Key Takeaways RLI's product diversification, rate increases, and expanded distribution support strong top-line growth.RLI has delivered 29 straight years of underwriting profitability, underscoring operational strength.The insurer has raised regular dividends for 50 years, plus paid special dividends since 2011.Shares of RLI Corp. (RLI) have lost 9.6% in the past year against its industry, the Finance sector and the Zacks S&P 500 composite’s return of 7.5%, 16% and 14.3%, respectively.Closing at $68.40 on T ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Exact name of registrant as specified in its charter) For the quarterly period ended June 30, 2025 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 001-09463 RLI Corp. FORM 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Indicate by check mark whether the regi ...

Core Insights - RLI Corp. reported second-quarter 2025 operating earnings of 84 cents per share, exceeding the Zacks Consensus Estimate by 12%, although this represents a 2.3% decrease from the prior-year quarter [1] Operational Performance - Operating revenues for the quarter were $441 million, reflecting a 6.9% year-over-year increase, driven by a 6% rise in net premiums earned and a 16% increase in net investment income, though it missed the Zacks Consensus Estimate by 0.5% [2] - Gross premiums written remained flat at $562.3 million, with performance improvements in the Casualty and Property segments offset by a decline in the Surety segment [2] - Net investment income rose 16% year over year to $39.4 million, aligning with estimates, while total expenses increased by 9.8% to $345.8 million due to higher loss and settlement expenses [3] Financial Update - Underwriting income decreased by 11.14% year over year to $62.2 million, with the combined ratio deteriorating by 300 basis points to 84.5, better than the Zacks Consensus Estimate of 88 [4] - RLI exited the quarter with total investments and cash of $4.4 billion, an 8.4% increase from the end of 2024, and book value rose 13.9% to $18.89 per share [4] - Net cash flow from operations increased by 23.2% year over year to $174.7 million [4] - The statutory surplus increased by 2.3% to $1.8 billion as of June 30, 2025, while return on equity was 23.5%, down 180 basis points from the previous year [5] Dividend Update - On June 20, 2025, RLI paid a dividend of 16 cents, an increase of 1 cent from the previous payout, with cumulative dividends exceeding $971 million over the last five years [6] Peer Performances - The Travelers Companies reported second-quarter 2025 core income of $6.51 per share, beating estimates by 83.8%, with total revenues increasing by 6.7% to $12.1 billion [9] - The Progressive Corporation's earnings per share of $4.88 exceeded estimates by 10.1%, with operating revenues rising 19.5% to $42.2 billion [10] - W.R. Berkley's operating income of $1.05 per share beat estimates, with operating revenues at $3.6 billion, up 7.9% year over year [11]

Financial Data and Key Metrics Changes - The company reported second quarter operating earnings of $0.84 per share, supported by solid underwriting performance and a 16% increase in investment income [9] - The total combined ratio was 84.5, up from 81.5 last year, reflecting modest increases in the underlying loss and expense ratios [9] - Year-to-date book value per share has grown 16% inclusive of dividends [6][14] Business Line Data and Key Metrics Changes - The property segment experienced a 10% decline in gross premiums, influenced by rate decreases in E and S property, while Marine and Hawaii homeowners products continued to deliver growth [10][17] - The casualty insurance segment posted a 7% increase in gross premiums with a combined ratio of 96.5 for Q2 [11][18] - Surety's gross premium was up 7% over last year, with all sub-segments experiencing growth [11] Market Data and Key Metrics Changes - The commercial property market showed significant softening, impacting top-line growth which remained flat [6] - Competition has increased in the E and S property space, with about 20 new entrants in the last two years [31] - The company noted a 12% rate increase in the transportation division, despite a highly competitive environment [22][41] Company Strategy and Development Direction - The company focuses on profitability and long-term value creation over short-term results, adjusting strategies based on market conditions [6][7] - Emphasis on selection and discipline in underwriting, particularly in the property segment where the risk-reward profile is being carefully evaluated [7][15] - The company is investing in technology and digital tools to enhance customer service and improve underwriting processes [28][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating current market challenges while identifying attractive opportunities across the portfolio [6][24] - The company remains cautious about loss trends and continues to be selective in underwriting, particularly in the auto coverage space [22][68] - Management noted that recent tort reforms in certain states may positively impact underwriting confidence and business opportunities [56] Other Important Information - The company reported a total return of 2.9% for the quarter, benefiting from market recovery in May and June [13] - Operating cash flow for Q2 totaled $175 million, up $33 million from last year, providing a solid foundation for continued portfolio activity [12] Q&A Session Summary Question: Can you provide insight on acquisition costs in property and casualty? - Management noted pressure on commission costs in property and surety, with a mix shift observed [26][27] Question: Where is the pricing pressure coming from in casualty? - Management indicated increased competition in the E and S property space, with many new entrants affecting rates [30][31] Question: What is the outlook for loss cost trends in transportation? - Management expects double-digit loss cost inflation in commercial vehicles, necessitating continued rate increases [41] Question: Can you elaborate on the mix shift within surety? - Management explained that the mix has shifted towards more commercial surety and away from energy-related business [48][51] Question: Are there any early benefits from tort reform? - Management indicated that while it's early, there are signs of improved underwriting confidence in states with recent tort reforms [55][56] Question: What is the current state of the construction market? - Management reported a healthy construction market with increased submissions and positive trends in both surety and casualty segments [62][66]

Financial Data and Key Metrics Changes - The company reported second quarter operating earnings of $0.84 per share, supported by solid underwriting performance and a 16% increase in investment income [8][9] - The total combined ratio was 84.5, up from 81.5 last year, reflecting modest increases in the underlying loss and expense ratios [9][10] - Year-to-date book value per share increased by 16% inclusive of dividends [6][15] Business Line Data and Key Metrics Changes - The property segment experienced a 10% decline in gross premiums, influenced by rate decreases in E and S property, while Marine and Hawaii homeowners products continued to deliver growth [10][18] - The casualty insurance segment posted a 7% increase in gross premiums with a combined ratio of 96.5, benefiting from favorable prior year's reserve development [12][19] - Surety's gross premium was up 7% over last year, with all sub-segments experiencing growth [12][19] Market Data and Key Metrics Changes - The commercial property market showed significant softening, impacting top line growth which remained flat [6][9] - Competition increased in the E and S property space, with about 20 new entrants over the last two years, leading to rate pressure [30] - The transportation division saw a 12% increase in rates, although competition remains high [21][40] Company Strategy and Development Direction - The company focuses on discipline, continuous improvement, and sustainability, prioritizing profitability and long-term value creation over short-term results [6][7] - The strategy includes being selective in underwriting and adjusting to market conditions, particularly in property where the risk-reward profile is unfavorable [7][16] - The company emphasizes a strong community and collaboration among teams to support customers and enhance service delivery [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges and highlighted attractive opportunities across most of the portfolio despite market headwinds [7][24] - The company remains cautious about loss trends and continues to be selective in underwriting, particularly in the auto coverage space [22][68] - Management noted that recent tort reforms in certain states could positively impact underwriting confidence and business opportunities [56] Other Important Information - The company reported a positive total return of 2.9% for the quarter, benefiting from market recovery in May and June [14] - Operating cash flow for Q2 totaled $175 million, up $33 million from last year, providing a solid foundation for continued portfolio activity [13] Q&A Session Summary Question: Can you provide insight on acquisition costs in property and casualty? - Management noted pressure on commission costs in property and surety, with investments in technology and customer relationship management contributing to higher expenses [26][28] Question: Where is the pricing pressure coming from in casualty? - Management indicated increased competition in the E and S property space, with many new entrants affecting rates, while casualty rates remain stable due to tailored coverage [30][31] Question: What is the outlook for the construction market? - Management reported a healthy construction industry with double-digit increases in submissions, indicating positive trends in both surety and casualty segments [65] Question: How is the company addressing loss cost trends in transportation? - Management acknowledged significant double-digit inflation in commercial vehicles and emphasized the importance of rate increases and risk selection to maintain profitability [40][41] Question: Are there any early benefits from tort reform? - Management indicated that while it is early to assess the full impact, there are signs of increased confidence in underwriting in states with recent tort reforms [56]

Core Insights - RLI Corp. reported revenue of $441.32 million for the quarter ended June 2025, marking a year-over-year increase of 6.9% and an EPS of $0.84, slightly down from $0.86 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $443.64 million by 0.52%, while the EPS exceeded the consensus estimate of $0.75 by 12% [1] Financial Performance Metrics - RLI Corp.'s shares have returned -2.7% over the past month, contrasting with the Zacks S&P 500 composite's +5.4% change, and the stock currently holds a Zacks Rank 4 (Sell) [3] - Net loss & settlement expenses were reported at 45.9%, better than the five-analyst average estimate of 49.9% [4] - Net operating expenses totaled 38.6%, slightly above the 37.8% average estimate based on five analysts [4] - Underwriting income (loss) was reported at 84.5%, below the five-analyst average estimate of 87.7% [4] - Net premiums earned were $401.9 million, compared to the estimated $404.7 million, reflecting a 6% increase year-over-year [4] - Net investment income increased by 16.1% year-over-year to $39.42 million, surpassing the average estimate of $38.94 million [4] - Net premiums earned in the Property segment were $130.66 million, below the estimated $138.3 million, representing a -2.6% change year-over-year [4] - Net premiums earned in the Surety segment were $36.6 million, slightly below the average estimate of $38.1 million, with a year-over-year change of +2.1% [4] - Net premiums earned in the Casualty segment were $234.64 million, exceeding the average estimate of $227.11 million, with a year-over-year change of +12.2% [4]

Group 1: Earnings Performance - RLI Corp. reported quarterly earnings of $0.84 per share, exceeding the Zacks Consensus Estimate of $0.75 per share, but down from $0.86 per share a year ago, representing an earnings surprise of +12.00% [1] - The company posted revenues of $441.32 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.52%, compared to $413.03 million in the same quarter last year [2] - Over the last four quarters, RLI Corp. has surpassed consensus EPS estimates three times [2] Group 2: Stock Performance and Outlook - RLI Corp. shares have declined approximately 14.8% since the beginning of the year, while the S&P 500 has gained 7.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.51 on revenues of $448.88 million, and for the current fiscal year, it is $2.97 on revenues of $1.78 billion [7] - The estimate revisions trend for RLI Corp. was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Group 3: Industry Context - The Insurance - Property and Casualty industry, to which RLI Corp. belongs, is currently in the top 37% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

All share and per share data in this release reflect the two-for-one stock split that RLI executed on January 15, 2025. | | | Second Quarter | Year to Date | | | --- | --- | --- | --- | --- | | Earnings Per Diluted Share | 2025 | 2024 | 2025 | 2024 | | Net earnings | $ 1.34 | $ 0.89 | $ 2.03 | $ 2.27 | | Operating earnings (1) | $ 0.84 | $ 0.86 | $ 1.76 | $ 1.80 | (1) See discussion below: Non-GAAP and Performance Measures. Highlights for the quarter included: EXHIBIT 99.1 RLI REPORTS SECOND QUARTER 2025 RE ...

The market expects RLI Corp. (RLI) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on July 21, might help the stock move higher if these key numbers are better than e ...

It has been about a month since the last earnings report for RLI Corp. (RLI) . Shares have lost about 1.5% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is RLI Corp. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.How Have Estimates Been Moving Since Then?It turns o ...