RLI Q3 Numbers Lead to New Earnings Records

Illinois-based RLI Corp. reported third quarter net earnings of $25.4 million ($0.98 per diluted share) were 250 percent better per share than the $5.6 million ($0.28 per diluted share) reported for the same period last year.

Quarterly operating earnings of $14.8 million ($0.57 per share) were a 16 percent per-share improvement from last year’s $10.0 million ($0.49 per share) result. Both the total dollar and per- share amounts set records for both net and operating earnings. Book value per share of $20.94 was up $2.44, or 13 percent, since year end.

Through nine months, RLI net earnings grew 77 percent per share, to $55.2 million ($2.14 per share) from $24.7 million ($1.21 per share) one year ago. Operating earnings of $43.1 million ($1.67 per share) topped the $27.1 million ($1.33 per share) result reported at this time last year by 26 percent per share. RLI operating earnings consist of net earnings after the elimination of after-tax realized investment gains/losses.

RLI’s underwriters reported a 92.8 net GAAP combined ratio, which generated quarterly underwriting profits of $8.6 million. For the same period last year, RLI posted a 95.2 combined ratio and a $4.4 million gain. The company’s property segment led the quarter’s results with a 71.7 combined ratio, despite seasonal weather-related claims. The casualty segment again recorded underwriting profits with a 97.4 combined ratio. Surety posted a combined ratio of 112.1 for the quarter.

“Our underwriting results speak for themselves,” said RLI President & CEO Jonathan Michael. “Our underwriters are disciplined and are following our business model. We’re growing where we see our best opportunities and rates are still expanding, as witnessed in our casualty lines. Where growth has leveled out, such as our property book, we’re maintaining profitability levels, which is always our first priority.”

Included in the quarterly results are losses from Hurricane Isabel of just over $1.0 million, or $0.03 per share. “The year is continuing as we expected. Net consolidated revenue and earnings have improved, as a result of our increased retentions. Net premiums earned grew 30 percent in the quarter, to $119.0 million. This is still a strong marketplace for specialty insurers like RLI, and we anticipate that we will continue to prosper,” added Michael.