RLI Reports 4Q Net Income Increased 411%

NU Online News Service, Jan. 26, 4:08 p.m. EST

Niche insurer RLI Corp. reported fourth-quarter net income increased 411 percent on strong underwriting results and improvements in its investment portfolio.

The Peoria, Ill.-based property and casualty and surety business specialty insurer reported net earnings for the fourth quarter increased $24.6 million to $30.6 million, or $1.41 a share. Total revenues in the quarter rose 26 percent, or $30 million, to $146 million.

For the year, net income rose 19 percent over 2008, or $15.2 million, to $94 million, or $4.32 a share. Revenues declined 3 percent, or $14.5 million, to $547 million.

RLI's combined ratio for the year improved 1.9 points, dropping to 82.3.

During an analyst's conference call, Jonathan E. Michael, president and chief executive officer of RLI, said it was a "very satisfying year for us," adding that the company continues to outperform the P&C insurance industry as a whole.

Michael J. Stone, president and chief operating officer, called the results satisfying despite the economic and soft market headwinds. He said a turn in the market would probably not take place until there was some catalyst, such as a loss event to turn the market.

The surplus lines are "being attacked" by standard lines companies, he noted, affecting the performance of a number of lines of business.

"Our business is based on underwriting profit and a disciplined underwriting performance," said Mr. Stone as he criticized other companies that pursued business for underwriting volume.

RLI declared a fourth-quarter dividend payment of 28 cents a share, an increase of 4 percent over the prior quarter, that was paid on Jan. 15 to shareholders of record as of Dec. 31.