Old Republic International Corp., Chicago, posted a net profit of $57 million in the second quarter, a major improvement from the same period last year, and another sign that the beleaguered MI industry may be on the road to recovery.
ORI owns Republic Mortgage Insurance Co., but also has investments in other residential-related businesses, including title insurance. In 2Q09 it lost $16 million.
Earlier this week, the nation's largest MI, MGIC Investment Corp., surprised the industry and posted its first quarterly profit in three years.
Even though all of ORI made a profit, its MI unit had an operating loss - but it was only $22 million, compared to $138 million of red ink in 2Q09. The company said the improved showing was due to lower provisions for outstanding claims, plus the positive effects of largely non-recurring captive reinsurance commutations and terminations of insured mortgage pools. (The termination of those contracts reduced the pretax loss by nearly $27 million.)
RMIC saw its delinquencies improve to 16.8% vs. 18% in the first quarter. In the quarter RMIC wrote new MI coverage of $964 million, compared to $748 million in the first quarter — but less than half of the $2.6 billion written in the 2Q09.
The entire company made a profit due to its other insurance divisions which includes various forms of liability insurance and financial indemnification coverage.
