Old Republic International NYSE: ORI reported first-quarter 2026 consolidated pre-tax operating income of $211.5 million, down from $252.7 million a year earlier, as underwriting results in its Specialty Insurance segment moderated and the company continued to invest in technology and new operating companies.
President and CEO Craig Smiddy said the company’s consolidated combined ratio was 96.6% for the quarter, compared to 93.7% in the prior-year period. Operating return on beginning equity was 11.5%, and book value per share growth including dividends was 2.6% during the quarter.
Operating results and capital actions
Chief Financial Officer Frank Sodaro said net operating income was $171 million, compared to $202 million in the first quarter of 2025. On a per-share basis, the company reported $0.68 versus $0.81 a year earlier.
Net investment income increased just over 4% year over year, which Sodaro attributed to “a larger investment base and higher yields on the bond portfolio.” He said corporate bonds acquired during the quarter averaged 4.7% versus about 3.8% rolling off, while the total bond portfolio book yield was “fairly steady” at about 4.75% at quarter-end. Looking ahead, Sodaro said the company expects net investment income growth to remain in the “low to mid-single digits throughout the rest of 2026” given the interest rate environment.
Old Republic ended the quarter with book value per share of $24.53. Sodaro said the company paid nearly $77 million in dividends and repurchased $161 million of shares during the quarter. After quarter-end, the company repurchased an additional $52 million in shares, leaving about $640 million remaining under its current repurchase authorization.
Reserve development and underwriting trends
Both Specialty and Title recognized favorable prior-year reserve development, though at a lower level than a year ago. Sodaro said favorable development in the quarter provided a 1.5 percentage point benefit to the consolidated loss ratio, compared with a 2.6 point benefit in the first quarter of 2025.
Within Specialty Insurance, Sodaro said property “continued to have favorable development and led the way” with a slightly higher level than last year. Commercial auto and workers’ compensation both posted favorable development, but at lower levels than the prior-year quarter. General liability, he said, had “a moderate amount of unfavorable development” spanning several recent accident years, partially offset by favorable development in older years.
Specialty Insurance: growth, rates, and expense pressure
Smiddy said Specialty Insurance net premiums earned increased 4.7% year over year, while pre-tax operating income fell to $209 million from $260 million. The segment’s combined ratio rose to 94.8% from 89.8%.
Specialty net premiums written rose 3.4% in the quarter, driven by strong rate increases in commercial auto and general liability, some new business, and growth in newer specialty operating companies. Those gains were “partially offset by a decline in our renewal retention ratios as we continue to prioritize rate in certain lines of coverage,” Smiddy said.
Smiddy said Old Republic is “leading the market specifically within commercial auto by driving mid-teen rate increases.” In commercial auto, net premiums written increased just over 1%, while the loss ratio was 70.4%, roughly flat with the prior-year quarter. Smiddy said rate increases remained steady with the fourth quarter at roughly 16%, which he described as in line with loss trends.
In workers’ compensation, net written premiums also increased just over 1%. The loss ratio was 62.3% versus 58.7% a year ago, which Smiddy said was “mostly” due to differences in favorable prior-year development. He said workers’ compensation rate decreases were about 2%, while severity was “relatively consistent” and frequency continued to trend downward.
On expenses, Specialty’s expense ratio increased to 31.2% from 28.1% a year earlier. Smiddy attributed the increase to investments in new specialty operating companies and initiatives including “technology modernization, data and analytics, and AI.” He told analysts the company remains confident those investments will provide “significant long-term upside,” but acknowledged the timeline varies. He said some newer operating companies may reach scale in one to two years, while others could take two to three years.
On technology modernization, Smiddy said about half of the Specialty group’s 20 operating companies are undergoing core system modernization. He noted that accounting rules require certain early-stage costs to be expensed, while later in the process—when systems are ready for production—costs can be capitalized and amortized. Sodaro added core systems are typically amortized over about 10 years.
Asked about the expense ratio outlook, Smiddy said it is difficult to provide a firm forecast because results depend heavily on premium levels. However, he said that if premium growth stays in the 3% to 5% range for the rest of the year, “an expense ratio that is at or below where we came in the first quarter is reasonable.”
Smiddy also discussed competitive dynamics in commercial auto, citing pressure on renewal retention as Old Republic continues to demand rate increases aligned with severity trends. He said some competitors are “willing to write commercial auto at levels that will ultimately be unprofitable,” and pointed to industry issues tied to “Legal System Abuse” as a key driver of the need for continued rate.
Operationally, Smiddy said the company formed a new operating company, Old Republic Property, led by Patrick Hagerty, targeting “very selective property placements.” The company also rebranded Lodestar Claims and Risk Services as a standalone operation focused on growing fee income. Smiddy added that Old Republic expects to close its ECM acquisition “around July 1st,” which he said should contribute to results in the second half of 2026.
Title Insurance: commercial strength and margin efforts
Old Republic’s Title Insurance Group reported premium and fee revenue of $678 million, up 12% from the first quarter of 2025. The segment produced pre-tax operating income of $16.7 million, up from $4.3 million, and improved its combined ratio to 100% from 102%.
Carolyn Monroe, President and CEO of Old Republic National Title Insurance Group, said 2026 began with “continued strong commercial activity,” while the first quarter remained seasonally slow for residential. She said the start of the 2026 home buying season featured higher inventory, lower interest rates, and moderating price growth compared with 2025, although interest rates spiked late in the quarter amid uncertainty and inflation concerns before easing slightly in April.
Direct title premiums increased 6% year over year, while agency-produced premiums rose 14% and represented nearly 80% of revenues, up from 78% a year ago. Monroe said commercial premiums increased and represented 27% of earned premiums, compared with 24% in the first quarter of 2025.
Monroe said the Title business entered into a new excess-of-loss reinsurance agreement to expand capacity for large commercial deals. In response to an analyst question, Smiddy and Monroe cited rising opportunities in areas such as data centers, energy production facilities, and large portfolio projects. Monroe said the reinsurance agreement was intended to help the company “feel a little more comfortable” taking on larger risks, particularly in states where policy limits are more discretionary.
In underwriting, Monroe said the Title loss ratio improved to 2.6%, including 1.1 percentage points of favorable prior-year development, compared with 2.7% a year earlier (including 0.8 points of favorable development). The expense ratio improved nearly two points to 97.5% from 99.4%.
While the Title combined ratio remains elevated at 100%, Monroe said the improvement reflects higher revenues and ongoing margin expansion efforts. She said the company remains focused on operational efficiency, providing agents with fraud prevention and technology tools, continuing the rollout of a new operating platform across title operations, and enhancing its commercial structure to handle elevated transaction volumes.
In closing remarks, Smiddy said Specialty fundamentals remain strong despite top-line and expense pressure, and that Title is positioned for an eventual improvement in residential real estate while continuing to reduce expenses. “We’re optimistic that things will continue to progress along as planned and we’ll continue to deliver solid profitability to our shareholders,” he said.
About Old Republic International NYSE: ORI
Old Republic International Corporation, through its subsidiaries, engages in the insurance underwriting and related services business primarily in the United States and Canada. It operates through three segments: General Insurance, Title Insurance, and Republic Financial Indemnity Group Run-off Business. The General Insurance segment offers aviation, commercial auto, commercial multi-peril, commercial property, general liability, home and auto warranty, inland marine, travel accident, and workers' compensation insurance products; and financial indemnity products for specialty coverages, including errors and omissions, fidelity, directors and officers, and surety.
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