RLI Reports 73% Higher Quarterly Income
NU Online News Service, April 14, 3:12 p.m. EDT?Specialty property-casualty insurer RLI Corp. said improved underwriting performance boosted its first-quarter income by 73 percent.[@@]
The Peoria, Ill.-based carrier posted $29.3 million in net profit for the 2005 first quarter, improving from $16.9 million one year ago. In reaction Moody's Investors Service said it was considering an upgraded rating for the insurer.
The company said that all three of its underwriting segments?property, casualty and surety?showed progress from the year-ago period.
RLI's property segment's combined ratio improved to 61.8 from 68.7. The casualty underwriting registered an 80.5 combined ratio, down from 96.7. The surety segment reported a 94.5 combined ratio, falling from 100.3. The total underwriting combined ratio for the 2005 first quarter was 78.8, versus 91.5 one year ago.
Overall underwriting income was reported at $26.3 million for the quarter, improving from $10.8 million one year ago.
Net premiums written for the quarter was $110.8 million, down from $123.2 million during 2004 first quarter.
"During the first quarter, discipline ruled the day," RLI Chief Executive Jonathan Michael said. The marketplace is continuing to soften in many coverage areas, Mr. Michael observed. Still, he added, "Our underwriters excelled by delivering profitable results in all three business segments."
RLI also benefited from favorable developments from prior-year loss reserves. During the quarter, positive development on prior-accident-year casualty-loss reserves resulted in additional earnings of $9.1 million.
RLI also improved its quarterly net investment income to $14.6 million, up 18.7 percent from $12.3 million one year ago.
The company's strong performance prompted Moody's Investors Service to announce that it is reviewing its RLI ratings for a possible upgrade.
The New York-based ratings firm said it has placed its "Baa3″ senior debt rating and the "A3″ insurance financial strength ratings for RLI and its business units on review for possible upgrade. The review, Moody's said, is prompted by the carrier's continued strong operating performance and capital growth.
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