

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:	September 30, ~~2021~~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 September 30, ~~2021~~2022 was ~~307,008,734.~~304,303,660.

There are 4744 pages in this report


OLD REPUBLIC INTERNATIONAL CORPORATION

Report on Form 10-Q / September 30, ~~2021~~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 - 1817

	MANAGEMENT ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS	1918 - 4240

	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	4341

	CONTROLS AND PROCEDURES	4341

PART II	OTHER INFORMATION:

	ITEM 1 - LEGAL PROCEEDINGS	4442

	ITEM 1A - RISK FACTORS	4442

	ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	42

	ITEM 6 - EXHIBITS	4542

SIGNATURE		4643

EXHIBIT INDEX		4744


Old Republic International Corporation and Subsidiaries	Old Republic International Corporation and Subsidiaries					Old Republic International Corporation and Subsidiaries
Consolidated Balance Sheets	Consolidated Balance Sheets					Consolidated Balance Sheets
($ in Millions, Except Share Data)	($ in Millions, Except Share Data)					($ in Millions, Except Share Data)
		(Unaudited)					(Unaudited)
		September 30,		December 31,			September 30,		December 31,
		2021		2020			2022		2021
Assets	Assets					Assets
Investments:	Investments:					Investments:
Available for sale:	Available for sale:					Available for sale:
Fixed maturity securities (at fair value) (amortized cost: $10,136.9 and $9,897.6)		$	10,486.3	$	10,496.8
Fixed income securities (at fair value) (amortized cost: $11,606.7 and $10,438.6)						Fixed income securities (at fair value) (amortized cost: $11,606.7 and $10,438.6)	$	10,841.8	$	10,675.7
Short-term investments (at fair value which approximates cost)	Short-term investments (at fair value which approximates cost)	1,102.1		749.6		Short-term investments (at fair value which approximates cost)	1,371.5		565.7
Total	Total	11,588.4		11,246.4		Total	12,213.3		11,241.4
Equity securities (at fair value) (cost: $3,754.7 and $3,269.7)		4,828.0		4,054.8
Equity securities (at fair value) (cost: $2,151.0 and $3,766.5)						Equity securities (at fair value) (cost: $2,151.0 and $3,766.5)	3,045.4		5,302.8
Other investments	Other investments	30.6		28.8		Other investments	30.3		32.0
Total Investments	Total Investments	16,447.1		15,330.1		Total Investments	15,289.1		16,576.3
Other Assets:	Other Assets:					Other Assets:
Cash	Cash	133.4		118.7		Cash	102.4		158.1
Accrued investment income	Accrued investment income	86.1		86.4		Accrued investment income	100.2		84.4
Accounts and notes receivable	Accounts and notes receivable	1,861.4		1,593.9		Accounts and notes receivable	2,096.9		1,768.7

Federal income tax recoverable: Current						Federal income tax recoverable: Current	—		11.8
Deferred						Deferred	127.4		—

Reinsurance balances and funds held	Reinsurance balances and funds held	234.8		205.0		Reinsurance balances and funds held	330.0		258.1
Reinsurance recoverable: Paid losses	Reinsurance recoverable: Paid losses	75.1		67.6		Reinsurance recoverable: Paid losses	136.8		118.2
Policy and claim reserves		4,979.6		4,295.1
Policy and loss reserves						Policy and loss reserves	5,542.8		4,825.1
Deferred policy acquisition costs	Deferred policy acquisition costs	355.3		328.0		Deferred policy acquisition costs	386.7		350.4
Sundry assets	Sundry assets	816.7		790.0		Sundry assets	834.2		830.3
Total Other Assets	Total Other Assets	8,542.8		7,485.0		Total Other Assets	9,657.9		8,405.5
Total Assets	Total Assets	$	24,989.9	$	22,815.2	Total Assets	$	24,947.0	$	24,981.8
Liabilities, Preferred Stock, and Common Shareholders' Equity	Liabilities, Preferred Stock, and Common Shareholders' Equity					Liabilities, Preferred Stock, and Common Shareholders' Equity
Liabilities:	Liabilities:					Liabilities:
Losses, claims, and settlement expenses		$	11,433.7	$	10,671.0
Loss and loss adjustment expense reserves						Loss and loss adjustment expense reserves	$	12,174.7	$	11,425.5
Unearned premiums	Unearned premiums	2,682.3		2,397.1		Unearned premiums	2,993.1		2,559.4
Other policyholders' benefits and funds	Other policyholders' benefits and funds	202.4		195.9		Other policyholders' benefits and funds	189.5		192.6
Total policy liabilities and accruals	Total policy liabilities and accruals	14,318.5		13,264.2		Total policy liabilities and accruals	15,357.3		14,177.5
Commissions, expenses, fees, and taxes	Commissions, expenses, fees, and taxes	657.0		663.5		Commissions, expenses, fees, and taxes	557.7		573.5
Reinsurance balances and funds	Reinsurance balances and funds	942.4		725.4		Reinsurance balances and funds	1,154.3		866.0
Federal income tax payable: Current	Federal income tax payable: Current	1.2		4.2		Federal income tax payable: Current	2.0		—
Deferred	Deferred	151.5		137.3		Deferred	—		249.5
Debt	Debt	1,588.2		966.4		Debt	1,596.6		1,588.5
Sundry liabilities	Sundry liabilities	1,001.4		867.3		Sundry liabilities	600.7		633.3
Commitments and contingent liabilities		0		0
Total Liabilities	Total Liabilities	18,660.5		16,628.5		Total Liabilities	19,268.9		18,088.6
Preferred Stock (1)	Preferred Stock (1)	—		—		Preferred Stock (1)	—		—
Common Shareholders' Equity:	Common Shareholders' Equity:					Common Shareholders' Equity:
Common stock (1)	Common stock (1)	307.0		304.1		Common stock (1)	304.3		307.5
Additional paid-in capital	Additional paid-in capital	1,363.8		1,306.9		Additional paid-in capital	1,299.7		1,376.1
Retained earnings	Retained earnings	4,653.3		4,394.8		Retained earnings	4,874.9		5,214.0
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	93.2		284.0		Accumulated other comprehensive income (loss)	(728.0)		78.0
Unallocated ESSOP shares (at cost)	Unallocated ESSOP shares (at cost)	(87.9)		(103.2)		Unallocated ESSOP shares (at cost)	(72.7)		(82.5)
Total Common Shareholders' Equity	Total Common Shareholders' Equity	6,329.4		6,186.6		Total Common Shareholders' Equity	5,678.1		6,893.2
Total Liabilities, Preferred Stock and Common Shareholders' Equity	Total Liabilities, Preferred Stock and Common Shareholders' Equity	$	24,989.9	$	22,815.2	Total Liabilities, Preferred Stock and Common Shareholders' Equity	$	24,947.0	$	24,981.8

________

(1) At September 30, ~~2021~~2022 and December 31, ~~2020,~~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 ~~307,008,734~~304,303,660 and ~~304,122,180~~307,565,632 were issued as of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. At September 30, ~~2021~~2022 and December 31, ~~2020,~~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	Old Republic International Corporation and Subsidiaries									Old Republic International Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)	Consolidated Statements of Income (Unaudited)									Consolidated Statements of Income (Unaudited)
($ in Millions, Except Share Data)	($ in Millions, Except Share Data)									($ in Millions, Except Share Data)
		Quarters Ended				Nine Months Ended					Quarters Ended				Nine Months Ended
		September 30,				September 30,					September 30,				September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Revenues:	Revenues:									Revenues:
Net premiums earned	Net premiums earned	$	1,941.7	$	1,622.2	$	5,542.5	$	4,553.4	Net premiums earned	$	1,862.3	$	1,941.7	$	5,578.5	$	5,542.5
Title, escrow, and other fees	Title, escrow, and other fees	113.6		110.5		339.1		278.2		Title, escrow, and other fees	80.9		113.6		266.1		339.1
Total premiums and fees	Total premiums and fees	2,055.4		1,732.8		5,881.6		4,831.6		Total premiums and fees	1,943.3		2,055.4		5,844.6		5,881.6
Net investment income	Net investment income	111.6		106.4		323.6		329.3		Net investment income	115.1		111.6		329.2		323.6
Other income	Other income	37.8		31.7		112.0		98.5		Other income	39.7		37.8		113.7		112.0
Total operating revenues	Total operating revenues	2,204.9		1,871.0		6,317.3		5,259.5		Total operating revenues	2,098.2		2,204.9		6,287.7		6,317.3
Investment gains (losses):
Realized from actual transactions		6.6		1.4		15.6		12.7

Net investment gains (losses):										Net investment gains (losses):
Realized from actual transactions and impairments										Realized from actual transactions and impairments	(26.2)		6.6		92.3		15.6
Unrealized from changes in fair value of	Unrealized from changes in fair value of									Unrealized from changes in fair value of
equity securities	equity securities	(199.3)		79.2		288.1		(529.4)		equity securities	(350.8)		(199.3)		(641.8)		288.1
Total realized and unrealized investment	Total realized and unrealized investment									Total realized and unrealized investment
gains (losses)	gains (losses)	(192.6)		80.7		303.7		(516.7)		gains (losses)	(377.1)		(192.6)		(549.5)		303.7
Total revenues	Total revenues	2,012.2		1,951.7		6,621.0		4,742.8		Total revenues	1,721.0		2,012.2		5,738.1		6,621.0

Benefits, Claims and Expenses:
Benefits, claims and settlement expenses		615.4		633.2		1,829.3		1,870.8
Expenses:										Expenses:
Loss and loss adjustment expenses										Loss and loss adjustment expenses	624.3		615.4		1,864.4		1,829.3
Dividends to policyholders	Dividends to policyholders	2.9		4.9		17.5		14.0		Dividends to policyholders	4.2		2.9		10.8		17.5
Underwriting, acquisition, and other expenses	Underwriting, acquisition, and other expenses	1,270.8		997.1		3,601.8		2,789.8		Underwriting, acquisition, and other expenses	1,195.8		1,270.8		3,604.5		3,601.8
Interest and other charges	Interest and other charges	16.8		9.5		39.7		31.8		Interest and other charges	16.3		16.8		49.9		39.7
Total expenses	Total expenses	1,906.2		1,644.7		5,488.4		4,706.6		Total expenses	1,840.7		1,906.2		5,529.7		5,488.4
Income (loss) before income taxes (credits)	Income (loss) before income taxes (credits)	106.0		306.9		1,132.6		36.1		Income (loss) before income taxes (credits)	(119.6)		106.0		208.3		1,132.6

Income Taxes (Credits):	Income Taxes (Credits):									Income Taxes (Credits):
Current	Current	63.0		45.0		160.4		110.9		Current	79.5		63.0		202.8		160.4
Deferred	Deferred	(45.7)		15.9		64.8		(113.7)		Deferred	(107.3)		(45.7)		(168.7)		64.8
Total	Total	17.2		60.9		225.2		(2.7)		Total	(27.8)		17.2		34.0		225.2

Net Income (Loss)	Net Income (Loss)	$	88.7	$	246.0	$	907.3	$	38.9	Net Income (Loss)	$	(91.7)	$	88.7	$	174.3	$	907.3

Net Income (Loss) Per Share:	Net Income (Loss) Per Share:									Net Income (Loss) Per Share:
Basic	Basic	$	.29	$	.83	$	3.01	$	.13	Basic	$	(.31)	$	.29	$	.57	$	3.01
Diluted	Diluted	$	.29	$	.83	$	3.00	$	.13	Diluted	$	(.31)	$	.29	$	.57	$	3.00

Average shares outstanding: Basic	Average shares outstanding: Basic	301,577,493		297,729,418		301,247,397		298,526,123		Average shares outstanding: Basic	303,652,802		301,577,493		303,797,001		301,247,397
Diluted	Diluted	303,539,358		297,990,822		302,908,488		299,015,526		Diluted	303,652,802		303,539,358		305,381,348		302,908,488

See accompanying Notes to Consolidated Financial Statements.


Old Republic International Corporation and Subsidiaries	Old Republic International Corporation and Subsidiaries									Old Republic International Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Unaudited)	Consolidated Statements of Comprehensive Income (Unaudited)									Consolidated Statements of Comprehensive Income (Unaudited)
($ in Millions)	($ in Millions)									($ in Millions)
		Quarters Ended				Nine Months Ended					Quarters Ended				Nine Months Ended
		September 30,				September 30,					September 30,				September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Net Income (Loss) As Reported	Net Income (Loss) As Reported	$	88.7	$	246.0	$	907.3	$	38.9	Net Income (Loss) As Reported	$	(91.7)	$	88.7	$	174.3	$	907.3

Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Unrealized gains (losses) on securities:
Unrealized gains (losses) on securities not included										Unrealized gains (losses) on securities not included
in the statements of income:										in the statements of income:
Unrealized gains (losses) before reclassifications,	Unrealized gains (losses) before reclassifications,									Unrealized gains (losses) before reclassifications,
not included in the statements of income	not included in the statements of income	(67.9)		32.3		(248.9)		321.5		not included in the statements of income	(387.5)		(67.9)		(1,277.0)		(248.9)
Amounts reclassified as realized investment (gains)	Amounts reclassified as realized investment (gains)									Amounts reclassified as realized investment (gains)
losses in the statements of income	losses in the statements of income	(.8)		(.7)		(1.9)		7.8		losses in the statements of income	207.2		(.8)		267.6		(1.9)
Pretax unrealized gains (losses) on securities		(68.8)		31.6		(250.9)		329.3
Pretax unrealized gains (losses) on securities not										Pretax unrealized gains (losses) on securities not
included in the statements of income										included in the statements of income	(180.3)		(68.8)		(1,009.3)		(250.9)
Deferred income taxes (credits)	Deferred income taxes (credits)	(14.5)		6.6		(52.9)		69.5		Deferred income taxes (credits)	(37.9)		(14.5)		(212.9)		(52.9)
Net unrealized gains (losses) on securities, net of tax		(54.3)		24.9		(197.9)		259.8
Net unrealized gains (losses) on securities not included										Net unrealized gains (losses) on securities not included
in the statements of income, net of tax										in the statements of income, net of tax	(142.3)		(54.3)		(796.3)		(197.9)
Defined benefit pension plans:	Defined benefit pension plans:									Defined benefit pension plans:
Net pension adjustment before reclassifications	Net pension adjustment before reclassifications	—		—		—		—		Net pension adjustment before reclassifications	—		—		—		—
Amounts reclassified as underwriting, acquisition,	Amounts reclassified as underwriting, acquisition,									Amounts reclassified as underwriting, acquisition,
and other expenses in the statements of income	and other expenses in the statements of income	1.8		.9		5.5		2.7		and other expenses in the statements of income	.7		1.8		2.3		5.5
Pretax net adjustment related to defined benefit	Pretax net adjustment related to defined benefit									Pretax net adjustment related to defined benefit
pension plans	pension plans	1.8		.9		5.5		2.7		pension plans	.7		1.8		2.3		5.5
Deferred income taxes (credits)	Deferred income taxes (credits)	.3		.1		1.1		.5		Deferred income taxes (credits)	.1		.3		.4		1.1
Net adjustment related to defined benefit pension	Net adjustment related to defined benefit pension									Net adjustment related to defined benefit pension
plans, net of tax	plans, net of tax	1.4		.7		4.3		2.1		plans, net of tax	.6		1.4		1.8		4.3
Foreign currency translation adjustment	Foreign currency translation adjustment	(4.3)		2.8		2.7		(3.6)		Foreign currency translation adjustment	(10.2)		(4.3)		(11.5)		2.7
Total other comprehensive income (loss)	Total other comprehensive income (loss)	(57.2)		28.5		(190.8)		258.3		Total other comprehensive income (loss)	(151.9)		(57.2)		(806.1)		(190.8)
Comprehensive Income (Loss)	Comprehensive Income (Loss)	$	31.5	$	274.5	$	716.4	$	297.3	Comprehensive Income (Loss)	$	(243.7)	$	31.5	$	(631.7)	$	716.4

See accompanying Notes to Consolidated Financial Statements.


Old Republic International Corporation and Subsidiaries	Old Republic International Corporation and Subsidiaries									Old Republic International Corporation and Subsidiaries
Consolidated Statements of Preferred Stock	Consolidated Statements of Preferred Stock									Consolidated Statements of Preferred Stock
and Common Shareholders' Equity (Unaudited)
and Common Shareholders' Equity (Unaudited)										and Common Shareholders' Equity (Unaudited)
($ in Millions)	($ in Millions)									($ in Millions)
		Quarters Ended				Nine Months Ended					Quarters Ended				Nine Months Ended
		September 30,				September 30,					September 30,				September 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Preferred Stock:	Preferred Stock:									Preferred Stock:
Balance, beginning and end of period	Balance, beginning and end of period	$	—	$	—	$	—	$	—	Balance, beginning and end of period	$	—	$	—	$	—	$	—

Common Stock:	Common Stock:									Common Stock:
Balance, beginning of period	Balance, beginning of period	$	305.7	$	304.0	$	304.1	$	303.6	Balance, beginning of period	$	308.9	$	305.7	$	307.5	$	304.1
Dividend reinvestment plan	Dividend reinvestment plan	—		—		—		—		Dividend reinvestment plan	—		—		—		—
Net issuance of shares under stock based compensation plans		1.2		—		2.7		.3

Stock based compensation										Stock based compensation	.1		1.2		1.5		2.7
Treasury stock restored to unissued status										Treasury stock restored to unissued status	(4.8)		—		(4.8)		—
Balance, end of period	Balance, end of period	$	307.0	$	304.0	$	307.0	$	304.0	Balance, end of period	$	304.3	$	307.0	$	304.3	$	307.0

Additional Paid-in Capital:	Additional Paid-in Capital:									Additional Paid-in Capital:
Balance, beginning of period	Balance, beginning of period	$	1,337.6	$	1,305.1	$	1,306.9	$	1,297.5	Balance, beginning of period	$	1,395.9	$	1,337.6	$	1,376.1	$	1,306.9
Dividend reinvestment plan	Dividend reinvestment plan	.2		.2		1.7		.7		Dividend reinvestment plan	1.3		.2		1.8		1.7
Net issuance of shares under stock based compensation plans		21.2		.1		45.6		4.8

Stock based compensation	Stock based compensation	.4		.4		3.1		2.0		Stock based compensation	5.6		21.6		22.0		48.7
ESSOP shares released	ESSOP shares released	4.1		—		6.3		.7		ESSOP shares released	1.8		4.1		4.8		6.3
Treasury stock restored to unissued status										Treasury stock restored to unissued status	(99.9)		—		(99.9)		—
Other - net	Other - net	—		(.2)		—		(.2)		Other - net	(5.0)		—		(5.1)		—
Balance, end of period	Balance, end of period	$	1,363.8	$	1,305.6	$	1,363.8	$	1,305.6	Balance, end of period	$	1,299.7	$	1,363.8	$	1,299.7	$	1,363.8

Retained Earnings:	Retained Earnings:									Retained Earnings:
Balance, beginning of period	Balance, beginning of period	$	5,082.1	$	4,051.2	$	4,394.8	$	4,386.0	Balance, beginning of period	$	5,341.0	$	5,082.1	$	5,214.0	$	4,394.8
Adoption of new accounting principle (1)		—		—		—		(2.3)
Balance, beginning of period, as adjusted		5,082.1		4,051.2		4,394.8		4,383.6

Net income (loss)	Net income (loss)	88.7		246.0		907.3		38.9		Net income (loss)	(91.7)		88.7		174.3		907.3
Dividends on common shares ($1.72, $.21, $2.16 and $.63 per
common share)		(517.5)		(62.4)		(648.8)		(187.7)
Dividends on common shares (1)										Dividends on common shares (1)	(374.3)		(517.5)		(513.4)		(648.8)
Balance, end of period	Balance, end of period	$	4,653.3	$	4,234.9	$	4,653.3	$	4,234.9	Balance, end of period	$	4,874.9	$	4,653.3	$	4,874.9	$	4,653.3

Accumulated Other Comprehensive Income (Loss):	Accumulated Other Comprehensive Income (Loss):									Accumulated Other Comprehensive Income (Loss):
Balance, beginning of period	Balance, beginning of period	$	150.4	$	307.5	$	284.0	$	77.7	Balance, beginning of period	$	(576.0)	$	150.4	$	78.0	$	284.0

Net unrealized gains (losses) on securities, net of tax		(54.3)		24.9		(197.9)		259.8
Net unrealized gains (losses) on securities not included in the										Net unrealized gains (losses) on securities not included in the
statements of income, net of tax										statements of income, net of tax	(142.3)		(54.3)		(796.3)		(197.9)
Net adjustment related to defined benefit pension plans,	Net adjustment related to defined benefit pension plans,									Net adjustment related to defined benefit pension plans,
net of tax	net of tax	1.4		.7		4.3		2.1		net of tax	.6		1.4		1.8		4.3
Foreign currency translation adjustment	Foreign currency translation adjustment	(4.3)		2.8		2.7		(3.6)		Foreign currency translation adjustment	(10.2)		(4.3)		(11.5)		2.7

Balance, end of period	Balance, end of period	$	93.2	$	336.1	$	93.2	$	336.1	Balance, end of period	$	(728.0)	$	93.2	$	(728.0)	$	93.2

Unallocated ESSOP Shares:	Unallocated ESSOP Shares:									Unallocated ESSOP Shares:
Balance, beginning of period	Balance, beginning of period	$	(97.3)	$	(109.0)	$	(103.2)	$	(64.8)	Balance, beginning of period	$	(76.6)	$	(97.3)	$	(82.5)	$	(103.2)
ESSOP shares released	ESSOP shares released	9.3		2.8		15.2		8.6		ESSOP shares released	3.8		9.3		9.8		15.2
Purchase of unallocated ESSOP shares		—		—		—		(50.0)

Balance, end of period	Balance, end of period	$	(87.9)	$	(106.1)	$	(87.9)	$	(106.1)	Balance, end of period	$	(72.7)	$	(87.9)	$	(72.7)	$	(87.9)

Treasury Stock:										Treasury Stock:
Balance, beginning of period										Balance, beginning of period	$	—	$	—	$	—	$	—
Acquired during the period										Acquired during the period	(104.8)		—		(104.8)		—
Restored to unissued status										Restored to unissued status	104.8		—		104.8		—
Balance, end of period										Balance, end of period	$	—	$	—	$	—	$	—

~~_______~~________

(1)~~Reflects~~ Cash dividends per common share of $1.23 and $1.72 were declared for the ~~Company's adoption of a new accounting principle relating to credit losses effective January 1, 2020. Refer to additional discussion in Note 1 to~~quarters ended September 30, 2022 and 2021, respectively, and $1.69 and $2.16 were declared for the ~~Consolidated Financial Statements.~~comparative nine month periods.

See accompanying Notes to Consolidated Financial Statements.


Old Republic International Corporation and Subsidiaries	Old Republic International Corporation and Subsidiaries					Old Republic International Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)	Consolidated Statements of Cash Flows (Unaudited)					Consolidated Statements of Cash Flows (Unaudited)
($ in Millions)	($ in Millions)					($ in Millions)
		Nine Months Ended					Nine Months Ended
		September 30,					September 30,
		2021		2020			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	907.3	$	38.9	Net income (loss)	$	174.3	$	907.3
Adjustments to reconcile net income (loss) to	Adjustments to reconcile net income (loss) to					Adjustments to reconcile net income (loss) to
net cash provided by operating activities:	net cash provided by operating activities:					net cash provided by operating activities:
Deferred policy acquisition costs	Deferred policy acquisition costs	(27.2)		(3.3)		Deferred policy acquisition costs	(36.2)		(27.2)
Premiums and other receivables	Premiums and other receivables	(267.5)		(263.5)		Premiums and other receivables	(328.1)		(267.5)
Unpaid claims and related items		257.5		328.8
Loss and loss adjustment expense reserves						Loss and loss adjustment expense reserves	265.0		257.5
Unearned premiums and other policyholders' liabilities	Unearned premiums and other policyholders' liabilities	112.0		46.0		Unearned premiums and other policyholders' liabilities	197.0		112.0
Income taxes	Income taxes	63.0		(99.7)		Income taxes	(150.6)		63.0

Reinsurance balances		179.8		193.1
Reinsurance balances and funds						Reinsurance balances and funds	197.6		179.8
Realized investment (gains) losses from actual transactions	Realized investment (gains) losses from actual transactions	(15.6)		(12.7)		Realized investment (gains) losses from actual transactions	(92.3)		(15.6)
Unrealized investment (gains) losses from changes in fair value	Unrealized investment (gains) losses from changes in fair value					Unrealized investment (gains) losses from changes in fair value
of equity securities	of equity securities	(288.1)		529.4		of equity securities	641.8		(288.1)
Accounts payable, accrued expenses and other	Accounts payable, accrued expenses and other	49.4		51.9		Accounts payable, accrued expenses and other	34.7		49.4
Total	Total	970.6		808.9		Total	903.4		970.6

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Fixed maturity securities:
Fixed income securities:						Fixed income securities:
Maturities and early calls	Maturities and early calls	1,121.4		935.3		Maturities and early calls	1,128.6		1,121.4
Sales	Sales	281.0		343.6		Sales	810.6		281.0

Sales of:	Sales of:					Sales of:
Equity securities	Equity securities	522.6		159.1		Equity securities	2,011.5		522.6
Other - net		6.5		7.1
Other investments						Other investments	7.4		6.5

Purchases of:	Purchases of:					Purchases of:
Fixed maturity securities		(1,668.4)		(1,380.2)
Fixed income securities						Fixed income securities	(3,417.2)		(1,668.4)
Equity securities	Equity securities	(993.5)		(321.0)		Equity securities	(37.7)		(993.5)
Other - net		(42.0)		(31.7)

Other investments						Other investments	(39.4)		(42.0)
Net decrease (increase) in short-term investments	Net decrease (increase) in short-term investments	(352.2)		(263.6)		Net decrease (increase) in short-term investments	(806.3)		(352.2)
Other - net	Other - net	—		(.4)		Other - net	(12.3)		—
Total	Total	(1,124.5)		(551.9)		Total	(354.7)		(1,124.5)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Issuance of debentures and notes	Issuance of debentures and notes	642.5		—		Issuance of debentures and notes	—		642.5
Issuance of common shares	Issuance of common shares	50.3		6.0		Issuance of common shares	19.0		50.3
Redemption of debentures and notes	Redemption of debentures and notes	(21.7)		(8.6)		Redemption of debentures and notes	—		(21.7)
Purchase of unallocated common shares by ESSOP		—		(50.0)
Dividends on common shares (including a special dividend paid in January
2021 of $304.0)		(501.5)		(187.7)

Dividends on common shares (including a special dividend of $308.4 paid in						Dividends on common shares (including a special dividend of $308.4 paid in
September 2022 and $304.0 paid in January 2021)						September 2022 and $304.0 paid in January 2021)	(512.5)		(501.5)
Treasury stock acquired						Treasury stock acquired	(104.8)		—
Other - net	Other - net	(.8)		(.5)		Other - net	(5.9)		(.8)
Total	Total	168.7		(240.8)		Total	(604.3)		168.7

Increase (decrease) in cash	Increase (decrease) in cash	14.7		16.1		Increase (decrease) in cash	(55.7)		14.7
Cash, beginning of period	Cash, beginning of period	118.7		78.8		Cash, beginning of period	158.1		118.7
Cash, end of period	Cash, end of period	$	133.4	$	95.0	Cash, end of period	$	102.4	$	133.4

Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Cash paid (received) during the period for: Interest	Cash paid (received) during the period for: Interest	$	40.9	$	41.3	Cash paid (received) during the period for: Interest	$	53.3	$	40.9
Income taxes	Income taxes	$	162.4	$	98.2	Income taxes	$	185.2	$	162.4

See accompanying Notes to Consolidated Financial Statements.


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

1.Note 1 - Summary of Significant Accounting Policies ~~and Basis of Presentation:~~

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 ~~2020~~2021 Annual Report on Form 10-K incorporated herein by reference.

~~Pertinent accounting and disclosure pronouncements issued from time to time by the FASB are adopted by the Company as they become effective. Recent pronouncements are discussed below.~~

Effective January 1, 2020, the Company adopted the FASB’s accounting guidance on current expected credit loss ("CECL") which requires the immediate recognition of estimated credit losses expected to occur over the remaining life of certain financial assets measured at amortized cost, primarily including the Company’s reinsurance recoverables, and its accounts and notes receivable. CECL replaced the incurred loss impairment model that recognized losses when a probability threshold was met with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased and at subsequent measurement dates. 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 sheet.

The guidance relating to financial assets measured at amortized cost was adopted on a modified retrospective basis, resulting in a net of tax adjustment to January 1, 2020 retained earnings of $2.3. The Company’s January 1, 2020 credit loss allowance of $30.1 was comprised of $14.5 related to reinsurance recoverables, $15.5 related to accounts and notes receivable, and an immaterial amount related to held to maturity securities. The September 30, 2021 allowance included $16.0 related to reinsurance recoverables and $21.5 related to accounts and notes receivable. No significant changes were made to the allowance during the nine months ended September 30, 2021.

The guidance also modified the impairment model for available for sale fixed maturity securities by requiring the recognition of credit losses through an allowance account, as opposed to a charge that cannot be revised should the underlying security recover. Under the guidance, the length of time a security has been in an unrealized loss position will no longer impact the determination as to whether a credit loss exists. The revised guidance for available for sale fixed maturity securities was adopted on a prospective basis and the related disclosures summarizing this standard’s impact on the Company’s investment portfolio are included in Note 3.

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~~ - Reclassifications are made in prior periods' financial statements whenever appropriate to conform to the most current presentation.

~~Immaterial Adjustment~~Investments - The Company ~~recorded immaterial adjustments~~classifies its fixed income securities, also referred to present revenues gross of the applicable commission expenses in the September 30, 2020 consolidated statements of income and comprehensive income by: increasing net premiums earned by $126.2 and $327.6 for the quarter and nine months, respectively, decreasing title, escrow and other fees by $58.3 and $140.7 for the quarter and nine months, respectively, and increasing underwriting, acquisition, and other expenses by $67.9 and $186.8 for the quarter and nine months, respectively. These immaterial adjustments were made to conform all prior periods to the current presentation and had no impact on net income (loss), comprehensive income (loss) or shareholders' equity.

~~2. Common Share Data:~~

Earnings 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 Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Numerator:
Basic and diluted earnings per share -
income (loss) available to common stockholders $ 88.7 $ 246.0 $ 907.3 $ 38.9
Denominator:
Basic earnings per share -
weighted-average shares (a) 301,577,493 297,729,418 301,247,397 298,526,123
Effect of dilutive securities - stock based
compensation awards 1,961,865 261,404 1,661,091 489,403
Diluted earnings per share -
adjusted weighted-average shares (a) 303,539,358 297,990,822 302,908,488 299,015,526
Earnings per share: Basic $ .29 $ .83 $ 3.01 $ .13
Diluted $ .29 $ .83 $ 3.00 $ .13
Anti-dilutive common stock equivalents
excluded from earnings per share computations:
Stock based compensation awards — 8,063,111 292,500 5,858,669

~~__________~~

(a) In calculating earnings per share, pertinent accounting rules 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.

~~3. Investments:~~

~~The Company classifies its~~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 ~~maturity~~income portfolio is classified as available for sale. As of June 30, 2020 the Company changed its intent to hold its tax exempt municipal bond portfolio until maturity and consequently, reclassified these securities from their previous held to maturity designation to available for sale. As a result, net of tax unrealized gains of $48.5 were recognized in other comprehensive income as of that date.

Fixed ~~maturity~~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 September 30, 2022, the Company and its subsidiaries did not have significant amounts of non-income producing securities.

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 20% 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 ~~status~~remaining title premium and ~~fair value changes of each~~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 ~~fixed maturity investments~~underlying title policy, and are ~~reviewed at least once per quarter during~~offset concurrently by production expenses and loss reserve provisions.

Loss and Loss Adjustment Expenses - The establishment of loss reserves by the ~~year~~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 ~~assess whether~~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 ~~decline in fair value~~reflection of ~~an investment below its cost basis is~~ the ~~result~~opinions of a ~~credit loss. Factors considered~~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 ~~making this assessment include a security's market price history,~~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 ~~issuer's operating results, financial condition~~effects of unexpected jury verdicts.

All reserves are therefore based on estimates which are periodically reviewed and ~~liquidity,~~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 ~~ability~~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 ~~access capital markets and~~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 ~~make scheduled principal or interest payments, credit rating trends, most current audited~~the consolidated financial statements ~~industry~~included in Old Republic's 2021 Annual Report on Form 10-K. Certain loss related financial statement captions and ~~securities markets conditions and analyst expectations. Sudden fair value declines caused by such adverse developments~~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 ~~newly emerged or imminent bankruptcy filings, issuer default on significant obligations, or reports~~ of ~~financial accounting developments that bring into question the validity~~December 31, 2013. The underfunded status of the ~~issuer's previously reported earnings or financial condition, are~~Plan is recognized as ~~realized losses~~a net pension liability with offsetting entries reflected as ~~soon as credible publicly available information emerges to confirm such developments.~~ a component of shareholders' equity in accumulated other comprehensive income, net of deferred taxes.

The Company ~~recorded no allowance for credit losses as~~also provides long-term incentive awards to certain employees. In March 2022, the Compensation Committee of ~~September 30, 2021, and December 31, 2020.~~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 ~~maturity~~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:
September 30, 2022:
U.S. & Canadian Governments	$	2,131.8	$	—	$	122.0	$	2,009.7
Tax-exempt	897.7		—		26.2		871.5
Corporate	8,577.1		1.7		618.3		7,960.5
	$	11,606.7	$	1.7	$	766.7	$	10,841.8

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 Gross
Unrealized
Gains Gross
Unrealized
Losses Estimated
Fair
Value
Fixed Maturity Securities by Type:
September 30, 2021:
U.S. & Canadian Governments $ 1,952.5 $ 59.2 $ 5.7 $ 2,006.0
Tax-exempt 956.3 48.5 — 1,004.8
Corporate 7,228.0 294.1 46.8 7,475.3
$ 10,136.9 $ 401.9 $ 52.5 $ 10,486.3
December 31, 2020:
U.S. & Canadian Governments $ 1,967.1 $ 96.4 $ .3 $ 2,063.2
Tax-exempt 997.1 66.3 — 1,063.5
Corporate 6,933.3 440.1 3.4 7,370.0
$ 9,897.6 $ 602.9 $ 3.8 $ 10,496.8


		Amortized Cost		Estimated Fair Value			Amortized Cost		Estimated Fair Value
Fixed Maturity Securities Stratified by Contractual Maturity at September 30, 2021:
Fixed Income Securities Stratified by Contractual Maturity at September 30, 2022:						Fixed Income Securities Stratified by Contractual Maturity at September 30, 2022:
Due in one year or less	Due in one year or less	$	1,142.3	$	1,154.3	Due in one year or less	$	1,324.2	$	1,311.0
Due after one year through five years	Due after one year through five years	5,048.3		5,301.6		Due after one year through five years	5,605.1		5,331.7
Due after five years through ten years	Due after five years through ten years	3,857.2		3,941.5		Due after five years through ten years	4,566.1		4,093.5
Due after ten years	Due after ten years	89.0		88.7		Due after ten years	111.2		105.3
		$	10,136.9	$	10,486.3		$	11,606.7	$	10,841.8

The following table reflects the Company's gross unrealized losses and fair value, aggregated by category and length of time that individual ~~available for sale~~ 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
September 30, 2021:
Fixed Maturity Securities:
  U.S. & Canadian Governments $ 482.9 $ 5.7 $ — $ — $ 482.9 $ 5.7
  Corporate 1,796.4 46.8 — — 1,796.4 46.8
$ 2,279.4 $ 52.5 $ — $ — $ 2,279.4 $ 52.5
Number of securities in
unrealized loss position 353 2 355
December 31, 2020:
Fixed Maturity Securities:
  U.S. & Canadian Governments $ 416.4 $ .3 $ — $ — $ 416.4 $ .3
  Corporate 333.6 3.4 — — 333.6 3.4
$ 750.0 $ 3.8 $ — $ — $ 750.0 $ 3.8
Number of securities in
unrealized loss position 74 3 77


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

Fixed Income Securities:
U.S. & Canadian Governments	$	1,601.5	$	76.4	$	408.2	$	45.6	$	2,009.7	$	122.0
Tax-exempt	863.8		26.2		—		—		863.8		26.2
Corporate	6,842.1		513.7		799.9		104.6		7,642.0		618.3
	$	9,307.4	$	616.4	$	1,208.1	$	150.2	$	10,515.6	$	766.7

Number of securities in
unrealized loss position			1,813				181				1,994

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 ~~maturity~~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~~whether it intends to ~~continue~~sell or is more likely than not required to ~~hold the~~sell securities, ~~until cost recovery,~~ principally in consideration of its asset and liability maturity matching objectives. Net realized investment gains (losses) in the third quarter and first nine months of 2022 included $120.9 and $123.5, respectively, of losses on fixed income securities for which management intends to dispose of, principally due to tax planning considerations. No such losses were recognized during the same periods of 2021. The Company recorded no allowance for credit losses as of September 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
September 30, 2021 $ 3,754.7 $ 1,185.3 $ 112.0 $ 4,828.0
December 31, 2020 $ 3,269.7 $ 1,028.1 $ 243.0 $ 4,054.8


	Equity Securities
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
September 30, 2022	$	2,151.0	$	953.7	$	59.3	$	3,045.4
December 31, 2021	$	3,766.5	$	1,620.8	$	84.5	$	5,302.8

During the third quarter and first nine months of ~~2021~~2022 and ~~2020,~~2021, the Company recognized pretax unrealized investment gains (losses) of $(350.8) and $(641.8), respectively for 2022, and $(199.3) and $288.1, respectively for 2021, ~~and $79.2 and $(529.4), respectively for 2020,~~ 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 September 30, 2022 and 2021 were $(215.8) and ~~2020 were~~$(378.6) for the third quarter and first nine months of 2022, respectively, and $(178.3) and $245.9 for the third quarter and first nine months of 2021, ~~respectively, and $78.9 and $(520.6) for the third quarter and first nine months of 2020,~~ 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 ~~maturity~~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 September 30, ~~2021~~2022 and December 31, ~~2020.~~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									Fair Value Measurements
As of September 30, 2021:		Level 1		Level 2		Level 3		Total
As of September 30, 2022:										As of September 30, 2022:	Level 1		Level 2		Level 3		Total
Available for sale:	Available for sale:									Available for sale:
Fixed maturity securities:
Fixed income securities:										Fixed income securities:
U.S. & Canadian Governments	U.S. & Canadian Governments	$	1,277.3	$	728.6	$	—	$	2,006.0	U.S. & Canadian Governments	$	1,430.1	$	579.6	$	—	$	2,009.7
Tax-exempt	Tax-exempt	—		1,004.8		—		1,004.8		Tax-exempt	—		871.5		—		871.5
Corporate	Corporate	—		7,464.8		10.5		7,475.3		Corporate	—		7,940.0		20.5		7,960.5
Short-term investments	Short-term investments	1,102.1		—		—		1,102.1		Short-term investments	1,371.5		—		—		1,371.5
Equity securities	Equity securities	$	4,826.1	$	—	$	1.9	$	4,828.0	Equity securities	$	3,043.6	$	—	$	1.7	$	3,045.4

As of December 31, 2020:
As of December 31, 2021:										As of December 31, 2021:
Available for sale:	Available for sale:									Available for sale:
Fixed maturity securities:
Fixed income securities:										Fixed income securities:
U.S. & Canadian Governments	U.S. & Canadian Governments	$	1,262.2	$	801.0	$	—	$	2,063.2	U.S. & Canadian Governments	$	1,453.8	$	704.6	$	—	$	2,158.5
Tax-exempt	Tax-exempt	—		1,063.5		—		1,063.5		Tax-exempt	—		989.2		—		989.2
Corporate	Corporate	—		7,359.5		10.5		7,370.0		Corporate	—		7,517.4		10.5		7,527.9
Short-term investments	Short-term investments	749.6		—		—		749.6		Short-term investments	565.7		—		—		565.7
Equity securities	Equity securities	$	4,052.9	$	—	$	1.8	$	4,054.8	Equity securities	$	5,300.8	$	—	$	1.9	$	5,302.8

There were no transfers between Levels 1, 2 or 3 during the quarter ended September 30, ~~2021.~~2022.

~~Investment income~~ is reported net of allocated expenses and includes appropriate adjustments for amortization of premium and accretion of discount on fixed maturity securities acquired at other than par value. Dividends on equity securities are credited to income on the ex-dividend date.

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 maturity securities, and cost in regard to equity securities; such bases apply to the specific securities sold. Unrealized gains and (losses) from changes in fair value of equity securities are recorded as investment gains (losses) in the income statement. Unrealized investment gains (losses) on fixed maturity securities, net of any deferred income taxes, are recorded directly as a component of accumulated other comprehensive income in shareholders' equity. At September 30, 2021, the Company and its subsidiaries did not have significant amounts of non-income producing fixed maturity or equity securities.

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 Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Investment income:
Fixed maturity securities $ 67.3 $ 71.3 $ 209.7 $ 218.3
Equity securities 45.0 36.1 116.6 111.1
Short-term investments — .1 .1 2.3
Other sources .8 .3 1.6 2.7
Gross investment income 113.2 107.9 328.1 334.5
Investment expenses (a) 1.5 1.5 4.5 5.1
Net investment income $ 111.6 $ 106.4 $ 323.6 $ 329.3
Investment gains (losses):
From actual transactions:
Fixed maturity securities:
Gains $ 1.0 $ 6.3 $ 2.6 $ 10.0
Losses (.1) (5.6) (.7) (17.9)
Net .8 .6 1.9 (7.8)
Equity securities:
Gains 31.2 .7 68.0 21.7
Losses (25.5) — (54.3) (1.2)
Net 5.7 .7 13.6 20.5
Total from actual transactions 6.6 1.4 15.6 12.7
From unrealized changes in fair value of equity securities (199.3) 79.2 288.1 (529.4)
Total realized and unrealized investment gains (losses) (192.6) 80.7 303.7 (516.7)
Current and deferred income taxes (credits) (40.9) 16.9 64.0 (108.7)
Net of tax realized and unrealized investment gains (losses) $ (151.6) $ 63.7 $ 239.6 $ (408.0)
Changes in unrealized investment gains (losses)
reflected directly in shareholders' equity:
Fixed maturity securities $ (68.3) $ 31.5 $ (249.2) $ 325.9
Less: Deferred income taxes (credits) (14.4) 6.6 (52.6) 68.7
(53.9) 24.8 (196.6) 257.1
Other investments (.4) .1 (1.6) 3.4
Less: Deferred income taxes (credits) (.1) — (.3) .7
(.3) — (1.3) 2.7
Net changes in unrealized investment gains (losses),
net of tax $ (54.3) $ 24.9 $ (197.9) $ 259.8

~~__________~~

~~(a) Investment expenses largely consist of personnel costs and investment management and custody service fees.~~

~~4. Losses, Claims and Settlement Expenses:~~

The establishment of claim 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 incurrence of possibly higher or lower than anticipated claim 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 claim 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 claims in future years, may offset, in whole or in part, favorable or unfavorable claim developments for certain coverages such as workers' compensation, portions of which are written under loss sensitive programs that provide for such adjustments. The Company 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 claims incurred. However, no representation is made nor is any guaranty given that ultimate net claim and related costs will not develop in future years to be greater or lower than currently established reserve estimates.

The Company’s accounting policy regarding the establishment of claim reserve estimates is described in Note 1(h) to the consolidated financial statements included in Old Republic’s 2020 Annual Report on Form 10-K. The following table shows an analysis of changes in aggregate reserves for the Company's losses, claims and settlement expenses for each of the periods shown.


	Quarters Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Investment income:
Fixed income securities	$	80.0	$	67.3	$	219.6	$	209.7
Equity securities	30.2		45.0		107.1		116.6
Short-term investments	6.0		—		7.3		.1
Other investments	1.2		.8		2.1		1.6
Gross investment income	117.6		113.2		336.2		328.1
Investment expenses	2.5		1.5		6.9		4.5
Net investment income	$	115.1	$	111.6	$	329.2	$	323.6

Net investment gains (losses):
Realized from actual transactions:
Fixed income securities:
Gains	$	.6	$	1.0	$	.7	$	2.6
Losses	(86.9)		(.1)		(146.2)		(.7)
Net	(86.3)		.8		(145.4)		1.9
Equity securities:
Gains	219.0		31.2		439.2		68.0
Losses	(38.1)		(25.5)		(79.2)		(54.3)
Net	180.9		5.7		359.9		13.6
Other investments, net	—		—		1.3		—
Total realized from actual transactions	94.7		6.6		215.8		15.6
From impairments	(120.9)		—		(123.5)		—
From unrealized changes in fair value of equity securities	(350.8)		(199.3)		(641.8)		288.1
Total realized and unrealized investment gains (losses)	(377.1)		(192.6)		(549.5)		303.7
Current and deferred income taxes (credits)	(79.2)		(40.9)		(115.6)		64.0
Net of tax realized and unrealized investment gains (losses)	$	(297.9)	$	(151.6)	$	(433.8)	$	239.6

Changes in unrealized investment gains (losses)
reflected directly in shareholders' equity:
Fixed income securities	$	(177.8)	$	(68.3)	$	(999.8)	$	(249.2)
Less: Deferred income taxes (credits)	(37.4)		(14.4)		(210.9)		(52.6)
	(140.4)		(53.9)		(788.8)		(196.6)

Other investments	(2.4)		(.4)		(9.5)		(1.6)
Less: Deferred income taxes (credits)	(.5)		(.1)		(1.9)		(.3)
	(1.9)		(.3)		(7.5)		(1.3)
Net changes in unrealized investment gains (losses),
net of tax	$	(142.3)	$	(54.3)	$	(796.3)	$	(197.9)

Note 3 - Loss and Loss Adjustment Expenses

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


	Nine Months Ended
	September 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	1,886.4		1,802.9
Title Insurance	107.6		118.0
RFIG Run-off	12.3		14.8
Other	6.8		9.0
Sub-total	2,013.3		1,944.8
Change in provision for insured events of prior years:
General Insurance	(92.2)		(77.0)
Title Insurance	(22.9)		(22.6)
RFIG Run-off	(29.8)		(11.4)
Other	(3.1)		(3.3)
Sub-total	(148.2)		(114.4)
Total incurred loss and loss adjustment expenses	1,865.1		1,830.4
Payments:
Loss and loss adjustment expenses attributable to
insured events of the current year:
General Insurance	550.1		523.9
Title Insurance	8.1		17.7
RFIG Run-off	.1		.2
Other	3.7		4.9
Sub-total	562.2		546.8
Loss and loss adjustment expenses attributable to
insured events of prior years:
General Insurance	977.7		971.4
Title Insurance	47.1		40.9
RFIG Run-off	11.7		12.3
Other	1.1		1.3
Sub-total	1,037.7		1,026.0
Total payments	1,599.9		1,572.8
Net reserves at end of period:
General Insurance	6,853.4		6,558.5
Title Insurance	623.5		592.8
RFIG Run-off	81.9		118.5
Other	6.4		8.0
Sub-total	7,565.3		7,278.0
Reinsurance losses recoverable	4,609.3		4,155.7
Gross reserves at end of period	$	12,174.7	$	11,433.7


~~This space left intentionally blank~~

For the nine months ended September 30, 2022, all operating segments experienced favorable loss reserve development. General Insurance favorable development came predominantly from 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, and to a lesser extent, general liability coverages. Favorable development

~~Summary of changes~~experienced from Title Insurance occurred largely within the 2017-2019 policy years, while RFIG Run-off was driven by positive trends in ~~aggregate reserves for claims and related costs:~~

Nine Months Ended
September 30,
2021 2020
Gross reserves at beginning of period $ 10,671.0 $ 9,929.5
Less: reinsurance losses recoverable 3,650.5 3,249.7
Net reserves at beginning of period:
General Insurance 6,328.0 6,021.3
Title Insurance 556.1 530.9
RFIG Run-off 127.6 118.9
Other 8.6 8.4
Sub-total 7,020.4 6,679.7
Incurred claims and claim adjustment expenses:
Provisions for insured events of the current year:
General Insurance 1,802.9 1,787.9
Title Insurance 118.0 80.8
RFIG Run-off 14.8 36.2
Other 9.0 8.3
Sub-total 1,944.8 1,913.4
Change in provision for insured events of prior years:
General Insurance (77.0) (11.6)
Title Insurance (22.6) (19.6)
RFIG Run-off (11.4) (7.8)
Other (3.3) (2.3)
Sub-total (114.4) (41.4)
Total incurred claims and claim adjustment expenses 1,830.4 1,871.9
Payments:
Claims and claim adjustment expenses attributable to
insured events of the current year:
General Insurance 523.9 505.9
Title Insurance 17.7 1.9
RFIG Run-off .2 .6
Other 4.9 4.8
Sub-total 546.8 513.4
Claims and claim adjustment expenses attributable to
insured events of prior years:
General Insurance 971.4 968.3
Title Insurance 40.9 35.5
RFIG Run-off 12.3 23.9
Other 1.3 1.9
Sub-total 1,026.0 1,029.8
Total payments 1,572.8 1,543.2
Amount of reserves for unpaid claims and claim adjustment expenses
at the end of each period, net of reinsurance losses recoverable:
General Insurance 6,558.5 6,323.4
Title Insurance 592.8 554.5
RFIG Run-off 118.5 122.7
Other 8.0 7.7
Sub-total 7,278.0 7,008.4
Reinsurance losses recoverable 4,155.7 3,548.6
Gross reserves at end of period $ 11,433.7 $ 10,557.1
delinquency cure rates.

~~5. Employee Benefit Plans:~~

The Company had an active pension plan (the "Plan") covering a portion of its work force until December 31, 2013. The Plan is a defined benefit plan pursuant to which pension payments are based primarily on years of service and employee compensation near retirement. The Plan was closed to new participants and benefits were frozen as of December 31, 2013. As a result, eligible employees retained all of the vested rights as of the effective date of the freeze. While additional benefits no longer accrue, the Company's cumulative obligation continues to be subject to

further adjustment due to changes in actuarial assumptions such as expected mortality and changes in interest rates. Net periodic pension costs for the quarterly periods ended September 30, 2021 and 2020 were not material to Old Republic's consolidated statements of income.

~~6. Information About Segments of Business:~~

Old Republic is engaged in the single business of insurance underwriting and related services. The Company conducts its operations through a number of regulated insurance company subsidiaries organized into 3 major segments, namely its General Insurance (property and liability insurance), Title Insurance, and the Republic Financial Indemnity Group ("RFIG") Run-off Business. The results of a small life and accident insurance business are included with those of the parent holding company and its internal corporate services subsidiaries. Each of the Company's segments underwrites and services only those insurance coverages which may be written by it pursuant to state insurance regulations and corporate charter provisions. Segment results exclude investment gains or losses as these are aggregated in the consolidated totals. The contributions of Old Republic's insurance industry segments to consolidated totals are shown in the following table.


~~This space left intentionally blank~~

~~Segmented and Consolidated Results:~~

Quarters Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
General Insurance:
Net premiums earned $ 902.8 $ 861.9 $ 2,629.2 $ 2,532.8
Net investment income and other income 121.7 117.3 367.4 362.1
Total revenues excluding investment gains (losses) $ 1,024.6 $ 979.3 $ 2,996.7 $ 2,895.0
Segment pretax operating income (loss) (a) $ 145.8 $ 109.7 $ 410.0 $ 305.1
Income tax expense (credits) $ 29.0 $ 20.5 $ 79.9 $ 56.9
Title Insurance:
Net premiums earned (c) $ 1,028.5 $ 746.5 $ 2,879.6 $ 1,976.3
Title, escrow and other fees (c) 113.6 110.5 339.1 278.2
Sub-total (c) 1,142.1 857.0 3,218.7 2,254.5
Net investment income and other income 11.2 10.5 33.3 32.1
Total revenues excluding investment gains (losses) (c) $ 1,153.3 $ 867.6 $ 3,252.0 $ 2,286.6
Segment pretax operating income (loss) (a) $ 135.7 $ 103.1 $ 378.3 $ 211.9
Income tax expense (credits) $ 29.8 $ 21.5 $ 80.8 $ 44.4
RFIG Run-off Business:
Net premiums earned $ 7.7 $ 10.8 $ 25.4 $ 35.1
Net investment income and other income 2.6 3.4 8.7 11.8
Total revenues excluding investment gains (losses) $ 10.3 $ 14.3 $ 34.2 $ 46.9
Segment pretax operating income (loss) $ 8.4 $ 4.5 $ 20.9 $ 8.0
Income tax expense (credits) $ 1.6 $ .8 $ 4.0 $ 1.2

Consolidated Revenues:
Total revenues of Company segments (c) $ 2,188.3 $ 1,861.3 $ 6,283.0 $ 5,228.6
Other sources (b) 50.1 36.4 122.0 112.6
Consolidated investment gains (losses):
Realized from actual transactions 6.6 1.4 15.6 12.7
Unrealized from changes in fair value of equity securities (199.3) 79.2 288.1 (529.4)
Total realized and unrealized investment gains (losses) (192.6) 80.7 303.7 (516.7)
Consolidation elimination adjustments (33.6) (26.7) (87.7) (81.7)
Consolidated revenues (c) $ 2,012.2 $ 1,951.7 $ 6,621.0 $ 4,742.8
Consolidated Pretax Income (Loss):
Total segment pretax operating income (loss) of
Company segments $ 290.0 $ 217.4 $ 809.3 $ 525.0
Other sources - net (b) 8.6 8.7 19.5 27.8
Consolidated investment gains (losses):
Realized from actual transactions 6.6 1.4 15.6 12.7
Unrealized from changes in fair value of equity securities (199.3) 79.2 288.1 (529.4)
Total realized and unrealized investment gains (losses) (192.6) 80.7 303.7 (516.7)
Consolidated income (loss) before income
taxes (credits) $ 106.0 $ 306.9 $ 1,132.6 $ 36.1

Quarters Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Consolidated Income Tax Expense (Credits):
Total income tax expense (credits)
of Company segments $ 60.5 $ 42.9 $ 164.8 $ 102.7
Other sources - net (b) (2.3) .9 (3.6) 3.2
Income tax expense (credits) on consolidated realized
and unrealized investment gains (losses) (40.9) 16.9 64.0 (108.7)
Consolidated income tax expense (credits) $ 17.2 $ 60.9 $ 225.2 $ (2.7)

September 30, December 31,
2021 2020
Consolidated Assets:
General Insurance $ 20,562.5 $ 19,226.1
Title Insurance 2,118.1 1,920.9
RFIG Run-off Business 524.7 582.9
Total assets of company segments 23,205.4 21,730.0
Other assets (b) 2,002.6 1,318.2
Consolidation elimination adjustments (218.2) (233.0)
Consolidated assets $ 24,989.9 $ 22,815.2

(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: GeneralNote 4 - $15.9 and $47.7 compared to $15.4 and $47.6 for the quarters and nine months ended September 30, 2021 and 2020, respectively, and Title - $.4 and $1.4 compared to $.6 and $2.2 for the quarters and nine months ended September 30, 2021 and 2020, respectively.

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

(c) Reclassification adjustments were made to certain Title segment revenues and expenses in the quarter and nine months ended September 30, 2020 to conform to the current presentation. See Note 1.

~~7. 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 September 30, 2021, the Company had no material non-claim litigation exposures in its consolidated business.

~~8. Debt:~~

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

September 30, 2021 December 31, 2020
Carrying
Amount Fair
Value Carrying
Amount Fair
Value
4.875% Senior Notes issued in 2014 and due 2024 $ 398.3 $ 444.5 $ 397.9 $ 457.7
3.875% Senior Notes issued in 2016 and due 2026 547.2 609.5 546.8 634.1
3.850% Senior Notes issued in 2021 and due 2051 642.6 709.3 — —
Other miscellaneous debt — — 21.7 21.7
Total debt $ 1,588.2 $ 1,763.5 $ 966.4 $ 1,113.6

~~On June 11, 2021, the Company completed a public offering of $650.0 aggregate principal amount of Senior Notes. The notes bear interest at a rate of~~ ~~3.850% per year and mature on June 11, 2051.~~

~~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:
September 30, 2021 $ 1,588.2 $ 1,763.5 $ — $ 1,763.5 $ —
December 31, 2020 $ 966.4 $ 1,113.6 $ — $ 1,091.9 $ 21.7

9. Income ~~Taxes:~~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. Such differences relate principally to the timing of deductions for loss and premium reserves. As in prior examinations, the Internal Revenue Service ("IRS") could assert that claim reserve deductions were overstated thereby reducing the Company's statutory taxable income in any particular year. The Company believes that it establishes its reserves fairly and consistently at each balance sheet date, and that it would succeed in defending its tax position in these regards. Because of the impact of deferred tax accounting, the possible accelerated payment of tax to the IRS would not necessarily affect the annual effective tax rate. 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~~2019 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				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Numerator:
Basic and diluted earnings per share -
income (loss) available to common stockholders	$	(91.7)	$	88.7	$	174.3	$	907.3



Denominator:
Basic earnings per share -
weighted-average shares (a)	303,652,802		301,577,493		303,797,001		301,247,397
Effect of dilutive securities - stock based
compensation awards	—		1,961,865		1,584,347		1,661,091
Diluted earnings per share -
adjusted weighted-average shares (a)	303,652,802		303,539,358		305,381,348		302,908,488
Earnings per share: Basic	$	(.31)	$	.29	$	.57	$	3.01
Diluted	$	(.31)	$	.29	$	.57	$	3.00

Anti-dilutive common stock equivalents
excluded from earnings per share computations:
Stock based compensation awards	10,651,301		—		2,653,750		292,500

__________

(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 September 30, 2022 and December 31, 2021, and $27.7 and $24.1 related to accounts and notes receivable, as of September 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.

1814

Note 7 - Debt

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


	September 30, 2022				December 31, 2021
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes:
4.875% issued in 2014 and due 2024	$	398.8	$	400.3	$	398.4	$	435.8
3.875% issued in 2016 and due 2026	547.8		520.5		547.3		597.0
3.850% issued in 2021 and due 2051	642.8		455.0		642.6		702.9
Other miscellaneous debt	7.1		7.1		—		—
Total debt	$	1,596.6	$	1,383.1	$	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:
September 30, 2022	$	1,596.6	$	1,383.1	$	—	$	1,375.9	$	7.1
December 31, 2021	$	1,588.5	$	1,735.7	$	—	$	1,735.7	$	—

Note 8 - Common Share Repurchases

On August 18, 2022, the Board of Directors authorized a $450.0 share repurchase program. During the quarter, the Company repurchased $104.8 of common shares (4.8 million shares at an average price of $21.49 per share). Following the close of the quarter and through November 3, the Company repurchased 6.0 million additional shares for $136.8 (average price of $22.48), leaving $208.2 remaining under the current repurchase authorization.

Note 9 - 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 September 30, 2022, the Company had no material non-claim litigation exposures in its consolidated business.

Note 10 - 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				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
General Insurance:
Net premiums earned	$	967.3	$	902.8	$	2,821.8	$	2,629.2
Net investment income and other income	128.3		121.7		367.8		367.4
Total revenues excluding investment gains (losses)	$	1,095.6	$	1,024.6	$	3,189.7	$	2,996.7
Segment pretax operating income (loss) (a)	$	167.6	$	145.8	$	448.1	$	410.0
Income tax expense (credits)	$	34.0	$	29.0	$	89.0	$	79.9

Title Insurance:
Net premiums earned	$	887.1	$	1,028.5	$	2,731.2	$	2,879.6
Title, escrow and other fees	80.9		113.6		266.1		339.1
Sub-total	968.1		1,142.1		2,997.3		3,218.7
Net investment income and other income	12.0		11.2		35.0		33.3
Total revenues excluding investment gains (losses)	$	980.1	$	1,153.3	$	3,032.3	$	3,252.0
Segment pretax operating income (loss) (a)	$	73.3	$	135.7	$	263.8	$	378.3
Income tax expense (credits)	$	16.1	$	29.8	$	56.2	$	80.8

RFIG Run-off:
Net premiums earned	$	5.5	$	7.7	$	18.1	$	25.4
Net investment income and other income	1.5		2.6		5.2		8.7
Total revenues excluding investment gains (losses)	$	7.1	$	10.3	$	23.3	$	34.2
Segment pretax operating income (loss)	$	9.2	$	8.4	$	31.3	$	20.9
Income tax expense (credits)	$	1.9	$	1.6	$	6.4	$	4.0


Consolidated Revenues:
Total revenues of Company segments	$	2,083.0	$	2,188.3	$	6,245.4	$	6,283.0
Corporate & other (b)	53.2		50.1		146.9		122.0
Consolidated investment gains (losses):
Realized from actual transactions and impairments	(26.2)		6.6		92.3		15.6
Unrealized from changes in fair value of equity securities	(350.8)		(199.3)		(641.8)		288.1
Total realized and unrealized investment gains (losses)	(377.1)		(192.6)		(549.5)		303.7
Consolidation elimination adjustments	(37.9)		(33.6)		(104.6)		(87.7)
Consolidated revenues	$	1,721.0	$	2,012.2	$	5,738.1	$	6,621.0

Consolidated Pretax Income (Loss):
Total segment pretax operating income (loss) of
Company segments	$	250.2	$	290.0	$	743.3	$	809.3
Corporate & other (b)	7.2		8.6		14.6		19.5
Consolidated investment gains (losses):
Realized from actual transactions and impairments	(26.2)		6.6		92.3		15.6
Unrealized from changes in fair value of equity securities	(350.8)		(199.3)		(641.8)		288.1
Total realized and unrealized investment gains (losses)	(377.1)		(192.6)		(549.5)		303.7
Consolidated income (loss) before income
taxes (credits)	$	(119.6)	$	106.0	$	208.3	$	1,132.6





Consolidated Income Tax Expense (Credits):
Total income tax expense (credits)
of Company segments	$	52.0	$	60.5	$	151.8	$	164.8
Corporate & other (b)	(.7)		(2.3)		(2.0)		(3.6)
Income tax expense (credits) on consolidated realized
and unrealized investment gains (losses)	(79.2)		(40.9)		(115.6)		64.0
Consolidated income tax expense (credits)	$	(27.8)	$	17.2	$	34.0	$	225.2


	September 30,		December 31,
	2022		2021
Consolidated Assets:
General Insurance	$	21,054.4	$	20,660.9
Title Insurance	2,016.7		2,234.2
RFIG Run-off	379.0		516.4
Total assets of company segments	23,450.2		23,411.6
Corporate & other (b)	1,672.9		1,716.3
Consolidation elimination adjustments	(176.1)		(146.1)
Consolidated assets	$	24,947.0	$	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 - $17.5 and $50.2 compared to $15.9 and $47.7 for the quarters and nine months ended September 30, 2022 and 2021, respectively, and Title - $- and $.8 compared to $.4 and $1.4 for the quarters and nine months ended September 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

Nine Months Ended September 30, ~~2021~~2022 and ~~2020~~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 ~~principally~~ through a number of regulated insurance company subsidiaries organized into three major ~~regulatory segments, namely, its~~segments: General Insurance (property and ~~liability)~~liability insurance), Title Insurance and ~~the RFIG Run-off Business.~~Republic Financial Indemnity Group ("RFIG") Run-off. A small life and accident insurance business, accounting for ~~.2%~~.1% of consolidated operating revenues for the nine months ended September 30, ~~2021~~2022 and .5% of consolidated assets as of that date, is included within the ~~corporate and other~~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 ~~largely~~ 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 ~~Note 1 of~~ the Notes to Consolidated Financial ~~Statements.~~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(a)~~1 to the consolidated financial statements included in Old Republic's ~~2020~~2021 Annual Report on Form 10-K.

The insurance business is distinguished from most others in that the prices (premiums) charged for ~~various insurance~~most products are set without ~~certainty of~~knowing what the ultimate ~~benefit and claim~~loss costs ~~that~~ will ~~emerge, often~~be. We also can't know exactly when claims will be paid, which may be many years after ~~issuance and expiration of~~ a ~~policy.~~policy was issued or expired. This ~~basic fact~~ casts Old Republic as a risk-taking enterprise managed for the long run. ~~Management~~Old Republic therefore conducts the business with a primary focus on achieving favorable underwriting results over cycles, and on ~~the maintenance of~~maintaining a sound financial ~~soundness in~~condition to support ~~of the insurance~~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 ~~maturity~~income and equity securities for long periods of time is ~~in turn~~ 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's affairs are~~Company is managed for the long run and ~~without significant~~with little regard ~~to the arbitrary strictures of~~for quarterly or even annual reporting ~~periods that American industry must observe. In Old Republic's view, such short reporting~~periods. These time frames ~~do not comport well with the long-term nature of much of its business.~~are too short. Management ~~therefore~~ believes ~~that the Company's operating~~ results ~~and financial condition can~~are best be evaluated by ~~observing~~looking at underwriting and overall operating performance trends over ~~succeeding five-~~10-year intervals. These likely include one or ~~preferably ten-year intervals. A ten-year period in particular can likely encompass at least one~~two economic and/or underwriting ~~cycle and thereby provide an appropriate~~cycles. This provides enough time ~~frame~~ for ~~such cycle~~these cycles to run ~~its~~their course, for underwriting and ~~for~~ premium rate changes to appear in financial results, and for reserved ~~claim~~loss costs to be quantified ~~and emerge in financial results~~ with greater ~~finality and effect.~~certainty.

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

1918


EXECUTIVE SUMMARY

Old Republic International Corporation reported the following consolidated results:
OVERALL RESULTS
Quarters Ended September 30, Nine Months Ended September 30,
2021 2020 % Change 2021 2020 % Change
Pretax income (loss) $ 106.0 $ 306.9 $ 1,132.6 $ 36.1
Pretax investment gains (losses) (192.6) 80.7 303.7 (516.7)
Pretax income (loss) excluding investment gains (losses) $ 298.6 $ 226.2 32.0 % $ 828.8 $ 552.8 49.9 %
Net income (loss) $ 88.7 $ 246.0 $ 907.3 $ 38.9
Net of tax investment gains (losses) (151.6) 63.7 239.6 (408.0)
Net income (loss) excluding investment gains (losses) $ 240.4 $ 182.3 31.9 % $ 667.6 $ 446.9 49.4 %
PER DILUTED SHARE
Quarters Ended September 30, Nine Months Ended September 30,
2021 2020 % Change 2021 2020 % Change
Net income (loss) $ .29 $ .83 $ 3.00 $ .13
Net of tax investment gains (losses) (.50) .21 .79 (1.37)
Net income (loss) excluding investment gains (losses) $ .79 $ .62 27.4 % $ 2.21 $ 1.50 47.3 %
SHAREHOLDERS' EQUITY
Sept. 30, Dec. 31,
2021 2020 % Change
Total $ 6,329.4 $ 6,186.6 2.3 %
Per Common Share $ 20.96 $ 20.75 1.0 %

Old Republic International Corporation reported the following consolidated results:

~~Consolidated~~


OVERALL RESULTS

	Quarters Ended September 30,								Nine Months Ended September 30,
	2022			2021			% Change		2022			2021			% Change
Pretax income (loss)	$	(119.6)		$	106.0				$	208.3		$	1,132.6
Pretax investment gains (losses)	(377.1)			(192.6)					(549.5)			303.7
Pretax income (loss) excluding investment gains (losses)	$	257.5		$	298.6		(13.8)	%	$	757.9		$	828.8		(8.6)	%

Net income (loss)	$	(91.7)		$	88.7				$	174.3		$	907.3
Net of tax investment gains (losses)	(297.9)			(151.6)					(433.8)			239.6
Net income (loss) excluding investment gains (losses)	$	206.1		$	240.4		(14.3)	%	$	608.1		$	667.6		(8.9)	%

Combined ratio	91.4		%	89.8		%			91.4		%	90.4		%

PER DILUTED SHARE

	Quarters Ended September 30,								Nine Months Ended September 30,
	2022			2021			% Change		2022			2021			% Change
Net income (loss)	$	(.31)		$	.29				$	.57		$	3.00
Net of tax investment gains (losses)	(.99)			(.50)					(1.42)			.79
Net income (loss) excluding investment gains (losses)	$	.68		$	.79		(13.9)	%	$	1.99		$	2.21		(10.0)	%

SHAREHOLDERS' EQUITY (BOOK VALUE)

									Sep. 30,			Dec. 31,
									2022			2021			% Change
Total									$	5,678.1		$	6,893.2		(17.6)	%
Per Common Share									$	18.92		$	22.76		(16.9)	%

Old Republic International Corporation reported pretax income, excluding investment gains ~~or losses continued to show strong growth in profitability in the General Insurance and Title Insurance businesses. Solid underwriting results produced consolidated combined ratios~~(losses), of ~~89.8%~~$257.5 for the ~~third~~ quarter and ~~90.4%~~$757.9 for the first nine months of ~~2021, compared~~2022. Results are within expectations, with General Insurance pretax operating income rising 15%, while the effect of increasing mortgage interest rates contributed to ~~92.3%~~a reduction in Title Insurance pretax operating income of 46%. Both General Insurance and ~~94.4% in~~Title Insurance produced solid underwriting results that drove a consolidated combined ratio of 91.4% for both the ~~respective 2020 periods. Total~~quarter and ~~per share year-to-date net income reflect significant increases in the fair value~~first nine months of ~~equity securities by comparison to 2020 when equity markets were disrupted by the COVID-19 pandemic.~~2022.

Consolidated net premiums and fees earned ~~increased 18.6%~~were down 5.5% for the quarter, ~~and 21.7% for the year-to-date period.~~with General Insurance net earned premiums ~~experienced mid-single digit growth over comparative 2020 periods, while~~growing 7.1%, offset by a 15.2% decline in Title Insurance ~~continued to experience robust~~net premiums and fees earned as a result of lower revenues in both direct and agency operations. For the first nine months, consolidated net premiums and fees earned were relatively steady, reflecting growth in ~~premium and fee revenues as low interest rates and~~General Insurance of 7.3%, offset by a ~~favorable real estate market persisted.~~6.9% decline in Title Insurance. Net investment income increased ~~for the quarter and declined slightly~~ in ~~the year-to-date period~~both 2022 periods, primarily reflecting growth in the invested asset base ~~offset by lower~~and slightly higher investment yields earned in the quarter.

During the quarter, the Company returned total capital to ~~varying degrees~~shareholders of $479.1, comprised of $374.3 in ~~both periods.~~common stock dividends, including a special cash dividend of $1.00 per share, and $104.8 of share repurchases (4.8 million shares at an average price of $21.49 per share). Following the close of the quarter and through November 3, the Company repurchased 6.0 million additional shares for $136.8 (average price of $22.48), leaving $208.2 remaining under the current repurchase authorization.

Book value per share ~~advanced to $20.96~~was $18.92 as of September 30, ~~2021 from $20.75 at December 31, 2020. The increase was primarily driven by year-to-date improved operating earnings~~2022, reflecting declining fair market values in both the fixed income and ~~favorable overall investment valuation trends which were~~equity portfolios, partially offset by strong operating earnings. With the addition of dividends ~~including~~declared during the first nine months, this was a ~~$1.50 special dividend.~~decrease of 9.4% over year-end 2021.

As the economy continues to emerge from the pandemic, premium and fee revenues in General Insurance could continue growing. As low interest rates and a favorable real estate market continue, Title Insurance premium and fee revenues could remain strong, although may be lower than recent periods.

2019

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 ~~and~~ (losses). Under Generally Accepted Accounting Principles (GAAP), however, net income, ~~(loss), which includes all specifically defined realized and unrealized~~inclusive of investment gains ~~and~~ (losses), is the measure of total profitability.

In management's opinion, the focus on income ~~(loss)~~ excluding ~~all~~ investment gains ~~and losses~~(losses), also described herein as segment pretax operating income (loss), provides a better way to ~~realistically~~ analyze, evaluate, and establish accountability for the results ~~and benefits that arise from the basic operations~~ of the ~~business.~~insurance operations. The inclusion of realized investment gains ~~and~~ (losses) in net income ~~(loss)~~ can mask ~~the reality and~~ trends in ~~the fundamental~~ operating results, ~~of the insurance business. That is~~ because ~~their realization is, more~~such realizations are often ~~than not,~~ highly discretionary. It is usually affected by the timing of individual securities sales, tax-planning considerations, and modifications of investment management judgments about the direction of securities markets or the prospects of individual investees or industry sectors. Moreover,Similarly, the inclusion of unrealized investment gains ~~and~~ (losses) in equity securities can further distort such operating results ~~and trends therein and thus lead to even greater~~with significant period-to-period fluctuations in reported net income (loss). The impact of the continuous volatility in stock market valuations is most evident in its net of tax effect on net income (loss) for the periods reported upon.fluctuations.

FINANCIAL HIGHLIGHTS
Quarters Ended September 30, Nine Months Ended September 30,
SUMMARY INCOME STATEMENTS (a):
2021 2020 % Change 2021 2020 % Change
Revenues:
Net premiums and fees earned $ 2,055.4 $ 1,732.8 18.6 % $ 5,881.6 $ 4,831.6 21.7 %
Net investment income 111.6 106.4 4.9 323.6 329.3 -1.7
Other income 37.8 31.7 19.2 112.0 98.5 13.7
Total operating revenues 2,204.9 1,871.0 17.8 6,317.3 5,259.5 20.1
Investment gains (losses):
Realized from actual transactions 6.6 1.4 15.6 12.7
Unrealized from changes in fair value of equity securities (199.3) 79.2 288.1 (529.4)
Total investment gains (losses) (192.6) 80.7 303.7 (516.7)
Total revenues 2,012.2 1,951.7 6,621.0 4,742.8
Operating expenses:
Claim costs 618.4 638.1 -3.1 1,846.8 1,884.8 -2.0
Sales and general expenses 1,270.8 997.1 27.5 3,601.8 2,789.8 29.1
Interest and other charges 16.8 9.5 77.8 39.7 31.8 24.6
Total operating expenses 1,906.2 1,644.7 15.9 % 5,488.4 4,706.6 16.6 %
Pretax income (loss) 106.0 306.9 1,132.6 36.1
Income taxes (credits) 17.2 60.9 225.2 (2.7)
Net income (loss) $ 88.7 $ 246.0 $ 907.3 $ 38.9
COMMON STOCK STATISTICS:
Components of net income (loss) per share:
Basic net income (loss) excluding investment gains (losses)
$ 0.79 $ 0.62 27.4 % $ 2.22 $ 1.50 48.0 %
Net investment gains (losses):
Realized from actual transactions 0.02 — 0.04 0.03
Unrealized from changes in fair value of equity securities (0.52) 0.21 0.75 (1.40)
Basic net income (loss) $ 0.29 $ 0.83 $ 3.01 $ 0.13
Diluted net income (loss) excluding investment gains (losses)
$ 0.79 $ 0.62 27.4 % $ 2.21 $ 1.50 47.3 %
Net investment gains (losses):
Realized from actual transactions 0.02 — 0.04 0.03
Unrealized from changes in fair value of equity securities (0.52) 0.21 0.75 (1.40)
Diluted net income (loss) $ 0.29 $ 0.83 $ 3.00 $ 0.13
Cash dividends on common stock $ 1.72 $ 0.21 $ 2.16 $ 0.63
Book value per share $ 20.96 $ 20.39 2.8 %
(a) Certain reclassification adjustments were made to increase net premiums and fees earned with a corresponding increase to sales and general expenses in the quarter and first nine months ended September 30, 2020 to conform the prior period to the current presentation. See Note (a) in Title Insurance Segment Results.


FINANCIAL HIGHLIGHTS
	Quarters Ended September 30,						Nine Months Ended September 30,
SUMMARY INCOME STATEMENTS:	2022		2021		% Change		2022		2021		% Change
Revenues:
Net premiums and fees earned	$	1,943.3	$	2,055.4	(5.5)	%	$	5,844.6	$	5,881.6	(0.6)	%
Net investment income	115.1		111.6		3.1		329.2		323.6		1.7
Other income	39.7		37.8		5.2		113.7		112.0		1.5
Total operating revenues	2,098.2		2,204.9		(4.8)		6,287.7		6,317.3		(0.5)
Investment gains (losses):
Realized from actual transactions and impairments	(26.2)		6.6				92.3		15.6

Unrealized from changes in fair value of equity securities	(350.8)		(199.3)				(641.8)		288.1
Total investment gains (losses)	(377.1)		(192.6)				(549.5)		303.7
Total revenues	1,721.0		2,012.2				5,738.1		6,621.0
Operating expenses:
Loss and loss adjustment expenses	628.6		618.4		1.6		1,875.2		1,846.8		1.5
Sales and general expenses	1,195.8		1,270.8		(5.9)		3,604.5		3,601.8		0.1
Interest and other charges	16.3		16.8		(3.4)		49.9		39.7		25.7
Total operating expenses	1,840.7		1,906.2		(3.4)	%	5,529.7		5,488.4		0.8	%
Pretax income (loss)	(119.6)		106.0				208.3		1,132.6
Income taxes (credits)	(27.8)		17.2				34.0		225.2
Net income (loss)	$	(91.7)	$	88.7			$	174.3	$	907.3


COMMON STOCK STATISTICS:
Components of net income (loss) per share:
Basic net income (loss) excluding investment gains (losses)	$	0.68	$	0.79	(13.9)	%	$	2.00	$	2.22	(9.9)	%
Net investment gains (losses):
Realized from actual transactions and impairments	(0.07)		0.02				0.24		0.04
Unrealized from changes in fair value of equity securities	(0.92)		(0.52)				(1.67)		0.75
Basic net income (loss)	$	(0.31)	$	0.29			$	0.57	$	3.01
Diluted net income (loss) excluding investment gains (losses)	$	0.68	$	0.79	(13.9)	%	$	1.99	$	2.21	(10.0)	%
Net investment gains (losses):
Realized from actual transactions and impairments	(0.07)		0.02				0.24		0.04
Unrealized from changes in fair value of equity securities	(0.92)		(0.52)				(1.66)		0.75
Diluted net income (loss)	$	(0.31)	$	0.29			$	0.57	$	3.00
Cash dividends on common stock	$	1.23	$	1.72			$	1.69	$	2.16
Book value per share							$	18.92	$	20.96	(9.7)	%

~~Management believes~~We believe the information presented in ~~sections A to G and J of the table on~~ the following ~~page highlight~~table highlights the most meaningful ~~realistic~~ indicators of ORI's segmented and consolidated financial performance. The information underscores the ~~necessity~~performance of ~~reviewing reported results by separating~~our underwriting operations, as well as our sound investment of the ~~inherent volatility of securities markets~~capital and ~~their above-noted impact on reported net income (loss).~~underwriting cash flows from these operations.

2120

Major Segmented and Consolidated Elements of Income (Loss)
Quarters Ended September 30, Nine Months Ended September 30,
2021 2020 % Change 2021 2020 % Change
A. Net premiums, fees, and other income (c):
General insurance $ 902.8 $ 861.9 4.7 % $ 2,629.2 $ 2,532.8 3.8 %
Title insurance 1,142.1 857.0 33.3 3,218.7 2,254.5 42.8
Corporate and other 2.6 2.9 -9.0 8.2 9.0 -9.2
Other income 37.8 31.7 19.2 112.0 98.5 13.7
Subtotal 2,085.5 1,753.7 18.9 5,968.1 4,895.0 21.9
RFIG run-off business 7.7 10.8 -28.8 25.4 35.1 -27.5
Consolidated $ 2,093.2 $ 1,764.6 18.6 % $ 5,993.6 $ 4,930.2 21.6 %
B. Underwriting and related services income (loss):
General insurance $ 77.7 $ 38.7 100.7 % $ 202.0 $ 89.5 125.6 %
Title insurance 125.3 93.2 34.4 347.8 182.3 90.8
Corporate and other (4.9) (3.7) -31.9 (17.1) (12.6) -35.0
Subtotal 198.0 128.2 54.5 532.7 259.2 105.5
RFIG run-off business 5.8 1.1 N/M 12.1 (3.7) N/M
Consolidated $ 203.9 $ 129.3 57.7 % $ 544.9 $ 255.4 113.4 %
C. Consolidated underwriting ratio (c):
Claim ratio:
Current year 32.4 % 38.2 % 33.4 % 39.9 %
Prior years (2.3) (1.4) (2.0) (.9)
Total 30.1 36.8 31.4 39.0
Expense ratio 59.7 55.5 59.0 55.4
Combined ratio 89.8 % 92.3 % 90.4 % 94.4 %
D. Net investment income:
General insurance $ 84.2 $ 85.9 -1.9 % $ 256.2 $ 264.2 -3.0 %
Title insurance 10.9 10.2 6.6 32.5 31.4 3.5
Corporate and other 13.8 6.8 103.5 26.1 21.8 19.5
Subtotal 109.0 102.9 5.9 314.8 317.5 -0.8
RFIG run-off business 2.6 3.4 -24.6 8.7 11.8 -25.9
Consolidated $ 111.6 $ 106.4 4.9 % $ 323.6 $ 329.3 -1.7 %
E. Interest and other charges (credits):
General insurance $ 16.1 $ 14.8 $ 48.2 $ 48.7
Title insurance 0.4 0.3 1.9 1.8
Corporate and other (a) 0.2 (5.7) (10.5) (18.7)
Subtotal 16.8 9.5 39.7 31.8
RFIG run-off business — — — —
Consolidated $ 16.8 $ 9.5 77.8 % $ 39.7 $ 31.8 24.6 %
F. Segmented and consolidated pretax income (loss) excluding investment gains (losses)(B+D-E):
General insurance $ 145.8 $ 109.7 32.8 % $ 410.0 $ 305.1 34.4 %
Title insurance 135.7 103.1 31.7 378.3 211.9 78.6
Corporate and other 8.6 8.7 -1.3 19.5 27.8 -30.0
Subtotal 290.2 221.6 30.9 807.9 544.8 48.3
RFIG run-off business 8.4 4.5 83.9 20.9 8.0 160.7
Consolidated 298.6 226.2 32.0 % 828.8 552.8 49.9 %
Income taxes (credits) on above (b)
58.2 43.9 161.1 105.9
G. Net income (loss) excluding
investment gains (losses) 240.4 182.3 31.9 % 667.6 446.9 49.4 %
H. Consolidated pretax investment gains (losses):
Realized from actual transactions 6.6 1.4 15.6 12.7
Unrealized from changes in
fair value of equity securities (199.3) 79.2 288.1 (529.4)
Total (192.6) 80.7 303.7 (516.7)
Income taxes (credits) on above (40.9) 16.9 64.0 (108.7)
Net of tax investment gains (losses) (151.6) 63.7 239.6 (408.0)
I. Net income (loss) $ 88.7 $ 246.0 $ 907.3 $ 38.9
J. Consolidated operating cash flow $ 455.1 $ 370.6 $ 970.6 $ 808.9


Sources of Consolidated Income (Loss)
	Quarters Ended September 30,								Nine Months Ended September 30,
	2022			2021			% Change		2022			2021			% Change
Net premiums and fees earned:
General insurance	$	967.3		$	902.8		7.1	%	$	2,821.8		$	2,629.2		7.3	%
Title insurance	968.1			1,142.1			(15.2)		2,997.3			3,218.7			(6.9)
RFIG run-off	5.5			7.7			(28.0)		18.1			25.4			(28.7)
Corporate & other	2.3			2.6			(12.8)		7.2			8.2			(11.6)
Consolidated	$	1,943.3		$	2,055.4		(5.5)	%	$	5,844.6		$	5,881.6		(0.6)	%

Underwriting and related services income (loss):
General insurance	$	96.2		$	77.7		23.8	%	$	243.6		$	202.0		20.6	%
Title insurance	61.1			125.3			(51.2)		230.0			347.8			(33.9)
RFIG run-off	7.6			5.8			31.7		26.1			12.1			114.3
Corporate & other	(6.3)			(4.9)			(28.5)		(21.2)			(17.1)			(23.7)
Consolidated	$	158.6		$	203.9		(22.2)	%	$	478.6		$	544.9		(12.2)	%

Consolidated underwriting ratio:
Loss ratio:
Current year	35.7		%	32.4		%			34.7		%	33.4		%
Prior years	(3.4)			(2.3)					(2.6)			(2.0)
Total	32.3			30.1					32.1			31.4
Expense ratio	59.1			59.7					59.3			59.0
Combined ratio	91.4		%	89.8		%			91.4		%	90.4		%

Net investment income:
General insurance	$	88.8		$	84.2		5.4	%	$	254.8		$	256.2		(0.5)	%
Title insurance	11.8			10.9			8.7		34.2			32.5			5.5
RFIG run-off	1.5			2.6			(39.7)		5.2			8.7			(40.3)
Corporate & other	12.9			13.8			(6.9)		34.8			26.1			33.6
Consolidated	$	115.1		$	111.6		3.1	%	$	329.2		$	323.6		1.7	%

Interest and other charges (credits):
General insurance	$	17.3		$	16.1				$	50.3		$	48.2
Title insurance	(0.3)			0.4					0.5			1.9
RFIG run-off	—			—					—			—
Corporate & other (a)	(0.7)			0.2					(0.9)			(10.5)
Consolidated	$	16.3		$	16.8		(3.4)	%	$	49.9		$	39.7		25.7	%

Segmented and consolidated pretax income (loss)
excluding investment gains (losses):
General insurance	$	167.6		$	145.8		15.0	%	$	448.1		$	410.0		9.3	%
Title insurance	73.3			135.7			(46.0)		263.8			378.3			(30.3)
RFIG run-off	9.2			8.4			9.6		31.3			20.9			49.7
Corporate & other	7.2			8.6			(15.9)		14.6			19.5			(25.1)
Consolidated	257.5			298.6			(13.8)	%	757.9			828.8			(8.6)	%
Income taxes (credits) on above	51.3			58.2					149.7			161.1
Net income (loss) excluding
investment gains (losses)	206.1			240.4			(14.3)	%	608.1			667.6			(8.9)	%
Consolidated pretax investment gains (losses):
Realized from actual transactions
and impairments	(26.2)			6.6					92.3			15.6
Unrealized from changes in
fair value of equity securities	(350.8)			(199.3)					(641.8)			288.1
Total	(377.1)			(192.6)					(549.5)			303.7
Income taxes (credits) on above	(79.2)			(40.9)					(115.6)			64.0
Net of tax investment gains (losses)	(297.9)			(151.6)					(433.8)			239.6
Net income (loss)	$	(91.7)		$	88.7				$	174.3		$	907.3
Consolidated operating cash flow	$	500.1		$	455.1				$	903.4		$	970.6

(a) Includes consolidation/elimination entries. (b) The effective tax rates applicable to pretax income excluding investment gains and (losses) were 19.5% and 19.4% for the third quarter and first nine months of 2021, respectively, and 19.4% and 19.2% for the third quarter and first nine months of 2020, respectively. (c) Certain reclassification adjustments were made to increase net premiums and fees earned with a corresponding increase to sales and general expenses in the quarter and first nine months ended September 30, 2020 to conform the prior period to the current presentation. See Note (a) in Title Insurance Segment results.

2221



General Insurance Segment Operating Results


		General Insurance Summary Operating Results
		Quarters Ended September 30,								Nine Months Ended September 30,									Quarters Ended September 30,								Nine Months Ended September 30,
		2021			2020			% Change		2021			2020			% Change			2022			2021			% Change		2022			2021			% Change
Net premiums written	Net premiums written	$	972.8		$	932.5		4.3	%	$	2,742.3		$	2,586.0		6.0	%	Net premiums written	$	1,066.3		$	972.8		9.6	%	$	3,029.4		$	2,742.3		10.5	%
Net premiums earned	Net premiums earned	902.8			861.9			4.7		2,629.2			2,532.8			3.8		Net premiums earned	967.3			902.8			7.1		2,821.8			2,629.2			7.3
Net investment income	Net investment income	84.2			85.9			-1.9		256.2			264.2			-3.0		Net investment income	88.8			84.2			5.4		254.8			256.2			(0.5)
Other income	Other income	37.5			31.4			19.3		111.2			97.8			13.6		Other income	39.5			37.5			5.4		112.9			111.2			1.6
Operating revenues	Operating revenues	1,024.6			979.3			4.6		2,996.7			2,895.0			3.5		Operating revenues	1,095.6			1,024.6			6.9		3,189.7			2,996.7			6.4
Claim costs		585.4			607.5			-3.6		1,743.4			1,790.4			-2.6
Loss and loss adjustment expenses																		Loss and loss adjustment expenses	606.6			585.4			3.6		1,804.9			1,743.4			3.5
Sales and general expenses	Sales and general expenses	277.1			247.2			12.1		794.9			750.7			5.9		Sales and general expenses	304.0			277.1			9.7		886.2			794.9			11.5
Interest and other charges	Interest and other charges	16.1			14.8			8.9		48.2			48.7			-1.0		Interest and other charges	17.3			16.1			7.5		50.3			48.2			4.3
Operating expenses	Operating expenses	878.8			869.5			1.1		2,586.6			2,589.9			-0.1		Operating expenses	928.0			878.8			5.6		2,741.5			2,586.6			6.0
Segment pretax operating income (loss)	Segment pretax operating income (loss)	$	145.8		$	109.7		32.8	%	$	410.0		$	305.1		34.4	%	Segment pretax operating income (loss)	$	167.6		$	145.8		15.0	%	$	448.1		$	410.0		9.3	%

Claim ratio		64.8		%	70.5		%			66.3		%	70.7		%
Loss ratio																		Loss ratio	62.7		%	64.8		%			64.0		%	66.3		%
Expense ratio	Expense ratio	26.5			25.0					26.0			25.8					Expense ratio	27.3			26.5					27.4			26.0
Combined ratio	Combined ratio	91.3		%	95.5		%			92.3		%	96.5		%			Combined ratio	90.0		%	91.3		%			91.4		%	92.3		%

General Insurance net premiums earned increased ~~4.7%~~7.1% and ~~3.8%~~7.3% for the ~~third~~ quarter and ~~year-to-date periods, respectively. Strong premium~~first nine months, respectively, driven by growth in commercial auto and workers' compensation lines of coverage. Premium rate increases for most lines of coverage, ~~other than workers' compensation,~~high renewal retention ratios, and new business production ~~continued. Rising premiums in commercial auto, financial indemnity and property coverages more than offset the decline in workers’ compensation and general liability premiums.~~all contributed. Net investment income ~~decreased~~increased in ~~both 2021 periods~~the quarter, reflecting ~~a growing invested asset~~growth in the investment base ~~more than offset by lower~~and slightly higher investment ~~yields.~~yields earned.

The reported loss ratio for General Insurance ~~reported claim ratio~~ improved in ~~both 2021 periods, influenced by~~the quarter, inclusive of favorable reserve development from prior periods and a lower current period ~~claim provision, reflecting~~loss costs. Favorable development of 4.7% in the quarter came predominantly from the commercial auto and workers' compensation lines of coverage, partially offset by unfavorable development in the financial indemnity line of coverage. The current period loss costs reflect several years of premium rate increases, ~~and~~ underwriting ~~actions. The year-to-date expense ratio remained relatively consistent with the prior year, generally reflecting variability of sales and general expenses within~~actions, a shift in the line of coverage mix, ~~while the~~and a relatively nominal amount from Hurricane Ian.

The third quarter ~~2021~~and first nine month expense ~~ratio was somewhat~~ratios were elevated ~~due~~compared to ~~fluctuating levels~~the same periods last year, generally reflecting the shift in line of ~~operating~~coverage mix. 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 ~~accruals.~~ratios and lower current period loss ratios.

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

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


					Effect of Prior Periods'										Effect of Prior Periods'
					(Favorable)/			Claim Ratio Excluding							(Favorable)/			Loss Ratio Excluding
		Reported			Unfavorable Claim			Prior Periods' Claim				Reported			Unfavorable Loss			Prior Periods' Loss
		Claim Ratio			Reserves Development			Reserves Development				Loss Ratio			Reserves Development			Reserves Development
2016			73.0	%		0.3	%		72.7	%
2017	2017		71.8			0.7			71.1		2017		71.8	%		0.7	%		71.1	%
2018	2018		72.2			—			72.2		2018		72.2			—			72.2
2019	2019		71.8			0.4			71.4		2019		71.8			0.4			71.4
2020	2020		69.9	%		(0.8)	%		70.7	%	2020		69.9			(0.8)			70.7
3rd Quarter 2020			70.5	%		(0.8)	%		71.3	%
2021											2021		64.8	%		(3.8)	%		68.6	%

3rd Quarter 2021	3rd Quarter 2021		64.8	%		(3.2)	%		68.0	%	3rd Quarter 2021		64.8	%		(3.2)	%		68.0	%
1st Nine Months 2020			70.7	%		(0.5)	%		71.2	%
3rd Quarter 2022											3rd Quarter 2022		62.7	%		(4.7)	%		67.4	%
1st Nine Months 2021	1st Nine Months 2021		66.3	%		(2.9)	%		69.2	%	1st Nine Months 2021		66.3	%		(2.9)	%		69.2	%
1st Nine Months 2022											1st Nine Months 2022		64.0	%		(3.3)	%		67.3	%

Quarterly and annual ~~claim~~loss ratios and trends may not be ~~particularly meaningful indicators~~indicative of future outcomes for a ~~liability-oriented mix of~~ business with relatively long claim payment patterns. ~~Assuming the current~~We target combined ratios between 90% and 95%, and based on our historical line of coverage mix, ~~management's targets are claim~~a loss ratio ~~averages~~average in the high 60% to low 70% range, and an expense ratio ~~averages~~average of 25% ~~or below, and a~~. These components of the combined ratio ~~between 90%~~will continue to reflect the line of coverage mix.



Title Insurance Segment Operating Results


	Quarters Ended September 30,								Nine Months Ended September 30,
	2022			2021			% Change		2022			2021			% Change
Net premiums and fees earned	$	968.1		$	1,142.1		(15.2)	%	$	2,997.3		$	3,218.7		(6.9)	%
Net investment income	11.8			10.9			8.7		34.2			32.5			5.5
Other income	0.2			0.3			(27.8)		0.7			0.8			(12.2)
Operating revenues	980.1			1,153.3			(15.0)		3,032.3			3,252.0			(6.8)
Loss and loss adjustment expenses	26.2			32.9			(20.4)		84.6			95.4			(11.2)
Sales and general expenses	880.9			984.1			(10.5)		2,683.3			2,776.3			(3.4)
Interest and other charges	(0.3)			0.4			(165.6)		0.5			1.9			(73.4)
Operating expenses	906.8			1,017.6			(10.9)		2,768.5			2,873.7			(3.7)
Segment pretax operating income (loss)	$	73.3		$	135.7		(46.0)	%	$	263.8		$	378.3		(30.3)	%

Loss ratio	2.7		%	2.9		%			2.8		%	3.0		%
Expense ratio	91.0			86.1					89.5			86.2
Combined ratio	93.7		%	89.0		%			92.3		%	89.2		%

Title Insurance net premiums and ~~95%.~~fees earned declined by 15.2% and 6.9% for the third quarter and first nine months, respectively. Both directly produced and agency produced revenues declined during the quarter, and it is expected that such revenues will continue to be lower in the fourth quarter of this year when compared to the same period last year. The main driver of these trends is increasing mortgage interest rates which continue to drive a steep reduction in refinance activity and to a lesser extent, purchase activity. An uptick in commercial transaction activity resulted in strong commercial premium growth during the quarter and first nine month periods. Net investment income increased in both 2022 periods, reflecting growth in the invested asset base and slightly higher investment yields earned in the quarter.

Title Insurance's loss ratios were relatively consistent for the quarter and first nine months. The third quarter and first nine 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, and to a lesser extent, a greater proportion of agency produced revenues that have a higher overall expense ratio.

Together, these factors produced profitable combined ratios albeit 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	%

3rd Quarter 2021		2.9	%		(0.8)	%		3.7	%
3rd Quarter 2022		2.7	%		(0.9)	%		3.6	%
1st Nine Months 2021		3.0	%		(0.7)	%		3.7	%
1st Nine Months 2022		2.8	%		(0.8)	%		3.6	%



~~Title~~RFIG Run-off Segment Operating Results - Mortgage Insurance ~~Segment Results~~

Title Insurance Summary Operating Results
Quarters Ended September 30, Nine Months Ended September 30,
2021 2020 % Change 2021 2020 % Change
Net premiums and fees earned (a) $ 1,142.1 $ 857.0 33.3 % $ 3,218.7 $ 2,254.5 42.8 %
Net investment income 10.9 10.2 6.6 32.5 31.4 3.5
Other income 0.3 0.3 1.1 0.8 0.6 22.6
Operating revenues 1,153.3 867.6 32.9 3,252.0 2,286.6 42.2
Claim costs 32.9 21.7 51.3 95.4 61.1 56.1
Sales and general expenses (a) 984.1 742.3 32.6 2,776.3 2,011.8 38.0
Interest and other charges 0.4 0.3 29.3 1.9 1.8 7.8
Operating expenses 1,017.6 764.5 33.1 2,873.7 2,074.7 38.5
Segment pretax operating income (loss) $ 135.7 $ 103.1 31.7 % $ 378.3 $ 211.9 78.6 %
Claim ratio 2.9 % 2.5 % 3.0 % 2.7 %
Expense ratio 86.1 86.6 86.2 89.2
Combined ratio 89.0 % 89.1 % 89.2 % 91.9 %

~~________~~

(a) Certain reclassification adjustments were made to increase net premiums and fees earned with a corresponding increase to sales and general expenses of $67.9 and $186.8 in the quarter and nine months ended September 30, 2020. These adjustments were made to conform the prior period to the current presentation to reflect such revenues gross of applicable commission expense and had no impact on segmented pretax operating income (loss).

Title Insurance net premiums and fees earned increased by 33.3% in the third quarter and by nearly 43% for the year-to-date period, with strong results generated from both agency and direct production channels. This performance was driven by a continued low interest rate environment and a robust real estate market, with increases in purchase transactions partially offset by a decline in refinance levels. Net investment income increased in both 2021 periods reflecting a growing invested asset base, somewhat offset by lower investment yields.

The Title Insurance reported claim ratio was higher for the quarter and year-to-date periods, influenced somewhat by less favorable reserve development from prior periods. The expense ratio improved over the prior year’s third quarter and first nine months from greater leverage of the expense structure on significantly higher premium and fee volume.

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

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

Effect of Prior Periods'
(Favorable)/ Claim Ratio Excluding
Reported Unfavorable Claim Prior Periods' Claim
Claim Ratio Reserves Development Reserves Development
2016 3.5 % (1.0) % 4.5 %
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 %
3rd Quarter 2020 2.5 % (1.0) % 3.5 %
3rd Quarter 2021 2.9 % (0.8) % 3.7 %
1st Nine Months 2020 2.7 % (0.8) % 3.5 %
1st Nine Months 2021 3.0 % (0.7) % 3.7 %



~~RFIG Run-off Segment Results~~

RFIG Run-off Summary Operating Results
Quarters Ended September 30, Nine Months Ended September 30,
2021 2020 % Change 2021 2020 % Change
Mortgage Insurance (MI)
Net premiums earned $ 7.7 $ 10.8 -28.8 % $ 25.4 $ 35.1 -27.5 %
Net investment income 2.6 3.4 -24.6 8.7 11.8 -25.9
Claim costs (1.1) 6.7 -116.5 3.4 28.4 -87.7
MI pretax operating income (loss) $ 8.4 $ 4.5 83.9 % $ 20.9 $ 8.0 160.7 %
Claim ratio -14.5 % 62.4 % 13.7 % 80.8 %
Expense ratio 39.0 27.2 38.5 29.9
Combined ratio 24.5 % 89.6 % 52.2 % 110.7 %


	Quarters Ended September 30,								Nine Months Ended September 30,
	2022			2021			% Change		2022			2021			% Change
Net premiums earned	$	5.5		$	7.7		(28.0)	%	$	18.1		$	25.4		(28.7)	%
Net investment income	1.5			2.6			(39.7)		5.2			8.7			(40.3)
Loss and loss adjustment expenses	(5.2)			(1.1)			N/M		(17.5)			3.4			N/M
Pretax operating income (loss)	$	9.2		$	8.4		9.6%		$	31.3		$	20.9		49.7	%

Loss ratio	(93.3)		%	(14.5)		%			(96.5)		%	13.7		%
Expense ratio	55.3			39.0					52.7			38.5
Combined ratio	(38.0)		%	24.5		%			(43.8)		%	52.2		%

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 ~~claim~~loss costs ~~in comparison~~compared to ~~2020~~the 2021 periods. Net investment income decreased in both ~~2021~~2022 periods, ~~from~~reflecting a declining invested asset base, driven by the payment of extraordinary dividends of $35.0 and ~~lower investment yields. Claim~~$105.0 to the parent company during the third quarter and first nine months, respectively. Loss costs reflect fewer newly reported delinquencies along with improving trends in cure ~~rates and claim severity influenced by the ongoing economic recovery and continued strength in the real estate market.~~rates.

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

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


					Effect of Prior Periods'										Effect of Prior Periods'
					(Favorable)/			Claim Ratio Excluding							(Favorable)/			Loss Ratio Excluding
		Reported			Unfavorable Claim			Prior Periods' Claim				Reported			Unfavorable Loss			Prior Periods' Loss
		Claim Ratio			Reserves Development			Reserves Development				Loss Ratio			Reserves Development			Reserves Development
2016			34.1	%		(39.8)	%		73.9	%
2017	2017		57.6			(38.3)			95.9		2017		57.6	%		(38.3)	%		95.9	%
2018	2018		43.2			(27.0)			70.2		2018		43.2			(27.0)			70.2
2019	2019		55.0			(12.5)			67.5		2019		55.0			(12.5)			67.5
2020	2020		81.7	%		(26.5)	%		108.2	%	2020		81.7			(26.5)			108.2
3rd Quarter 2020			62.4	%		(77.8)	%		140.2	%
2021											2021		(5.3)	%		(67.5)	%		62.2	%

3rd Quarter 2021	3rd Quarter 2021		(14.5)	%		(106.3)	%		91.8	%	3rd Quarter 2021		(14.5)	%		(106.3)	%		91.8	%
1st Nine Months 2020			80.8	%		(22.3)	%		103.1	%
3rd Quarter 2022											3rd Quarter 2022		(93.3)	%		(186.8)	%		93.5	%
1st Nine Months 2021	1st Nine Months 2021		13.7	%		(47.7)	%		61.4	%	1st Nine Months 2021		13.7	%		(47.7)	%		61.4	%
1st Nine Months 2022											1st Nine Months 2022		(96.5)	%		(169.7)	%		73.2	%

2524



Corporate ~~and~~& Other Operating Results


		Corporate and Other Summary Operating Results
		Quarters Ended September 30,						Nine Months Ended September 30,							Quarters Ended September 30,						Nine Months Ended September 30,
		2021		2020		% Change		2021		2020		% Change			2022		2021		% Change		2022		2021		% Change
Net life and accident premiums earned	Net life and accident premiums earned	$	2.6	$	2.9	-9.0	%	$	8.2	$	9.0	-9.2	%	Net life and accident premiums earned	$	2.3	$	2.6	(12.8)	%	$	7.2	$	8.2	(11.6)	%
Net investment income	Net investment income	13.8		6.8		103.5		26.1		21.8		19.5		Net investment income	12.9		13.8		(6.9)		34.8		26.1		33.6
Other operating income	Other operating income	—		—		—		—		—		—		Other operating income	—		—		—		—		—		—
Operating revenues	Operating revenues	16.5		9.7		69.9		34.3		30.8		11.2		Operating revenues	15.2		16.5		(7.8)		42.2		34.3		23.0
Claim costs		1.1		2.0		-45.4		4.5		4.9		-8.0
Benefits and loss and loss adjustment expenses														Benefits and loss and loss adjustment expenses	0.9		1.1		(18.1)		3.1		4.5		(31.8)
Insurance expenses	Insurance expenses	0.8		0.9		-16.5		2.6		3.3		-19.7		Insurance expenses	0.7		0.8		(11.6)		2.4		2.6		(7.8)
Corporate, interest and other expenses - net	Corporate, interest and other expenses - net	5.9		(2.0)		N/M		7.5		(5.2)		243.1		Corporate, interest and other expenses - net	6.3		5.9		6.5		22.0		7.5		191.1
Operating expenses	Operating expenses	7.8		0.9		N/M		14.8		3.0		N/M		Operating expenses	7.9		7.8		1.1		27.6		14.8		86.5
Corporate and other pretax operating income (loss)		$	8.6	$	8.7	-1.3	%	$	19.5	$	27.8	-30.0	%
Corporate & other pretax operating income (loss)														Corporate & other pretax operating income (loss)	$	7.2	$	8.6	(15.9)	%	$	14.6	$	19.5	(25.1)	%

This segment includes ~~the combination of~~ a small life and accident insurance business and the net costs associated with the parent holding company and ~~its~~several internal corporate services subsidiaries. The segment tends to produce highly variable results stemming from volatility inherent from the lack of scale. ~~Interest~~For the quarter, net investment income declined partially attributable to the return of capital to shareholders. For the first nine months, interest expense increased ~~related~~due to the issuance of $650 million of debt late in the second ~~quarter. This increase was largely~~quarter of 2021, partially offset by net investment income from ~~the~~a higher level of investments and higher investment ~~of the proceeds.~~yields earned.



Summary Consolidated Balance Sheet


		September 30,		December 31,		September 30,			September 30,		December 31,		September 30,
		2021		2020		2020			2022		2021		2021
Assets:	Assets:							Assets:
Cash and fixed maturity securities		$	11,721.9	$	11,365.1	$	11,049.8
Cash and fixed income securities								Cash and fixed income securities	$	12,315.8	$	11,399.6	$	11,721.9
Equity securities	Equity securities	4,828.0		4,054.8		3,682.9		Equity securities	3,045.4		5,302.8		4,828.0
Other invested assets	Other invested assets	116.7		115.3		113.3		Other invested assets	130.6		116.5		116.7
Cash and invested assets	Cash and invested assets	16,666.7		15,535.3		14,846.0		Cash and invested assets	15,491.8		16,818.9		16,666.7
Accounts and premiums receivable	Accounts and premiums receivable	1,861.4		1,593.9		1,734.0		Accounts and premiums receivable	2,096.9		1,768.7		1,861.4

Federal income tax recoverable								Federal income tax recoverable	127.4		11.8		—

Reinsurance balances recoverable	Reinsurance balances recoverable	5,054.7		4,362.8		4,359.8		Reinsurance balances recoverable	5,679.7		4,943.4		5,054.7
Deferred policy acquisition costs	Deferred policy acquisition costs	355.3		328.0		328.8		Deferred policy acquisition costs	386.7		350.4		355.3
Sundry assets	Sundry assets	1,051.6		995.0		979.9		Sundry assets	1,164.2		1,088.4		1,051.6
Total assets	Total assets	$	24,989.9	$	22,815.2	$	22,248.7	Total assets	$	24,947.0	$	24,981.8	$	24,989.9

Liabilities and Shareholders' Equity:	Liabilities and Shareholders' Equity:							Liabilities and Shareholders' Equity:
Policy liabilities	Policy liabilities	$	2,884.7	$	2,593.1	$	2,689.9	Policy liabilities	$	3,182.6	$	2,752.0	$	2,884.7
Claim reserves		11,433.7		10,671.0		10,557.1
Federal income tax payable: Current		1.2		4.2		9.4
Deferred		151.5		137.3		66.4
Loss and loss adjustment expense reserves								Loss and loss adjustment expense reserves	12,174.7		11,425.5		11,433.7
Federal income tax payable								Federal income tax payable	2.0		249.5		152.8
Reinsurance balances and funds	Reinsurance balances and funds	942.4		725.4		852.1		Reinsurance balances and funds	1,154.3		866.0		942.4
Debt	Debt	1,588.2		966.4		966.2		Debt	1,596.6		1,588.5		1,588.2
Sundry liabilities	Sundry liabilities	1,658.4		1,530.8		1,032.8		Sundry liabilities	1,158.5		1,206.9		1,658.4
Total liabilities	Total liabilities	18,660.5		16,628.5		16,174.0		Total liabilities	19,268.9		18,088.6		18,660.5
Shareholders' equity	Shareholders' equity	6,329.4		6,186.6		6,074.6		Shareholders' equity	5,678.1		6,893.2		6,329.4
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	24,989.9	$	22,815.2	$	22,248.7	Total liabilities and shareholders' equity	$	24,947.0	$	24,981.8	$	24,989.9

2625



Cash, Invested Assets, and Shareholders' Equity


					Cash, Invested Assets, and Shareholders' Equity
											% Change														% Change
					Sept. 30,		Dec. 31,		Sept. 30,		Sept. '21/		Sept. '21/						Sep. 30,		Dec. 31,		Sep. 30,		Sep. '22/		Sep. '22/
					2021		2020		2020		Dec. '20		Sept. '20						2022		2021		2021		Dec. '21		Sep. '21
Cash and invested assets:	Cash and invested assets:														Cash and invested assets:
		Fixed maturity securities, cash and other invested assets			$	11,838.6	$	11,480.4	$	11,163.1	3.1	%	6.1	%		Fixed income securities, cash and other invested assets			$	12,446.4	$	11,516.1	$	11,838.6	8.1	%	5.1	%
		Equity securities			4,828.0		4,054.8		3,682.9		19.1		31.1			Equity securities			3,045.4		5,302.8		4,828.0		(42.6)		(36.9)
		Total per balance sheet			$	16,666.7	$	15,535.3	$	14,846.0	7.3	%	12.3	%		Total per balance sheet			$	15,491.8	$	16,818.9	$	16,666.7	(7.9)	%	(7.0)	%
		Total at cost for all			$	15,244.2	$	14,151.6	$	13,849.1	7.7	%	10.1	%		Total at cost for all			$	15,363.6	$	15,045.8	$	15,244.2	2.1	%	0.8	%

Composition of shareholders' equity per share:	Composition of shareholders' equity per share:														Composition of shareholders' equity per share:
		Equity before items below			$	17.85	$	17.73	$	18.17	0.7	%	-1.8	%		Equity before items below			$	19.00	$	18.50	$	17.85	2.7	%	6.4	%
		Unrealized investment gains (losses) and other														Unrealized investment gains (losses) and other
			accumulated comprehensive income (loss)		3.11		3.02		2.22								accumulated comprehensive income (loss)		(0.08)		4.26		3.11
				Total	$	20.96	$	20.75	$	20.39	1.0	%	2.8	%				Total	$	18.92	$	22.76	$	20.96	(16.9)	%	(9.7)	%

Segmented composition of	Segmented composition of														Segmented composition of
shareholders' equity per share:	shareholders' equity per share:														shareholders' equity per share:
		Excluding RFIG run-off segment			$	19.65	$	19.25	$	18.93	2.1	%	3.8	%		Excluding RFIG run-off segment			$	17.94	$	21.47	$	19.65	(16.4)	%	(8.7)	%
		RFIG run-off segment			1.31		1.50		1.46							RFIG run-off segment			0.98		1.29		1.31
				Consolidated total	$	20.96	$	20.75	$	20.39	1.0	%	2.8	%				Consolidated total	$	18.92	$	22.76	$	20.96	(16.9)	%	(9.7)	%

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 ~~customers,~~ policyholders and their beneficiaries, as well as the long-term stability of the subsidiaries’ capital ~~accounts.~~base. For these reasons, the investment portfolio ~~contains no significant insurance risk-correlated~~does not contain high risk or illiquid asset ~~exposures~~classes and has zero or extremely limited exposure to, ~~real estate, mortgage-backed securities,~~ collateralized debt obligations (CDO's), ~~derivatives,~~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 ~~illiquid~~ private equity ~~and hedge fund~~ 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 September 30, ~~2021,~~2022, the consolidated investment portfolio reflected an allocation of approximately ~~71%~~80% to ~~fixed-maturity~~fixed income (bonds and notes) and short-term investments, and ~~29%~~20% 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-maturity~~fixed income portfolio continues to be the anchor for the insurance underwriting subsidiaries' obligations. The maturities of our fixed income assets are ~~stratified and conservatively~~ matched to the expected ~~timing of paying those~~liabilities for claim payment obligations ~~in the future.~~to policyholders and their beneficiaries. The quality of the investment portfolio remains at high levels. The Company's third quarter net income includes investment impairment charges of $120.9, reflecting management's intent to dispose of certain fixed income securities currently in an unrealized loss position, driven by tax planning considerations.

~~In recent years, a~~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~~approximately 75 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.

2726

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 ~~or losses,~~(losses), and dividend payments to shareholders.


		Shareholders' Equity Per Share													Shareholders' Equity Per Share
		Quarter									Year				Quarter									Year
		Ended			Nine Months Ended						Ended				Ended			Nine Months Ended						Ended
		Sept. 30,			September 30,						Dec. 31,				Sep. 30,			September 30,						Dec. 31,
		2021			2021			2020			2020				2022			2022			2021			2021
Beginning balance	Beginning balance	$	22.59		$	20.75		$	19.98		$	19.98		Beginning balance	$	20.99		$	22.76		$	20.75		$	20.75
Changes in shareholders' equity:	Changes in shareholders' equity:													Changes in shareholders' equity:
Net income (loss) excluding net investment gains (losses)	Net income (loss) excluding net investment gains (losses)	0.79			2.22			1.50			2.24			Net income (loss) excluding net investment gains (losses)	0.68			2.00			2.22			3.10
Net of tax realized investment gains (losses)	Net of tax realized investment gains (losses)	0.02			0.04			0.03			0.04			Net of tax realized investment gains (losses)	(0.07)			0.24			0.04			0.02
Net of tax unrealized investment gains (losses)		(0.70)			0.09			(0.53)			0.50
Net of tax unrealized investment gains (losses):														Net of tax unrealized investment gains (losses):
Fixed income securities														Fixed income securities	(0.47)			(2.62)			(0.66)			(0.97)
Equity securities														Equity securities	(0.92)			(1.67)			0.75			1.96
Total net of tax realized and unrealized	Total net of tax realized and unrealized													Total net of tax realized and unrealized
investment gains (losses)	investment gains (losses)	(0.68)			0.13			(0.50)			0.54			investment gains (losses)	(1.46)			(4.05)			0.13			1.01
Cash dividends	Cash dividends	(1.72)			(2.16)			(0.63)			(1.84)			Cash dividends	(1.23)			(1.69)			(2.16)			(2.38)
Other	Other	(0.02)			0.02			0.04			(0.17)			Other	(0.06)			(0.10)			0.02			0.28
Net change	Net change	(1.63)			0.21			0.41			0.77			Net change	(2.07)			(3.84)			0.21			2.01
Ending balance	Ending balance	$	20.96		$	20.96		$	20.39		$	20.75		Ending balance	$	18.92		$	18.92		$	20.96		$	22.76
Percentage change for the period	Percentage change for the period	-7.2		%	1.0		%	2.1		%	3.9		%	Percentage change for the period	(9.9)		%	(16.9)		%	1.0		%	9.7		%



Capitalization

Capitalization
September 30, December 31, September 30,
2021 2020 2020
Debt:
4.875% Senior Notes due 2024 $ 398.3 $ 397.9 $ 397.7
3.875% Senior Notes due 2026 547.2 546.8 546.7
3.850% Senior Notes due 2051 642.6 — —
Other miscellaneous debt — 21.7 21.7
Total debt 1,588.2 966.4 966.2
Common shareholders' equity 6,329.4 6,186.6 6,074.6
Total capitalization $ 7,917.6 $ 7,153.1 $ 7,040.8
Capitalization ratios:
Debt 20.1 % 13.5 % 13.7 %
Common shareholders' equity 79.9 86.5 86.3
Total 100.0 % 100.0 % 100.0 %


	Capitalization
	September 30,			December 31,			September 30,
	2022			2021			2021
Debt:
4.875% Senior Notes due 2024	$	398.8		$	398.4		$	398.3
3.875% Senior Notes due 2026	547.8			547.3			547.2
3.850% Senior Notes due 2051	642.8			642.6			642.6
Other miscellaneous debt	7.1			—			—
Total debt	1,596.6			1,588.5			1,588.2
Common shareholders' equity	5,678.1			6,893.2			6,329.4
Total capitalization	$	7,274.7		$	8,481.7		$	7,917.6

Capitalization ratios:
Debt	21.9		%	18.7		%	20.1		%
Common shareholders' equity	78.1			81.3			79.9
Total	100.0		%	100.0		%	100.0		%

2827


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
Nine Months Ended September 30:
2021	2,629.2		3,218.7		25.4		8.2		5,881.6		21.7
2022	2,821.8		2,997.3		18.1		7.2		5,844.6		(.6)
Quarters Ended September 30:
2021	902.8		1,142.1		7.7		2.6		2,055.4		18.6
2022	$	967.3	$	968.1	$	5.5	$	2.3	$	1,943.3	(5.5)	%

Consolidated net premiums and fees earned were down 5.5% for the quarter, with General Insurance net earned premiums growing 7.1%, offset by a 15.2% decline in Title Insurance net premiums and fees as a result of lower revenues in both direct and agency operations. For the first nine months, consolidated net premiums and fees earned were relatively steady, reflecting growth in General Insurance of 7.3%, offset by a 6.9% decline in Title Insurance.


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 September 30:
2021	11,313.9		1,479.0		479.3		1,751.7		15,024.1		1,422.9		16,447.1
2022	$	11,715.6	$	1,526.1	$	377.0	$	1,543.9	$	15,162.7	$	126.3	$	15,289.1


	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
Nine Months Ended
September 30:
2021	256.2		32.5		8.7		26.1		323.6		2.98		2.72
2022	254.8		34.2		5.2		34.8		329.2		2.93		2.75
Quarters Ended
September 30:
2021	84.2		10.9		2.6		13.8		111.6		3.01		2.72
2022	$	88.8	$	11.8	$	1.5	$	12.9	$	115.1	3.03	%	2.96	%

Net investment income increased in both 2022 periods, primarily reflecting growth in the invested asset base and slightly higher investment yields earned in the quarter. 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 September 30, 2022 and December 31, 2021:


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

Workers' compensation			$	4,900.3		$	2,919.3		$	4,893.0		$	2,955.6
General liability			1,395.1			631.6			1,324.4			630.7
Commercial automobile (mostly trucking)			3,191.0			1,779.0			2,850.0			1,736.5
Other coverages			1,674.6			1,226.3			1,355.5			979.3
Unallocated loss adjustment expense reserves			297.6			296.9			285.2			284.8
		Total general insurance reserves	11,458.8			6,853.4			10,708.4			6,587.0
Title			623.5			623.5			594.2			594.2
RFIG Run-off			81.9			81.9			111.2			111.2
Life and accident			10.3			6.4			11.6			7.6
		Total loss and loss adjustment expense reserves	$	12,174.7		$	7,565.3		$	11,425.5		$	7,300.2
Asbestosis and environmental loss reserves included
	in the above general insurance reserves:
		Amount	$	117.6		$	82.2		$	118.1		$	77.2
		% of total general insurance reserves	1.0		%	1.2		%	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
Nine Months Ended September 30:
2021	66.3		3.0		13.7		31.4
2022	64.0		2.8		(96.5)		32.1
Quarters Ended September 30:
2021	64.8		2.9		(14.5)		30.1
2022	62.7	%	2.7	%	(93.3)	%	32.3	%

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
Nine Months Ended September 30:
2021	26.0		86.2		38.5		59.0
2022	27.4		89.5		52.7		59.3
Quarters Ended September 30:
2021	26.5		86.1		39.0		59.7
2022	27.3	%	91.0	%	55.3	%	59.1	%

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
Nine Months Ended September 30:
2021	92.3		89.2		52.2		90.4
2022	91.4		92.3		(43.8)		91.4
Quarters Ended September 30:
2021	91.3		89.0		24.5		89.8
2022	90.0	%	93.7	%	(38.0)	%	91.4	%


Net Investment Gains (Losses)

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
Nine Months Ended
September 30:
2021	1.9		13.7		15.6		—		—		—		288.1		303.7
2022	(145.4)		361.3		215.8		(123.5)		—		(123.5)		(641.8)		(549.5)
Quarters Ended
September 30:
2021	.8		5.7		6.6		—		—		—		(199.3)		(192.6)
2022	$	(86.3)	$	181.0	$	94.7	$	(120.9)	$	—	$	(120.9)	$	(350.8)	$	(377.1)

During the third quarter and first nine months of 2022, net realized investment gains reflect the continued rebalancing of the investment portfolio as well as tax planning considerations. All equity securities sold as part of the rebalance were completed within 11% of their respective 52 week high price. Dispositions of fixed income securities from scheduled maturities and early calls were 58.2% and 80.0% of total dispositions occurring in the first nine months of 2022 and 2021, respectively. Additionally, the third quarter includes investment impairment charges of $120.9, reflecting management's intent to dispose of certain fixed income securities currently in an unrealized loss position, driven by tax planning considerations.


Income Taxes

The effective consolidated income tax rates were (23.3)% and 16.4% in the third quarter and first nine months of 2022 compared to 16.2% and 19.9% in the third quarter and first nine 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 September 30,								Nine Months Ended September 30,
	2022			2021			% Change		2022			2021			% Change
Net premiums earned	$	967.3		$	902.8		7.1	%	$	2,821.8		$	2,629.2		7.3	%
Loss and loss adjustment expenses	606.6			585.4			3.6		1,804.9			1,743.4			3.5
Sales and general expenses	304.0			277.1			9.7		886.2			794.9			11.5
Segment pretax operating income (loss)	$	167.6		$	145.8		15.0	%	$	448.1		$	410.0		9.3	%

Loss ratio	62.7		%	64.8		%			64.0		%	66.3		%
Expense ratio	27.3			26.5					27.4			26.0
Combined ratio	90.0		%	91.3		%			91.4		%	92.3		%


Premiums & Fees

The percentage 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
Nine Months Ended September 30:
2021	39.9		22.1		9.4		9.5		5.2		13.9
2022	39.4		21.4		9.7		10.6		4.9		14.0
Quarters Ended September 30:
2021	39.2		22.0		9.3		9.7		5.4		14.4
2022	39.4	%	22.0	%	9.0	%	10.5	%	4.8	%	14.3	%

General Insurance net premiums earned increased 7.1% and 7.3% for the quarter and first nine months, respectively, driven by growth in commercial auto and workers' compensation lines of coverage. Premium rate increases for most lines of coverage, high renewal retention ratios, and new business production all contributed, but were partially offset by reinstatement premiums currently estimated at $16.6 resulting from losses reinsured relative to Hurricane Ian.


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
Nine Months Ended
September 30:
2021	66.3		74.1		58.2		60.0		56.2		63.9		66.8
2022	64.0		66.7		49.7		66.6		74.3		70.0		64.6
Quarters Ended
September 30:
2021	64.8		73.1		59.0		61.1		54.2		41.4		63.9
2022	62.7	%	64.3	%	35.8	%	84.1	%	66.5	%	98.2	%	66.1	%

The reported loss ratio for General Insurance improved in the quarter, inclusive of favorable reserve development from prior periods and lower current period loss costs. Favorable development of 4.7% in the quarter came predominantly from 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, and to a lesser extent, general liability coverages. The current period loss costs reflect several years of premium rate increases, underwriting actions, a shift in the line of coverage mix, and a relatively nominal amount from Hurricane Ian based on the Company's estimated $10.0 net retention.


Sales and General Expenses

The third quarter and first nine month expense ratios were elevated compared to the same periods last year, generally reflecting the shift in line of coverage mix. 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.


Title Insurance


Summary Operating Results


	Quarters Ended September 30,								Nine Months Ended September 30,
	2022			2021			% Change		2022			2021			% Change
Net premiums and fees earned	$	968.1		$	1,142.1		(15.2)	%	$	2,997.3		$	3,218.7		(6.9)	%
Loss and loss adjustment expenses	26.2			32.9			(20.4)		84.6			95.4			(11.2)
Sales and general expenses	880.9			984.1			(10.5)		2,683.3			2,776.3			(3.4)
Segment pretax operating income (loss)	$	73.3		$	135.7		(46.0)	%	$	263.8		$	378.3		(30.3)	%

Loss ratio	2.7		%	2.9		%			2.8		%	3.0		%
Expense ratio	91.0			86.1					89.5			86.2
Combined ratio	93.7		%	89.0		%			92.3		%	89.2		%


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
Nine Months Ended September 30:
2021	22.7		77.3
2022	20.0		80.0
Quarters Ended September 30:
2021	22.2		77.8
2022	18.8	%	81.2	%

Title Insurance net premiums and fees earned declined by 15.2% and 6.9% for the third quarter and first nine months, respectively. Both directly produced and agency produced revenues declined during the quarter, and it is expected that such revenues will continue to be lower in the fourth quarter of this year when compared to the same period last year. The main driver of these trends is increasing mortgage interest rates which continue to drive a steep reduction in refinance activity and to a lesser extent, purchase activity. An uptick in commercial transaction activity resulted in strong commercial premium growth during the periods reported, and accounted for 21.1% and 21.2% of third quarter and first nine months of 2022 earned premium, respectively, versus 15.4% and 14.5%, respectively, for the same periods last year.


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 nine months.


Sales and General Expenses

The third quarter and first nine 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, and to a lesser extent, a greater proportion of agency produced revenues that have a higher overall expense ratio.


RFIG Run-off


Summary Operating Results


	Quarters Ended September 30,								Nine Months Ended September 30,
	2022			2021			% Change		2022			2021			% Change
Net premiums earned	$	5.5		$	7.7		(28.0)	%	$	18.1		$	25.4		(28.7)	%
Loss and loss adjustment expenses	(5.2)			(1.1)			N/M		(17.5)			3.4			N/M
Pretax operating income (loss)	$	9.2		$	8.4		9.6	%	$	31.3		$	20.9		49.7	%

Loss ratio	(93.3)		%	(14.5)		%			(96.5)		%	13.7		%
Expense ratio	55.3			39.0					52.7			38.5
Combined ratio	(38.0)		%	24.5		%			(43.8)		%	52.2		%

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
Nine Months Ended September 30:
2021	25.4		74.5
2022	18.1		75.6	%
Quarters Ended September 30:
2021	7.7
2022	$	5.5


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 September 30:
2021	1,468.2		147.3		1,615.6
2022	$	1,100.7	$	118.5	$	1,219.3

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
Nine Months Ended September 30:
2021	40,991		12.6
2022	$	37,702	11.7	%

__________

(a) Amounts are in whole dollars.

Loss costs reflect fewer newly reported delinquencies along with improving trends in cure rates.


FINANCIAL POSITION

The Company's financial position at September 30, 2022 reflects an increase in liabilities of 6.5% and decreases in assets and common shareholders' equity of .1% and 17.6%, respectively, when compared to the immediately preceding year-end. Cash and invested assets represent 62.1% and 67.3% of consolidated assets as of September 30, 2022 and December 31, 2021, respectively. As of September 30, 2022, the invested asset base, cash and accrued investment income decreased by 7.9% to $15,491.8.


Investment Portfolio

During the first nine months of 2022 and 2021, the Company continued to reduce equity holdings and reinvest the proceeds in intermediate-term, investment grade fixed income securities. Old Republic continues to adhere to its long-term policy of investing primarily in investment grade, marketable securities. At both September 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 September 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. Short-term investment levels were elevated at September 30, 2022 due to the timing of reinvesting funds from sales of investments and the funding of the Company's share repurchase program.

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):

	September 30,		December 31,
	2022		2021
Aaa	22.4	%	25.1	%
Aa	10.9		12.3
A	34.8		31.9
Baa	30.3		28.5
Total investment grade	98.4		97.8
All other (b)	1.6		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

September 30, 2022			Amortized Cost		Gross Unrealized Losses
Non-Investment Grade Fixed Income Securities by Industry Concentration:
	Energy		$	30.9	$	2.9
	Industrial		38.4		2.8
	Consumer Durables		32.8		2.2
	Basic Industry		45.7		1.9
	Other (includes 2 industry groups)		23.1		1.4
		Total	$	171.1	$	11.4


Investment Grade Fixed Income Securities by Industry Concentration:
	U.S. Governments & Agencies		$	1,956.7	$	111.4
	Utilities		1,459.8		110.1
	Financial, Banking & Insurance		1,317.4		105.4
	Industrial		974.1		73.6
	Consumer Staples & Durables		1,018.0		68.0
	Natural Gas & Energy		878.3		67.8
	Technology		620.9		44.1
	Health Care		509.5		38.0
	Municipal Tax-Exempt		942.8		37.0
	Other (includes 8 industry groups)		1,433.3		99.4
		Total	$	11,111.2	$	755.2

The level of gross unrealized losses for this portfolio is primarily driven by changes in the interest rate environment.


Gross Unrealized Losses Stratified by Industry Concentration for Equity Securities

September 30, 2022			Cost		Gross Unrealized Losses

Equity Securities by Industry Concentration:
	Insurance		$	41.2	$	19.5
	Consumer Staples		37.5		14.9
	Telecom		95.2		11.9
	Utilities		33.0		5.7
	Other (includes 6 industry groups)		211.2		7.1
		Total	$	418.4	$	59.3

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
September 30, 2022		All		Non- Investment Grade Only		All		Non- Investment Grade Only
Maturity Ranges:
Due in one year or less		$	1,277.0	$	27.4	$	13.3	$	.2
Due after one year through five years		5,572.0		82.0		273.5		4.5
Due after five years through ten years		4,340.3		61.5		473.9		6.6
Due after ten years		92.8		—		5.8		—
	Total	$	11,282.3	$	171.1	$	766.7	$	11.4


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

			Amount of Gross Unrealized Losses
September 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		$	476.1	$	20.5	$	—	$	496.6
	Seven to twelve months		103.1		16.6		—		119.8
	More than twelve months		131.7		18.4		—		150.2
		Total	$	711.0	$	55.6	$	—	$	766.7

Number of Issues in Unrealized Loss Position:

Fixed Income Securities:
	One to six months		1,633		20		—		1,653
	Seven to twelve months		143		17		—		160
	More than twelve months		162		19		—		181
		Total	1,938		56		—		1,994

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

			September 30,		December 31,
			2022		2021
Maturity Ranges:
	Due in one year or less		11.4	%	11.7	%
	Due after one year through five years		48.3		49.7
	Due after five years through ten years		39.3		37.6
	Due after ten years through fifteen years		.9		.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 September 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 $440.4 has been received through September 30, 2022. The liquidity achievable through such permitted dividend payments is sufficient to cover the parent holding company's currently expected regularly recurring 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 $7,274.7 at September 30, 2022 consisted of debt of $1,596.6 and common shareholders' equity of $5,678.1. Changes in the common shareholders' equity account reflect primarily net income excluding net investment gains (losses), realized and unrealized gains (losses), dividend payments to shareholders and share repurchases for the period then ended. At September 30, 2022, the Company's consolidated debt to equity ratio was 28.1%.

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.

On August 18, 2022, the Board of Directors authorized a $450 share repurchase program and a special, one-time cash dividend of $1.00 per share. The repurchase program is intended to comply with Rule 10b-18 and has no expiration date, does not require the purchase of any minimum number of shares and may be suspended, modified or discontinued at any time without prior notice. Old Republic may also from time to time repurchase shares pursuant to written, pre-arranged Rule 10b5-1 plans. In reaching its decision to authorize the share repurchase program and the special cash dividend, the Board evaluated such factors as the current and foreseeable liquidity and capital needs of the parent holding company and its insurance company subsidiaries. During the quarter, the Company returned total capital to shareholders of $479.1, comprised of $374.3 in common stock dividends and $104.8 of share repurchases (4.8 million shares at an average price of $21.49 per share). Following the close of the quarter and through November 3, the Company repurchased 6.0 million additional shares for $136.8 (average price of $22.48), leaving $208.2 remaining under the current repurchase authorization.

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 $105.0 during the third quarter and first nine 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.


TERMINATION OF SHAREHOLDERS' RIGHTS PLAN

On August 18, 2022, the Board of Directors approved the termination of the Company's shareholders' rights plan, commonly referred to as a "poison pill", which was originally scheduled to terminate on June 25, 2027. The shareholders' rights plan was amended to accelerate the expiration date to August 18, 2022, terminating the plan as of that date. The Company had maintained a shareholders' rights plan in place for more than three decades. The decision to terminate the shareholders' rights plan reflects the Board of Director's regular assessment of the governance attributes that best serve the long-term interests of all the Company's stakeholders and was made after engagement with institutional shareholders.


CRITICAL ACCOUNTING ~~AND REPORTING POLICIES~~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: a) the determination of credit losses in the value of investments; b) the recoverability of reinsured outstanding losses; and c)~~to the establishment of reserves for losses and loss adjustment ~~expenses.~~expenses and the recoverability of reinsured outstanding losses. The major assumptions and methods used in setting these estimates are ~~discussed~~summarized in the Company's ~~2020~~2021 Annual Report on Form 10-K.


~~COVID-19 PANDEMIC AND OLD REPUBLIC'S BUSINESS~~

During the third quarter of 2021, the economy continued to recover from the effects of the COVID-19 pandemic and the associated governmental responses (“COVID-19” or “the pandemic”). Most of Old Republic’s business operations have permitted associates to return to the office. Old Republic experienced no meaningful interruption in its ability to service the needs of customers throughout the remote working environment or the beginning stages of the return to office.

Demand for several of the Company’s insurance coverages in the General Insurance Segment is related to overall economic conditions, however, the Company’s exposure to the sectors most significantly affected by COVID-19 has not been significant. ~~Additionally,~~ aside from higher reported delinquencies and resulting claims costs experienced within the RFIG-run off business during 2020, the overall impact of COVID-19 on the Company’s claims experience has not been significant.

The COVID-19 pandemic continues to adversely impact the U.S. economy and financial markets, however, to a much lesser degree than 2020. New variants of the COVID-19 virus or a resurgence in infection rates could lead to a further or continuing reduction in economic activity, resulting in a decline in demand for the Company’s products or increased claims experience in future periods. As a result, the Company’s operating results, business and financial condition could be adversely affected in subsequent periods by future economic disruptions caused by the COVID-19 pandemic.

As the economy continues to emerge from the impacts of the pandemic, premium and fee revenues in General Insurance could continue growing. As low interest rates and a favorable real estate market continue, Title Insurance premium and fee revenues could remain strong, although may be lower than recent periods. In the RFIG Run-off business, future claims experience could depend upon the continued, mitigating effects of loan forbearance programs mandated by the Federal government, the rate at which employment levels recover, and the real estate market. Management believes that the Company’s strong financial condition will enable it to thrive as the economy recovers.


~~FINANCIAL POSITION~~

~~The Company's financial position at September 30, 2021 reflected increases in assets, liabilities and common shareholders' equity of 9.5%, 12.2% and 2.3%~~, respectively, when compared to the immediately preceding year-end. Cash and invested assets represented 66.7% and 68.1% of consolidated assets as of September 30, 2021 and December 31, 2020, respectively. As of September 30, 2021, the invested asset base, cash and accrued investment income increased by 7.3% to $16,666.7.

~~Investments~~ - During the first nine months of 2021 and 2020, the Company committed the majority of investable funds to short to intermediate-term fixed maturity securities and higher yielding publicly traded large capitalization equity securities. Old Republic continues to adhere to its long-term policy of investing primarily in investment grade, marketable securities. At both September 30, 2021 and December 31, 2020, nearly all of the Company's investments consisted of marketable securities. The investment portfolio contains no significant insurance risk-correlated asset exposures to real estate, mortgage-backed securities, collateralized debt obligations ("CDO's"), derivatives, hybrid securities, or illiquid private equity and hedge fund 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 September 30, 2021, the Company had no fixed maturity investments in default as to principal and/or interest.

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 long-term fixed maturity 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 long-term fixed maturity investment portfolio that is not subject to extreme interest rate sensitivity and principal deterioration.

The fair value of the Company's long-term fixed maturity 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 long-term fixed maturity 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 maturity investments. By contrast, a decline in such rates reduces currently available yields but usually serves to increase the fair value of the existing fixed maturity investment portfolio. All such changes in fair value of available for sale 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 maturity 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 available for sale fixed maturity 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 maturity and equity portfolios as of the dates shown.~~

Fixed Maturity Securities Stratified by Credit Quality (a):
September 30, December 31,
2021 2020
Aaa 23.4 % 24.6 %
Aa 12.7 13.1
A 32.2 33.0
Baa 29.0 26.5
Total investment grade 97.3 97.2
All other (b) 2.7 2.8
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 Maturity Securities
September 30, 2021 Amortized
Cost Gross
Unrealized
Losses
Fixed Maturity Securities by Industry Concentration:
Utilities $ 358.9 $ 10.9
U.S. Governments & Agencies 436.4 4.7
Consumer Staples 198.5 4.6
Health Care 134.5 4.1
Industrial 239.4 4.1
Retail 147.3 3.7
Technology 133.0 3.2
Other (includes 13 industry groups) 683.6 16.7
Total $ 2,331.9 (b) $ 52.5

~~__________~~

~~(b) Represents 23.0% of the total fixed maturity securities portfolio.~~

Gross Unrealized Losses Stratified by Industry Concentration for Equity Securities
September 30, 2021
Cost Gross
Unrealized
Losses
Equity Securities by Industry Concentration:
Energy $ 423.6 $ 68.8
Telecom 72.5 11.3
Utilities 210.2 8.3
Retail 40.0 6.5
Other (includes 6 industry groups) 336.6 16.9
Total $ 1,083.0 (c) $ 112.0 (d)

~~__________~~

~~(c) Represents 28.8% of the total equity securities portfolio.~~

~~(d) Represents 3.0% of the cost of the total equity securities portfolio, while gross unrealized gains represent 31.6% of the portfolio.~~

Gross Unrealized Losses Stratified by Maturity Ranges for All Fixed Maturity Securities
Amortized Cost
of Fixed Maturity Securities Gross Unrealized Losses
September 30, 2021 All Non-
Investment
Grade Only All Non-
Investment
Grade Only
Maturity Ranges:
Due in one year or less $ 62.5 $ — $ — $ —
Due after one year through five years 266.0 — 1.9 —
Due after five years through ten years 1,944.8 10.9 48.8 .1
Due after ten years 58.5 — 1.7 —
Total $ 2,331.9 $ 10.9 $ 52.5 $ .1

Gross Unrealized Losses Stratified by Duration and Amount of Unrealized Losses
Amount of Gross Unrealized Losses
September 30, 2021 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 Maturity Securities:
One to six months $ 34.9 $ — $ — $ 34.9
Seven to twelve months 17.6 — — 17.6
More than twelve months — — — —
Total $ 52.5 $ — $ — $ 52.5
Number of Issues in Unrealized Loss Position:
Fixed Maturity Securities:
One to six months 292 — — 292
Seven to twelve months 61 — — 61
More than twelve months 2 — — 2
Total 355 — — 355 (e)

~~__________~~

~~(e) At September 30, 2021 the number of issues in an unrealized loss position represent 18.8% of the total number of such fixed maturity issues held by the Company.~~

The aging of issues with unrealized losses employs balance sheet date fair value comparisons with an issue's cost. The percentage reduction from such cost reflects the decline as of a specific point in time (September 30, 2021 in the above table) and, accordingly, is not indicative of a security's value having been consistently below its cost at the percentages shown nor throughout the periods shown.

Age Distribution of Fixed Maturity Securities
September 30, December 31,
2021 2020
Maturity Ranges:
Due in one year or less 11.3 % 9.8 %
Due after one year through five years 49.8 57.0
Due after five years through ten years 38.1 31.4
Due after ten years through fifteen years .8 1.7
Due after fifteen years — .1
Total 100.0 % 100.0 %
Average Maturity in Years 4.5 4.3
Duration (f) 4.1 3.8

~~___________~~

(f) Duration is used as a measure of bond price sensitivity to interest rate changes. A duration of 4.1 as of September 30, 2021 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 maturity investment portfolio of approximately 4.1%.

Composition of Unrealized Gains (Losses)
September 30, December 31,
2021 2020
Available for Sale Fixed Maturity Securities:
Amortized cost $ 10,136.9 $ 9,897.6
Estimated fair value 10,486.3 10,496.8
Net unrealized gains (losses) $ 349.3 $ 599.1
Components of net unrealized gains (losses):
Gross unrealized gains $ 401.9 $ 602.9
Gross unrealized losses (52.5) (3.8)
Net unrealized gains (losses) $ 349.3 $ 599.1
Equity Securities:
Cost $ 3,754.7 $ 3,269.7
Estimated fair value 4,828.0 4,054.8
Net unrealized gains (losses)(g) $ 1,073.2 $ 785.1
Components of net unrealized gains (losses):
Gross unrealized gains $ 1,185.3 $ 1,028.1
Gross unrealized losses (112.0) (243.0)
Net unrealized gains (losses)(g) $ 1,073.2 $ 785.1

~~___________~~

~~(g) Unrealized gains and losses from changes in fair value of equity securities are included in total realized and unrealized investment gains (losses) in the consolidated statements of income.~~

~~Other Assets~~ - Substantially all of the Company's receivables are not past due. 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 claims costs. The Company's deferred policy acquisition cost balances have not fluctuated substantially from period-to-period, and do not represent significant percentages of assets or shareholders' equity.

~~Liquidity~~ - 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 to the parent company is generally restricted by law or subject to approval of the insurance regulatory authorities. Based on December 31, 2020 statutory balances, the Company can receive up to $699.3 in ordinary dividends from its subsidiaries in 2021 without the prior approval of regulatory authorities. The liquidity achievable through such permitted dividend payments is considered sufficient to cover the parent holding company's currently expected cash outflows represented mostly by interest and scheduled repayments on outstanding debt, reasonably anticipated cash dividend payments to shareholders, modest operating expenses, and the near-term capital needs of its operating company subsidiaries. In addition to ordinary dividends, the Company's principal mortgage insurance carriers sought and received approval from the North Carolina Department of Insurance to pay extraordinary dividends amounting to $25.0 and $75.0 for the quarter and nine months ended September 30, 2021, respectively.

~~Capitalization~~ - Old Republic's total capitalization of $7,917.6 at September 30, 2021 consisted of debt of $1,588.2 and common shareholders' equity of $6,329.4. 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 September 30, 2021, the Company's consolidated debt to equity ratio was 25.1%.

Old Republic has paid a cash dividend without interruption since 1942 (80 years), and it has raised the annual cash dividend payout for each of the past 40 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 statutory and GAAP 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. The Company's Board of Directors declared a special cash dividend of $1.50 per share in August 2021, which was paid on October 6, 2021.


~~RESULTS OF OPERATIONS~~


~~Revenues: Premiums & Fees~~

~~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 benefits, claims and expenses. Earned but unbilled premiums are generally taken into income on the billing date, while adjustments for retrospective premiums, commissions and similar charges or credits are accrued on the basis of periodic evaluations of current underwriting experience and contractual obligations.

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 23% of 2021 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 77% of consolidated title premium and fee revenues is produced by independent title agents and underwritten title companies. 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 claim reserve provisions.

The Company's mortgage guaranty premiums primarily stem from monthly installments paid on long-duration, guaranteed renewable insurance policies. Such premiums are written and earned in the month coverage is effective. With respect to relatively few annual or single premium policies, earned premiums are largely recognized on a pro-rata basis over the terms of the policies.

~~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 Other Total (*) % Change
from prior
period (*)
Years Ended December 31:
2018 $ 3,277.1 $ 2,573.1 $ 75.9 $ 14.6 $ 5,940.9 3.0 %
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
Nine Months Ended September 30:
2020 2,532.8 2,254.5 35.1 9.0 4,831.6 6.1
2021 2,629.2 3,218.7 25.4 8.2 5,881.6 21.7
Quarters Ended September 30:
2020 861.9 857.0 10.8 2.9 1,732.8 6.0
2021 $ 902.8 $ 1,142.3 $ 7.7 $ 2.6 $ 2,055.4 18.6 %

~~__________~~

(*) Reclassification adjustments were made to certain Title segment revenues and expenses in prior periods to conform to the current presentation. See Note 1 to the accompanying Notes to Consolidated Financial Statements.

~~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:
2018 36.8 % 31.1 % 7.7 % 5.3 % 6.2 % 12.9 %
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
Nine Months Ended September 30:
2020 37.8 26.0 8.3 7.8 6.2 13.9
2021 39.9 22.1 9.4 9.5 5.2 13.9
Quarters Ended September 30:
2020 37.6 25.3 9.1 7.8 5.8 14.4
2021 39.2 % 22.0 % 9.3 % 9.7 % 5.4 % 14.4 %

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

Title Premium and Fee Production by Source (*)
Direct
Operations Independent
Title
Agents &
Other
Years Ended December 31:
2018 23.7 % 76.3 %
2019 24.9 75.1
2020 24.9 75.1
Nine Months Ended September 30:
2020 25.3 74.7
2021 22.7 77.3
Quarters Ended September 30:
2020 26.3 73.7
2021 22.2 % 77.8 %

~~__________~~

~~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:
2018 $ 74.4 79.2 %
2019 58.8 77.5
2020 45.1 77.6
Nine Months Ended September 30:
2020 35.1 76.2
2021 25.4 74.5 %
Quarters Ended September 30:
2020 10.8
2021 $ 7.7

~~The Company's flagship mortgage guaranty insurance carrier ceased the underwriting of new policies effective August 31, 2011 and the existing book of business was placed in run-off operating mode.~~

Net Risk in Force
Net Risk in Force By Type: Traditional Primary Bulk & Other Total
As of December 31:
2018 $ 3,098.3 $ 246.7 $ 3,345.0
2019 2,388.3 201.8 2,590.1
2020 1,842.2 169.0 2,011.2
As of September 30:
2020 1,985.3 178.6 2,163.9
2021 $ 1,468.2 $ 147.3 $ 1,615.6

~~Risk Distribution by Property State:~~

FL IL GA CA NJ MD NY TX PA OH
As of December 31:
2018 8.5 % 6.3 % 5.9 % 5.4 % 4.7 % 4.5 % 3.7 % 5.5 % 4.3 % 3.5 %
2019 8.9 6.7 6.1 5.7 5.0 4.9 3.9 4.8 4.1 3.7
2020 9.2 7.0 6.0 5.8 5.3 5.1 4.2 4.5 4.1 3.7
As of September 30:
2020 9.2 6.9 6.0 5.8 5.2 5.1 4.1 4.6 4.1 3.7
2021 9.8 % 7.2 % 6.0 % 5.8 % 5.5 % 5.1 % 4.7 % 4.4 % 4.1 % 3.7 %


~~Revenues: Net Investment Income~~

Net investment income is affected by trends in interest and dividend yields for the types of securities in which the Company's funds are invested during each reporting period. 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 (a)
General Title RFIG Run-off Corporate
and Other Total
As of December 31:
2019 $ 10,577.9 $ 1,172.3 $ 566.3 $ 841.7 $ 13,158.4 $ 1,200.7 $ 14,359.2
2020 10,987.8 1,328.4 545.1 1,083.8 13,945.2 1,384.9 15,330.1
As of September 30:
2020 10,888.4 1,233.5 536.9 1,005.8 13,664.7 998.2 14,662.9
2021 $ 11,313.9 $ 1,479.0 $ 479.3 $ 1,751.7 $ 15,024.1 $ 1,422.9 $ 16,447.1

~~__________~~

~~(a) The December 31, 2019 balances include fixed maturity securities classified as held to maturity which are reported and reflected herein at amortized cost.~~

Net Investment Income Yield at
General Title RFIG Run-off Corporate
and Other Total Original Cost Fair
Value
Years Ended
December 31:
2018 $ 341.0 $ 38.8 $ 20.1 $ 31.7 $ 431.8 3.41 % 3.28 %
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
Nine Months Ended
September 30:
2020 264.2 31.4 11.8 21.8 329.3 3.27 3.03
2021 256.2 32.5 8.7 26.1 323.6 2.98 2.72
Quarters Ended
September 30:
2020 85.9 10.2 3.4 6.8 106.4 3.15 2.94
2021 $ 84.2 $ 10.9 $ 2.6 $ 13.8 $ 111.6 3.01 % 2.72 %


~~Revenues: 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 the providing of sufficient liquidity to meet insurance underwriting and other obligations as they become payable in the future. Dispositions of fixed maturity securities from scheduled maturities and early calls were 80.0% and 73.1% of total dispositions occurring in the first nine months of 2021 and 2020, 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
Maturity
Securities Equity
Securities
and Miscel-laneous Investments Total Fixed
Maturity
Securities Miscel-laneous Investments Total Total Investment Gains (Losses)
Years Ended
December 31:
2018 $ (4.8) $ 63.1 $ 58.2 $ — $ — $ — $ (293.8) $ (235.6)
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)
Nine Months Ended
September 30:
2020 (7.8) 20.6 12.7 — — — (529.4) (516.7)
2021 1.9 13.7 15.6 — — — 288.1 303.7
Quarters Ended
September 30:
2020 .6 .7 1.4 — — — 79.2 80.7
2021 $ .8 $ 5.7 $ 6.6 $ — $ — $ — $ (199.3) $ (192.6)


~~Expenses: Benefits and Claims~~

The Company records the benefits, claims and related settlement costs that have been incurred during each accounting period. Total claim 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 claim reserve estimates for major types of insurance coverages as of September 30, 2021 and December 31, 2020:~~

Claim and Loss Adjustment Expense Reserves
September 30, 2021 December 31, 2020
Gross Net Gross Net
Workers' compensation $ 4,915.7 $ 2,970.3 $ 4,929.2 $ 3,044.1
General liability 1,354.4 638.4 1,309.4 641.5
Commercial automobile (mostly trucking) 2,875.3 1,743.8 2,379.8 1,591.5
Other coverages 1,284.5 927.0 1,086.2 782.4
Unallocated loss adjustment expense reserves 279.2 278.9 269.1 268.3
Total general insurance reserves 10,709.3 6,558.5 9,973.9 6,328.0
Title 592.8 592.8 556.1 556.1
RFIG Run-off 118.5 118.5 127.6 127.6
Life and accident 12.9 8.0 13.2 8.6
Total claim and loss adjustment expense reserves $ 11,433.7 $ 7,278.0 $ 10,671.0 $ 7,020.4
Asbestosis and environmental claim reserves included
in the above general insurance reserves:
Amount $ 125.6 $ 81.2 $ 127.6 $ 82.4
% of total general insurance reserves 1.2 % 1.2 % 1.3 % 1.3 %

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 claim reserves by the Company's insurance subsidiaries is a reasonably complex and dynamic process influenced by a large variety of factors as further discussed below. 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 claim costs and the resulting changes in estimates are recorded in operations of the periods during which they are made. Increases to prior reserve estimates are often referred to as unfavorable development whereas any changes that decrease previous estimates of the Company's ultimate liability are referred to as favorable development.

~~Overview of Loss Reserving Process~~

~~The Company's reserve setting process reflects the nature of its insurance business and the operationally decentralized basis upon which it is conducted. Old Republic's~~ ~~general insurance~~ operations encompasses a large variety of coverages or classes of commercial insurance; it has negligible exposure to personal insurance coverages such as homeowners or private passenger automobile insurance that exhibit wide diversification of risks, significant frequency of claim occurrences, and high degrees of statistical credibility. Additionally, the Company's insurance subsidiaries do not provide significant amounts of insurance protection for premises; most of its property insurance exposures relate to cargo, incidental property, and insureds' inland marine assets. Consequently, the wide variety of policies issued and commercial insurance customers served require that loss reserves be analyzed and established in the context of the unique or different attributes of each block or class of business produced by the Company. For example, accident liability claims emanating from insured trucking companies or from general aviation customers become known relatively quickly, whereas claims of a general liability nature arising from the building activities of a construction company may emerge over extended periods of time. Similarly, claims filed pursuant to errors and omissions or directors and officers liability coverages are usually not prone to immediate evaluation or quantification inasmuch as many such claims may be litigated over several years and their ultimate costs may be affected by the vagaries of judged or jury verdicts. Approximately 90% of the general insurance group's claim reserves stem from liability insurance coverages for commercial customers which typically require more extended periods of investigation and at times protracted litigation before they are finally settled. As a consequence of these and other factors, Old Republic does not utilize a single, overarching loss reserving approach.

The Company prepares periodic analyses of its loss reserve estimates for its significant insurance coverages. It establishes point estimates for most losses on an insurance coverage line-by-line basis for individual subsidiaries, sub-classes, individual accounts, blocks of business or other unique concentrations of insurance risks such as directors and officers liability, that have similar attributes. Actuarially or otherwise derived ranges of reserve levels are not utilized as such in setting these reserves. Instead the reported reserves encompass the Company's best point estimates at each reporting date and the overall reserve level at any point in time therefore represents the compilation of a very large number of reported reserve estimates and the results of a variety of formula calculations largely driven by analysis of historical data. Favorable or unfavorable developments of prior year reserves are implicitly covered by the point estimates incorporated in total reserves at each balance sheet date. The Company does not project future variability or make an explicit provision for uncertainty when determining its best estimate of loss reserves. Over the most recent decade actual incurred losses have developed within a reasonable range of their original estimates.

Aggregate loss reserves consist of liability estimates for claims that have been reported ("case") to the Company's insurance subsidiaries and reserves for claims that have been incurred but not yet reported ("IBNR") or whose ultimate costs may not become fully apparent until a future time. Additionally, the Company establishes unallocated loss adjustment expense reserves for loss settlement costs that are not directly related to individual claims. Such reserves are based on prior years' cost experience and trends, and are intended to cover the unallocated costs of

claim departments' administration of case and IBNR claims over time. Long-term, disability-type workers' compensation reserves are discounted to present value based on interest rates that generally range from 3.0% to 4.0%.

A large variety of statistical analyses and formula calculations are utilized to provide for IBNR claim costs as well as additional costs that can arise from such factors as monetary and social inflation, changes in claims administration processes, changes in reinsurance ceded and recoverability levels, and expected trends in claim costs and related ratios. Typically, such formulas take into account so-called link ratios that represent prior years' patterns of incurred or paid loss trends between succeeding years, or past experience relative to progressions of the number of claims reported over time and ultimate average costs per claim.

Overall, reserves pertaining to several hundred large individual commercial insurance accounts that exhibit sufficient statistical credibility, and at times may be subject to retrospective premium rating plans or the utilization of varying levels or types of self-insured retentions through captive insurers and similar risk management mechanisms are established on an account by account basis using case reserves and applicable formula-driven methods. Large account reserves are usually set and analyzed for groups of coverages such as workers' compensation, commercial automobile (trucking) and general liability that are typically underwritten jointly for many customers. For certain so-called long-tail categories of insurance such as retained or assumed excess liability or excess workers' compensation, officers and directors' liability, and commercial umbrella liability relative to which claim development patterns are particularly long, more volatile, and immature in their early stages of development, the Company judgmentally establishes the most current accident years' loss reserves on the basis of expected claim ratios. Such expected claim ratios typically reflect currently estimated claim ratios from prior accident years, adjusted for the effect of actual and anticipated rate changes, actual and anticipated changes in coverage, reinsurance, mix of business, and other anticipated changes in external factors such as trends in loss costs or the legal and claims environment. Expected claim ratios are generally used for the two to five most recent accident years depending on the individual class or category of business. As actual claims data emerges in succeeding interim and annual periods, the original accident year claim ratio assumptions are validated or otherwise adjusted sequentially through the application of statistical projection techniques such as the Bornhuetter/Ferguson method which utilizes data from the more mature experience of prior years to arrive at a likely indication of more recent years' loss trends and costs.

~~Title insurance~~and related escrow services loss and loss adjustment expense reserves are established as point estimates to cover the projected settlement costs of known as well as IBNR losses related to premium and escrow service revenues of each reporting period. Reserves for known claims are based on an assessment of the facts available to the Company during the settlement process. The point estimates covering all claim reserves take into account IBNR claims based on past experience and evaluations of such variables as changing trends in the types of policies issued, changes in real estate markets and interest rate environments, and changing levels of loan refinancing, all of which can have a bearing on the emergence, number, and ultimate costs of claims.

~~RFIG Run-offmortgage guaranty~~ ~~insurance~~reserves for unpaid claims and claim adjustment expenses are recognized only upon an instance of default, defined as an insured mortgage loan for which two or more consecutive monthly payments have been missed. Loss reserves are based on statistical calculations that take into account the number of reported insured mortgage loan defaults as of each balance sheet date, as well as experience-based estimates of loan defaults that have occurred but have not as yet been reported. Further, the loss reserve estimating process takes into account a large number of variables including trends in claim severity, potential salvage recoveries, expected cure rates for reported loan delinquencies at various stages of default, the level of coverage rescissions and claims denials due to material misrepresentation in key underwriting information or non-compliance with prescribed underwriting guidelines, and management judgments relative to future employment levels, housing market activity, and mortgage loan interest costs, demand, and extensions.

The Company has the legal right to rescind mortgage insurance coverage unilaterally as expressly stated in its policy. Moreover, two federal courts that have considered that policy wording have each affirmed that right. According to the policy, if any representations are materially false or misleading with respect to a loan, the Company has the right to cancel or rescind coverage for that loan retroactively to commencement of the coverage. In the case of mortgage guaranty insurance, rescissions have occurred regularly over the years but have been generally immaterial. During the period of the great recession the Company experienced a much greater incidence of rescissions due to increased levels of observed fraud and misrepresentations in insurance applications pertaining to business underwritten between 2004 and the first half of 2008 in particular. In recent years, the incidence of rescissions has returned to immaterial levels.

~~Incurred Loss Experience~~

Management believes that the Company's overall reserving practices have been consistently applied over many years. Previously established aggregate reserves have produced reasonable estimates of the cumulative ultimate net costs of claims incurred. However, there are no guarantees that such outcomes will continue, and, accordingly, no representation is made that ultimate net claim and related costs will not develop in future years to be greater or lower than currently established reserve estimates. In management's opinion, however, such potential development is 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 2020 Annual Report on Form 10-K under Item 1A - Risk Factors.

~~A summary of changes in aggregate reserves for claims and related costs is included in Note 4 of the Consolidated Financial Statements.~~

The percentage of net claims, benefits and related settlement 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:
2018 72.2 % 1.9 % 39.4 % 41.4 %
2019 71.8 2.5 53.5 41.2
2020 69.9 2.3 81.7 37.0
Nine Months Ended September 30:
2020 70.7 2.7 80.8 39.0
2021 66.3 3.0 13.7 31.4
Quarters Ended September 30:
2020 70.5 2.5 62.4 36.8
2021 64.8 % 2.9 % (14.5) % 30.1 %

~~__________~~

~~The percentage of net claims, benefits and related settlement expenses measured against premiums earned by major types of general insurance coverage were as follows:~~

General Insurance Claim 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:
2018 72.2 % 79.3 % 70.7 % 62.8 % 73.8 % 68.9 % 60.1 %
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
Nine Months Ended
September 30:
2020 70.7 80.3 63.6 58.6 59.4 74.2 67.3
2021 66.3 74.1 58.2 60.0 56.2 63.9 66.8
Quarters Ended
September 30:
2020 70.5 80.4 54.1 59.3 58.0 95.6 70.1
2021 64.8 % 73.1 % 59.0 % 61.1 % 54.2 % 41.4 % 63.9 %

~~The~~ ~~General Insurance~~ reported claim ratio improved in both 2021 periods, influenced by favorable reserve development from prior periods and a lower current period claim provision, reflecting several years of premium rate increases and underwriting actions. The group experienced favorable development of prior years' reserves of 3.2 and 2.9 percentage points for the third quarter and first nine months of 2021, respectively, compared to .8 and .5 percentage points for the third quarter and first nine months of 2020, respectively.

Unfavorable asbestos and environmental ("A&E") claim developments, although not material in any of the periods presented, are typically attributable to periodic re-evaluations of A&E claim reserves as well as subsequent reclassifications of other coverages' reserves, most often workers' compensation, deemed assignable to A&E category of losses. Except for a small portion that emanates from ongoing primary insurance operations, a large majority of the A&E claim reserves posted by Old Republic stem mainly from its participations in assumed reinsurance treaties and insurance pools which were discontinued during the 1980's and have since been in run-off status. With respect to the primary portion of gross A&E reserves, Old Republic administers the related claims through its claims personnel as well as outside attorneys, and posted reserves reflect its best estimates of ultimate claim costs. Claims administration for the assumed portion of the Company's A&E exposures is handled by the claims departments of unrelated primary or ceding reinsurance companies. While the Company performs periodic reviews of certain claim files managed by third parties, the overall A&E reserves it establishes respond to the paid claim and case reserve activity reported to the Company as well as available industry statistical data such as so-called survival ratios. Such ratios represent the number of years' average paid losses for the three or five most recent calendar years that are encompassed by an insurer's A&E reserve level at any point in time. According to this simplistic appraisal of an insurer's A&E loss reserve level, Old Republic's average five year survival ratios stood at 7.4 years (gross) and 7.8 years (net of reinsurance) as of September 30, 2021 and 6.3 years (gross) and 7.1 years (net of reinsurance) as of

December 31, 2020. Fluctuations in this ratio between years can be caused by the inconsistent pay out patterns associated with these types of claims. Incurred net losses for A&E claims have averaged .3% of ~~general insurance~~ ~~group net incurred losses for the five years ended December 31, 2020.~~

~~Title insurance~~claim ratios have remained in the single digits for a number of years due to a continuation of favorable trends in claims frequency and severity. The reported claim ratio was higher for the quarter and year-to-date periods of 2021, influenced somewhat by less favorable reserve development from prior periods. This favorable development of reserves established in prior years reduced the claim ratio by .8 and .7 percentage points for the third quarter and first nine months of 2021, respectively and 1.0 and .8 percentage points for the same respective periods of 2020.

~~RFIG Run-off~~ claim costs reflect fewer newly reported delinquencies along with improving trends in cure rates and claim severity influenced by the ongoing economic recovery and continued strength in the real estate market. Incurred claim ratios reflect favorable development of 106.3 and 47.7 percentage points in the third quarter and first nine months of 2021, respectively. This compares to 77.8 and 22.3 percentage points of favorable development for the respective 2020 periods.

~~Certain~~ ~~mortgage guaranty~~ ~~average claims related trends are listed below:~~

Average Settled Claim Amount (a) Reported Delinquency
Ratio at End of Period
Years Ended December 31:
2018 $ 46,946 9.9 %
2019 49,195 10.1
2020 37,172 14.2
Nine Months Ended September 30:
2020 42,035 14.2
2021 $ 40,991 12.6 %

~~__________~~

~~(a) Amounts are in whole dollars.~~

Total Delinquency Rated for Top Ten States (includes "other" business) (b):
FL IL GA CA NJ MD NY TX PA OH
As of December 31:
2018 10.6 % 9.2 % 8.1 % 6.8 % 15.3 % 10.7 % 21.3 % 10.4 % 12.0 % 10.1 %
2019 8.8 9.0 8.6 6.5 12.4 10.4 20.7 12.4 12.4 10.5
2020 13.1 13.8 12.7 9.9 18.2 15.2 25.5 18.7 15.7 13.7
As of September 30:
2020 13.6 14.6 13.3 9.9 19.4 14.8 25.8 17.2 16.0 12.8
2021 10.6 % 13.0 % 10.6 % 7.8 % 15.7 % 13.0 % 22.8 % 17.4 % 13.9 % 11.7 %

~~__________~~

~~(b) As determined by risk in force as of September 30, 2021, these 10 states represent approximately 56.2% of total risk in force.~~

~~Reinsurance Programs~~

To maintain premium production within its capacity and limit maximum losses and risks for which it might become liable under its policies, Old Republic may cede a portion or all of its premiums and 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 2020 Annual Report on Form 10-K.


~~Expenses: 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:
2018 25.0 % 90.9 % 21.5 % 53.5 %
2019 25.7 90.5 25.0 54.1
2020 25.6 88.4 30.2 56.3
Nine Months Ended September 30:
2020 25.8 89.2 29.9 55.4
2021 26.0 86.2 38.5 59.0
Quarters Ended September 30:
2020 25.0 86.6 27.2 55.5
2021 26.5 % 86.1 % 39.0 % 59.7 %

~~__________~~

Variations in the Company's consolidated expense ratios reflect a continually changing mix of coverages sold and attendant costs of producing business in the Company's three largest business segments. 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. Moreover, general operating expenses can contract or expand in differing proportions due to varying levels of operating efficiencies and expense management opportunities in the face of changing market conditions.


~~Expenses: Total~~

~~The combined ratios of the above summarized net claims, benefits and underwriting expenses that reflect the sum total of all the factors enumerated above have been as follows:~~

RFIG
General Title (*) Run-off Consolidated (*)
Years Ended December 31:
2018 97.2 % 92.8 % 60.9 % 94.9 %
2019 97.5 93.0 78.5 95.3
2020 95.5 90.7 111.9 93.3
Nine Months Ended September 30:
2020 96.5 91.9 110.7 94.4
2021 92.3 89.2 52.2 90.4
Quarters Ended September 30:
2020 95.5 89.1 89.6 92.3
2021 91.3 % 89.0 % 24.5 % 89.8 %

~~__________~~


~~Expenses: Income Taxes~~

The effective consolidated income tax rates were 16.2% and 19.9% in the third quarter and first nine months of 2021 compared to 19.9% and (7.7)% in the third quarter and first nine months of 2020. The rates for each period reflect primarily the varying proportions of pretax operating income (loss) derived from partially tax sheltered investment income (principally tax-exempt interest and dividend income), the combination of fully taxable investment income, investment gains or losses, underwriting and service income and adjustments regarding the recoverability of deferred tax assets.


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. ~~Of necessity, any~~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.

~~The~~ General Insurance, Title Insurance, Corporate ~~and~~& Other, ~~Segments,~~ and ~~the~~ RFIG Run-off ~~business~~ 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 ~~II, Item 1A - Risk Factor of this report and Part~~ I, Item 1A - Risk Factors, of the Company's ~~2020~~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.

4240

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 ~~maturities~~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 September 30, ~~2021,~~2022, have not materially changed from those identified in the Company's ~~2020~~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 ~~accounting~~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 September 30, ~~2021,~~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.

4341


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

Item 1 - Legal Proceedings

The information contained in Note 79 "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

~~The following items update~~There have been no material changes with respect to the risk factors disclosed in the Company's ~~2020~~2021 Annual report on Form 10-K.

~~Technology~~Item 2 - Unregistered Sales of Equity Securities and ~~security breaches or failures, including cybersecurity incidents, could disrupt the Company’s operations, result in financial losses, the loss~~Use of ~~critical and confidential information and expose the Company to additional liabilities, which could adversely affect its reputation and results~~Proceeds

Purchase of ~~operations.~~Equity Securities

The Company depends upon technology to conduct business. The Company uses computer systems to store and use customer, employee, and company data and information. These include both proprietary and third party technology systems and tools. In addition,following table summarizes share repurchase activity for the Company routinely transmits, receives and stores personal, confidential and proprietary information by email and other electronic means. The Company and its employees and agents also transfer significant amounts of funds using electronic means.three months ended September 30, 2022:


Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan	Approximate Dollar Value of Shares That May Yet be Purchased Under the Plan ($ in Millions)


September 1 - September 30, 2022	4,877,473	$	21.49	4,877,473	$	345.1
Total	4,877,473	$	21.49	4,877,473	$	345.1

~~The Company’s systems and processes have been, and will likely remain, subject~~(1) On August 18, 2022, the Company announced a share repurchase program authorizing the repurchase up to cyber-attacks and other intrusions. These attacks are occurring with greater frequency and sophistication, and include malware and computer virus attacks, ransomware, unauthorized access, misuse, denial-of-service attacks, system failures and disruptions. A breach$450 million in shares of the ~~Company’s systems or~~Company's common stock. The repurchase program is intended to comply with Rule 10b-18 and has no expiration date, does not require the ~~systems~~purchase of ~~a third-party vendor or services provider could disrupt the Company’s ability to conduct business operations. During such an event, systems~~any minimum number of shares and may be ~~inaccessible to employees, customers~~suspended, modified or ~~business partners for an extended period of~~discontinued at any time and employees may be unable to perform their duties. These attacks could expose the Company to substantial costs and negative consequences, including the loss of funds, remediation costs, lost revenues and reputational damage.

In addition, the email and computer systems used by the Company, its service providers and agents for the transfer of funds have been subject to fraudulent spoofing attacks. In some cases, unauthorized access or fraudulent attacks have not been immediately detected, thereby increasing the severity of the incident. Funds transferred to a fraudulent recipient are not always recoverable and the Company may be liable for those unrecovered funds. Losses resulting from unrecovered funds could result in a material adverse effect on the Company’s financial condition and results of operations.

Old Republic regularly monitors its networks, infrastructure and procedures in an effort to prevent, detect, address and mitigate these risks. There is no assurance that the Company’s security procedures will provide fully effective protection from such events. A cyber incident or fraud attack could have a material adverse effect on the Company’s business, financial condition and results of operations.

Furthermore, Old Republic’s businesses must comply with laws and regulations enacted by U.S. federal and state governments, as well as laws enacted by various regulatory organizations or exchanges relating to the privacy and security of the information of clients, employees or others. These laws and regulations are increasing in complexity and number, change frequently and sometimes conflict. The compromise of personal, confidential or proprietary information could expose the Company to liability under federal and state laws, and subject it to litigation and investigations and result in reputational harm, which could have a material adverse effect on the Company’s business, financial condition and results of operations.

~~The ongoing COVID-19 pandemic and the associated governmental responses could materially adversely affect Old Republic’s business.~~

The COVID-19 pandemic continues to adversely impact the U.S. economy and financial markets. New variants of the COVID-19 virus or a resurgence in infection rates could lead to a further or continuing reduction in economic activity, resulting in a decline in demand for the Company’s products. The pandemic could also have a more significant impact on Old Republic’s claims experience in future periods, resulting in a decrease in profitability.

In addition, actions taken in response to the pandemic by federal, state and local government authorities, including state insurance departments, could, individually or in the aggregate, adversely affect Old Republic’s business.

without prior notice.

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

4542

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:	November ~~5, 2021~~4, 2022

		/s/ Frank J. Sodaro

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

4643

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

4744


Consolidated Revenues:
Total revenues of Company segments (c)	$	2,188.3	$	1,861.3	$	6,283.0	$	5,228.6
Other sources (b)	50.1		36.4		122.0		112.6
Consolidated investment gains (losses):
Realized from actual transactions	6.6		1.4		15.6		12.7
Unrealized from changes in fair value of equity securities	(199.3)		79.2		288.1		(529.4)
Total realized and unrealized investment gains (losses)	(192.6)		80.7		303.7		(516.7)
Consolidation elimination adjustments	(33.6)		(26.7)		(87.7)		(81.7)
Consolidated revenues (c)	$	2,012.2	$	1,951.7	$	6,621.0	$	4,742.8

Consolidated Pretax Income (Loss):
Total segment pretax operating income (loss) of
Company segments	$	290.0	$	217.4	$	809.3	$	525.0
Other sources - net (b)	8.6		8.7		19.5		27.8
Consolidated investment gains (losses):
Realized from actual transactions	6.6		1.4		15.6		12.7
Unrealized from changes in fair value of equity securities	(199.3)		79.2		288.1		(529.4)
Total realized and unrealized investment gains (losses)	(192.6)		80.7		303.7		(516.7)
Consolidated income (loss) before income
taxes (credits)	$	106.0	$	306.9	$	1,132.6	$	36.1


	September 30, 2021				December 31, 2020
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
4.875% Senior Notes issued in 2014 and due 2024	$	398.3	$	444.5	$	397.9	$	457.7
3.875% Senior Notes issued in 2016 and due 2026	547.2		609.5		546.8		634.1
3.850% Senior Notes issued in 2021 and due 2051	642.6		709.3		—		—
Other miscellaneous debt	—		—		21.7		21.7
Total debt	$	1,588.2	$	1,763.5	$	966.4	$	1,113.6



	RFIG Run-off Summary Operating Results
	Quarters Ended September 30,								Nine Months Ended September 30,
	2021			2020			% Change		2021			2020			% Change
Mortgage Insurance (MI)
Net premiums earned	$	7.7		$	10.8		-28.8	%	$	25.4		$	35.1		-27.5	%
Net investment income	2.6			3.4			-24.6		8.7			11.8			-25.9
Claim costs	(1.1)			6.7			-116.5		3.4			28.4			-87.7
MI pretax operating income (loss)	$	8.4		$	4.5		83.9	%	$	20.9		$	8.0		160.7	%

Claim ratio	-14.5		%	62.4		%			13.7		%	80.8		%
Expense ratio	39.0			27.2					38.5			29.9
Combined ratio	24.5		%	89.6		%			52.2		%	110.7		%


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

		Amortized Cost of Fixed Maturity Securities				Gross Unrealized Losses
September 30, 2021		All		Non- Investment Grade Only		All		Non- Investment Grade Only
Maturity Ranges:
Due in one year or less		$	62.5	$	—	$	—	$	—
Due after one year through five years		266.0		—		1.9		—
Due after five years through ten years		1,944.8		10.9		48.8		.1
Due after ten years		58.5		—		1.7		—
	Total	$	2,331.9	$	10.9	$	52.5	$	.1


	Net Earned Premiums and Fees
	General		Title (*)		RFIG Run-off		Other		Total (*)		% Change from prior period (*)
Years Ended December 31:
2018	$	3,277.1	$	2,573.1	$	75.9	$	14.6	$	5,940.9	3.0	%
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
Nine Months Ended September 30:
2020	2,532.8		2,254.5		35.1		9.0		4,831.6		6.1
2021	2,629.2		3,218.7		25.4		8.2		5,881.6		21.7
Quarters Ended September 30:
2020	861.9		857.0		10.8		2.9		1,732.8		6.0
2021	$	902.8	$	1,142.3	$	7.7	$	2.6	$	2,055.4	18.6	%


Title Premium and Fee Production by Source (*)
	Direct Operations		Independent Title Agents & Other
Years Ended December 31:
2018	23.7	%	76.3	%
2019	24.9		75.1
2020	24.9		75.1
Nine Months Ended September 30:
2020	25.3		74.7
2021	22.7		77.3
Quarters Ended September 30:
2020	26.3		73.7
2021	22.2	%	77.8	%


	Invested Assets at Cost										Fair Value Adjust- ment		Invested Assets at Fair Value (a)
	General		Title		RFIG Run-off		Corporate and Other		Total
As of December 31:
2019	$	10,577.9	$	1,172.3	$	566.3	$	841.7	$	13,158.4	$	1,200.7	$	14,359.2
2020	10,987.8		1,328.4		545.1		1,083.8		13,945.2		1,384.9		15,330.1
As of September 30:
2020	10,888.4		1,233.5		536.9		1,005.8		13,664.7		998.2		14,662.9
2021	$	11,313.9	$	1,479.0	$	479.3	$	1,751.7	$	15,024.1	$	1,422.9	$	16,447.1