Old Republic returns to a profit as mortgage guaranty losses decline
Mortgage insurer Old Republic (ORI) reported a near break-even first-quarter after a loss-burdened 1Q a year ago.
The insurance giant reported income of $400,000, or break even on a per share basis, compared to a loss of $12.9 million, or a loss of 5 cents a share, in the year-ago period.
The quarter reflects greater earnings contributions by Old Republic's general and title insurance groups, and lower operating losses from the mortgage guaranty line.
Revenue rose about 3% to $1.16 billion compared to $1.13 billion in 1Q2011.
The mortgage guaranty unit narrowed its loss to $81.8 million, compared to a pre-tax loss of $101 million in the year-ago quarter. The numbers reflect lower claim cost ratios when compared with those registered in the same period of 2011 and all of last year.
Mortgage guaranty earned premiums for 2012 continued to decline. The 9.4% quarter-over-quarter reduction was mostly due to the gradual depletion of a book of business in run-off operating mode, and to premium refunds from claim rescission activity, Old Republic said.
Claim costs for this year's first quarter were 15.7% lower year-over-year as the continued downward trend in newly reported cases, relatively stable cure rates, and lower paid claims, offset on-going declines in claim rescission and denial activity.
Title insurance earnings rose to $9.4 million from $2.6 million in the year-ago period, up in part due to refinancing activity.