Old Republic InternationalORI

Morningstar Rating

Stock Research and Analysis

by Jim Ryan

Old Republic boasts a collection of narrow-moat specialist insurers and a generally stellar underwriting record. Unfortunately, a large chunk of its insurance operations income is exposed to a housing market that has witnessed an explosion in mortgage Read more

Bulls Say

The firm's property and liability insurance business is one of the 100 largest in the United States, and the individual subsidiaries have some of the higher financial strength ratings.

The managers employ debt sparingly, don't consume capital buying back shares when market prices are too high, and don't risk destroying value by acquiring other insurers with uncertain liabilities.

Liquid, investment-grade, fixed-maturity securities compose the majority of the firm's investment portfolio. Read more

Bears Say

Old Republic is too reliant on mortgage insurance for income. During the last 10 years 63% of insurance profits have come from mortgage insurance.

About 40% of general insurance premiums are earned from truck insurance, which is sensitive to economic conditions.

Mortgage defaults are Republic Mortgage's largest expense, and they can increase dramatically if the economy falters. This business could cough up large losses if employment levels drop precipitously. Read more

Strategy

Old Republic is managed for the long run and prioritizes underwriting profitability. Its deliberate diversification across specialist insurance businesses aims to preserve capital, foster consistent Read more

Management

Many years of sound stewardship were partially unwound with the purchase of stocks for the investment portfolio in mortgage insurance and title insurance competitors, costing Old Republic and its shareholders hundreds of millions of dollars. Still, Read more

Profile

Old Republic offers a diverse range of specialized insurance products to individuals and institutions. The firm's property-casualty business, which attracted 61% of premium Read more

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