RLI Reports Fourth Quarter and Year-End 2024 Results

PEORIA, Ill.--(BUSINESS WIRE)--RLI Corp. (NYSE: RLI) – RLI Corp. reported fourth quarter 2024 net earnings of $40.9 million ($0.44 per share), compared to $114.6 million ($1.24 per share) for the fourth quarter of 2023. Operating earnings(1) for the fourth quarter of 2024 were $38.4 million ($0.41 per share), compared to $71.1 million ($0.77 per share) for the same period in 2023. On January 15, 2025, RLI executed a two-for-one stock split of common stock. All share and per share data in this release reflect the stock split. Fourth Quarter Year to Date Earnings Per Diluted Share 2024 2023 2024 2023 Net earnings $ 0.44 $ 1.24 $ 3.74 $ 3.31 Operating earnings (1) $ 0.41 $ 0.77 $ 2.87 $ 2.47 (1) See discussion below: Non-GAAP and Performance Measures. Highlights for the quarter included: Underwriting income(1) of $22.2 million on a combined ratio(1) of 94.4. 9% increase in gross premiums written and 19% increase in net investment income. Favorable development in prior years’ loss reserves resulted in a $8.7 million net increase in underwriting income. Losses from Hurricane Milton, resulting in a $42.4 million net decrease in underwriting income. Special dividend of $2.00 per share, representing $183.5 million returned to shareholders. Highlights for the year included: Underwriting income(1) of $210.7 million on a combined ratio(1) of 86.2. 11% increase in gross premiums written and 18% increase in net investment income. Net cash flow provided by operations of $560.2 million, an increase of 21%. Favorable development in prior years’ loss reserves resulted in a $84.1 million net increase in underwriting income. Book value per share of $16.59, an increase of 24% (inclusive of dividends) from year-end 2023. “Our customer service, consistent financial performance and prudent capital management distinguished RLI in 2024,” said RLI Corp. President & CEO Craig Kliethermes. “Despite an active hurricane season and highly competitive environment, we achieved an 86 combined ratio, marking our 29th consecutive year of underwriting profitability. Gross premiums written grew by 11%, surpassing $2 billion for the first time, with all three product segments contributing to this growth. Our positive underwriting and investment results allowed us to return $236 million to shareholders through special and regular dividends. I want to thank our associate-owners for their contributions throughout the year, which helped differentiate RLI.” Underwriting Income RLI achieved $22.2 million of underwriting income in the fourth quarter of 2024 on a 94.4 combined ratio, compared to $59.8 million on an 82.7 combined ratio in 2023. For the year, RLI achieved $210.7 million of underwriting income on an 86.2 combined ratio, compared to $173.2 million on an 86.6 combined ratio in 2023. Results for both years include favorable development in prior years’ loss reserves, which resulted in an $84.1 million and $95.3 million net increase to underwriting income in 2024 and 2023, respectively. The favorable development was offset by a $93.6 million net reduction to underwriting income for losses from Hurricanes Beryl, Helene and Milton, as well as other storm losses, in 2024. This compares to $81.2 million for losses from Hawaiian wildfires and other storm losses in 2023. The following table highlights underwriting income and combined ratios by segment for the year. Underwriting Income(1) Combined Ratio(1) (in millions) 2024 2023 2024 2023 Casualty $ 17.8 $ 59.5 Casualty 97.9 92.2 Property 167.6 86.3 Property 68.5 78.5 Surety 25.3 27.4 Surety 82.2 79.6 Total $ 210.7 $ 173.2 Total 86.2 86.6 (1) See discussion below: Non-GAAP and Performance Measures. Other Income(2) Net investment income for the quarter increased 19% to $38.8 million, compared to the same period in 2023. For the year ended December 31, 2024, net investment income was $142.3 million, compared to $120.4 million for the same period in 2023. The investment portfolio’s total return was -1.1% for the quarter and 6.4% for the year. RLI’s comprehensive loss was $26.3 million for the quarter (-$0.28 per share), compared to comprehensive earnings of $216.2 million ($2.35 per share) for the same quarter in 2023. In addition to net earnings, comprehensive loss included after-tax unrealized losses from the fixed income portfolio in the fourth quarter of 2024, due to increasing interest rates. Full-year comprehensive earnings were $338.4 million ($3.66 per share), compared to $367.4 million ($3.99 per share) in 2023. Special and Regular Dividends(2) On December 20, 2024, the company paid a special cash dividend of $2.00 per share and a regular quarterly dividend of $0.145 per share for a combined total of $196.8 million. RLI has paid dividends for 194 consecutive quarters and increased regular dividends in each of the last 49 years. Over the last 10 years, the company has returned nearly $1.5 billion to shareholders and the regular dividend has grown an average of 4.9% per year. Non-GAAP and Performance Measures Management has included certain non-generally accepted accounting principles (non-GAAP) financial measures in presenting the company’s results. Management believes that these non-GAAP measures further explain the company’s results of operations and allow for a more complete understanding of the underlying trends in the company’s business. These measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles (GAAP). In addition, our definitions of these items may not be comparable to the definitions used by other companies. Operating earnings and operating earnings per share (EPS) consist of our GAAP net earnings adjusted by net realized gains/(losses), net unrealized gains/(losses) on equity securities and taxes related thereto. Net earnings and net earnings per share are the GAAP financial measures that are most directly comparable to operating earnings and operating EPS. A reconciliation of the operating earnings and operating EPS to the comparable GAAP financial measures is included in the 2024 financial highlights below. Underwriting income or profit represents the pretax profitability of our insurance operations and is derived by subtracting loss and settlement expenses, policy acquisition costs and insurance operating expenses from net premium earned, which are all GAAP financial measures. The combined ratio, which is derived from components of underwriting income, is a performance measure commonly used by property and casualty insurance companies and is calculated as the sum of loss and settlement expenses, policy acquisition costs and insurance operating expenses, divided by net premiums earned, which are all GAAP measures. Other News At 10 a.m. central standard time (CST) on January 23, 2025, RLI management will hold a conference call to discuss quarterly results with insurance industry analysts. Interested parties may listen to the discussion at https://events.q4inc.com/attendee/436980475. (2) All share and per share data reflect the 2-for-1 stock split that occurred on January 15, 2025. Except for historical information, this news release may include forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) including, without limitation, statements reflecting our current expectations about the future performance of our company or our business segments or about future market conditions. These statements are subject to certain risk factors that could cause actual results to differ materially. Various risk factors that could affect future results are listed in the company's filings with the Securities and Exchange Commission, including the Form 10-K Annual Report for the year ended December 31, 2023. About RLI RLI Corp. (NYSE: RLI) is a specialty insurer serving niche property, casualty and surety markets. The company provides deep underwriting expertise and superior service to commercial and personal lines customers nationwide. RLI’s products are offered through its insurance subsidiaries – RLI Insurance Company, Mt. Hawley Insurance Company and Contractors Bonding and Insurance Company. All of RLI’s insurance subsidiaries are rated A+ (Superior) by AM Best Company. RLI has paid and increased regular dividends for 49 consecutive years and delivered underwriting profits for 29 consecutive years. To learn more about RLI, visit www.rlicorp.com. Supplemental disclosure regarding the earnings impact of specific items: Reserve Development(1) and Catastrophe Losses, Net of Reinsurance Three Months Ended Twelve Months Ended December 31, December 31, (Dollars in millions, except per share amounts) 2024 2023 2024 2023 Favorable development in casualty prior years' reserves $ 11.5 $ 9.0 $ 51.4 $ 76.0 Favorable development in property prior years' reserves $ 0.1 $ 2.0 $ 28.6 $ 16.2 Favorable (unfavorable) development in surety prior years' reserves $ (1.7 ) $ 0.6 $ 9.3 $ 8.9 Net incurred losses related to: 2024 storms $ — $ — $ (30.0 ) $ — Hurricanes Beryl, Helene and Milton $ (39.0 ) $ — $ (76.0 ) $ — 2023 and prior events $ — $ 1.3 $ 6.0 $ (72.8 ) Reinstatement premium from events $ — $ 2.6 $ — $ (11.7 ) Operating Earnings Per Share Three Months Ended Twelve Months Ended December 31, December 31, 2024 2023 2024 2023 Operating Earnings Per Share(2)(3) $ 0.41 $ 0.77 $ 2.87 $ 2.47 Specific items included in operating earnings per share:(1) (4) Net favorable development in casualty prior years' reserves $ 0.09 $ 0.06 $ 0.37 $ 0.57 Net favorable development in property prior years' reserves $ — $ 0.02 $ 0.22 $ 0.12 Net favorable (unfavorable) development in surety prior years' reserves $ (0.02 ) $ — $ 0.07 $ 0.06 Net incurred losses related to: 2024 storms $ — $ — $ (0.22 ) $ — Hurricanes Beryl, Helene and Milton $ (0.29 ) $ — $ (0.56 ) $ — 2023 and prior events (incurred loss and reinstatement premium) $ — $ 0.03 $ 0.04 $ (0.63 ) (1) Reserve development reflects changes from previously estimated losses. (2) See discussion above: Non-GAAP and Performance Measures. (3) All share and per share data reflect the 2-for-1 stock split that occurred on January 15, 2025. (4) Items included in operating earnings per share are after tax and incorporates incentive and profit sharing-related impacts which affected policy acquisition, insurance operating and general corporate expenses. RLI CORP 2024 FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) Three Months Ended December 31, Twelve Months Ended December 31, SUMMARIZED INCOME STATEMENT DATA: 2024 2023 % Change 2024 2023 % Change Net premiums earned $ 397,176 $ 345,894 14.8 % $ 1,526,406 $ 1,294,306 17.9 % Net investment income 38,776 32,548 19.1 % 142,278 120,383 18.2 % Net realized gains 8,744 5,760 51.8 % 19,966 32,518 (38.6 ) % Net unrealized gains (losses) on equity securities (5,580 ) 49,313 NM 81,734 64,787 26.2 % Consolidated revenue $ 439,116 $ 433,515 1.3 % $ 1,770,384 $ 1,511,994 17.1 % Loss and settlement expenses 225,512 146,424 54.0 % 739,253 604,413 22.3 % Policy acquisition costs 121,854 111,242 9.5 % 464,040 418,325 10.9 % Insurance operating expenses 27,568 28,381 (2.9 ) % 112,460 98,383 14.3 % Interest expense on debt 1,492 1,373 8.7 % 6,331 7,301 (13.3 ) % General corporate expenses 2,736 5,112 (46.5 ) % 15,880 15,917 (0.2 ) % Total expenses $ 379,162 $ 292,532 29.6 % $ 1,337,964 $ 1,144,339 16.9 % Equity in earnings of unconsolidated investees (12,522 ) 2,441 NM (4,869 ) 9,610 NM Earnings before income taxes $ 47,432 $ 143,424 (66.9 ) % $ 427,551 $ 377,265 13.3 % Income tax expense 6,572 28,812 (77.2 ) % 81,772 72,654 12.5 % Net earnings $ 40,860 $ 114,612 (64.3 ) % $ 345,779 $ 304,611 13.5 % Other comprehensive earnings (loss), net of tax (67,199 ) 101,621 NM (7,420 ) 62,773 NM Comprehensive earnings (loss) $ (26,339 ) $ 216,233 NM $ 338,359 $ 367,384 (7.9 ) % Operating earnings(1): Net earnings $ 40,860 $ 114,612 (64.3 ) % $ 345,779 $ 304,611 13.5 % Less: Net realized gains (8,744 ) (5,760 ) 51.8 % (19,966 ) (32,518 ) (38.6 ) % Income tax on realized gains 1,836 1,210 51.7 % 4,193 6,829 (38.6 ) % Net unrealized (gains) losses on equity securities 5,580 (49,313 ) NM (81,734 ) (64,787 ) 26.2 % Income tax on unrealized gains (losses) on equity securities (1,171 ) 10,355 NM 17,164 13,605 26.2 % Operating earnings $ 38,361 $ 71,104 (46.0 ) % $ 265,436 $ 227,740 16.6 % Return on Equity: Net earnings 22.2 % 23.3 % Comprehensive earnings 21.7 % 28.1 % Per Share Data(2): Diluted: Weighted average shares outstanding (in 000's) 92,725 92,144 92,451 92,155 Net earnings per share $ 0.44 $ 1.24 (64.5 ) % $ 3.74 $ 3.31 13.0 % Less: Net realized gains (0.09 ) (0.06 ) 50.0 % (0.22 ) (0.35 ) (37.1 ) % Income tax on realized gains 0.02 0.01 100.0 % 0.05 0.07 (28.6 ) % Net unrealized (gains) losses on equity securities 0.06 (0.54 ) NM (0.88 ) (0.70 ) 25.7 % Income tax on unrealized gains (losses) on equity securities (0.02 ) 0.12 NM 0.18 0.14 28.6 % Operating earnings per share(1) $ 0.41 $ 0.77 (46.8 ) % $ 2.87 $ 2.47 16.2 % Comprehensive earnings (loss) per share $ (0.28 ) $ 2.35 NM $ 3.66 $ 3.99 (8.3 ) % Cash dividends per share - ordinary $ 0.145 $ 0.135 7.4 % $ 0.570 $ 0.535 6.5 % Cash dividends per share - special $ 2.00 $ 1.00 100.0 % $ 2.00 $ 1.00 100.0 % Net cash flow provided by operations $ 128,080 $ 122,065 4.9 % $ 560,219 $ 464,257 20.7 % (1) See discussion above: Non-GAAP and Performance Measures. (2) All share and per share data reflect the 2-for-1 stock split that occurred on January 15, 2025. NM = Not Meaningful RLI CORP 2024 FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts) December 31, December 31, 2024 2023 % Change SUMMARIZED BALANCE SHEET DATA: Fixed income, at fair value $ 3,175,796 $ 2,855,849 11.2 % (amortized cost - $3,391,159 at 12/31/24) (amortized cost - $3,054,391 at 12/31/23) Equity securities, at fair value 736,191 590,041 24.8 % (cost - $417,897 at 12/31/24) (cost - $354,022 at 12/31/23) Short-term investments 74,915 134,923 (44.5 ) % Other invested assets 57,939 59,081 (1.9 ) % Cash and cash equivalents 39,790 36,424 9.2 % Total investments and cash $ 4,084,631 $ 3,676,318 11.1 % Accrued investment income 28,319 24,062 17.7 % Premiums and reinsurance balances receivable 230,534 221,206 4.2 % Ceded unearned premiums 124,955 112,257 11.3 % Reinsurance balances recoverable on unpaid losses 755,425 757,349 (0.3 ) % Deferred policy acquisition costs 166,214 146,566 13.4 % Property and equipment 43,172 46,715 (7.6 ) % Investment in unconsolidated investees 56,477 56,966 (0.9 ) % Goodwill and intangibles 53,562 53,562 0.0 % Income taxes - deferred 7,793 15,872 (50.9 ) % Other assets 77,720 69,348 12.1 % Total assets $ 5,628,802 $ 5,180,221 8.7 % Unpaid losses and settlement expenses $ 2,693,470 $ 2,446,025 10.1 % Unearned premiums 984,140 892,326 10.3 % Reinsurance balances payable 44,681 71,507 (37.5 ) % Funds held 97,380 101,446 (4.0 ) % Income taxes - current 749 3,757 (80.1 ) % Short-term debt 100,000 100,000 — % Accrued expenses 124,242 108,880 14.1 % Other liabilities 62,173 42,766 45.4 % Total liabilities $ 4,106,835 $ 3,766,707 9.0 % Shareholders' equity 1,521,967 1,413,514 7.7 % Total liabilities & shareholders' equity $ 5,628,802 $ 5,180,221 8.7 % OTHER DATA(1): Common shares outstanding (in 000's) 91,738 91,280 Book value per share $ 16.59 $ 15.49 7.1 % Closing stock price per share $ 82.42 $ 66.56 23.8 % Statutory surplus $ 1,787,312 $ 1,520,135 17.6 % (1) All share and per share data reflect the 2-for-1 stock split that occurred on January 15, 2025. NM = Not Meaningful RLI CORP 2024 FINANCIAL HIGHLIGHTS UNDERWRITING SEGMENT DATA (Unaudited) (Dollars in thousands, except per share amounts) Three Months Ended December 31, GAAP GAAP GAAP GAAP Casualty Ratios Property Ratios Surety Ratios Total Ratios 2024 Gross premiums written $ 282,204 $ 153,295 $ 37,711 $ 473,210 Net premiums written 228,455 103,945 34,045 366,445 Net premiums earned 225,823 134,610 36,743 397,176 Net loss & settlement expenses 155,217 68.7 % 63,856 47.4 % 6,439 17.5 % 225,512 56.8 % Net operating expenses 79,356 35.2 % 44,516 33.1 % 25,550 69.6 % 149,422 37.6 % Underwriting income (loss)(1) $ (8,750 ) 103.9 % $ 26,238 80.5 % $ 4,754 87.1 % $ 22,242 94.4 % 2023 Gross premiums written $ 238,467 $ 158,047 $ 37,846 $ 434,360 Net premiums written 191,626 104,154 35,117 330,897 Net premiums earned 195,962 115,934 33,998 345,894 Net loss & settlement expenses 121,399 62.0 % 22,554 19.5 % 2,471 7.3 % 146,424 42.3 % Net operating expenses 72,562 37.0 % 40,653 35.0 % 26,408 77.6 % 139,623 40.4 % Underwriting income (loss)(1) $ 2,001 99.0 % $ 52,727 54.5 % $ 5,119 84.9 % $ 59,847 82.7 % Twelve Months Ended December 31, GAAP GAAP GAAP GAAP Casualty Ratios Property Ratios Surety Ratios Total Ratios 2024 Gross premiums written $ 1,108,356 $ 743,486 $ 161,206 $ 2,013,048 Net premiums written 915,625 542,997 146,899 1,605,521 Net premiums earned 852,837 531,384 142,185 1,526,406 Net loss & settlement expenses 524,490 61.5 % 198,806 37.4 % 15,957 11.2 % 739,253 48.4 % Net operating expenses 310,559 36.4 % 165,042 31.1 % 100,899 71.0 % 576,500 37.8 % Underwriting income (loss)(1) $ 17,788 97.9 % $ 167,536 68.5 % $ 25,329 82.2 % $ 210,653 86.2 % 2023 Gross premiums written $ 961,665 $ 697,372 $ 147,623 $ 1,806,660 Net premiums written 788,982 500,057 138,708 1,427,747 Net premiums earned 758,346 401,530 134,430 1,294,306 Net loss & settlement expenses 418,032 55.1 % 172,062 42.9 % 14,319 10.7 % 604,413 46.7 % Net operating expenses 280,835 37.1 % 143,152 35.6 % 92,721 68.9 % 516,708 39.9 % Underwriting income (loss)(1) $ 59,479 92.2 % $ 86,316 78.5 % $ 27,390 79.6 % $ 173,185 86.6 % (1) See discussion above: Non-GAAP and Performance Measures. Category: Earnings Release

RLI Reports Fourth Quarter and Year-End 2024 Results

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