Old Republic Reports Record Q4 Earnings

February 5, 2004

Chicago-based insurer Old Republic International Corp. reported its highest ever fourth-quarter and full-year operating earnings. In 2003’s final quarter most of the earnings progress stemmed from Old Republic’s general insurance line, while overall earnings progress for 2003 was aided by further growth in the Company’s general, title and mortgage guaranty segments.

“The solid results achieved by Old Republic’s consolidated operations continue to demonstrate the benefits of managing a balanced book of business in the interest of achieving reasonably consistent growth,” said Al Zucaro, chairman and chief executive officer.

Fourth-quarter 2003 net operating income, which excludes realized investment gains and losses, was $108.2 million, or 59 cents per share, versus $91.5 million, or 50 cents per share in the year-ago period. Full year net operating income was $447.2 million, or $2.44 per share in 2003, compared to $383.8 million, or $2.11 per share in 2002.

Including realized investment gains and losses, net income for the fourth quarter of 2003 totaled $113.9 million, or 62 cents per share, compared to $93.5 million, or 51 cents per share, for the year-ago quarter. For all of 2003, net income rose to $459.8 million, or $2.51 per share, versus $392.9 million, or $2.16 per share, for 2002.

With minor exceptions, substantially all of the growth in fourth-quarter and full-year 2003 net income stemmed from greater underwriting and service income in Old Republic’s three largest segments.

Falling investment yields during the past 24 months in particular offset the benefits of strong operating cash flows on the invested asset base, and resulted in relatively minor increases in investment income. Net realized gains from dispositions or permanent reductions in the value of equity and fixed maturity security holdings were moderately higher in both the final quarter and full year 2003 vis-a-vis 2002.

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