Old Republic posts 4Q profit, but deep loss for 2011
Investment gains thrusted Old Republic International Corp. (ORI) to a fourth-quarter profit, but the insurance giant continues to struggle under the weight of its mortgage insurance segment. The Chicago-based firm earned $55.2 million, or 22 cents a share, on revenue of about $1.18 billion for the three months ended Dec. 31. That compares to a loss of $13.3 million, or 5 cents a share, on revenue of $1.14 billion in the same quarter of 2010. For the year, Old Republic reported a loss of $140.5 million, or 55 cents a share, on revenue of $4.5 billion. That compares to income of $30.1 million, or 13 cents a share, on revenue of $3.9 billion for 2010. Old Republic's net operating loss for the fourth quarter was 14.5% lower than the previous year. But year-end results show the firm's net operating loss hitting $218.5 million in 2011, compared $40.6 million a year prior. The firm pins its struggles on the mortgage insurance segment, which reported a pretax operating income loss of $163.2 million in the fourth quarter, compared to a loss of $110.4 million during the same period of 2010. "In the aggregate, the general and title insurance segments reflected substantial operating improvements as underwriting accounts turned positive for the first time since 2007," Old Republic said. Still, the mortgage guaranty business faced a rocky 2011, with the mortgage insurance unit going into run-off mode and sustaining high-operating losses. "These results outweighed the better outcomes posted by the general and title insurance segments," Old Republic said. Fitch Ratings placed Old Republic on negative ratings watch after the North Carolina Department of Insurance stepped in to supervise Old Republic's Republic Mortgage Insurance Co. unit. Old Republic claims the order of supervision will not trigger a breach of debt obligations. Mortgage insurance premiums in the fourth quarter hit $108.7 million, down 3.8% from $113 million a year earlier. For all of 2011, premium earnings fell 10.8% from $498.8 million in 2010 to $444.9 million. Write to Kerri Panchuk.