More Bad News for RMIC
Old Republic International Corp.'s mortgage guaranty business lost $163 million for the fourth quarter and $678 million for the year, 48% worse and 160% worse than the same periods one year ago, as claims costs intensified throughout the year.
Claims costs were up 17% over the prior year for the fourth quarter at $262 million and up 38% for the full year at $1.1 billion.
Republic Mortgage Insurance Co. has been operating in run-off since September and was placed under a supervisory order on Jan. 19 that limits claims payments to $0.50 per $1.
ORI says it will not put any more capital into RMIC and as a result its losses are limited to its $40.5 million investment in the unit as of Dec. 31, 2011.
Still ORI added its forecasts through 2020 continue to reflect RMIC's book of business being profitable.
ORI also continues to harbor ambitions of being in the mortgage insurance business. But in its earnings, it stated any possibility of getting back into the business were dependent on the future structure of the secondary market and "the establishment of industry-wide risk management disciplines that address the long term catastrophe exposures of those financial guarantees."
ORI did earn $55 million for the quarter as a result of investment gains; otherwise, it had an operating loss of $28 million. For the year, it had a net loss of $140 million and an operating loss of $219 million.
The title insurance business had $18 million in pre-tax profits for the fourth quarter, up from $8 million for the same period in 2010. For the full year, it earned $36 million, up from $9 million in 2010.