RLI(US:RLI)2025-04-25 16:31Financial Performance - RLI Corp. achieved a net premium earned of $398.3 million for Q1 2025, a 10% increase from $360.7 million in Q1 2024[114]. - Underwriting income for Q1 2025 was $71 million with a combined ratio of 82.3, compared to $78 million and a combined ratio of 78.5 in Q1 2024[115]. - The loss ratio increased to 44.5% in Q1 2025 from 39.9% in Q1 2024, while the expense ratio decreased to 37.8% from 38.6%[116]. - Net earnings for Q1 2025 totaled $63 million, down from $128 million in Q1 2024, primarily due to unrealized losses on equity securities[119]. - Comprehensive earnings for Q1 2025 were $93 million, compared to $115 million in Q1 2024, with other comprehensive earnings of $30 million attributed to lower interest rates[120]. Premiums and Underwriting - Gross premiums written increased by $22 million in Q1 2025, driven by the casualty segment, while net premiums earned increased by $38 million across all segments[122]. - Gross premiums written for the casualty segment increased by $33 million in Q1 2025, driven by positive rate movement and new business growth[124]. - Gross premiums written for the property segment decreased by $10 million in Q1 2025, influenced by increased competition in the commercial property space[125]. - Gross premiums written for the surety segment remained flat in Q1 2025, with growth in transactional and commercial surety offset by a decline in contract surety premium[126]. - Underwriting income for the casualty segment was $2 million in Q1 2025, down from $14 million in the same period last year[128]. - The combined ratio for the casualty segment increased to 99.1 in Q1 2025 from 93.1 in Q1 2024, reflecting higher loss ratios[129]. - Underwriting income for the property segment was $57 million in Q1 2025, compared to $58 million in the same period last year[130]. - The surety segment recorded underwriting income of $12 million in Q1 2025, up from $6 million in the same period last year[132]. Investment Income - Investment income rose by 12% in Q1 2025, attributed to an increased average asset base and higher reinvestment rates[114]. - Net investment income increased by 12% to $37 million in Q1 2025, attributed to higher reinvestment rates and an increased average asset base[135]. - The company reported $42 million in unrealized losses on equity securities in Q1 2025, contrasting with $45 million in unrealized gains in Q1 2024[114]. - The company recognized $3 million of equity in earnings from unconsolidated investees in Q1 2025, down from $5 million in Q1 2024[118]. Cash Flow and Debt - Operating cash flows improved to $103.5 million in Q1 2025 from $70.9 million in Q1 2024, benefiting from increased premium receipts[140]. - As of March 31, 2025, the company had $100 million in debt outstanding, with a revolving line of credit of $50 million accessed in September 2023[141]. - The capital structure included $100 million in debt, representing 6% of total capital, with an average interest rate of 5.18%[155]. Investment Portfolio - As of March 31, 2025, the investment portfolio increased by $120 million from December 31, 2024, totaling $4.204 billion[146]. - The fixed income portfolio accounted for 77.9% of the total portfolio, with a fair value of $3.274 billion and an unrealized loss of $174.47 million[146]. - The equity portfolio had a fair value of $725.946 million, with a dividend yield of 1.9%, outperforming the S&P 500 index's yield of 1.4%[152]. - The corporate fixed income securities totaled $1.385 billion, including $124 million in a high-yield credit strategy[149]. - The municipal bond portfolio consisted of approximately 68% taxable securities and 32% tax-exempt securities, with 93% rated 'AA' or better[150]. - The investment portfolio has limited exposure to structured asset-backed securities, with $220 million in ABS as of March 31, 2025[147]. - The fixed income portfolio is well diversified, comprising 1,851 individual issues as of March 31, 2025[146]. Dividends - RLI Ins. paid $80 million in ordinary dividends to RLI Corp. in the first three months of 2025, compared to $152 million in 2024[158]. Investment Strategy - The company has no exposure to derivatives, maintaining a conservative investment strategy[154].