for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Old Republic International Third Quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question, simply press star on your telephone keypad, star one on your telephone keypad.

To withdraw your question press star one again it is now my pleasure to turn the call over to joe calabrese with mww please go ahead thank you tina good afternoon everyone and thank you for joining us for the old republic conference call to discuss third quarter 2025 results this morning we distributed copy the press release and posted a separate financial supplement both of the documents are available on Old Republic's website at www.oldrepublic.com. Please be advised that this call may involve forward-looking statements as discussed in the press release dated October 23, 2025. Assumptions, uncertainties, and risks exist that may cause results to differ materially from those set forth in these forward-looking statements. For more information on these assumptions, uncertainties, and risks, please refer to the forward-looking statements discussion in the press release and the company's other recent SEC filings, and the risk factors discussed in the company's most recent Form 10K and other recent SEC filings. You may also include references to net income, excluding net investment gains, or net operating income, a non-GAAP financial measure, in our remarks or in responses to questions. GAAP reconciliations are included in the press release. Presenting on today's conference call will be Craig Smitty, President and CEO, Frank Sedara, Chief Financial Officer, and Carolyn Monroe, President and CEO of Old Republic's National Title Insurance Group. Management, we'll make some opening remarks, and then we'll open the line for your questions. At this time, I'd like to turn the call over to Craig. Please go ahead, sir.

Okay, thank you, Joe. Good afternoon, everyone, and welcome again to Old Republic's third quarter 2025 earnings call. In addition to our earnings release, we also issued a separate news release this morning regarding our agreement to purchase Everett Cash Mutual through a sponsored demutualization. We think this is reflective of our commitment to continue to pursue profitable growth of our specialty insurance business. ECM, as it's referred, is a leading insurer of farm and agricultural operations nationwide, writing $237 million of direct premium in 2024. We also added a new slide on ECM to the appendix of our investor presentation on our website, so there's more there for you to see if you're so interested. Strategically, ECM fits very nicely into our specialty insurance portfolio, given our close cultural alignment and their narrow and deep focus on farm and ag specialty. ECM provides for further product diversification within our existing specialty insurance business. And we will not compete with any of ECM's current offerings or vice versa. So once the transaction closes, we expect ECM to be very well positioned from a capital and product perspective to pursue profitable growth geographically and through new product offerings. So we're very happy to have the ECM folks join the Old Republic family. So now turning to the earnings release, our story of solid growth and profitability continued through the third quarter as we produced $248.2 million of consolidated pre-tax operating income. That's up from $229.2 million in the third quarter of 2024. Our consolidated combined ratio was 95.3, and that compares to 95 in the third quarter of last year. On our balance sheet, it remains strong. while we continue to invest in new specialty operating companies, make ongoing technology investments, and also invest in talent across the organization. Our annualized operating return on beginning equity improved to an annualized rate of 14.4%, and that compares to 11.9% in the third quarter last year which we think reflects our strong operating earnings and thoughtful management of capital in specialty insurance we grew net premiums earned by 8.1% compared to the third quarter 24 when we produced 207 million of pre-tax operating income up from 197.3 million in the third quarter last year the specialty insurance combined ratio was at 94.8 in the quarter compared to 94 in the third quarter last year despite the continuation of a slow real estate market title insurance grew premium and fees by 8.3 percent compared to the third quarter last year and produced 45.7 million of pre-tax operating income, and that's up from 40.2 million in the third quarter last year. The title insurance combined ratio was 94, or excuse me, 96.4 in the quarter, and that compares to 96.7 in the third quarter last year. Our conservative reserving practices continue to produce favorable prior year loss reserve development in both specialty insurance and title insurance, and Frank will provide more details around that topic. So with that, I'll turn the discussion over to Frank, and then Frank will turn things back to me to discuss specialty insurance, followed by Carolyn, who will discuss title insurance, and then, as the operator says, we will open it up for Q&A.

So, Frank? Thank you, Craig, and good afternoon, everyone. This morning, we reported net operating income of $197 million for the quarter compared to $183 million last year. On a per-share basis, comparable quarter-over-quarter results were $0.78 cents compared to 71 cents, a 10% increase. Net investment income increased 6.7% primarily as a result of higher yields on the bond portfolio. Our average reinvestment rate on corporate bonds acquired during the quarter was 4.7% compared to the average yield rolling off of about 4.1%. The total bond portfolio book yield stands at 4.7 percent compared to 4.5 at the end of last year. Turning now to loss reserves, both specialty insurance and title insurance recognized favorable development in the quarter leading to a benefit in the consolidated loss ratio of 2.5 percentage points compared to 1.3 points of favorable development last year. Within specialty insurance, workers continued to have significant favorable development and accounted for the majority of the group's total favorable development. Commercial auto, general liability, and property all had favorable development in the quarter. As we have mentioned in the past, general liability is a relatively small but growing line that does have some quarter-to-quarter volatility. This quarter GL had favorable development and the year-to-date impact was negligible on the specialty insurance loss ratio. We ended the quarter with book value per share of $26.19, which inclusive of the regular dividend equated to an increase of 18.5% year-to-date. That resulted primarily from our strong operating earnings and higher investment valuations. In the quarter, we paid $71 million in regular cash dividends and repurchased $44 million worth of our shares. We did not repurchase additional shares since the end of the quarter, leaving us with just over 910 million remaining on our current repurchase program. The recently launched operating companies and the ECM acquisition do not materially hinder our ability to return capital, so as usual we will be discussing with our Board of Directors the most efficient way to return capital by the end of the year. I'll now turn the call back over to Craig, for discussion of specialty insurance.

Okay, Frank, thanks for that summary. Specialty insurance net written premiums were up 6.9% in the third quarter, with strong rate increases on commercial auto and general liability that I'll talk about momentarily. We had solid renewal retentions, strong new business writings, and an increasing amount of premium in our new specialty operating companies. As mentioned in my opening remarks, in the third quarter, specialty insurance pre-tax operating income was $207.7 million, and the combined ratio was 94.8. The loss ratio for the third quarter was 63.5. That included 3.4 percentage points of favorable prior year loss reserve development, compared to 65.2 in the third quarter last year, which included 1.7 points of favorable development. The expense ratio was 31.3 in the third quarter compared to 28.8 last year, primarily reflecting higher personnel expenses, including those within our newest specialty operating companies not yet producing premium, and ongoing investments in technology. For note, the year-to-date expense ratio and loss ratio tend to be better indications of run rates and they also reflect changes in our mix of business toward lower loss ratios and higher commission ratios now to give you some details around our two largest lines of business commercial auto and workers compensation commercial auto net premiums written grew 7% in the third quarter, while the loss ratio came in at 68.3 compared to 67.1 last year. Rate increases remained at the 14% level, which is the same we saw in the second quarter, and that's commensurate with the loss severity trend we're observing. Switching to workers' compensation, net premiums written grew 6.7% in the third quarter, while the loss ratio came in at 63.8 compared to 58.8 last year. Rates continue to remain relatively flat, and here, too, that's consistent with what we observed in the second quarter. Loss frequency trend continues to decline, more than offsetting the increase in loss severity trend. So given the positive wage trend within payroll, and again, that's what we apply our rates to, a declining loss frequency trend and a relatively stable loss severity trend, we think our rate levels continue to remain adequate. it. So we expect solid growth and profitability and specialty insurance to continue, reflecting the success of our specialty strategy and our growing contributions from our new specialty operating companies. Our operational excellence initiatives continue to contribute to this profitable growth by leveraging Old Republic's collective knowledge and expertise. And we also here, too, included a new slide on these initiatives in the appendix of our investor presentation on our website. So, that concludes my remarks on specialty insurance, and I'll now turn the discussion over to you, Carolyn, to report on title insurance.

Thank you, Craig, and good afternoon, everyone. Title reported premium and fee revenue for a quarter of $767 million. This represents an increase of 8 percent from third quarter of last year. The third quarter market story is a continuation of what we reported last quarter. We still see strong activity in the commercial sector, a modest uptick in refinance activity, and a softness in the residential purchase market driven by persistent price and affordability challenges. Overall, we are pleased with our revenue improvement during the year. Premiums from our direct title operations were up 8 percent from third quarter of last year. Agency produced premiums were up 11 percent and made up nearly 80 percent of our revenue during the quarter, up from 78 percent during third quarter of 2024. Commercial premiums increased this quarter and were 26 percent of our earned premiums compared to 20 percent in third quarter of last year. Investment income was also up this quarter by nearly 11 percent compared to third quarter 2024, primarily reflecting higher investment yields earned. Our overall loss ratio decreased to 2.7 percent this quarter compared to 2.8 in the third quarter of 2024. The slight improvement relates to continued favorable development in prior policy years. Agency premiums accounted for a larger share of our revenue this quarter, raising agent commissions and increasing our expense ratio by 1.9 percent. The remainder of our expenses decreased by 2.1 percent relative to premiums and fees. These changes led to a combined ratio of 96.4 percent for this quarter and improvement over both last quarter and the 96.7% reported in the third quarter of 2024. Pre-tax operating income this quarter was $46 million compared to $40 million in third quarter of last year. During the quarter, we continued progressing with the advancement of digital transaction tools and solutions for our direct operations and title agents through our strategic partnerships. We remain focused on the importance of providing our agents with the innovative technological solutions required to maintain a competitive edge. And thank you. And with that, I will turn it back to Craig.

Okay. Thank you, Carolyn. Well, that concludes our prepared remarks. So we'll now open up the discussion to Q&A. I'll try to answer your questions, or I'll ask Frank or Carolyn for some help.

As a reminder to ask a question, simply press star followed by the number one on your telephone keypad. And our first question comes from the line of Gregory Peters with Raymond James. Please go ahead.

Hey, good afternoon, everyone. For my first question, I want to go back to Frank's comments on capital um and uh i guess what i'm looking for is just um how you are measuring excess capital because it seems like there's a shift um or maybe put it a different way maybe you're there's been a strategic decision not to hold as much excess capital but either way i'm just looking for how you're measuring capital right now is it is it reserves on based on reserves or what the ratios you're looking at and you know how you're thinking about excess capital in the context of what frank

was saying in the fourth quarter yeah greg i'll uh start and uh frank has anything to add he can add it. Last year, when we declared the $2 special dividend, we made note that a nice problem of continuing to have operating income retained earnings that were building faster than we could return capital to shareholders, either through share repurchases or dividends, and so we issued a special dividend. When we contemplate that and discuss that with our board, we look at several different enterprise risk management measures, and one of those is certainly the the amount of capital we hold relative to the reserves, but there's been no major shift at all. It's really just a matter of, again, having a nice problem where we continue to just build capital faster than we could deploy it. So as we sit here this year, the same kind of thing has happened. We have built up capital again, and we have done so, then we're able to return it through share repurchases or ordinary dividends. So as Frank indicated, it's a matter that, as we always do, we'll take up with our board and suggest the best ways to return that to shareholders in a way that is most productive for the shareholders. So that's, again, no shift. We continue to look at multiple different metrics when we look at capital, and we manage it thoughtfully, as I indicated in my con myth, and do a significant amount of analysis and make recommendations accordingly to our board.

Oh, great. And I was looking over your slide on Everett and just curious, you know, if you could tell us a little bit more about this entity. You highlighted that there's not a lot of crossover over in terms of product. So I'm just curious how you're thinking about this business and how it's going to sit inside over public. And, you know, when more importantly, I know you've got these, you know, startup operating companies, you know, the five you've outlined, you know, does this become number six as you branch off into some other types of businesses? So just some more color there would be helpful.

Sure, sure. So I'll start with the latter part of your question, and that is we definitely look at it as a new operating company within our existing portfolio of operating companies. I think that would take us up to 18 companies within our specialty insurance and and then of course our title insurance being our 19th so you know one of the things that I think attractive to ECM was that decentralized model and the degree of independence and accountability that we give to each of those operating companies and as I you mentioned as well just a strong cultural alignment of integrity and transparency and and um the other components of our of our cultural tenets that we share so um as far as as the business itself um we uh again are thinking that it is uh very complementary uh doesn't compete with our existing segments, it's a specialty segment in the marketplace, and that is the sole focus of Everett, which is exactly what our strategy is, and that is for each of those 18 different operating companies to be an inch wide, mile deep in their specialty, focus very narrowly on what they do and do it better than anybody else. And ECM checks every one of those boxes. I guess getting into more of the technicals, as I mentioned, ECM focuses on farm and ag business. And in that portfolio, farm owners and commercial multi-parallel make up 70% of their coverages, with Inland Marine and Commercial Auto each making up about 9% of their coverages. And another important attractive note is that their business skews more toward short tail lines of coverage, which a lot of the new companies that we've added lately to diversify our portfolio have been, which is a short tail kind of line. So you have a much faster understanding of how the business is performing. And again, we intend to give ECM the capital necessary to continue to drive expansion of their business. We expect they'll do that through geographic expansion. They started some geographic expansion by making an acquisition in late 2022 when they made an acquisition that allowed them to expand westward. And, you know, I think another attribute that is shared is they compete on the basis of expertise, relationships, ease of doing business around their specialty niche, just like all of our specialties.

So again, their profile is very consistent with the profile of our existing specialty companies and as such we just think it's a perfect fit uh thanks for the color and i i just pivot to the title business um it's my final question um and you know hope springs eternal the things the market will turn on the residential side um uh in the interim you know i know you just this last conference call you know there's in texas there were some challenges on some rate rollbacks. I'm wondering if you're seeing any other regulatory pressures build up in any other states, or is it just, you know, normal operating status everywhere else?

Yeah, I think it's been fairly consistent. Nothing significant has emerged, But, Carolyn, you're much closer to the action than I am, so I'll turn it to you to maybe add any color you might have.

Hi, Greg. No, it's been, you know, fairly quiet on the regulatory front, nothing out of the ordinary. Still waiting on the Texas, you know, it was appealed. There's supposed to be a hearing in December, but really no word on that yet. But that's the only thing that's out there brewing right now.

Got it.

Thanks for your answers. thank you great as a reminder to ask a question press star one and our next question comes from the line of paul newsome with piper sandler please go ahead um good afternoon thanks guys um i want to um be on the ecm dead horse a little bit more um the um and i don't know if you will actually get more precise numbers but you know i'd like to know how this fits in with a little bit better with how it fits in the capital decisions that you're going to be making in the near future. I mean, I would imagine ECM is going to cost at least the statutory capital for you folks. And then it sounds like, again, correct me if I'm wrong on these assumptions, that there's an intention to put more capital into ECM. And then I guess on top of that, you have whatever's left in your view of excess capital. And so, you know, I guess the questions are, are those the right pieces I should be looking at? And then can we talk about sort of like potential timing for those things? It sounds like ECM is going to close sometime in 26. I don't know if that means you're heading on to capital a little bit longer this time around than some of the more speedy things you've done in the past at year end. It's about five questions in there.

That is the utilization to that analysis with our board and look at how things look at the end of the year. There's really no sponsored demutualization. Mutualization, additional capital, and as you know, the organization itself is contributing additional capital beyond that. We're looking at our capital position and the recommendations we'll be making with regard to returning capital to shareholders going forward.

Okay, that's great. Now, a follow-up question on a different horse, beat-up horse. yesterday night last night we had um some not so happy news at a selective about uh commercial auto insurance uh rearing an additional problem for them and um i don't know if you can or would like to respond to that directly but obviously you are a big commercial auto writer uh it's a different business i recognize that but maybe some thoughts on what you think's going on in commercial auto business and why you may or may not be ahead of the game there to the industry as i think i've

mentioned prior we continue to put up favorable loss reserve development on commercial auto while many of our peers over the course of the last few years have been putting up unfavorable development and um you know there's a lot of components for why we're would point to just first and foremost point of the severity trend and then getting the commensurate rate that you need. And now we're going back six or seven years where we identified it a lot earlier than a lot of our peers and responded rate increases to offset those trends we were seeing. I mentioned in my opening calmer the industry in that we think the trend is running somewhere in in the low teens and we're getting rate increases on commercial auto of 14 percent so that's been our mo you know for the last six or seven years we've spot the trend we get rate increase commensurate with that trend once you have a good starting point and I think a lot of our peers didn't have a good starting point because they didn't recognize it as quickly maybe weren't getting the the rate increases and or not getting as strong as rate increases as necessary keep up with that trend just about the way we think about things and do business that and they do one thing and one thing only and ISO you're already probably behind the game a proprietary rate filing on trend new is long-haul trucking claims traffic losses that can in claims they have relationships with all the about just again how specialized we are serving in the industry like initial loss pick commercial auto those long tail lines and how we manage IVNR in addition to came in at exactly system abuse issue the severity issue plaintiff attorney tactics and all of having a couple points of favorable development on average over time on every line of business all right appreciate the help as always thank you thank you and once again to ask a question press star 1 on your telephone keypad.

I'm with no further questions in queue. I will now turn the call back over to management for closing remarks.

Okay. Well, we appreciate the interest. We appreciate the questions. And again, we look forward to welcoming the ECM stakeholders to the Old Republic family. And we also are looking forward to producing the strong, profitable growth for our shareholders and all other stakeholders as well. And we look forward to reporting our year-end results next time we talk to you. So thank you very much.

Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.