RLI Reports Second Quarter 2024 Results

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The financial results reported by RLI Corp. for the second quarter of 2024 indicate strong performance improvements compared to the previous year. The net earnings rose to $82.0 million from $77.7 million and operating earnings increased significantly from $53.3 million to $79.3 million, showing a robust growth trajectory. The substantial rise in operating earnings suggests that the company's core operations are becoming more efficient and profitable.

Notably, the underwriting income and combined ratio improvements across different segments, particularly in the property sector, indicate that RLI's risk management and pricing strategies are effective. The property segment's combined ratio of 60.3% is particularly impressive, showing a substantial improvement from 74.6% in the same quarter last year. This suggests that RLI is managing its underwriting risk exceptionally well in this sector.

The 11% increase in gross premiums written and an 18% increase in net investment income reflect a healthy expansion and diversification of revenue streams. The book value per share also saw a notable increase of 14%, showing solid value creation for shareholders. For retail investors, this data indicates a positive financial health trend for RLI, potentially making it an attractive investment in both short and long terms.

From a market perspective, the consistent performance of RLI Corp. in improving their underwriting income and combined ratios across multiple segments is a strong indicator of their competitive edge in the property and casualty insurance market. The company's ability to find growth opportunities in the casualty and surety segments while maintaining disciplined underwriting in the property segment highlights a well-balanced approach to market expansion and risk management.

The favorable development in prior years' loss reserves contributing to the underwriting income underscores effective reserve management practices. The increase in net investment income by 18% indicates RLI's strategic investment decisions are yielding positive results even in a volatile interest rate environment. This comprehensive performance suggests market confidence in RLI's ongoing strategies and resilience, which can attract more investor interest.

RLI Corp.'s results showcase their strong underwriting proficiency and strategic management within the insurance industry. The combined ratio of 81.5% is well below the industry average, which typically hovers around 100%, indicating better operational efficiency and profitability. The property segment's combined ratio improvement from 74.6% to 60.3% is particularly noteworthy, demonstrating RLI's adeptness in managing claims and operational costs.

The recognition by Ward Benchmarking as a top-performing company for the 34th consecutive year reinforces RLI's longstanding reputation for excellence in the industry. This accolade, coupled with strong financial performance, suggests that RLI is not only maintaining but also building on its leadership position. This continued recognition can enhance RLI's brand value and attract more high-quality business, further driving future growth.

07/22/2024 - 04:10 PM

PEORIA, Ill.--(BUSINESS WIRE)-- RLI Corp. (NYSE: RLI) – RLI Corp. reported second quarter 2024 net earnings of $82.0 million ($1.78 per share), compared to $77.7 million ($1.69 per share) for the second quarter of 2023. Operating earnings⁽¹⁾ for the second quarter of 2024 were $79.3 million ($1.72 per share), compared to $53.3 million ($1.16 per share) for the same period in 2023.


	Second Quarter				Year to Date
Earnings Per Diluted Share	2024		2023		2024		2023
Net earnings	$	1.78	$	1.69	$	4.55	$	3.83
Operating earnings ⁽¹⁾	$	1.72	$	1.16	$	3.61	$	2.79

(1) See discussion below: Non-GAAP and Performance Measures.

See discussion below: Non-GAAP and Performance Measures.

Highlights for the quarter included:

Underwriting income⁽¹⁾ of $70.0 million on a combined ratio⁽¹⁾ of 81.5.
11% increase in gross premiums written.
18% increase in net investment income.
Favorable development in prior years’ loss reserves resulted in a $19.8 million net increase in underwriting income.
Book value per share of $34.64, an increase of 14% (inclusive of dividends) from year-end 2023.

“We delivered excellent results in the second quarter and reported an 82 combined ratio, 11% growth in gross premiums written and 18% increase in investment income," said RLI Corp. President & CEO Craig Kliethermes. “We are pleased with the balanced growth we achieved across our product portfolio. The casualty and surety segments continued to find opportunities for expansion, while market conditions in our property segment allowed us to demonstrate our underwriting discipline. Our performance during the quarter highlights the value of RLI’s underwriting-focused business model and strength of our diversified portfolio.”

Underwriting Income

RLI achieved $70.0 million of underwriting income in the second quarter of 2024 on an 81.5 combined ratio, compared to $41.2 million on an 87.2 combined ratio in 2023.

Results for both years include favorable development in prior years’ loss reserves, which resulted in a $19.8 million and $17.0 million net increase to underwriting income in 2024 and 2023, respectively.

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

Underwriting Income⁽¹⁾

Combined Ratio⁽¹⁾

(in millions)

2024

2023

2024

2023

Casualty

10.3

7.0

Casualty

95.1

96.3

Property

53.2

25.9

Property

60.3

74.6

Surety

6.5

8.3

Surety

81.8

75.0

Total

70.0

41.2

Total

81.5

87.2

(1) See discussion below: Non-GAAP and Performance Measures.

Other Income

Net investment income for the quarter increased 18.0% to $34.0 million, compared to the same period in 2023. The investment portfolio’s total return was 0.9% for the quarter and 2.7% for the six months ended June 30, 2024.

RLI’s comprehensive earnings were $74.1 million for the quarter ($1.61 per share), compared to $57.9 million ($1.26 per share) for the same quarter in 2023. In addition to net earnings, comprehensive earnings included after-tax unrealized losses from the fixed income portfolio, due to rising interest rates.

Dividends Paid in Second Quarter of 2024

On June 20, 2024, the company paid a regular quarterly dividend of $0.29 per share, a $0.02 increase over the prior quarter. RLI’s cumulative dividends total more than $819 million paid over the last five years.

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

On July 11, 2024, RLI was named one of the insurance industry’s top-performing companies by Ward Benchmarking, a business unit of Aon, for the 34th consecutive year. RLI is the only property & casualty insurance company to be recognized as a Ward’s 50® P&C Top Performer every year since the list’s inception in 1991.

At 10 a.m. central daylight time (CDT) on July 23, 2024, 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/427115749.

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 28 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						Six Months Ended
	June 30,						June 30,
(Dollars in millions, except per share amounts)	2024			2023			2024			2023
Favorable development in casualty prior years' reserves	$	12.8		$	9.0		$	31.0		$	44.9
Favorable development in property prior years' reserves	$	5.3		$	3.5		$	24.1		$	16.1
Favorable development in surety prior years' reserves	$	2.4		$	4.2		$	7.8		$	7.4

Net incurred losses related to:
2024 storms	$	(16.0	)	$	—		$	(28.0	)	$	—
2023 and prior events	$	2.0		$	(15.0	)	$	2.0		$	(18.9	)

	Operating Earnings Per Share
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Operating Earnings Per Share⁽²⁾	$	1.72		$	1.16		$	3.61		$	2.79

Specific items included in operating earnings per share:^{(1) (3)}
Net favorable development in casualty prior years' reserves	$	0.19		$	0.14		$	0.42		$	0.66
Net favorable development in property prior years' reserves	$	0.08		$	0.05		$	0.38		$	0.24
Net favorable development in surety prior years' reserves	$	0.04		$	0.07		$	0.12		$	0.11

Net incurred losses related to:
2024 storms	$	(0.24	)	$	—		$	(0.41	)	$	—
2023 and prior events	$	0.03		$	(0.23	)	$	0.03		$	(0.28	)

(1)	Reserve development reflects changes from previously estimated losses.
(2)	See discussion above: Non-GAAP and Performance Measures.
(3)	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 June 30,									Six Months Ended June 30,
SUMMARIZED INCOME STATEMENT DATA:	2024			2023			% Change			2024				2023				% Change
Net premiums earned	$	379,065		$	322,280		17.6		%	$	739,741			$	630,003			17.4		%
Net investment income		33,961			28,788		18.0		%		66,808				55,872			19.6		%
Net realized gains (losses)		(192	)		5,580		NM				5,802				20,200			(71.3	)	%
Net unrealized gains on equity securities		3,608			25,214		(85.7	)	%		48,922				40,710			20.2		%
Consolidated revenue	$	416,442		$	381,862		9.1		%	$	861,273			$	746,785			15.3		%
Loss and settlement expenses		167,799			153,943		9.0		%		311,623				268,431			16.1		%
Policy acquisition costs		113,921			102,626		11.0		%		224,375				204,070			10.0		%
Insurance operating expenses		27,321			24,510		11.5		%		56,024				48,411			15.7		%
Interest expense on debt		1,604			2,047		(21.6	)	%		3,222				4,055			(20.5	)	%
General corporate expenses		4,140			4,219		(1.9	)	%		9,150				8,433			8.5		%
Total expenses	$	314,785		$	287,345		9.5		%	$	604,394			$	533,400			13.3		%
Equity in earnings of unconsolidated investees		1,646			1,514		8.7		%		6,415				5,437			18.0		%
Earnings before income taxes	$	103,303		$	96,031		7.6		%	$	263,294			$	218,822			20.3		%
Income tax expense		21,311			18,379		16.0		%		53,402				42,359			26.1		%
Net earnings	$	81,992		$	77,652		5.6		%	$	209,892			$	176,463			18.9		%

Other comprehensive earnings (loss), net of tax		(7,843	)		(19,721	)	(60.2	)	%		(20,514	)			17,986			NM
Comprehensive earnings	$	74,149		$	57,931		28.0		%	$	189,378			$	194,449			(2.6	)	%

Operating earnings⁽¹⁾:
Net earnings	$	81,992		$	77,652		5.6		%	$	209,892			$	176,463			18.9		%
Less:
Net realized (gains) losses		192			(5,580	)	NM				(5,802	)			(20,200	)		(71.3	)	%
Income tax on realized gains (losses)		(41	)		1,171		NM				1,218				4,242			(71.3	)	%
Net unrealized gains on equity securities		(3,608	)		(25,214	)	(85.7	)	%		(48,922	)			(40,710	)		20.2		%
Income tax on unrealized gains on equity securities		757			5,295		(85.7	)	%		10,273				8,549			20.2		%
Operating earnings	$	79,292		$	53,324		48.7		%	$	166,659			$	128,344			29.9		%

Return on Equity:
Net earnings (trailing four quarters)											23.6		%		56.9		%
Comprehensive earnings (trailing four quarters)											25.3		%		53.1		%

Per Share Data:
Diluted:
Weighted average shares outstanding (in 000's)		46,179			46,044						46,169				46,045

Net earnings per share	$	1.78		$	1.69		5.3		%	$	4.55			$	3.83			18.8		%
Less:
Net realized (gains) losses		—			(0.12	)	NM				(0.13	)			(0.44	)		(70.5	)	%
Income tax on realized gains (losses)		—			0.03		NM				0.03				0.09			(66.7	)	%
Net unrealized gains on equity securities		(0.08	)		(0.55	)	(85.5	)	%		(1.06	)			(0.88	)		20.5		%
Income tax on unrealized gains on equity securities		0.02			0.11		(81.8	)	%		0.22				0.19			15.8		%
Operating earnings per share⁽¹⁾	$	1.72		$	1.16		48.3		%	$	3.61			$	2.79			29.4		%

Comprehensive earnings per share	$	1.61		$	1.26		27.8		%	$	4.10			$	4.22			(2.8	)	%

Cash dividends per share - ordinary	$	0.29		$	0.27		7.4		%	$	0.56			$	0.53			5.7		%

Net cash flow provided by operations	$	141,825		$	174,376		(18.7	)	%	$	212,771			$	243,595			(12.7	)	%

(1) See discussion above: Non-GAAP and Performance Measures.

NM = Not Meaningful

RLI CORP
2024 FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)

	June 30,		December 31,
	2024		2023		% Change
SUMMARIZED BALANCE SHEET DATA:
Fixed income, at fair value	$	2,989,527	$	2,855,849	4.7		%
(amortized cost - $3,217,866 at 6/30/24)
(amortized cost - $3,054,391 at 12/31/23)
Equity securities, at fair value		666,563		590,041	13.0		%
(cost - $381,138 at 6/30/24)
(cost - $354,022 at 12/31/23)
Short-term investments		125,865		134,923	(6.7	)	%
Other invested assets		55,364		59,081	(6.3	)	%
Cash and cash equivalents		50,030		36,424	37.4		%
Total investments and cash	$	3,887,349	$	3,676,318	5.7		%

Accrued investment income		26,683		24,062	10.9		%
Premiums and reinsurance balances receivable		294,774		221,206	33.3		%
Ceded unearned premiums		114,893		112,257	2.3		%
Reinsurance balances recoverable on unpaid losses		782,288		757,349	3.3		%
Deferred policy acquisition costs		167,295		146,566	14.1		%
Property and equipment		46,574		46,715	(0.3	)	%
Investment in unconsolidated investees		67,249		56,966	18.1		%
Goodwill and intangibles		53,562		53,562	0.0		%
Income taxes - deferred		12,291		15,872	(22.6	)	%
Other assets		58,715		69,348	(15.3	)	%
Total assets	$	5,511,673	$	5,180,221	6.4		%

Unpaid losses and settlement expenses	$	2,544,622	$	2,446,025	4.0		%
Unearned premiums		992,754		892,326	11.3		%
Reinsurance balances payable		38,968		71,507	(45.5	)	%
Funds held		107,235		101,446	5.7		%
Income taxes - current		7,610		3,757	102.6		%
Debt		100,000		100,000	—		%
Accrued expenses		83,805		108,880	(23.0	)	%
Other liabilities		51,972		42,766	21.5		%
Total liabilities	$	3,926,966	$	3,766,707	4.3		%
Shareholders' equity		1,584,707		1,413,514	12.1		%
Total liabilities & shareholders' equity	$	5,511,673	$	5,180,221	6.4		%

OTHER DATA:
Common shares outstanding (in 000's)		45,746		45,640

Book value per share	$	34.64	$	30.97	11.9		%
Closing stock price per share	$	140.69	$	133.12	5.7		%

Statutory surplus	$	1,708,501	$	1,520,135	12.4		%

RLI CORP
2024 FINANCIAL HIGHLIGHTS
UNDERWRITING SEGMENT DATA
(Unaudited)
(Dollars in thousands, except per share amounts)

Three Months Ended June 30,
			GAAP				GAAP				GAAP				GAAP
	Casualty		Ratios		Property		Ratios		Surety		Ratios		Total		Ratios
2024

Gross premiums written	$	286,556			$	236,014			$	40,803			$	563,373
Net premiums written		238,892				183,453				37,554				459,899
Net premiums earned		209,100				134,097				35,868				379,065
Net loss & settlement expenses		121,850	58.3	%		41,382	30.9	%		4,567	12.7	%		167,799	44.3	%
Net operating expenses		76,935	36.8	%		39,535	29.4	%		24,772	69.1	%		141,242	37.2	%
Underwriting income⁽¹⁾	$	10,315	95.1	%	$	53,180	60.3	%	$	6,529	81.8	%	$	70,024	81.5	%

2023

Gross premiums written	$	251,057			$	221,889			$	35,018			$	507,964
Net premiums written		208,978				177,830				32,733				419,541
Net premiums earned		187,048				101,841				33,391				322,280
Net loss & settlement expenses		110,195	58.9	%		41,139	40.4	%		2,609	7.8	%		153,943	47.8	%
Net operating expenses		69,876	37.4	%		34,825	34.2	%		22,435	67.2	%		127,136	39.4	%
Underwriting income⁽¹⁾	$	6,977	96.3	%	$	25,877	74.6	%	$	8,347	75.0	%	$	41,201	87.2	%


Six Months Ended June 30,
			GAAP				GAAP				GAAP				GAAP
	Casualty		Ratios		Property		Ratios		Surety		Ratios		Total		Ratios
2024

Gross premiums written	$	531,885			$	416,378			$	83,785			$	1,032,048
Net premiums written		444,520				316,624				76,388				837,532
Net premiums earned		407,376				263,508				68,857				739,741
Net loss & settlement expenses		231,322	56.8	%		73,959	28.1	%		6,342	9.2	%		311,623	42.1	%
Net operating expenses		152,065	37.3	%		78,653	29.8	%		49,681	72.2	%		280,399	37.9	%
Underwriting income⁽¹⁾	$	23,989	94.1	%	$	110,896	57.9	%	$	12,834	81.4	%	$	147,719	80.0	%

2023

Gross premiums written	$	468,891			$	380,735			$	73,350			$	922,976
Net premiums written		390,179				302,696				69,251				762,126
Net premiums earned		373,079				190,608				66,316				630,003
Net loss & settlement expenses		194,883	52.2	%		67,576	35.5	%		5,972	9.0	%		268,431	42.6	%
Net operating expenses		139,388	37.4	%		68,772	36.0	%		44,321	66.8	%		252,481	40.1	%
Underwriting income⁽¹⁾	$	38,808	89.6	%	$	54,260	71.5	%	$	16,023	75.8	%	$	109,091	82.7	%

(1) See discussion above: Non-GAAP and Performance Measures.

Category: Earnings Release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240722476008/en/

Aaron Diefenthaler

Chief Investment Officer & Treasurer

309-693-5846

Aaron.Diefenthaler@rlicorp.com

Source: RLI Corp.

FAQ

What were RLI's Q2 2024 earnings per share?

RLI reported net earnings of $1.78 per share for Q2 2024, compared to $1.69 per share in Q2 2023.

How much did RLI's gross premiums written increase in Q2 2024?

RLI reported an 11% increase in gross premiums written for Q2 2024 compared to the same period in 2023.

What was RLI's combined ratio for Q2 2024?

RLI achieved a combined ratio of 81.5 for Q2 2024, an improvement from 87.2 in Q2 2023.

How much did RLI's net investment income grow in Q2 2024?

RLI's net investment income increased by 18% to $34.0 million in Q2 2024 compared to the same period in 2023.

What was RLI's book value per share at the end of Q2 2024?

RLI's book value per share was $34.64 at the end of Q2 2024, representing a 14% increase from year-end 2023.

RLI Reports Second Quarter 2024 Results

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FAQ

What were RLI's Q2 2024 earnings per share?

How much did RLI's gross premiums written increase in Q2 2024?

What was RLI's combined ratio for Q2 2024?

How much did RLI's net investment income grow in Q2 2024?

What was RLI's book value per share at the end of Q2 2024?

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What was RLI's book value per share at the end of Q2 2024?

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