NU Online News Service, Jan. 25, 2:00 p.m. EST

Specialty insurer RLI Corp. saw higher earned premiums as it reported 2010 fourth-quarter net income of $40.3 million, a nearly 32 percent increase over the prior year’s fourth quarter.

The Peoria, Ill.-based insurer said net premiums earned in the quarter increased 4.9 percent to $127 million, compared to $121.1 million in the 2009 fourth quarter. By segment, RLI said net premiums earned were $49.5 million for property, up from $40 million in the 2009 fourth quarter; $21.3 million for surety, up from $18.9 million; and $56.2 million for casualty, down from $62.3 million.

For the year, RLI said net income was $127.4 million, up from $93.8 million in 2009. The combined ratio for all of 2010 was 80.7, compared to 82.3 in 2009, and 2010 net realized investment gains were $23.2 million compared to a loss of $12.8 million in 2009.

“Fourth-quarter financial results were excellent,” RLI President and CEO Jonathan E. Michael said in a statement.

He added, “RLI posted strong results for the year as well, which were driven by growth in our property and surety businesses.”

Underwriting income for the year was $34.1 million for property, up from $23.3 million a year ago; $23.1 million for surety, up from $12 million; and $38.2 million for casualty, down from $51.5 million.

The fourth quarter saw RLI involved in mergers and acquisitions activity as the insurer announced on Dec. 22 that it will acquire Seattle-based Contractors Bonding Insurance Company (CBIC) for approximately $137 million in cash. Mr. Michael said the acquisition “will expand our geographic footprint and enhance existing casualty and surety products.”