Marilynn Meek - MWW Group Aldo Zucaro - Chairman and Chief Executive Officer Scott Rager - President and Chief Operating Officer Rande Yeager - Chairman and Chief Executive Officer, Old Republic Title Insurance Companies Karl Mueller - Senior Vice President and Chief Financial Officer

Christine Worley - JMP Securities

Thank you, operator. Good afternoon, everyone, and thank you for joining us today for Old Republic’s conference call to discuss second quarter 2015 results.

This morning, we distributed a copy of the press release. If there is anyone online who did not receive a copy, you can access it 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 dated July 23, 2015. Risks associated with these statements can be found in the Company’s latest SEC filings.

Participating in the call, we have Scott Rager, President and Chief Operating Officer; Rande Yeager, Chairman and Chief Executive Officer of Old Republic Title Insurance Companies; Karl Mueller, Senior Vice President and Chief Financial Officer; and Al Zucaro, Chairman and Chief Executive Officer. At this time, I’d like to turn the call over to Al Zucaro for his opening remarks.

Please go ahead, sir.

Okay. Well, thank you, and welcome again to this discussion of our company’s latest results and as was just indicated after the remarks we’ll open up the session to field any questions there are or that may be left unanswered by either the press release itself or the discussion we’re about to have.

We’ll handle this visit as we have in the past by covering matters specific to each of our operating segments and will do so in the same order as the discussion appears in the news release. So that said, why don’t we start with you, Scott, and take up the General Insurance business discussion.

Okay?

Thanks, Al. The General Insurance group experienced 5.6% growth in net premiums earned for the quarter year-over-year, and an increase of 6.4% for 2015 year-to-date.

We currently believe that these growth rates should hold at or near those levels through the remainder of the year. This growth rate obviously varies – excuse me, among the various coverages and product line.

While rate increases should begin to moderate going forward, we still expect organic growth and stable retention rates to continue on existing accounts. We also have reasonable opportunities or should have reasonable opportunities for new business such that most of our operations should experience steady growth for the foreseeable future.

Addressing rate trends and with the understanding that we operate in several specific marketplaces with varying product mixes, we are seeing rate levels moderating in an increasing more stable economic, but still very competitive environment. Some of our operations are achieving low to mid single digit production growth.

In other parts of the business that have posted less than acceptable performance in the past couple years or more we’re having to retrench some in order to reorient the business mix on both geographical and product type standpoints. As we have noted before, we have different markets, different products, and no one size fits all.

Year-to-date, the composite ratio declined from 98.2% in the second quarter of 2014 to 97.1% this year. And the loss ratio was down a bit and the expense ratio ticked up, but overall a better composite for the quarter and year-to-date.

Commercial auto performance improved over the first quarter, resulting in a year-to-date loss ratio of 77.5% more in line with our expectations. The workers’ compensation loss ratio is down a couple of points year-to-date from 2014, to 81%, and we continue our efforts to return that ratio to a more historic levels in the 70s.

General Liability is performing much better year-over-year. With this smaller line, severity and claim development are the usual performance drivers as we have noted before, trends are both better thus far.

The line [ph] posted a loss ratio of 67.1% versus 81% in 2014 year-to-date. Remaining product lines have performed well through mid-year as well, thus resulting in an improved composite ratio for the group.

We continue our efforts where appropriate in our several markets to emphasize more loss sensitive product offerings versus guaranteed cost products. As we’ve explained before, our results tend to improve as the insured shares in the risk of loss, and has a real incentive to observe good loss control practices.

Looking ahead in the near-term, we believe our respective markets will maintain their present competitive environments, as they have to-date for the remainder of the year. Our focus remains on favorable underwriting results and achieving the objectives outlined in the five-year plan we established as 2012 came to an end.

And with that, I’ll turn the meeting over to Rande Yeager for a Title group update.

All right. Thank you, Scott.

Well, we’re very happy with the latest report we’re able to give here on the Old Republic Title Insurance business. Title recorded its best quarterly profit ever, the previous record dates all the way back to the third quarter of 2003.

Our record performance in the latest quarter is even more remarkable when you consider the 2003’s third quarter, mortgage origination market totaled nearly $1.2 trillion, while 2015 second quarter, originations were only about $400 billion, about a third of what had been recorded in 2003. As we reported – Title segment registered a $47.7 million pre-tax profit in comparison to 2014 second quarter profit of $26 million, were up 83.3%.

Year-to-date, pre-tax operating income was up about $33 million compared to 2014, rising from $30.8 million to $63.7 million. This represents year-to-date growth of about 106%.

As we can see in the release, premiums and fees were up a little more than 19% from $421 million to $503 million. And so far this year, the premiums and fees are approximately 14%, or approximately 14.3% from $815 million to $931 million in the latest quarter.

Closed orders from our direct operations increased 22%, while independent agency production was up about $58 million or close to 20%. Vertical [ph] operations continue to exceed our expectations.

Revenue from commercial orders was up almost 20% relative to comparable quarters, and now accounts for over 16% of our total premium revenue. Our national market share has exceeded 15% early in the year so far in [ph].

Taking a look at the factors that drive profit margins, we note that claims trends continue to improve. If you look at table – the table on page three of the release, you can see the claims ratio dropped from 6% to 5% in the quarter, and 5.3% year-to-date.

The expense ratio was also declined as we obtained significant benefits from operating leverage. Our results are benefiting number of things, low interest rates, and improving economy and more purchase transactions relative to refinances.

We have little reason to believe that much will change in the near-term. Interest rates, seasonal fluctuations, regulatory issues seem to be stable.

Consumer Financial Protection Bureau was to release new rules next month in August. But that’s now been delayed till October.

It was supposed to be the hiccup that many predicted would affect the third quarter money market, and it probably won’t have much impact this year. Sum total of all the factors we cited leads us to be optimistic about our potential for growth and the Title segment’s contributions to the Old Republic family companies.

And with that very good thought, I’ll turn the meeting back to Al Zucaro.

Okay. So let’s see – let’s take a look at the Pages 3 and 4 with these if you have it there.

And looking at those numbers with respect to the RFIG run-off that’s – it’s obviously clear that we’re not yet out of the woods with regard to the litigation matters we’ve been dealing with since the Great Recession started in 2007 or thereabouts. Periodically, as you might expect, as is expected of us, we do revisit the trends in the mortgage insurance and CCI litigation.

As you know, we have two separate cases even though they are both with the same major banking institution. But we do look at those case trends in terms of the litigation costs, as I say.

And as a result, we tend to respond as necessary in the light of changing circumstances, and more importantly, the advancing fees – legal fees that we incur in order to assess the estimable costs of these ongoing cases. In last year’s second quarter, for instance, that period reflected a substantial charge for the settlement of a CCI case, in an amount that exceeded what we had earlier felt where well-founded cost expectations.

On the other hand in this year’s second quarter, we once again took pencil to paper, so to speak, and concluded that we needed to put up some more money in what we referred to in the trade as unallocated loss adjustment expense reserves. Those are reserves set aside to pay expenses of litigation in this case or even indemnity as it might occur.

We still believe that with respect to these cases that we are reasonably well-reserved to address the ongoing litigation, and we still have every expectation of resolving these matters in the, I would suspect, the intermediate term, which would imply, hopefully, that we can get this done within the next 12 months as quickly as we can. The results of the – on the other hand, the results of the run-off book, ex the litigation aspects of it that I just referred to, are coming in pretty much as we’ve expected quarter in and quarter out for the last several years.

As it’s generally known, obviously, housing values are perking up in many markets throughout the nation, and of course, the job situation which is always important to most people’s ability to make good on their debt obligations, those keep improving fairly consistently. So this is having a continuing beneficial effect on both the emergence of new mortgage defaults as well as the ability to cure previously reported and sometimes this languishing defaults.

So these are the major reasons that previously established claim reserves have fairly, regularly worked out positively and have produced the types of current claim cost relief and the lowered claim ratios that you can readily see in the statistics that we have in the first paragraph on page four of this morning’s release. So the bottom line for this run-off book is this, as we see it today.

And that is that as quickly as we can read ourselves of this persisting litigation that we’ve noted, we should be able to achieve the soft easy landing that we’ve contemplated for these two run-off books of business in the so-called RFIG run-off segment. And when we do that, we should be able to move our concentration on tension to a more, our productive efforts in the interest of all of our stakeholders, whether they would be in and among the RFIG run-off or elsewhere in our enterprise.

So, maybe, Karl, you can pick up and speak to some financial matters as we’ve planned.

Very good. Thank you.

Today’s press release reflects very little change of significance in Old Republic’s financial condition as of June 30. The cash and invested asset balance of $11.3 billion remain largely consistent with amounts reported at the end of December, and is down slightly from March 31st levels.

As shown on the tables on page five of the release, the cost basis of the investment portfolio increased by approximately, $209 million during the first six months of this year. This growth in the invested asset base was substantially offset by a general decline in a fair value of the portfolio during the second quarter of this year, in particular.

The portfolio composition remained steady at June 30 with approximately 82% allocated to fixed maturity and short-term investments and the remaining 18% towards equity securities. Investment income rose by a little more than 9% in this year’s second quarter to $93 million and by 9.7% to $184 million for the first-half of 2015.

This high level investment income is due primarily to the greater invested asset balances accompanied by an increase in the overall portfolio. The fixed income portfolio’s credit quality retained its overall A rating at the end of June, and the average life of the fixed income portfolio remains at approximately five years.

Consolidated claim reserves were essentially flat at the end of June compared to both the March and prior year-end balance sheets. For the first six months of 2015 and 2014, consolidated claim costs have developed slightly favorable.

Comparative reserve development percentages for the General Insurance group are included in this morning’s release. As we noted, the reserve development was slightly deficient in the second quarter and for six months of both years.

I would say consistent with the past several quarters, we experienced favorable developments in the mortgage insurance prior year reserves, as Al referred to in his earlier comments. Finally, the title reserves developed favorably during the quarter, resulting from the recovery of losses paid in prior years.

As in this, the second quarter loss ratio would remain largely consistent with loss ratio reported during the first quarter of this year. Shareholders’ equity as of June 30 was $3.9 billion or $15.16 per share, which was essentially unchanged from December 31 and down $0.32 per share for the second quarter.

As we’ve shown in the book value per share table that’s on Page 6 of the release, we continue to add book value by virtue of the net operating income and realized gains that are in excess of the quarterly cash dividends that we pay to our shareholders. As the table readily shows, the volatility in reported book value share is driven largely by changes to the unrealized gains and losses on the investment portfolio.

And finally, the capitalization ratios shown at the bottom of Page 6 are relatively unchanged at the end of June by comparison to the prior period. So that’s the financial highlights that I wanted to cover.

So let me turn this call back to Al Zucaro for few closing remarks before we go to the Q&A.

Okay. So when you wrap up all these comments from the four of us here, we do conclude that we have a very good start on the year.

In General Insurance, as Scott Rager mentioned before, premium growth should pretty much track the trends that we’re seeing in the first-half of this year. And underwriting and investment income, that should also continue to trend higher.

A great deal of the underwriting improvement for the remainder of this year should most likely be driven by the much stronger claim reserve base that we closed 2014 with. And therefore, we should not have the level of adverse development that we contended with in last year’s second-half and much more accentuated, as some of you who follow us may have noted in last year’s fourth quarter.

So I think we’re going to have an easier time in terms of loss ratio expectations for the rest of this year. Rande Yeager, course gave a good basis for our optimism in the Title business.

And then finally, absent any unexpectedly adverse resolution of the litigation situation in our run-off business, that business also should produce moderately positive, though declining results. Again, that’s to be expected in a run-off book, the premium base continues to decline as the in-force gets lopped off.

And as a result, particularly in light of the better economy, better housing and so forth, the remaining book should produce some sound positive results. So when we wrap up all this together, it does make us confident that we are likely to post a good set of operating numbers for all of 2015.

So with these thoughts, why don’t we open up the meeting to any questions that you may have. Why don’t you, anybody with questions direct them to me and I’ll bounce them off, Rande or Scott or Karl or myself as necessary.

Thank you very much. I was wondering if you could talk about the competitive landscape in the workers’ compensation line, and how you feel about the rates that you’re getting there versus the loss trends that you’re currently seeing?

Well, Scott, do you want to address that? I think, you tried to make a few comments about it before, but go ahead.

Yes, in terms of the competitive arena, Christine, it varies marketplace-to-marketplace in the several specialty operations we have. It’s a – I think you can say though that no matter what arena you’re in, and it’s always a competitive marketplace.

In terms of the rates right now, obviously, we’re running about 81, as I indicated. On loss costs, we would like to see that into the 70s.

So, by and large, when you look at the rates line-to-line geographically product line, specialty line, there’s a lot of moving parts on all this and nothing is the same. But in general, we’d like to see rate increases and in the operations from the low to mid single-digit increases for the remainder of the year, if we could.

And our retention rates are good, so that should play well for us. Obviously, the performing books maybe less than that and the books with higher claim costs would be more.

But typically, we would see low to mid single-digits.

Okay. Thank you.

And then…

Did that answer your question? Good.

It does, it does. Thank you.

And the just looking at the General Liability line, was there any favorable development in that line in this quarter?

Generally, that line is, Karl is looking actually at the development issues on that, but I would say, generally, as I indicated that line is typically driven by severity. And because of its size, it doesn’t take many severe occurrences to run that up to where it has been over the last two or three years.

Typically, that line will run about where it is. If you look at it historically on the on the exhibit we provided through 2012, it runs in the mid-60s.

And so we really see this as the normal loss ratio placement that we would like to see on this as opposed to the results that we posted the last two or three years. So it is…

Okay. So…

Let’s [ph] go ahead [Multiple Speakers]

I guess, you don’t view the 70% then, if I look at the 10-year weighted average that you give in the supplement, the 70% then you feel is a bit above where the line should be running?

Where we see it running is to – go ahead. Go ahead and answer it out [ph].

No, you go.

Okay. I just – I didn’t want to step on anybody in the conversation.

If you look at those ratios, yes, the tenure average is 70. But if you look at the last two or three years they’ve been on the 80s, the upper 70s, and 80s.

Historically, that line is run in the mid-60s for us, and that’s where – that’s kind of where the target is that we would like that to be is in the upper 60.

Okay. Thank you very much.

You bet.

Okay. Thank you.

Well, I guess, we must be doing a pretty good job of explaining what’s happening to our business since there are no further questions. And so, therefore, we’ll bring the meeting to a conclusion.

And as always, we appreciate everyone’s participation in it, and look forward to our next visit sometimes in October, following the third quarter release of our earnings. On that note, we’ll bid you a good afternoon.