Cuộc họp báo cáo kết quả kinh doanh quý 3/2026 của Old Republic (ORI): Phí bảo hiểm chuyên biệt tăng, tỷ lệ kết hợp đạt 96,1%

Các điểm chính

• Old Republic International đã báo cáo lợi nhuận hoạt động thuần quý 3/2026 đạt 181 triệu USD, tương đương 0,73 USD trên mỗi cổ phiếu, so với 197 triệu USD, tương đương 0,78 USD trên mỗi cổ phiếu cùng kỳ năm ngoái.
• Lợi nhuận hoạt động trước thuế hợp nhất giảm xuống 227 triệu USD từ 248 triệu USD, trong khi tỷ lệ kết hợp tăng từ 95,3% lên 96,1%.
• Phí bảo hiểm thuần đã viết của mảng Bảo hiểm Chuyên biệt tăng 10,5%. Nếu không tính ECM và phần tăng giá bán lẻ của mảng bảo hành ô tô, mức tăng trưởng là 4,4%.
• Mảng Bảo hiểm Chuyên biệt đạt 204 triệu USD lợi nhuận hoạt động trước thuế và tỷ lệ kết hợp 96,0%. Giá bảo hiểm xe thương mại tăng ở mức khoảng 15%, tiếp tục cao hơn đánh giá của ban lãnh đạo về xu hướng tổn thất.
• Mảng Bảo hiểm Quyền sở hữu tạo ra 50 triệu USD lợi nhuận hoạt động trước thuế, tăng từ 46 triệu USD, với tỷ lệ kết hợp 96,1%. Doanh thu từ kênh đại lý tăng 9%, trong khi doanh thu trực tiếp đi ngang.
• Ban lãnh đạo dự định duy trì tỷ lệ kết hợp của mảng Bảo hiểm Chuyên biệt ở mức bằng hoặc dưới 95% trong suốt chu kỳ giá giảm, mặc dù nguyên tắc khai thác bảo hiểm nghiêm ngặt có thể hạn chế mức tăng trưởng phí bảo hiểm.

Dữ liệu tài chính trọng yếu

Old Republic đã chi 76 triệu USD tiền cổ tức và mua lại 114 triệu USD cổ phiếu trong quý. Công ty đã mua lại thêm 60 triệu USD sau khi kết thúc quý, còn lại khoảng 460 triệu USD theo hạn mức ủy quyền hiện tại.

Kết quả kinh doanh và hoạt động

Bảo hiểm Chuyên biệt

Tỷ lệ kết hợp 96,0% của mảng Bảo hiểm Chuyên biệt bao gồm tỷ lệ tổn thất 64,0% và tỷ lệ chi phí 32,0%. Biến động dự phòng thuận lợi từ năm trước đóng góp 0,8 điểm phần trăm, giảm từ 3,4 điểm phần trăm trong quý 3/2025.

Phí bảo hiểm thuần đã viết mảng xe thương mại tăng 5,7%, trong khi tỷ lệ tổn thất tăng từ 68,3% lên 71,0%. Ban lãnh đạo đã đạt được mức tăng giá khoảng 15% và duy trì tỷ lệ giữ chân khách hàng gần 80%. Mảng kinh doanh này đã ghi nhận ít nhất 16 quý liên tiếp biến động dự phòng thuận lợi từ năm trước.

Phí bảo hiểm thuần đã viết của mảng bồi thường cho công nhân tăng 7%, và tỷ lệ tổn thất cải thiện từ 63,8% xuống 62,7%. Công ty đã giảm giá ở mức một chữ số thấp, với lý do mức độ nghiêm trọng ổn định, tần suất giảm và tiền lương tăng trưởng.

Bảo hành ô tô tiếp tục là động lực tăng trưởng chính. Ban lãnh đạo cho biết mảng kinh doanh này sẽ tiếp tục mở rộng ở tốc độ đáng kể và chỉ ra rằng phí bảo hiểm thuần hàng năm đạt 600 triệu đến 700 triệu USD trong vài năm tới—và có thể nhiều hơn nữa—là điều hoàn toàn có thể.

Thương vụ thâu tóm ECM đã hoàn tất trong quý và làm tăng giá trị sổ sách trên mỗi cổ phiếu cũng như lợi nhuận trên mỗi cổ phiếu. Ban lãnh đạo cho biết tỷ lệ kết hợp của ECM nằm trong phạm vi mục tiêu của công ty. Việc dỡ bỏ thỏa thuận chia tỷ lệ (quota-share) của ECM dự kiến sẽ hỗ trợ cả phí bảo hiểm thuần và lợi nhuận.

Các công ty hoạt động mới hơn của Old Republic tăng trưởng khoảng 40% từ đầu năm đến nay. Những công ty này hiện tạo áp lực lên tỷ lệ kết hợp do chi phí vẫn ở mức cao so với doanh số phí bảo hiểm, nhưng ban lãnh đạo kỳ vọng đóng góp của họ sẽ cải thiện khi mở rộng quy mô.

Bảo hiểm Quyền sở hữu

Mảng Bảo hiểm Quyền sở hữu hưởng lợi từ mức tăng 9% doanh thu đại lý, trong khi các hoạt động trực tiếp đi ngang. Phí bảo hiểm do đại lý tạo ra chiếm 81% doanh thu bảo hiểm quyền sở hữu, tăng từ 80% của một năm trước đó.

Phí bảo hiểm thương mại chiếm 24% phí bảo hiểm thu được, so với 26% trong quý 3/2025. Ban lãnh đạo mô tả chuỗi giao dịch thương mại tiềm năng là mạnh mẽ và đa dạng trên nhiều phân khúc bất động sản.

Tỷ lệ tổn thất mảng bảo hiểm quyền sở hữu cải thiện 60 điểm cơ bản nhờ biến động dự phòng thuận lợi từ năm trước cao hơn. Tỷ lệ chi phí 94,0% cao hơn một chút so với 93,7% năm ngoái. Tỷ trọng đại lý lớn hơn đã làm tăng 1,7 điểm phần trăm vào tỷ lệ chi phí, nhưng phần lớn được bù đắp bởi 1,4 điểm phần trăm lợi ích từ hiệu quả hoạt động và kiểm soát chi phí.

Tỷ lệ kết hợp mảng bảo hiểm quyền sở hữu từ đầu năm đến nay cải thiện lên 96,9%. Old Republic đang tiếp tục triển khai hệ thống Qualia, bắt đầu từ năm 2026 và dự kiến kéo dài đến hết năm 2027.

Triển vọng từ ban lãnh đạo

Ban lãnh đạo cho biết họ hy vọng mảng Bảo hiểm Chuyên biệt sẽ kết thúc năm 2026 trong khoảng mục tiêu tỷ lệ kết hợp từ 90% đến 95%. Trong thị trường dự kiến sẽ hạ nhiệt trong vài năm tới, công ty có kế hoạch duy trì tỷ lệ này ở mức hoặc dưới 95% bằng cách chú trọng vào tính phù hợp của giá cả và kiểm soát chi phí.

Nếu không tính phần tăng giá bán lẻ của mảng bảo hành ô tô, ban lãnh đạo đang nỗ lực duy trì tỷ lệ chi phí mảng Bảo hiểm Chuyên biệt dưới 30%. Trong 9 tháng đầu năm 2026, tỷ lệ này ở mức dưới ngưỡng đó, trong khi quý 3 đạt khoảng 30%.

Đối với mảng Bảo hiểm Quyền sở hữu, mục tiêu dài hạn vẫn là tỷ lệ kết hợp dưới 95%. Ban lãnh đạo tập trung vào hiệu quả hoạt động và mở rộng biên lợi nhuận khi nền tảng Qualia được triển khai.

Công ty kỳ vọng ECM và mảng bảo hành ô tô sẽ tiếp tục đóng góp vào cả doanh thu và lợi nhuận trong các quý tiếp theo. Những nhận định này thể hiện kỳ vọng của ban lãnh đạo và vẫn phụ thuộc vào các điều kiện khai thác bảo hiểm, giá cả, sản lượng giao dịch và thời tiết.

Rủi ro và các mảng cần theo dõi

• Việc lạm dụng hệ thống pháp lý tiếp tục làm gia tăng mức độ nghiêm trọng của trách nhiệm pháp lý, đặc biệt trong mảng xe thương mại và trách nhiệm chung.
• Mảng trách nhiệm chung và bồi thường tài chính ghi nhận biến động dự phòng bất lợi gia tăng trong quý.
• Lãi suất thế chấp cao hơn tạo ra sự không chắc chắn cho sản lượng giao dịch bảo hiểm quyền sở hữu nhà ở, mặc dù hoạt động thương mại vẫn mang tính hỗ trợ.
• Điều kiện mảng bảo hiểm quyền sở hữu nhà ở có sự khác biệt đáng kể theo địa lý, làm hạn chế tính hữu ích của các hoạt động trực tiếp như một chỉ báo thị trường rộng lớn.
• Chu kỳ giảm giá mảng tài sản và thiệt hại có thể làm giảm mức tăng trưởng phí bảo hiểm. Nếu doanh thu giảm, tỷ lệ chi phí và tỷ lệ kết hợp có thể tăng.
• Khoản chi phí tổn thất tín dụng 20 triệu USD làm tăng tỷ lệ chi phí mảng Bảo hiểm Chuyên biệt thêm 1,4 điểm phần trăm. Ban lãnh đạo mô tả đây là sự kiện đơn lẻ ở cấp độ chương trình và cho biết họ không kỳ vọng sẽ phát sinh thêm.
• ECM chịu rủi ro thời tiết nhiều hơn so với danh mục tổng thể của Old Republic, mặc dù kết quả thời tiết thuận lợi trong kỳ báo cáo.

Điểm nhấn phần Q&A với chuyên gia phân tích

Các chuyên gia phân tích tập trung vào việc liệu tăng trưởng của ECM và mảng bảo hành ô tô có kéo dài hay không. Ban lãnh đạo cho biết cả hai sẽ mang lại động lực thúc đẩy liên tục thay vì lợi ích một lần, nhờ sự hỗ trợ từ khả năng tiếp cận vốn của ECM và việc loại bỏ thỏa thuận chia tỷ lệ.

Về chi phí, ban lãnh đạo nhấn mạnh rằng khoản tổn thất tín dụng 20 triệu USD là trường hợp rất hiếm khi xảy ra và không mang tính hệ thống. Nếu không tính phần tăng giá bán lẻ mảng bảo hành ô tô và khoản chi phí tổn thất tín dụng, công ty coi tỷ lệ chi phí mảng Bảo hiểm Chuyên biệt từ đầu năm đến nay là mức đại diện hơn.

Khi được hỏi về chu kỳ mảng tài sản và thiệt hại, ban lãnh đạo tái khẳng định định hướng tập trung vào việc duy trì mức giá phù hợp với rủi ro thay vì bảo vệ quy mô phí bảo hiểm. Mức tăng giá mảng xe thương mại và trách nhiệm chung vẫn duy trì ở khoảng 15%, nhưng ban lãnh đạo thừa nhận rằng tăng trưởng doanh thu có thể suy yếu khi cạnh tranh tăng lên.

Đối với mảng Bảo hiểm Quyền sở hữu, ban lãnh đạo cho biết sự tăng trưởng mạnh mẽ trong các giao dịch thương mại đang bù đắp một phần áp lực từ mảng nhà ở do lãi suất thế chấp cao hơn. Hoạt động tái tài trợ không chiếm phần lớn trong danh mục quyền sở hữu của Old Republic, do đó tác động hạn chế đến kết quả chung.

Toàn văn biên bản cuộc họp báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Hello, everyone. Thank you for joining us, and welcome to Old Republic International Third Quarter 2026 Earnings Conference Call.

[Operator Instructions]

I will now hand the call over to Joe Calabrese with the Financial Relations Board. Please go ahead.

Joe Calabrese

Thank you. Good afternoon, everyone, and thank you for joining us for the Old Republic conference call to discuss third quarter 2026 results. This morning, we distributed a copy of the press release and posted a separate financial supplement. Both of the documents are available on our Republic's website at oldrepublic.com.

Please be advised that this call may involve forward-looking statements as discussed in the press release dated October 22, 2026. The assumptions, uncertainties and risks exist that may cause results to differ materially from those in these forward-looking statements. For more information on these assumptions, uncertainties and risks, -- please refer to the forward-looking statements discussion in the press release and the company's other recent SEC filings and the risk factors discussed in the company's most recent Form 10-K and other recent SEC filings.

You may also include references to net income, excluding net investment gains or net operating income, a non-GAAP financial measure in our remarks or in responses to questions. GAAP reconciliations are included in the press release. Presenting on today's conference call will be Craig Smiddy, President and CEO; and Frank Sodaro, Chief Financial Officer; and Carolyn Monroe, President and CEO of Old Republic's National Title Insurance Group. Management will make some opening remarks, and then we'll open the line for your questions.

At this time, I'd like to turn the call over to Craig. Please go ahead, sir.

Craig Smiddy

Okay. Joe, thank you, and good afternoon, everyone, and welcome again to Old Republic's Third Quarter Earnings Call. During the quarter, we produced $227 million of consolidated pretax operating income, and that compares to $248 million and our consolidated combined ratio was 96.1%, and that compares to $95.3 million. Our annualized operating return on beginning equity continues to stand at 12.1%, that's identical to last quarter.

And for the first 9 months of the year, growth in book value per share, including dividends, at 5.7%. We continued to benefit from favorable prior year reserve development, both in specialty insurance and title insurance and we think this continues to reflect our underwriting and reserving discipline. And as usual, Frank will provide more detail on reserve development in a few minutes. Specialty Insurance net premiums earned were 9.7% higher compared to the third quarter of $25 million -- but later in the fall, when I discuss specialty, I'll provide a little more context around that premium growth for you. Specialty produced $204 million of pretax operating income and that compares to $208 million with a combined ratio of 96%, which compares to 94.8%.

For specialty Competition remains active across much of the marketplace, although conditions do vary by line of coverage and legal system abuse continues to put pressure on severity loss trends on our liability lines of coverage. And frankly, those trends are more relevant to us than the competitive environment. In title, title net premiums and fees earned were 7.3% higher compared to the third quarter of '25 and title produced $50 million of pretax operating income compared to $46 million with a combined ratio of 96.1% compared to 96.4%.

So while title continue to produce solid results, the recent increase in mortgage interest rates does create some uncertainty regarding transaction volumes as we go forward. But we think our title business has demonstrated over many decades and ability to remain profitable and adapt through a variety of housing and mortgage rate environments. And of course, Carolyn will provide additional perspective on the market and titles operating results later in the call.

So with that, Frank, I think I'll turn the discussion over to you, and then you can turn it back to me to discuss specialty, and we'll follow that with Carolyn, who will discuss the title. So Frank, over to you.

Francis Sodaro

Thank you, Craig, and good afternoon, everyone. This morning, we reported net operating income of $181 million for the quarter compared to $197 million last year. On a per share basis, comparable quarter-over-quarter results were $0.73 compared to $0.78.

Starting with investments. Net investment income increased 1.5% in the quarter. However, if you exclude a few unique investment charges, net investment income would have increased by about 4%. The increase was due to a larger investment base, partially from the timing of our debt refinancing and to a lesser extent, higher bond yields. Our average rate on corporate bonds acquired during the quarter was 5.4% compared to the average yield rolling off of about 4.4%. The total bond portfolio book yield ended the quarter at nearly 4.9%, up about 10 basis points from year-end.

Turning now to loss reserves. Overall, the consolidated combined ratio in the quarter benefited 1.1 points from favorable development compared to 2.5 points of benefit last year. This was a result of higher favorable development from title insurance and a lower level of favorable development from specialty insurance. Now while the level of favorable development from specialty insurance was lower than we experienced in recent years, it is within the range of our expectations relative to our long-term target.

Now digging into specialty coverages. Property continued to have significant favorable development that was higher than prior year. Workers' comp had a solid level of favorable development but was significantly lower than what was experienced last year. Commercial auto had favorable development that was in line with last year, while general liability and financial indemnity had elevated levels of unfavorable development. We ended the quarter with book value per share of $24.65 which inclusive of regular dividends, represents an increase of 5.7% since year-end. This increase resulted primarily from solid operating earnings and the impact of the bargain purchase gain on the ECM acquisition, and that was partially offset by lower bond valuations related to the current interest rate environment.

In the quarter, we paid $76 million in dividends and repurchased $114 million worth of our shares. Since the end of the quarter, we repurchased another $60 million worth of our shares, and that leaves us with about $460 million remaining in our current repurchase program.

I'll now turn the call back over to Craig for a discussion of specialty insurance.

Craig Smiddy

Okay. Thanks, Frank. So specialty insurance net premiums written were up 10.5% in the quarter. However, as I indicated earlier, to give you a little more color around that, that figure includes ECM for the first time and also strong growth in our auto warranty business. So if we exclude ECM and we exclude the write-up portion of our auto warranty business, net premiums written were up 4.4% in the quarter.

So we think that's a growth rate that aligns with where we're at in the P&C underwriting cycle today. We saw strong rate increases on commercial auto and general liability. And I'll talk about both of those lines individually in a moment. And our overall retention ratios came in as expected and in line with the second quarter. So to provide some more color around our auto warranty business. I just want to remind everybody that Old Republic participated in this market for many decades through vehicle service contract programs with auto dealers and administrators.

And recently, we made a strategic decision to increase our presence in that market by partnering with market-leading administrators with capabilities that align well with Old Republic's capabilities. Frankly, we view this business as an attractive source of growth and diversification because its performance is less driven by the P&C underwriting cycle that we see and more by the quality of our partnerships with administrators and the quality of their underlying programs.

As mentioned in my opening remarks, in the quarter, Specialty pretax operating income was $204 million, while the combined ratio was 96%. The loss ratio for the quarter was 64%, which included 0.8 percentage points of favorable prior year loss reserve development. And that compares to 63.5% in the third quarter last year when we included 3.4 percentage points of favorable development.

The expense ratio for the quarter was 32% compared with 31.3% in the third quarter last year. As you saw in the release, we began to provide an additional combined ratio analysis, excluding the impact from the retail write-off portion of our auto warranty business. We did this because we reached an inflection point where the impact on the expense and loss ratios from this portion of our auto warranty business starting to become more material due to the significant growth in those programs.

So with this exclusion, as you can see in that supplemental exhibit, the expense ratio was 29.9% million compared to 30.2% in the third quarter of last year. However, there's also some additional items here to note, and that is that -- there was a $20 million credit charge in the quarter that increased the expense ratio by 1.4 percentage points, while changes in mix decrease the expense ratio somewhat in the quarter. And if you're comparing to the third quarter of '25, as a reminder, there was a true-up of ceding commission in that third quarter of '25 that increased our third quarter '25 expense ratio by 0.9 percentage points. So some moving pieces there.

Turning to commercial auto. Our commercial auto net premiums written were up 5.7% in the quarter, while the loss ratio came in at 71% compared to 68.3% in the third quarter last year. Auto liability severity loss trend continues to be impacted by legal system abuse. And as we continue to closely monitor this trend as we have for many years now, we also continue to maintain our risk selection and pricing discipline when it comes to commercial auto.

During the quarter, we achieved rate increases for commercial auto in the mid-teens, which remain above our view of observed and anticipated loss trends. At the same time, retention ratios remained stable, near 80%. So we think these results reflect the market that is rational and generally supportive of our pricing actions. As we continue to benefit from favorable prior year reserve development in commercial auto. I'll point out that we've had at least 16 consecutive quarters of favorable prior year reserve development partial auto -- and we think that provides some evidence that our historical underwriting and reserving practices have remained appropriately cautious.

In the commercial transportation market, economic factors continue to vary. Conditions are probably most favorable for large fleet operators, while small operators particularly those operating 1 to 5 units face greater economic pressures. Because we serve the full spectrum of commercial transportation market, we're able to observe these conditions across a broad range of operators and adjust our pricing and growth strategies accordingly.

Now turning to workers' compensation. Our workers' compensation net premiums written were up 7% in the quarter, while the loss ratio came in at 62.7% compared to 63.8% in the third quarter last year. In the quarter, we gave a rate in the low single-digit range on workers' comp because as severity trends remained constant, frequency trends continue to to decline and wages continued to increase.

So bottom line here is we think our rates remain adequate relative to these lots and exposure trends that we're observing. Moving on. Generally speaking, we're very pleased to have successfully closed the ECM transaction this quarter. which, as we noted in the release, was accretive to book value per share and earnings per share. And our newer start-up operating companies continue to make good progress, although these businesses are still relatively small if you look at it in the context of Old Republic. Collectively, they have grown approximately 40% year-to-date. So to us, that's evidence that the investments we've made over the past several years are gaining traction and will continue to contribute more meaningfully as we go forward.

So overall, we continue to see a competitive P&C marketplace, and we remain focused on cycle management and risk adequate pricing that will continue to produce profitable combined ratios.

So with that, I'll now turn the discussion over to Carolyn to report on title insurance.

Carolyn Monroe

Thank you, Craig. Title reported premium and fee revenue of $823 million for the quarter, an increase of $7 million compared to the third quarter of '25. Interest rates being elevated throughout the period and moved modestly higher following the Federal Reserve's September rating increase. Despite the higher rate environment, our title operations delivered solid growth driven by continued strength in the agency channel, where revenues increased 9% compared to third quarter of 2025. Revenue from our direct operations was flat compared to the prior year period.

Commercial premiums represented 24% of premiums earned during the quarter compared to 26% in the previous year period. We continue to see a strong pipeline of commercial transactions with a diverse mix across many segments of the commercial real estate market. Agency generated premiums represented 81% of title revenues during the quarter compared to 80% in the third quarter of last year. Our loss ratio improved by 60 basis points this quarter compared to last year, driven by higher levels of prior year favorable development, reflecting our consistent and conservative reserving practices. Our expense ratio of 94% was up slightly over the 93.7% we achieved in the third quarter of '25. The growth in our agency business increased our agent commissions and contributed an additional 1.7 percentage points to the expense ratio as agency revenues represented a larger share of our title revenues.

This increase was substantially offset by a 1.4 percentage point improvement from our continued focus on operational efficiency and disciplined expense management resulting in a quarterly combined ratio of 96.1%. Year-to-date, our combined ratio has improved to 96.9%, reflecting continued progress toward our long-term objective of achieving a combined ratio below 95%. Investment income increased marginally in the quarter. All these items reduced pretax operating income for the quarter of $50 million up from $46 million in the third quarter of last year.

As we move into the final quarter of 2026, we remain focused on improving operational efficiency and expanding our margins. A key part of that effort is our partnership with Qualia and the continued rollout of our new operating system. Implementation began earlier this year and will continue through the end of next year, strengthening our foundation for long-term success. Thank you, and I'll now turn it back to Craig.

Craig Smiddy

All right. Thanks, Carolyn. So the fundamentals in specialty insurance remained strong as we navigate competitive P&C marketplace. And our focus continues to be on cycle management and rate adequacy to achieve combined ratios within our target range. And in title, similar story, a title continues to carefully manage expenses to bring the combined ratio within our target range as we navigate the headwinds of higher mortgage interest rates.

So with that, we'll now be happy to take any questions, and either I'll answer your question or I'll ask Frank or Carolyn for some help.

Operator

[Operator Instructions]

Your first question is from the line of Gregory Peters with Raymond James.

Phần hỏi đáp

Charles Peters

Yes, I will focus my first question on the Specialty Insurance segment in the top line, and you called out the effect of ECM and also the auto warranty business as it relates to third quarter, curious what your expectations are for those 2 components for the next couple of quarters? Are we going to expect a continuing lift to the underlying organic revenue growth of your organization as we go through the next couple of quarters? Or are those onetime deals?

Craig Smiddy

Thank you for the question, Greg. And the short answer is yes. You can expect a continued lift from here on out. The growth within the auto warranty business is going to continue at a robust pace. And ECM will continue to contribute to top line and bottom line as we go through the subsequent quarters.

And you may recall, one of the reasons that our acquisition of ECM came to being is they have done a lot to prepare themselves for future growth, and they were somewhat capital constrained. And this acquisition provides them with the necessary capital to move forward with their strategic initiatives on several fronts. So we expect some growth. And part of that capital constraint on ECM was their need to have a quota share in place. So we no longer have that quota share in place. So that too will add to the net top line and bottom line as well.

So we should see again, good continued growth in both of those areas. And with respect to how that changes the top line for specialty and how it influences the loss ratio and expense ratios will continue to provide the supplemental information so you can see things with and without.

Charles Peters

Okay. The other very important area to cover would be the language that you included around the expense ratio in the third quarter -- you called out a bunch of moving parts. And so I was just looking for more detail. First of all, the credit loss is kind of a surprise -- and curious if there's anything -- there's some underlying issues that you're growing concerned about there? And then when you talk about the tech spend and all that, just curious how this expense ratio should look over the next several quarters?

Craig Smiddy

Sure. So with respect to the credit loss, it was a lots that needed to be recognized under expense under the GAAP accounting rules. So these are highly infrequent types of events for us. We, as you know, manage collateral very conservatively. And in this case, there was one unique program that had very poor performance.

And as a consequence, it was in a collateral deficit position that we have, as of so far, been able to -- have been unable to rectify. So we took the conservative position and put up what we believe to be the ultimate loss for that program, assuming no recoverables beyond the collateral that we have. And so we don't expect that to have any further developments and we don't see this as a systemic type of situation at all. So that's a little bit about the credit -- with regard to the overall expenses, I'll probably begin to focus a little bit more on what our expenses are after we exclude the auto warranty write-up to retail because it -- as I said in my opening comments, it's just hit an inflection point where it's material to the reported expense ratio and having a level set on wordings with what things would look like if we weren't growing that business.

I think as is at least how we look at things here. So if you look at the expense ratio for the first 9 months without that retail write-up business. You're below a 30% and right at about the 30% for the quarter. So I think the -- if you take away some of those other things like the credit loss. I think the 9 months year-to-date expense ratios after excluding the auto warranty write-up or are more in line with where things hopefully will be as we move forward. So I think I've said we are working very hard to try to keep that below 30% and we will continue to do so.

Operator

[Operator Instructions]

Your next question is from the line of Paul Newsome with Piper Sandler.

Jon Paul Newsome

The ECM in the mortgage business, is it fair to assume that those businesses had an improvement or deficit on the combined ratio? Are they are they having an impact on the bottom line for the combined ratio? Or is it just a dire of loss versus expenses?

Craig Smiddy

The ECM is is producing results that are right in line with our target results. So you can make the assumption that, that will be the case going forward. So far this year, they have produced combined ratios right within that range. and we've had limited weather activity, as you know. They are exposed a little bit more to weather than usual within our portfolios, but they've had very good weather results. And as such, are having a very, very good year, and we expect them to continue down that path.

Jon Paul Newsome

I was hoping to ask maybe a bigger picture question where we could kind of step back, Craig, and think about sort of the company within the overall property casualty cycle, we're talking about special commercial, obviously, necessarily title. And where you are from a profitability perspective? And how you think that that profitability will evolve over the next couple of years with the current pricing soft market. And because we're the combined ratio sort of even if we pull out the let me call it, excess expenses related to the efforts to have a whole bunch of new businesses, which are great for the future.

It looks like we're kind of top of the range from the undermined ratio perspective. If the goal is to get back to some place in between with the goal. How does that work out from a cycle perspective, do you think? Do you think we had a little patient, maybe go above the range for a bit before we can get into kind of normal position? Do you think there are some other things that could happen along the way, given we are from a big picture perspective, I'd like to not ask about the quarter per se, really the years?

Craig Smiddy

Sure, sure. I appreciate the question and I understand it. Yes, I think where we'll end the year, hopefully, we'll be within our range for the year. We done a very good job looking back over the prior years of producing some very decent combined ratios over the last several years. And our overall philosophy is is to, again, be between that 90% and 95%, depending on where we're at in the cycle.

Right now, it would appear we're at the top end of that. And we're going to work very hard to not exceed the top end as we persevere through a softer market in the next few years. And we're currently in the process of planning with each of our operating companies, 21 different operating companies and putting together plans and making realistic assumptions about rate pressure.

So our view is we would not expect to exceed that range as we as we move through the next few years of a soft market, that's what we're going to work hard to do. The big variable to all of that is top line. And as we -- as I mentioned, as we try to maintain pricing discipline top line could suffer. And that's really the wildcard here is if top line would fall off during the softer years in the cycle, it could push that combined ratio up a bit driven by the expense ratio.

But we're keeping an eye on expenses. We're doing everything to maintain a profitable loss ratio. And we're sticking with our top end target that in the softest part of the cycle, we want to be at a 95% or below. So that's how we're thinking about it. And as I indicated in my earlier remarks, what we're focused on more than competition and trying to be price competitive is selling our value proposition. That's why we're diversified and decentralized into the specialty niches that are an inch-wide mile deep.

We hope that our distribution partners and our customers are viewing us as a value buy as opposed to a price buy. And to the extent that we can sell our specialization and the services that come along with that, we think we'll we will come out the other end stronger. And -- but at the end of the day, we're going to stay focused on bottom line and the top line could suffer so far, as I indicated, even if you look at commercial auto, it appears the market is rational.

We're able to get rate increases in the mid-teens on commercial auto, rate increases in the mid-teens on general liability. And that's going to be our focus, is rate adequate pricing. And we'll see what happens with the top line. But so far, we've been able to do okay on the top line.

And as I also mentioned, our new startups are starting to produce some meaningful premium that will give us a bit of a tailwind on growth. Right now, those startups are driving up the combined ratio because of the lack of premium relative to their expenses. So the more that comes into balance and the premium growth continues to move along in those startup entities that should help with, again, some tailwind on top line, even if our -- some of our other businesses might have to shrink a little bit. So hopefully, that answers your question.

Operator

[Operator Instructions]

Your next question is from the line of Gregory Peters with Raymond James.

Charles Peters

Craig, can we go back -- if I look at the supplement for the Specialty Insurance segment. And I'm focused on the home and auto warranty portion and you give the net written premium, and I'm looking at the year-to-date numbers of like $545.9 , which is up materially from the $350 million a year ago. What is this -- what are we -- what does this book look like? Is it a $750 million to $800 million book? Is that where we're headed? Or is it going even further than that?

Craig Smiddy

Well, you asked a tough question. Things are progressing very well on the let me clarify first that it is driven by auto warranty even though we do put those 2 together. But auto warranty on a gross basis is growing significantly. And even on a net basis, you can see the growth you pointed out. We expect that to continue at a very meaningful clip. So looking at it on a net basis, $600 million, $700 million in the next few years isn't out of the question and even higher.

Charles Peters

So with $600 million, $700 million of annual premium or annual new premium.

Craig Smiddy

Annual premium.

Charles Peters

Okay. and then, I guess, just you go to the title business for a second, with rates moving up a little bit, it doesn't feel good for the real estate market. And it feels like there's pressure on forecast going forward. I'm just curious if you have any different views in that view on that position relative to how you see your book of business performing?

Craig Smiddy

I would underscore a point Carolyn made and that is that commercial is still coming in very strong. And the pipeline looks robust. So fortunately, we have the commercial tailwinds that are helping to offset some of the residential headwinds. So I know I've said many times over the last 2 or 3 years that it felt like there was pent-up demand in the residential market and that if interest rates had a 5 in front of them instead of a 6, that it could be a major turning point for us.

And now we're talking about having a in front of 30-year mortgage rates instead of 6. So as I pointed out in my comments, as Carolyn pointed out, it does give us pause about where things might be heading -- but we do have the commercial that is holding up very well, and we continue to play a very significant role on that business. And the only other thing I would point out that I'm sure Carolyn would echo is that what we're seeing right now, we have a footprint entitled on agency business that spans the entire country. And we're seeing some very big differences geographically.

So even if you look at our direct, there's certain points in time where direct might be a leading indicator of where residential is going I would -- we would not say that right now. We would not say that it's a good leading indicator because we're seeing too big of a delta between geographies, and we're very limited in our geography on direct. So it's -- residential is driven by our agency and depending on which marketplace you're talking about. Some look pretty decent and others not so much.

So it's a very diverse landscape right now on residential. And certainly, the higher 30-year mortgage rates are not helpful. But hopefully, by the time commercial winds down a little bit. We'll be hopefully back into the 6s and residential will pick up again. And I would point out, too, refis not a big part of our portfolio. So to the extent that higher interest rates are depressing refis, that's not going to move the needle one way or another for us very much.

Operator

There are no further questions at this time. I will now turn the call back to management for closing remarks.

Craig Smiddy

Okay. Well, we very much appreciate all of your attention and participation in today's call, and -- we're looking forward to our call next quarter where we'll be able to report our year-end results. And we remain optimistic that given all the things we've discuss today that we'll have some good news to report for year-end and final quarters.

So thank you very much, and appreciate your involvement again. Thank you. This concludes today's call. Thank you for attending. You may now disconnect.