RLI Reports Record Earnings

RLI Reports Record Earnings

NU Online News Service, July 14, 12:14 p.m. EST?With a combined ratio of just 90.7 for the second quarter, Peoria, Ill.-based RLI Corp. announced record second-quarter net earnings of $18.4 million.[@@]

The earnings figure, which translated to 71 cents per share, was 19 percent higher than the $15.4 million earnings for last year's second quarter.

In terms of underwriting results for the quarter, the property, casualty and surety segments of the company all contributed to a nearly 3-point drop in the second-quarter overall combined ratio, which improved to 90.7 from 93.4 in last year's second quarter.

Among the segment, only the surety combined ratio revealed a slightly unprofitable result, with a combined ratio of 100.8 on $14.4 million of net written premiums. The surety actually improved more than 11 points from a 112 level for second-quarter 2003.

"Our disciplined property underwriters have been able to continue posting outstanding, profitable results," said RLI President & CEO Jonathan E. Michael in a statement. "Casualty writings are still benefiting from a strong marketplace that offers opportunity for both growth and positive results," he said.

For RLI, the property book was clearly its most profitable, with a 66.1 combined ratio for the quarter. Casualty posted a 95.9 ratio, down from 98.5 in last year's second quarter.

While net written premiums for the property book remained essentially flat, at roughly $28 million in the quarter, casualty premiums grew 19 percent to $96 million.

"We like the way 2004 is going; it is still an attractive market for specialty writers such as RLI," Mr. Michael said.

In addition to underwriting profits, investment income contributed to the company's record results?reaching $13.4 million. The company attributed the 23 percent gain in investment income to the strength of cash flows and proceeds from a December 2003 debt offering.

Through six months, RLI posted net earnings of $35.3 million, or $1.35 per share?an 18 percent gain over last year's $29.8 million.