Fitch Assigns 'AA' IFS Rating to Old Republic's Primary P&C Companies; Affirms Debt Rating.

NEW YORK -- Fitch Ratings has affirmed Old Republic International Corporation's (ORI) 'A+' long-term issuer rating and 'F1' commercial paper rating. In addition Fitch has assigned an 'AA' Insurer Financial Strength (IFS) rating to the members of Old Republic Property Casualty Group (ORPC) (see list below for member companies). The Rating Outlook is Stable.

ORI's 'A+' long-term issuer and senior debt ratings reflect management's consistent and conservative operating philosophy, which is evidenced by the very strong capitalization of its operating subsidiaries, modest holding company financial leverage, and diversified sources of revenue. Strong operating results have been achieved through disciplined underwriting that is focused on profitable organic growth of existing businesses as opposed to acquisition-oriented growth or rapid expansion into new products.

Commercial lines property and casualty, mortgage insurance and, to a lesser extent, title insurance generate the majority of revenues and operating income. Property and casualty business consists of a diverse group of commercial insurers with a focus providing specialty liability coverage to small, medium, and large businesses involved in transportation (trucking and general aviation), construction, forest products, and energy as well as public entities such as municipalities.

ORPC has posted strong underwriting results in recent years that compare favorably to its commercial lines peers. Fitch believes this is reflective of the improved property/casualty pricing environment, as well as management's conservative underwriting and reserving practices and limited exposure to latent liabilities which has resulted in modest reserve redundancies in recent years as opposed to the meaningful reserve deficiencies experienced by many commercial lines competitors. Overall Fitch views ORPC's loss reserve position as adequate, which reflects estimates of a moderate redundancy among non-asbestos reserves and a moderate deficiency among asbestos related reserves.

The mortgage insurance segment led by Republic Mortgage Insurance Corp. (RMIC), has accounted for roughly 30%-50% of ORI's pre-tax operating income during 2004-2002, respectively. This largely reflects strong but deteriorating performance in the mortgage insurance sector as well as improving profitability within the commercial lines segment.

ORI's Stable Rating Outlook reflects Fitch's view that the company will continue to achieve above-average profitability while adhering to its conservative operating philosophy. Profitability of the mortgage insurance operation is expected to moderate from its strong level as claim rates potentially increase as the result of weak temporal diversification and severe competition. However, profitability of ORI's other predominant operating sector, property and casualty insurance, is expected to remain strong as a result of the favorable market pricing environment. Financial leverage is anticipated to remain modest to moderate and fixed-charge coverage very strong. Additionally, ORI's long-term practice of maintaining strong capitalization at its operating subsidiaries and focusing on profitable and organic growth of existing operations is expected to continue.

Chicago-based ORI reported assets of $10.6 billion and capital of $3.9 billion at year-end 2004.

Old Republic International Corp.

--Long-term issuer affirmed at 'A+' / Stable Outlook;

--Senior Debt affirmed at 'A+' / Stable Outlook;

--Commercial Paper Affirmed at 'F1'.

Old Republic Property Casualty Group

--Rated 'AA'/Stable Outlook

The following ratings are unchanged by Fitch, with a Stable Outlook:

Republic Mortgage Insurance Corp.

--Insurer Financial Strength 'AA'.

Old Republic Title Group

--Insurer Financial Strength 'AA-'.

Members of the Old Republic Property Casualty Group:

Bituminous Casualty Corp.

Bituminous Fire & Marine Insurance Co.

Great West Casualty Co.

Old Republic Insurance Co.

Old Republic Lloyds of Texas