Old Republic International Corp., Chicago, had net losses of $13 million for the fourth quarter, including a $110 million pretax operating loss for its mortgage insurance business. However, these are still an improvement over a $37 million corporate net loss and a $126 million pretax operating loss for the same period in 2009.
For the full year, ORI had net income of $30 million vs. a net loss of $99 million in 2009. The mortgage guaranty business lost $261 million on a pretax basis in 2010, a 46% improvement over the $486 million loss for all of 2009.
Lower claim costs and better management of operating expenses drove the year-over-year improvement in the mortgage insurance business.
Fourth quarter and full year claim costs were significantly lower than for the same periods in 2009, ORI said, because of downward trends in newly reported and outstanding delinquencies. Another contributing factor was the historically high rate of rescissions and denials, although these are gradually declining.
ORI's title insurance business had a pre-tax profit of $8 million for the quarter and $9 million for the year vs. $1.5 million and $2 million the year before.
But the fourth quarter results were hurt by a $4 million charge due to an insurance counterparty balance that ORI deems uncollectible.
ORI owns common stock in two of its MI competitors, MGIC Investment Corp. and The PMI Group. The current holdings have an original cost of $313 million, which ORI wrote down to $76 million in 2008.
The fair value of the investment at the end of last year is now $168 million, up from $131 million one year prior.
The pretax unrealized investment gain for the full year was $68 million and since ORI took the writedown, $92 million.
