Their last quarterly report showed they had around $650 million tied up in these two beauties. While it was a bad investment with 20/20 hindsight,it is not a death blow, just a major set back for a fairly well run company. They recognized a mark to market loss of about half of cost in their comprehensive income presentation if I read their 1st QTR statement filing correctly.
Hopefully they have not compounded their problems by averaging down and continuing to add to their position. Maybe they should work with a hedge fund to take over MGIC and recapitalize it.
As a long term play, the MI industry is a good shape.
Current business is sticky (e.g high persistancy) which results in better fixed cost absorbtion, and all around is being written on better quality business.
Also TGIC is dead. While TGIC specialised in trash loans, its always good to permanently lose a competator.
The key question is if ORI's P&C franchise stays strong since they are going to need to pump some capital into the title/MI businesses at some point.
IMHO they should have raised the dividend by a alot less than they did. Keeping the record of dividend increases is a good thing, but the company should be conseving capital and positioning itself as a tower of strength.