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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