RLI(RLI) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Results Overview This section provides a comprehensive overview of RLI Corp.'s financial, underwriting, and investment performance for the second quarter of 2025 Financial Performance Summary RLI Corp. achieved significant net earnings growth in Q2 2025, despite a slight decrease in operating earnings, driven by strong underwriting and investment income Key Financial Metrics Comparison Q2 2025 (Diluted EPS) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Earnings | $1.34 | $0.89 | 50.6% | | Operating Earnings | $0.84 | $0.86 | -2.3% | | Comprehensive Earnings | $1.55 | $0.80 | 93.8% | - RLI Corp. President and CEO Craig Kliethermes stated the company achieved robust earnings and sustained book value growth in the second quarter, with a combined ratio of 85, emphasizing underwriting discipline. Increased investment income drove a 16% growth in book value since year-end 2024[3][8] Underwriting Performance RLI's underwriting income in Q2 2025 was $62.2 million with a combined ratio of 84.5, showing varied segment performance but benefiting from favorable prior-year loss reserve development Underwriting Income and Combined Ratio Comparison Q2 2025 (Millions of USD) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Underwriting Income | $62.2 | $70.0 | -11.2% | | Combined Ratio | 84.5 | 81.5 | +3.0 percentage points | | Favorable Prior-Year Loss Reserve Development | $24.4 | $19.8 | 23.2% | Underwriting Income and Combined Ratio by Business Segment Q2 2025 | Business Segment | Underwriting Income (Millions of USD) | Combined Ratio | | :--- | :--- | :--- | | Casualty | $8.3 | 96.5 | | Property | $49.5 | 62.1 | | Surety | $4.4 | 87.9 | | Total | $62.2 | 84.5 | Investment and Other Income RLI's net investment income grew significantly in Q2, with strong total portfolio returns and a substantial increase in comprehensive earnings due to unrealized gains Investment and Comprehensive Earnings Q2 2025 | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Investment Income | $39.4 Million | $33.961 Million | 16.1% | | Total Portfolio Return (Quarterly) | 2.9% | N/A | N/A | | Total Portfolio Return (Half-Year) | 4.2% | N/A | N/A | | Comprehensive Earnings | $143.0 Million | $74.1 Million | 92.9% | | Comprehensive Earnings Per Share | $1.55 | $0.80 | 93.8% | - 2025 comprehensive earnings include after-tax unrealized gains from the fixed-income investment portfolio, primarily due to declining interest rates[11] Dividends Paid RLI Corp. paid a regular quarterly dividend of $0.16 per share in Q2 2025, an increase from the prior quarter, continuing its long-standing dividend record Dividends Information Q2 2025 | Metric | Amount | | :--- | :--- | | Regular Quarterly Dividend (Per Share) | $0.16 | | Increase from Prior Quarter | $0.01 | | Cumulative Dividends Over Past Five Years | Over $971 Million | Non-GAAP and Performance Measures Explanation This section clarifies non-GAAP financial metrics and performance measures used by management to provide a clearer understanding of RLI Corp.'s operational trends Non-GAAP and Performance Measures Management provides non-GAAP financial metrics like operating earnings and underwriting income to better explain company performance and business trends, supplementing GAAP measures - Operating earnings and operating earnings per share are GAAP net earnings adjusted for realized and unrealized gains and losses and related taxes[16] - Underwriting income represents the pre-tax profitability of insurance operations, derived by subtracting losses and loss adjustment expenses, policy acquisition costs, and insurance operating expenses from net premiums earned[17] - The combined ratio is a common performance measure for property and casualty insurance companies, calculated as the sum of losses and loss adjustment expenses, policy acquisition costs, and insurance operating expenses divided by net premiums earned[17] Corporate Updates This section highlights RLI Corp.'s recent industry recognition and provides details on upcoming investor communications regarding its quarterly performance Other News & Recognition RLI Corp. was recognized by Ward Benchmarking as a top insurance company for the 35th consecutive year and plans a conference call to discuss quarterly results - RLI was named one of the top-performing insurance companies by Ward Benchmarking, an Aon business unit, on July 8, 2025, marking its 35th consecutive year and making it the only property and casualty company to be listed every year since the list's inception in 1991[19] - RLI management will host a conference call with insurance industry analysts to discuss quarterly results on July 22, 2025, at 10:00 a.m. Central Daylight Time[20] About RLI Corp. RLI Corp. is a specialty insurer focused on niche property, casualty, and surety markets, known for its underwriting expertise, service, and long record of dividends and underwriting profitability - RLI Corp. is a specialty insurance company serving niche property, casualty, and surety markets, providing underwriting expertise and quality service through its insurance subsidiaries[23] - All of RLI's insurance subsidiaries have received an A+ (Superior) rating from AM Best Company[23] - RLI has paid and increased regular dividends for 50 consecutive years and achieved underwriting profit for 29 consecutive years[23] Detailed Financial Information This section provides in-depth financial statements and segment data, offering a comprehensive view of RLI Corp.'s financial position and operational performance Supplemental Earnings Impact Disclosure This section details the impact of reserve development and catastrophe losses on RLI Corp.'s operating earnings, showing favorable prior-year reserve development and current-year catastrophe losses Reserve Development and Catastrophe Losses Q2 2025 (Millions of USD) | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Casualty Prior-Year Reserve Favorable Development | $15.4 | $12.8 | | Property Prior-Year Reserve Favorable Development | $4.9 | $5.3 | | Surety Prior-Year Reserve Favorable Development | $2.3 | $2.4 | | Net Losses from 2025 Catastrophe Events | $(14.0) | — | | Net Losses from 2024 and Prior Catastrophe Events | $5.0 | $(14.0) | Impact of Specific Items on Operating EPS Q2 2025 | Item | Q2 2025 EPS | Q2 2024 EPS | | :--- | :--- | :--- | | Casualty Prior-Year Reserve Favorable Development | $0.11 | $0.10 | | Property Prior-Year Reserve Favorable Development | $0.04 | $0.04 | | Surety Prior-Year Reserve Favorable Development | $0.02 | $0.02 | | Net Losses from 2025 Catastrophe Events | $(0.10) | — | | Net Losses from 2024 and Prior Catastrophe Events | $0.03 | $(0.11) | Summarized Income Statement RLI Corp.'s summarized income statement for Q2 2025 shows growth in net premiums earned and net investment income, driving higher consolidated revenue and strong net and comprehensive earnings Summarized Income Statement Data Q2 2025 (Thousands of USD) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Premiums Earned | $401,904 | $379,065 | 6.0% | | Net Investment Income | $39,418 | $33,961 | 16.1% | | Consolidated Revenue | $499,826 | $416,442 | 20.0% | | Losses and Loss Adjustment Expenses | $184,578 | $167,799 | 10.0% | | Total Expenses | $345,778 | $314,785 | 9.8% | | Net Earnings | $124,336 | $81,992 | 51.6% | | Comprehensive Earnings | $143,037 | $74,149 | 92.9% | | Operating Earnings | $78,118 | $79,292 | -1.5% | Summarized Income Statement Data H1 2025 (Thousands of USD) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Premiums Earned | $800,249 | $739,741 | 8.2% | | Net Investment Income | $76,144 | $66,808 | 14.0% | | Consolidated Revenue | $907,491 | $861,273 | 5.4% | | Losses and Loss Adjustment Expenses | $361,816 | $311,623 | 16.1% | | Total Expenses | $677,860 | $604,394 | 12.2% | | Net Earnings | $187,550 | $209,892 | -10.6% | | Comprehensive Earnings | $236,281 | $189,378 | 24.8% | | Operating Earnings | $162,982 | $166,659 | -2.2% | Summarized Balance Sheet As of June 30, 2025, RLI Corp. reported growth in total assets and shareholders' equity, primarily due to increased fixed-income and equity securities investments, with liabilities remaining controlled Summarized Balance Sheet Data as of June 30, 2025 (Thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Fixed Maturity Securities (Fair Value) | $3,420,761 | $3,175,796 | 7.7% | | Equity Securities (Fair Value) | $810,959 | $736,191 | 10.2% | | Short-Term Investments | $115,662 | $74,915 | 54.4% | | Total Investments and Cash | $4,426,062 | $4,084,631 | 8.4% | | Total Assets | $5,990,807 | $5,628,802 | 6.4% | | Unpaid Losses and Loss Adjustment Expenses | $2,806,889 | $2,693,470 | 4.2% | | Total Liabilities | $4,256,146 | $4,106,835 | 3.6% | | Shareholders' Equity | $1,734,661 | $1,521,967 | 14.0% | | Book Value Per Share | $18.89 | $16.59 | 13.9% | Underwriting Segment Data RLI Corp.'s underwriting segment data for Q2 2025 shows decreased underwriting income for Casualty and Surety, and a slight reduction for Property, yet all segments maintained healthy combined ratios Underwriting Segment Data Q2 2025 (Thousands of USD) | Business Segment | Gross Premiums Written | Net Premiums Written | Net Premiums Earned | Underwriting Income | Combined Ratio | | :--- | :--- | :--- | :--- | :--- | :--- | | Casualty | $306,610 | $256,245 | $234,638 | $8,289 | 96.5% | | Property | $211,817 | $160,919 | $130,664 | $49,511 | 62.1% | | Surety | $43,854 | $39,895 | $36,602 | $4,430 | 87.9% | | Total | $562,281 | $457,059 | $401,904 | $62,230 | 84.5% | Underwriting Segment Data H1 2025 (Thousands of USD) | Business Segment | Gross Premiums Written | Net Premiums Written | Net Premiums Earned | Underwriting Income | Combined Ratio | | :--- | :--- | :--- | :--- | :--- | :--- | | Casualty | $585,064 | $491,852 | $463,686 | $10,360 | 97.8% | | Property | $381,869 | $282,655 | $263,208 | $106,426 | 59.6% | | Surety | $86,454 | $79,643 | $73,355 | $15,990 | 78.2% | | Total | $1,053,387 | $854,150 | $800,249 | $132,776 | 83.4% |