Old Republic 3Q Earnings Fall 75 Percent
October 25, 2007
CHICAGO (AP) -- Insurance provider Old Republic International Corp. said Thursday net income plummeted 75 percent due to operating losses in the company's mortgage guaranty and title insurance businesses.
Net income fell to $29.2 million, or 12 cents per share, from $116.1 million, or 50 cents per share, during the same quarter a year ago.
Analysts polled by Thomson Financial, on average, forecast earnings of 39 cents per share for the quarter.
Both the mortgage guaranty and title insurance businesses were significantly weakened by the downturn in the housing market. With fewer homes being sold, volume declined in both businesses.
Old Republic posted an $83 million pretax loss in the third quarter in its mortgage guaranty business, after posting earnings of $58.1 million in the division during the same quarter a year ago.
Rising claims also added to losses in the mortgage guaranty business. Composite ratio for the mortgage guaranty business was 176.9, compared with a ratio of 64.2 during the same quarter last year. Composite ratio measures the amount of expenses and claims an insurer pays out compared to underwriting premiums. A ratio above 100 means the insurer paid out more in claims and expenses that it generated underwriting insurance.
Title insurance operations accounted for a $3.3 million pretax loss, after posting earnings of $10.9 million during the third quarter last year. Old Republic's title insurance composite ratio was 104.3, up from 98.2 during the same quarter a year ago.
Overall, net premiums earned rose to $921.1 million in the quarter, from $869.2 million earned during the same quarter last year.
Coopyright 2007 Associated Press