Insurer Old Republic International (ORI 0.07%) saw its share price slump on an otherwise bullish Thursday for the stock market. The decline was triggered by the company's latest quarterly earnings release, which many investors found to be lackluster.
Underwhelming underwriting
That morning, Old Republic reported fourth-quarter revenue of $2.39 billion, up 19% year over year. Net operating income, i.e. that not in accordance with generally accepted accounting principles (GAAP) went in the opposite direction. It fell to slightly under $185 million ($0.74 per share), compared to the fourth-quarter 2024 profit of $227 million.
Image source: Getty Images.
On average, analysts were modeling $2.31 billion for revenue, and $0.87 per share for non-GAAP (adjusted) net income.
Over that one-year stretch, Old Republic's combined ratio -- a key indicator of an insurer's underwriting success, as it essentially compares premiums earned with incurred losses plus operating expenses -- rose to 96% from the year-ago figure of 92.7%. That's seen as a negative, since a lower number indicates higher underwriting profitability.
Of the company's three reporting segments, specialty insurance saw a significant decline in underwriting income, falling to just over $37 million from nearly $101 million in the 2024 fourth quarter. Compounding that, the corporate and other unit's underwriting loss deepened to $15 million from a deficit of slightly over $8 million.
The increased take for title insurance -- to over $47 million from $39 million -- couldn't compensate for the slides in the other businesses.
NYSE: ORI
Key Data Points
Not a great start to 2026
The difference in the overall combined ratio and the dramatic changes in underwriting income (or loss) in those two segments are concerning, and investors were justified in reacting negatively to Old Republic's numbers. While I don't think the quarter was a catastrophe for the company, it'll almost surely need to improve those figures to bring investors back to the stock.
