Old Republic International (NYSE:ORI) reported lower consolidated pre-tax operating income in the fourth quarter of 2025, reflecting a higher combined ratio in its specialty insurance segment, while its title business posted higher quarterly operating income on improved revenue and continued expense management.
Fourth-quarter and full-year results
President and CEO Craig Smiddy said Old Republic generated $236 million of consolidated pre-tax operating income in the fourth quarter, down from $285 million a year earlier. The company’s consolidated combined ratio was 96%, compared with 92.7% in the prior-year quarter.
Investments and reserve development
Chief Financial Officer Frank Sodaro said net operating income was $185 million for the quarter, compared with $227 million last year. On a per-share basis, results were $0.74 versus $0.90 in the prior-year quarter.
Net investment income rose 7.9% in the quarter, driven primarily by higher bond portfolio yields and, to a lesser extent, a larger investment base. Sodaro said the average reinvestment rate on corporate bonds acquired during the quarter was 4.6%, compared with an average yield rolling off of about 4.2%. The total bond portfolio book yield was 4.75% at quarter-end, compared with 4.5% at the end of the prior year. Looking ahead, he said the company expects net investment income growth to slow in 2026, citing portfolio actions over the past few years, return-of-capital initiatives, and the current interest rate environment.
On reserves, Sodaro said both specialty and title recognized favorable development in the quarter, providing a 2.4 percentage point benefit to the consolidated loss ratio, compared with 2.9 points in the prior-year quarter. Within specialty, workers’ compensation prior-year reserve development was slightly unfavorable, which he said was offset by solid favorable development in commercial auto, general liability, and property.
Management also reiterated its reserving posture. Smiddy said Old Republic’s conservative reserving practices can lead to slower reserve releases, but that the company reacts quickly to increase reserves when it sees trends moving.
Specialty insurance: growth, higher combined ratio, and commercial auto trends
Specialty insurance continued to grow, but profitability declined from the prior-year quarter. Smiddy said specialty insurance net premiums earned increased 8.3% in the fourth quarter and 10.9% for the full year, surpassing $5 billion for the first time. Net premiums written rose 6.1% in the quarter, supported by “strong rate increases” in commercial auto and general liability, solid renewal retention, new business writings, and increasing premium in newer specialty operating companies.
Specialty pre-tax operating income was $178 million in the quarter, compared with $228 million a year earlier, and the specialty combined ratio was 97.3% versus 91.8%. For the full year, specialty produced an all-time-high $900 million of pre-tax operating income and a 93.2% combined ratio.
- Loss ratio: 67.6% in the quarter, including 2.2 points of favorable prior-year development, compared with 64.1% (including 2.4 points favorable) in the prior-year quarter. Full-year loss ratio was 63.9%, including 2.9 points favorable development.
- Expense ratio: 29.7% in the quarter versus 27.7% a year earlier; full-year expense ratio was 29.3%. Smiddy said investments in newer specialty operations, technology modernization, data and analytics, and AI are pressuring the expense ratio in the near term but are expected to generate long-term benefits.
Commercial auto was a central topic during the Q&A. Smiddy said net premiums written in commercial auto grew 6.4% in the quarter, while the loss ratio was 80 versus 77.9% in the prior-year quarter. He said the company increased the current accident year loss ratio by 3 percentage points after observing higher case reserves late in the year, even though paid claim data had not yet reflected the change.
Smiddy described the company’s process as tracking case reserves and paid losses weekly and assessing severity and frequency trends. He said commercial auto trends shifted from the low teens earlier in 2025 to the mid-teens later in the year, and that Old Republic responded by accelerating commercial auto rate increases to 16% in the fourth quarter.
In response to questions about what was driving case reserve increases, Smiddy said the company observed a higher proportion of bodily injury claims relative to accidents, along with a higher percentage of claims with attorney representation and an increased share of claims entering litigation. He attributed much of the increase to litigation and “system abuse,” including the proliferation of attorney advertising. He also said the trend was more pronounced in long-haul trucking than in other parts of commercial auto.
Workers’ compensation net premiums written fell 6% in the quarter, and the loss ratio rose to 65.2 from 35.5 a year earlier, which Smiddy said was primarily due to a “significant difference” in the level of favorable prior-year development between the two quarters. He said rate decreases in workers’ compensation were about 3%, and management believes rates remain adequate given stable severity trends and declining frequency.
Smiddy also highlighted growth in property, with net premiums written up 21% in the quarter and full-year property writings reaching $750 million. The property loss ratio was 55% in the quarter and included favorable prior-year development.
Title insurance: commercial strength, residential softness, and 2026 view
Old Republic’s title business reported premium and fee revenue of $789 million in the fourth quarter, up about 12% from the prior-year quarter. President and CEO of Old Republic National Title Insurance Group Carolyn Monroe said the quarter was the company’s strongest of the year, reflecting a continuation of the trend seen throughout 2025: strong commercial activity and softness in residential transactions amid persistent pricing and affordability challenges.
Direct title premiums were up 18% year over year, while agency-produced premiums rose 13% and represented 77% of quarterly revenue, consistent with the prior-year quarter. Commercial premiums increased and represented 29% of earned premiums in the quarter, up from 23% a year earlier. For the full year, commercial premiums accounted for 26% of earned premiums, compared with 22% in 2024.
Monroe said investment income in title was up nearly 12% year over year, and the segment’s combined ratio improved to 94% from 94.4%. She added that expense management and higher revenues reduced operating expenses by 1.2% relative to premium and fees. The title loss ratio increased to 0.8% as favorable development continued, though at a lower level than in the prior-year quarter.
Title pre-tax operating income was $66 million in the quarter, compared with $55 million a year earlier. For the full year, title produced $140 million of pre-tax operating income.
Looking to 2026, Monroe cited external research suggesting commercial title activity could improve 15% to 20% from 2025 levels, while residential could see a single-digit increase, with estimates ranging from 3% to 7%. Operationally, she said the title business remains focused on supporting agents with technology, expanding margins through efficiencies, and implementing the Qualia operating platform across title operations during 2026.
Capital return and 2026 targets
Old Republic’s capital return remained significant. Sodaro said the company declared nearly $700 million in dividends in the quarter and repurchased $56 million of shares. Total capital return for the year was “just over” $1 billion, and management said about $850 million remained in the current repurchase program.
In response to questions on 2026 outlook, Smiddy said specialty’s 93.2% full-year combined ratio in 2025 “feels pretty good,” and that the company’s plan is to produce “something around the same level” in 2026, emphasizing underwriting discipline and a focus on combined ratio over growth. He said management expects solid growth and profitability in specialty to continue through 2026, helped by contributions from newer specialty operating companies and a more diversified portfolio.
On capital levels, Smiddy said the company expects to have “plenty of capital” as it heads into its February board meetings and anticipates recommending a regular dividend increase consistent with recent years. He also said the company intends to be opportunistic with share repurchases and could use much of the remaining authorization if conditions provide a buying opportunity, while continuing to evaluate whether a special dividend is appropriate later in the year depending on the capital position.
About Old Republic International (NYSE:ORI)
Old Republic International Corporation, through its subsidiaries, engages in the insurance underwriting and related services business primarily in the United States and Canada. It operates through three segments: General Insurance, Title Insurance, and Republic Financial Indemnity Group Run-off Business. The General Insurance segment offers aviation, commercial auto, commercial multi-peril, commercial property, general liability, home and auto warranty, inland marine, travel accident, and workers' compensation insurance products; and financial indemnity products for specialty coverages, including errors and omissions, fidelity, directors and officers, and surety.
