RLI Reports Fourth Quarter and Year-End 2024 Results

Rhea-AI Summary

RLI Corp. reported Q4 2024 net earnings of $40.9 million ($0.44 per share), down from $114.6 million ($1.24 per share) in Q4 2023. The company achieved underwriting income of $22.2 million with a combined ratio of 94.4 in Q4 2024.

Key highlights for 2024 include: a 11% increase in gross premiums written exceeding $2 billion, 18% increase in net investment income, and underwriting income of $210.7 million with an 86.2 combined ratio. The company paid a special dividend of $2.00 per share and maintained its 29-year streak of underwriting profitability.

Notable impacts include $93.6 million in hurricane-related losses and $84.1 million favorable development in prior years' loss reserves. Book value per share increased 24% to $16.59. The company executed a two-for-one stock split on January 15, 2025.

Positive

• 11% growth in gross premiums written, surpassing $2 billion
• 18% increase in net investment income to $142.3 million
• 29th consecutive year of underwriting profitability
• 24% increase in book value per share
• 21% increase in operational cash flow to $560.2 million
• $236 million returned to shareholders through dividends

Negative

• Q4 net earnings declined 64% YoY to $40.9 million
• $93.6 million impact from hurricane losses
• Q4 combined ratio deteriorated to 94.4 from 82.7 in 2023
• Comprehensive loss of $26.3 million in Q4 due to fixed income portfolio losses

Insights

Financial Analyst

RLI Corp's Q4 2024 financial results present a complex picture that requires careful analysis. The headline net earnings decline to $40.9 million ($0.44 per share) from $114.6 million ($1.24 per share) in Q4 2023 initially appears concerning, but deeper analysis reveals underlying strength in the business model.

The company's underwriting performance remains impressive, achieving a 86.2% combined ratio for the full year, despite significant catastrophe losses. This marks an extraordinary 29-year streak of underwriting profitability, a rare achievement in the property and casualty insurance sector. The segmental breakdown shows particularly strong performance in the Property segment, with a 68.5% combined ratio, while Casualty faced some pressure at 97.9%.

Investment performance shows notable strength, with net investment income increasing 19% to $38.8 million in Q4. However, the fixed income portfolio experienced unrealized losses due to rising interest rates, resulting in a comprehensive loss of $26.3 million for the quarter.

A particularly positive signal is RLI's capital management strategy. The special dividend of $2.00 per share, combined with the regular dividend, returned $196.8 million to shareholders. This marks the company's 194th consecutive quarterly dividend, with 49 years of consecutive increases - a remarkable testament to financial stability and shareholder commitment.

The recent 2-for-1 stock split should enhance trading liquidity and potentially make the shares more accessible to retail investors. Premium growth of 11% for the full year, surpassing $2 billion for the first time, indicates strong market position and pricing power across all segments.

Market Research Analyst

From a market perspective, RLI's performance demonstrates remarkable resilience in a challenging insurance environment. The 11% premium growth amid intense competition and significant catastrophe events showcases strong underwriting discipline and market positioning.

The company's diversified revenue streams are proving effective, with all three segments contributing to growth. This balanced approach helps mitigate concentration risk and provides multiple growth avenues. The 21% increase in operational cash flow to $560.2 million indicates strong fundamental business performance and efficient capital management.

Book value per share growth of 24% (including dividends) significantly outperforms industry averages, reflecting superior capital allocation and risk management. The company's ability to maintain pricing discipline while growing premiums suggests strong competitive positioning and valuable niche market focus.

The recent stock split, combined with consistent dividend growth averaging 4.9% annually over the past decade, positions RLI attractively for both institutional and retail investors. The total shareholder return of nearly $1.5 billion over ten years demonstrates a compelling long-term value creation strategy.

PEORIA, Ill.--(BUSINESS WIRE)-- RLI Corp. (NYSE: RLI) – RLI Corp. reported fourth quarter 2024 net earnings of $40.9 million ($0.44 per share), compared to $114.6 million ($1.24 per share) for the fourth quarter of 2023. Operating earnings⁽¹⁾ for the fourth quarter of 2024 were $38.4 million ($0.41 per share), compared to $71.1 million ($0.77 per share) for the same period in 2023.

On January 15, 2025, RLI executed a two-for-one stock split of common stock. All share and per share data in this release reflect the stock split.

		Fourth Quarter						Year to Date
Earnings Per Diluted Share		2024			2023			2024			2023
Net earnings		$	0.44		$	1.24		$	3.74		$	3.31
Operating earnings (1)		$	0.41		$	0.77		$	2.87		$	2.47
(1) See discussion below: Non-GAAP and Performance Measures.

Highlights for the quarter included:

• Underwriting income⁽¹⁾ of $22.2 million on a combined ratio⁽¹⁾ of 94.4.
• 9% increase in gross premiums written and 19% increase in net investment income.
• Favorable development in prior years’ loss reserves resulted in a $8.7 million net increase in underwriting income.
• Losses from Hurricane Milton, resulting in a $42.4 million net decrease in underwriting income.
• Special dividend of $2.00 per share, representing $183.5 million returned to shareholders.

Highlights for the year included:

• Underwriting income⁽¹⁾ of $210.7 million on a combined ratio⁽¹⁾ of 86.2.
• 11% increase in gross premiums written and 18% increase in net investment income.
• Net cash flow provided by operations of $560.2 million, an increase of 21%.
• Favorable development in prior years’ loss reserves resulted in a $84.1 million net increase in underwriting income.
• Book value per share of $16.59, an increase of 24% (inclusive of dividends) from year-end 2023.

“Our customer service, consistent financial performance and prudent capital management distinguished RLI in 2024,” said RLI Corp. President & CEO Craig Kliethermes. “Despite an active hurricane season and highly competitive environment, we achieved an 86 combined ratio, marking our 29^th consecutive year of underwriting profitability. Gross premiums written grew by 11%, surpassing $2 billion for the first time, with all three product segments contributing to this growth. Our positive underwriting and investment results allowed us to return $236 million to shareholders through special and regular dividends. I want to thank our associate-owners for their contributions throughout the year, which helped differentiate RLI.”

Underwriting Income

RLI achieved $22.2 million of underwriting income in the fourth quarter of 2024 on a 94.4 combined ratio, compared to $59.8 million on an 82.7 combined ratio in 2023.

For the year, RLI achieved $210.7 million of underwriting income on an 86.2 combined ratio, compared to $173.2 million on an 86.6 combined ratio in 2023. Results for both years include favorable development in prior years’ loss reserves, which resulted in an $84.1 million and $95.3 million net increase to underwriting income in 2024 and 2023, respectively. The favorable development was offset by a $93.6 million net reduction to underwriting income for losses from Hurricanes Beryl, Helene and Milton, as well as other storm losses, in 2024. This compares to $81.2 million for losses from Hawaiian wildfires and other storm losses in 2023.

The following table highlights underwriting income and combined ratios by segment for the year.

Underwriting Income(1)								Combined Ratio(1)
(in millions)		2024			2023					2024		2023
Casualty		$	17.8		$	59.5		Casualty		97.9		92.2
Property			167.6			86.3		Property		68.5		78.5
Surety			25.3			27.4		Surety		82.2		79.6
Total		$	210.7		$	173.2		Total		86.2		86.6
(1) See discussion below: Non-GAAP and Performance Measures.

Other Income⁽²⁾

Net investment income for the quarter increased 19% to $38.8 million, compared to the same period in 2023. For the year ended December 31, 2024, net investment income was $142.3 million, compared to $120.4 million for the same period in 2023. The investment portfolio’s total return was -1.1% for the quarter and 6.4% for the year.

RLI’s comprehensive loss was $26.3 million for the quarter (-$0.28 per share), compared to comprehensive earnings of $216.2 million ($2.35 per share) for the same quarter in 2023. In addition to net earnings, comprehensive loss included after-tax unrealized losses from the fixed income portfolio in the fourth quarter of 2024, due to increasing interest rates. Full-year comprehensive earnings were $338.4 million ($3.66 per share), compared to $367.4 million ($3.99 per share) in 2023.

Special and Regular Dividends⁽²⁾

On December 20, 2024, the company paid a special cash dividend of $2.00 per share and a regular quarterly dividend of $0.145 per share for a combined total of $196.8 million. RLI has paid dividends for 194 consecutive quarters and increased regular dividends in each of the last 49 years. Over the last 10 years, the company has returned nearly $1.5 billion to shareholders and the regular dividend has grown an average of 4.9% per year.

Non-GAAP and Performance Measures

Management has included certain non-generally accepted accounting principles (non-GAAP) financial measures in presenting the company’s results. Management believes that these non-GAAP measures further explain the company’s results of operations and allow for a more complete understanding of the underlying trends in the company’s business. These measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles (GAAP). In addition, our definitions of these items may not be comparable to the definitions used by other companies.

Operating earnings and operating earnings per share (EPS) consist of our GAAP net earnings adjusted by net realized gains/(losses), net unrealized gains/(losses) on equity securities and taxes related thereto. Net earnings and net earnings per share are the GAAP financial measures that are most directly comparable to operating earnings and operating EPS. A reconciliation of the operating earnings and operating EPS to the comparable GAAP financial measures is included in the 2024 financial highlights below.

Underwriting income or profit represents the pretax profitability of our insurance operations and is derived by subtracting loss and settlement expenses, policy acquisition costs and insurance operating expenses from net premium earned, which are all GAAP financial measures. The combined ratio, which is derived from components of underwriting income, is a performance measure commonly used by property and casualty insurance companies and is calculated as the sum of loss and settlement expenses, policy acquisition costs and insurance operating expenses, divided by net premiums earned, which are all GAAP measures.

Other News

At 10 a.m. central standard time (CST) on January 23, 2025, RLI management will hold a conference call to discuss quarterly results with insurance industry analysts. Interested parties may listen to the discussion at https://events.q4inc.com/attendee/436980475.

(2) All share and per share data reflect the 2-for-1 stock split that occurred on January 15, 2025.

Except for historical information, this news release may include forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) including, without limitation, statements reflecting our current expectations about the future performance of our company or our business segments or about future market conditions. These statements are subject to certain risk factors that could cause actual results to differ materially. Various risk factors that could affect future results are listed in the company's filings with the Securities and Exchange Commission, including the Form 10-K Annual Report for the year ended December 31, 2023.

About RLI

RLI Corp. (NYSE: RLI) is a specialty insurer serving niche property, casualty and surety markets. The company provides deep underwriting expertise and superior service to commercial and personal lines customers nationwide. RLI’s products are offered through its insurance subsidiaries – RLI Insurance Company, Mt. Hawley Insurance Company and Contractors Bonding and Insurance Company. All of RLI’s insurance subsidiaries are rated A+ (Superior) by AM Best Company. RLI has paid and increased regular dividends for 49 consecutive years and delivered underwriting profits for 29 consecutive years. To learn more about RLI, visit www.rlicorp.com.

Supplemental disclosure regarding the earnings impact of specific items:

		Reserve Development(1) and Catastrophe Losses,
		Net of Reinsurance
		Three Months Ended							Twelve Months Ended
		December 31,							December 31,
(Dollars in millions, except per share amounts)		2024				2023			2024				2023
Favorable development in casualty prior years' reserves		$	11.5			$	9.0		$	51.4			$	76.0
Favorable development in property prior years' reserves		$	0.1			$	2.0		$	28.6			$	16.2
Favorable (unfavorable) development in surety prior years' reserves		$	(1.7	)		$	0.6		$	9.3			$	8.9
Net incurred losses related to:
2024 storms		$	—			$	—		$	(30.0	)		$	—
Hurricanes Beryl, Helene and Milton		$	(39.0	)		$	—		$	(76.0	)		$	—
2023 and prior events		$	—			$	1.3		$	6.0			$	(72.8	)
Reinstatement premium from events		$	—			$	2.6		$	—			$	(11.7	)
		Operating Earnings Per Share
		Three Months Ended							Twelve Months Ended
		December 31,							December 31,
		2024				2023			2024				2023
Operating Earnings Per Share(2)(3)		$	0.41			$	0.77		$	2.87			$	2.47
Specific items included in operating earnings per share:(1) (4)
Net favorable development in casualty prior years' reserves		$	0.09			$	0.06		$	0.37			$	0.57
Net favorable development in property prior years' reserves		$	—			$	0.02		$	0.22			$	0.12
Net favorable (unfavorable) development in surety prior years' reserves		$	(0.02	)		$	—		$	0.07			$	0.06
Net incurred losses related to:
2024 storms		$	—			$	—		$	(0.22	)		$	—
Hurricanes Beryl, Helene and Milton		$	(0.29	)		$	—		$	(0.56	)		$	—
2023 and prior events (incurred loss and reinstatement premium)		$	—			$	0.03		$	0.04			$	(0.63	)

(1)		Reserve development reflects changes from previously estimated losses.
(2)		See discussion above: Non-GAAP and Performance Measures.
(3)		All share and per share data reflect the 2-for-1 stock split that occurred on January 15, 2025.
(4)		Items included in operating earnings per share are after tax and incorporates incentive and profit sharing-related impacts which affected policy acquisition, insurance operating and general corporate expenses.

RLI CORP 2024 FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts)
		Three Months Ended December 31,												Twelve Months Ended December 31,
SUMMARIZED INCOME STATEMENT DATA:		2024				2023				% Change				2024				2023					% Change
Net premiums earned		$	397,176			$	345,894			14.8		%		$	1,526,406			$	1,294,306				17.9		%
Net investment income			38,776				32,548			19.1		%			142,278				120,383				18.2		%
Net realized gains			8,744				5,760			51.8		%			19,966				32,518				(38.6	)	%
Net unrealized gains (losses) on equity securities			(5,580	)			49,313			NM					81,734				64,787				26.2		%
Consolidated revenue		$	439,116			$	433,515			1.3		%		$	1,770,384			$	1,511,994				17.1		%
Loss and settlement expenses			225,512				146,424			54.0		%			739,253				604,413				22.3		%
Policy acquisition costs			121,854				111,242			9.5		%			464,040				418,325				10.9		%
Insurance operating expenses			27,568				28,381			(2.9	)	%			112,460				98,383				14.3		%
Interest expense on debt			1,492				1,373			8.7		%			6,331				7,301				(13.3	)	%
General corporate expenses			2,736				5,112			(46.5	)	%			15,880				15,917				(0.2	)	%
Total expenses		$	379,162			$	292,532			29.6		%		$	1,337,964			$	1,144,339				16.9		%
Equity in earnings of unconsolidated investees			(12,522	)			2,441			NM					(4,869	)			9,610				NM
Earnings before income taxes		$	47,432			$	143,424			(66.9	)	%		$	427,551			$	377,265				13.3		%
Income tax expense			6,572				28,812			(77.2	)	%			81,772				72,654				12.5		%
Net earnings		$	40,860			$	114,612			(64.3	)	%		$	345,779			$	304,611				13.5		%
Other comprehensive earnings (loss), net of tax			(67,199	)			101,621			NM					(7,420	)			62,773				NM
Comprehensive earnings (loss)		$	(26,339	)		$	216,233			NM				$	338,359			$	367,384				(7.9	)	%
Operating earnings(1):
Net earnings		$	40,860			$	114,612			(64.3	)	%		$	345,779			$	304,611				13.5		%
Less:
Net realized gains			(8,744	)			(5,760	)		51.8		%			(19,966	)			(32,518	)			(38.6	)	%
Income tax on realized gains			1,836				1,210			51.7		%			4,193				6,829				(38.6	)	%
Net unrealized (gains) losses on equity securities			5,580				(49,313	)		NM					(81,734	)			(64,787	)			26.2		%
Income tax on unrealized gains (losses) on equity securities			(1,171	)			10,355			NM					17,164				13,605				26.2		%
Operating earnings		$	38,361			$	71,104			(46.0	)	%		$	265,436			$	227,740				16.6		%
Return on Equity:
Net earnings															22.2		%		23.3		%
Comprehensive earnings															21.7		%		28.1		%
Per Share Data(2):
Diluted:
Weighted average shares outstanding (in 000's)			92,725				92,144								92,451				92,155
Net earnings per share		$	0.44			$	1.24			(64.5	)	%		$	3.74			$	3.31				13.0		%
Less:
Net realized gains			(0.09	)			(0.06	)		50.0		%			(0.22	)			(0.35	)			(37.1	)	%
Income tax on realized gains			0.02				0.01			100.0		%			0.05				0.07				(28.6	)	%
Net unrealized (gains) losses on equity securities			0.06				(0.54	)		NM					(0.88	)			(0.70	)			25.7		%
Income tax on unrealized gains (losses) on equity securities			(0.02	)			0.12			NM					0.18				0.14				28.6		%
Operating earnings per share(1)		$	0.41			$	0.77			(46.8	)	%		$	2.87			$	2.47				16.2		%
Comprehensive earnings (loss) per share		$	(0.28	)		$	2.35			NM				$	3.66			$	3.99				(8.3	)	%
Cash dividends per share - ordinary		$	0.145			$	0.135			7.4		%		$	0.570			$	0.535				6.5		%
Cash dividends per share - special		$	2.00			$	1.00			100.0		%		$	2.00			$	1.00				100.0		%
Net cash flow provided by operations		$	128,080			$	122,065			4.9		%		$	560,219			$	464,257				20.7		%

(1)		See discussion above: Non-GAAP and Performance Measures.
(2)		All share and per share data reflect the 2-for-1 stock split that occurred on January 15, 2025.
NM = Not Meaningful

RLI CORP 2024 FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts)
		December 31,			December 31,
		2024			2023			% Change
SUMMARIZED BALANCE SHEET DATA:
Fixed income, at fair value		$	3,175,796		$	2,855,849		11.2		%
(amortized cost - $3,391,159 at 12/31/24)
(amortized cost - $3,054,391 at 12/31/23)
Equity securities, at fair value			736,191			590,041		24.8		%
(cost - $417,897 at 12/31/24)
(cost - $354,022 at 12/31/23)
Short-term investments			74,915			134,923		(44.5	)	%
Other invested assets			57,939			59,081		(1.9	)	%
Cash and cash equivalents			39,790			36,424		9.2		%
Total investments and cash		$	4,084,631		$	3,676,318		11.1		%
Accrued investment income			28,319			24,062		17.7		%
Premiums and reinsurance balances receivable			230,534			221,206		4.2		%
Ceded unearned premiums			124,955			112,257		11.3		%
Reinsurance balances recoverable on unpaid losses			755,425			757,349		(0.3	)	%
Deferred policy acquisition costs			166,214			146,566		13.4		%
Property and equipment			43,172			46,715		(7.6	)	%
Investment in unconsolidated investees			56,477			56,966		(0.9	)	%
Goodwill and intangibles			53,562			53,562		0.0		%
Income taxes - deferred			7,793			15,872		(50.9	)	%
Other assets			77,720			69,348		12.1		%
Total assets		$	5,628,802		$	5,180,221		8.7		%
Unpaid losses and settlement expenses		$	2,693,470		$	2,446,025		10.1		%
Unearned premiums			984,140			892,326		10.3		%
Reinsurance balances payable			44,681			71,507		(37.5	)	%
Funds held			97,380			101,446		(4.0	)	%
Income taxes - current			749			3,757		(80.1	)	%
Short-term debt			100,000			100,000		—		%
Accrued expenses			124,242			108,880		14.1		%
Other liabilities			62,173			42,766		45.4		%
Total liabilities		$	4,106,835		$	3,766,707		9.0		%
Shareholders' equity			1,521,967			1,413,514		7.7		%
Total liabilities & shareholders' equity		$	5,628,802		$	5,180,221		8.7		%
OTHER DATA(1):
Common shares outstanding (in 000's)			91,738			91,280
Book value per share		$	16.59		$	15.49		7.1		%
Closing stock price per share		$	82.42		$	66.56		23.8		%
Statutory surplus		$	1,787,312		$	1,520,135		17.6		%

(1)		All share and per share data reflect the 2-for-1 stock split that occurred on January 15, 2025.
NM = Not Meaningful

RLI CORP 2024 FINANCIAL HIGHLIGHTS UNDERWRITING SEGMENT DATA (Unaudited) (Dollars in thousands, except per share amounts)
Three Months Ended December 31,
						GAAP					GAAP					GAAP					GAAP
		Casualty				Ratios		Property			Ratios		Surety			Ratios		Total			Ratios
2024
Gross premiums written		$	282,204					$	153,295				$	37,711				$	473,210
Net premiums written			228,455						103,945					34,045					366,445
Net premiums earned			225,823						134,610					36,743					397,176
Net loss & settlement expenses			155,217			68.7	%		63,856		47.4	%		6,439		17.5	%		225,512		56.8	%
Net operating expenses			79,356			35.2	%		44,516		33.1	%		25,550		69.6	%		149,422		37.6	%
Underwriting income (loss)(1)		$	(8,750	)		103.9	%	$	26,238		80.5	%	$	4,754		87.1	%	$	22,242		94.4	%
2023
Gross premiums written		$	238,467					$	158,047				$	37,846				$	434,360
Net premiums written			191,626						104,154					35,117					330,897
Net premiums earned			195,962						115,934					33,998					345,894
Net loss & settlement expenses			121,399			62.0	%		22,554		19.5	%		2,471		7.3	%		146,424		42.3	%
Net operating expenses			72,562			37.0	%		40,653		35.0	%		26,408		77.6	%		139,623		40.4	%
Underwriting income (loss)(1)		$	2,001			99.0	%	$	52,727		54.5	%	$	5,119		84.9	%	$	59,847		82.7	%

Twelve Months Ended December 31,
					GAAP					GAAP					GAAP					GAAP
		Casualty			Ratios		Property			Ratios		Surety			Ratios		Total			Ratios
2024
Gross premiums written		$	1,108,356				$	743,486				$	161,206				$	2,013,048
Net premiums written			915,625					542,997					146,899					1,605,521
Net premiums earned			852,837					531,384					142,185					1,526,406
Net loss & settlement expenses			524,490		61.5	%		198,806		37.4	%		15,957		11.2	%		739,253		48.4	%
Net operating expenses			310,559		36.4	%		165,042		31.1	%		100,899		71.0	%		576,500		37.8	%
Underwriting income (loss)(1)		$	17,788		97.9	%	$	167,536		68.5	%	$	25,329		82.2	%	$	210,653		86.2	%
2023
Gross premiums written		$	961,665				$	697,372				$	147,623				$	1,806,660
Net premiums written			788,982					500,057					138,708					1,427,747
Net premiums earned			758,346					401,530					134,430					1,294,306
Net loss & settlement expenses			418,032		55.1	%		172,062		42.9	%		14,319		10.7	%		604,413		46.7	%
Net operating expenses			280,835		37.1	%		143,152		35.6	%		92,721		68.9	%		516,708		39.9	%
Underwriting income (loss)(1)		$	59,479		92.2	%	$	86,316		78.5	%	$	27,390		79.6	%	$	173,185		86.6	%

(1)

See discussion above: Non-GAAP and Performance Measures.

Category: Earnings Release

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Media Contact

Aaron Diefenthaler

Chief Investment Officer & Treasurer

309-693-5846

Aaron.Diefenthaler@rlicorp.com

Source: RLI Corp.

FAQ

What was RLI's earnings per share for Q4 2024?

RLI reported earnings of $0.44 per share for Q4 2024, compared to $1.24 per share in Q4 2023.

How much did RLI's special dividend pay in December 2024?

RLI paid a special dividend of $2.00 per share plus a regular quarterly dividend of $0.145 per share in December 2024, totaling $196.8 million.

What was the impact of Hurricane Milton on RLI's Q4 2024 results?

Hurricane Milton resulted in a $42.4 million net decrease in underwriting income for Q4 2024.

How did RLI's gross premiums written perform in 2024?

RLI's gross premiums written grew by 11% in 2024, exceeding $2 billion for the first time in company history.

What was RLI's combined ratio for full-year 2024?

RLI achieved a combined ratio of 86.2 for the full year 2024, compared to 86.6 in 2023.