Old Republic International Corp (ORI) 2023 Q2 法說會逐字稿

Hello. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Old Republic International Second Quarter 2023 Earnings Conference Call. (Operator Instructions) Joe Calabrese with the Financial Relations Board, you may begin.

你好。我叫克里斯，今天我將擔任你們的會議操作員。在此，我歡迎大家參加舊共和國際2023年第二季度收益電話會議。 （操作員指示）財務關係委員會的 Joe Calabrese，您可以開始了。

Thank you. Good afternoon, everyone, and thank you for joining us for the Old Republic conference call to discuss second quarter 2023 results. This morning, we distributed a copy of the press release and posted a separate financial supplement, which we assume you have seen and/or otherwise have access to during the call.

謝謝。大家下午好，感謝您參加舊共和國電話會議，討論 2023 年第二季度的業績。今天早上，我們分發了一份新聞稿，並發布了一份單獨的財務補充材料，我們假設您在通話期間已經看到和/或以其他方式獲得了該補充材料。

Both of the documents are available at Old Republic's website, which is www.oldrepublic.com. Please be advised that this call may involve forward-looking statements as discussed in the press release and financial supplement dated July 27, 2023. Risks associated with these statements can be found in the company's latest SEC filings.

這兩份文件均可在 Old Republic 網站 www.oldrepublic.com 上獲取。請注意，本次電話會議可能涉及 2023 年 7 月 27 日的新聞稿和財務補充材料中討論的前瞻性陳述。與這些陳述相關的風險可以在該公司最新的 SEC 文件中找到。

This afternoon's conference call will be led by Craig Smiddy, President and CEO of Old Republic International Corporation and several other senior executive members as planned for this meeting. At this time, I'd like to turn the call over to Craig Smiddy. Please go ahead, sir.

按照計劃，今天下午的電話會議將由 Old Republic International Corporation 總裁兼首席執行官 Craig Smiddy 以及其他幾位高級管理人員主持。此時，我想將電話轉給 Craig Smiddy。請繼續，先生。

All right. Joe, thank you. Good afternoon, and welcome again, everyone, to Old Republic's second quarter earnings call. With me today is Frank Sodaro, our CFO of ORI; and Carolyn Monroe, our President and CEO of Title Insurance. Well, during the second quarter, General Insurance continued to produce strong underwriting results, which drove a 34% increase in pretax operating income.

好的。喬，謝謝你。下午好，再次歡迎大家參加《舊共和國》第二季度財報電話會議。今天和我在一起的是 ORI 首席財務官 Frank Sodaro；以及我們的產權保險總裁兼首席執行官卡洛琳·門羅 (Carolyn Monroe)。第二季度，普通保險繼續產生強勁的承保業績，帶動稅前營業收入增長 34%。

And despite continued challenges with mortgage interest rates affecting the top line, our Title Insurance pretax operating income improved over the first quarter of the year. Our focus on specialization and diversification across Title and P&C Insurance paid off in the second quarter, producing $227 million of consolidated pretax operating income.

儘管抵押貸款利率持續面臨影響營收的挑戰，但我們的產權保險稅前營業收入較今年第一季度有所改善。我們對產權和財產與意外傷害保險專業化和多元化的關注在第二季度得到了回報，產生了 2.27 億美元的綜合稅前營業收入。

And on a year-to-date basis, General Insurance has produced $378 million of pretax operating income, while Title Insurance has produced $52 million, alongside of a consolidated combined ratio of 92.6. Our conservative reserving practices that we've spoken about are once again clearly visible with favorable reserve development reported in all 3 of our segments, led by General Insurance.

今年迄今為止，普通保險已產生 3.78 億美元的稅前營業收入，而產權保險則產生 5,200 萬美元，綜合綜合成本率為 92.6。我們所談到的保守的準備金做法再次清晰可見，以普通保險為首的所有三個部門都報告了有利的準備金發展。

With our strong underwriting income and investment income results, we've maintained our strong balance sheet, while at the same time, continuing to return capital to shareholders during the quarter and through -- did this through both dividends and share repurchases. And we're also continuing to invest for the long run, including the April announcement of our newest underwriting business, Old Republic Lawyers Specialty Insurance.

憑藉我們強勁的承保收入和投資收入業績，我們保持了強勁的資產負債表，同時，在本季度及整個季度繼續向股東返還資本——通過股息和股票回購來做到這一點。我們還將繼續進行長期投資，包括四月份宣布推出我們最新的承保業務 Old Republic Lawyers Specialty Insurance。

So I will now turn the discussion over to Frank. Frank will then turn things back to me to cover General Insurance. We'll follow that with Carolyn, who will discuss Title Insurance, and then we'll open up the conversation for Q&A. So with that, Frank, I will turn it to you.

所以我現在將討論轉交給弗蘭克。然後，弗蘭克會將一般保險的費用轉還給我。我們將與卡羅琳一起討論，她將討論產權保險，然後我們將開始問答對話。那麼，弗蘭克，我將把它交給你。

Thank you, Craig, and good afternoon, everyone. This morning, we reported net operating income of $180 million for the quarter compared to $210 million last year. On a per share basis, comparable year-over-year results were $0.62 versus $0.69. For the first half of the year, net operating profit was $359 million compared to $402 million last year.

謝謝你，克雷格，大家下午好。今天早上，我們報告本季度淨營業收入為 1.8 億美元，而去年為 2.1 億美元。按每股計算，可比同比業績為 0.62 美元，而去年同期為 0.69 美元。今年上半年，淨利潤為 3.59 億美元，去年同期為 4.02 億美元。

The considerable headwinds experienced by the Title Group were largely offset by strong operating results of the General Insurance Group. Net investment income increased by about 30% for both the quarter and year-to-date, driven primarily by higher yields on the fixed income and short-term investment portfolios.

Title Group 所經歷的巨大阻力在很大程度上被普通保險集團強勁的經營業績所抵消。本季度和年初至今的淨投資收入增長了約 30%，這主要是由於固定收益和短期投資組合收益率上升所致。

To put it in perspective, our average reinvestment rate on corporate bonds during 2023 was just over 5.1%, while the book yield on similar bonds being disposed of was just under 3%. The investment portfolio has held steady at approximately 80% in highly rated bonds and short-term investments, with the remaining 20% allocated to large cap dividend-paying stocks.

客觀來看，2023年我們公司債券的平均再投資率略高於5.1%，而處置的類似債券的賬面收益率略低於3%。投資組合中高評級債券和短期投資的比例穩定在約80%，其餘20%分配給大盤股派息股票。

The quality of the bond portfolio remains high with 99% in investment grade securities, with an average maturity of 4.2 years and an average overall book yield of 3.5% compared to 2.7% at the end of the second quarter last year. The fixed income portfolio valuation decreased by approximately $125 million during the quarter, while the stock portfolio valuation was relatively flat, ending the period in an unrealized gain position of over $1.2 billion.

債券投資組合的質量仍然很高，99%為投資級證券，平均期限為4.2年，平均整體賬面收益率為3.5%，而去年第二季度末為2.7%。本季度固定收益投資組合估值下降約 1.25 億美元，而股票投資組合估值相對持平，期末未實現收益超過 12 億美元。

Turning to loss reserves. Once again, all 3 operating segments recognized favorable loss reserve development for all periods presented. The consolidated loss ratio benefited by 4.6 percentage points for the quarter compared to 1.9 points for the same period a year ago. Year-to-date, the consolidated loss ratio benefited by 4.5 percentage points compared to 2.1 percentage points last year.

轉向損失準備金。所有三個運營部門再次確認所有期間的損失準備金發展良好。本季度綜合虧損率提高了 4.6 個百分點，而去年同期為 1.9 個百分點。年初至今，綜合虧損率從去年的 2.1 個百分點上升了 4.5 個百分點。

The Mortgage Insurance Group paid a $35 million dividend to the parent holding company in the quarter and plans to return $110 million for the full year, subject to regulatory approval. Shareholders' equity ended the quarter at over $6.1 billion, resulting in book value per share of $21.78. When adding back dividends, book value increased 5.7% from the prior year-end, driven by our strong operating earnings.

Mortgage Insurance Group 本季度向母公司支付了 3500 萬美元的股息，併計劃全年返還 1.1 億美元，但須經監管部門批准。本季度末股東權益超過 61 億美元，每股賬面價值為 21.78 美元。加上股息後，賬面價值比上年末增長了 5.7%，這主要得益於我們強勁的運營收益。

In the quarter, we paid $70 million in dividends and repurchased nearly $220 million worth of our shares for a total of just under $290 million returned to shareholders. Since the end of the quarter, we repurchased another $83 million worth of shares, leaving us with about $180 million remaining in our current repurchase program. I'll now turn the call back to Craig for a discussion of General Insurance.

本季度，我們支付了 7000 萬美元的股息，並回購了價值近 2.2 億美元的股票，總共向股東返還了近 2.9 億美元。自本季度末以來，我們又回購了價值 8300 萬美元的股票，目前的回購計劃還剩下約 1.8 億美元。我現在將電話轉回給克雷格，討論一般保險問題。

Okay. Frank, thanks. So in the second quarter, General Insurance net written premiums were up 8% and pretax operating income increased to $184 million. And the combined ratio was at 90.2% compared to 92.5% in the second quarter of '22. So we continue to see our underwriting excellence efforts pay off, and we thank all of our associates for remaining keenly focused on profitable growth.

好的。弗蘭克，謝謝。因此，第二季度普通保險淨承保保費增長了 8%，稅前營業收入增至 1.84 億美元。綜合成本率為 90.2%，而 2022 年第二季度為 92.5%。因此，我們繼續看到我們卓越承保的努力得到了回報，我們感謝所有員工繼續熱衷於盈利增長。

The loss ratio for the quarter was 60.9%, including 6 points of favorable reserve development. And the expense ratio was higher at 29.3%, but this is in line with our line of coverage mix that over the last few years has trended toward lower loss ratio and higher commission ratio line. Both strong renewal retention ratios and new business growth have helped drive that 8% increase in net premiums written.

本季度虧損率為60.9%，其中有6個點有利於準備金發展。費用比率較高，達到 29.3%，但這與我們的承保組合線一致，過去幾年我們的承保組合線一直趨向於較低的損失率和較高的佣金率線。強勁的續保保留率和新業務增長推動淨承保保費增長 8%。

And we continue to achieve rate increases across our portfolio with the exception of D&O and workers' compensation. Turning more specifically to a few of our larger lines of coverage starting with commercial auto, net premiums grew at a 13% [clip], while the loss ratio came in at 67.5% compared to 66.6% in the second quarter of '22 with favorable development in both of those periods.

除 D&O 和工人賠償外，我們的投資組合繼續實現利率上漲。更具體地說，從商用汽車開始，我們的一些較大的承保範圍，淨保費增長了 13% [剪輯]，而損失率為 67.5%，而 22 年第二季度為 66.6%，有利這兩個時期的發展。

Severity continues in the high single-digit range and rate increases are commensurate with that trend. So that implies that we continue to cover our loss cost trend in commercial auto. Moving to workers' compensation. Net premiums written grew by 8%, while the loss ratio came in at a low 37.9% compared to 52.3% in the second quarter of 2022.

嚴重程度繼續維持在較高的個位數範圍內，並且發病率的增加與這一趨勢相稱。因此，這意味著我們將繼續彌補商用汽車的損失成本趨勢。轉向工人賠償。淨承保保費增長了 8%，而損失率則從 2022 年第二季度的 52.3% 降至 37.9%。

And obviously, here, too, there's considerable favorable reserve development in both of those periods. Frequency continues to trend down per comp, while severity trend is relatively stable. So here, too, we think our rate levels remain adequate for this line of coverage. We expect solid growth and profitability in General Insurance to continue throughout the rest of this year.

顯然，這兩個時期的儲量發展也相當有利。每個比較的頻率繼續呈下降趨勢，而嚴重程度趨勢則相對穩定。因此，我們也認為我們的費率水平仍然足以滿足這一覆蓋範圍。我們預計普通保險業務的穩健增長和盈利能力將在今年剩餘時間內持續下去。

And we think this continues to reflect the success of our specialty growth focus and our operational excellence initiatives. So I'll now turn the discussion over to Carolyn to report on Title Insurance. Carolyn?

我們認為這繼續反映了我們的專業增長重點和卓越運營計劃的成功。因此，我現在將討論轉交給卡羅琳，由她報告產權保險的情況。卡羅琳？

Thank you, Craig, and good afternoon. The Title Group reported premium and fee revenue for the quarter of $650 million, down 37% from second quarter 2022. Agency premiums were down 38% and direct premiums were down 32%. Our pretax operating income of $35 million compared to $110 million in the second quarter of 2022. Our combined ratio of 96.9% compared to 90.4% in the second quarter of 2022.

謝謝你，克雷格，下午好。 Title Group 報告本季度保費和費用收入為 6.5 億美元，較 2022 年第二季度下降 37%。代理保費下降 38%，直接保費下降 32%。我們的稅前營業收入為 3500 萬美元，而 2022 年第二季度為 1.1 億美元。我們的綜合成本率為 96.9%，而 2022 年第二季度為 90.4%。

Our 2023 results compared to 2022 reflect the economic headwinds continuing to affect the volume of transactions in our market. We continue working to manage costs in response to market revenue levels while keeping a focus on longer-term strategic initiatives. We have improved our combined ratio by 2.4 points from the first quarter of this year, which helped drive increased profitability.

我們 2023 年的業績與 2022 年相比反映了經濟逆風繼續影響我們市場的交易量。我們繼續努力根據市場收入水平來管理成本，同時關注長期戰略計劃。與今年第一季度相比，我們的綜合成本率提高了 2.4 個百分點，這有助於推動盈利能力的提高。

This overall improvement during the second quarter compared to this year's first quarter is a positive trend to build on. Market conditions also adversely impacted our commercial business. In the second quarter, commercial premiums were down 37% over second quarter of 2022 and represented 22% of our premiums in both 2023 and 2022.

與今年第一季度相比，第二季度的整體改善是一個積極的趨勢。市場狀況也對我們的商業業務產生了不利影響。第二季度，商業保費比 2022 年第二季度下降了 37%，佔 2023 年和 2022 年保費的 22%。

Year-to-date, commercial premiums are down 31% over last year. While being mindful of market conditions, we continue to demonstrate our commitment to this segment with tools and resources to take advantage of the opportunities available. Over the last year, we have expanded and transformed our footprint nationwide and have been able to grow our market share in this segment.

今年迄今為止，商業保費比去年下降了 31%。在關注市場狀況的同時，我們繼續通過工具和資源來展示我們對這一細分市場的承諾，以充分利用現有的機會。去年，我們在全國范圍內擴大和改造了我們的業務，並擴大了我們在這一領域的市場份額。

We continue to provide industry-leading value-added services that enable our agents, the cornerstone of our strategic focus, to concentrate on their core business and provide opportunities for efficiencies in their operations. While the first half of 2023 reflects the ongoing economic challenges in the real estate industry, we are focused on streamlining operational efficiencies and developing innovative products and services to prepare for both the short-term and long-term market conditions. Thank you. And with that, I'll turn it back to Craig.

我們繼續提供行業領先的增值服務，使我們的代理商（我們戰略重點的基石）能夠專注於其核心業務，並為其運營效率提供機會。儘管 2023 年上半年反映了房地產行業持續面臨的經濟挑戰，但我們仍專注於提高運營效率並開發創新產品和服務，為短期和長期市場狀況做好準備。謝謝。說到這裡，我會把它轉回給克雷格。

All right. Carolyn, thank you. So as a diversified specialty insurer, we remain pleased with our continued profitable growth in General Insurance, which is helping to mitigate the lower revenue and profit levels in Title Insurance. And while higher mortgage interest rates haven't helped our Title Insurance business, the higher interest rates continue to produce significant growth in our investment income, as Frank pointed out.

好的。卡羅琳，謝謝你。因此，作為一家多元化的專業保險公司，我們對普通保險的持續盈利增長感到滿意，這有助於緩解產權保險收入和利潤水平較低的情況。正如弗蘭克指出的那樣，雖然較高的抵押貸款利率並沒有幫助我們的產權保險業務，但較高的利率繼續為我們的投資收入帶來顯著增長。

We also remain pleased with our recent and long-term track record of capital stewardship and book value growth per share, including the $492 million returned to shareholders in the first half of this year through both dividends and share repurchases. So for the remainder of '23, we remain optimistic for continued profitable growth in General Insurance while we remain of the view that Title Insurance will continue to face headwinds.

我們還對我們近期和長期的資本管理和每股賬面價值增長記錄感到滿意，包括今年上半年通過股息和股票回購向股東返還 4.92 億美元。因此，在 23 年剩餘時間裡，我們對普通保險的持續盈利增長保持樂觀，同時我們仍然認為產權保險將繼續面臨阻力。

As we noted and mentioned and discussed in the last few quarters, this is Old Republic's 100-year anniversary, which we're celebrating under the banner of 100 Years of Excellence. And as part of this ongoing celebration, we will be ringing the opening bell on the New York Stock Exchange next month on August 22. So that concludes our prepared remarks, and we'll now open up the discussion to Q&A. And I'll try to answer your questions, or I'll ask Frank or Carolyn to respond.

正如我們在過去幾個季度中提到、提到和討論的那樣，這是《舊共和國》的 100 週年紀念日，我們在“卓越 100 年”的旗幟下慶祝這一周年。作為正在進行的慶祝活動的一部分，我們將於下個月的 8 月 22 日敲響紐約證券交易所的開盤鐘聲。我們準備好的發言到此結束，現在我們將開始問答環節。我會盡力回答你的問題，或者我會請弗蘭克或卡羅琳回答。

(Operator Instructions). Our first question is from Greg Peters with Raymond James.

（操作員說明）。我們的第一個問題是格雷格·彼得斯和雷蒙德·詹姆斯提出的。

And 100 years, it's a pretty striking achievement for the company. So that's something for the record books. Looking over the statistics in the financial supplement, I noticed that the paid loss ratio for General Insurance has ticked up noticeably on a 6-month basis for '23 versus '22. And I'm curious if you could provide some commentary about what's going on inside that?

100 年來，這對公司來說是一個相當驚人的成就。這就是記錄簿上的事情。查看財務補充中的統計數據，我注意到普通保險的有償損失率在 23 年與 22 年的 6 個月基礎上明顯上升。我很好奇你能否對其中發生的事情提供一些評論？

Greg, this is Craig. Sure. This ratio is something that we look at over the long term. And if you look at where we started back in 2018, you can see where -- in 2020 and 2021 and even into 2022, there were probably some effects of the COVID situation and how that may have affected settlements in courthouses and the likes.

格雷格，這是克雷格。當然。這個比率是我們長期關注的。如果你看看我們在 2018 年開始的地方，你就會發現，在 2020 年和 2021 年，甚至到 2022 年，新冠疫情可能會產生一些影響，以及這可能如何影響法院等的和解。

And then as you move into '23, I'm not drawing any sort of conclusions. There's a little bit of a backlog there, perhaps, but it's certainly in line with our long-term. And then as we mentioned when we talked about our expense ratio, we also have shorter tail lines of business in our portfolio today. And those tend to pay out a little bit quicker, which is why they're short tail.

然後，當你進入 23 年時，我不會得出任何結論。也許那裡有一點積壓，但這肯定符合我們的長期目標。正如我們在談論費用比率時提到的，我們今天的投資組合中的尾部業務也較短。這些人往往支付得更快一些，這就是為什麼他們是短尾的。

And then, of course, there is an inflationary environment as well that affects payout. So all those things -- pulling all those things together, there isn't anything that I glean out of the 59.9% you're seeing there in the second quarter of '23 compared to that longer-term trend.

當然，通貨膨脹環境也會影響支付。因此，將所有這些因素綜合起來，我從 23 年第二季度看到的 59.9% 的數據中沒有收集到任何與長期趨勢相比的信息。

Fair enough. You just stuck out, so I felt like I had to ask a question. The other question on -- in General Insurance would be just, again, focused on the 6-month results, the loss ratio. And I know you -- by the way, I know you mentioned -- talked a little bit about this in your comments, but the loss ratio for commercial auto has trended up.

很公平。你只是很突出，所以我覺得我必須問一個問題。關於普通保險的另一個問題將再次集中於 6 個月的結果，即損失率。我知道你——順便說一句，我知道你提到過——在你的評論中談到了這一點，但商用汽車的損失率呈上升趨勢。

I guess in the context of what I think is going on inside with your rate actions, I'm kind of surprised it's trending up, I would have figured it just stabilized. But maybe I'm missing something, or this is just a normal pattern? And I recognize it's still a lot better than it was a couple of years ago. But any comments there would be helpful.

我想在我認為您的利率行動內部正在發生的情況下，我對它的上升趨勢感到有點驚訝，我本以為它只是穩定下來。但也許我錯過了一些東西，或者這只是一個正常的模式？我認識到它仍然比幾年前好得多。但任何評論都會有幫助。

Sure, Greg. Welcome that question. So as I mentioned in my prepared remarks, both of those periods include favorable reserve development. And -- so what you're seeing here is not an indication on current accident year loss ratio. But what you're seeing here is a little bit higher of a level of favorable development in '22. And while '23 still had favorable development, perhaps just not to the same degree.

當然，格雷格。歡迎這個問題。正如我在準備好的發言中提到的，這兩個時期都包括有利的儲備開發。而且——所以你在這裡看到的並不是當前事故年損失率的指標。但你在這裡看到的情況比 22 年的有利發展水平要高一些。雖然 '23 仍然有良好的發展，但也許只是程度不同。

So this is not the rate increases that we're achieving and the trends that we think we're seeing are, again, producing a profitable accident year loss ratio. And the noise that you're seeing between these 2 periods is reflective of prior -- favorable prior year development.

因此，這並不是我們正在實現的增長率，我們認為我們看到的趨勢再次產生了有利可圖的事故年損失率。您在這兩個時期之間看到的噪音反映了之前的良好發展。

Fair enough. My last question, I always like to ask a question on the Title business, too. And Carolyn, I was listening to your comments about the weakness in the Title -- the commercial business. I guess trying to understand when we see about the downside risk in valuation marks in commercial real estate, wondering how you think that might ripple through Old Republic in terms of loss ratios, or if there's really little impact that you anticipate as a result of the new marks that are coming out of some areas of the commercial real estate portfolios?

很公平。我的最後一個問題，我也總是喜歡問有關產權業務的問題。卡羅琳，我正在聽你對標題中的弱點的評論——商業業務。我想試圖理解當我們看到商業房地產估值標記的下行風險時，想知道您如何看待這可能會在損失率方面波及舊共和國，或者您預期的影響是否真的很小商業房地產投資組合某些領域出現的新標誌？

Carolyn, I think you're in a perfect position to respond to Greg's question on that.

卡羅琳，我認為你非常適合回答格雷格的問題。

Okay. Yes, I don't really think that the valuations will have much impact on our loss reserves or loss ratios. They're highly leveraged properties. And you have to remember that when commercial is done, there's so many attorneys involved and people involved looking at the properties, looking at the deals that -- I don't -- I just don't think that's going to -- just because the properties get devalued that, that will really affect our loss ratios.

好的。是的，我真的不認為估值會對我們的損失準備金或損失率產生太大影響。它們是高槓桿資產。你必須記住，當商業完成時，有很多律師和相關人員參與查看房產、查看交易——我不——我只是認為這不會——只是因為房產貶值，這將真正影響我們的損失率。

The next question is from Paul Newsome with Piper Sandler.

下一個問題是保羅·紐瑟姆和派珀·桑德勒提出的。

The shift towards these businesses with a lower loss ratio, higher expense ratio, is that effect finished? Or should we expect (inaudible) prospectively as well?

向虧損率較低、費用率較高的業務轉移，效果結束了嗎？或者我們也應該期待（聽不清）前瞻性嗎？

I missed the very last part of your question, Paul. I'm sorry, it didn't come through.

我錯過了你問題的最後一部分，保羅。抱歉，沒有成功。

In the General Insurance business, you're seeing a mix change that's higher expense ratio, lower loss ratio.

在一般保險業務中，您會看到費用率更高、損失率更低的組合變化。

Right.

正確的。

Should we expect that mix change to continue prospectively?

我們是否應該預期這種組合變化會持續下去？

Okay. Got it. Thank you. Well, it's a great question. And Greg was just pointing to some things in our financial supplement, and I might use that supplement to try to paint a clear picture here. And one of the things I would point out is that what's driving this is not just the new business we're putting on into our portfolio that is shorter tail business that tends to be higher commission ratio business.

好的。知道了。謝謝。嗯，這是一個很好的問題。格雷格只是指出了我們的財務補充中的一些內容，我可能會使用該補充來嘗試在這裡描繪出清晰的畫面。我要指出的一件事是，推動這一趨勢的不僅僅是我們在投資組合中投入的新業務，即短尾業務，往往是佣金率較高的業務。

But we also have the impact of workers' comp. So if you look at workers' compensation, that is one of the lowest commission ratio lines of coverage that we write. And if you look at that line in the financial supplement and you just look at the net premiums earned, you can see in 2018, we were over $1 billion of net premiums earned.

但我們也受到工人補償的影響。因此，如果你看看工人的賠償，就會發現這是我們所寫的最低佣金率的保險範圍之一。如果您查看財務補充中的這一行，並且只查看所賺取的淨保費，您可以看到 2018 年，我們賺取的淨保費超過 10 億美元。

And then by the time you get to '22, you're at about $800 million. So as we're putting on to the portfolio, shorter tail business in a very deliberate effort to diversify our portfolio into other lines of coverage, at the same time, workers' compensation with low loss ratios was coming down.

當你到了 22 歲的時候，你的資產就達到了 8 億美元左右。因此，當我們非常謹慎地投入投資組合、短尾業務，以使我們的投資組合多樣化到其他承保範圍時，與此同時，低損失率的工人賠償正在下降。

As a matter of fact, workers' compensation back in '18 was about 31% of our portfolio. And today, that sits at 20%. So you can see that the effects of both of those things happening at the same time are what has driven a good portion of that expense ratio up. While at the same time, you can look at our accident year combined ratios or loss ratios, I should say, on Page 4 of the release.

事實上，18 年工人的薪酬約占我們投資組合的 31%。如今，這一比例為 20%。因此，您可以看到，這兩件事同時發生的影響推動了費用比率的很大一部分上升。與此同時，我應該說，您可以在新聞稿的第 4 頁上查看我們的事故年綜合比率或損失比率。

And you can see since 2018, those loss ratios on an accident year basis have trended down from 72.2% and we ended the second quarter of '23 at 66.9%. So that's a trade-off that we're happy to make. And then now to get to your part about going forward. So going forward, we mentioned that we continue to place business into our portfolio from some of the new underwriting ventures that we've undertaken, Old Republic Inland Marine, Old Republic E&S, Old Republic Lawyers Specialty Insurance. And those are lines that do have a bit higher commission ratios. Now on the other hand, as you noticed, workers' compensation has started to grow again. And if you look at the numbers and the financial supplement, you can see that, that growth returning when you look at the net written premium, for instance, was $209 million in the quarter compared to $192.8 million in the same quarter of '22.

您可以看到，自 2018 年以來，事故年的損失率已從 72.2% 下降，23 年第二季度結束時為 66.9%。所以這是我們很樂意做出的權衡。現在開始談談你的下一步。因此，展望未來，我們提到我們將繼續將我們開展的一些新承保業務的業務納入我們的投資組合，例如舊共和國內陸海事、舊共和國 E&S、舊共和國律師專業保險。這些線路的佣金比率確實較高。另一方面，正如您所注意到的，工人的報酬已開始再次增長。如果你看一下數字和財務補充，你會發現，例如，當你看淨承保保費時，該季度的增長為 2.09 億美元，而 22 年同一季度為 1.928 億美元。

And we said that's growing at about 8%. So at least we're growing in a lower commission ratio line again. So that will help mitigate this somewhat. But at the same time, we are putting onto the books more diverse lines of business that do carry lower loss ratios but a bit higher commission ratios. So hopefully, that answers your question.

我們說增長率約為 8%。因此，至少我們再次以較低的佣金比率增長。因此，這將有助於在一定程度上緩解這種情況。但與此同時，我們正在將更多樣化的業務納入賬簿，這些業務的損失率確實較低，但佣金率略高。希望這能回答你的問題。

Yes, that was great. Lots of good details, no doubt. I want to move on to sort of the rate versus inflation conversation that we have with just about every company. It sounds like in your major businesses like commercial auto and workers' comp, you are raising rates about what you think claims inflation is, but you didn't -- I don't think you commented on the rest of the businesses. Overall, do you think you're just sort of covering current levels of inflation? Or do you think you're still making progress towards expanding the underlying profit margins?

是的，那太好了。毫無疑問，有很多好的細節。我想繼續討論我們與幾乎所有公司進行的利率與通貨膨脹的對話。聽起來好像在你的主要業務中，如商用汽車和工人補償，你正在提高你所認為的通貨膨脹率，但你沒有——我認為你沒有對其他業務發表評論。總體而言，您認為您只是覆蓋了當前的通脹水平嗎？或者您認為您在擴大基本利潤率方面仍在取得進展嗎？

Right. So well, this one is a bit tougher because it really varies by line of coverage, and I'll just comment on a few. So workers' compensation, we're giving up a little bit of rate there, but the -- if you think about what drives the premium there, it's payrolls. And payrolls are up pretty substantially.

正確的。好吧，這個有點難，因為它確實因覆蓋範圍而異，我只會評論其中的一些。因此，在工人賠償方面，我們放棄了一點點工資，但是——如果你考慮一下是什麼推動了那裡的保險費，那就是工資。工資單也大幅增長。

So we're getting more premium because of the higher payrolls, while at the same time, medical inflation, which is the biggest component of our loss payout is relatively stable. Wage inflation, which is a smaller part of our workers' compensation payout is going to be generally commensurate with your payroll growth. So that's a one-for-one kind of trade-off there.

因此，由於就業人數增加，我們獲得了更多的保費，而與此同時，醫療通脹（我們損失賠償的最大組成部分）相對穩定。工資通脹僅占我們工人薪酬支出的一小部分，通常與工資增長相稱。所以這是一種一對一的權衡。

And you don't have the social kind of inflation that you have on -- in workers' comp that you see in auto or general liability. So just the payroll growth alone should be accretive to profitability and loss ratios on workers' comp. On auto, again, we feel very good about our accident year loss ratio. We have multiple years of compounded rate increases built into our portfolio.

而且你沒有像在汽車或一般責任中看到的工人補償那樣出現社會通貨膨脹。因此，僅工資增長就應該會增加工人薪酬的盈利率和損失率。在汽車方面，我們對事故年損失率再次感到非常滿意。我們的投資組合中包含了多年的複合加息。

We're trying to stay even with what we're seeing on severity and frequency is stable. So therefore, our loss ratios on auto should be pretty solid. Some of the specialty coverages like aviation, for instance, we've seen dramatic rate increases in that line of business that will and are definitely driving greater profitability and lower loss ratios on that line.

我們正在努力保持我們所看到的嚴重性和頻率穩定。因此，我們的汽車損失率應該相當穩定。例如，一些專業保險，例如航空業，我們已經看到該業務領域的費率急劇上升，這將並且肯定會推動該業務領域更高的盈利能力和更低的損失率。

On D&O, we mentioned earlier, D&O, the market is soft. I think I mentioned this on the last call that there is increased competition in the D&O marketplace. And a lot of that is because the last several years have had robust rate increases. And that has coupled with lower security class action lawsuits over the last year or so. And the latest report out indicates that we're kind of holding steady with a lower security class action frequency.

關於D&O，我們前面提到，D&O，市場疲軟。我想我在上次電話會議中提到過 D&O 市場的競爭日益激烈。這很大程度上是因為過去幾年利率大幅上漲。再加上過去一年左右的安全集體訴訟數量較低。最新報告表明，我們在安全集體訴訟頻率較低方面保持穩定。

So on D&O, we're giving up rates, but that rate we're giving up is more in line, not with inflation, which was part of your question, but more relative to security class action lawsuit frequency, which is considerably down. So hopefully, that helps. I think I gave you 4 different diverse examples there and -- which underscores my opening comments that you really have to look at the line of coverage and what's going on in that particular line of coverage.

因此，在 D&O 方面，我們放棄了利率，但我們放棄的利率更符合通貨膨脹，這是你問題的一部分，但更與安全集體訴訟頻率相關，後者大幅下降。希望這會有所幫助。我想我給了你們 4 個不同的例子，這強調了我的開場評論，即你們真的必須看看報導範圍以及該特定報導範圍內發生的情況。

The next question is from Matt Carletti with JMP.

下一個問題來自 JMP 的 Matt Carletti。

I got a few questions. Maybe stick with General Insurance to start. The past 2, 3 quarters have definitely seen a higher level of favorable development than some of the quarters before that. You pointed to workers' comp and commercial auto as the drivers. Can you give any color around, are there particular accident years that the majority has been coming from? Or has it been kind of pretty well spread over time?

我有幾個問題。也許堅持從普通保險開始。過去的兩、三個季度肯定比之前的一些季度出現了更高水平的有利發展。您指出工人補償金和商用汽車是驅動因素。您能給出一些顏色嗎？大多數人都來自特定的事故年份嗎？或者隨著時間的推移它已經很好地傳播了？

Frank is in a good position to give you a little more color around that.

弗蘭克（Frank）處於一個很好的位置，可以為您提供更多的色彩。

Yes, I mean it's really spread out. The analysis we look at go back 10 years and almost every year has favorable development coming from it at an all-lines basis. The -- I'd say about 2/3 of the development is coming from workers' comp, with another 1/3 coming from commercial auto, but it is really -- it's widespread.

是的，我的意思是它真的很分散。我們的分析可以追溯到 10 年前，幾乎每年全線都有良好的發展。我想說大約 2/3 的發展來自工人補償，另外 1/3 來自商用汽車，但它確實很普遍。

Okay. Very helpful. And then maybe sticking with numbers, just -- I noticed the kind of interest and other cost line stepped up a few million this quarter. Is there something onetime in there? Or is that something more trendable?

好的。很有幫助。然後也許堅持數字，只是 - 我注意到本季度的利息和其他成本線增加了幾百萬美元。裡面有什麼一次性的東西嗎？或者說這是更流行的東西？

I'll continue with this one also. There's a onetime event in there, a little more than half of that increase that we would not expect to happen again, but the rest of it is just slightly elevated. There's nothing alarming there, though, a relatively small number.

我也會繼續這個。其中有一個一次性事件，其中一半多一點的增長是我們預計不會再次發生的，但其餘部分只是略有上升。不過，這個數字相對較小，沒有什麼值得警惕的。

Okay. All right. Perfect. And then maybe last question, if I can, on Title. It sounds like this quarter, the kind of headwinds in commercial down 37% were pretty commensurate with what you're seeing in residential. Has that been the case in prior quarters? I can't recall if you gave the numbers or not, but as we think about maybe Q1, Q4, has kind of the commercial headwinds caught up to kind of the residential market? Or have they been commensurate for the past few quarters all long?

好的。好的。完美的。如果可以的話，也許最後一個問題是關於標題的。聽起來本季度商業地產下降 37% 的逆風與住宅地產的情況相當相稱。前幾個季度也是這樣嗎？我不記得你是否提供了這些數字，但正如我們所想，也許第一季度、第四季度，商業逆風是否趕上了住宅市場的某種程度？或者過去幾個季度的表現一直都相當？

Carolyn, I'm happy to start. I think there is some catch-up here. I think in our -- recollection of our prior quarters was that commercial was still coming in strong. And this quarter, we saw it catch-up, to use your words, is my initial reaction. But Carolyn, again, here too, you're closer to the action. So I'll turn it to you.

卡羅琳，我很高興開始。我認為這裡有一些追趕。我認為，根據我們對前幾個季度的回憶，商業廣告仍然表現強勁。這個季度，我們看到它迎頭趕上，用你的話來說，這是我的最初反應。但卡羅琳，在這裡，你也更接近行動了。所以我會把它轉給你。

You're right, Craig. This is the first quarter that it really caught up to residential. But one thing you have to remember with us is that because so much of our revenue comes from our agents, we also have that lag of agency reporting. So that's why you see a lot of it this quarter as well.

你是對的，克雷格。這是它真正趕上住宅市場的第一季度。但您必須記住的一件事是，由於我們的大部分收入來自我們的代理商，因此我們也存在代理報告的滯後性。這就是為什麼你在本季度也會看到很多這樣的情況。

(Operator Instructions). The next question is from John Heagney with Dowling & Partners.

（操作員說明）。下一個問題來自 Dowling & Partners 的 John Heagney。

I think most of my questions were answered. I just have maybe a capital question. And -- particularly in the runoff. So if I look at the contingency reserve, the [stack] contingency reserve as of Q1, it was roughly $110 million, give or take. You upstreamed $35 million of capital out of that entity. I'm assuming then a lot of that, if not all, was another regulatory release of the contingency reserves.

我想我的大部分問題都得到了解答。我可能只是有一個重要的問題。而且——特別是在徑流中。因此，如果我看看應急儲備，截至第一季度的[堆棧]應急儲備，大約為 1.1 億美元，或多或少。您從該實體籌集了 3500 萬美元的資金。我猜想，其中很大一部分（如果不是全部的話）都是監管機構對應急儲備金的又一次釋放。

So that ballpark is $75 million or so left. How should I think about -- or how should we think about that coming down from this point forward? I mean is $20 million, $25 million a quarter over the next year or so the run rate we should assume?

因此，大約還剩下 7500 萬美元左右。我應該如何考慮——或者我們應該如何考慮從現在開始的情況？我的意思是，我們應該假設明年左右的運行率是 2000 萬美元、2500 萬美元一個季度嗎？

John, this is Frank. For this year, I think that's a good estimate. About $25 million a quarter is the plan, and it is subject to regulatory approval. So you're spot on. We cannot just do it. We have to get approval. And we feel comfortable with that for the rest of the year.

約翰，這是弗蘭克。對於今年，我認為這是一個很好的估計。該計劃每季度約 2500 萬美元，尚待監管部門批准。所以你是對的。我們不能只是這樣做。我們必須獲得批准。在今年剩下的時間裡，我們對此感到滿意。

So then essentially...

那麼本質上...

And that would take the total to $110 million for the year, sorry.

抱歉，這將使今年的總額達到 1.1 億美元。

Yes. But then -- so essentially, you would exhaust the contingency reserve in a sense. And then the book of business would just run-off over whatever the period is, another 5 to 7 or so years for the remaining equity?

是的。但從本質上講，你會在某種意義上耗盡應急儲備。然後，無論期限多長，業務賬簿都會流失，剩餘股本還需要 5 到 7 年左右的時間？

I think that's right. I haven't focused on the exact way that contingency reserve is coming on dollar for dollar for dividends. So I just would -- I want to follow up on that. But that -- the time line you're giving here, it feels about right to me.

我認為這是對的。我沒有關注應急準備金以美元換取股息的具體方式。所以我想跟進此事。但是，你在這裡給出的時間表，對我來說感覺是正確的。

Yes, I agree with Frank. The amount of dividend that we would expect next year, I would say is -- will be less than this year. But on the other hand, I wouldn't say it would be 0. If you follow the trend -- you can kind of follow the trend of the dividends that we upstream to the parent company over the last year or 2 and get a feel on how that has tracked.

是的，我同意弗蘭克的觀點。我想說的是，我們預計明年的股息金額將少於今年。但另一方面，我不會說它會是0。如果你跟隨趨勢——你可以跟隨我們在過去一兩年向母公司上游派發的股息趨勢，並感受一下其追踪情況如何。

So maybe more broadly then, because that all makes sense to me. You've had -- you've been able to release some of the excess capital there and basically sort of front load some of the release and dividend and up. How should we think more broadly about capital management going forward? You returned quite a bit. The mortgage has helped. The Title results being a capital-light business has helped.

所以也許更廣泛，因為這對我來說都是有意義的。你已經能夠在那裡釋放一些多餘的資本，並且基本上可以預先加載一些釋放和股息等等。我們應該如何更廣泛地思考未來的資本管理？你回來了不少。抵押貸款有幫助。輕資本業務的標題結果有所幫助。

You've been able to move capital up and out there. The market is sort of shifting. The growth is more P&C side, maybe heavier lines of business from a capital perspective. You take all that together, how are you thinking about your capital return over the next -- '24, '25, maybe beyond?

你已經能夠將資本轉移到那裡。市場正在發生變化。從資本角度來看，增長更多的是財產保險方面，也許是更重的業務線。把所有這些放在一起，你如何看待接下來的資本回報——'24、'25，也許更久？

Well, capital management and more specifically, return of capital to shareholders is a matter that we review with the Board every quarter. And I think the biggest generator of any excess capital has been really the retained earnings coming from the General Insurance Group. And if you look at that trend and those combined ratios and the amount of income that the General Insurance Group continues to contribute, then it would suggest that we will continue to build capital and need to continue to look at every quarter how much capital we have and whether we have excess capital, discuss that with the Board.

嗯，資本管理，更具體地說，股東資本回報是我們每個季度與董事會審查的問題。我認為多餘資本的最大來源實際上是來自普通保險集團的留存收益。如果你看看這一趨勢、這些綜合比率以及普通保險集團繼續貢獻的收入金額，那麼這表明我們將繼續建立資本，並且需要繼續每個季度查看我們擁有多少資本我們是否有多餘的資本，請與董事會討論。

And then as a secondary discussion, in which way did we return that capital to shareholders if we're not putting it to work in new businesses. Then we are -- I mentioned some of the new businesses that are starting to produce business as well as the newest in April, and we're in discussions regarding another business or 2 to get into.

然後作為二次討論，如果我們不將這些資本用於新業務，我們將如何將其返還給股東。然後我們——我提到了一些開始產生業務的新業務以及四月份最新的業務，我們正在討論另一項或兩項業務。

So first order of business is putting that capital to work in a way that we can maximize return to shareholders through us investing that capital into the business. And then the second order of business, if we still deem that we have the excess capital, then discuss that with the Board and the best way to return it.

因此，首要任務就是讓這些資本發揮作用，通過將這些資本投資到企業中，我們可以最大限度地為股東帶來回報。然後第二件事，如果我們仍然認為我們有多餘的資本，那麼與董事會討論這個問題以及返還資本的最佳方式。

The next question is from Ryan Winrick with Guggenheim.

下一個問題來自古根海姆的 Ryan Winrick。

Kind of echoing Greg's comments -- congratulations on the 100-year anniversary and the ringing of the bell next month. And then similar to John's question, you have -- 3 of the past 4 Augusts, you have declared a special dividend with the off year being declared into December. I guess, when you're evaluating your excess capital level, from our end, we're trying to determine the likelihood of another special dividend, do you target certain thresholds when determining that amount that you will not go under, for example? Any commentary would be helpful.

有點呼應格雷格的評論——祝賀 100 週年紀念日和下個月的鐘聲敲響。然後，與約翰的問題類似，在過去 4 個 8 月中，有 3 個 8 月，您宣布了特別股息，並將下一年宣佈為 12 月。我想，當您評估您的超額資本水平時，從我們的角度來看，我們正在嘗試確定另一次特別股息的可能性，例如，您在確定不會低於的金額時是否會設定某些閾值？任何評論都會有幫助。

Sure. So -- well, first thing I would just say is that the timing of those dividends, I wouldn't read anything into that, as I just mentioned in the earlier response. We review capital levels with our Board every quarter. And there is not a particular quarter whereby we focus on making a decision about returning capital.

當然。所以，我要說的第一件事是這些股息的時間，我不會對此進行任何解讀，正如我在之前的回復中提到的那樣。我們每季度都會與董事會一起審查資本水平。我們並沒有在某個特定季度專注於做出有關返還資本的決定。

We ask ourselves that question every quarter. So that's the first thing I would say. The second thing I would say is as we went out in the release and have discussed over the last few years, we have introduced share repurchases in addition -- as an additional tool in our capital management strategy. So over the last couple of years, we've returned a considerable amount of capital through share repurchases.

我們每個季度都會問自己這個問題。這就是我要說的第一件事。我要說的第二件事是，正如我們在過去幾年中發布並討論的那樣，我們還引入了股票回購——作為我們資本管理策略的附加工具。因此，在過去幾年中，我們通過股票回購返還了大量資本。

And therefore, any of that capital that we returned through share repurchases obviously is not available to be returned by a special dividend. So we have introduced that, again, as a tool in our capital management toolbox, and we'll continue to, with the Board, discuss returning capital every quarter. And we know that we have tools to do that.

因此，我們通過股票回購返還的任何資本顯然都不能通過特別股息返還。因此，我們再次將其作為資本管理工具箱中的一個工具引入，我們將繼續與董事會討論每個季度的資本返還問題。我們知道我們有工具可以做到這一點。

If we deem we have excess capital, those tools being still special dividends as well as additional share repurchase authorizations.

如果我們認為我們有多餘的資本，這些工具仍然是特別股息以及額外的股票回購授權。

We have no further questions at this time. I'll turn it back to management for any closing remarks.

目前我們沒有進一步的問題。我會將其轉回管理層以供結束語。

Okay. Well, thank you all very much for participating, and we hope that you enjoy your summer, and we will look forward to talking to you all again next quarter and excited to report our ongoing progress throughout the year. So thank you very much, and have a good day.

好的。好吧，非常感謝大家的參與，我們希望你們度過一個愉快的夏天，我們將期待下個季度再次與你們交談，並很高興報告我們全年的持續進展。非常感謝您，祝您有美好的一天。

This concludes today's conference call. You may now disconnect. Thank you.

今天的電話會議到此結束。您現在可以斷開連接。謝謝。