Old Republic Net Income Plummets After Accounting Rule Change

Monday, January 28, 2019 | 0

Old Republic International Corp. reported a $106.5 million loss in the fourth quarter of 2018, but still ended the year with $370.5 million in profits.

That compares to $299.6 million in net income during the fourth quarter of 2017 and $560.5 million for full year 2017.

The holding company said its fourth-quarter earnings report was influenced by a new Financial Accounting Standards Board ruling that requires unrealized investment gains or losses in the value of securities to be used in determining pre- and post-tax income.

Old Republic reported a $311.6 million loss in the fair value of securities in the fourth quarter, while realizing a $158.8 million gain from insurance sales.

The company downplayed the significance of the losses.

"In Old Republic's view, such short reporting time frames do not comport well with the long-term nature of much of its business," the company said.

Old Republic reported $1.45 billion in earned net premiums during the fourth quarter, up from $1.44 billion in the fourth quarter of 2017. For the full year, Old Republic took in $5.7 billion earned net premiums, compared to $5.5 billion in 2017.