RLI(RLI) - 2024 Q2 - Quarterly Results

Financial Highlights RLI Corp. achieved strong Q2 2024 results, with increased net and operating earnings, driven by premium growth and investment income Q2 2024 Earnings Summary | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net Earnings (Millions) | $82.0M | $77.7M | | Net Earnings per Share | $1.78 | $1.69 | | Operating Earnings (Millions) | $79.3M | $53.3M | | Operating Earnings per Share | $1.72 | $1.16 | - Gross premiums written increased by 11% and net investment income grew by 18% in the second quarter[3] - Book value per share rose to $34.64, marking a 14% increase (inclusive of dividends) from the end of 2023[3] - CEO Craig Kliethermes highlighted the excellent results, attributing them to a balanced growth across the product portfolio and a disciplined underwriting approach, particularly in the property segment[14] Underwriting Performance Underwriting income significantly increased to $70.0 million in Q2 2024, with the combined ratio improving to 81.5% Underwriting Income & Combined Ratio by Segment (Q2 2024 vs. Q2 2023) | Segment | Underwriting Income (2024, Millions) | Underwriting Income (2023, Millions) | Combined Ratio (2024) | Combined Ratio (2023) | | :--- | :--- | :--- | :--- | :--- | | Casualty | $10.3M | $7.0M | 95.1% | 96.3% | | Property | $53.2M | $25.9M | 60.3% | 74.6% | | Surety | $6.5M | $8.3M | 81.8% | 75.0% | | Total | $70.0M | $41.2M | 81.5% | 87.2% | - Favorable development in prior years' loss reserves contributed a net increase of $19.8 million to underwriting income in Q2 2024, compared to $17.0 million in Q2 2023[5] - For the six months ended June 30, 2024, the total underwriting income was $147.7 million on a combined ratio of 80.0%[38] Investment and Other Income Net investment income grew 18.0% to $34.0 million in Q2 2024, with the investment portfolio achieving a 0.9% total return - Net investment income rose 18.0% to $34.0 million compared to the same period in 2023[28] - The investment portfolio's total return was 0.9% for the second quarter and 2.7% for the six months ended June 30, 2024[28] Capital Management and Shareholder Returns RLI increased its quarterly dividend to $0.29 per share, with cumulative dividends exceeding $819 million over five years - On June 20, 2024, the company paid a regular quarterly dividend of $0.29 per share, a $0.02 increase over the prior quarter[7] - Cumulative dividends paid over the last five years exceed $819 million[7] Financial Statements and Data This section provides detailed unaudited financial data for Q2 and H1 2024, including income statements, balance sheets, and non-GAAP reconciliation Summarized Income Statement Q2 2024 consolidated revenue grew 9.1% to $416.4 million, with net premiums earned up 17.6% and net earnings rising 5.6% Q2 2024 Income Statement Highlights (in thousands) | Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Premiums Earned | $379,065 | $322,280 | 17.6% | | Net Investment Income | $33,961 | $28,788 | 18.0% | | Consolidated Revenue | $416,442 | $381,862 | 9.1% | | Total Expenses | $314,785 | $287,345 | 9.5% | | Net Earnings | $81,992 | $77,652 | 5.6% | Summarized Balance Sheet As of June 30, 2024, total assets increased 6.4% to $5.51 billion, and shareholders' equity grew 12.1% to $1.58 billion Balance Sheet Highlights (in thousands) | Metric | June 30, 2024 | Dec 31, 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Investments and Cash | $3,887,349 | $3,676,318 | 5.7% | | Total Assets | $5,511,673 | $5,180,221 | 6.4% | | Total Liabilities | $3,926,966 | $3,766,707 | 4.3% | | Shareholders' Equity | $1,584,707 | $1,413,514 | 12.1% | Non-GAAP Reconciliation Q2 2024 operating earnings, a non-GAAP measure, increased 48.7% to $79.3 million, adjusted from GAAP net earnings Reconciliation of Net Earnings to Operating Earnings (Q2, in thousands) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net Earnings | $81,992 | $77,652 | | Less: Adjustments for securities gains/losses (net of tax) | ($2,700) | ($24,328) | | Operating Earnings | $79,292 | $53,324 | Corporate Information and Outlook RLI Corp. was recognized as a top-performing insurer for the 34th consecutive year, operating as a specialty insurer with A+ rated subsidiaries - For the 34th consecutive year, RLI was named a Ward's 50® P&C Top Performer, being the only company to achieve this recognition every year since the list's inception in 1991[9] - RLI is a specialty insurer serving niche property, casualty, and surety markets, with all its insurance subsidiaries rated A+ (Superior) by AM Best Company[21] - The earnings release contains forward-looking statements, and readers are advised that actual results could differ materially due to various risk factors detailed in the company's SEC filings[20]