RLI Q2 Earnings Call Highlights

RLI posted another profitable quarter , with an 85.6 combined ratio, 17% growth in net investment income to $46 million, and operating earnings of $0.83 per share. Net earnings rose to $1.82 per share, helped by strong equity portfolio gains. Growth was strongest in casualty , led by personal umbrella and transportation, while property and surety faced more competitive or softer conditions. Casualty premium rose 11%, but property gross premium fell 6% and surety premium declined 6%. RLI returned significant capital to shareholders through a $0.18 regular dividend, a $2.00 special dividend, and share buybacks, while also authorizing a new $250 million repurchase program. Management said it will keep prioritizing disciplined underwriting and selective growth over chasing market share. RLI NYSE: RLI reported another quarter of profitable underwriting and higher investment income, with management emphasizing disciplined growth, capital returns and selectivity in increasingly competitive specialty insurance markets. President and Chief Executive Officer Craig Kliethermes said the company generated an 86 combined ratio, grew gross premiums written by 3%, increased net investment income by 17% and produced a 25% return on equity during the second quarter. He also noted that RLI returned capital to shareholders through both a special dividend and share repurchases. “Markets change; our principles don’t,” Kliethermes said, pointing to underwriting discipline, relationships with producers and insureds, and capital management as key drivers of the company’s performance. Chief Financial Officer Aaron Diefenthaler said RLI reported second-quarter operating earnings of $0.83 per share, compared with $0.82 per share in the prior-year period. On a GAAP basis, net earnings were $1.82 per share, up from $1.34 per share a year earlier. The gap between operating and net earnings was largely driven by the company’s equity portfolio. Diefenthaler said RLI recognized $103 million of unrealized gains on equity securities in the quarter, compared with $44 million last year. Realized gains totaled $9 million, which he described as reflecting modest portfolio rebalancing. Underwriting income was $59.9 million. The company’s combined ratio was 85.6, compared with 84.5 last year. The loss ratio improved by 0.4 percentage points to 45.5, while the expense ratio increased 1.5 points to 40.1 due to personnel-related costs, acquisition expenses and technology investments. Results included $39.8 million of favorable development on prior-year loss reserves, compared with $27.6 million in the second quarter of 2025. The quarter also included $10 million of net incurred losses from 2026 catastrophe events. Net investment income increased 17% to $46 million. Diefenthaler said operating cash flow of $145 million supported fixed-income purchases with yields averaging 4.9% during the quarter. Total investments and cash were approximately $4.9 billion at quarter-end. Chief Operating Officer Jen Klobnak said casualty premium rose 11% in the quarter, with rates up 10%. Personal umbrella and transportation were the primary drivers. Personal umbrella premium increased 26%, supported by a 17% rate increase. Klobnak said the rate increase was influenced by higher approved rate filings in California and Florida, though she expects rate increases in the second half of the year to moderate as some filings earn through the book. She said the company has also targeted growth in non-coastal s...