OLD REPUBLIC INTERNATIONAL CORP - Quarter Report: 2022 June (Form 10-Q)



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM			10-Q


☒	Quarterly report pursuant to section 13 or 15(d) of the Security Exchange Act of 1934
	for the quarterly period ended:	June 30, 2022
or
☐	Transition report pursuant to section 13 or 15(d) of the Security Exchange Act of 1934


Commission File Number:			001-10607


OLD REPUBLIC INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)


Delaware						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)

(Zip Code)

Registrant's telephone number, including area code: 312-346-8100

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock / $1 par value

ORI

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes: ☒ No: ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes: ☒ No: ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).Yes: ☐ No: ☒

The number of shares of the Registrant's Common Stock outstanding at June 30, 2022 was 308,937,054.

There are 44 pages in this report


OLD REPUBLIC INTERNATIONAL CORPORATION

Report on Form 10-Q / June 30, 2022

INDEX



		PAGE NO.

PART I	FINANCIAL INFORMATION:

	CONSOLIDATED BALANCE SHEETS	3

	CONSOLIDATED STATEMENTS OF INCOME	4

	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	5

	CONSOLIDATED STATEMENTS OF PREFERRED STOCK AND COMMON
	SHAREHOLDERS' EQUITY	6

	CONSOLIDATED STATEMENTS OF CASH FLOWS	7

	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	8 - 17

	MANAGEMENT ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS	18 - 40

	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	41

	CONTROLS AND PROCEDURES	41

PART II	OTHER INFORMATION:

	ITEM 1 - LEGAL PROCEEDINGS	42

	ITEM 1A - RISK FACTORS	42

	ITEM 6 - EXHIBITS	42

SIGNATURE		43

EXHIBIT INDEX		44


Old Republic International Corporation and Subsidiaries
Consolidated Balance Sheets
($ in Millions, Except Share Data)
	(Unaudited)
	June 30,		December 31,
	2022		2021
Assets
Investments:
Available for sale:
Fixed income securities (at fair value) (amortized cost: $11,500.8 and $10,438.6)	$	10,914.1	$	10,675.7
Short-term investments (at fair value which approximates cost)	736.9		565.7
Total	11,651.1		11,241.4
Equity securities (at fair value) (cost: $2,937.1 and $3,766.5)	4,182.4		5,302.8
Other investments	31.2		32.0
Total Investments	15,864.9		16,576.3
Other Assets:
Cash	100.8		158.1
Accrued investment income	94.1		84.4
Accounts and notes receivable	2,096.0		1,768.7
Federal income tax recoverable: Current	19.6		11.8


Reinsurance balances and funds held	351.1		258.1
Reinsurance recoverable: Paid losses	140.0		118.2
Policy and loss reserves	5,411.0		4,825.1
Deferred policy acquisition costs	372.6		350.4
Sundry assets	844.8		830.3
Total Other Assets	9,430.5		8,405.5
Total Assets	$	25,295.4	$	24,981.8
Liabilities, Preferred Stock, and Common Shareholders' Equity
Liabilities:
Loss and loss adjustment expense reserves	$	11,905.4	$	11,425.5
Unearned premiums	2,937.3		2,559.4
Other policyholders' benefits and funds	192.4		192.6
Total policy liabilities and accruals	15,035.2		14,177.5
Commissions, expenses, fees, and taxes	512.5		573.5
Reinsurance balances and funds	1,177.3		866.0

Federal income tax payable: Deferred	17.2		249.5
Debt	1,594.5		1,588.5
Sundry liabilities	565.3		633.3
Total Liabilities	18,902.2		18,088.6
Preferred Stock (1)	—		—
Common Shareholders' Equity:
Common stock (1)	308.9		307.5
Additional paid-in capital	1,395.9		1,376.1
Retained earnings	5,341.0		5,214.0
Accumulated other comprehensive income (loss)	(576.0)		78.0
Unallocated ESSOP shares (at cost)	(76.6)		(82.5)
Total Common Shareholders' Equity	6,393.1		6,893.2
Total Liabilities, Preferred Stock and Common Shareholders' Equity	$	25,295.4	$	24,981.8

________

(1) At June 30, 2022 and December 31, 2021, 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 308,937,054 and 307,565,632 were issued as of June 30, 2022 and December 31, 2021, respectively. At June 30, 2022 and December 31, 2021, there were 100,000,000 shares of Class B Common Stock, $1.00 par value, authorized, of which no shares were issued.

See accompanying Notes to Consolidated Financial Statements.


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
($ in Millions, Except Share Data)
	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Revenues:
Net premiums earned	$	1,887.4	$	1,868.5	$	3,716.1	$	3,600.7
Title, escrow, and other fees	94.8		118.7		185.1		225.4
Total premiums and fees	1,982.3		1,987.3		3,901.3		3,826.2
Net investment income	107.8		107.6		214.1		211.9
Other income	37.6		37.8		73.9		74.1
Total operating revenues	2,127.8		2,132.8		4,189.4		4,112.4
Net investment gains (losses):
Realized from actual transactions and impairments	53.2		1.0		118.5		8.9
Unrealized from changes in fair value of
equity securities	(370.7)		119.9		(290.9)		487.4
Total realized and unrealized investment
gains (losses)	(317.4)		120.9		(172.3)		496.4
Total revenues	1,810.3		2,253.7		4,017.0		4,608.8

Expenses:
Loss and loss adjustment expenses	635.6		615.8		1,240.1		1,213.8
Dividends to policyholders	3.0		9.1		6.5		14.5
Underwriting, acquisition, and other expenses	1,209.6		1,220.6		2,408.7		2,330.9
Interest and other charges	16.6		12.1		33.6		22.8
Total expenses	1,865.0		1,857.7		3,688.9		3,582.2
Income (loss) before income taxes (credits)	(54.6)		396.0		328.0		1,026.6

Income Taxes (Credits):
Current	60.2		46.6		123.3		97.4
Deferred	(74.6)		32.9		(61.4)		110.6
Total	(14.4)		79.5		61.9		208.0

Net Income (Loss)	$	(40.1)	$	316.4	$	266.1	$	818.5

Net Income (Loss) Per Share:
Basic	$	(.13)	$	1.06	$	.88	$	2.73
Diluted	$	(.13)	$	1.05	$	.87	$	2.72

Average shares outstanding: Basic	303,793,432		299,934,621		303,695,113		299,831,932
Diluted	303,793,432		302,328,012		305,312,529		301,381,955

See accompanying Notes to Consolidated Financial Statements.


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Unaudited)
($ in Millions)
	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Net Income (Loss) As Reported	$	(40.1)	$	316.4	$	266.1	$	818.5

Other comprehensive income (loss):
Unrealized gains (losses) on securities not included
in the statements of income:
Unrealized gains (losses) before reclassifications,
not included in the statements of income	(356.1)		61.4		(889.4)		(180.9)
Amounts reclassified as realized investment (gains)
losses in the statements of income	38.6		(.6)		60.4		(1.0)
Pretax unrealized gains (losses) on securities not
included in the statements of income	(317.4)		60.7		(829.0)		(182.0)
Deferred income taxes (credits)	(66.9)		12.7		(175.0)		(38.4)
Net unrealized gains (losses) on securities not included
in the statements of income, net of tax	(250.4)		47.9		(654.0)		(143.6)
Defined benefit pension plans:
Net pension adjustment before reclassifications	—		—		—		—
Amounts reclassified as underwriting, acquisition,
and other expenses in the statements of income	.7		1.8		1.5		3.6
Pretax net adjustment related to defined benefit
pension plans	.7		1.8		1.5		3.6
Deferred income taxes (credits)	.1		.3		.3		.7
Net adjustment related to defined benefit pension
plans, net of tax	.6		1.4		1.2		2.9
Foreign currency translation adjustment	(5.5)		4.0		(1.3)		7.0
Total other comprehensive income (loss)	(255.3)		53.4		(654.1)		(133.6)
Comprehensive Income (Loss)	$	(295.5)	$	369.8	$	(388.0)	$	684.9

See accompanying Notes to Consolidated Financial Statements.


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Preferred Stock
and Common Shareholders' Equity (Unaudited)
($ in Millions)
	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Preferred Stock:
Balance, beginning and end of period	$	—	$	—	$	—	$	—

Common Stock:
Balance, beginning of period	$	308.3	$	304.7	$	307.5	$	304.1
Dividend reinvestment plan	—		—		—		—
Stock based compensation	.6		.9		1.3		1.5
Balance, end of period	$	308.9	$	305.7	$	308.9	$	305.7

Additional Paid-in Capital:
Balance, beginning of period	$	1,391.3	$	1,318.9	$	1,376.1	$	1,306.9
Dividend reinvestment plan	.2		.2		.5		1.4


Stock based compensation	3.1		16.8		16.4		27.1
ESSOP shares released	1.3		1.5		2.9		2.1
Other - net	(.1)		—		(.1)		—
Balance, end of period	$	1,395.9	$	1,337.6	$	1,395.9	$	1,337.6

Retained Earnings:
Balance, beginning of period	$	5,450.8	$	4,831.4	$	5,214.0	$	4,394.8


Net income (loss)	(40.1)		316.4		266.1		818.5
Dividends on common shares (1)	(69.6)		(65.7)		(139.1)		(131.2)
Balance, end of period	$	5,341.0	$	5,082.1	$	5,341.0	$	5,082.1

Accumulated Other Comprehensive Income (Loss):
Balance, beginning of period	$	(320.7)	$	96.9	$	78.0	$	284.0
Net unrealized gains (losses) on securities not included in the
statements of income, net of tax	(250.4)		47.9		(654.0)		(143.6)
Net adjustment related to defined benefit pension plans,
net of tax	.6		1.4		1.2		2.9
Foreign currency translation adjustment	(5.5)		4.0		(1.3)		7.0

Balance, end of period	$	(576.0)	$	150.4	$	(576.0)	$	150.4

Unallocated ESSOP Shares:
Balance, beginning of period	$	(79.6)	$	(100.3)	$	(82.5)	$	(103.2)
ESSOP shares released	2.9		2.9		5.9		5.9

Balance, end of period	$	(76.6)	$	(97.3)	$	(76.6)	$	(97.3)

________

(1) Cash dividends per common share of $.23 and $.22 were declared for the quarters ended June 30, 2022 and 2021, respectively, and $.46 and $.44 were declared for the comparative six month periods.

See accompanying Notes to Consolidated Financial Statements.


Old Republic International Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
($ in Millions)
	Six Months Ended
	June 30,
	2022		2021
Cash flows from operating activities:
Net income (loss)	$	266.1	$	818.5
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Deferred policy acquisition costs	(22.1)		(18.3)
Premiums and other receivables	(327.2)		(234.7)
Loss and loss adjustment expense reserves	166.9		205.3
Unearned premiums and other policyholders' liabilities	104.6		46.1
Income taxes	(65.4)		89.0

Reinsurance balances and funds	196.4		168.7
Realized investment (gains) losses from actual transactions	(118.5)		(8.9)
Unrealized investment (gains) losses from changes in fair value
of equity securities	290.9		(487.4)
Accounts payable, accrued expenses and other	(88.4)		(62.7)
Total	403.2		515.4

Cash flows from investing activities:
Fixed income securities:
Maturities and early calls	732.5		740.6
Sales	372.4		168.3
Sales of:
Equity securities	1,045.8		197.7
Other investments	5.1		4.8

Purchases of:
Fixed income securities	(2,250.1)		(1,086.2)
Equity securities	(37.7)		(850.5)
Other investments	(24.8)		(30.2)
Net decrease (increase) in short-term investments	(171.2)		115.7
Other - net	(7.0)		—
Total	(335.0)		(739.6)

Cash flows from financing activities:
Issuance of debentures and notes	—		642.5
Issuance of common shares	14.4		27.5
Redemption of debentures and notes	—		(19.5)

Dividends on common shares (including a special dividend paid in January
2021 of $304.0)	(139.0)		(435.3)
Other - net	(.9)		(.6)
Total	(125.5)		214.7

Increase (decrease) in cash	(57.3)		(9.4)
Cash, beginning of period	158.1		118.7
Cash, end of period	$	100.8	$	109.2

Supplemental cash flow information:
Cash paid (received) during the period for: Interest	$	32.9	$	20.4
Income taxes	$	128.0	$	119.2

See accompanying Notes to Consolidated Financial Statements.


OLD REPUBLIC INTERNATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
($ in Millions, Except Share Data)

Note 1 - Summary of Significant Accounting Policies

Accounting Principles - The accompanying consolidated financial statements have been prepared in conformity with the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") of accounting principles generally accepted in the United States of America ("GAAP"). These interim financial statements should be read in conjunction with these notes and those included in the Company's 2021 Annual Report on Form 10-K incorporated herein by reference. The financial accounting and reporting process relies on estimates and on the exercise of judgment. In the opinion of management all adjustments consisting only of normal recurring accruals necessary for a fair presentation of interim periods' results and financial position have been recorded. Pertinent accounting and disclosure pronouncements issued from time to time by the FASB are adopted by the Company as they become effective.

Statement Presentation - Amounts shown in the consolidated financial statements and applicable notes are stated (except as otherwise indicated and as to share data) in millions, which amounts may not add to totals shown due to truncation. Reclassifications are made in prior periods' financial statements whenever appropriate to conform to the most current presentation.

Investments - The Company classifies its fixed income securities, also referred to as fixed maturity securities, as those it either (1) has the intent and ability to hold until maturity, (2) has available for sale or (3) has the intention of trading. The Company's entire fixed income portfolio is classified as available for sale.

Fixed income securities classified as available for sale are reported at fair value with changes in such values, net of deferred income taxes, reflected directly in shareholders' equity. Equity securities are reported at fair value with changes in such values reflected as unrealized investment gains (losses) in the consolidated statements of income. Fair values are based on quoted market prices or estimates using values obtained from recognized independent pricing services.

The status and fair value changes of each of the fixed income investments are reviewed at least once per quarter to assess whether a decline in fair value of an investment below its cost basis is the result of a credit loss. Credit losses are recorded through an allowance with the corresponding charge to realized investment gains (losses). If the Company intends to sell or is more likely than not required to sell a security, the asset is written down to fair value directly through realized investment gains (losses).

Investment income is reported net of allocated expenses and includes appropriate adjustments for amortization of premium and accretion of discount on fixed income securities acquired at other than par value. Dividends on equity securities are credited to income on the ex-dividend date. At June 30, 2022, the Company and its subsidiaries did not have significant amounts of non-income producing fixed income or equity securities.

Investment gains and losses, which result from sales or write downs of securities, are reflected as revenues in the income statement and are determined on the basis of amortized cost at date of sale for fixed income securities, and cost in regard to equity securities; such bases apply to the specific securities sold.

Revenue Recognition - Pursuant to GAAP applicable to the insurance industry, revenues are recognized as follows:

Substantially all general insurance premiums pertain to annual policies and are reflected in income on a pro-rata basis in association with the related loss and loss adjustment expenses.

Title premium and fee revenues stemming from the Company's direct operations (which include branch offices of its title insurers and wholly owned agency subsidiaries) represent approximately 21% of 2022 consolidated title business revenues. Such premiums are generally recognized as income at the escrow closing date which approximates the policy effective date. Fee income related to escrow and other closing services is recognized when the related services have been performed and completed. The remaining title premium and fee revenues are produced by independent title agents. Rather than making estimates that could be subject to significant variance from actual premium and fee production, the Company recognizes revenues from those sources upon receipt. Such receipts can reflect a three to four month lag relative to the effective date of the underlying title policy, and are offset concurrently by production expenses and loss reserve provisions.

Loss and Loss Adjustment Expenses - The establishment of loss reserves by the Company's insurance subsidiaries is a reasonably complex and dynamic process influenced by a large variety of factors. These factors principally include past experience applicable to the anticipated costs of various types of claims, continually evolving and changing legal theories emanating from the judicial system, recurring accounting, statistical, and actuarial studies, the professional experience and expertise of the Company's claim departments' personnel or attorneys and independent claim adjusters, ongoing changes in claim frequency or severity patterns such as those caused by natural disasters, illnesses, accidents, work-related injuries, and changes in general and industry-specific economic conditions. Consequently, the reserves established are a reflection of the opinions of a large number of persons, of the application and interpretation of historical precedent and trends, of expectations as to future developments, and of management's judgment in interpreting all such factors. At any point in time, the Company is exposed to the possibility of higher or lower than anticipated loss costs due to all of these factors, and to the evolution, interpretation, and

expansion of tort law, as well as the effects of unexpected jury verdicts.

All reserves are therefore based on estimates which are periodically reviewed and evaluated in the light of emerging loss experience and changing circumstances. The resulting changes in estimates are recorded in operations of the periods during which they are made. Return and additional premiums and policyholders' dividends, all of which tend to be affected by development of losses in future years, may offset, in whole or in part, favorable or unfavorable loss developments for certain coverages such as workers' compensation, portions of which are written under loss sensitive programs that provide for such adjustments. Management believes that its overall reserving practices have been consistently applied over many years, and that its aggregate net reserves have generally resulted in reasonable approximations of the ultimate net costs of losses incurred. However, no representation is made nor is any guaranty given that ultimate net losses and related costs will not develop in future years to be significantly greater or lower than currently established reserve estimates.

The Company’s accounting policy regarding the establishment of loss reserve estimates is described in Note 1 to the consolidated financial statements included in Old Republic’s 2021 Annual Report on Form 10-K. Certain loss related financial statement captions and disclosures reflect minor wording changes when compared to the Company's 2021 Annual Report on Form 10-K.

Employee Benefit Plans - The Company has a closed pension plan (the "Plan") for certain employees under which benefits were frozen as of December 31, 2013. The underfunded status of the Plan is recognized as a net pension liability with offsetting entries reflected as a component of shareholders' equity in accumulated other comprehensive income, net of deferred taxes.

The Company also provides long-term incentive awards to certain employees. In March 2022, the Compensation Committee of the Company's Board of Directors approved the grant of stock-based awards to certain employees under the 2022 Incentive Compensation Plan which received shareholder approval in May 2022.

Note 2 - Investments

The amortized cost and estimated fair values by type and contractual maturity of fixed income securities are shown in the following tables. Expected maturities will differ from contractual maturities since borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Fixed Income Securities by Type:
June 30, 2022:
U.S. & Canadian Governments	$	2,233.8	$	.9	$	74.0	$	2,160.6
Tax-exempt	908.1		1.6		5.7		904.0
Corporate	8,358.9		9.2		518.7		7,849.4
	$	11,500.8	$	11.8	$	598.5	$	10,914.1

December 31, 2021:
U.S. & Canadian Governments	$	2,121.6	$	44.8	$	7.9	$	2,158.5
Tax-exempt	944.9		44.3		—		989.2
Corporate	7,372.1		220.0		64.2		7,527.9
	$	10,438.6	$	309.2	$	72.2	$	10,675.7


	Amortized Cost		Estimated Fair Value
Fixed Income Securities Stratified by Contractual Maturity at June 30, 2022:
Due in one year or less	$	1,243.8	$	1,241.5
Due after one year through five years	5,739.1		5,614.3
Due after five years through ten years	4,451.5		3,994.5
Due after ten years	66.2		63.6
	$	11,500.8	$	10,914.1

The following table reflects the Company's gross unrealized losses and fair value, aggregated by category and length of time that individual securities have been in an unrealized loss position. Fair value and issuer's cost comparisons follow:


	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2022:

Fixed Income Securities:
U.S. & Canadian Governments	$	1,601.4	$	39.7	$	435.2	$	34.3	$	2,036.6	$	74.0
Tax-exempt	578.2		5.7		—		—		578.2		5.7
Corporate	5,738.1		335.3		992.3		183.3		6,730.4		518.7
	$	7,917.8	$	380.7	$	1,427.5	$	217.7	$	9,345.4	$	598.5

Number of securities in
unrealized loss position			1,413				222				1,635

December 31, 2021:

Fixed Income Securities:
U.S. & Canadian Governments	$	761.8	$	6.2	$	43.2	$	1.6	$	805.0	$	7.9
Corporate	2,032.8		55.5		174.1		8.7		2,207.0		64.2
	$	2,794.7	$	61.8	$	217.3	$	10.3	$	3,012.0	$	72.2

Number of securities in
unrealized loss position			419				32				451

In the above tables the unrealized losses on fixed income securities are primarily deemed to reflect changes in the interest rate environment. As part of its assessment of credit losses, the Company considers its intent and ability to continue to hold the securities until cost recovery, principally in consideration of its asset and liability maturity matching objectives. Net realized investment gains (losses) in the second quarter and first six months of 2022 included $2.5 of losses on fixed income securities for which the Company no longer intends to hold until recovery. No such losses were recognized during the same periods of 2021. The Company recorded no allowance for credit losses as of June 30, 2022, and December 31, 2021.

The following table shows cost and fair value information for equity securities:


	Equity Securities
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2022	$	2,937.1	$	1,289.2	$	43.9	$	4,182.4
December 31, 2021	$	3,766.5	$	1,620.8	$	84.5	$	5,302.8

During the second quarter and first six months of 2022 and 2021, the Company recognized pretax unrealized investment gains (losses) of $(370.7) and $(290.9), respectively for 2022, and $119.9 and $487.4, respectively for 2021, emanating from changes in the fair value of equity securities in the consolidated statements of income. Changes in the fair value of equity securities still held at June 30, 2022 and 2021 were $(292.4) and $(154.6) for the second quarter and first six months of 2022, respectively, and $119.9 and $479.7 for the second quarter and first six months of 2021, respectively.

Fair Value Measurements - Fair value is defined as the estimated price that is likely to be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date. A fair value hierarchy is established that prioritizes the sources ("inputs") used to measure fair value into three broad levels: Level 1 inputs are based on quoted market prices in active markets; Level 2 observable inputs are based on corroboration with available market data; and Level 3 unobservable inputs are based on uncorroborated market data or a reporting entity's own assumptions. Following is a description of the valuation methodologies and general classification used for financial instruments measured at fair value.

The Company uses quoted values and other data provided by a nationally recognized independent pricing source as inputs into its quarterly process for determining fair values of fixed income and equity securities. To validate the techniques or models used by pricing sources, the Company's review process includes, but is not limited to: (i) initial and ongoing evaluation of methodologies used by outside parties to calculate fair value; and (ii) comparisons with other sources including the fair value estimates based on current market quotations, and with independent fair value estimates provided by the independent investment custodian. The independent pricing source obtains market quotations and actual transaction prices for securities that have quoted prices in active markets and uses their own proprietary method for determining the fair value of securities that are not actively traded. In general, these methods involve the use of "matrix pricing" in which the independent pricing source uses observable market inputs including,

but not limited to, investment yields, credit risks and spreads, benchmarking of like securities, broker-dealer quotes, reported trades and sector groupings to determine a reasonable fair value.

Level 1 securities include U.S. and Canadian Treasury notes, publicly traded common stocks, mutual funds, and short-term investments in highly liquid money market instruments. Level 2 securities generally include corporate bonds, municipal bonds, and certain U.S. and Canadian government agency securities. Securities classified within Level 3 include non-publicly traded bonds and equity securities. There were no significant changes in the fair value of Level 3 assets as of June 30, 2022 and December 31, 2021.

The following tables show a summary of the fair value of financial assets segregated among the various input levels described above:


	Fair Value Measurements
As of June 30, 2022:	Level 1		Level 2		Level 3		Total
Available for sale:
Fixed income securities:
U.S. & Canadian Governments	$	1,521.0	$	639.6	$	—	$	2,160.6
Tax-exempt	—		904.0		—		904.0
Corporate	—		7,838.9		10.5		7,849.4
Short-term investments	736.9		—		—		736.9
Equity securities	$	4,180.6	$	—	$	1.7	$	4,182.4

As of December 31, 2021:
Available for sale:
Fixed income securities:
U.S. & Canadian Governments	$	1,453.8	$	704.6	$	—	$	2,158.5
Tax-exempt	—		989.2		—		989.2
Corporate	—		7,517.4		10.5		7,527.9
Short-term investments	565.7		—		—		565.7
Equity securities	$	5,300.8	$	—	$	1.9	$	5,302.8

There were no transfers between Levels 1, 2 or 3 during the quarter ended June 30, 2022.

The following table reflects the composition of net investment income, net realized gains or losses, and the net change in unrealized investment gains or losses for each of the periods shown.


	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Investment income:
Fixed income securities	$	73.3	$	72.6	$	139.6	$	142.4
Equity securities	35.3		35.4		76.9		71.6
Short-term investments	1.1		—		1.2		—
Other sources	.5		.7		.8		.7
Gross investment income	110.4		108.9		218.5		214.9
Investment expenses	2.5		1.3		4.4		2.9
Net investment income	$	107.8	$	107.6	$	214.1	$	211.9

Net investment gains (losses):
Realized from actual transactions:
Fixed income securities:
Gains	$	.1	$	1.0	$	.1	$	1.6
Losses	(37.5)		(.3)		(59.3)		(.5)
Net	(37.4)		.6		(59.1)		1.0
Equity securities:
Gains	106.6		.3		220.1		36.7
Losses	(14.6)		—		(41.1)		(28.8)
Net	91.9		.3		179.0		7.8
Other investments, net	1.2		—		1.2		—
Total realized from actual transactions	55.8		1.0		121.1		8.9
From impairments	(2.5)		—		(2.5)		—
From unrealized changes in fair value of equity securities	(370.7)		119.9		(290.9)		487.4
Total realized and unrealized investment gains (losses)	(317.4)		120.9		(172.3)		496.4
Current and deferred income taxes (credits)	(67.0)		25.4		(36.4)		105.0
Net of tax realized and unrealized investment gains (losses)	$	(250.4)	$	95.5	$	(135.9)	$	391.3

Changes in unrealized investment gains (losses)
reflected directly in shareholders' equity:
Fixed income securities	$	(314.6)	$	60.2	$	(822.0)	$	(180.8)
Less: Deferred income taxes (credits)	(66.3)		12.6		(173.5)		(38.1)
	(248.2)		47.6		(648.4)		(142.6)

Other investments	(2.8)		.4		(7.0)		(1.2)
Less: Deferred income taxes (credits)	(.5)		—		(1.4)		(.2)
	(2.2)		.3		(5.5)		(.9)
Net changes in unrealized investment gains (losses),
net of tax	$	(250.4)	$	47.9	$	(654.0)	$	(143.6)

Note 3 - Loss and Loss Adjustment Expenses

The following table shows changes in aggregate reserves for the Company's loss and loss adjustment expenses:


	Six Months Ended
	June 30,
	2022		2021
Gross reserves at beginning of period	$	11,425.5	$	10,671.0
Less: reinsurance losses recoverable	4,125.3		3,650.5
Net reserves at beginning of period:
General Insurance	6,587.0		6,328.0
Title Insurance	594.2		556.1
RFIG Run-off	111.2		127.6
Other	7.6		8.6
Sub-total	7,300.2		7,020.4
Incurred loss and loss adjustment expenses:
Provisions for insured events of the current year:
General Insurance	1,238.7		1,191.6
Title Insurance	72.8		75.9
RFIG Run-off	7.3		7.9
Other	4.8		5.9
Sub-total	1,323.8		1,281.5
Change in provision for insured events of prior years:
General Insurance	(46.8)		(48.2)
Title Insurance	(14.4)		(13.5)
RFIG Run-off	(19.7)		(3.3)
Other	(2.1)		(2.3)
Sub-total	(83.1)		(67.4)
Total incurred loss and loss adjustment expenses	1,240.6		1,214.0
Payments:
Loss and loss adjustment expenses attributable to
insured events of the current year:
General Insurance	291.5		276.5
Title Insurance	2.2		2.6
RFIG Run-off	—		—
Other	2.2		3.0
Sub-total	296.1		282.2
Loss and loss adjustment expenses attributable to
insured events of prior years:
General Insurance	734.5		688.5
Title Insurance	34.1		27.8
RFIG Run-off	7.9		8.7
Other	.9		1.1
Sub-total	777.5		726.2
Total payments	1,073.6		1,008.5
Net reserves at end of period:
General Insurance	6,752.7		6,506.3
Title Insurance	616.2		588.1
RFIG Run-off	91.0		123.4
Other	7.1		8.0
Sub-total	7,467.2		7,226.0
Reinsurance losses recoverable	4,438.2		3,949.2
Gross reserves at end of period	$	11,905.4	$	11,175.2

For the six months ended June 30, 2022, all operating segments experienced favorable loss reserve development. General Insurance favorable development continued in the commercial auto and workers' compensation lines of coverage. This was partially offset by unfavorable development in the financial indemnity (which includes public company D&O) line of coverage, stemming from large security class action claims activity occurring

from accident years 2018 and 2019. Favorable development experienced from Title Insurance occurred largely within the 2017-2019 accident years, while RFIG Run-off was driven by positive trends in delinquency cure rates.

Note 4 - Income Taxes

Tax positions taken or expected to be taken in a tax return by the Company are recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. To the best of management's knowledge, there are no tax uncertainties that are expected to result in significant increases or decreases to unrecognized tax benefits within the next twelve month period. The Company views its income tax exposures as primarily consisting of timing differences whereby the ultimate deductibility of a taxable amount is highly certain but the timing of its deductibility is uncertain. The Company classifies interest and penalties as income tax expense in the consolidated statement of income. The Company is not currently under audit by the IRS and 2018 and subsequent tax years remain open.

Note 5 - Net Income Per Share

Consolidated basic earnings per share excludes the dilutive effect of common stock equivalents and is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares actually outstanding for the periods presented. Diluted earnings per share are similarly calculated with the inclusion of dilutive common stock equivalents. The following table provides a reconciliation of net income (loss) and the number of shares used in basic and diluted earnings per share calculations.


	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Numerator:
Basic and diluted earnings per share -
income (loss) available to common stockholders	$	(40.1)	$	316.4	$	266.1	$	818.5



Denominator:
Basic earnings per share -
weighted-average shares (a)	303,793,432		299,934,621		303,695,113		299,831,932
Effect of dilutive securities - stock based
compensation awards	—		2,393,391		1,617,416		1,550,023
Diluted earnings per share -
adjusted weighted-average shares (a)	303,793,432		302,328,012		305,312,529		301,381,955
Earnings per share: Basic	$	(.13)	$	1.06	$	.88	$	2.73
Diluted	$	(.13)	$	1.05	$	.87	$	2.72

Anti-dilutive common stock equivalents
excluded from earnings per share computations:
Stock based compensation awards	10,876,599		—		2,670,000		350,000

__________

(a) In calculating earnings per share, pertinent accounting standards require that common shares owned by the Company's Employee Savings and Stock Ownership Plan that are not yet allocated to participants in the plan be excluded from the calculation. Such shares are issued and outstanding, and have the same voting and other rights applicable to all common shares.

Note 6 - Credit Losses

Credit losses on financial assets measured at amortized cost, primarily the Company’s reinsurance recoverables and accounts and notes receivable, are recognized based on estimated losses expected to occur over the life of the asset. The expected credit losses, and subsequent adjustment to such losses, are recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the asset presented on the consolidated balance sheets.

The Company’s credit allowance was comprised of $16.0 related to reinsurance recoverables as of both June 30, 2022 and December 31, 2021, and $25.7 and $24.1 related to accounts and notes receivable, as of June 30, 2022 and December 31, 2021, respectively.

The Company’s evaluation of credit allowances on available for sale fixed income securities is discussed further in Note 2. The Company is not exposed to material concentrations of credit risks as to any one issuer of investment securities.

Note 7 - Debt

Consolidated debt of Old Republic and its subsidiaries is summarized below:


	June 30, 2022				December 31, 2021
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes:
4.875% issued in 2014 and due 2024	$	398.7	$	407.0	$	398.4	$	435.8
3.875% issued in 2016 and due 2026	547.6		536.4		547.3		597.0
3.850% issued in 2021 and due 2051	642.7		493.0		642.6		702.9
Other miscellaneous debt	5.3		5.3		—		—
Total debt	$	1,594.5	$	1,441.8	$	1,588.5	$	1,735.7

Fair Value Measurements - The Company utilizes indicative market prices, which incorporate recent actual market transactions and current bid/ask quotations to estimate the fair value of outstanding debt securities that are classified within Level 2 of the fair value hierarchy as presented below. The Company used an internally generated interest yield market matrix table, which incorporates maturity, coupon rate, credit quality, structure and current market conditions to estimate the fair value of its outstanding debt securities that were classified within Level 3.

The following table shows a summary of financial liabilities disclosed, but not carried at fair value, segregated among the various input levels described in Note 3 above:


	Carrying		Fair
	Value		Value		Level 1		Level 2		Level 3
Financial Liabilities:
Debt:
June 30, 2022	$	1,594.5	$	1,441.8	$	—	$	1,436.5	$	5.3
December 31, 2021	$	1,588.5	$	1,735.7	$	—	$	1,735.7	$	—

Note 8 - Commitments and Contingent Liabilities

Legal Proceedings - Legal proceedings against the Company and its subsidiaries routinely arise in the normal course of business and usually pertain to claim matters related to insurance policies and contracts issued by its insurance subsidiaries. At June 30, 2022, the Company had no material non-claim litigation exposures in its consolidated business.

Note 9 - Information About Segments of Business

The Company is engaged in the single business of insurance underwriting and related services. It conducts its operations through a number of regulated insurance company subsidiaries organized into three major segments: General Insurance (property and liability insurance), Title Insurance and the Republic Financial Indemnity Group ("RFIG") Run-off. The results of a small life and accident insurance business are included within the Corporate & Other caption of this report. Old Republic's business is managed for the long run. In this context management's key objectives are to achieve highly profitable operating results over the long term, and to ensure balance sheet strength for the primary needs of the insurance subsidiaries' underwriting and related services business. In this view, the evaluation of periodic and long-term results excludes consideration of all investment gains (losses). Under GAAP, however, net income, inclusive of investment gains (losses), is the measure of total profitability. In management's opinion, the focus on income excluding investment gains (losses), also described herein as segment pretax operating income (loss), provides a better way to analyze, evaluate, and establish accountability for the results of the insurance operations. The inclusion of realized investment gains (losses) in net income can mask trends in operating results, because such realizations are often highly discretionary. Similarly, the inclusion of unrealized investment gains (losses) in equity securities can further distort such operating results with significant period-to-period fluctuations. The contributions of Old Republic's insurance industry segments to consolidated totals are shown in the following table.


	Quarters Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
General Insurance:
Net premiums earned	$	943.5	$	867.2	$	1,854.5	$	1,726.3
Net investment income and other income	121.0		124.7		239.4		245.6
Total revenues excluding investment gains (losses)	$	1,064.5	$	991.9	$	2,094.0	$	1,972.0
Segment pretax operating income (loss) (a)	$	137.9	$	123.4	$	280.4	$	264.2
Income tax expense (credits)	$	27.3	$	23.5	$	55.0	$	50.9

Title Insurance:
Net premiums earned	$	935.3	$	990.0	$	1,844.0	$	1,851.0
Title, escrow and other fees	94.8		118.7		185.1		225.4
Sub-total	1,030.2		1,108.8		2,029.2		2,076.5
Net investment income and other income	11.4		11.3		22.9		22.1
Total revenues excluding investment gains (losses)	$	1,041.6	$	1,120.2	$	2,052.1	$	2,098.7
Segment pretax operating income (loss) (a)	$	109.5	$	138.9	$	190.5	$	242.6
Income tax expense (credits)	$	23.2	$	29.1	$	40.1	$	51.0

RFIG Run-off:
Net premiums earned	$	6.0	$	8.5	$	12.6	$	17.7
Net investment income and other income	1.5		2.9		3.6		6.1
Total revenues excluding investment gains (losses)	$	7.6	$	11.4	$	16.2	$	23.8
Segment pretax operating income (loss)	$	12.2	$	7.5	$	22.0	$	12.4
Income tax expense (credits)	$	2.5	$	1.4	$	4.5	$	2.3


Consolidated Revenues:
Total revenues of Company segments	$	2,113.8	$	2,123.6	$	4,162.4	$	4,094.6
Other sources (b)	48.2		36.7		93.6		71.8
Consolidated investment gains (losses):
Realized from actual transactions and impairments	53.2		1.0		118.5		8.9
Unrealized from changes in fair value of equity securities	(370.7)		119.9		(290.9)		487.4
Total realized and unrealized investment gains (losses)	(317.4)		120.9		(172.3)		496.4
Consolidation elimination adjustments	(34.2)		(27.5)		(66.7)		(54.0)
Consolidated revenues	$	1,810.3	$	2,253.7	$	4,017.0	$	4,608.8

Consolidated Pretax Income (Loss):
Total segment pretax operating income (loss) of
Company segments	$	259.8	$	269.8	$	493.1	$	519.3
Other sources - net (b)	3.0		5.1		7.3		10.8
Consolidated investment gains (losses):
Realized from actual transactions and impairments	53.2		1.0		118.5		8.9
Unrealized from changes in fair value of equity securities	(370.7)		119.9		(290.9)		487.4
Total realized and unrealized investment gains (losses)	(317.4)		120.9		(172.3)		496.4
Consolidated income (loss) before income
taxes (credits)	$	(54.6)	$	396.0	$	328.0	$	1,026.6





Consolidated Income Tax Expense (Credits):
Total income tax expense (credits)
of Company segments	$	53.1	$	54.1	$	99.7	$	104.2
Other sources - net (b)	(.5)		—		(1.3)		(1.3)
Income tax expense (credits) on consolidated realized
and unrealized investment gains (losses)	(67.0)		25.4		(36.4)		105.0
Consolidated income tax expense (credits)	$	(14.4)	$	79.5	$	61.9	$	208.0


	June 30,		December 31,
	2022		2021
Consolidated Assets:
General Insurance	$	21,017.3	$	20,660.9
Title Insurance	2,076.3		2,234.2
RFIG Run-off	421.4		516.4
Total assets of company segments	23,515.1		23,411.6
Other assets (b)	1,970.8		1,716.3
Consolidation elimination adjustments	(190.5)		(146.1)
Consolidated assets	$	25,295.4	$	24,981.8

(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 - $16.5 and $32.6 compared to $15.9 and $31.8 for the quarters and six months ended June 30, 2022 and 2021, respectively, and Title - $.3 and $.8 compared to $.4 and $.9 for the quarters and six months ended June 30, 2022 and 2021, respectively.

(b) Includes amounts for a small life and accident insurance business as well as those of the parent holding company and several internal corporate services subsidiaries.

OLD REPUBLIC INTERNATIONAL CORPORATION

MANAGEMENT ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

Six Months Ended June 30, 2022 and 2021

($ in Millions, Except Share Data)


OVERVIEW

This management analysis of financial position and results of operations pertains to the consolidated accounts of Old Republic International Corporation ("Old Republic", "ORI", or "the Company"). The Company conducts its operations through a number of regulated insurance company subsidiaries organized into three major segments: General Insurance (property and liability insurance), Title Insurance and Republic Financial Indemnity Group ("RFIG") Run-off. A small life and accident insurance business, accounting for .1% of consolidated operating revenues for the six months ended June 30, 2022 and .5% of consolidated assets as of that date, is included within the Corporate & Other caption of this report.

The consolidated accounts are presented in conformity with the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") of accounting principles generally accepted in the United States of America ("GAAP"). As a publicly held company, Old Republic utilizes GAAP to comply with the financial reporting requirements of the Securities and Exchange Commission ("SEC"). From time to time the FASB and the SEC issue various releases, many of which require additional financial statement disclosures and provide related application guidance. Recent guidance issued by the FASB is summarized further in the Notes to Consolidated Financial Statements where applicable.

As a state regulated financial institution vested with the public interest, however, business of the Company's insurance subsidiaries is managed pursuant to the laws, regulations, and accounting practices of the various states in the U.S. and those of a small number of other jurisdictions outside the U.S. in which they operate. In comparison with GAAP, the statutory accounting practices generally reflect greater conservatism and comparability among insurers, and are intended to address the primary financial security interests of policyholders and their beneficiaries. Additionally, these practices also affect a significant number of important factors such as product pricing, risk bearing capacity and capital adequacy, the determination of Federal income taxes payable currently among ORI's tax-consolidated entities, and the upstreaming of dividends by insurance subsidiaries to the parent holding company. The major differences between these statutory financial accounting practices and GAAP are summarized in Note 1 to the consolidated financial statements included in Old Republic's 2021 Annual Report on Form 10-K.

The insurance business is distinguished from most others in that the prices (premiums) charged for most products are set without knowing what the ultimate loss costs will be. We also can't know exactly when claims will be paid, which may be many years after a policy was issued or expired. This casts Old Republic as a risk-taking enterprise managed for the long run. Old Republic therefore conducts the business with a primary focus on achieving favorable underwriting results over cycles, and on maintaining a sound financial condition to support our subsidiaries' long-term obligations to policyholders and their beneficiaries. To achieve these objectives, adherence to insurance risk management principles is stressed, and asset diversification and quality are emphasized. In addition, management engages in an ongoing assessment of operating risks, such as cybersecurity risks, that could adversely affect the Company's business and reputation.

In addition to income arising from Old Republic's basic underwriting and related services functions, significant investment income is earned from invested funds generated by those functions and from capital resources. Investment management aims for stability of income from interest and dividends, protection of capital, and for sufficiency of liquidity to meet insurance underwriting and other obligations as they become payable in the future. Securities trading and the realization of capital gains are not primary objectives. The investment philosophy is therefore best characterized as emphasizing value, credit quality, and relatively long-term holding periods. The Company's ability to hold both fixed income and equity securities for long periods of time is enabled by the scheduling of maturities in contemplation of an appropriate matching of assets and liabilities, and by investments in large capitalization, highly liquid equity securities.

In light of the above factors, the Company is managed for the long run and with little regard for quarterly or even annual reporting periods. These time frames are too short. Management believes results are best evaluated by looking at underwriting and overall operating performance trends over 10-year intervals. These likely include one or two economic and/or underwriting cycles. This provides enough time for these cycles to run their course, for underwriting and premium rate changes to appear in financial results, and for reserved loss costs to be quantified with greater certainty.

This management analysis should be read in conjunction with the consolidated financial statements and the footnotes appended to them.


EXECUTIVE SUMMARY

Old Republic International Corporation reported the following consolidated results:


OVERALL RESULTS

	Quarters Ended June 30,								Six Months Ended June 30,
	2022			2021			% Change		2022			2021			% Change
Pretax income (loss)	$	(54.6)		$	396.0				$	328.0		$	1,026.6
Pretax investment gains (losses)	(317.4)			120.9					(172.3)			496.4
Pretax income (loss) excluding investment gains (losses)	$	262.8		$	275.0		(4.4)	%	$	500.4		$	530.2		(5.6)	%

Net income (loss)	$	(40.1)		$	316.4				$	266.1		$	818.5
Net of tax investment gains (losses)	(250.4)			95.5					(135.9)			391.3
Net income (loss) excluding investment gains (losses)	$	210.2		$	220.9		(4.8)	%	$	402.0		$	427.2		(5.9)	%

Combined ratio	90.9		%	90.6		%			91.4		%	90.8		%

PER DILUTED SHARE

	Quarters Ended June 30,								Six Months Ended June 30,
	2022			2021			% Change		2022			2021			% Change
Net income (loss)	$	(.13)		$	1.05				$	.87		$	2.72
Net of tax investment gains (losses)	(.82)			.32					(.45)			1.30
Net income (loss) excluding investment gains (losses)	$	.69		$	.73		(5.5)	%	$	1.32		$	1.42		(7.0)	%

SHAREHOLDERS' EQUITY (BOOK VALUE)

									June 30,			Dec. 31,
									2022			2021			% Change
Total									$	6,393.1		$	6,893.2		(7.3)	%
Per Common Share									$	20.99		$	22.76		(7.8)	%

Old Republic International Corporation reported pretax income, excluding investment gains (losses), of $262.8 for the quarter and $500.4 for the first six months of 2022. The decline compared to the 2021 periods is within expectations, with General Insurance pretax operating income increasing nearly 12%, while the effect of increasing mortgage interest rates reduced Title Insurance results. Both General Insurance and Title Insurance produced solid underwriting results that drove a consolidated combined ratio of 90.9% and 91.4% for the quarter and first six months of 2022, respectively.

Consolidated net premiums and fees earned were relatively consistent for the quarter, with General Insurance net earned premiums growing 8.8%, offset by a 7.1% decline in Title Insurance net premiums and fees as a result of lower revenues in both direct and agency operations. For the first six months, consolidated net premiums and fees earned were up 2.0%, reflecting growth in General Insurance of 7.4%, partially offset by a 2.3% decline in Title Insurance. Net investment income increased slightly in both 2022 periods, reflecting growth in the invested asset base, offset by lower investment yields earned.

Book value per share was $20.99 as of June 30, 2022, reflecting declining fair market values in both the fixed income and equity portfolios, partially offset by operating earnings. With the addition of dividends declared during the first six months, this was a decrease of 5.8% over year-end 2021.

Old Republic's business is managed for the long run. In this context management's key objectives are to achieve highly profitable operating results over the long term, and to ensure balance sheet strength for the primary needs of the insurance subsidiaries' underwriting and related services business. In this view, the evaluation of periodic and long-term results excludes consideration of all investment gains (losses). Under Generally Accepted Accounting Principles (GAAP), however, net income, inclusive of investment gains (losses), is the measure of total profitability.

In management's opinion, the focus on income excluding investment gains (losses), also described herein as segment pretax operating income (loss), provides a better way to analyze, evaluate, and establish accountability for the results of the insurance operations. The inclusion of realized investment gains (losses) in net income can mask trends in operating results, because such realizations are often highly discretionary. Similarly, the inclusion of unrealized investment gains (losses) in equity securities can further distort such operating results with significant period-to-period fluctuations.


FINANCIAL HIGHLIGHTS
	Quarters Ended June 30,						Six Months Ended June 30,
SUMMARY INCOME STATEMENTS:	2022		2021		% Change		2022		2021		% Change
Revenues:
Net premiums and fees earned	$	1,982.3	$	1,987.3	(0.2)	%	$	3,901.3	$	3,826.2	2.0	%
Net investment income	107.8		107.6		0.2		214.1		211.9		1.0
Other income	37.6		37.8		(0.5)		73.9		74.1		(0.3)
Total operating revenues	2,127.8		2,132.8		(0.2)		4,189.4		4,112.4		1.9
Investment gains (losses):
Realized from actual transactions and impairments	53.2		1.0				118.5		8.9

Unrealized from changes in fair value of equity securities	(370.7)		119.9				(290.9)		487.4
Total investment gains (losses)	(317.4)		120.9				(172.3)		496.4
Total revenues	1,810.3		2,253.7				4,017.0		4,608.8
Operating expenses:
Loss and loss adjustment expenses	638.6		624.9		2.2		1,246.6		1,228.3		1.5
Sales and general expenses	1,209.6		1,220.6		(0.9)		2,408.7		2,330.9		3.3
Interest and other charges	16.6		12.1		37.1		33.6		22.8		47.3
Total operating expenses	1,865.0		1,857.7		0.4	%	3,688.9		3,582.2		3.0	%
Pretax income (loss)	(54.6)		396.0				328.0		1,026.6
Income taxes (credits)	(14.4)		79.5				61.9		208.0
Net income (loss)	$	(40.1)	$	316.4			$	266.1	$	818.5


COMMON STOCK STATISTICS:
Components of net income (loss) per share:
Basic net income (loss) excluding investment gains (losses)	$	0.69	$	0.74	(6.8)	%	$	1.32	$	1.43	(7.7)	%
Net investment gains (losses):
Realized from actual transactions and impairments	0.14		—				0.31		0.02
Unrealized from changes in fair value of equity securities	(0.96)		0.32				(0.75)		1.28
Basic net income (loss)	$	(0.13)	$	1.06			$	0.88	$	2.73
Diluted net income (loss) excluding investment gains (losses)	$	0.69	$	0.73	(5.5)	%	$	1.32	$	1.42	(7.0)	%
Net investment gains (losses):
Realized from actual transactions and impairments	0.14		—				0.30		0.02
Unrealized from changes in fair value of equity securities	(0.96)		0.32				(0.75)		1.28
Diluted net income (loss)	$	(0.13)	$	1.05			$	0.87	$	2.72
Cash dividends on common stock	$	0.23	$	0.22			$	0.46	$	0.44
Book value per share							$	20.99	$	22.59	(7.1)	%

We believe the information presented in the following table highlights the most meaningful indicators of ORI's segmented and consolidated financial performance. The information underscores the performance of our underwriting operations, as well as our sound investment of the capital and underwriting cash flows from these operations.


Sources of Consolidated Income (Loss)
	Quarters Ended June 30,								Six Months Ended June 30,
	2022			2021			% Change		2022			2021			% Change
Net premiums and fees earned:
General insurance	$	943.5		$	867.2		8.8	%	$	1,854.5		$	1,726.3		7.4	%
Title insurance	1,030.2			1,108.8			(7.1)		2,029.2			2,076.5			(2.3)
RFIG run-off	6.0			8.5			(29.1)		12.6			17.7			(29.0)
Corporate & other	2.4			2.7			(8.7)		4.9			5.5			(11.0)
Consolidated	$	1,982.3		$	1,987.3		(0.2)	%	$	3,901.3		$	3,826.2		2.0	%

Underwriting and related services income (loss):
General insurance	$	70.9		$	52.4		35.4	%	$	147.3		$	124.3		18.5	%
Title insurance	98.7			128.6			(23.3)		168.9			222.5			(24.1)
RFIG run-off	10.6			4.6			132.5		18.4			6.3			190.2
Corporate & other	(8.7)			(6.0)			(43.0)		(14.8)			(12.1)			(21.8)
Consolidated	$	171.7		$	179.5		(4.4)	%	$	319.9		$	341.0		(6.2)	%

Consolidated underwriting ratio:
Loss ratio:
Current year	34.1		%	33.2		%			34.1		%	33.9		%
Prior years	(1.9)			(1.8)					(2.1)			(1.8)
Total	32.2			31.4					32.0			32.1
Expense ratio	58.7			59.2					59.4			58.7
Combined ratio	90.9		%	90.6		%			91.4		%	90.8		%

Net investment income:
General insurance	$	83.6		$	87.1		(4.0)	%	$	166.0		$	172.0		(3.4)	%
Title insurance	11.1			11.0			0.3		22.4			21.5			3.9
RFIG run-off	1.5			2.9			(45.2)		3.6			6.1			(40.5)
Corporate & other	11.5			6.4			77.2		21.9			12.2			79.4
Consolidated	$	107.8		$	107.6		0.2	%	$	214.1		$	211.9		1.0	%

Interest and other charges (credits):
General insurance	$	16.6		$	16.0				$	32.9		$	32.0
Title insurance	0.2			0.8					0.8			1.5
RFIG run-off	—			—					—			—
Corporate & other (a)	(0.2)			(4.7)					(0.1)			(10.7)
Consolidated	$	16.6		$	12.1		37.1	%	$	33.6		$	22.8		47.3	%

Segmented and consolidated pretax income (loss)
excluding investment gains (losses):
General insurance	$	137.9		$	123.4		11.8	%	$	280.4		$	264.2		6.1	%
Title insurance	109.5			138.9			(21.1)		190.5			242.6			(21.5)
RFIG run-off	12.2			7.5			63.7		22.0			12.4			76.9
Corporate & other	3.0			5.1			(41.1)		7.3			10.8			(32.5)
Consolidated	262.8			275.0			(4.4)	%	500.4			530.2			(5.6)	%
Income taxes (credits) on above	52.5			54.1					98.3			102.9
Net income (loss) excluding
investment gains (losses)	210.2			220.9			(4.8)	%	402.0			427.2			(5.9)	%
Consolidated pretax investment gains (losses):
Realized from actual transactions
and impairments	53.2			1.0					118.5			8.9
Unrealized from changes in
fair value of equity securities	(370.7)			119.9					(290.9)			487.4
Total	(317.4)			120.9					(172.3)			496.4
Income taxes (credits) on above	(67.0)			25.4					(36.4)			105.0
Net of tax investment gains (losses)	(250.4)			95.5					(135.9)			391.3
Net income (loss)	$	(40.1)		$	316.4				$	266.1		$	818.5
Consolidated operating cash flow	$	124.7		$	219.4				$	403.2		$	515.4

(a) Includes consolidation/elimination entries.



General Insurance Segment Operating Results


	Quarters Ended June 30,								Six Months Ended June 30,
	2022			2021			% Change		2022			2021			% Change
Net premiums written	$	1,002.3		$	898.3		11.6	%	$	1,963.1		$	1,769.5		10.9	%
Net premiums earned	943.5			867.2			8.8		1,854.5			1,726.3			7.4
Net investment income	83.6			87.1			(4.0)		166.0			172.0			(3.4)
Other income	37.3			37.6			(0.6)		73.3			73.6			(0.4)
Operating revenues	1,064.5			991.9			7.3		2,094.0			1,972.0			6.2
Loss and loss adjustment expenses	616.1			590.5			4.3		1,198.3			1,157.9			3.5
Sales and general expenses	293.8			261.9			12.2		582.2			517.7			12.4
Interest and other charges	16.6			16.0			3.5		32.9			32.0			2.7
Operating expenses	926.6			868.5			6.7		1,813.5			1,707.7			6.2
Segment pretax operating income (loss)	$	137.9		$	123.4		11.8	%	$	280.4		$	264.2		6.1	%

Loss ratio	65.3		%	68.1		%			64.6		%	67.1		%
Expense ratio	27.2			25.9					27.4			25.7
Combined ratio	92.5		%	94.0		%			92.0		%	92.8		%

General Insurance net premiums earned increased 8.8% and 7.4% for the quarter and first six months, respectively, with rising premiums in all major lines of coverage. Premium rate increases for most lines of coverage, high renewal retention ratios, and new business production all contributed. Net investment income decreased in both 2022 periods, reflecting lower investment yields earned, partially offset by growth in the invested asset base.

The reported loss ratio for General Insurance improved in the quarter, inclusive of favorable reserve development from prior periods and a lower current period loss provision, attributable to several years of premium rate increases, underwriting actions, and a shift in the line of coverage mix. Favorable development of 1.9% was lower in the quarter with continued favorable development in the commercial auto and workers' compensation lines of coverage, partially offset by unfavorable development in the financial indemnity line of coverage.

Together, these factors produced highly profitable combined ratios and greater pretax operating income for the periods reported.

The following table shows recent annual and interim periods' loss ratios and the effects of loss development trends:


				Effect of Prior Periods'
				(Favorable)/			Loss Ratio Excluding
	Reported			Unfavorable Loss			Prior Periods' Loss
	Loss Ratio			Reserves Development			Reserves Development
2017		71.8	%		0.7	%		71.1	%
2018		72.2			—			72.2
2019		71.8			0.4			71.4
2020		69.9			(0.8)			70.7
2021		64.8	%		(3.8)	%		68.6	%

2nd Quarter 2021		68.1	%		(2.9)	%		71.0	%
2nd Quarter 2022		65.3	%		(1.9)	%		67.2	%
1st Six Months 2021		67.1	%		(2.8)	%		69.9	%
1st Six Months 2022		64.6	%		(2.5)	%		67.1	%

Quarterly and annual loss ratios and trends may not be indicative of future outcomes for a business with relatively long claim payment patterns. We target combined ratios between 90% and 95%, and based on our historical line of coverage mix, a loss ratio average in the high 60% to low 70% range, and an expense ratio average of 25%. These components of the combined ratio will continue to reflect the line of coverage mix.



Title Insurance Segment Operating Results


	Quarters Ended June 30,								Six Months Ended June 30,
	2022			2021			% Change		2022			2021			% Change
Net premiums and fees earned	$	1,030.2		$	1,108.8		(7.1)	%	$	2,029.2		$	2,076.5		(2.3)	%
Net investment income	11.1			11.0			0.3		22.4			21.5			3.9
Other income	0.2			0.2			(0.6)		0.5			0.5			(3.1)
Operating revenues	1,041.6			1,120.2			(7.0)		2,052.1			2,098.7			(2.2)
Loss and loss adjustment expenses	29.0			33.1			(12.3)		58.4			62.4			(6.4)
Sales and general expenses	902.7			947.3			(4.7)		1,802.3			1,792.1			0.6
Interest and other charges	0.2			0.8			(65.8)		0.8			1.5			(44.4)
Operating expenses	932.1			981.3			(5.0)		1,861.6			1,856.0			0.3
Segment pretax operating income (loss)	$	109.5		$	138.9		(21.1)	%	$	190.5		$	242.6		(21.5)	%

Loss ratio	2.8		%	3.0		%			2.9		%	3.0		%
Expense ratio	87.6			85.4					88.8			86.3
Combined ratio	90.4		%	88.4		%			91.7		%	89.3		%

Title Insurance net premiums and fees earned declined by 7.1% and 2.3% for the second quarter and first six months, respectively. Both directly produced and agency produced revenues declined during the quarter, and it is expected that such revenues will be lower throughout the year when compared to the same periods last year. The main driver of these trends is increasing mortgage interest rates which continue to significantly reduce refinance activity. Housing prices remained firm, although the effect of increasing mortgage interest rates may reduce purchase activity in the remainder of the year. An uptick in commercial transaction activity resulted in strong commercial premium growth during the quarter and first six month periods. Net investment income increased slightly in both 2022 periods, reflecting growth in the invested asset base, offset by lower investment yields earned.

Title Insurance's loss ratios were relatively consistent for the quarter and first six months. The second quarter and first six month's expense ratios were elevated compared to the same periods last year, generally reflecting the combination of lower directly produced revenues that carry higher fixed expenses, along with a greater proportion of agency produced revenues that have a higher overall expense ratio.

Together, these factors produced highly profitable combined ratios and lower pretax operating income for the periods reported.

The following table shows recent annual and interim periods’ loss ratios and the effects of loss development trends:


				Effect of Prior Periods'
				(Favorable)/			Loss Ratio Excluding
	Reported			Unfavorable Loss			Prior Periods' Loss
	Loss Ratio			Reserves Development			Reserves Development
2017		0.8	%		(3.0)	%		3.8	%
2018		1.9			(1.8)			3.7
2019		2.5			(1.2)			3.7
2020		2.3			(1.3)			3.6
2021		2.6	%		(1.0)	%		3.6	%

2nd Quarter 2021		3.0	%		(0.7)	%		3.7	%
2nd Quarter 2022		2.8	%		(0.8)	%		3.6	%
1st Six Months 2021		3.0	%		(0.7)	%		3.7	%
1st Six Months 2022		2.9	%		(0.7)	%		3.6	%



RFIG Run-off Segment Operating Results - Mortgage Insurance


	Quarters Ended June 30,								Six Months Ended June 30,
	2022			2021			% Change		2022			2021			% Change
Net premiums earned	$	6.0		$	8.5		(29.1)	%	$	12.6		$	17.7		(29.0)	%
Net investment income	1.5			2.9			(45.2)		3.6			6.1			(40.5)
Loss and loss adjustment expenses	(8.0)			0.3			N/M		(12.3)			4.6			N/M
Pretax operating income (loss)	$	12.2		$	7.5		63.7%		$	22.0		$	12.4		76.9	%

Loss ratio	(133.7)		%	3.6		%			(97.8)		%	26.0		%
Expense ratio	56.6			42.3					51.5			38.3
Combined ratio	(77.1)		%	45.9		%			(46.3)		%	64.3		%

Pretax operating results of RFIG Run-off reflect the continuing drop in net earned premiums in line with the declining risk in force, and significantly lower loss costs compared to the 2021 periods. Net investment income decreased in both 2022 periods, reflecting a declining invested asset base, and lower investment yields earned. Extraordinary dividends of $35.0 and $70.0 were paid to the parent company during the second quarter and first six months, respectively. Loss costs reflect fewer newly reported delinquencies along with improving trends in cure rates, influenced by a relatively strong real estate market.

Together, these factors produced greater pretax operating income for the periods reported.

The following table shows recent annual and interim periods' loss ratios and the effects of loss development trends:


				Effect of Prior Periods'
				(Favorable)/			Loss Ratio Excluding
	Reported			Unfavorable Loss			Prior Periods' Loss
	Loss Ratio			Reserves Development			Reserves Development
2017		57.6	%		(38.3)	%		95.9	%
2018		43.2			(27.0)			70.2
2019		55.0			(12.5)			67.5
2020		81.7			(26.5)			108.2
2021		(5.3)	%		(67.5)	%		62.2	%

2nd Quarter 2021		3.6	%		(24.8)	%		28.4	%
2nd Quarter 2022		(133.7)	%		(196.1)	%		62.4	%
1st Six Months 2021		26.0	%		(18.9)	%		44.9	%
1st Six Months 2022		(97.8)	%		(162.2)	%		64.4	%



Corporate & Other Operating Results


	Quarters Ended June 30,						Six Months Ended June 30,
	2022		2021		% Change		2022		2021		% Change
Net life and accident premiums earned	$	2.4	$	2.7	(8.7)	%	$	4.9	$	5.5	(11.0)	%
Net investment income	11.5		6.4		77.2		21.9		12.2		79.4
Other operating income	—		—		—		—		—		—
Operating revenues	14.0		9.1		52.5		26.9		17.7		51.7
Benefits and loss and loss adjustment expenses	1.5		0.9		64.2		2.1		3.4		(36.4)
Insurance expenses	0.8		1.0		(18.2)		1.7		1.8		(6.2)
Corporate, interest and other expenses - net	8.5		2.0		N/M		15.7		1.6		N/M
Operating expenses	10.9		4.0		173.4		19.6		6.9		183.3
Corporate & other pretax operating income (loss)	$	3.0	$	5.1	(41.1)	%	$	7.3	$	10.8	(32.5)	%

This segment includes a small life and accident insurance business and the net costs associated with the parent holding company and several internal corporate services subsidiaries. The segment tends to produce highly variable results stemming from volatility inherent from the lack of scale. Interest expense increased related to the issuance of $650 million of debt late in the second quarter of 2021, partially offset by net investment income from a higher level of investments.



Summary Consolidated Balance Sheet


	June 30,		December 31,		June 30,
	2022		2021		2021
Assets:
Cash and fixed income securities	$	11,751.9	$	11,399.6	$	11,224.7
Equity securities	4,182.4		5,302.8		5,204.1
Other invested assets	125.4		116.5		115.1
Cash and invested assets	16,059.9		16,818.9		16,544.0
Accounts and premiums receivable	2,096.0		1,768.7		1,828.7
Federal income tax recoverable	19.6		11.8		18.2

Reinsurance balances recoverable	5,551.1		4,943.4		4,879.1
Deferred policy acquisition costs	372.6		350.4		346.4
Sundry assets	1,195.9		1,088.4		1,061.8
Total assets	$	25,295.4	$	24,981.8	$	24,678.4

Liabilities and Shareholders' Equity:
Policy liabilities	$	3,129.7	$	2,752.0	$	2,837.9
Loss and loss adjustment expense reserves	11,905.4		11,425.5		11,175.2

Federal income tax payable	17.2		249.5		211.1
Reinsurance balances and funds	1,177.3		866.0		966.5
Debt	1,594.5		1,588.5		1,590.1
Sundry liabilities	1,077.9		1,206.9		1,118.7
Total liabilities	18,902.2		18,088.6		17,899.8
Shareholders' equity	6,393.1		6,893.2		6,778.6
Total liabilities and shareholders' equity	$	25,295.4	$	24,981.8	$	24,678.4



Cash, Invested Assets, and Shareholders' Equity


										% Change
				June 30,		Dec. 31,		June 30,		June '22/		June '22/
				2022		2021		2021		Dec. '21		June '21
Cash and invested assets:
	Fixed income securities, cash and other invested assets			$	11,877.4	$	11,516.1	$	11,339.9	3.1	%	4.7	%
	Equity securities			4,182.4		5,302.8		5,204.1		(21.1)		(19.6)
	Total per balance sheet			$	16,059.9	$	16,818.9	$	16,544.0	(4.5)	%	(2.9)	%
	Total at cost for all			$	15,402.2	$	15,045.8	$	14,853.8	2.4	%	3.7	%

Composition of shareholders' equity per share:
	Equity before items below			$	19.66	$	18.50	$	18.74	6.3	%	4.9	%
	Unrealized investment gains (losses) and other
		accumulated comprehensive income (loss)		1.33		4.26		3.85
			Total	$	20.99	$	22.76	$	22.59	(7.8)	%	(7.1)	%

Segmented composition of
shareholders' equity per share:
	Excluding RFIG run-off segment			$	19.91	$	21.47	$	21.19	(7.3)	%	(6.0)	%
	RFIG run-off segment			1.08		1.29		1.40
			Consolidated total	$	20.99	$	22.76	$	22.59	(7.8)	%	(7.1)	%

Old Republic's invested assets portfolio is directed in consideration of enterprise-wide risk management objectives. Most importantly, these are intended to ensure solid funding of the insurance subsidiaries' long-term claim payment obligations to policyholders and their beneficiaries, as well as the long-term stability of the subsidiaries’ capital base. For these reasons, the investment portfolio does not contain high risk or illiquid asset classes and has zero or extremely limited exposure to, collateralized debt obligations (CDO's), credit default and interest rate swaps, hybrid securities, asset-backed securities (ABS), guaranteed investment contracts (GIC), structured investment vehicles (SIV), auction rate variable short-term securities, limited partnerships, derivatives, hedge funds or private equity investments. Moreover, the Company does not engage in hedging or securities lending transactions, nor does it invest in securities whose values are predicated on non-regulated financial instruments exhibiting amorphous or unfunded counter-party risk attributes.

As of June 30, 2022, the consolidated investment portfolio reflected an allocation of approximately 74% to fixed income (bonds and notes) and short-term investments, and 26% to equity securities (common stock). During the quarter, we continued to reduce our equity holdings and reinvest the proceeds in fixed income securities. The fixed income portfolio continues to be the anchor for the insurance underwriting subsidiaries' obligations. The maturities of our fixed income assets are matched to the expected liabilities for claim payment obligations to policyholders and their beneficiaries. The quality of the investment portfolio remains at high levels.

A significant portion of our investable funds have been directed toward high-quality common stocks of U.S. companies (currently limited to fewer than 100 issues). We favor those with long-term records of reasonable earnings growth and steadily increasing dividends. Pursuant to our enterprise risk management guidelines and controls, we perform regular stress tests of the equities portfolio to gain reasonable assurance that periodic downdrafts in market prices would not seriously undermine our financial strength and the long-term continuity and prospects of our insurance underwriting business.

Changes in shareholders' equity per share are reflected in the following table. As shown, these resulted mostly from net income excluding net investment gains (losses), realized and unrealized investment gains (losses), and dividend payments to shareholders.


	Shareholders' Equity Per Share
	Quarter									Year
	Ended			Six Months Ended						Ended
	June 30,			June 30,						Dec. 31,
	2022			2022			2021			2021
Beginning balance	$	22.23		$	22.76		$	20.75		$	20.75
Changes in shareholders' equity:
Net income (loss) excluding net investment gains (losses)	0.69			1.32			1.43			3.10
Net of tax realized investment gains (losses)	0.14			0.31			0.02			0.02
Net of tax unrealized investment gains (losses):
Fixed income securities	(0.82)			(2.15)			(0.48)			(0.97)
Equity securities	(0.96)			(0.75)			1.28			1.96
Total net of tax realized and unrealized
investment gains (losses)	(1.64)			(2.59)			0.82			1.01
Cash dividends	(0.23)			(0.46)			(0.44)			(2.38)
Other	(0.06)			(0.04)			0.03			0.28
Net change	(1.24)			(1.77)			1.84			2.01
Ending balance	$	20.99		$	20.99		$	22.59		$	22.76
Percentage change for the period	(5.6)		%	(7.8)		%	8.9		%	9.7		%



Capitalization


	Capitalization
	June 30,			December 31,			June 30,
	2022			2021			2021
Debt:
4.875% Senior Notes due 2024	$	398.7		$	398.4		$	398.1
3.875% Senior Notes due 2026	547.6			547.3			547.1
3.850% Senior Notes due 2051	642.7			642.6			642.5
Other miscellaneous debt	5.3			—			2.2
Total debt	1,594.5			1,588.5			1,590.1
Common shareholders' equity	6,393.1			6,893.2			6,778.6
Total capitalization	$	7,987.7		$	8,481.7		$	8,368.7

Capitalization ratios:
Debt	20.0		%	18.7		%	19.0		%
Common shareholders' equity	80.0			81.3			81.0
Total	100.0		%	100.0		%	100.0		%


DETAILED MANAGEMENT ANALYSIS

This section of the Management Analysis of Financial Position and Results of Operations is additive to and should be read in conjunction with the Executive Summary which precedes it.


RESULTS OF OPERATIONS


Consolidated Overview


Premiums & Fees

The major sources of Old Republic's consolidated earned premiums and fees for the periods shown were as follows:


	Net Earned Premiums and Fees
	General		Title		RFIG Run-off		Corporate & Other		Total		% Change from prior period
Years Ended December 31:
2019	$	3,432.4	$	2,736.0	$	59.2	$	13.4	$	6,241.1	5.1	%
2020	3,394.2		3,286.3		45.1		12.0		6,737.8		8.0
2021	3,555.5		4,404.3		32.6		11.0		8,003.6		18.8
Six Months Ended June 30:
2021	1,726.3		2,076.5		17.7		5.5		3,826.2		23.5
2022	1,854.5		2,029.2		12.6		4.9		3,901.3		2.0
Quarters Ended June 30:
2021	867.2		1,108.8		8.5		2.7		1,987.3		29.1
2022	$	943.5	$	1,030.2	$	6.0	$	2.4	$	1,982.3	(.2)	%


Net Investment Income

Net investment income was affected mostly by trends in interest rates and levels of investments. The following tables reflect the segmented and consolidated invested asset bases as of the indicated dates, and the investment income earned and resulting yields on such assets. Since the Company can exercise little control over fair values, yields are evaluated on the basis of investment income earned in relation to the cost of the underlying invested assets, though yields based on the fair values of such assets are also shown in the statistics below.


	Invested Assets at Cost										Fair Value Adjust- ment		Invested Assets at Fair Value
	General		Title		RFIG Run-off		Corporate & Other		Total
As of December 31:
2020	$	10,987.8	$	1,328.4	$	545.1	$	1,083.8	$	13,945.2	$	1,384.9	$	15,330.1
2021	11,379.7		1,569.2		459.0		1,394.8		14,802.9		1,773.4		16,576.3
As of June 30:
2021	11,152.8		1,408.4		501.8		1,594.9		14,657.9		1,690.9		16,348.8
2022	$	11,553.3	$	1,539.6	$	412.6	$	1,702.9	$	15,208.5	$	656.3	$	15,864.9


	Net Investment Income										Yield at
	General		Title		RFIG Run-off		Corporate & Other		Total		Cost		Fair Value
Years Ended
December 31:
2019	$	356.4	$	41.4	$	17.6	$	35.1	$	450.7	3.48	%	3.30	%
2020	352.2		42.0		15.2		29.4		438.9		3.24		2.96
2021	342.4		43.8		11.4		36.5		434.3		3.02		2.72
Six Months Ended
June 30:
2021	172.0		21.5		6.1		12.2		211.9		2.96		2.68
2022	166.0		22.4		3.6		21.9		214.1		2.85		2.64
Quarters Ended
June 30:
2021	87.1		11.0		2.9		6.4		107.6		3.02		2.72
2022	$	83.6	$	11.1	$	1.5	$	11.5	$	107.8	2.84	%	2.67	%

Net investment income increased slightly in both 2022 periods, reflecting growth in the invested asset base, offset by lower investment yields earned. The Company expects yields to increase on a comparable year-over-year basis in the next few quarters.


Loss and Loss Adjustment Expenses

Total loss costs are affected by the amount of paid claims and the adequacy of reserve estimates established for current and prior years' claim occurrences at each balance sheet date.

The following table shows a breakdown of gross and net of reinsurance loss reserve estimates for major types of insurance coverages as of June 30, 2022 and December 31, 2021:


			Loss and Loss Adjustment Expense Reserves
			June 30, 2022						December 31, 2021
			Gross			Net			Gross			Net

Workers' compensation			$	4,862.5		$	2,911.2		$	4,893.0		$	2,955.6
General liability			1,355.1			613.6			1,324.4			630.7
Commercial automobile (mostly trucking)			3,082.7			1,776.5			2,850.0			1,736.5
Other coverages			1,590.3			1,154.9			1,355.5			979.3
Unallocated loss adjustment expense reserves			296.7			296.3			285.2			284.8
		Total general insurance reserves	11,187.5			6,752.7			10,708.4			6,587.0
Title			616.2			616.2			594.2			594.2
RFIG Run-off			91.0			91.0			111.2			111.2
Life and accident			10.6			7.1			11.6			7.6
		Total loss and loss adjustment expense reserves	$	11,905.4		$	7,467.2		$	11,425.5		$	7,300.2
Asbestosis and environmental loss reserves included
	in the above general insurance reserves:
		Amount	$	110.9		$	74.2		$	118.1		$	77.2
		% of total general insurance reserves	1.0		%	1.1		%	1.1		%	1.2		%

A summary of changes in aggregate reserves for loss and loss adjustment expenses is included in Note 3 of the Consolidated Financial Statements.

The percentage of net loss and loss adjustment expenses incurred as a percentage of premiums and related fee revenues of the Company's three major operating segments and for consolidated operations were as follows:


	General		Title		RFIG Run-off		Consolidated
Years Ended December 31:
2019	71.8	%	2.5	%	53.5	%	41.2	%
2020	69.9		2.3		81.7		37.0
2021	64.8		2.6		(5.3)		30.2
Six Months Ended June 30:
2021	67.1		3.0		26.0		32.1
2022	64.6		2.9		(97.8)		32.0
Quarters Ended June 30:
2021	68.1		3.0		3.6		31.4
2022	65.3	%	2.8	%	(133.7)	%	32.2	%

The Company's reserve for loss and loss adjustment expenses represents the accumulation of estimates of ultimate losses payable, including incurred but not reported losses and loss adjustment expenses. The establishment of loss reserves by the Company's insurance subsidiaries is a reasonably complex and dynamic process influenced by a large variety of factors. Consequently, reserves established are a reflection of the opinions of a large number of persons, of the application and interpretation of historical precedent and trends, of expectations as to future developments, and of management's judgment in interpreting all such factors. At any point in time, the Company is exposed to the possibility of higher or lower than anticipated loss costs and the resulting changes in estimates are recorded in operations of the periods during which they are made.

Management believes that its overall reserving practices have been consistently applied over many years, and that its aggregate net reserves have generally resulting in reasonable approximations of the ultimate net costs of losses incurred. However, no representation is made nor is any guaranty given that ultimate net loss and related costs will not develop in future years to be significantly greater or lower than currently established reserve estimates. In management's opinion, such changes in net losses and related costs are not likely to have a material effect on the Company's consolidated financial position, although it could affect materially its consolidated results of operations for any one annual or interim reporting period. See further discussion in the Company's 2021 Annual Report on Form 10-K under Item 1A - Risk Factors.


Underwriting Acquisition and Other Expenses

The following table sets forth the expense ratios registered by each major business segment and in consolidation for the periods shown:


					RFIG
	General		Title		Run-off		Consolidated
Years Ended December 31:
2019	25.7	%	90.5	%	25.0	%	54.1	%
2020	25.6		88.4		30.2		56.3
2021	26.5		86.7		39.9		59.7
Six Months Ended June 30:
2021	25.7		86.3		38.3		58.7
2022	27.4		88.8		51.5		59.4
Quarters Ended June 30:
2021	25.9		85.4		42.3		59.2
2022	27.2	%	87.6	%	56.6	%	58.7	%

Variations in the Company's consolidated expense ratios reflect a continually changing mix of coverages sold and costs of producing business. To a significant degree, expense ratios for both the General and Title Insurance segments are mostly reflective of variable costs, such as commissions or similar charges, that rise or decline along with corresponding changes in premium and fee income. General operating expenses are routinely subject to timing, and can fluctuate with line of coverage mix, as well as investments in business expansion and information technology.


Combined Ratios

The combined ratios of the above summarized net loss and loss adjustment expenses and underwriting expenses are as follows:


					RFIG
	General		Title		Run-off		Consolidated
Years Ended December 31:
2019	97.5	%	93.0	%	79.8	%	95.3	%
2020	95.5		90.7		111.9		93.3
2021	91.3		89.3		34.6		89.9
Six Months Ended June 30:
2021	92.8		89.3		64.3		90.8
2022	92.0		91.7		(46.3)		91.4
Quarters Ended June 30:
2021	94.0		88.4		45.9		90.6
2022	92.5	%	90.4	%	(77.1)	%	90.9	%


Net Investment Gains (Losses)

The Company's investment policies are not designed to maximize or emphasize the realization of investment gains. Rather, these policies aim for a stable source of income from interest and dividends, protection of capital, and providing sufficient liquidity to meet insurance underwriting and other obligations as they become payable in the future. Dispositions of fixed income securities from scheduled maturities and early calls were 66.3% and 81.5% of total dispositions occurring in the first six months of 2022 and 2021, respectively.

The following table reflects the composition of net investment gains or losses for the periods shown.


	Realized Investment Gains (Losses) from Actual Transactions						Impairment Losses on Securities						Unrealized Gains (Losses) from Changes in Fair Value of Equity Securities
	Fixed Income Securities		Equity Securities and Miscel-laneous Investments		Total		Fixed Income Securities		Miscel-laneous Investments		Total				Total Investment Gains (Losses)
Years Ended
December 31:
2019	$	(1.9)	$	40.6	$	38.6	$	(2.0)	$	—	$	(2.0)	$	599.5	$	636.1
2020	(7.4)		21.6		14.2		—		—		—		(156.2)		(142.0)
2021	1.5		5.3		6.9		—		—		—		751.1		758.0
Six Months Ended
June 30:
2021	1.0		7.9		8.9		—		—		—		487.4		496.4
2022	(59.1)		180.2		121.1		(2.5)		—		(2.5)		(290.9)		(172.3)
Quarters Ended
June 30:
2021	.6		.4		1.0		—		—		—		119.9		120.9
2022	$	(37.4)	$	93.2	$	55.8	$	(2.5)	$	—	$	(2.5)	$	(370.7)	$	(317.4)

During the second quarter and first six months of 2022, net realized investment gains reflect the continued rebalancing of the investment portfolio as well as tax planning considerations.


Income Taxes

The effective consolidated income tax rates were (26.4)% and 18.9% in the second quarter and first six months of 2022 compared to 20.1% and 20.3% in the second quarter and first six months of 2021. The rates for each period reflect primarily the varying proportions of pretax operating income (loss) derived from partially tax preferred investment income (principally tax-exempt interest and dividend income).


Segment Overview


General Insurance


Summary Operating Results


	Quarters Ended June 30,								Six Months Ended June 30,
	2022			2021			% Change		2022			2021			% Change
Net premiums earned	$	943.5		$	867.2		8.8	%	$	1,854.5		$	1,726.3		7.4	%
Loss and loss adjustment expenses	616.1			590.5			4.3		1,198.3			1,157.9			3.5
Sales and general expenses	293.8			261.9			12.2		582.2			517.7			12.4
Segment pretax operating income (loss)	$	137.9		$	123.4		11.8	%	$	280.4		$	264.2		6.1	%

Loss ratio	65.3		%	68.1		%			64.6		%	67.1		%
Expense ratio	27.2			25.9					27.4			25.7
Combined ratio	92.5		%	94.0		%			92.0		%	92.8		%


Premiums & Fees

The percentage allocation of net premiums earned for major insurance coverages in the General Insurance Group was as follows:


	General Insurance Net Earned Premiums by Type of Coverage
	Commercial Automobile (mostly trucking)		Workers' Compensation		Inland Marine and Property		Financial Indemnity		General Liability		Other
Years Ended December 31:
2019	37.2	%	29.1	%	7.6	%	6.4	%	6.6	%	13.1	%
2020	38.4		25.4		8.7		8.0		6.0		13.5
2021	39.7		21.9		9.7		9.7		5.2		13.8
Six Months Ended June 30:
2021	40.2		22.2		9.5		9.4		5.1		13.6
2022	39.4		21.1		10.0		10.7		5.0		13.8
Quarters Ended June 30:
2021	40.2		21.5		9.7		9.4		5.0		14.2
2022	39.3	%	21.0	%	10.0	%	10.2	%	5.1	%	14.4	%


Loss and Loss Adjustment Expenses

The percentage of net loss and loss adjustment expenses measured against premiums earned by major types of insurance coverage were as follows:


	General Insurance Loss Ratios by Type of Coverage
	All Coverages		Commercial Automobile (mostly trucking)		Workers' Compen-sation		Inland Marine and Property		Financial Indemnity		General Liability		Other
Years Ended
December 31:
2019	71.8	%	84.0	%	63.2	%	62.6	%	64.0	%	77.8	%	61.4	%
2020	69.9		80.8		60.8		58.3		57.1		73.6		67.2
2021	64.8		70.8		58.9		59.4		53.9		64.1		65.7
Six Months Ended
June 30:
2021	67.1		74.6		57.7		59.4		57.3		76.5		68.5
2022	64.6		68.0		57.3		58.3		78.3		55.6		63.8
Quarters Ended
June 30:
2021	68.1		75.4		59.6		63.4		53.8		60.4		70.4
2022	65.3	%	65.9	%	52.3	%	57.5	%	103.5	%	52.9	%	62.3	%

The reported loss ratio for General Insurance improved in the quarter, inclusive of favorable reserve development from prior periods and a lower current period loss provision, attributable to several years of premium rate increases, underwriting actions, and a shift in the line of coverage mix. Favorable development of 1.9% was lower in the quarter with continued favorable development in the commercial auto and workers' compensation lines of coverage. This was partially offset by unfavorable development in the financial indemnity (which includes public company D&O) line of coverage, stemming from large security class action claims activity occurring from accident years 2018 and 2019.


Sales and General Expenses

The second quarter and first six month expense ratios were elevated compared to the same periods last year, generally reflecting the shift in line of coverage mix, and an increase in employee related costs. Investments in new products and geographies in recent years have diversified the General Insurance business, resulting in shifts in the lines of coverage mix toward lines with higher expense ratios and lower current period loss ratios. The combination of recent year's growth in lines such as financial indemnity and property, and a decline in workers' compensation has contributed to a overall lower current period loss ratio and higher expense ratio.


Title Insurance


Summary Operating Results


	Quarters Ended June 30,								Six Months Ended June 30,
	2022			2021			% Change		2022			2021			% Change
Net premiums and fees earned	$	1,030.2		$	1,108.8		(7.1)	%	$	2,029.2		$	2,076.5		(2.3)	%
Loss and loss adjustment expenses	29.0			33.1			(12.3)		58.4			62.4			(6.4)
Sales and general expenses	902.7			947.3			(4.7)		1,802.3			1,792.1			0.6
Segment pretax operating income (loss)	$	109.5		$	138.9		(21.1)	%	$	190.5		$	242.6		(21.5)	%

Loss ratio	2.8		%	3.0		%			2.9		%	3.0		%
Expense ratio	87.6			85.4					88.8			86.3
Combined ratio	90.4		%	88.4		%			91.7		%	89.3		%


Premiums & Fees

The following table shows the percentage distribution of Title Insurance premium and fee revenues by production sources:


Title Premium and Fee Production by Source
	Direct Operations		Independent Title Agents
Years Ended December 31:
2019	24.9	%	75.1	%
2020	24.9		75.1
2021	22.0		78.0
Six Months Ended June 30:
2021	23.0		77.0
2022	20.5		79.5
Quarters Ended June 30:
2021	22.8		77.2
2022	21.4	%	78.6	%


Loss and Loss Adjustment Expenses

Title Insurance loss ratios have remained in the single digits for a number of years due to a continuation of favorable trends in claims frequency and severity and were relatively consistent for the quarter and first six months.


Sales and General Expenses

The second quarter and first six month's expense ratios were elevated compared to the same periods last year, generally reflecting the combination of lower directly produced revenues that carry higher fixed expenses, along with a greater proportion of agency produced revenues that have a higher overall expense ratio.


RFIG Run-off


Summary Operating Results


	Quarters Ended June 30,								Six Months Ended June 30,
	2022			2021			% Change		2022			2021			% Change
Net premiums earned	$	6.0		$	8.5		(29.1)	%	$	12.6		$	17.7		(29.0)	%
Loss and loss adjustment expenses	(8.0)			0.3			N/M		(12.3)			4.6			N/M
Pretax operating income (loss)	$	12.2		$	7.5		63.7	%	$	22.0		$	12.4		76.9	%

Loss ratio	(133.7)		%	3.6		%			(97.8)		%	26.0		%
Expense ratio	56.6			42.3					51.5			38.3
Combined ratio	(77.1)		%	45.9		%			(46.3)		%	64.3		%

RFIG Run-off's mortgage guaranty insurance carriers ceased the underwriting of new policies effective August 31, 2011 and the existing book of business was placed in run-off operating mode.


Premiums & Fees

The following tables provide information on production and related risk exposure trends for Old Republic's mortgage guaranty insurance operation:


Premium and Persistency Trends:	Net Earned Premiums		Persistency
Years Ended December 31:
2019	$	58.8	77.5	%
2020	45.1		77.6
2021	32.6		74.8
Six Months Ended June 30:
2021	17.7		75.2
2022	12.6		74.0	%
Quarters Ended June 30:
2021	8.5
2022	$	6.0


Net Risk in Force
Net Risk in Force By Type:	Traditional Primary		Bulk & Other		Total
As of December 31:
2019	$	2,388.3	$	201.8	$	2,590.1
2020	1,842.2		169.0		2,011.2
2021	1,364.9		140.4		1,505.4
As of June 30:
2021	1,583.2		156.6		1,739.8
2022	$	1,158.7	$	125.6	$	1,284.3

The results of RFIG Run-off reflect the continuing drop in net earned premiums in line with the declining risk in force.


Loss and Loss Adjustment Expenses

Certain mortgage guaranty average loss related trends are listed below:


	Average Settled Claim Amount (a)		Reported Delinquency Ratio at End of Period
Years Ended December 31:
2019	$	49,195	10.1	%
2020	37,172		14.2
2021	31,682		12.4
Six Months Ended June 30:
2021	42,688		12.9
2022	$	44,192	11.7	%

__________

(a) Amounts are in whole dollars.

Loss costs reflect fewer newly reported delinquencies along with improving trends in cure rates, influenced by a relatively strong real estate market.


FINANCIAL POSITION

The Company's financial position at June 30, 2022 reflected increases in assets and liabilities of 1.3% and 4.5%, respectively, and a decrease in common shareholders' equity of 7.3% when compared to the immediately preceding year-end. Cash and invested assets represented 63.5% and 67.3% of consolidated assets as of June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022, the invested asset base, cash and accrued investment income decreased by 4.5% to $16,059.9.


Investment Portfolio

During the first six months of 2022 and 2021, the Company committed the majority of investable funds to short to intermediate-term fixed income securities. Old Republic continues to adhere to its long-term policy of investing

primarily in investment grade, marketable securities. At both June 30, 2022 and December 31, 2021, nearly all of the Company's investments consisted of marketable securities. The investment portfolio does not contain high risk or illiquid asset classes and has zero or extremely limited exposure to, collateralized debt obligations (CDO's), credit default and interest rate swaps, hybrid securities, asset-backed securities (ABS), guaranteed investment contracts (GIC), structured investment vehicles (SIV), auction rate variable short-term securities, limited partnerships, derivatives, hedge funds or private equity investments. Moreover, the Company does not engage in hedging or securities lending transactions, nor does it invest in securities whose values are predicated on non-regulated financial instruments exhibiting amorphous or unfunded counter-party risk attributes. At June 30, 2022, the Company had no fixed income investments in default as to principal and/or interest.

Short-term investment positions reflect a large variety of seasonal and intermediate-term factors including current operating needs, expected operating cash flows, seasonality of quarterly cash flow, debt maturities, and investment strategy considerations. Accordingly, the future level of short-term investments will vary and respond to the interplay of these factors and may, as a result, increase or decrease from current levels.

The Company does not own or utilize derivative financial instruments for the purpose of hedging, enhancing the overall return of its investment portfolio, or reducing the cost of its debt obligations. With regard to its equity portfolio, the Company does not own any options nor does it engage in any type of option writing. Traditional investment management tools and techniques are employed to address the yield and valuation exposures of the invested assets base. The fixed income investment portfolio is managed so as to limit various risks inherent in the bond market. Credit risk is addressed through asset diversification and the purchase of investment grade securities. Reinvestment rate risk is reduced by concentrating on non-callable issues, and by taking asset-liability matching considerations into account. Purchases of mortgage and asset backed securities, which have variable principal prepayment options, are generally avoided. Market value risk is limited through the purchase of bonds of intermediate maturity. The combination of these investment management practices is expected to produce a more stable fixed income investment portfolio that is not subject to extreme interest rate sensitivity and principal deterioration.

The fair value of the Company's fixed income investment portfolio is sensitive, however, to fluctuations in the level of interest rates, but not materially affected by changes in anticipated cash flows caused by any prepayments. The impact of interest rate movements on the fixed income investment portfolio generally affects net unrealized gains or losses. As a general rule, rising interest rates enhance currently available yields but typically lead to a reduction in the fair value of existing fixed income investments. By contrast, a decline in such rates reduces currently available yields but usually serves to increase the fair value of the existing fixed income investment portfolio. All such changes in fair value of securities are reflected, net of deferred income taxes, directly in the shareholders' equity account, and as a separate component of the statement of comprehensive income. Given the Company's inability to forecast or control the movement of interest rates, Old Republic sets the maturity spectrum of its fixed income securities portfolio within parameters of estimated liability payouts, and focuses the overall portfolio on high quality investments. By so doing, Old Republic believes it is reasonably assured of its ability to hold securities to maturity as it may deem necessary in changing environments, and of ultimately recovering their aggregate cost.

Possible future declines in fair values for Old Republic's fixed income portfolio would negatively affect the common shareholders' equity account at any point in time, but would not necessarily result in the recognition of realized investment losses.

The following tables show certain information relating to the Company's fixed income and equity portfolios as of the dates shown.


Fixed Income Securities Stratified by Credit Quality (a):

	June 30,		December 31,
	2022		2021
Aaa	23.4	%	25.1	%
Aa	11.3		12.3
A	34.2		31.9
Baa	29.2		28.5
Total investment grade	98.1		97.8
All other (b)	1.9		2.2
Total	100.0	%	100.0	%

__________

(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.

(b) "All other" includes non-investment grade or non-rated issuers.


Gross Unrealized Losses Stratified by Industry Concentration for Fixed Income Securities

June 30, 2022			Amortized Cost		Gross Unrealized Losses
Non-Investment Grade Fixed Income Securities by Industry Concentration:
	Industrial		$	38.8	$	4.4
	Consumer Durables		41.2		4.0
	Basic Industry		47.5		3.4
	Energy		30.9		2.3
	Other (includes 3 industry groups)		17.1		1.2
		Total	$	175.7	$	15.4


Investment Grade Fixed Income Securities by Industry Concentration:
	Utilities		$	1,371.9	$	91.7
	Financial, Banking & Insurance		1,130.8		74.7
	Industrial		879.5		69.0
	U.S. Governments & Agencies		1,927.5		63.9
	Consumer Staples & Durables		896.3		54.9
	Natural Gas & Energy		718.0		46.6
	Health Care		498.0		42.9
	Technology		521.9		37.8
	Other (includes 9 industry groups)		1,823.9		101.1
		Total	$	9,768.1	$	583.0

The level of gross unrealized losses for this portfolio is in line with expectations given the interest rate environment.


Gross Unrealized Losses Stratified by Industry Concentration for Equity Securities

June 30, 2022			Cost		Gross Unrealized Losses

Equity Securities by Industry Concentration:
	Industrial		$	103.2	$	13.6
	Retail		39.5		12.4
	Insurance		55.3		11.2
	Consumer Staples		37.5		4.2
	Other (includes 2 industry groups)		109.4		2.3
		Total	$	345.1	$	43.9

The equity portfolio has performed well in the current market downturn as, by design, it is comprised of high-quality common stocks of U.S. companies with long-term records of reasonable earnings growth and steadily increasing dividends.


Gross Unrealized Losses Stratified by Maturity Ranges for All Fixed Income Securities

		Amortized Cost				Gross Unrealized Losses
June 30, 2022		All		Non- Investment Grade Only		All		Non- Investment Grade Only
Maturity Ranges:
Due in one year or less		$	757.3	$	17.2	$	3.4	$	.1
Due after one year through five years		4,929.9		81.0		129.3		4.7
Due after five years through ten years		4,213.6		77.4		462.8		10.5
Due after ten years		42.8		—		2.9		—
	Total	$	9,943.9	$	175.7	$	598.5	$	15.4


Gross Unrealized Losses Stratified by Duration and Amount of Unrealized Losses for All Fixed Income Securities

			Amount of Gross Unrealized Losses
June 30, 2022			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 Income Securities:
	One to six months		$	301.7	$	.2	$	—	$	301.9
	Seven to twelve months		74.6		4.1		—		78.7
	More than twelve months		213.6		4.1		—		217.7
		Total	$	590.0	$	8.4	$	—	$	598.5

Number of Issues in Unrealized Loss Position:

Fixed Income Securities:
	One to six months		1,306		1		—		1,307
	Seven to twelve months		101		5		—		106
	More than twelve months		216		6		—		222
		Total	1,623		12		—		1,635

In the above tables the unrealized losses on fixed income securities are primarily deemed to reflect changes in the interest rate environment.


Age Distribution of Fixed Income Securities

			June 30,		December 31,
			2022		2021
Maturity Ranges:
	Due in one year or less		10.8	%	11.7	%
	Due after one year through five years		49.9		49.7
	Due after five years through ten years		38.7		37.6
	Due after ten years through fifteen years		.5		.9
	Due after fifteen years		.1		.1
		Total	100.0	%	100.0	%

Average Maturity in Years			4.4		4.4
Duration			4.0		4.0

Duration is used as a measure of bond price sensitivity to interest rate changes. A duration of 4.0 as of June 30, 2022 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 income investment portfolio of approximately 4.0%.


Liquidity and Capital Resources

The parent holding company meets its liquidity and capital needs principally through dividends and interest on intercompany financing arrangements paid by its subsidiaries. The insurance subsidiaries' ability to pay cash dividends and interest to the parent company is generally restricted by law or subject to approval of the insurance regulatory authorities. Based on December 31, 2021 statutory balances, the Company can receive up to $982.0 in ordinary dividends from its subsidiaries in 2022 without the prior approval of regulatory authorities of which $286.8 has been received through June 30, 2022. The liquidity achievable through such permitted dividend payments is sufficient to cover the parent holding company's currently expected cash outflows represented mostly by interest, reasonably anticipated cash dividend payments to shareholders, modest operating expenses, and the near-term capital needs of its operating company subsidiaries.

Old Republic's total capitalization of $7,987.7 at June 30, 2022 consisted of debt of $1,594.5 and common shareholders' equity of $6,393.1. Changes in the common shareholders' equity account reflect primarily net income excluding net investment gains (losses), realized and unrealized gains (losses), and dividend payments to shareholders for the period then ended. At June 30, 2022, the Company's consolidated debt to equity ratio was 24.9%.

Old Republic has paid a cash dividend without interruption since 1942 (81 years), and it has raised the annual cash dividend payout for each of the past 41 years. The dividend rate is reviewed and approved by the Board of Directors on a quarterly basis each year. In establishing each year's cash dividend rate the Company does not follow a strict formulaic approach. Rather, it favors a gradual rise in the annual dividend rate that is largely reflective of long-term consolidated operating earnings trends. Accordingly, each year's dividend rate is set judgmentally in consideration of such key factors as the dividend paying capacity of the Company's insurance subsidiaries, the trends in average annual earnings for the five to ten most recent calendar years, and management's long-term expectations for the Company's consolidated business and its individual operating subsidiaries.

Under state insurance regulations, the Company's three mortgage guaranty insurance subsidiaries are required to hold minimum amounts of capital based on specified formulas. Since the Company's mortgage insurance subsidiaries have discontinued writing new business the risk-to-capital ratio considerations are therefore no longer of consequence.

The Company's principal mortgage insurance subsidiaries sought and received approval from the North Carolina Department of Insurance to pay extraordinary dividends amounting to $35.0 and $70.0 during the second quarter and first six months of 2022, respectively.


Other Assets

Substantially all of the Company's receivables are current. Reinsurance recoverable balances on paid or estimated unpaid losses are deemed recoverable from solvent reinsurers or have otherwise been reduced by allowances for estimated credit losses. Deferred policy acquisition costs are estimated by taking into account the direct costs relating to the successful acquisition of new or renewal insurance contracts and evaluating their recoverability on the basis of recent trends in loss costs.


Reinsurance Programs

In order to maintain premium production within its capacity and limit maximum losses for which it might become liable under its policies, Old Republic, as is common practice in the insurance industry, may cede a portion or all of its premiums and related liabilities on certain classes of insurance, individual policies, or blocks of business to other insurers and reinsurers. Further discussion of the Company's reinsurance programs can be found in Part 1 of the Company's 2021 Annual Report on Form 10-K.


CRITICAL ACCOUNTING ESTIMATES

The Company's annual and interim financial statements incorporate a large number and types of estimates relative to matters which are highly uncertain at the time the estimates are made. The estimation process required of an insurance enterprise such as Old Republic is by its very nature highly dynamic inasmuch as it necessitates a continuous evaluation, analysis, and quantification of factual data as it becomes known to the Company. As a result, actual experienced outcomes can differ from the estimates made at any point in time and thus affect future periods' reported revenues, expenses, net income or loss, and financial condition.

Old Republic believes that its most critical accounting estimates relate to the establishment of reserves for losses and loss adjustment expenses and the recoverability of reinsured outstanding losses. The major assumptions and methods used in setting these estimates are summarized in the Company's 2021 Annual Report on Form 10-K.


OTHER INFORMATION

Reference is here made to "Information About Segments of Business" appearing elsewhere herein.

Historical data pertaining to the operating results, liquidity, and other performance indicators applicable to an insurance enterprise such as Old Republic are not necessarily indicative of results to be achieved in succeeding years. In addition to the factors cited below, the long-term nature of the insurance business, seasonal and annual patterns in premium production and incidence of claims, changes in yields obtained on invested assets, changes in government policies and free markets affecting inflation rates and general economic conditions, and changes in legal precedents or the application of law affecting the settlement of disputed and other claims can have a bearing on period-to-period comparisons and future operating results. It is possible that Old Republic's operating results, business and financial condition could be adversely affected in subsequent periods by future economic disruptions caused by the COVID-19 pandemic and the associated governmental responses.

Some of the oral or written statements made in the Company's reports, press releases, and conference calls following earnings releases, can constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve assumptions, uncertainties, and risks that may affect the Company's future performance. With regard to Old Republic's General Insurance segment, its results can be particularly affected by the level of market competition, which is typically a function of available capital and expected returns on such capital among competitors, the levels of investment yields and inflation rates, and periodic changes in claim frequency and severity patterns caused by natural disasters, weather conditions, accidents, illnesses, work-related injuries, and unanticipated external events. Title Insurance and RFIG Run-off results can be affected by similar factors, and by changes in national and regional housing demand and values, the availability and cost of mortgage loans, employment trends, and default rates on mortgage loans. Life and accident insurance earnings can be affected by the levels of employment and consumer spending, changes in mortality and health trends, and alterations in policy lapsation rates. At the parent holding company level, operating earnings or losses are generally reflective of the amount of debt outstanding and its cost, interest income on temporary holdings of short-term investments, and period-to-period variations in the costs of administering the Company's widespread operations.

General Insurance, Title Insurance, Corporate & Other, and RFIG Run-off maintain customer information and rely upon technology platforms to conduct their business. As a result, each of them and the Company are exposed to cyber risk. Many of the Company's operating subsidiaries maintain separate IT systems which are deemed to reduce enterprise-wide risks of potential cybersecurity incidents. However, given the potential magnitude of a significant breach, the Company continually evaluates on an enterprise-wide basis its IT hardware, security infrastructure and business practices to respond to these risks and to detect and remediate in a timely manner significant cybersecurity incidents or business process interruptions.

A more detailed listing and discussion of the risks and other factors which affect the Company's risk-taking insurance business are included in Part I, Item 1A - Risk Factors, of the Company's 2021 Form 10-K Annual Report filing to the Securities and Exchange Commission, which is specifically incorporated herein by reference.

Any forward-looking statements or commentaries speak only as of their dates. Old Republic undertakes no obligation to publicly update or revise any and all such comments, whether as a result of new information, future events or otherwise, and accordingly they may not be unduly relied upon.

OLD REPUBLIC INTERNATIONAL CORPORATION




Item 3 - Quantitative and Qualitative Disclosure About Market Risk

Market risk represents the potential for loss due to adverse changes in the fair value of financial instruments as a result of changes in interest rates, equity prices, foreign exchange rates and commodity prices. Old Republic's primary market risks consist of interest rate risk associated with investments in fixed income and equity price risk associated with investments in equity securities. The Company has no material foreign exchange or commodity risk.

Old Republic's market risk exposures at June 30, 2022, have not materially changed from those identified in the Company's 2021 Annual Report on Form 10-K.

Item 4 - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company's principal executive officer and its principal financial officer have evaluated the Company's disclosure controls and procedures as of the end of the period covered by this quarterly report. Based upon their evaluation, the principal executive officer and principal financial officer have concluded that the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective for the above referenced evaluation period.

Changes in Internal Control

During the three month period ended June 30, 2022, there were no changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Management's Report on Internal Control Over Financial Reporting

The Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


OLD REPUBLIC INTERNATIONAL CORPORATION
FORM 10-Q
PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

The information contained in Note 8 "Commitments and Contingent Liabilities" of the Notes to Consolidated Financial Statements filed as Part 1 of this Quarterly Report on Form 10-Q is incorporated herein by reference.

Item 1A - Risk Factors

There have been no material changes with respect to the risk factors disclosed in the Company's 2021 Annual report on Form 10-K.

Item 6 - Exhibits

(a) Exhibits



31.1						Certification by Craig R. Smiddy, Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as
						adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification by Frank J. Sodaro, Chief Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as
						adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1						Certification by Craig R. Smiddy, Chief Executive Officer, pursuant to Section 1350, Chapter 63 of Title
						18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Certification by Frank J. Sodaro, Chief Financial Officer, pursuant to Section 1350, Chapter 63 of Title
						18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						XBRL Instance Document - The Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Old Republic International Corporation
		(Registrant)
Date:	August 5, 2022

		/s/ Frank J. Sodaro

		Frank J. Sodaro Senior Vice President, Chief Financial Officer, and Principal Accounting Officer

EXHIBIT INDEX


Exhibit
No.						Description

31.1						Certification by Craig R. Smiddy, Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as
						adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification by Frank J. Sodaro, Chief Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as
						adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1						Certification by Craig R. Smiddy, Chief Executive Officer, pursuant to Section 1350, Chapter 63 of Title
						18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Certification by Frank J. Sodaro, Chief Financial Officer, pursuant to Section 1350, Chapter 63 of Title
						18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						XBRL Instance Document - The Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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