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Frank Sodaro

All right. Thank you, Craig, and good afternoon, everyone. This morning, we reported net operating income of $202 million for the quarter compared to $185 million last year. On a per share basis, comparable year-over-year results were $0.81 compared to $0.67, a 21% improvement.
Net investment income increased 4% as a result of higher yields on the bond portfolio, partially offset by a lower invested asset base from returning excess capital. Our average reinvestment rate on corporate bonds during the quarter was 5.1%.
The total bond portfolio book yield now stands at 4.6% compared to 4.5% at the end of last year. The value of our total investment portfolio increased by nearly $200 million. Our equity portfolio, which is focused on high-quality value stocks and makes up 16% of the total investment portfolio was up nearly $60 million in the quarter.
Turning now to loss reserves. Both Specialty Insurance and title insurance recognized favorable development in the quarter, leading to a benefit in the consolidated loss ratio of 2.6 percentage points with no significant unfavorable development to speak of.
This compares to 2.3 points of favorable development last year. I'll now go a little deeper into Specialty Insurance coverages. Workers' comp continued to have strong favorable development, albeit less than last year. Both commercial auto and property experienced favorable development that was considerably higher than last year.
In general, liability had a very small amount of unfavorable development compared to a more meaningful level of unfavorable development last year. We ended the quarter with book value per share of $24.19, which inclusive of the regular dividend weighted to an increase of just over 7%, and that resulted primarily from our strong operating earnings and higher investment valuations.
In the quarter, we paid approximately $500 million for the special dividend declared late last year. In addition, we paid $68 million of regular dividends and repurchased $25 million of our shares. We did not repurchase additional shares since the end of the quarter, so that leaves us with just over $200 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 for that, Frank. Specialty Insurance net premium written was up 10% in the first quarter, and that came from strong renewal retention ratios, rate increases on most of the lines of coverage, solid new business writings and increasing premium production in our new specialty underwriting subsidiaries.
Our specialty growth continues to expand our E&S presence with seven of our underwriting subsidiaries utilizing Old Republic's E&S platform. Our E&S direct premiums written were up 13% this quarter. As mentioned in my opening remarks, in the first quarter Specialty Insurance pretax operating income was $260 million and the combined ratio was 89.8%.
So given these top line and bottom-line results, we continue on our journey of profitable growth within Specialty Insurance. Getting a little more into the details. The loss ratio for the first quarter was 61.7%, including $3.3 million percentage points of favorable prior year loss reserve development compared to 62.7% last year that included 2.5 points of favorable development. The expense ratio was 28.1% in the first quarter compared to 27.6% last year, right in line with expectations.
Turning to some comments on property catastrophe losses that have impacted the industry as a result of the LA wildfires. During our last quarter's earnings call, you might recall that we indicated we had estimated our ultimate LA wildfire losses to be between $10 million and $15 million and currently, we've reduced that estimate to less than $10 million.
Now if you can give you some details on Commercial Auto and Workers Compensation, our two largest lines of coverage. Commercial auto net premiums written grew 9% in the first quarter, while the loss ratio came in at 70.3% compared to 71.9% last year. Rate increases were approximately 11%. And consistent with comments we've made in previous quarters, that is commensurate with the loss trends that we're observing in Commercial Auto.
Workers' Compensation net premiums written were 3% higher in the first quarter, while the loss ratio came in at 58.7% compared to 47% last year. Loss frequency trend continues to decline while the loss severity trend remains stable. So given higher wage trends within table, which is of course our rating base, decling loss frequency trends, stable loss severity trend combined with rate decreases that are in the low single digits, we think our rate levels in this line of coverage remain adequate.
We expect solid growth and profitability in Specialty Insurance to continue throughout '25, which we think reflects the success of our strategy and our operational excellence initiatives. And we also expect to continue to see growing contributions from our newest specialty underwriting subsidiaries.
So that will end it for Specialty Insurance for now, and I'll hand it over to you, Carolyn, to give us some color and comments on Title Insurance.

Carolyn Monroe

Thank you, Craig. Title Insurance reported premium and fee revenue for the quarter of $605 million. This represents an increase of just under 11% from the first quarter 2024. While we are pleased with our performance, conditions in the real estate and mortgage industries continue to be less than favorable in the seasonally weak first quarter. Our directly produced premium and fees were up 6% from the first quarter of last year, while agency produced premiums were up 12%. And Commercial premiums increased 27% this quarter compared to first quarter 2024.
Commercial premiums were 24% of our earned premiums this quarter compared to 21% in the first quarter of last year. Agency premiums made up 78% of our revenue during the quarter, up from 77% during first quarter of last year. Investment income was also up this quarter around 7% compared to first quarter of 2024, reflecting higher investment yields earned.
Our overall loss ratio increased to 2.7% this quarter compared to 2.2% in the first quarter of 2024. Although prior policy years continued to develop favorably, the amount of favorable development in first quarter 2025 was less than the first quarter of 2024.
Our pretax operating income increased to $4 million this quarter compared to $2 million in the first quarter of last year, and our combined ratio of 102.1% is slightly lower than the first quarter of 2024. Our elevated combined ratio continues to reflect market conditions, which we are managing through. Our expense ratio improved to 99.4% from 100.3% in the first quarter of 2024, an improvement of nearly 1%.
Technology continues to be paramount to ensuring smooth and secure real estate transactions. In our previous fourth quarter call, we emphasized the importance of refocusing our technological efforts to streamline business operations. In the first quarter, we proudly announced our strategic partnership with Qualia, which saw Qualia acquiring our settlement and production software platforms, RamQuest and E-Closing.
By leveraging Quali's expertise and advanced infrastructure, providing a modern digital transaction, we will be able to equip our direct offices and title agents with cutting-edge tools and solutions. This partnership also allows our internal tech teams to reallocate our focus and resources toward developing other crucial technologies that will help us thrive in a competitive market.
It is necessary for our internal systems such as remittance, policy issuance, CPLs and rate engines to work seamlessly with all closing and production platforms. Additionally, integrating fraud prevention systems and AI technologies is of utmost importance to strengthen our security measures and enhance operational efficiencies.
As we continue to be agency focused, we understand the unique challenges and opportunities that our title agents encounter daily and we are dedicated to providing them with innovative technological solutions required to maintain a competitive edge. And with that, I'll turn it back to Craig.

Craig Smiddy

Okay. Thanks, Carolyn. So profitable growth continues in Specialty Insurance and in Title Insurance, we remain focused on profitability in a challenging marketplace. And on a final note, operating return on equity improved to an annualized rate of 14.4% compared to 11.5% in the first quarter last year, which you might have noticed in the supplement. And that's happening as we continue to profitably manage capital returning excess capital to shareholders.
So that'll conclude our prepared remarks and I'll now open up for discussion to Q&A where I'll answer your question or I'll ask Frank or Carolyn to help me out and respond.

Question and Answer Session

Operator

(Operator Instructions) Greg Peters, Raymond James.

Greg Peters

So let's go to the Specialty Insurance business. And as we go through and evaluate your top line performance in the first quarter, can you give us a sense of how much of the top line is a function of rate versus actually new business produced, because I imagine it's going to vary by segment.

Craig Smiddy

Well, that's right, Greg. It does indeed vary by segment. As we mentioned in the release, we're seeing rate decreases in the public directors and officers business as well as of course, Workers' Compensation, some slight decreases there.
But on the other hand, as I mentioned in my earlier comments, we're getting strong rate increases still on our Commercial Auto business. And we're also getting strong rate increases on our general liability business as well.
So it really is a mixed bag. I would say that our new underwriting subsidiaries are providing a pretty substantial lift here beyond just rate and retention and new business in the organic segments of our business.
So as we indicated last year, we were optimistic that as these new newest underwriting subsidiaries came online that we were going to continue to see greater and greater contributions throughout '25, and that's happening. So -- and we expect it to happen going forward. So it's a combination of a lot of things that are driving rate versus growth in organic business versus contributions from new underwriting subsidiaries.

Greg Peters

Right. Maybe on the new business initiatives, because you don't have a lot of historical data inside the company regarding claim patterns, et cetera. How do you approach the reserving on these ventures? And how do you approach loss picks, et cetera?

Craig Smiddy

Sure. Well, we approach it exactly as we approach all of our other businesses. But to your point on the longer tail lines of businesses. We do look at industry data. We look at our own data. And to the extent that those lines of business are the same, we're deriving loss patterns from our existing business.
The other thing I would point out is that A lot of the new underwriting subsidiaries are shorter tail lines. As mentioned previously, we're trying to diversify the line of coverage mix. And I think we've done a pretty good job of that over the last five years, diversifying away from being so concentrated in just Workers' Compensation and Auto -- Commercial Auto.
And through that, the diversification we've added a considerable amount of short tail lines. So reserving there is less of an issue. So for instance, Inland Marine coverages, while we have history on Inland Marine experience that we could look at, it's so short tail. It's a year ending anyway. So it's -- there's not a lot of tail risk there. And similarly, that would go for our A&H business. It's very short tail, a year, two years.
And then I'll use another example, our new Lawyers' Professional Liability business. Well, we've written professional liability business and even written Lawyers' Professional Liability business. So we do have a history there and we rely on that. And then I'll just stop with if you look at our E&S business, they're writing general liability.
They're writing some auto liabilities, some property, again, the property short tail, and we have the experience that we look to when we're looking at trends on general liability and auto liability. So to sum it up, again, either we have the experience we might supplement that with some industry experience or it's so short tail that it comes out very, very quickly.

Greg Peters

That's good detail. I guess, the last question, I'll pivot to Carolyn's business and I guess, ultimately, the expense ratio improved, but it's still running higher and I don't want to get too hung up on the first quarter, but maybe give us some thoughts about how the expense ratio could improve over the course of the year relative to the prior year -- and any thoughts you might have on that?

Craig Smiddy

Carolyn, I would be happy to kick it off. So we mentioned last quarter and then Carolyn mentioned again, in her comments, the example where we sold our closing platforms and refocused our technology development efforts on other tools, and we think we're partnering with a vendor there that's going to provide even better technologies -- and that alone will help the bottom line as we move throughout this year. It will gradually help the bottom line. And as we move into next year, we should see probably about a $4 million per quarter improvement in the bottom line, because we were incurring expenses there that were greater than the fees that we were taking in.
Carolyn, I'll turn it to you. I know there's other things that we're doing as well to manage. And then, Greg, I -- before I hand it to Carolyn, I would just underscore that I agree with you completely. I wouldn't -- if you look at last year where we started a similar position, but we ended up the year in a better place because of that first quarter being a quarter that is traditionally very low in transactions.
So Carolyn, I'll turn it to you.

Carolyn Monroe

Okay. Thank you, Craig. We continue to manage our expenses to the market. But Greg, it's really going to be based on our top line revenue. We've got to see the market turn more for us to really have a large effect on our expense ratio. But it doesn't stop us. I mean we're constantly monitoring what we're doing, what we're spending and what we -- how we can change that. So I do see it improving throughout the year, because we also feel like we're going to see an improved market as we get to this summer.

Greg Peters

Yeah, it does. On the technology piece, as part of your answer or part of Craig's answer, that was principally in the direct operations, right, where you're going to get the savings? Or was that also agency too?

Carolyn Monroe

So our -- this was just -- our platforms were totally separate. They actually only served a small piece of our direct operations. They were RamQuestiny closing were software platforms that were used out in the market by independent title agents. So -- but they just rolled up under our whole title operation. They were operated as separate companies that we combined into our financials. So it's not really a function of direct or agency, they were separate companies.

Operator

(Operator Instructions) Matt Carletti, Citizens.

Matt Carletti

I want to ask you a question on kind of a high-level question, but just there's been a lot of obviously focus and discussion on uncertainty in the markets to the economy and tariffs and all that sort of thing since, call it, April 2.
Have you seen anything even anecdotally in your book of business, whether it be on the specialty side, just projects or clients kind of taking a pause before making decisions? Or there have been some, again, probably anecdotal articles, but about the housing market and how people have kind of stopped and kind of reassessing maybe a move or buying a house. Have you seen any changes in volumes on -- even on the title side since then?

Craig Smiddy

Right. Well, it's hard to really know what we're seeing in the way of top line is a result of tariffs or is it some other economic variable. I would say probably an area that you could take some prudence from the reduction in our Canadian business.
We -- of course, exchange rates there has some impact and you can attribute some of the reduction to just exchange rates alone. But given that a large amount of our business on the trucking side is north-south type of travel, and we've seen a reduction there. I would think some of that is tariff related.
And then I feel even more confident saying that our accident business up there, the reductions that we're seeing up there are probably some fallout from the tariff discussions, because what our travel accident business does up there, we have the incoming business where you have visitors into Canada and students coming into Canada. And then we also have business where Canadians are the so-called snowbirds are heading down into the United States.
And there's been a lot of media coverage where they are not -- a lot of Canadians are not deciding to come here and go somewhere else. So we've seen a pretty steep drop off in our travel and accident business. We've seen some drop-off in the commercial trucking business. So I think that's an area where it's probably the easiest to surmise that it's probably related to tariff or at least the ensuing behaviors after the tariffs.
So -- and then I would just add from a -- we haven't seen anything from a loss cost standpoint. We're keeping our eyes open. On the Workers' Compensation side of things, tariffs down the line could have an impact on pharmaceuticals could have an impact on medical devices. On the Commercial Auto side of things, tariffs could have an impact on vehicle parts and replacement vehicles.
But we -- as you know, what we do for a living is monitor in as real-time as possible, what's going on in severity and frequency trends and to the extent that those tariffs start to have an impact on severity trends, we're going to spot it and we're going to do what we always do and react accordingly just as we have done when there's been inflationary trends in the past.
Again, that's -- for us, that's what we do is we -- part of our underwriting excellence proposition is making sure that we have a complete understanding of changes to exposure trend, frequency trends, severity trends and we'll be following it very closely. And right now, those are the couple of areas in Work Comp and a couple of areas in Commercial Auto that we know we have to keep an eye on.

Operator

Paul Newsome, Piper Sandler.

Paul Newsome

I've got a couple of questions here. First, maybe start off with a competitive environment question. One of the things that this quarter has been softest as you get into the larger markets as opposed to little and maybe small. Are you also seeing that newness?

Craig Smiddy

Paul, that's a hard one for us to answer. Most of our business is small and mid commercial business. And if I understood your question, are we seeing a difference between softness and hardness in the small and mid versus the large.
On the large, what we do there through our older public risk management subsidiary is business whereby the insurers are taking the preponderance of the risk, either through large deductible or captives. And that business is very sticky for us. And our rates there are not somewhat subject to the types of rates you might experience on other kinds of large commercial risk transfer business. This is risk retention business less rate sensitive. So I can't say anything that we've seen in our portfolio is suggesting a difference between our book of small commercial, middle market commercial and large commercial business.

Frank Sodaro

And our capital markets question -- or capital management question, pardon me. So the buybacks slowed or stopped at a certain point, I'm curious if there is a reason for that. And maybe you could just talk about sort of the outlook for stock repurchases prospectively given the pause?

Craig Smiddy

Sure. So yeah, we -- as I think we discussed last quarter, we made the decision based upon our analysis of our capital position to evaluate both special dividends and share repurchases. And as I think I commented on, we had a very nice problem of continuing to carry too much capital because as quickly as we could return excess capital and reinvest it, which comes first into our business, we kept replenishing at a faster pace than we could return it.
And we made the decision at the end of the year to go ahead and issue a special dividend, as Frank commented on, about $500 million through a $2 special dividend because we felt that, that enabled us to more -- to reset that level or level set that capital base to a more appropriate level without continuing to retain excess capital.
And as we commented on, we did have some share repurchases in the first quarter as well. As we go forward, there's a lot of variables at play here as we entertain other new specialty underwriting subsidiaries as we entertain the possibility of of acquisitions, those require capital. And we still have an outstanding authorization under our existing repurchase and we'll continue to execute on that as we go forward.
And we'll see where things are and do what we always do, which is at a point in time where management believes we're continuing or that we have excess capital, we need to return to shareholders. We will take that matter up with our Board and decide the best way to return it whether that's through share repurchases, special dividend or a combination of the two.

Paul Newsome

And then maybe 1 final question. The corporate expense levels look like they jumped a bit in the quarter and the commentary and the press release is just made your somewhat sustainable. But as you noted, is that the way to think about it? Or is there another way to think about sort of how the corporate expenses will be? Obviously, that's a huge piece of your business, but can you throw a little bit --?

Craig Smiddy

Sure. I'll comment and then Frank can fill in where he might see appropriate. So on corporate expenses, this quarter, as we noted in the release, you have a lot of moving pieces with a lower level of interest income because of the lower invested asset base, you've got the RFIG runoff moving out of that piece of the business as well in the $500 million special cash dividend payment.
And on the expense side of things, a lot of that is related to executive compensation expenses, which were higher. And that's -- they're higher as a result of -- mostly as a result of performance. A lot of that is variable in nature related to our performance, and we've had very strong performance.
So as a result, higher executive compensation levels, nice problem to have, because of the very good performance, we have a higher expense there. So on a go-forward basis, with the reduced level of capital, highly variable income and expenses, I think you can suggest that the bottom-line type of loss within corporate is probably going to continue throughout the remainder of the year.

Operator

And that concludes our question-and-answer session. I will now turn the conference back over to management for closing remarks.

Craig Smiddy

Okay. Well, we have one quarter under the belt and that feels pretty good thus far. We're very proud of the results we've been able to deliver to shareholders, and we thank all of our associates and business partners that have helped us achieve that. Obviously, the economy is a question mark, a lot of volatility, a lot of question marks remain and we'll have to see how the rest of the year goes. But so far, so good for Old Republic.
So thank you very much. We appreciate your time and interest.

Operator

And ladies and gentlemen, this concludes today's call. We thank you for your participation. You may now disconnect.