It has been about a month since the last earnings report for RLI Corp. (RLI) . Shares have added about 4.2% in that time frame, outperforming the S&P 500.But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is RLI Corp. due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for RLI Corp. before we dive into how investors and analysts have reacted as of lat ...

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Nov 13, 2025 1:30 PM Eastern Standard Time RLI Declares Regular & Special Dividends Share PEORIA, Ill.--(BUSINESS WIRE)--RLI Corp. (NYSE: RLI) – RLI Corp. announced today its Board of Directors has declared a special cash dividend of $2.00 per share of common stock, which is expected to total approximately $184 million, and a regular quarterly cash dividend of $0.16 per share. Both dividends are payable on December 19, 2025, to shareholders of record as of November 28, 2025. "RLI's return of $184 million in ...

Core Insights - RLI Transportation has partnered with Netradyne to enhance driver safety and fleet performance through AI and edge computing solutions [1][3] - The partnership aims to reduce accidents and improve driver behavior by providing access to Netradyne's Driver•i® video telematics solution [1][2] Partnership Details - RLI Transportation customers using Netradyne's dual-facing dashcams can receive an insurance premium discount of up to 5%, while those using only outward-facing cameras can receive a discount of up to 2% [2] - RLI's loss control experts will collaborate with customers to analyze driver data and tailor risk management strategies [2][3] Company Commitment - RLI is focused on advancing fleet safety through innovative technology, combining Netradyne's AI-driven insights with RLI's proactive risk management solutions [3] - The partnership is designed to help customers identify and correct risky driving behaviors, reinforce positive driving patterns, and reduce losses [3] About RLI and Netradyne - RLI Corp. is a specialty insurer providing a range of insurance products and services, rated A+ "Superior" by AM Best Company [4] - Netradyne is recognized for its AI-powered technologies in fleet management, having analyzed over 25 billion miles for risk and developed a driver scoring system [6]

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the next 30 days [2][3] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [3] Value Score - The Value Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - The Growth Score assesses a company's future prospects by analyzing projected and historical earnings, sales, and cash flow to find stocks with sustainable growth [4] Momentum Score - The Momentum Score helps investors capitalize on price trends by analyzing short-term price changes and earnings estimate revisions [5] VGM Score - The VGM Score combines the three Style Scores to identify stocks with attractive value, strong growth forecasts, and promising momentum, serving as a useful indicator alongside the Zacks Rank [6] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in building successful portfolios, with 1 (Strong Buy) stocks achieving an average annual return of +23.93% since 1988, significantly outperforming the S&P 500 [7][8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [9][10] Company Spotlight: RLI Corp. - RLI Corp., a specialty property-casualty underwriter based in Peoria, IL, operates primarily through RLI Insurance Company and serves 50 states and the District of Columbia [11] - Currently rated 3 (Hold) by Zacks, RLI has a VGM Score of A and a Growth Style Score of B, with a projected year-over-year earnings growth of 14.6% for the current fiscal year [12] - Recent upward revisions in earnings estimates and a solid earnings surprise average of +9% position RLI as a potential growth investment [12]

Core Viewpoint - RLI Corp. has promoted Cathy Martin to Vice President of Excess and Surplus (E&S) Excess Liability, highlighting the company's commitment to leadership and expertise in the specialty insurance sector [1][2]. Group 1: Leadership and Experience - Cathy Martin will lead RLI's E&S Excess Liability business and co-lead the E&S Casualty Brokerage Group with Chris Hughs [2]. - Martin joined RLI in 2007 as Director of Underwriting, Specialty Programs, and has nearly four decades of industry experience [2][3]. - Prior to her role at RLI, she held leadership positions at New World Insurance and The Center for E&S Insurance [3]. Group 2: Recognition and Confidence - Jen Klobnak, COO of RLI Corp., praised Martin's exceptional underwriting expertise and leadership record, indicating strong internal support for her new role [3][4]. - Martin is recognized for her strategic, solution-oriented approach and her ability to build trusted partnerships with producers and colleagues [4].

[Company Information](index=1&type=section&id=Company%20Information) This section details RLI Corp.'s corporate structure, stock information, and regulatory filing status [Registrant Details](index=1&type=section&id=Registrant%20Details) RLI Corp. is a Delaware-incorporated company, with common stock (RLI) listed on the NYSE - RLI Corp. is a Delaware-incorporated company, trading on the New York Stock Exchange under the symbol **RLI**[2](index=2&type=chunk)[3](index=3&type=chunk) Common Stock Outstanding (as of Oct 14, 2025) | Metric | Value | | :--- | :--- | | Common Stock Outstanding (as of Oct 14, 2025) | 91,837,835 shares | - The registrant is a **large accelerated filer** and is not a shell company[3](index=3&type=chunk)[4](index=4&type=chunk) [Part I - Financial Information](index=4&type=section&id=Part%20I%20-%20Financial%20Information) This part presents RLI Corp.'s unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents RLI Corp.'s unaudited condensed consolidated financial statements and detailed notes [Condensed Consolidated Statements of Earnings and Comprehensive Earnings](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings%20and%20Comprehensive%20Earnings) This statement provides RLI Corp.'s financial performance, including revenues, net earnings, and comprehensive earnings Consolidated Revenue (in thousands) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net premiums earned | $407,695 | $389,489 | $1,207,944 | $1,129,230 | | Net investment income | $41,270 | $36,694 | $117,414 | $103,502 | | Net realized gains | $18,318 | $5,420 | $48,234 | $11,222 | | Net unrealized gains on equity securities | $41,981 | $38,392 | $43,163 | $87,314 | | **Consolidated revenue** | **$509,264** | **$469,995** | **$1,416,755** | **$1,331,268** | Net Earnings and EPS (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net earnings | $124,610 | $95,027 | $312,160 | $304,919 | | Basic net earnings per share | $1.36 | $1.04 | $3.40 | $3.33 | | Diluted net earnings per share | $1.35 | $1.03 | $3.38 | $3.30 | | Comprehensive earnings | $152,284 | $175,320 | $388,565 | $364,698 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement details RLI Corp.'s financial position, including assets, liabilities, and shareholders' equity Key Balance Sheet Items (in thousands) | Metric | September 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total investments and cash | $4,690,177 | $4,084,631 | | Total assets | $6,247,000 | $5,628,802 | | Unpaid losses and settlement expenses | $2,873,054 | $2,693,470 | | Unearned premiums | $1,035,756 | $984,140 | | Total liabilities | $4,372,824 | $4,106,835 | | Total shareholders' equity | $1,874,176 | $1,521,967 | | Total liabilities and shareholders' equity | $6,247,000 | $5,628,802 | [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) This statement outlines changes in RLI Corp.'s shareholders' equity, including net earnings and dividends Shareholders' Equity Changes (in thousands) | Metric | Balance, Jan 1, 2025 | Balance, Sep 30, 2025 | | :--- | :--- | :--- | | Total Common Shareholders' Equity | $1,521,967 | $1,874,176 | | Net earnings | $63,214 (Q1) + $124,336 (Q2) + $124,610 (Q3) | - | | Other comprehensive earnings (loss), net of tax | $30,030 (Q1) + $18,701 (Q2) + $27,674 (Q3) | - | | Dividends and dividend equivalents | $(13,776) (Q1) + $(14,706) (Q2) + $(14,698) (Q3) | - | - Total shareholders' equity increased from **$1,521,967 thousand** at January 1, 2025, to **$1,874,176 thousand** at September 30, 2025, driven by net earnings and other comprehensive earnings, partially offset by dividends[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes RLI Corp.'s cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary (in thousands) | Cash Flow Type | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $457,453 | $432,139 | | Net cash used in investing activities | $(402,518) | $(372,088) | | Net cash used in financing activities | $(42,104) | $(35,841) | | Net increase in cash | $12,831 | $24,210 | | Cash at September 30, | $52,621 | $60,634 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of RLI Corp.'s financial statements, accounting policies, and specific components [1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=1.%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note describes the basis of financial statement preparation and key accounting policies, including stock split adjustments - The unaudited interim condensed consolidated financial statements are prepared in accordance with **GAAP** and reflect all necessary adjustments of a normal and recurring nature[20](index=20&type=chunk) - On January 15, 2025, RLI Corp. effected a **two-for-one stock split**, retroactively adjusting all share and per share information[22](index=22&type=chunk) - New accounting standards (**ASU 2023-09, 2024-03, 2025-06**) are disclosure-related or not expected to materially impact financial statements[24](index=24&type=chunk)[26](index=26&type=chunk)[29](index=29&type=chunk) [D. REINSURANCE](index=11&type=section&id=D.%20REINSURANCE) This note details reinsurance balances recoverable, associated credit risk, and allowances for uncollectible amounts - Reinsurance balances recoverable are reported as assets and are subject to **credit risk**, which the Company monitors through financial condition reviews and credit ratings[30](index=30&type=chunk) Allowances for Uncollectible Reinsurance Balances (in millions) | Metric | September 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Allowance for uncollectible paid reinsurance balances | $17 | $17 | | Allowance for uncollectible unpaid reinsurance balances | $11 | $10 | [E. INTANGIBLE ASSETS](index=11&type=section&id=E.%20INTANGIBLE%20ASSETS) This note provides information on goodwill and other intangible assets, including impairment assessments Goodwill and Intangible Assets (in thousands) | Asset Type | September 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Goodwill (Surety) | $40,816 | $40,816 | | Goodwill (Casualty) | $5,246 | $5,246 | | Indefinite-lived intangibles | $7,500 | $7,500 | | **Total goodwill and intangibles** | **$53,562** | **$53,562** | - Annual impairment assessments performed in **Q2 2025** found **no impairment** of goodwill or indefinite-lived intangible assets, and no triggering events as of September 30, 2025[34](index=34&type=chunk) [F. EARNINGS PER SHARE](index=11&type=section&id=F.%20EARNINGS%20PER%20SHARE) This note presents basic and diluted earnings per share calculations and weighted average share counts Basic and Diluted EPS (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Basic EPS | $1.36 | $1.04 | $3.40 | $3.33 | | Diluted EPS | $1.35 | $1.03 | $3.38 | $3.30 | | Weighted average basic shares | 91,849 | 91,559 | 91,816 | 91,467 | | Weighted average diluted shares | 92,310 | 92,441 | 92,460 | 92,370 | [G. COMPREHENSIVE EARNINGS](index=13&type=section&id=G.%20COMPREHENSIVE%20EARNINGS) This note explains comprehensive earnings, including unrealized gains/losses on fixed income securities and tax impacts - Comprehensive earnings include net earnings plus after-tax unrealized gains and losses on available-for-sale fixed income portfolio, using a **21% federal statutory tax rate**[37](index=37&type=chunk) Other Comprehensive Earnings (Loss) (in thousands) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net current-period other comprehensive earnings (loss) | $27,674 | $80,293 | $76,405 | $59,779 | | Beginning balance (Accumulated OCI) | $(124,992) | $(186,817) | $(173,723) | $(166,303) | | Ending balance (Accumulated OCI) | $(97,318) | $(106,524) | $(97,318) | $(106,524) | - Unrealized gains, net of tax, from the fixed income portfolio increased to **$76 million** for the first nine months of 2025 (vs. **$60 million** in 2024) due to decreasing interest rates[38](index=38&type=chunk) [H. FAIR VALUE MEASUREMENTS](index=15&type=section&id=H.%20FAIR%20VALUE%20MEASUREMENTS) This note describes the fair value hierarchy and classification of financial instruments, including investments - Fair value is determined using a hierarchy: **Level 1** (quoted prices in active markets), **Level 2** (observable inputs), and **Level 3** (unobservable inputs)[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - Corporate, Agency, Government, Municipal bonds, and most MBS/CMBS/ABS are classified as **Level 2**. Regulation D private placement securities are **Level 3**[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) - Nearly all equity holdings are **Level 1** (exchange-traded), with some Level 2 and Level 3 for non-exchange traded equities[52](index=52&type=chunk) [2. INVESTMENTS](index=17&type=section&id=2.%20INVESTMENTS) This note details the investment portfolio, including fixed income and equity securities, and realized gains/losses - The investment portfolio primarily consists of fixed income debt securities (available-for-sale, at fair value) and common stock equity securities (at fair value)[54](index=54&type=chunk) Net Realized Gains (Losses) from Investment Dispositions (in thousands) | Investment Type | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | | Fixed income securities - available-for-sale | $1,857 | $(1,951) | | Equity securities | $45,487 | $19,936 | | Fixed income securities - calls/maturities | $199 | $(973) | Fair Value Measurements by Level (in thousands) | Asset Type | Sep 30, 2025 (Level 1) | Sep 30, 2025 (Level 2) | Sep 30, 2025 (Level 3) | Dec 31, 2024 (Level 1) | Dec 31, 2024 (Level 2) | Dec 31, 2024 (Level 3) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Fixed income securities | $0 | $3,439,225 | $97,259 | $0 | $3,085,293 | $90,503 | | Equity securities | $874,621 | $0 | $4,251 | $731,569 | $0 | $4,622 | | **Total** | **$874,621** | **$3,439,225** | **$101,510** | **$731,569** | **$3,085,293** | **$95,125** | [Allowance for Credit Losses and Unrealized Losses on Fixed Income Securities](index=20&type=section&id=Allowance%20for%20Credit%20Losses%20and%20Unrealized%20Losses%20on%20Fixed%20Income%20Securities) This note discusses allowances for credit losses and unrealized losses on available-for-sale fixed income securities - An allowance for credit losses is recognized for available-for-sale fixed income securities based on criteria like changes in technology, non-payment, operating losses, or credit downgrades[60](index=60&type=chunk)[63](index=63&type=chunk) Allowance for Expected Credit Losses on Available-for-Sale Securities (in thousands) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Beginning balance | $245 | $228 | $197 | $306 | | Increase to allowance | $717 | $30 | $720 | $30 | | Net increase (decrease) | $(63) | $(24) | $(18) | $(13) | | **Balance as of Sep 30,** | **$899** | **$234** | **$899** | **$234** | - As of September 30, 2025, **1,077 fixed income securities** had unrealized losses totaling **$150 million** (4% of cost basis), with **926** in loss positions for **12+ months**. The Company expects to recover amortized cost[62](index=62&type=chunk) [Other Invested Assets](index=23&type=section&id=Other%20Invested%20Assets) This note provides details on other invested assets, including LIHTC, HTC, FHLBC membership, and private funds - Other invested assets totaled **$56 million** at September 30, 2025, down from **$58 million** at December 31, 2024. These include LIHTC, HTC, FHLBC membership, and private funds[66](index=66&type=chunk) - LIHTC interests increased to **$10 million** (from **$7 million**) with **$4 million** unfunded commitment. HTC investment decreased to **$12 million** (from **$15 million**) with **$4 million** unfunded commitment[68](index=68&type=chunk)[69](index=69&type=chunk) - Investments in private funds decreased to **$18 million** (from **$24 million**) with **$3 million** unfunded commitments[71](index=71&type=chunk) [Investments in Unconsolidated Investees](index=25&type=section&id=Investments%20in%20Unconsolidated%20Investees) This note describes investments in unconsolidated entities, primarily Prime Holdings Insurance Services, Inc - Investments in unconsolidated investees increased to **$64 million** at September 30, 2025, from **$56 million** at December 31, 2024, primarily due to the **$63 million** investment in Prime Holdings Insurance Services, Inc[72](index=72&type=chunk) [Cash and Short-Term Investments](index=25&type=section&id=Cash%20and%20Short-Term%20Investments) This note presents the balances of cash and short-term investments at period-end Cash and Short-Term Investments (in thousands) | Metric | September 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $52,621 | $39,790 | | Short-term investments | $165,706 | $74,915 | [3. HISTORICAL LOSS AND LAE DEVELOPMENT](index=26&type=section&id=3.%20HISTORICAL%20LOSS%20AND%20LAE%20DEVELOPMENT) This note reconciles unpaid losses and loss adjustment expenses (LAE) and discusses prior year reserve development Unpaid Losses and LAE Reconciliation (in thousands) | Metric | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | | Net unpaid losses and LAE at beginning of year | $1,938,045 | $1,688,676 | | Total incurred losses and LAE | $549,814 | $513,741 | | Total paid losses and LAE | $(384,416) | $(350,016) | | Net unpaid losses and LAE at Sep 30, | $2,103,443 | $1,852,401 | - Favorable development on prior years' loss reserves contributed **$74 million** to incurred losses and LAE in 2025 (vs. **$85 million** in 2024), primarily from commercial excess liability, marine, surety, and commercial property[74](index=74&type=chunk)[75](index=75&type=chunk) - Auto liability exposures developed **adversely** in 2025, particularly in commercial transportation[74](index=74&type=chunk) [4. INCOME TAXES](index=26&type=section&id=4.%20INCOME%20TAXES) This note details the effective tax rates and factors influencing tax expense, including legislative impacts Effective Tax Rates | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended Sep 30, | 20.8% | 18.7% | | Nine Months Ended Sep 30, | 20.4% | 19.8% | - The effective tax rate was **higher in 2025** due to lower tax-favored adjustments and higher pretax income, which reduced the percentage impact of these adjustments[76](index=76&type=chunk) - The **One Big Beautiful Bill Act (OBBBA)** signed on July 4, 2025, did not materially impact the Company's financial statements[79](index=79&type=chunk) [5. STOCK BASED COMPENSATION](index=28&type=section&id=5.%20STOCK%20BASED%20COMPENSATION) This note describes the Company's stock-based compensation plans, expense, and unrecognized compensation - The **2023 RLI Corp. Long-Term Incentive Plan (LTIP)** replaced the 2015 LTIP, authorizing **8,009,782 shares** for equity-based compensation[80](index=80&type=chunk)[81](index=81&type=chunk) Stock-Based Compensation Expense (in millions) | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended Sep 30, | $2 | $6 | | Nine Months Ended Sep 30, | $2 | $6 | - Total unrecognized compensation expense for outstanding and unvested awards was **$7 million**, to be recognized over a weighted average vesting period of **2.53 years**[82](index=82&type=chunk) [Stock Options](index=28&type=section&id=Stock%20Options) This note provides details on stock option activity, vesting, exercise prices, and intrinsic value - Stock options generally vest over **five years** and expire **eight years** after grant, with immediate expensing for retirement-eligible participants[84](index=84&type=chunk)[85](index=85&type=chunk) Stock Option Activity (Nine Months Ended Sep 30, 2025) | Metric | Options | Weighted Average Exercise Price | | :--- | :--- | :--- | | Outstanding at Jan 1, 2025 | 2,837,938 | $52.80 | | Granted | 280,680 | $72.98 | | Exercised | (81,518) | $29.47 | | Canceled/Forfeited | (36,150) | $64.51 | | **Outstanding at Sep 30, 2025** | **3,000,950** | **$55.18** | | Exercisable at Sep 30, 2025 | 1,909,058 | $48.94 | - The intrinsic value of options exercised was **$4 million** for the first nine months of 2025, significantly lower than **$19 million** in 2024[87](index=87&type=chunk) [Restricted Stock Units](index=30&type=section&id=Restricted%20Stock%20Units) This note outlines restricted stock unit activity, vesting schedules, and fair value of vested units - RSUs generally have a **three-year cliff vesting** for employees (accelerated for retirement-eligible) and vest within **one year** for directors, accruing dividends as additional units[89](index=89&type=chunk) Restricted Stock Unit Activity (Nine Months Ended Sep 30, 2025) | Metric | RSUs | Weighted Average Grant Date Fair Value | | :--- | :--- | :--- | | Nonvested at Jan 1, 2025 | 99,095 | $67.54 | | Granted | 36,901 | $74.40 | | Vested | (36,821) | $64.77 | | **Nonvested at Sep 30, 2025** | **96,426** | **$71.10** | - The total fair value of vested RSUs was **$3 million** for the first nine months of 2025, up from **$2 million** in 2024[89](index=89&type=chunk) [6. OPERATING SEGMENT INFORMATION](index=32&type=section&id=6.%20OPERATING%20SEGMENT%20INFORMATION) This note presents financial performance by operating segment: property, casualty, and surety, including underwriting income - The Company's performance is assessed across three segments: **property, casualty, and surety**, using earnings before income taxes (underwriting income) and combined ratio[91](index=91&type=chunk)[93](index=93&type=chunk) Net Premiums Earned by Segment (in thousands) | Segment | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Casualty | $243,508 | $219,638 | $707,194 | $627,014 | | Property | $126,689 | $133,266 | $389,897 | $396,774 | | Surety | $37,498 | $36,585 | $110,853 | $105,442 | | **Grand Total** | **$407,695** | **$389,489** | **$1,207,944** | **$1,129,230** | Segment Earnings Before Income Taxes (in thousands) | Segment | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Casualty | $4,486 | $2,549 | $14,846 | $26,538 | | Property | $50,424 | $30,402 | $156,850 | $141,298 | | Surety | $5,635 | $7,741 | $21,625 | $20,575 | | **Total Segment Earnings** | **$60,545** | **$40,692** | **$193,321** | **$188,411** | [7. LEASES](index=35&type=section&id=7.%20LEASES) This note details operating lease assets and liabilities, lease costs, and weighted-average lease terms and discount rates - Operating lease ROU assets and liabilities are recognized based on the present value of future minimum lease payments, using the **incremental borrowing rate**[101](index=101&type=chunk) Lease Costs (in thousands) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating lease cost | $1,040 | $1,149 | $3,270 | $3,483 | | Variable lease cost | $323 | $351 | $1,112 | $966 | | Sublease income | $(42) | $(42) | $(127) | $(127) | | **Total lease cost** | **$1,321** | **$1,458** | **$4,255** | **$4,322** | Operating Lease Balances | Metric | September 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Operating lease ROU assets | $11,629 | $14,016 | | Operating lease liabilities | $13,320 | $15,711 | | Weighted-average remaining lease term | 5.91 years | 6.01 years | | Weighted-average discount rate | 3.76% | 3.63% | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on RLI Corp.'s financial condition, operations, and key performance drivers [OVERVIEW](index=36&type=section&id=OVERVIEW) This overview describes RLI Corp. as a specialty insurer focused on niche markets and consistent underwriting profitability - RLI Corp. is a U.S.-based specialty insurance company focused on niche markets, underwriting select property, casualty, and surety products[105](index=105&type=chunk) - The Company achieved its **29th consecutive year of underwriting profitability** in 2024, with an average combined ratio of **88.1** over that period[107](index=107&type=chunk) - Profitability is measured by underwriting income and combined ratios across property, casualty, and surety segments, with a primary focus on **underwriting profitability** over premium growth[108](index=108&type=chunk)[113](index=113&type=chunk) [Key Performance Measures](index=38&type=section&id=Key%20Performance%20Measures) This section defines key performance measures like underwriting income and combined ratio used to assess profitability - Underwriting income is a pretax measure of insurance operations profitability, calculated by subtracting losses, policy acquisition costs, and insurance operating expenses from net premiums earned[115](index=115&type=chunk) - The combined ratio, a common industry performance measure, is the sum of the loss ratio (losses/net premiums earned) and the expense ratio (policy acquisition costs + insurance operating expenses / net premiums earned)[117](index=117&type=chunk) Reconciliation of Net Earnings to Net Underwriting Income (in thousands) | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net earnings | $124,610 | $95,027 | $312,160 | $304,919 | | Earnings before income taxes | $157,245 | $116,825 | $392,391 | $380,119 | | **Net underwriting income** | **$60,545** | **$40,692** | **$193,321** | **$188,411** | [Critical Accounting Policies](index=40&type=section&id=Critical%20Accounting%20Policies) This section highlights critical accounting policies involving significant estimates for liabilities and investment valuation - Critical accounting policies involve significant estimates for liabilities, investment valuation, reinsurance recoverability, deferred policy acquisition costs, and deferred taxes[119](index=119&type=chunk) - No **significant changes** to critical accounting policies occurred during the year[120](index=120&type=chunk) [RESULTS OF OPERATIONS](index=40&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes RLI Corp.'s financial results, comparing performance across different reporting periods [Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024](index=40&type=section&id=Nine%20Months%20Ended%20September%2030,%202025%20Compared%20to%20Nine%20Months%20Ended%20September%2030,%202024) This section compares RLI Corp.'s consolidated revenues and underwriting performance for the nine-month periods Consolidated Revenues (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net premiums earned | $1,207,944 | $1,129,230 | | Net investment income | $117,414 | $103,502 | | Net realized gains | $48,234 | $11,222 | | Net unrealized gains on equity securities | $43,163 | $87,314 | | **Total consolidated revenue** | **$1,416,755** | **$1,331,268** | - Net premiums earned increased **7%**, driven by casualty and surety segments. Investment income rose **13%** due to higher asset base and reinvestment rates[121](index=121&type=chunk) - Underwriting income was **$193 million** (**84.0 combined ratio**) in 2025, up from **$188 million** (**83.3 combined ratio**) in 2024, benefiting from lower catastrophe losses (**$26 million** vs **$67 million**) but offset by lower favorable reserve development (**$74 million** vs **$85 million**)[123](index=123&type=chunk) [Premiums](index=42&type=section&id=Premiums_9M) This section analyzes gross and net premiums written and earned by segment for the nine-month periods Gross and Net Premiums by Segment (Nine Months Ended Sep 30, in thousands) | Segment | Gross Premiums Written 2025 | Gross Premiums Written 2024 | % Change (GPW) | Net Premiums Earned 2025 | Net Premiums Earned 2024 | % Change (NPE) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Casualty | $902,127 | $826,152 | 9% | $707,194 | $627,014 | 13% | | Property | $536,500 | $590,191 | (9)% | $389,897 | $396,774 | (2)% | | Surety | $124,981 | $123,495 | 1% | $110,853 | $105,442 | 5% | | **Grand Total** | **$1,563,608** | **$1,539,838** | **2%** | **$1,207,944** | **$1,129,230** | **7%** | - Casualty gross premiums increased **9%** due to positive rate movement, new personal umbrella business, and expanded marketing for commercial excess and general liability[131](index=131&type=chunk) - Property gross premiums decreased **9%** due to declining commercial property rates and increased competition, despite growth in marine and other property lines[132](index=132&type=chunk) [Underwriting Income](index=44&type=section&id=Underwriting%20Income_9M) This section details underwriting income and combined ratios by segment for the nine-month periods Underwriting Income and Combined Ratio by Segment (Nine Months Ended Sep 30, in thousands) | Segment | Underwriting Income 2025 | Underwriting Income 2024 | Combined Ratio 2025 | Combined Ratio 2024 | | :--- | :--- | :--- | :--- | :--- | | Casualty | $14,846 | $26,538 | 97.9 | 95.8 | | Property | $156,850 | $141,298 | 59.8 | 64.4 | | Surety | $21,625 | $20,575 | 80.5 | 80.5 | | **Total** | **$193,321** | **$188,411** | **84.0** | **83.3** | - Casualty underwriting income decreased due to lower prior accident year reserve releases (**$28 million** vs **$42 million**) and higher current year loss reserves, increasing the loss ratio to **61.9%** (from **58.9%**)[135](index=135&type=chunk)[136](index=136&type=chunk) - Property underwriting income increased, with a lower combined ratio (**59.8%** vs **64.4%**) driven by reduced catastrophe losses (**$24 million** vs **$63 million**), despite higher expense ratio due to investments[137](index=137&type=chunk)[138](index=138&type=chunk) [Investment Income](index=46&type=section&id=Investment%20Income_9M) This section discusses net investment income and fixed income investment yields for the nine-month periods - Net investment income increased **13%** to **$117 million** for the first nine months of 2025, driven by higher reinvestment rates and an increased average asset base[141](index=141&type=chunk) Fixed Income Investment Yields (Nine Months Ended Sep 30) | Yield Type | 2025 | 2024 | | :--- | :--- | :--- | | Pretax Taxable | 4.10% | 3.79% | | Pretax Tax-Exempt | 2.83% | 2.88% | | After-Tax Taxable | 3.24% | 2.99% | | After-Tax Tax-Exempt | 2.68% | 2.73% | - The fixed income portfolio increased by **$361 million**, and the equity portfolio increased by **$143 million**, primarily due to market strength and cash flow allocation[143](index=143&type=chunk) [Income Taxes](index=46&type=section&id=Income%20Taxes_9M) This section analyzes the effective tax rate for the nine-month periods and influencing factors - The effective tax rate for the first nine months of 2025 was **20.4%**, up from **19.8%** in 2024, due to lower tax-favored adjustments and higher pretax income[144](index=144&type=chunk) [Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024](index=46&type=section&id=Three%20Months%20Ended%20September%2030,%202025%20Compared%20to%20Three%20Months%20Ended%20September%2030,%202024) This section compares RLI Corp.'s consolidated revenues and underwriting performance for the three-month periods Consolidated Revenues (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net premiums earned | $407,695 | $389,489 | | Net investment income | $41,270 | $36,694 | | Net realized gains | $18,318 | $5,420 | | Net unrealized gains on equity securities | $41,981 | $38,392 | | **Total consolidated revenue** | **$509,264** | **$469,995** | - Net premiums earned increased **5%**, driven by casualty and surety segments. Investment income rose **12%** due to higher asset base and reinvestment rates[145](index=145&type=chunk) - Underwriting income was **$61 million** (**85.1 combined ratio**) in Q3 2025, up from **$41 million** (**89.6 combined ratio**) in Q3 2024, primarily due to minimal catastrophe losses in 2025 (vs. **$39 million** in 2024)[148](index=148&type=chunk) [Premiums](index=48&type=section&id=Premiums_3M) This section analyzes gross and net premiums written and earned by segment for the three-month periods Gross and Net Premiums by Segment (Three Months Ended Sep 30, in thousands) | Segment | Gross Premiums Written 2025 | Gross Premiums Written 2024 | % Change (GPW) | Net Premiums Earned 2025 | Net Premiums Earned 2024 | % Change (NPE) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Casualty | $317,063 | $294,267 | 8% | $243,508 | $219,638 | 11% | | Property | $154,631 | $173,813 | (11)% | $126,689 | $133,266 | (5)% | | Surety | $38,527 | $39,710 | (3)% | $37,498 | $36,585 | 2% | | **Grand Total** | **$510,221** | **$507,790** | **0%** | **$407,695** | **$389,489** | **5%** | - Casualty gross premiums increased **8%** due to positive rate movement and new business growth, offsetting declines in other casualty programs[155](index=155&type=chunk) - Property gross premiums decreased **11%** due to declining commercial property rates and increased competition, despite growth in other property lines[156](index=156&type=chunk) [Underwriting Income](index=50&type=section&id=Underwriting%20Income_3M) This section details underwriting income and combined ratios by segment for the three-month periods Underwriting Income and Combined Ratio by Segment (Three Months Ended Sep 30, in thousands) | Segment | Underwriting Income 2025 | Underwriting Income 2024 | Combined Ratio 2025 | Combined Ratio 2024 | | :--- | :--- | :--- | :--- | :--- | | Casualty | $4,486 | $2,549 | 98.2 | 98.8 | | Property | $50,424 | $30,402 | 60.2 | 77.2 | | Surety | $5,635 | $7,741 | 85.0 | 78.8 | | **Total** | **$60,545** | **$40,692** | **85.1** | **89.6** | - Casualty underwriting income increased due to improved current accident year losses, lowering the loss ratio to **62.0%** (from **62.8%**)[159](index=159&type=chunk)[160](index=160&type=chunk) - Property underwriting income significantly increased, with a lower combined ratio (**60.2%** vs **77.2%**) driven by lower catastrophe losses in 2025[161](index=161&type=chunk)[162](index=162&type=chunk) [Investment Income](index=52&type=section&id=Investment%20Income_3M) This section discusses net investment income and fixed income investment yields for the three-month periods - Net investment income increased **12%** to **$41 million** for the third quarter of 2025, driven by higher reinvestment rates and an increased average asset base[166](index=166&type=chunk) Fixed Income Investment Yields (Three Months Ended Sep 30) | Yield Type | 2025 | 2024 | | :--- | :--- | :--- | | Pretax Taxable | 4.19% | 3.86% | | Pretax Tax-Exempt | 2.69% | 2.98% | | After-Tax Taxable | 3.31% | 3.05% | | After-Tax Tax-Exempt | 2.55% | 2.82% | [Income Taxes](index=52&type=section&id=Income%20Taxes_3M) This section analyzes the effective tax rate for the three-month periods and influencing factors - The effective tax rate for the third quarter of 2025 was **20.8%**, up from **18.7%** in 2024, due to lower tax-favored adjustments and higher pretax income[168](index=168&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=52&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses RLI Corp.'s cash flows, debt, investment portfolio, and dividend policy - Operating cash flows provided **$457 million** in the first nine months of 2025, an increase from **$432 million** in 2024, driven by higher premium and investment income[170](index=170&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Type | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :--- | :--- | :--- | | Operating cash flows | $457,453 | $432,139 | | Investing cash flows | $(402,518) | $(372,088) | | Financing cash flows | $(42,104) | $(35,841) | | **Total** | **$12,831** | **$24,210** | - The Company had **$100 million** in debt outstanding as of September 30, 2025, including **$50 million** from a revolving line of credit with PNC Bank and **$50 million** from FHLBC[171](index=171&type=chunk) - The investment portfolio increased by **$606 million** from December 31, 2024, to **$4.69 billion** at September 30, 2025, with **75.4%** in fixed income and **18.8%** in equity[176](index=176&type=chunk) - RLI Corp. has increased dividends for **50 consecutive years**, paying a regular quarterly cash dividend of **$0.16 per share**[187](index=187&type=chunk) - Dividends from the principal insurance subsidiary to RLI Corp. are restricted by Illinois state insurance laws, with **$1 million** of unrestricted net assets available as of September 30, 2025[188](index=188&type=chunk)[190](index=190&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section addresses RLI Corp.'s exposure to market risks, including equity price and interest rate risks - No **material changes** to market risk exposure since the 2024 Annual Report on Form 10-K[191](index=191&type=chunk) - Primary market risks include **equity price risk** (equity securities) and **interest rate risk** (fixed income securities)[192](index=192&type=chunk) - The Company consistently invests in **high credit quality, investment grade securities**[192](index=192&type=chunk) [Item 4. Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of RLI Corp.'s disclosure controls and internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed **effective** as of September 30, 2025, providing reasonable assurance for financial statement reliability[193](index=193&type=chunk)[194](index=194&type=chunk) - No **material changes** were made to internal control over financial reporting during the last fiscal quarter[195](index=195&type=chunk) [Part II - Other Information](index=59&type=section&id=Part%20II%20-%20Other%20Information) This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, mine safety, and other information [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) This section reports no material changes regarding legal proceedings - No **material changes** to report regarding legal proceedings[197](index=197&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) This section reports no material changes regarding risk factors - No **material changes** to report regarding risk factors[198](index=198&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the reporting period - This item is **not applicable**[199](index=199&type=chunk) [Item 3. Defaults upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This item is not applicable for the reporting period - This item is **not applicable**[200](index=200&type=chunk) [Item 4. Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period - This item is **not applicable**[201](index=201&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) This section reports no Rule 10b5-1 trading arrangement adoptions or terminations by directors or officers - No director or officer adopted or terminated a **Rule 10b5-1 trading arrangement** or non-Rule 10b5-1 trading arrangement during the three months ended September 30, 2025[203](index=203&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including certifications (Sections 302 and 906 of Sarbanes-Oxley Act) and Inline XBRL documents - Exhibits include certifications pursuant to **Sections 302 and 906 of the Sarbanes-Oxley Act of 2002**[204](index=204&type=chunk) - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbases, and Cover Page Interactive Data File) are filed[204](index=204&type=chunk) [SIGNATURES](index=61&type=section&id=SIGNATURES) This section contains the official signatures for the report, confirming its submission [Signature Block](index=61&type=section&id=Signature%20Block) The report is signed on behalf of RLI Corp. by Todd W. Bryant, Chief Financial Officer (Principal Financial and Chief Accounting Officer), dated October 22, 2025 - The report was signed by **Todd W. Bryant, Chief Financial Officer**, on **October 22, 2025**[209](index=209&type=chunk)

Core Insights - RLI Corp. reported third-quarter 2025 operating earnings of 83 cents per share, exceeding the Zacks Consensus Estimate by 33.9% and reflecting a 27.7% increase from the prior-year quarter [1][8] - The quarterly results were driven by higher net premiums earned and net investment income, alongside lower loss and settlement expenses [1] Operational Performance - Operating revenues for the quarter reached $449 million, marking a 5.3% year-over-year increase, supported by a 4.7% rise in net premiums earned and a 12.5% increase in net investment income [2] - Gross premiums written totaled $562.3 million, a 0.5% year-over-year increase, although performance improvements in the Casualty segment were offset by declines in the Property and Surety segments [2] Investment Income - Net investment income rose by 12% year over year to $41.3 million, slightly below estimates [3] - The investment portfolio's total return was reported at 3% for the quarter [3] Expense Management - Total expenses decreased by 0.2% year over year to $353.6 million, primarily due to lower loss and settlement expenses [3] Underwriting Performance - Underwriting income increased significantly by 48.6% year over year to $60.5 million, with the combined ratio improving by 450 basis points to 85.1 [4][8] Financial Update - RLI's total investments and cash at the end of the quarter were $4.7 billion, a 14.8% increase from the end of 2024 [5] - Book value per share rose to $20.41, reflecting a 26% increase from December 31, 2024 [5] - Net cash flow from operations was reported at $179.2 million, down 18.3% year over year [5] - The statutory surplus increased by 5.6% to $1.9 billion as of September 30, 2025 [5] - Return on equity was recorded at 20.8%, a decrease of 690 basis points from the previous year [5] Dividend Update - On September 19, 2025, RLI declared a dividend of 16 cents, an increase of 1 cent from the previous payout, with cumulative dividends exceeding $975 million over the last five years [6]

Financial Data and Key Metrics Changes - The company reported third quarter operating earnings of $0.83 per share, supported by solid underwriting performance and a 12% increase in investment income [8] - The total combined ratio improved to 85.1, down from 89.6 last year, largely due to a benign hurricane season [8][10] - Book value per share has grown 26% year to date, resulting in a 20%+ return on equity [4][12] Business Line Data and Key Metrics Changes - The property segment experienced an 11% decline in gross premiums, influenced by rate and exposure declines in ENS property, while Hawaii homeowners grew 33% in the quarter [9][13] - The casualty segment saw gross premiums advance 8%, with a combined ratio of 98, benefiting from favorable prior year's reserve development [10][18] - The surety segment posted an 85% combined ratio, with premiums down modestly for the quarter [16][18] Market Data and Key Metrics Changes - The commercial property catastrophe market has softened significantly, presenting headwinds to current growth [4][5] - The industry faces increased market volatility, political uncertainty, and competition from alternative capital providers [6][15] - The company noted a decrease in renewal rates for wind by 11% in the quarter, while rates remain significantly higher than pre-hard market levels [15][42] Company Strategy and Development Direction - The company emphasizes maintaining underwriting discipline and adaptability in a rapidly evolving market [6][7] - Investments in technology and processes are aimed at improving efficiency and enhancing the underwriting experience [24][25] - The company is focused on sustainable growth rather than chasing top-line growth at the expense of portfolio quality [15][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic headwinds and maintaining a strong competitive position through disciplined underwriting [17][18] - The company anticipates continued opportunities for growth despite current market challenges, particularly in niche segments [6][15] - Management highlighted the importance of relationships with producers and the need for ongoing investment in talent and technology [56][59] Other Important Information - The company has doubled its premium over the last five years while significantly increasing its capabilities [23] - New product offerings are being developed to diversify the portfolio and capture growth opportunities as market conditions change [24] Q&A Session Summary Question: Impact of higher attachment points in personal umbrella book on margins - Management noted that moving to a higher attachment point has improved loss trends and is expected to help with frequency [28][29] Question: Rate increase in personal umbrella - The substantial rate increase was influenced by significant changes in Florida and other states coming online [30] Question: Current state of the property market - The property market remains competitive, with some softening observed, but the company continues to seek adequate rates and terms [36][38] Question: Competitive environment in surety business - The company maintains its competitive advantage through strong relationships and service, focusing on being the easiest provider for producers [56][59] Question: Drivers of casualty underlying loss ratio improvement - The improvement is attributed to a mix shift and benefits from prior year's reserve development [67] Question: Re-underwriting of transportation book - The company is being diligent in risk selection, with some cancellations impacting growth [70]