Insurer Old Republic's Q3 net premiums rise, helped by acquisition

Overview

• US specialty insurer's Q3 net premiums and fees earned rose 8.8% yr/yr

• Q3 net operating income per diluted share fell 6% yr/yr

• Company returned $190.2 mln to shareholders, including $113.8 mln in share repurchases

Outlook

• Company targets Specialty Insurance combined ratios between 90% and 95% over a full underwriting cycle

• Old Republic aims for Title Insurance combined ratios between 90% and 95% over a full underwriting cycle

• Company says Title Insurance segment continues to face a difficult real estate environment

Result Drivers

• PREMIUM GROWTH - Co said Q3 net premiums earned rose due to premium rate increases, new business production, and acquisition of ECM Insurance Group

• UNDERWRITING RATIOS - Specialty Insurance segment loss ratios increased due to lower favorable prior year loss reserve development, partially offset by improved current year loss ratios

• EXPENSES - Co said expense ratios reflect investments in start-up operating companies, IT modernization, data and analytics, and higher personnel costs

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the property & casualty insurance peer group is "hold."

• Wall Street's median 12-month price target for Old Republic International Corporation is $39.00, about 2.8% below its October 21 closing price of $40.13

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 12 three months ago

Reuters Recommended Reads

• Oct 19 - RLI Q3 revenue beats estimates on underwriting performance

• Oct 19 - W.R. Berkley Q3 revenue falls more than expected

• Oct 20 - Social inflation deepens pressure on US liability insurers: AM Best

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)