|
|
100%
|
PMA Holdings, Ltd.
|
|
Bermuda
|
|
100%
|
Pennsylvania Manufacturers International Insurance, Ltd.
|
|
Bermuda
|
|
100%
|
Mid Atlantic States Investment Company
|
|
Delaware
|
|
100%
|
PMA Insurance SPC
|
|
Cayman Islands
|
|
100%
|
PMA Management Corp.
|
|
Pennsylvania
|
|
100%
|
PMA Management Corp. of New England, Inc.
|
|
Connecticut
|
|
100%
|
Reliable Canadian Holdings, Ltd.
|
|
Federal (Canada)
|
|
100%
|
D.I.S.C.C. Enterprise, Ltd.
|
|
British Columbia (Canada)
|
|
100%
|
Old Republic Canadian Holdings, Ltd.
|
|
Federal (Canada)
|
|
100%
|
Reliable Life Insurance Company
|
|
Federal (Canada)
|
|
100%
|
Old Republic Insurance Company of Canada
|
|
Federal (Canada)
|
|
100%
|
|
|
|
|
Exhibit (21)
|
Subsidiaries of the registrant (As of December 31, 2018)
|
|
|
|
|
|
|
|
|
Percentage
|
|
|
|
|
of Voting
|
|
|
|
|
Securities
|
|
|
|
|
Owned by
|
|
|
State of
|
|
Immediate
|
Name
|
|
Organization
|
|
Parent
|
Old Republic Title Insurance Group, Inc.
|
|
Delaware
|
|
100%
|
Old Republic National Title Holding Company
|
|
Delaware
|
|
100%
|
Old Republic Title Insurance Companies, Inc.
|
|
Delaware
|
|
100%
|
American Guaranty Title Insurance Company
|
|
Oklahoma
|
|
100%
|
Mississippi Valley Title Insurance Company
|
|
Mississippi
|
|
100%
|
Old Republic National Title Insurance Company
|
|
Florida
|
|
100%
|
Old Republic Title Companies, Inc.
|
|
Delaware
|
|
100%
|
Old Republic Eastern Title, Inc.
|
|
Delaware
|
|
100%
|
Compass Abstract, Inc.
|
|
Pennsylvania
|
|
100%
|
Genesis Abstract, LLC
|
|
Pennsylvania
|
|
32%
|
Old Republic Title Company of Tennessee
|
|
Tennessee
|
|
100%
|
Sentry Abstract Company
|
|
Pennsylvania
|
|
100%
|
The Title Company of North Carolina
|
|
North Carolina
|
|
100%
|
Troon Management Corporation
|
|
Pennsylvania
|
|
100%
|
Old Republic National Commercial Title Services, Inc.
|
|
Delaware
|
|
100%
|
L.T. Service Corp.
|
|
New York
|
|
100%
|
Lex Terrae, Ltd.
|
|
New York
|
|
100%
|
Lex Terrae National Title Services, Inc.
|
|
New Jersey
|
|
100%
|
Old Republic Central Title, Inc.
|
|
Delaware
|
|
100%
|
American First Title & Trust Company
|
|
Oklahoma
|
|
100%
|
Lenders Inspection Company
|
|
Oklahoma
|
|
80%
|
Old Republic Title Company of Conroe
|
|
Texas
|
|
58%
|
Old Republic Title Company of Indiana
|
|
Indiana
|
|
100%
|
Old Republic Title Company of Oklahoma
|
|
Oklahoma
|
|
100%
|
Old Republic Title Company of St. Louis, Inc.
|
|
Missouri
|
|
100%
|
Old Republic Western Title, Inc.
|
|
California
|
|
100%
|
Old Republic Title Holding Company, Inc.
|
|
California
|
|
100%
|
Mara Escrow Company
|
|
California
|
|
100%
|
Old Republic Title and Escrow of Hawaii, Ltd.
|
|
Hawaii
|
|
100%
|
Old Republic Title Company
|
|
California
|
|
100%
|
Old Republic Title Company of Nevada
|
|
Nevada
|
|
100%
|
Old Republic Title Company of Oregon
|
|
Oregon
|
|
100%
|
Old Republic Title Information Concepts
|
|
California
|
|
100%
|
Old Republic Title Insurance Agency, Inc.
|
|
Arizona
|
|
100%
|
Old Republic Title, Ltd.
|
|
Delaware
|
|
100%
|
5.
|
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):
|
5.
|
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):
|
(1)
|
the yearly report on Form 10-K of the Company for the year ended December 31, 2018 (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
|
(2)
|
the information contained in the Report fairly presents the financial condition and results of operations of the Company.
|
(1)
|
the yearly report on Form 10-K of the Company for the year ended December 31, 2018 (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
|
(2)
|
the information contained in the Report fairly presents the financial condition and results of operations of the Company.
|