On July 22, 2024, RLI Corp (RLI, Financial) released its 8-K filing reporting second quarter 2024 results. RLI Corp, a specialty insurer underwriting property and casualty insurance through its subsidiaries, reported net earnings of $82.0 million ($1.78 per share), surpassing the analyst estimate of $1.49 per share. The company also reported operating earnings of $79.3 million ($1.72 per share), a significant increase from $53.3 million ($1.16 per share) in the same period last year.
Company Overview
RLI Corp underwrites property and casualty insurance through its subsidiaries. The company offers insurance coverage in the specialty admitted market and the excess and surplus markets, providing alternatives for customers with unique risks. RLI distributes its products through wholly-owned branch offices that market to wholesale and retail producers. The company's insurance operation segments include Casualty, Property, and Surety, with the majority of revenue derived from the Casualty segment.
Performance Highlights
RLI Corp's net earnings for Q2 2024 were $82.0 million ($1.78 per share), compared to $77.7 million ($1.69 per share) in Q2 2023. Operating earnings were $79.3 million ($1.72 per share), up from $53.3 million ($1.16 per share) in the previous year. The company achieved $70.0 million in underwriting income on an 81.5 combined ratio, compared to $41.2 million on an 87.2 combined ratio in 2023.
“We delivered excellent results in the second quarter and reported an 81.5 combined ratio, 11% growth in gross premiums written and 18% increase in investment income," said RLI Corp. President & CEO Craig Kliethermes. “We are pleased with the balanced growth we achieved across our product portfolio. The casualty and surety segments continued to find opportunities for expansion, while market conditions in our property segment allowed us to demonstrate our underwriting discipline. Our performance during the quarter highlights the value of RLI’s underwriting-focused business model and strength of our diversified portfolio.”
Financial Achievements
RLI Corp reported a 17.6% increase in net premiums earned, reaching $379.1 million in Q2 2024, compared to $322.3 million in Q2 2023. Net investment income rose by 18.0% to $34.0 million. The company's comprehensive earnings for the quarter were $74.1 million ($1.61 per share), up from $57.9 million ($1.26 per share) in the same quarter last year.
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Net Premiums Earned | $379.1 million | $322.3 million | 17.6% |
| Net Investment Income | $34.0 million | $28.8 million | 18.0% |
| Net Earnings | $82.0 million | $77.7 million | 5.6% |
| Operating Earnings | $79.3 million | $53.3 million | 48.7% |
Key Metrics and Analysis
RLI Corp's combined ratio improved to 81.5 from 87.2, indicating better underwriting performance. The company's return on equity (ROE) for the trailing four quarters was 23.6%, reflecting strong profitability. The book value per share increased by 11.9% to $34.64, and the closing stock price per share rose by 5.7% to $140.69.
RLI Corp's balance sheet remains robust with total assets of $5.51 billion, up 6.4% from December 31, 2023. Shareholders' equity increased by 12.1% to $1.58 billion, demonstrating the company's strong financial position.
Conclusion
RLI Corp's Q2 2024 results highlight the company's strong underwriting performance and effective investment strategy. The significant increase in operating earnings and net premiums earned, along with improved combined ratios, underscore RLI's ability to navigate market conditions and deliver value to shareholders. The company's continued recognition as a top performer in the insurance industry further solidifies its reputation for excellence.
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Explore the complete 8-K earnings release (here) from RLI Corp for further details.
