RLI 3Q Net Down 68%, Hurt By Storms

The third-quarter underwriting loss for the company came in at $7.1 million, for a 105.6 net combined ratio. In comparison, RLI reported $8.6 million underwriting gain with a 92.8 combined ratio during the corresponding period last year.

On the property segment, the company registered a 125.9 combined ratio, while the casualty segment reported a 101.1 combined ratio. The company reported that its surety writings were profitable for the quarter, as the segment achieved a combined ratio of 99.7.

Net premiums earned grew 8 percent for the quarter, to $128 million, and resulted in consolidated revenue of $146.6 million. Gross premiums written were $191.5 million, down one percent from the same period one year ago. Total net premium written for the quarter came in at $128.7 million.

"This was a challenging quarter," remarked RLI Chief Executive Jonathan Michael, "particularly for our customers in Florida, who endured four hurricanes within six weeks. During that difficult time, we were pleased to help our insureds get back on their feet." Mr. Michael added that given the breadth and strength of hurricanes that hit the U.S. coast this year, his company's storm losses could be described as "modest."

Those losses "show that we also benefited from a sound underwriting performance," Mr. Michael said. "Other than these highly unusual events, we had solid operating results. The insurance marketplace still has substantial opportunity for profitable underwriting. We are particularly optimistic for the casualty and surety markets, where we have seen strong prospects for growth."

For the third quarter, RLI's investment income reached $13.7 million, a 22 percent increase from the third quarter of last year, thanks to the strength of cash flows and proceeds from the December 2003 debt offering. Year to date, RLI's invested assets grew 17 percent, which helped push the company's investment portfolio to $1.6 billion.