$ORI (+0.03%) - Old Republic International
The company has announced the implementation of a non-qualified deferral plan for select executives and highly compensated employees effective January 1, 2025. This strategic move, recently announced in a filing with the SEC, is designed to align with Section 409A of the Internal Revenue Code and provide key personnel with a structured option to defer compensation.
The plan allows participants to defer a portion of their compensation while keeping their contributions fully vested at all times. Old Republic International may also elect, at its discretion, to make contributions to participants' accounts, which contributions are subject to adjustments based on hypothetical investment returns or losses. These accounts are designed to function as unfunded and unsecured promises to pay and to position participants as unsecured general creditors on these obligations.
Under the terms of the plan, no participant or beneficiary may post expected payments as collateral, so these indemnities are solely promises to make future payments. The Company has clarified that all funds set aside for this plan remain general, unpledged and unrestricted assets of Old Republic International.
The introduction of this deferred compensation plan is part of Old Republic International's broader effort to manage and align the compensation of its senior executives with tax regulations. It is a common practice for large companies to provide additional financial planning tools to their executive teams and other highly compensated employees.
In other recent news, Old Republic International Corporation reported an increase in its second quarter pre-tax operating income to $254 million from $227 million a year ago.
The General Insurance segment reported a 10% increase in pre-tax operating income, while the Title Insurance segment reported a significant 32% increase. These developments underscore Old Republic's continued investment in technology and new underwriting subsidiaries.
The company expects continued growth and profitability in both insurance segments for the remainder of the year. Old Republic has also returned significant amounts of capital to its shareholders and expects this trend to continue.
While three out of four subsidiaries in the General Insurance sector are not yet profitable due to high costs relative to premium production, the company is making strategic efforts to grow its fee-based business and increase efficiency through investments in technology.
Analysts emphasize the company's conservative approach to claims forecasting and its goal to keep the combined ratio between 90 and 92.5 percent for both insurance segments.
In addition, Old Republic plans to reduce the expense ratio of the title insurance segment by increasing its size and sales. These recent developments indicate that the company is managing its segments effectively and is well positioned for future growth.
Source: https://www.investing.com/