Title giant Old Republic saw massive first quarter 2021 gains, reporting a 40% year-over-year growth in title insurance premiums and fees.
The company posted a total operating revenue of $2.3 billion for the first quarter 2021 — up from only $764 million in the first quarter of 2020. Income was reported at $502 million, a huge recovery from the first quarter of 2020 when Old Republic reported a loss of $605 million.
Total expenses for the first quarter were $1.7 billion, a 12.4% increase from the first quarter of 2020.
Old Republic’s title insurance segment notched $978 million in operating revenue in the first quarter of 2021, a 40% increase over the $690.7 million from the same quarter a year ago. Its income in the segment checked in at $103.7 million, a 139% gain from the $43.3 million registered during Q1 2020. Claim costs came in at $29.2 million, 35.8% over the $21.5 million from Q1 2020.
President and CEO Craig Smiddyori called the company’s first quarter “exceptional,” and the company noted the increases were “driven by a continued low interest rate environment and a robust real estate market, resulting in an increase in both purchase transactions and refinance activity.”
“Having begun the year with a solid foundation, we remain optimistic for the remainder of the year,” Smiddyori said during Old Republic’s earnings call. “Mortgage rates are expected to remain near historic lows throughout 2021, providing a catalyst for continued robust real estate market, and although refinance transactions are projected to drop over 35%, this is in comparison to 2020’s record-setting volume.
“Relatively speaking, will still be at a healthy level.”
Old Republic, based in Chicago, saw a total of $670 million in net income in 2020, excluding investment gains or losses, up 21% from $554 million in 2019. For all of 2020, the company reported a 20% increase in title insurance income, rounding out at $3.29 billion — compared to $2.74 billion in 2019.
The company noted that general insurance premiums increased slightly compared to the first quarter of 2020, when the impact of the pandemic was not yet reflected.
The company’s board of directors announced in February a regular quarterly cash dividend of 22 cents per common share to shareholders, as well as full-year cash dividend of 88 cents per share. That’s up from 84 cents paid in 2020 — the 40th consecutive year Old Republic boosted its shares.
“Shareholders’ equity rose to $6.45 billion, and book value per share grew to $21.59,” said Karl W. Muellerori, Old Republic CFO and vice president, in the earnings call. “That’s about a 5.1% increase for the quarter, inclusive of all regular dividends.”
Last year saw a boon for title agencies across the board, as insurers wrote $19.2 billion in premiums in 2020 — a nearly 22% increase from the $15.8 billion in 2019. Interestingly, though, Old Republic saw a drop in its marketshare from 2019 (15.4%) to 2020(15%).