Q2 2024 RLI Corp Earnings Call Transcript
Key Points
- RLI Corp (RLI) reported second quarter operating earnings of $1.72 per share, reflecting solid underwriting performance.
- The combined ratio improved to 81.5, with a notable 18% increase in net investment income.
- Casualty segment experienced double-digit growth for the second consecutive quarter, benefiting from favorable prior year's loss development.
- Surety segment achieved mid-10s growth and maintained underwriting profit despite a competitive market.
- Property segment posted a 60 combined ratio, led by a 20% growth in the Marine division and a 27% increase in Hawaii homeowners premium.
- Storm losses totaled $16 million for the quarter, impacting the property and casualty segments.
- Operating cash flow was down slightly due to larger tax payments and the timing of several large claims.
- E&S property growth is slowing, with rates flattening and increased competition from MGAs.
- The equity portfolio posted only $3.6 million of unrealized gains compared to $25 million a year ago.
- Transportation segment faced mixed results, with increased severities driven by legal system abuse affecting the industry.
Good morning, and welcome to the RLI Corp. Second Quarter Earnings Teleconference. After management's prepared remarks, we will open the conference for questions and answers.
Before we get started, let me remind everyone that through the course of the teleconference, RLI management may make comments that reflect their intentions, beliefs, and expectations for the future. As always, these forward-looking statements are subject to certain factors and uncertainties, which could cause actual results to differ materially. Please refer to the risk factors described in the company's various SEC filings, including in the annual report on the Form 10-K, as supplemented in Form 10-Q, all of which should be reviewed carefully. The company has filed a Form 8-K with the Securities and Exchange Commission that contains the press release announcing third quarter results.
During the call, RLI management may refer to operating earnings and earnings per share from operations, which are non-GAAP measures of financial results. RLI's operating earnings and earnings per share from operations consist of net
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