Key Takeaways:
– Old Republic is selling its mortgage insurance business to Arch Capital Group for $140 million.
– Arch will acquire all of the capital stock of Old Republic’s subsidiary RMIC Companies Inc. and its subsidiaries.
– The acquisition is subject to regulatory approval and is expected to close in the first half of 2024.
– Old Republic expects to receive a final fourth quarter dividend of $25 million from the mortgage insurance segment before the sale closes.
– The sale marks Old Republic’s exit from the mortgage insurance business.
– Old Republic has preserved significant value for shareholders since placing the business in run-off in 2011.
– The company has received over $398 million in dividends from the run-off reserves in the last five years.
– In Q3 2023, Old Republic reported total operating revenue of $1.947 billion, down 7.2% year over year.
– The company recorded a net income of $52.6 million in Q3 2023, compared to a net loss of $91.7 million in Q3 2022.
HousingWire:
Big Four title firm Old Republic is selling its mortgage insurance business to Arch Capital Group Ltd., according to an announcement on Monday.
As part of the $140 million transaction, Arch will acquire all of the capital stock of Old Republic’s wholly owned subsidiary RMIC Companies Inc., and its wholly-owned subsidiaries that together comprise Old Republic’s run-off mortgage insurance business.
The acquisition is still subject to regulatory approval, but it is expected to close during the first half of 2024. Prior to the sale closing, Old Republic said it expects to receive a final fourth quarter dividend of $25 million from the segment.
“We are pleased to announce this definitive exit from the mortgage insurance business. Since placing this business in run-off in 2011, we have been able to preserve significant value for shareholders and we are grateful for the many years of hard work and dedication of our RMIC associates,” Craig Smiddy, the CEO and president of Old Republic, said in a statement. “In the last five years our run-off reserves have developed favorably, enabling us to receive over $398 million of dividends from these subsidiaries, inclusive of the $25 million expected in the 4th quarter.”
During the third quarter of 2023, Old Republic reported total operating revenue of $1.947 billion in Q3 2023, down just 7.2% year over year, and a net income of $52.6 million, compared to a net loss of $91.7 million in Q3 2022.
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Property Chomp’s Take:
Hey there! Let’s talk about the recent news involving Old Republic and their decision to sell their mortgage insurance business to Arch Capital Group Ltd. This move comes as part of a $140 million transaction, with Arch acquiring all of the capital stock of Old Republic’s subsidiary, RMIC Companies Inc.
The sale is still pending regulatory approval but is expected to close in the first half of 2024. Prior to the sale closing, Old Republic anticipates receiving a final fourth-quarter dividend of $25 million from the mortgage insurance segment.
Old Republic’s CEO and president, Craig Smiddy, expressed his satisfaction with the definitive exit from the mortgage insurance business. He highlighted the value preservation for shareholders since the business was placed in run-off in 2011. Over the past five years, Old Republic’s run-off reserves have developed favorably, resulting in over $398 million in dividends from these subsidiaries, including the expected $25 million in the fourth quarter.
In the third quarter of 2023, Old Republic reported total operating revenue of $1.947 billion, a decrease of just 7.2% compared to the previous year. They also achieved a net income of $52.6 million, a significant improvement from a net loss of $91.7 million in Q3 2022.
This strategic move by Old Republic demonstrates their commitment to optimizing their business portfolio and focusing on core operations. By divesting their mortgage insurance business, they can further streamline their operations and allocate resources where they see the most potential for growth and profitability.
Overall, this transaction showcases the dynamic nature of the insurance industry and the strategic decisions companies make to adapt to changing market conditions. Old Republic’s decision to sell their mortgage insurance business marks a significant milestone in their ongoing efforts to enhance shareholder value and strengthen their position in the market.
