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
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