Our Mission is to provide quality insurance security and related services to businesses, individuals and public institutions, and be a dependable long-term steward of the trust that policyholders and shareholders place in us. BUSINESS UPDATE Through June 8, 2017 Old Republic ranks among the nation s 50 largest publicly held insurance organizations.
Safe Harbor Statement Historical data pertaining to the operating results, liquidity, and other performance indicators applicable to an insurance enterprise such as Old Republic are not necessarily indicative of results to be achieved in succeeding years. In addition to the factors cited below, the long-term nature of the insurance business, seasonal and annual patterns in premium production and incidence of claims, changes in yields obtained on invested assets, changes in government policies and free markets affecting inflation rates and general economic conditions, and changes in legal precedents or the application of law affecting the settlement of disputed and other claims can have a bearing on period-to-period comparisons and future operating results. Some of the oral or written statements made in the Company s reports, press releases, and conference calls following earnings releases, can constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Of necessity, any such forward-looking statements involve assumptions, uncertainties, and risks that may affect the Company s future performance. With regard to Old Republic s General Insurance segment, its results can be affected, in particular, by the level of market competition, which is typically a function of available capital and expected returns on such capital among competitors, the levels of interest and inflation rates, and periodic changes in claim frequency and severity patterns caused by natural disasters, weather conditions, accidents, illnesses, work-related injuries, and unanticipated external events. Title Insurance and RFIG Run-off results can be affected by similar factors, and by changes in national and regional housing demand and values, the availability and cost of mortgage loans, employment trends, and default rates on mortgage loans. Life and accident insurance earnings can be affected by the levels of employment and consumer spending, variations in mortality and health trends, and changes in policy lapsation rates. At the parent holding company level, operating earnings or losses are generally reflective of the amount of debt outstanding and its cost, interest income on temporary holdings of short-term investments, and period-to-period variations in the costs of administering the Company's widespread operations. A more detailed listing and discussion of the risks and other factors which affect the Company s risk-taking insurance business are included in Part I, Item 1A - Risk Factors, of the Company s 2016 Form 10-K Annual Report and Part II, Item 1A - Risk Factors, of the Company s most recent Form 10-Q Quarterly Report to the Securities and Exchange Commission, which Items are specifically incorporated herein by reference. Any forward-looking statements or commentaries speak only as of their dates. Old Republic undertakes no obligation to publicly update or revise any and all such comments, whether as a result of new information, future events or otherwise, and accordingly they may not be unduly relied upon. 2
Our Mission is to provide quality insurance security and related services to businesses, individuals and public institutions, and be a dependable long-term steward of the trust that policyholders and shareholders place in us. ORI BUSINESS OVERVIEW Old Republic ranks among the nation s 50 largest publicly held insurance organizations.
Company Financial Overview Exchange/Ticker NYSE: ORI Share price (at 06/05/17) $19.56 Shares outstanding* 263.5 million Market capitalization $5.15 billion Gross Premiums & Fees Written Fiscal Year Ended March 31, 2017 33.4% 0.6% 6.0% 6.1% 22.9% Annual dividend per share $0.76 Yield: 4.0% Shareholders equity* $4.59 billion Total capitalization* $6.12 billion Book value per share* $17.62 *As of March 31, 2017 2.3% 18.2% $6,741.8 million 10.5% Commercial Auto (Trucking) Workers Compensation Property General Liability Other Specialty Coverages RFIG (MI & CCI) Title (Premiums & Fees) Other 4
Business Contribution by Economic Sector (1) 60.1% American Transportation 22.4% American Big Business 22.3% American Mid- Size Business 15.4% Trucking (*) 16.7% Auto Warranty (*) 2.0% Aviation 1.9% GAP Coverage 1.2% Travel Insurance.6% All Industry Risk Management (*) 21.0% E&O / D&O 1.3% Contractors 7.8% Gas & Oil 1.0% Fidelity & Surety.8% Manufacturing.4% Wholesale/Retail.4% Health Care.3% Education.1% Other 4.6% American Housing Coverages 36.8% Title 33.5% Home Warranty 3.3% RFIG run-off & Other 3.1% Mortgage Guaranty 2.3% Consumer Credit Indemnity.2% Other.6% (1) Determined on the basis of Old Republic s consolidated gross premiums in 2016. * Risk management business is also produced through the utilization of captives and various loss sensitive underwriting programs in trucking and automobile extended warranty. 5
Basic Organization of Key Insurance Operations (as of February 2017) ORI American Guaranty Title Ins. Co. BITCO Great West PMA OR TITLE INS. GRP. OR Nat l Title Ins. Co. OR Home Protection OR General Ins. Corp. OR Ins. Co. (Can.) OR GENERAL INS. GRP. IWAL OR Surety Co. OR Union Ins. Co. REPUBLIC FINANCIAL INDEMNITY OR Title Companies Republic Mortgage Ins. Co. Republic Credit Indemnity Co. OR Specialty Ins. Und. ORSIC Old Republic Insurance Co. OR Contractors Insurance Grp. ORSAC OR LIFE INS. GRP. OR Life Ins. Co. Reliable Life Ins. Co.(Can.) OR Professional Liability, Inc. Old Republic Aerospace, Inc. OR Insured Automotive Inter Capital Grp. OR Risk Mgmt. Inc. American Bus. & Merc. Ins. Mutual OR NATIONAL SERVICES GRP. OR Asset Mgmt. Co. OR Capital Corp. 18c OR General Services, Inc. Reinsurance or affiliated company relationships. 6
Maintaining and Selling Long-Term Financial Security Managing the business for the long run by: Keeping long-term promises to customers Keeping total shareholder returns in focus Emphasis on balance sheet management and strength Retaining a basic focus on underwriting through: Balanced / stable investment policy = Protect and enhance capital Balanced and targeted book of business = Specialization Price and cost discipline = Competitive advantage 7
Our Long-Term Objectives: Advance our Long-Term Mission Our continuing business segments are well positioned Growth prospects focused on core business segments: General Insurance Title Insurance In all that we do, we need to emphasize accountability to policyholders and shareholders. All else flows from this. 8
Capital Allocation Trends and Objectives* Emphasize corporate objectives through Recalibration of capital accounts Organic growth and targeted acquisition initiatives Ranges of Current Long-Term Objectives Actual As of March 31, Actual Allocations as of December 31,* 2017* 2016 2015 2014 2013 2012 General Insurance 85.0% - 90.0% 77.6% 78.0% 78.2% 78.0% 82.2% 83.7% Housing Title 12.5% - 15.0% 14.0% 13.9% 13.7% 13.6% 13.7% 13.3% RFIG Run-off 0.0% 6.7% 6.5% 5.3% 4.4% -0.3% -1.4% Life & Accident 2.5% - 2.5% 1.0% 1.1% 1.2% 1.7% 2.1% 2.4% Other 0.7% 0.5% 1.6% 2.3% 2.3% 2.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% * Percentages are based on including all capital instruments. 9
Recalibrating the Business Net Premium and Fees Earned ($ in millions) ($ in millions) $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Here s what net premiums and fees earned looked like over the recent years to date. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Annualized Consolidated General Title RFIG Run-off Here s what net premiums and fees earned would have looked like without RFIG. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Annualized Consolidated General Title 10
Recalibrating the Business Pretax Operating Income (Loss) ($ in millions) ($ in millions) $800 $400 $0 -$400 -$800 $550 $450 $350 $250 $150 $50 -$50 Here s what pretax operating income (loss) has looked like over the past ten years. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Annualized Consolidated General Title RFIG Run-off Here s what pretax operating income (loss) would have looked like without RFIG. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Annualized Consolidated General Title 11
Recalibrating the Business ($ in millions) ($ in millions) $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 -$1,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Capital Allocations (*) Here s what the capitalization has looked like over the past 10 years. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Consolidated General Title RFIG Run-off Here s what capitalization would have looked like without RFIG. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Consolidated General Title (*) Includes all capital instruments. 12
Key Elements of Maintaining a Strong Balance Sheet High quality, liquid investment portfolio Minimal intangible assets: 1.0% of total assets / 4.0% of shareholders equity Minimal correlation of assets with insurance risk exposures Strong claim reserve position Reasonable debt leverage ratios at March 31, 2017: Debt to equity 33.2% Debt to total capitalization 24.9% Parent company liquidity/decades-long history of dividend payments 13
Investments, Debt, and Shareholders Equity ($ in Billions) $14 $12 $10 $8 $6 $4 $2 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 March 2017 Cash & Invested Assets Net Loss Reserves Debt Shareholders' Equity 14
Strength of Independent Financial Ratings (as of 04/13/17) Most Recent Ratings Assigned by: A.M. Standard General Insurance: Best Moody's & Poor's BITCO Insurance Companies (2) A+ A2 A+ Great West Casualty Company A+ A2 A+ Old Republic General Insurance Corporation A A2 A+ Old Republic Insurance Company A+ A2 A+ Old Republic Surety Company A * A+ PMA Insurance Companies (3) A A2 * Old Republic National Title Insurance A A2 A Old Republic International Corporation Long-Term Debt * Baa2 BBB+ Outlook * Stable Stable * No ratings sought or available Rating determinations made by rating agencies are subject to change from time to time. While the Company attempts to show accurate information, it cannot assure the timeliness of ratings referred to herein and assumes no obligation to monitor the ratings actions of any rating agency. Please refer to the Company s website for its most current rating determinations. 15
Investment Portfolio Composition Equity Securities 23.4% Investments: Funding Liabilities & Protecting Capital Short-Term Investments 5.1% Tax Exempt Bonds 8.2% as of March 31, 2017 Credit Quality Distribution of Fixed-Maturity Securities BAA 29.6% All Other 7.2% A 30.1% Taxable Bonds Government 11.3% Taxable Bonds Corporate 52.0% AAA 20.4% AA 12.7% Average Quality Rating: A Average Maturity: 4.8 years 16
Investments: Stock Portfolio Allocations as of March 31, 2017 Stock Portfolio Composition Stock Portfolio Distribution Other 0.7% Utility 23.6% Vanguard Index Funds 2.9% Insurance Related 9.5% Non-Insurance Companies 23.6% Blue Chip Dividend 63.3% Insurance Companies 76.4% 17
Net Investment Income Trends $450 $400 $350 $300 341.6 379.9 377.4 383.5 379.0 364.7 336.6 318.7 345.5 405.1 388.6 387.0 312.1 312.1 315.4 ($ in Millions) $250 $200 $150 221.3 260.3 253.3 258.9 260.1 270.5 264.9 249.6 278.8 $100 $50 74.6 79.6 87.2 92.1 85.0 59.3 36.4 36.8 29.9 34.0 36.2 38.1 $0 27.0 27.3 25.2 25.2 26.6 27.4 27.3 26.6 27.5 25.1 23.2 22.3 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Annualized Consolidated General Title RFIG Run-off 18
Our Mission is to provide quality insurance security and related services to businesses, individuals and public institutions, and be a dependable long-term steward of the trust that policyholders and shareholders place in us. GENERAL INSURANCE UPDATE Old Republic ranks among the nation s 50 largest publicly held insurance organizations.
Who We Are and Segment Objectives: Managing for the Long Run: Our lead insurers in business since the early 1900 s Approximately 100 service offices mostly in smaller cities Exclusive North American market orientation Production sources include: direct operations, independent agents, and brokers Underwriting focus: commercial accounts and industry specialization Emphasis on accountability to policyholders and shareholders and doing things the right way Strong independent financial ratings, strong balance sheet, conservative reserving 20
Historical Operating and Balance Sheet Trends $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 3,326.9 3,334.3 2,463.3 1,785.0 2,837.9 3,928.1 3,906.1 3,135.6 1,661.1 1,694.2 4,081.8 4,370.7 3,376.8 3,434.8 3,526.3 2,109.4 363.0 311.4 316.7 353.9 2,324.4 2,513.7 4,792.9 5,160.4 3,658.8 3,623.2 2,735.6 261.0 288.3 221.3 5,393.4 5,457.5 3,944.1 3,983.1 2,894.7 2,936.3 2,971.3 336.4 319.9 374.9 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Annualized Net Claim Reserves Year End Equity(*) Net Premiums and Fees Earned Pretax Operating Income Net Claim Reserves Year End Equity(*) Net Premiums & Fees Earned Pretax Operating Income (*) Includes all capital instruments. 21
Capital Strength Claim Reserve Leverage (*) 200.0% MAX 175.0% 155.8% 150.0% 147.8% ORGIG MIN 125.0% 133.3% 136.4% 138.2% 137.0% 134.8% 137.8% 137.2% 142.3% 141.2% 142.0% 100.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 03/31/17 (*) Claim and claim expense reserves to policyholders surplus 22
Gross Premiums & Fees by Major Coverage ($ in Millions) 2011 Fiscal Year Ended March 31, 2017 5.4% 5.8% 3.2% 28.9% 5.1% 8.2% 3.2% 28.6% 8.4% 9.3% 13.5% 9.6% 34.8% 36.0% $2,773.6 $4,295.0 Commercial Auto Workers Compensation Other Non-liability General Liability Financial Indemnity Home & Auto Warranty Miscellaneous 23
Underwriting Performance: Bested Industry in 8 of the past 10 years 110.0% 110.0% 106.6% 105.0% 100.0% 101.2% 99.5% 101.0% 102.5% 97.3% 100.8% 98.3% 100.9% 100.3% 105.0% 100.0% 95.0% 94.8% 95.6% 94.7% 94.4% 98.7% 96.2% 97.4% 97.6% 97.8% 97.5% 95.0% 90.0% 91.3% 93.1% 90.0% 85.0% 85.0% 80.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Fiscal March 2017 80.0% Industry Composite Ratio (1) Old Republic General Insurance Composite Ratio (1) Source: A.M. Best; March 2017 estimated; 2007-2010 restated to reflect A.M. Best s exclusion of mortgage and financial guaranty segments. 24
Financial Performance ($ in Millions) 120% 100% Composite Ratio 91.3% 93.1% 95.6% 94.7% 98.7% 94.4% 97.3% 100.8% 97.6% 97.8% 95.9% 120% 100% 80% 65.5% 66.9% 69.0% 67.8% 69.2% 73.0% 73.6% 77.9% 74.1% 73.0% 71.0% 80% 60% Loss Ratio 60% 40% Expense Ratio 40% 20% 25.8% 26.2% 26.6% 26.9% 25.2% 25.7% 23.7% 22.9% 23.5% 24.8% 24.9% 20% 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 March 2017 0% Three Months Ended Years Ended December 31, March 31, 2012 2013 2014 2015 2016 2016 2017 Gross Premiums Written $ 3,065.3 $ 3,395.4 $ 3,809.8 $ 4,035.1 $ 4,172.2 $ 988.8 $ 1,111.6 Net Premiums Earned 2,324.4 2,513.7 2,735.6 2,894.7 2,936.3 718.9 742.8 Net Investment Income 264.9 249.6 278.8 312.1 312.1 78.6 78.8 Pretax Operating Income $ 261.0 $ 288.3 $ 221.3 $ 336.4 $ 319.9 $ 87.0 $ 93.7 25
Underwriting Performance ($ in Millions) Quarter 10 Year Ended Weighted Years Ended December 31, March 31, Average 2012 2013 2014 2015 2016 2017 2007-2016 All Lines Combined Net Premiums Earned $ 2,324.4 $ 2,513.7 $ 2,735.6 $ 2,894.7 $ 2,936.3 $ 742.8 Benefits & Claim Ratio 73.0% 73.6% 77.9% 74.1% 73.0% 71.0% 71.6% Commercial Auto (Trucking) Net Premiums Earned $ 767.0 $ 824.2 $ 873.5 $ 929.9 $ 988.6 $ 248.5 Benefits & Claim Ratio 75.3% 76.1% 74.0% 77.8% 79.4% 82.6% 75.2% Workers' Compensation Net Premiums Earned $ 924.9 $ 997.1 $ 1,109.6 $ 1,128.7 $ 1,072.5 $ 261.0 Benefits & Claim Ratio 78.6% 79.6% 89.2% 80.7% 76.1% 75.6% 78.0% General Liability Net Premiums Earned $ 145.2 $ 158.4 $ 170.0 $ 171.2 $ 163.3 $ 45.1 Benefits & Claim Ratio 63.8% 78.5% 88.2% 76.8% 77.5% 56.5% 71.0% Three Above Coverages Combined Net Premiums Earned $ 1,837.2 $ 1,979.9 $ 2,153.2 $ 2,230.0 $ 2,224.5 $ 554.7 Benefits & Claim Ratio 76.1% 78.0% 82.9% 79.2% 77.6% 77.2% 76.0% Financial Indemnity Coverages (a) Net Premiums Earned $ 97.2 $ 95.9 $ 105.9 $ 117.4 $ 125.0 $ 34.4 Benefits & Claim Ratio 29.6% 21.4% 25.6% 39.1% 45.5% 62.2% 37.1% Property (b) Net Premiums Earned $ 177.2 $ 193.5 $ 206.3 $ 214.3 $ 217.9 $ 53.6 Benefits & Claim Ratio 71.6% 59.6% 65.7% 57.0% 60.9% 52.1% 62.3% Other Coverages (c) Net Premiums Earned $ 215.7 $ 247.1 $ 270.3 $ 335.2 $ 369.9 $ 90.3 Benefits & Claim Ratio 65.6% 67.8% 67.8% 60.4% 62.2% 57.6% 62.5% (a) Includes Fidelity and Surety, Executive Indemnity (E&O/D&O), and Guaranteed Asset Protection (GAP) coverages. (b) Includes Commercial Multi-Peril and Inland Marine coverages. (c).includes Home and Auto Warranty, Aviation, and Travel Accident coverages. 26
Near Term Expectations Rate environment remains generally positive Premium revenue growth for the near term should be in the 6% to 8% range Targeted claim ratios in the high 60% to low 70% range Manage the expense ratio between 23% and 25% 27
Our Mission is to provide quality insurance security and related services to businesses, individuals and public institutions, and be a dependable long-term steward of the trust that policyholders and shareholders place in us. TITLE INSURANCE UPDATE Old Republic ranks among the nation s 50 largest publicly held insurance organizations.
Who We Are and Segment Objectives: Managing for the Long Run: Our flagship title insurer is 109 years old Over 250 offices, 4,000 employees, 8,000 agents Nationwide reach all 50 states 3 rd largest title insurance family with about a 15% national market share Full line of title insurance & real estate settlement services Emphasis on accountability to policyholders and shareholders and doing things the right way Industry leading financial strength ratings, strong and clean balance sheet, conservative reserving 29
Historical Operating and Balance Sheet Trends $2,250 $2,000 $1,750 1,677.4 1,996.1 1,759.2 2,045.3 2,206.6 2,072.0 Net Premiums and Fees Earned $1,500 $1,250 1,211.0 1,362.4 $1,000 $750 $500 $250 $0 -$250 656.1 380.4 282.4 (46.3) 888.4 428.6 451.0 466.9 227.1 298.0 332.0 544.8 396.4 2.1 9.4 36.2 73.8 589.1 471.5 505.4 124.3 637.3 635.9 99.5 702.9 716.4 580.8 602.0 598.1 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Annualized 166.8 210.2 161.9 Year End Equity(*) Claim Reserves Pretax Operating Income Net Premiums & Fees Earned Year End Equity(*) Claim Reserves Pretax Operating Income (*) Includes all capital instruments. 30
Peaks and Valleys: Cyclical Nature of the Real Estate Industry During the 5 year period, 2001 2005 ORTIG reported cumulative pre-tax operating income of approximately $454 million dollars. During the 5 year period, 2007 2011 (the Great Recession) ORTIG experienced cumulative pre-tax operating losses of approximately $13 million dollars $61 million of this occurred within the two year period 2007-2008. Over the last 5 year period 2012 2016 ORTIG has reported cumulative pre-tax operating income of approximately $675 million dollars. Above is just a reminder of the peaks and valleys that are part of the real estate industry. 31
Financial Performance ($ in Millions) 120% 100% 80% 60% 104.7% 110.6% 98.1% 103.6% 101.7% 101.0% 99.0% 96.8% 94.7% 95.6% 93.2% 91.7% 93.6% 93.8% 93.0% 91.2% 89.6% 88.0% 90.4% 88.3% 87.9% 91.5% Expense Ratio Composite Ratio 120% 100% 80% 60% 40% 20% 0% Loss Ratio 6.6% 7.0% 7.9% 8.0% 7.8% 7.2% 6.7% 5.2% 4.9% 3.8% 2.1% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 March 2017 Three Months Ended Years Ended December 31, March 31, 2012 2013 2014 2015 2016 2016 2017 Net Premiums & Fees Earned $ 1,677.4 $ 1,996.1 $ 1,759.2 $ 2,045.3 $ 2,206.6 $ 474.1 $ 518.0 Net Investment Income 27.3 26.6 29.9 34.0 36.2 9.0 9.5 Pretax Operating Income $ 73.8 $ 124.3 $ 99.5 $ 166.8 $ 210.2 $ 21.4 $ 40.4 40% 20% 0% 32
Growth in Underwriter Statutory Surplus ($ in millions) $600.0 $545.8 $500.0 $459.4 $481.5 $428.7 $400.0 $358.2 $300.0 $200.0 $156.5 $183.7 $213.1 $236.6 $100.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 33
Near Term Expectations Moderately robust housing market Interest rates will increase, but remain low by historical standards Increased commercial market presence as we make inroads with new commercial customers Premiums and fees will show modest growth with increased purchases transactions offsetting the decline in refinance activity 34
Our Mission is to provide quality insurance security and related services to businesses, individuals and public institutions, and be a dependable long-term steward of the trust that policyholders and shareholders place in us. RMIC COMPANIES UPDATE Old Republic ranks among the nation s 50 largest publicly held insurance organizations.
What s been achieved in the 5 years since August 2011? Returned to profitability & restored the capital base Kept a sharp focus on efficient, customer focused, servicing operations All valid obligations paid in full Servicing technology & information security maintained to a very high standard Resolved the litigation with Bank of America Maintained good standing with insurance regulators & GSEs Priorities ahead? Continued focus on efficient servicing operations Final resolution and exit from regulatory supervision Ultimately, return of capital to Old Republic 36
Quarterly Operating Trends 300.0% $150.0 Loss Ratio 250.0% 200.0% 150.0% 100.0% 50.0% $125.0 $100.0 $75.0 $50.0 $25.0 Net Earned Premiums ($ in millions) 0.0% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 $0.0 Loss Ratio* Earned Premium* * The net earned premium and loss ratio trends reflected above for 3Q09 and 1Q10-4Q10 have been adjusted to exclude the non-recurring benefits attributable to the termination of certain captive insurance agreements. 37
Our Mission is to provide quality insurance security and related services to businesses, individuals and public institutions, and be a dependable long-term steward of the trust that policyholders and shareholders place in us. ORI LOOKING AHEAD Old Republic ranks among the nation s 50 largest publicly held insurance organizations.
Looking Ahead Our legacy RFIG business will work itself out Remaining legal exposures should resolve themselves within range of our expectation The large mortgage guaranty part of RFIG is expected to run off positively Our continuing businesses are in good shape: Growth prospects are sound: General Insurance / Recovering economy and positive rate situation Title Insurance / Recovering housing markets We ll solidify these prospects through: Recalibration of our capital accounts Organic and bolt-on general and title insurance growth initiatives Bank on very fine ORI brand name Our liquidity and strong capital base are sufficient to ensure the sustainability of earnings progress and long-term above average total returns to shareholders 39
Parent Company Liquidity / Dividend History ($ in millions) Ratios Dividend Cash Paying Dividend Paid on Dividend Capacity to Common Shares Dividend Dividends Paid on Dividends to Dividends Years Ended Paying Paid to Common Paid to Paid to December 31, Capacity (*) ORI-Parent Shares ORI-Parent ORI-Parent 2008 $ 414.7 $ 190.8 $ 155.2 46.0% 81.3% 2009 245.7 181.5 160.0 73.9% 88.2% 2010 295.6 181.1 166.1 61.3% 91.7% 2011 306.5 177.1 178.4 57.8% 100.7% 2012 361.4 195.0 181.5 54.0% 93.1% 2013 350.6 205.3 184.8 58.6% 90.0% 2014 427.2 281.1 188.3 65.8% 67.0% 2015 461.9 326.0 191.3 70.6% 58.7% 2016 493.8 317.6 193.8 64.3% 61.0% 2017 $ 473.3 $ 367.3 (**) $ 197.9 (**) 77.6% 53.9% * As reported in the Company s Annual Report ** 2017 estimated 40
$6,000 $5,500 $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 Net Premiums and Fees Earned Trends: $500 $0 Where We ve Been / Where We d Like and Aim To Go 2,423.9 1,155.1 2,936.0 1,314.7 813.4 1,103.8 405.2 465.7 3,116.1 1,528.9 3,386.9 3,400.5 1,709.4 1,025.2 1,081.8 Average $3,393.7 3,601.2 1,785.8 1,961.7 1,785.0 980.0 497.2 525.3 560.5 850.7 711.7 3,318.1 3,388.9 796.8 656.1 3,573.5 1,661.1 1,694.2 888.4 765.9 1,211.0 586.8 4,050.1 2,109.4 1,362.4 4,471.0 2,324.4 1,677.4 503.2 410.5 4,885.6 2,513.7 4,550.0 2,439.0 1,996.1 1,711.0 5,064.0 2,735.6 4,811.1 2,725.0 5,179.4 5,110.0 2,894.7 2,889.0 2,045.3 2,000.0 1,950.0 1,759.2 5,622.0 5,355.0 5,333.2 3,246.0 3,062.0 2,936.3 2,206.6 2,200.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2,075.0 Consolidated 25.7%(*) (4.7% Annual) General w/o CCI 39.6%(*) (6.9% Annual) Title 31.2%(*) (5.6% Annual) 340.0 219.9 170.0 MI & CCI 275.0 212.0-71.5%(*) 159.0 117.0 (-22.2% Annual) 316.5 255.4 Consolidated General (w/o CCI) Title RFIG Range of Objectives (*) % increase from original 2012 base 41
Pretax Operating Income (Loss) Trends: Where We ve Been / Where We d Like and Aim To Go $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 -$100 -$200 -$300 -$400 -$500 -$600 -$700 546.9 660.7 278.6 297.4 171.1 97.8 237.8 129.8 602.9 682.4 303.8 322.9 253.7 62.5 270.9 88.7 661.1 355.0 Average $671.8 275.0 413.2 31.0 (14.7) (105.5) 308.0 363.0 (46.3) (332.7) (663.0) 311.4 (279.9) 316.7 353.9 2.1 9.4 36.2 (597.7) (81.5) (404.8) (352.2) 261.0 (176.4) 524.8 288.3 110.0 73.8 124.3 (508.6) 303.2 296.8 94.1 10.3 (108.4) 508.0 221.3 99.5 337.1 613.0 166.8 758.0 540.4 385.0 444.0 147.0 (33.0) 613.1 336.4 319.9 210.2 843.0 500.0 555.0 182.0 153.0 170.0 29.4 80.0 100.0 8.0 69.8 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Consolidated 557.9%(*) General w/o CCI 112.6%(*) (16.3% Annual) Title 146.6%(*) (19.8% Annual) MI & CCI 119.7%(*) Consolidated General Title RFIG Run-off Range of Objectives (*) % increase from original 2012 base 42
Old Republic s Long Run Performance: Book and Market Total Return vs. S & P 500 $44,100 $44.10 Unit Value $40,100 $36,100 $32,100 $28,100 $24,100 $20,100 $16,100 $12,100 $8,100 ORI Book Value Total Return - (Average compound annual rate = 13.1%) ORI Market Value Total Return - (Average compound annual rate = 12.4%) S & P 500 Total Return - (Average compound annual rate = 10.0%) Common Stock Year End Quotation $40.10 $36.10 $32.10 $28.10 $24.10 $20.10 $16.10 $12.10 $8.10 Common Stock Closing Price $4,100 $4.10 $100 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 March 2017 Year End $0.10 43
Total Book Return Compared with S&P 500 Relative Old Republic Performance S&P 500 Results Ending Cash Percentage Total Total ORI Book Dividends Change in Dividend Book Annual vs. Year Value Paid Book Value Yield Return Return S&P 500 1992 $5.07 $0.093 13.8% 2.1% 15.9% 7.6% 8.3% 1993 5.75 0.102 13.4% 1.9% 15.3% 10.1% 5.2% 1994 6.11 0.111 6.3% 2.0% 8.3% 1.3% 7.0% 1995 7.24 0.121 18.5% 2.0% 20.5% 37.6% -17.1% 1996 7.77 0.148 7.3% 2.0% 9.3% 23.0% -13.7% 1997 8.31 0.178 7.0% 2.3% 9.3% 33.4% -24.1% 1998 9.21 0.206 10.8% 2.5% 13.3% 28.6% -15.3% 1999 9.59 0.261 4.2% 2.8% 7.0% 21.0% -14.0% 2000 11.00 0.293 14.6% 3.1% 17.7% -9.1% 26.8% 2001 12.48 0.315 13.5% 2.9% 16.4% -11.9% 28.3% 2002 13.96 0.336 11.8% 2.7% 14.5% -22.1% 36.6% 2003 15.65 0.890 12.1% 6.4% 18.6% 28.7% -10.1% 2004 16.94 0.402 8.2% 2.6% 10.8% 10.9% -0.1% 2005 17.53 1.312 3.5% 7.7% 11.2% 4.9% 6.3% 2006 18.91 0.590 7.9% 3.4% 11.3% 15.8% -4.5% 2007 19.71 0.630 4.2% 3.3% 7.5% 5.5% 2.0% 2008 15.91 0.670-19.3% 3.4% -15.9% -37.0% 21.1% 2009 16.49 0.680 3.6% 4.3% 7.9% 26.5% -18.6% 2010 16.16 0.690-2.0% 4.2% 2.2% 15.1% -12.9% 2011 14.76 0.700-8.7% 4.3% -4.4% 2.1% -6.5% 2012 14.03 0.710-4.9% 4.8% -0.1% 16.0% -16.1% 2013 14.64 0.720 4.3% 5.1% 9.4% 32.4% -23.0% 2014 15.15 0.730 3.5% 5.0% 8.5% 13.7% -5.2% 2015 15.02 0.740-0.9% 4.9% 4.0% 1.4% 2.6% 2016 $17.20 $0.750 14.5% 5.0% 19.5% 11.9% 7.6% Annual Average - 1967 to 2016 (50 Years) 11.1% 3.6% 14.7% 11.5% 3.2% 44
Total Market Return Compared with S&P 500 Relative Old Republic Performance S&P 500 Results Ending Cash Percentage Total Total ORI Market Dividends Change in Dividend Market Annual vs. Year Value Paid Market Value Yield Return Return S&P 500 1992 $5.90 $0.093 40.2% 2.2% 42.4% 7.6% 34.8% 1993 5.37 0.102-9.0% 1.7% -7.3% 10.1% -17.4% 1994 5.04 0.111-6.1% 2.1% -4.0% 1.3% -5.3% 1995 8.42 0.121 67.1% 2.4% 69.5% 37.6% 31.9% 1996 9.51 0.148 13.0% 1.8% 14.8% 23.0% -8.2% 1997 13.22 0.178 39.0% 1.9% 40.9% 33.4% 7.5% 1998 12.00 0.206-9.2% 1.6% -7.6% 28.6% -36.2% 1999 7.27 0.261-39.4% 2.2% -37.2% 21.0% -58.2% 2000 17.06 0.293 134.8% 4.0% 138.8% -9.1% 147.9% 2001 14.93 0.315-12.5% 1.8% -10.7% -11.9% 1.2% 2002 14.93 0.336 % 2.2% 2.2% -22.1% 24.3% 2003 20.29 0.890 35.9% 5.9% 41.8% 28.7% 13.1% 2004 20.24 0.402-0.2% 2.0% 1.8% 10.9% -9.1% 2005 21.01 1.312 3.8% 6.5% 10.3% 4.9% 5.4% 2006 23.28 0.590 10.8% 2.8% 13.6% 15.8% -2.2% 2007 15.41 0.630-33.8% 2.7% -31.1% 5.5% -36.6% 2008 11.92 0.670-22.6% 4.3% -18.3% -37.0% 18.7% 2009 10.04 0.680-15.8% 5.7% -10.1% 26.5% -36.6% 2010 13.63 0.690 35.8% 6.9% 42.7% 15.1% 27.6% 2011 9.27 0.700-32.0% 5.1% -26.9% 2.1% -29.0% 2012 10.65 0.710 14.9% 7.7% 22.6% 16.0% 6.6% 2013 17.27 0.720 62.2% 6.8% 69.0% 32.4% 36.6% 2014 14.63 0.730-15.3% 4.2% -11.1% 13.7% -24.8% 2015 18.63 0.740 27.3% 5.1% 32.4% 1.4% 31.0% 2016 $19.00 $0.750 2.0% 4.0% 6.0% 11.9% -5.9% Annual Average - 1967 to 2016 (50 Years) 13.7% 3.6% 17.3% 11.5% 5.8% 45
Ensuring Sustainability and Continuity of the Business for the Long Run Management Bench Strength and Succession Management selection and tenure objectives aligned with long-term nature of insurance promises made Office of the Chief Executive Officer top management structure Employment at will / No employment agreements / People stay because they prefer Long-term incentive plans substantially driven by 5 to 10 years underwriting results Long-term tenures from top to bottom ORI Itself in its 93 year history only: 4 CEOs 7 CFOs 6 Senior Actuarial Positions 46
Ensuring Sustainability and Continuity of the Business for the Long Run (cont d) Corporate Governance Board membership and tenure objectives are aligned with long-term nature of insurance promises made 80% of the Board is represented by non-management independent directors Directors business expertise is aligned with the nature and needs of ORI s long-term insurance business ORI s Charter and By-Laws: Long conditioned by corporate governance practices to best: Ensure the continuity and stability of the enterprise; Ensure the long-term interests of insurance subsidiaries policyholders; Meet the long-term expectations of other stakeholders 47