RLI

This article first appeared on GuruFocus. - Operating Earnings Per Share: $0.86 in Q3 2026 vs. $0.82 in Q3 2025. - GAAP Net Earnings Per Share: $0.88 vs. $1.35 in the prior-year quarter. - Gross Premiums Written: Up 2% in the quarter. - Combined Ratio: 86.2% vs. 85.1% last year. - Loss Ratio: 47.4%, up 1.3 points. - Expense Ratio: 38.8%, improved modestly. - Underwriting Income: $58.8 million for the quarter. - Favorable Prior-Year Reserve Development: $22.9 million vs. $15.5 million in Q3 2025. - Catastrophe Losses: Approximately $4 million, primarily in the property segment. - Casualty Segment: Premiums up 4%; combined ratio 99.6% vs. 98.2%; $8.2 million favorable development; underlying loss ratio just under 67% year-to-date. - Property Segment: Premiums down ~1%; combined ratio 60.1% (flat vs. last year); just over $50 million underwriting income; $10.4 million favorable development; $3.9 million current-year catastrophe losses. - Surety Segment: Premiums up ~1%; combined ratio 79.8% vs. 85%; $4.3 million favorable development; underwriting income up $7.3 million to $12.9 million from $5.6 million. - Marine: Premium growth of 11% in the quarter. - E&S Property: Premium down 17% in the quarter. - Hawaii Homeowners: Premium up 9%; rates up 13%. - Steadily Partnership: Generated $9 million of premium in the quarter. - Personal Umbrella: Premium growth of 22%; rates up 8%. - E&S Casualty: Premium declined 10% in the quarter. - Transportation: Premium declined 9%; rates up 12%; renewal retention down almost 10 points. - Operating Cash Flow: $195 million in the quarter, up 9% year over year. - Net Investment Income: $46.7 million, up 13%. - New Fixed Income Purchases: Average yields of 5.5%, nearly 100 basis points above book yield. - Total Investment Return: Negative 2% on a mark-to-market basis for the quarter. - Comprehensive Earnings: Comprehensive loss of $36.8 million, or $0.40 per share, vs. comprehensive earnings of $152 million, or $1.65 per share, last year. - Dividends: Regular quarterly dividend of $0.18 per share. - Share Repurchases: Just under 104,000 shares at an average price of $60.51; ~$232 million remaining under authorization. - Book Value: Up 10% from year-end 2025, inclusive of dividends and share repurchases. - Year-to-Date Underwriting Income: $176 million on an 85.9% combined ratio through nine months of 2026. - Year-to-Date Net Investment Income: Up 15%. - Year-to-Date Operating Earnings Per Share: $2.52, consistent with the prior year. - Warning! GuruFocus has detected 3 Warning Signs with BOM:500034. - Is RLI fairly valued? Test your thesis with our free DCF calculator. Release Date: October 20, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - RLI Corp delivered an 86.2% combined ratio and $58.8 million in underwriting income for Q3 2026, reflecting consistent underwriting profitability. - Net investment income increased 13% to $46.7 million, supported by new fixed income purchases at an average yield of 5.5%, nearly 100 basis points above book yield. - Book value grew 10% from year-end 2025, inclusive of dividends and share repurchases, demonstrating strong capital management. - Favorable prior-year reserve development totaled $22.9 million, up from $15.5 million in the prior-year quarter, benefiting casualty, property, and surety segments. - The property segment posted a 60.1% combined ratio and $50 million of underwriting income, while surety improved to a 79.8% combined ratio from 85%. - The Steadily partnership generated $9 million of premium in the quarter, showcasing RLI Corp's ability to find profitable growth through strategic distribution partnerships. - Gross premiums written grew only 2% in the quarter, with property premiums down 1% and E&S property down 17% due to increased competition and market softening. - The loss ratio increased 1.3 points to 47.4%, driven by higher attritional losses and modest catastrophe activity. - Comprehensive earnings swung to a loss of $36.8 million ($0.40 per share) from earnings of $152 million ($1.65 per share) last year, due to rising yields and lower bond prices. - E&S casualty premiums declined 10% amid increased competition, particularly in the Northeast, and transportation premiums fell 9% as competition intensified late in the quarter. - The expense ratio improved only modestly to 38.8%, and the Steadily partnership is expected to add a couple of points to the expense ratio for that book due to higher commissions and profit-sharing. - Management expressed caution on recognizing positive loss trends in personal umbrella, holding loss ratio picks steady until further evidence, and noted a mixed surety market with some competitors reducing underwriting requirements. Q: With personal umbrella rates moderating this quarter, are the benefits of recent rate actions and higher attachment points showing up in current year loss ratios, or are they being offset by higher severity? A: COO Jennifer Klobnak said it is early days, but cumulative rates on the book are up about 50% over the last three years, alongside significant work with producers to improve the risk profile. RLI is seeing positive signs in both the current accident year and prior accident year 2025, but is holding loss ratio picks in those years until it has more time to confirm the actions are truly having a positive impact. Q: Can you provide more detail on the Steadily relationship who underwrites, how much risk RLI retains, and whether it is primarily a distribution play? A: COO Jennifer Klobnak said RLI rejects over 99% of MGA opportunities but was impressed by Steadily's laser focus on landlord insurance. RLI views Steadily as essentially a branch office, with strong cultural fit, input into coverage, vetted in-house claims and constant reporting and interaction, including an on-site visit next week. There is no top-line target; the focus is on writing business with expected losses, which has held so far. Q: Property's underlying loss ratio was flat year-over-year despite 400 basis points of deterioration in the first half. Was anything one-off in the quarter, or did loss trend assumptions change? A: CFO Aaron Diefenthaler said there was nothing one-off in the current quarter. He pointed to the first half of the year as having higher attritional loss activity across the portfolio, which was discussed on the prior call. Q: With excess casualty showing favorable development, which accident years are driving it, and how are competitive pressures evolving in that market? A: CFO Aaron Diefenthaler said the favorable development is primarily from accident years 2020 and 2021 in that longer-tail business. COO Jennifer Klobnak added that competition has picked up, especially in the Northeast, from MGAs and standard markets packaging auto with liability on larger accounts. RLI is maintaining a stable appetite and consistent presence, waiting for less disciplined competitors to pull back. Q: With reinsurance seen as a buyer's market, what is the early read on reinsurance costs for 2027? A: COO Jennifer Klobnak said it is early days, but several reinsurance meetings have already occurred. With the market well publicized as a buyer's market, RLI expects positive terms and conditions at renewal, though significant negotiation remains. She expects a positive result for RLI at 1/1. Q: Casualty's year-over-year underlying loss ratio deterioration appeared to accelerate. How much was pricing and mix versus a change in loss trend views? A: CFO Aaron Diefenthaler said the current casualty underlying loss ratio is in line with the prior two quarters on a sequential basis. He attributed the prior year quarter comparison to some current accident year action that benefited that period, and described the underlying trajectory as fairly stable. Q: Surety growth turned positive, but competition has increased. What does the pipeline look like, and are there signs of activity that could sustain positive growth? A: COO Jennifer Klobnak described a crowded surety market, with construction focus concentrated on data centers where RLI, targeting small to mid-market contractors, is not a major player. Commercial and transactional surety face a reset after several years of growth, with renewable energy projects slowing. She noted some competitors are writing surety with almost no questions and no indemnity requirements, which typically leads to losses, while RLI remains disciplined and is actively marketing. Q: In excess liability, you noted better binding rates at quarter end as a potential green shoot. Was that driven by RLI's initiatives and relationships, or broader market factors? A: COO Jennifer Klobnak said it is hard to tell. The first half was slower as the industry waited for construction to pick up, and a few more binders came at quarter end. Activity is region-specific, with strength in the West and central US but a slower East Coast. She hopes it is a trend but said it is too early to call. Q: E&S property premium fell 17% amid more capacity entering the market. How much more downside is there, and what are the signposts that the worst may be behind you? A: COO Jennifer Klobnak said the market is still softening but not soft, with business still bindable at rates and terms delivering double-digit returns. Rates are around 2022 levels, still up from prior years, and with no major event, she expects continued softening as new MGAs enter. RLI likes the business and will keep writing it while staying disciplined as competitors adjust terms and conditions. Q: In transportation, you cited increased competition late in the quarter from emerging players and new MGAs. Is that random fluctuation or something more fundamental? A: COO Jennifer Klobnak believes people are reemerging in the transportation market, chasing large accounts some with $2 million in premium to support top-line growth given industry consolidation. She called the dynamic somewhat nonsensical given severity and loss issues in commercial transportation, and said RLI will lean into risk selection, focusing on accounts dedicated to loss control and priced appropriately for the risk. Q: You previously mentioned increasing limit sizes in property to defend renewals. How successful has that been, or are competitors undercutting by margins that make limits less relevant? A: COO Jennifer Klobnak said the strategy has been successful in retaining business, but new MGAs are offering larger limits than RLI provides, forcing selective stretching. Increasing limits has also made sense given inflation-driven increases in location values. She described a constant evaluation of market changes to retain favored accounts and win new business. Q: Should the Steadily MGA relationship be expected to affect acquisition expenses or the expense ratio? A: COO Jennifer Klobnak confirmed that commissions are a couple of points higher on that book when working with a distribution partner, and it includes a profit commission component that self-regulates based on results. She clarified the impact is limited to that particular book, not the overall expense ratio. Q: What is the current state of the management liability market? < For the complete transcript of the earnings call, please refer to the full earnings call transcript.

RLI's third quarter was marked by disciplined underwriting and strong investment income, resulting in a positive market reaction. Management pointed to an 86% combined ratio, 2% premium growth, and a 13% rise in net investment income as key contributors. CEO Craig Kliethermes emphasized, "Consistency may be boring to some. At RLI, we think boring is beautiful," highlighting the company's focus on risk selection and long-term relationships with distribution partners. Is now the time to buy RLI? Find out in our full research report (it's free). - Revenue: $472.7 million vs analyst estimates of $470 million (5.4% year-on-year growth, 0.6% beat) - Adjusted EPS: $0.86 vs analyst estimates of $0.53 (61.1% beat) - Operating Margin: 23.4%, down from 36.1% in the same quarter last year - Market Capitalization: $5.75 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. - Michael Phillips (Oppenheimer) asked how recent rate actions and underwriting changes in personal umbrella are affecting loss ratios. Chief Operating Officer Jennifer Klobnak explained it is too early to quantify the impact but noted early positive signs, while maintaining a cautious stance on loss ratio recognition. - Hristian Getsov (Wells Fargo) questioned the flat property loss ratio despite earlier deterioration. CFO Aaron Diefenthaler clarified that there were no one-off events in the quarter, attributing stability to normalized attritional losses compared to the first half. - Meyer Shields (Keefe, Bruyette, & Woods) inquired about the expense impact of the Steadily partnership. Klobnak confirmed commissions are a few points higher on that book, but limited to the partnership's business and self-regulating based on profitability. - Charles Peters (Raymond James) sought clarity on competitive pressures in excess casualty. Klobnak acknowledged heightened competition, especially in the Northeast, but reiterated RLI's stable underwriting appetite and willingness to let unprofitable accounts go. - Mark Hughes (Truist Securities) asked about signs of improvement in excess liability and marine. Klobnak said late-quarter binding activity in excess liability could indicate momentum but stressed it's too early to call a trend, while marine growth was attributed to broad geographic underwriting strength. In the coming quarters, our analysts will closely watch (1) RLI's ability to sustain underwriting discipline as competition intensifies, (2) the contribution from new partnerships and distribution channels such as Steadily, and (3) trends in segment-level premium growth, particularly in marine, casualty, and surety. We will also monitor any shifts in reinsurance costs and the impact of technology on customer behavior. RLI currently trades at $62.71, up from $61.20 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it's free for active Edge members). WHILE YOU'RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Management emphasized a 'boring is beautiful' philosophy, focusing on consistent underwriting profitability and risk selection over top-line growth targets. - Performance was driven by an 86% combined ratio and a 13% increase in net investment income, supported by disciplined underwriting across a diverse niche portfolio. - The Property segment faced a highly competitive environment with a 17% premium decline in E&S Property as standard carriers reclaimed business and new capacity entered the market. - Casualty growth of 4% was led by Personal Umbrella, though management is maintaining cautious loss ratio picks despite significant cumulative rate increases of 50% over three years. - Strategic distribution partnerships, such as the landlord insurance collaboration with Steadily, are beginning to contribute meaningfully to the top line, offsetting declines in other property areas. - Management noted increased competition in Surety and Transportation, particularly from MGAs and established markets offering aggressive terms or reduced underwriting requirements. - Investment strategy remains focused on investment-grade fixed income, with new purchase yields approximately 100 basis points above the current book yield. - Personal Umbrella rate increases are expected to return to double-digit levels in 2027 following the implementation of a new approved rate filing effective January 1. - Management anticipates a positive outcome for the upcoming January 1 reinsurance renewals, characterizing the current environment as a 'buyer's market' for terms and conditions. - The company plans to continue its selective approach in E&S Property, prioritizing return targets over premium retention as the market continues to soften toward 2022 rate levels. - Strategic focus remains on monitoring new business characteristics in Casualty to improve the underlying risk profile, particularly regarding geographic mix and driver characteristics. - Management expects to maintain its 'no top-line budget' policy, empowering underwriters to pull back if market conditions do not support profitability objectives. - Favorable prior year reserve development totaled $22.9 million, a significant increase from $15.5 million in the prior year quarter, primarily driven by Casualty and Property segments. - Current year catastrophe losses were modest at approximately $4 million, with about half attributed to storm activity in Hawaii. - The company introduced a new disclosure format breaking out catastrophe losses by segment to improve transparency regarding underlying loss ratios. - Share repurchase activity continued with approximately 104,000 shares bought back, leaving $232 million available under the current authorization. - Management stated it is 'early days' for recognizing benefits from the 50% cumulative rate increases and risk profile changes. - While positive signs exist in 2025 and current accident years, RLI is holding loss ratio picks steady until a longer period of favorable data is confirmed. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - The partnership functions like a 'branch office' with RLI maintaining control over coverage, claims, and underwriting rigor. - Management noted that while acquisition expenses are a 'couple of points higher' for this specific book, there is no fixed top-line production target. - Favorable development is primarily coming from the longer-tail accident years of 2020 and 2021. - Management observed increased competition in the Northeast region from MGAs and standard carriers packaging auto with liability to win accounts. - The market has stabilized with rate changes described as 'fairly flat' for the year. - Management believes the industry has reached a pricing floor as it begins to account for evolving risks like artificial intelligence. - The market is currently 'softening' rather than 'soft,' with rates roughly equivalent to 2022 levels. - RLI is using increased limit sizes to defend renewals but remains willing to let business walk if competitors offer nonsensical terms.

- Interested in RLI Corp.? Here are five stocks we like better. - RLI reported solid operating results: Third-quarter operating earnings rose to $0.86 per share from $0.82, supported by an 86.2% combined ratio, 13% growth in net investment income, and disciplined underwriting. - Performance varied across specialty markets: Property remained strong with a 60.1% combined ratio, while E&S property, E&S casualty, and commercial transportation faced increased competition and declining premiums. Personal umbrella premiums grew 22%, led by higher rates. - RLI maintained a conservative capital strategy: Operating cash flow increased 9% to $195 million, new investments targeted investment-grade fixed income yielding 5.5%, and the company repurchased nearly 104,000 shares while continuing its quarterly dividend. - Palomar's High-Risk Insurance Strategy Is Paying Off Big RLI (NYSE:RLI) reported third-quarter operating earnings of $0.86 per share, up from $0.82 a year earlier, as underwriting profitability and higher investment income offset competitive conditions in several specialty insurance markets. Chief Executive Officer Craig Kliethermes said the company produced an 86 combined ratio, grew gross premiums written by 2%, increased net investment income by 13%, and raised book value 10% from year-end 2025 after dividends and share repurchases. He attributed the results to disciplined underwriting across the company's portfolio of specialty products. → The AI Sell-Off Continues—These 3 Stocks Keep Raising Guidance Anyway - 3 Recession-Resistant Stocks: Low Beta, High Margins, Low Debt "We don't need every opportunity," Kliethermes said. "Across our diverse portfolio of niche specialty products, we will look for the right opportunities where expertise and risk selection gives us an advantage." Chief Financial Officer Aaron Diefenthaler said underwriting income totaled $58.8 million in the third quarter. The company's combined ratio was 86.2%, compared with 85.1% in the prior-year quarter. The loss ratio increased 1.3 percentage points to 47.4%, while the expense ratio improved modestly to 38.8%. → Tesla's Roadster Reveal Hints at 2 Much Bigger Moves - Don't Overlook Hidden Gem Kinsale As Rallies To New Highs Results included $22.9 million of favorable prior-year reserve development, compared with $15.5 million a year earlier. Current-year catastrophe losses were approximately $4 million, primarily in the property segment. GAAP net earnings were $0.88 per share, down from $1.35 per share a year earlier. Diefenthaler said the decline primarily reflected changes in the value of equity securities between periods. RLI also recorded a comprehensive loss of $36.8 million, or $0.40 per share, as rising yields reduced bond prices. Net investment income rose 13% to $46.7 million. → Luxury's Middle Market Is Cracking—These 3 Stocks Could Win Operating cash flow increased 9% to $195 million. The company concentrated new investments in investment-grade fixed income securities with average yields of 5.5%, nearly 100 basis points above its book yield, Diefenthaler said. During the quarter, RLI paid its regular dividend of $0.18 per share and repurchased just under 104,000 shares at an average price of $60.51. About $232 million remained under the company's repurchase authorization as of Sept. 30. Property gross premiums declined about 1%, but the segment generated more than $50 million in underwriting income and posted a 60.1% combined ratio, matching the prior-year result. The segment benefited from $10.4 million in favorable reserve development, including $4 million related to prior-year storms. Chief Operating Officer Jen Klobnak said marine was a highlight, with premiums rising 11% despite essentially flat rate changes. She said double-digit growth in submissions gave the company opportunities to remain selective. In E&S property, however, premiums fell 17% as additional capacity entered the market and standard carriers and retailers reclaimed business that had previously moved through wholesalers. Klobnak said renewal pricing declined by double digits for accounts reaching their second renewal in the softening cycle, while retention remained modestly below historical levels. RLI is willing to let business leave when pricing fails to meet return targets, she said, though the company continues to bind business at rates it considers adequate. During the question-and-answer session, Klobnak said the market was softening but remained attractive, with rates around 2022 levels and opportunities still available for underwriting at acceptable terms. Hawaii homeowners premiums increased 9%, driven by a 13% rate increase. Storm activity was elevated, but its financial impact on RLI was immaterial, according to Klobnak. RLI's partnership with landlord-insurance specialist Steadily generated $9 million of premium during the quarter. Klobnak described Steadily as operating similarly to an RLI branch office, with RLI maintaining involvement in coverage, claims oversight, reporting and underwriting. She said the company does not have a production target for the relationship and is focused instead on expected loss performance. Commissions are somewhat higher on that book, she added, with a profit commission component tied to results. Casualty premiums rose 4%, while the segment recorded a 99.6% combined ratio, compared with 98.2% a year earlier. The segment benefited from $8.2 million in favorable reserve development, including contributions from excess casualty and commercial transportation. Personal umbrella premiums increased 22%, with rates up 8%. Klobnak said the pace of rate increases moderated as previously approved changes earned through the book, but the next approved filing takes effect Jan. 1 and is expected to return rate increases to double-digit levels during 2027. She said cumulative rates in personal umbrella have increased roughly 50% over the past three years, alongside efforts to improve the book's geographic mix and driver characteristics. RLI has seen positive signs in current and 2025 accident-year results, but is maintaining its loss-ratio assumptions until it has a longer period to evaluate the impact. E&S casualty premiums declined 10% amid greater competition, particularly in the Northeast, from MGAs and standard carriers. Klobnak said submissions increased by double digits and the company saw higher excess-liability bind activity near quarter-end, though she said it was too early to determine whether that represented a broader trend. Commercial transportation premiums fell 9%, despite a 12% increase in rates. RLI non-renewed selected accounts that did not meet profit expectations or loss-control recommendations, while increased competition and re-emerging MGAs contributed to a nearly 10-point decline in renewal retention. Surety premiums increased about 1%, and the segment's combined ratio improved to 79.8% from 85% a year earlier. Favorable prior-year reserve development totaled $4.3 million, while underwriting income rose to $7.3 million from $5.6 million. Klobnak said competition has increased, especially among small and middle-market accounts, with some competitors reducing underwriting requirements. Construction activity in government and renewable-energy projects has slowed, while transactional surety benefited from public official bond opportunities during the election year. Management said it remains focused on producer relationships and underwriting discipline rather than pursuing premium growth for its own sake. Through the first nine months of 2026, RLI generated $176 million in underwriting income on an 85.9% combined ratio and operating earnings of $2.52 per share. RLI Corp. (NYSE: RLI) is a specialty insurance company that underwrites property and casualty insurance products for commercial and personal customers. The company focuses on specialized risks that may not be adequately served by standard insurance carriers. RLI's offerings include commercial property and casualty coverage, professional liability insurance, surety bonds, transportation-related insurance, and personal lines such as homeowners and personal umbrella coverage. Its products are distributed through independent agents, brokers, and other insurance intermediaries. Founded in 1965 and headquartered in Peoria, Illinois, RLI serves customers primarily throughout the United States. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "RLI Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Image source: The Motley Fool. Tuesday, Oct. 20, 2026 - President and Chief Executive Officer - Craig Kliethermes - Chief Financial Officer - Aaron Diefenthaler - Chief Operating Officer - Jennifer Klobnak Operator: Good morning, and welcome to the RLI Corp. Third Quarter Earnings Teleconference. After management's prepared remarks, we will open the conference up for question and answers. Before we get started, let me remind everyone that through the course of the teleconference, RLI management may make comments that reflect their intentions, beliefs and expectations for the future. As always, these forward-looking statements are subject to certain factors and uncertainties, which could cause actual results to differ materially. Please refer to the risk factors described in the company's various SEC filings, including in the annual report of Form 10-K as supplemented in Forms 10-Q, all of which should be reviewed carefully. The company has filed a Form 8-K with the Securities and Exchange Commission that contains the press release announcing third quarter results. During the call, RLI management may refer to operating earnings and earnings per share from operations, which are non-GAAP measures of financial results. RLI's operating earnings and earnings per share from operations consist of net earnings after the elimination of after-tax realized gains or losses and after-tax unrealized gains or losses on equity securities. Additionally, equity in earnings of unconsolidated investees and related taxes are excluded from operating earnings and operating EPS to present a consistent approach in excluding all unrealized changes in values from equity investments. RLI's management believes these measures are useful in gauging core operating performance across reporting periods, but may not be comparable to other companies' definitions of operating earnings. The Form 8-K contains a reconciliation between operating earnings and net earnings. The Form 8-K and press release are available at the company's website at www.rlicorp.com. I will now turn the conference over to RLI's President and Chief Executive Officer, Mr. Craig Kliethermes. Please go ahead. Craig Kliethermes: Good morning, everyone, and thank you for joining us today. With me are Aaron Diefenthaler, our Chief Financial Officer; and Jen Klobnak, our Chief Operating Officer. We are pleased with another quarter of consistent profitable performance. We produced an 86% combined ratio, grew premiums 2%, increased net investment income 13% and grew book value 10% from year-end, inclusive of dividends and share repurchases. Those results may sound familiar. We're okay with that. Consistency may be boring to some. At RLI, we think boring is beautiful. Behind that consistency is disciplined underwriting. Our underwriters are selective, discerning and exacting about the risks we take and the price and terms we require. We don't need every opportunity. Across our diverse portfolio of niche specialty products, we will look for the right opportunities where our expertise and risk selection gives us an advantage. Insurance remains a relationship business. People like doing business with people they like. And more importantly, people and companies they trust. Our customers and distribution partners know our people are accessible, genuine, empowered to solve problems and consistently show up. Our expertise gets us to the right answer. Our service and relationships help earn us the next opportunity. Markets change, our principles don't. We will continue to underwrite with discipline, invest in our people and relationships and pursue profitable opportunities where our expertise makes a difference. With that, I'll turn it over to Aaron for more detail on the financials. Aaron Diefenthaler: Thanks, Craig, and good morning. Yesterday, we reported third quarter operating earnings of $0.86 per share compared with $0.82 last year. The quarter reflected solid underwriting performance, a 13% increase in net investment income and 2% growth in gross premiums written. As we have noted in prior quarters, our definition of operating earnings changed in Q4 of 2025 and excludes equity in the earnings of unconsolidated investees and the related taxes. Prior period comparisons have been appropriately recast. On a GAAP basis, third quarter net earnings totaled $0.88 per share compared with $1.35 in the year ago period. The year-over-year difference was primarily driven by comparable changes in the value of equity securities between periods. Underwriting income totaled $58.8 million for the quarter, and our overall combined ratio was 86.2% compared with 85.1% last year. The loss ratio increased 1.3 points to 47.4%, while the expense ratio improved modestly to 38.8%. Results benefited from favorable development on prior year's loss reserves, which totaled $22.9 million in the current quarter, up from $15.5 million in the third quarter of 2025. Current year catastrophe losses were modest at approximately $4 million, primarily in the property segment. Related to catastrophe losses, I want to mention a new display in our earnings press release on Page 4, where we now break out catastrophe losses by segment. As we have discussed in prior quarters, the casualty segment can pick up some catastrophe activity related to package businesses. We believe the new disclosure will be helpful in determining changes in the underlying loss ratio. As discussed in the footnote, any development on prior year storms is included in the upper part of the table. Turning to our segments results. Casualty again led on growth, up 4% in the quarter while posting a 99.6% combined ratio compared with 98.2% last year. Casualty's underwriting results benefited from $8.2 million of favorable development on prior year's reserves, roughly in line with Q3 of 2025. Several products contributed to the release, including excess casualty and commercial transportation. On a sequential basis, casualty's underlying loss ratio was similar to the prior quarter and remains just under 67% on a year-to-date basis. Property continued to generate very strong underwriting results. Gross premiums were down approximately 1%, while the segment produced just over $50 million of underwriting income on a 60.1% combined ratio, equivalent to last year. Property benefited from $10.4 million of favorable prior year reserve development, inclusive of $4 million from prior year storms. During the quarter, property's current year catastrophe losses totaled $3.9 million, about half of which was represented by activity in Hawaii. Surety also had a very good quarter with gross premiums up approximately 1% on a 79.8% combined ratio compared with 85% last year. The segment benefited from $4.3 million of favorable prior year reserve development and lower loss activity. Underwriting income for surety increased $7.3 million from $5.6 million in the prior year quarter. As usual, Jen will offer more detail on product level performance and market conditions. Turning to cash and investments. Operating cash flow was $195 million in the quarter, up 9% from last year and providing meaningful support to portfolio activity. New purchases were largely concentrated in investment-grade fixed income with average yields of 5.5%, which is nearly 100 basis points above our book yield. As mentioned, net investment income increased 13% to $46.7 million and remains an important contributor to operating results. On a mark-to-market basis, rising yields, lower bond prices and a modest offset from equities resulted in a negative 2% total return for the quarter. The movement in fixed income prices also affected comprehensive earnings. We recorded a comprehensive loss of $36.8 million or $0.40 a share for the quarter compared with comprehensive earnings of $152 million or $1.65 a share last year. From a capital management perspective, during the quarter, we paid our regular quarterly dividend of $0.18 per share, while repurchasing just under 104,000 shares at an average price of $60.51. At September 30, approximately $232 million remained available under our share repurchase authorization. Adjusting for dividends and share repurchases, book value increased 10% from year-end 2025. Putting it all together through the first 9 months of 2026, we generated $176 million of underwriting income on an 85.9% combined ratio. Net investment income increased 15% and operating earnings were $2.52 a share, very consistent with the prior year. We are pleased with our third quarter performance and the balance of underwriting profitability, investment income and capital strength. And with that, I'll turn the call over to Jen for more detail. Jennifer Klobnak: Thank you, Aaron. I'll jump right into segment update. Property premium was down 1% in the quarter on a 60% combined ratio. Marine is a highlight within our portfolio, delivering 11% premium growth in the quarter, along with a meaningful contribution to underwriting profit. While the marine market remains competitive with rate change essentially flat for both the quarter and year, the team continues to proactively work with our producers and are known as problem solvers. Our partnership approach helped drive double-digit growth in submissions, providing us with plenty of opportunities so we can be selective in writing profitable business. E&S property continues to navigate a highly competitive environment with premium down 17% for the quarter as additional capacity enters the market and standard carriers and retailers reclaim business that had previously flowed through wholesalers. However, new business submission activity remains strong and increased again this quarter, providing us with plenty of opportunities to target profitable business. Renewal pricing declined double digits on accounts experiencing their second renewal in this softening market cycle, and retention remains slightly below historical levels. We continue to prioritize underwriting discipline over premium retention and are comfortable allowing business to move when pricing does not meet our return targets. The business we are binding is at rates we believe are adequate. Hawaii homeowners delivered solid rate-driven growth with premium increasing 9% for the quarter and rates up 13%. Policy count was modestly lower, reflecting a book roll completed earlier this year with renewal retention slightly below historical levels. Storm activity remained elevated during the quarter, and our local claims team responded to our insureds following these events. However, the associated financial impact to RLI was immaterial. We continue to look for new opportunities for profitable growth across our insurance portfolio. Over the past several years, we planted a number of seeds, including hiring underwriting talent, expanding into complementary products that leverage our existing underwriting expertise and more recently, developing strategic distribution partnerships that bring new capabilities to bear. This quarter, one of those investments began to meaningfully contribute to our top line. Our partnership with Steadily, which specializes in landlord insurance, generated $9 million of premium and helped to offset some of the premium decline in parts of our property segment. We are pleased with the early results and remain disciplined in how we manage the partnership. Our teams are closely aligned on underwriting and claims, and we actively monitor production through regular reporting, ongoing communication and on-site visits with the same rigor as all RLI products. This is a good example of how we maintain underwriting discipline while finding new opportunities to add to our diverse portfolio. Surety delivered another strong quarter with a 79.8% combined ratio and premium growth of 1%. Competition has increased, particularly in the small to middle market, where some competitors are reducing underwriting requirements. Contract and commercial surety premium was modestly lower, reflecting slower construction starts in government and renewable energy projects. Transactional surety was a bright spot with increased opportunities in public official bonds during this election year. Our team is actively marketing our capabilities and focusing on growing producer relationships, while maintaining the underwriting discipline and oversight that continue to drive strong results. Casualty premium increased 4% on a 99.6% combined ratio. Personal umbrella delivered strong premium growth of 22% for the quarter, with rates increasing 8%. As forecast last quarter, the pace of rate increases moderated as several previously approved rate actions have now earned through the book. Our next approved rate filing is effective January 1, and we expect rate increases to return to double-digit levels during 2027. In addition to rate, we continue to focus on improving the underlying risk profile of the book. We are closely monitoring new business characteristics and sharing those insights with our producer partners to reinforce our risk appetite and shape the growth. We are encouraged by the progress we are seeing, particularly in geographic mix and driver characteristics. Combined with the meaningful rate increases implemented over the past 3 years, we believe these improvements position the personal umbrella book well for more profitable growth. E&S casualty, which includes both general and excess liability coverage, has seen an increase in competition, particularly in the Northeast. Premium declined 10% in the quarter, reflecting pressure from new entrants on both renewal retention and new business. Despite the evolving market conditions, underlying activity remains encouraging. Submissions increased double digits, supported by continued engagement with our producer partners and a strong focus on maintaining those relationships. While new capacity from MGAs and standard carriers has modestly impacted retention, we remain disciplined in our underwriting and focused on achieving adequate rate for the coverages we provide. We have a strong pipeline of quoted project business and saw increased buying activity on excess liability business at the end of the quarter. We hope this encouraging activity signals improving momentum. Transportation delivered a profitable quarter, including recognizing favorable reserve development. As competition increased late in the quarter, we remain focused on underwriting discipline and maintaining an underwriting profit. Premium declined 9% for the quarter, while rates increased 12%. We proactively non-renewed select accounts that did not meet our profit expectations or failed to address loss control recommendations. We also saw increased competition from both established markets and reemerging MGAs, which contributed to renewal retention declining almost 10 points. Insureds continue to seek rate relief and are increasingly shopping, which has contributed to higher new business submission activity and provides additional opportunities to selectively add attractive accounts. We remain disciplined and well positioned to capitalize on opportunities where we believe the insured invests in safety practices, and we can obtain adequate premium for the risk. The theme for 2026 has been maintaining discipline in an evolving environment. We have the benefit of a diverse product portfolio where in some sectors, competitors are hungry for growth and aggressively cutting rates and expanding terms and conditions to write premium. We do not enforce top line budgets with our underwriters, and they are empowered to pull back when market conditions do not support our profitability objectives. At the same time, the market continues to provide opportunities in other sectors. Our talented teams stay close to our customers to recognize where those opportunities exist. In an overall softening market, the team was able to grow premium 2% in the quarter and produce an 86% combined ratio. That is an outstanding result. With 3 quarters of underwriting profit on the books, we are well positioned for a strong finish to 2026. And now I'll turn the call back to the moderator to open it up for questions. Operator: [Operator Instructions] Your first question comes from Michael Phillips with Oppenheimer. Michael Phillips: I wanted to first ask on personal umbrella. You've mentioned some rate actions and now it's going to moderate and pick back up, Jen, you said in 2027. You've done a lot of stuff there, though, with rates recently and then, of course, higher underlying attachment points. I guess my question would be, are you seeing those benefits in that business's current year loss ratios? Or are they holding steady because those benefits are maybe being offset by higher severity there? Jennifer Klobnak: Yes. Thank you, Michael. I'd say it is early days. We have taken a lot of action. If you look at cumulatively over the last 3 years, rates overall on the book are up about 50%. In addition to that, we've changed a lot in regard to working with our producers to make sure that the business we're getting on the books meets our appetite and the risk profile we're looking for. So all that has been good action. We are seeing positive signs in the current accident year as well as in the prior accident year 2025. We are very hesitant to recognize those good signs yet. And so we are holding up our loss ratio picks in those accident years for now until we have a little longer period of time to make sure that all of those actions are truly resulting in a positive impact. Michael Phillips: Okay. Could you give a little more detail on your relationship with Steadily that you mentioned? Who's doing the underwriting there? How much risk will you guys retain? Is that more of a distribution play? Just any details there? Jennifer Klobnak: Sure. So as we look at these unique relationships, we see a lot, as you can imagine, a lot of MGAs want to have our paper. We say no to over 99% of them. But occasionally, there's a diamond in the rough. And so in this case, Steadily really impressed us with regard to the focus, the laser focus that they have as a company. We see them as running essentially like a branch office of RLI. We have a strong cultural fit. We have an input into coverage, and we vetted the claims that they do, which they do in-house. And we also have a lot of interaction with the team. We're actually doing a visit next week. But -- so there is constant interaction in terms of reporting and understanding what's going on in the book of business. So the other thing is they don't have a top line focus in terms of -- we don't have a target for them. We really don't feel strongly about how much business they write. We just want to have business that we expect to be on the books, and then we want the losses to come in as expected as well. And that has happened so far, even though it's early days, but that's the nature of that relationship. Michael Phillips: Okay. And you haven't said how much kind of a top line that could be over the next year, right? Jennifer Klobnak: We really don't forecast that because, again, we don't have strong feelings about having them produce a certain amount. Operator: Your next question comes from Hristian Getsov with Wells Fargo. Hristian Getsov: My first question is on the property underlying loss ratio. The ratio was flat year-over-year, which was surprising given the 400 bps of deterioration we saw in the first half. Is there anything one-off that we should be aware of or any change in loss trend assumptions as we kind of think about the trajectory going forward? Aaron Diefenthaler: No. Hristian, this is Aaron. It -- there's nothing in the current quarter that's one-off necessarily. I would point to the first half of the year as just having some higher attritional loss activity across the portfolio, and we mentioned that in the prior call. Hristian Getsov: Got it. And then for my second question, with the increased adoption of personal AI agents by consumers, have you seen any change in shopping any parts of your business, particularly focusing on like the personal umbrella product where agentic AI can help consumers refine their coverages or shop around more easily? And any changes you're thinking about your distribution strategy? Jennifer Klobnak: Good question. We have not seen any changes at this point in time. We have a very diverse group of producers on personal umbrella, ranging from large personal lines carriers all the way to independent agents in your local town. And so I think a lot of that agentic AI capabilities are really focused on the home and auto so far. And so as that evolves, we're obviously monitoring that, but we haven't seen it impact our personal umbrella book as of yet. Operator: Your next question comes from the line of Meyer Shields with Keefe, Bruyette, & Woods. Meyer Shields: Two really brief questions. First, with regard to the MGA relationship, should we think of that as having any expected impact on, I guess, acquisition expenses or the expense ratio? Jennifer Klobnak: Yes, Meyer, you're correct in that commissions are a little bit higher when you work with a distribution partner like that, and they do have a profit commission component. So that will self-regulate depending on the results of the business. But yes, a couple of points higher, I would say. Meyer Shields: Okay. A couple of points on that book, not that the overall impact of a couple of points? Jennifer Klobnak: No, just -- yes, just on that particular book, you're right. Meyer Shields: Okay. Sorry, I just want to make sure I understood it. I was hoping for an update on management liability. I was hearing some signs out there that it might be turning, but I'm wondering what you're seeing. Jennifer Klobnak: Yes, Meyer, I think that management liability market has stabilized. I'm going to use that word. It appears that our rate change, for example, is fairly flat for the year. And -- well, actually for the quarter, it's flat. It's down just 1% for the year. But we're seeing, I'll say, some discipline in that market in terms of people understanding that, that risk continues to evolve. You think about the artificial intelligence components and things, there's a need to have a floor on that pricing. And so I think the market has come to terms with flat is reasonable and then you have to look at individual risk to determine someone needs a rate increase or someone deserves a rate decrease. But overall, it's definitely a flat market at this point. Meyer Shields: Okay. Perfect. And I also wanted to thank you for the additional disclosure. Operator: Your next question comes from the line of C. Gregory Peters with Raymond James. Charles Peters: I wanted to just pivot back to the excess casualty. I think you had some favorable development there that you talked about. And I think you previously just described that book as primarily construction related. Can you talk about the years where you're getting the development? And then just talk about how you think about the competitive pressures in that market right now? Aaron Diefenthaler: Greg, it's Aaron. That tends to be a longer tail business for us. So primarily accident years '20 and '21, driving some of that favorable result. Jennifer Klobnak: Yes. And this is Jen. As you think about the competitive environment, I would say the competition has picked up in the excess liability space. I'd say last year, there was less competition. People were pulling back or providing less limit. And this year, it seems like people are, again, looking for premium. And so particularly in the Northeast region, we've seen more competition from both MGAs as well as standard markets coming in, making accommodations on larger accounts, taking advantage of offering the auto to package the liability with that. And so there is more competition this year. Again, we're kind of, as Craig mentioned, boring. We have a stable appetite. We are consistent for our producers and our insureds. So the market knows what we offer. They know that we will be there. We wait for these other markets to have issues and pull back. And then again, we'll have more opportunity. This year just happens to be a little bit more crowded marketplace. Charles Peters: Got it. My follow-up question is, and I realize it's early days, but it feels like there's going to be another positive step change in reinsurance costs for you guys next year. Just curious how you're -- if you've had any early read on how you think reinsurance is going to play out for you guys for the '27 year? Jennifer Klobnak: You're right. It is early days. We've had a few of our reinsurance trips happen already. So we're definitely in the market talking to our partners in that space. And as is well publicized, it's a buyer's market. So we expect to get some positive terms and conditions as we renew, but we have a couple more conferences and things to attend and a lot of negotiation yet to happen. So -- but I do expect a positive result for RLI for 1/1. Operator: Your next question comes from the line of Andrew Andersen with Jefferies. Sidney Schultz: This is Sid on for Andrew. First, it looks like the year-over-year deterioration in the casualty underlying loss ratio accelerated this quarter. Can you just unpack how much of that was pricing and mix versus if there was any change in your underlying view of loss trends? Aaron Diefenthaler: Yes. Sid, this is Aaron. I would say I would put the current underlying loss ratio for casualty kind of in line with the prior 2 quarters. So on a sequential basis, we're very much in line. And I would set aside the prior year quarter where we had a little bit of action on the current accident year that helped that quarter. So I would just say we're fairly stable from an underlying standpoint when you look at the sequential trajectory. Sidney Schultz: Okay. And then maybe pivoting to surety. I think growth turned positive this quarter, but you also mentioned some increased competition. So just curious if you can give us an update on what the pipeline looks like there and if you're seeing any signs of increased activity that could sustain positive growth? Jennifer Klobnak: Yes. So surety, the market is crowded. There's a lot of competition. I would say in the construction part of the book, there's a lot of talk of construction in the United States regarding the data centers. That's where a lot of the focus is, and there are a lot of large contractors in that space. And for that reason, we're not a big market for that space because we tend to target small to middle market sized contractors. So this year is kind of a headwind a bit in that other construction projects aren't as active as, I'll say, the data center part of the world. On the commercial and transactional side, we've had several years of growth. And so this year might be a bit of a reset. We have some headwinds coming. Last year, we took some opportunities from -- in the last couple of years from investments in renewable energy projects, things of that nature. And this year, that has slowed given the change to tax advantage and things of that nature. So -- and then you have to balance that with the interest rates, which at first, I thought that was holding up some construction, but I think some people in different regions are tired of waiting for lower interest rates, so they're just starting projects. So it's kind of a mixed bag. You can't kind of do a broad brush. I know there are also a couple of industry losses in surety, and we're hoping that, that brings a little discipline to the market. But what we've seen is some competitors are so hungry for surety premium that they're asking almost no questions and not requiring indemnity, which is unusual in the surety space and typically results eventually in some loss activity. So we are remaining disciplined and continuing our underwriting practices as we have and hoping that, again, opportunity will knock down the road. But we have seen some bright spots this year so far, and we hope that we can continue. We're getting out and marketing often and trying to stay in front of people and asking for their business, which as simple as that sounds, tends to result in some positive opportunities. Operator: Your next question comes from the line of Mark Hughes with Truist Securities. Mark Hughes: You had mentioned in the excess liability that I think your binding rate was a little bit better at quarter end. And you thought maybe that was a potential green shoot, if I heard you correctly. Do you think that was your initiatives, kind of your relationships? Or do you think there's anything more broadly that is influencing that? Jennifer Klobnak: Well, it's hard to tell as we meet with our broker partners, which -- WSIA was a big conference last week. We got to touch base with a lot of our producer partners. The first half of the year was a bit slower for us and for them, and we were all banking on construction picking up. We're all still kind of waiting. And so we're hoping that, that is a sign, but it's a little too early to tell. Again, it's kind of specific by region. So we're seeing strong business in the West and in the middle of the country, it's just really the East Coast that has been a bit slower. And so here, we saw a couple more binders at the end of the quarter. We're hoping that, that will continue. But it's hard to -- I mean, I'm hoping that's a trend, but it's hard to call it that yet. Mark Hughes: Okay. In the marine, you had a nice acceleration top line. Any individual markets, kind of end markets or geographies where you saw more strength? Jennifer Klobnak: We have a great group of underwriters who are planted across the country. And that's really helping us just take advantage wherever there is some opportunity because a lot of marine is based on the construction industry as well. So wherever in the U.S., there is opportunity, we tend to find it because we do have people locally who are working with producers closely. So I'd say it's really broad. We did start up a smaller product a couple of years ago, auto physical damage in that space. We've seen some good growth there, but there's nothing too specific to point to. I think it's just our team doing a great job. Mark Hughes: Yes. If I might squeeze one more in. The E&S property down 17%. You talked about more capacity coming into the market. How much more downside do we have here? How is the pricing when you think about relative to earlier cycles? What are the signposts that the worst could be behind us or not? Jennifer Klobnak: Yes. I would say we're still in a softening market. It's not a soft market. We can still get -- we can bind business at rates and terms that we're comfortable with and getting a double-digit return on. So we think the market is still very attractive. Our rates are approximately around 2022 rates, which are up from prior years. So there's still room to go. And I think with not being a very big event, I think the market will continue to soften. Again, new MGAs and people coming to the table. So we still have a ways to go. We like that business. We're going to keep writing it, and we're going to try to stay as disciplined as possible as others try to attack different terms and conditions. But it's still a very attractive market. And so I know it's disappointing because it's not what it used to be, but it's still got a lot of good business out there that we hope to be able to obtain. Operator: Your next question comes from the line of Michael Phillips with Oppenheimer. Michael Phillips: I want to follow up one more time. Jen, on your comments on transportation, I think you said late in the quarter, you saw increased competition there from emerging players and some new MGAs, I think you said. Was that just more random fluctuations there? Or anything more fundamental you think is happening? Jennifer Klobnak: I think people are coming back to that market. This is just me thinking about it. But towards the end of the quarter, we -- and into this quarter, we're just seeing a lot more competition, people going after these large accounts. There's a lot of large accounts in the business given the consolidation that has occurred. And so when you're looking at an account with a $2 million premium, for example, there are people starting to want that just to help their top line. So I think it is a reemerging more competitive dynamic that we're going to have to deal with, which is a little bit nonsensical given the severity and all the issues we've had in commercial transportation business. But again, we're going to really lean into risk selection and pick the accounts that we think are, again, dedicated to loss control and are priced appropriately for the risk that happen because there are accidents that happen every day. So you have to be disciplined around charging to cover those losses. Operator: Your next question comes from the line of Hristian Getsov with Wells Fargo. Hristian Getsov: One more for me. Last time, Jen, I think you talked about increasing some of the limit sizes. I think it was a comment around property to defend some of your renewals. Can you maybe kind of frame how successful has that been? Or is it people kind of still kind of undercutting by a decent margin where the limit size doesn't matter as much? Jennifer Klobnak: It has been successful in that we've been able to retain business. But you look at some of the announcements of these new MGAs and people coming out to provide capacity, they have big limits they're providing, limits that are larger than what we provide. So we have to stretch in ways that make sense for us. And one of those has been, again, increasing limits given inflation by itself has increased the value of these locations. So it has helped. But again, there's a lot going on in that market in terms of competition that is -- are things that we just have to fight against. And so it's a constant evaluation of what's changing in the market and what we can do to continue to retain the accounts that we love and try to win new business. Operator: If there are no further questions, I will now turn the conference over to Mr. Craig Kliethermes for some closing remarks. Craig Kliethermes: Well, thanks, Aaron and Jen, and thank you all for your questions today. Our objective is pretty simple: produce consistent underwriting profits, protect our financial strength, serve our customers and distribution partners exceptionally well and get a little better every day. That doesn't mean taking the least risk. It means taking the right risks, selected by experienced underwriters who know their markets deeply and have the discipline to say yes when the opportunity is right, and no thank you when it isn't. Our diverse portfolio gives us plenty of places to look for those opportunities, and our people, relationships and service give us an advantage when we find them. There will always be something newer, faster or more exciting in this business. We're comfortable adapting to things that make sense and that improve our value proposition while remaining true to who we are. We like our position, and we're optimistic about what's ahead. Being different still works. Thank you for your continued confidence in RLI. We look forward to speaking with you again next quarter. Operator: Ladies and gentlemen, if you wish to access the replay for this call, you may do so on the RLI homepage at www.rlicorp.com. This concludes our conference for today. Thank you all for participating, and have a nice day. All parties may now disconnect. Before you buy stock in RLI, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and RLI wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. RLI (RLI) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

PEORIA, Ill., October 19, 2026--(BUSINESS WIRE)--RLI Corp. (NYSE: RLI) reported third quarter 2026 net earnings of $81.0 million ($0.88 per share), compared to $124.6 million ($1.35 per share) for the third quarter of 2025. Operating earnings(1) for the third quarter of 2026 were $79.3 million ($0.86 per share), compared to $75.8 million ($0.82 per share) for the same period in 2025. | | | | | | | | | | | | | | Third Quarter | | Year to Date Earnings Per Diluted Share | | 2026 | | 2025 | | 2026 | | 2025 Net earnings | | $ | 0.88 | | $ | 1.35 | | $ | 3.29 | | $ | 3.38 Operating earnings (1)(2) | | $ | 0.86 | | $ | 0.82 | | $ | 2.52 | | $ | 2.53 (1) | See discussion below: Non-GAAP and Performance Measures. (2) | Equity in earnings of unconsolidated investees and the related taxes were removed from operating earnings and operating earnings per share beginning in the fourth quarter of 2025, resulting in consistent exclusion of unrealized changes in equity investments from operating results. Prior period amounts have been recast to conform to the current definition. Highlights for the quarter included: - Underwriting income(1) of $58.8 million on a combined ratio(1) of 86.2. - Gross premiums written increased 2% and net investment income increased 13%. - Favorable development in prior years' loss reserves resulted in a $20.1 million net increase in underwriting income. - Book value increased 10% from year-end 2025, inclusive of dividends and share repurchases. "Our third-quarter results reflect consistent, disciplined execution across the business," said RLI Corp. President & CEO Craig Kliethermes. "We delivered an 86 combined ratio, with strong underwriting performance in our property and surety segments. Gross premiums written increased 2%, led by our casualty segment. Investment income grew 13%, further contributing to earnings. As market conditions evolve across our portfolio, we remain focused on risk selection and profitable growth. We will continue to pursue opportunities where our underwriting expertise can deliver attractive long-term returns." Underwriting Income RLI achieved $58.8 million of underwriting income in the third quarter of 2026 on an 86.2 combined ratio, compared to $60.5 million on an 85.1 combined ratio in 2025. Results for both years include favorable development in prior years' loss reserves, which resulted in a $20.1 million and $13.7 million net increase to underwriting income in 2026 and 2025, respectively. The following table highlights underwriting income and combined ratios by segment for the third quarter. Underwriting Income(1) | | Combined Ratio(1) (in millions) | | 2026 | | 2025 | | | | 2026 | | 2025 Casualty | | $ | 1.0 | | $ | 4.5 | | Casualty | | 99.6 | | 98.2 Property | | | 50.5 | | | 50.4 | | Property | | 60.1 | | 60.2 Surety | | | 7.3 | | | 5.6 | | Surety | | 79.8 | | 85.0 Total | | $ | 58.8 | | $ | 60.5 | | Total | | 86.2 | | 85.1 (1) | See discussion below: Non-GAAP and Performance Measures. Other Income Net investment income for the quarter increased 13% to $46.7 million, compared to the same period in 2025. The investment portfolio's total return was -2.0% for the quarter and 0.9% for the nine months ended September 30, 2026. RLI's comprehensive loss was $36.8 million for the quarter (-$0.40 per share), compared to $152.3 million of comprehensive earnings ($1.65 per share) for the same quarter in 2025. In addition to net earnings, comprehensive loss for 2026 included after-tax unrealized losses from the fixed income portfolio, due to rising interest rates. Dividends and Share Repurchase Program On September 15, 2026, the company paid a regular quarterly dividend of $0.18 per share, the same amount as the prior quarter. During the third quarter, RLI repurchased 103,573 shares at an average price of $60.51 per share for a total cost of $6.3 million. As of September 30, 2026, $231.7 million of capacity remained available under the share repurchase program. Over the past five years, RLI has returned more than $1.3 billion to its shareholders through dividends and share repurchases. Non-GAAP and Performance Measures Management has included certain non-generally accepted accounting principles (non-GAAP) financial measures in presenting the company's results. Management believes that these non-GAAP measures further explain the company's results of operations and allow for a more complete understanding of the underlying trends in the company's business. These measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles (GAAP). In addition, our definitions of these items may not be comparable to the definitions used by other companies. Operating earnings and operating earnings per share (EPS) consist of our GAAP net earnings adjusted by net realized gains/(losses), net unrealized gains/(losses) on equity securities and taxes related thereto. Equity in earnings of unconsolidated investees and the related taxes were excluded from operating earnings and operating EPS beginning in the fourth quarter of 2025. The change was made to present a consistent approach in excluding all unrealized changes in equity investments. Operating earnings and operating EPS for prior periods have been recast to conform to the current definition. Net earnings and net earnings per share are the GAAP financial measures that are most directly comparable to operating earnings and operating EPS. A reconciliation of the operating earnings and operating EPS to the comparable GAAP financial measures is included in the 2026 financial highlights below. Underwriting income or profit represents the pretax profitability of our insurance operations and is derived by subtracting loss and settlement expenses, policy acquisition costs and insurance operating expenses from net premium earned, which are all GAAP financial measures. The combined ratio, which is derived from components of underwriting income, is a performance measure commonly used by property and casualty insurance companies and is calculated as the sum of loss and settlement expenses, policy acquisition costs and insurance operating expenses, divided by net premiums earned, which are all GAAP measures. Other News At 10 a.m. central daylight time (CDT) on October 20, 2026, RLI management will hold a conference call to discuss quarterly results with insurance industry analysts. Interested parties may listen to the discussion at https://events.q4inc.com/attendee/320165068. Except for historical information, this news release may include forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) including, without limitation, statements reflecting our current expectations about the future performance of our company or our business segments or about future market conditions. These statements are subject to certain risk factors that could cause actual results to differ materially. Various risk factors that could affect future results are listed in the company's filings with the Securities and Exchange Commission, including the Form 10-K Annual Report for the year ended December 31, 2025. About RLI RLI Corp. (NYSE: RLI) is a specialty insurer serving niche property, casualty and surety markets. The company provides deep underwriting expertise and superior service to commercial and personal lines customers nationwide. RLI's products are offered through its insurance subsidiaries – RLI Insurance Company, Mt. Hawley Insurance Company and Contractors Bonding and Insurance Company. All of RLI's insurance subsidiaries are rated A++ (Superior) by AM Best Company. RLI has paid and increased regular dividends for 51 consecutive years and delivered underwriting profits for 30 consecutive years. To learn more about RLI, visit www.rlicorp.com. Supplemental disclosure regarding the earnings impact of specific items: | | Reserve Development(1) and Catastrophe Losses, | | Net of Reinsurance | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, (Dollars in millions, except per share amounts) | | 2026 | | 2025 | | 2026 | | 2025 Favorable development in prior accident years' casualty reserves | | $ | 8.2 | | | $ | 8.1 | | | $ | 35.8 | | | $ | 28.4 | Favorable development in prior accident years' property reserves | | $ | 10.4 | | | $ | 4.7 | | | $ | 54.2 | | | $ | 32.4 | Favorable development in prior accident years' surety reserves | | $ | 4.3 | | | $ | 2.7 | | | $ | 8.2 | | | $ | 13.3 | | | | | | | | | | | | | Net incurred losses from current accident year catastrophe events(2): | | | | | | | | | | | | Casualty | | $ | (0.1 | ) | | $ | (0.2 | ) | | $ | (2.6 | ) | | $ | (2.0 | ) Property | | $ | (3.9 | ) | | $ | 0.2 | | | $ | (27.4 | ) | | $ | (24.0 | ) | | | | | | | | | | | | | | Operating Earnings Per Share | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, | | 2026 | | 2025 | | 2026 | | 2025 Operating Earnings Per Share(3)(4) | | $ | 0.86 | | | $ | 0.82 | | | $ | 2.52 | | | $ | 2.53 | | | | | | | | | | | | | Specific items included in operating earnings per share:(1)(5) | | | | | | | | | | | | Net favorable development in prior accident years' casualty reserves | | $ | 0.06 | | | $ | 0.05 | | | $ | 0.23 | | | $ | 0.19 | Net favorable development in prior accident years' property reserves | | $ | 0.08 | | | $ | 0.04 | | | $ | 0.43 | | | $ | 0.25 | Net favorable development in prior accident years' surety reserves | | $ | 0.03 | | | $ | 0.02 | | | $ | 0.06 | | | $ | 0.10 | | | | | | | | | | | | | Net incurred losses from current accident year catastrophe events(2): | | | | | | | | | | | | Casualty | | $ | — | | | $ | — | | | $ | (0.02 | ) | | $ | (0.01 | ) Property | | $ | (0.03 | ) | | $ | — | | | $ | (0.20 | ) | | $ | (0.18 | ) (1) | Reserve development reflects changes in estimated losses for prior accident years, including development related to catastrophe events occurring in prior accident years. (2) | Current accident year catastrophe losses reflect net incurred losses from catastrophe events occurring during the current accident year. Development on prior accident year catastrophe events is included in reserve development by segment above. (3) | See discussion above: Non-GAAP and Performance Measures. (4) | Equity in earnings of unconsolidated investees and the related taxes were removed from operating earnings and operating earnings per share beginning in the fourth quarter of 2025, resulting in consistent exclusion of unrealized changes in equity investments from operating results. Prior period amounts have been recast to conform to the current definition. (5) | Items included in operating earnings per share are after tax and incorporate incentive and profit sharing-related impacts which affected policy acquisition, insurance operating and general corporate expenses. RLI CORP2026 FINANCIAL HIGHLIGHTS(Unaudited)(Dollars in thousands, except per share amounts) | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | | Nine Months Ended September 30, | SUMMARIZED INCOME STATEMENT DATA: | | 2026 | | 2025 | | % Change | | | 2026 | | 2025 | | | % Change | Net premiums earned | | $ | 424,914 | | | $ | 407,695 | | | 4.2 | | % | | $ | 1,253,396 | | | $ | 1,207,944 | | | | 3.8 | | % Net investment income | | | 46,694 | | | | 41,270 | | | 13.1 | | % | | | 135,057 | | | | 117,414 | | | | 15.0 | | % Net realized gains | | | 8,637 | | | | 18,318 | | | (52.8 | ) | % | | | 27,603 | | | | 48,234 | | | | (42.8 | ) | % Net unrealized gains (losses) on equity securities | | | (3,282 | ) | | | 41,981 | | | NM | | | | | 60,346 | | | | 43,163 | | | | 39.8 | | % Consolidated revenue | | $ | 476,963 | | | $ | 509,264 | | | (6.3 | ) | % | | $ | 1,476,402 | | | $ | 1,416,755 | | | | 4.2 | | % Loss and settlement expenses | | | 201,341 | | | | 187,998 | | | 7.1 | | % | | | 584,480 | | | | 549,814 | | | | 6.3 | | % Policy acquisition costs | | | 134,147 | | | | 128,937 | | | 4.0 | | % | | | 400,897 | | | | 378,126 | | | | 6.0 | | % Insurance operating expenses | | | 30,657 | | | | 30,215 | | | 1.5 | | % | | | 91,554 | | | | 86,683 | | | | 5.6 | | % Interest expense on debt | | | 4,200 | | | | 1,364 | | | NM | | | | | 10,994 | | | | 4,049 | | | | 171.5 | | % General corporate expenses | | | 3,388 | | | | 5,045 | | | (32.8 | ) | % | | | 12,335 | | | | 12,747 | | | | (3.2 | ) | % Total expenses | | $ | 373,733 | | | $ | 353,559 | | | 5.7 | | % | | $ | 1,100,260 | | | $ | 1,031,419 | | | | 6.7 | | % Equity in earnings of unconsolidated investees | | | (3,137 | ) | | | 1,540 | | | NM | | | | | 1,980 | | | | 7,055 | | | | (71.9 | ) | % Earnings before income taxes | | $ | 100,093 | | | $ | 157,245 | | | (36.3 | ) | % | | $ | 378,122 | | | $ | 392,391 | | | | (3.6 | ) | % Income tax expense | | | 19,084 | | | | 32,635 | | | (41.5 | ) | % | | | 74,200 | | | | 80,231 | | | | (7.5 | ) | % Net earnings | | $ | 81,009 | | | $ | 124,610 | | | (35.0 | ) | % | | $ | 303,922 | | | $ | 312,160 | | | | (2.6 | ) | % | | | | | | | | | | | | | | | | | | | Other comprehensive earnings (loss), net of tax | | | (117,809 | ) | | | 27,674 | | | NM | | | | | (145,489 | ) | | | 76,405 | | | | NM | | Comprehensive earnings (loss) | | $ | (36,800 | ) | | $ | 152,284 | | | NM | | | | $ | 158,433 | | | $ | 388,565 | | | | (59.2 | ) | % | | | | | | | | | | | | | | | | | | | Operating earnings(1): | | | | | | | | | | | | | | | | | | | Net earnings | | $ | 81,009 | | | $ | 124,610 | | | (35.0 | ) | % | | $ | 303,922 | | | $ | 312,160 | | | | (2.6 | ) | % Less: | | | | | | | | | | | | | | | | | | | Net realized gains | | | (8,637 | ) | | | (18,318 | ) | | (52.8 | ) | % | | | (27,603 | ) | | | (48,234 | ) | | | (42.8 | ) | % Income tax on realized gains | | | 1,814 | | | | 3,848 | | | (52.9 | ) | % | | | 5,797 | | | | 10,130 | | | | (42.8 | ) | % Net unrealized (gains) losses on equity securities | | | 3,282 | | | | (41,981 | ) | | NM | | | | | (60,346 | ) | | | (43,163 | ) | | | 39.8 | | % Income tax on unrealized gains (losses) on equity securities | | | (689 | ) | | | 8,816 | | | NM | | | | | 12,672 | | | | 9,064 | | | | 39.8 | | % Equity in earnings of unconsolidated investees | | | 3,137 | | | | (1,540 | ) | | NM | | | | | (1,980 | ) | | | (7,055 | ) | | | (71.9 | ) | % Income tax on equity in earnings of unconsolidated investees | | | (659 | ) | | | 323 | | | NM | | | | | 416 | | | | 1,481 | | | | (71.9 | ) | % Operating earnings(2) | | $ | 79,257 | | | $ | 75,758 | | | 4.6 | | % | | $ | 232,878 | | | $ | 234,383 | | | | (0.6 | ) | % | | | | | | | | | | | | | | | | | | | Return on Equity: | | | | | | | | | | | | | | | | | | | Net earnings (trailing four quarters) | | | | | | | | | | | | 22.2 | | % | | 20.8 | | % | | | Comprehensive earnings (trailing four quarters) | | | | | | | | | | | | 14.5 | | % | | 21.3 | | % | | | | | | | | | | | | | | | | | | | | | | Per Share Data: | | | | | | | | | | | | | | | | | | | Diluted: | | | | | | | | | | | | | | | | | | | Weighted average shares outstanding (in 000's) | | | 92,251 | | | | 92,310 | | | | | | | 92,259 | | | | 92,460 | | | | | | | | | | | | | | | | | | | | | | | | Net earnings per share | | $ | 0.88 | | | $ | 1.35 | | | (34.8 | ) | % | | $ | 3.29 | | | $ | 3.38 | | | | (2.7 | ) | % Less: | | | | | | | | | | | | | | | | | | | Net realized gains | | | (0.09 | ) | | | (0.20 | ) | | (55.0 | ) | % | | | (0.30 | ) | | | (0.52 | ) | | | (42.3 | ) | % Income tax on realized gains | | | 0.02 | | | | 0.04 | | | (50.0 | ) | % | | | 0.06 | | | | 0.11 | | | | (45.5 | ) | % Net unrealized (gains) losses on equity securities | | | 0.04 | | | | (0.45 | ) | | NM | | | | | (0.65 | ) | | | (0.47 | ) | | | 38.3 | | % Income tax on unrealized gains (losses) on equity securities | | | (0.01 | ) | | | 0.09 | | | NM | | | | | 0.14 | | | | 0.10 | | | | 40.0 | | % Equity in earnings of unconsolidated investees | | | 0.03 | | | | (0.01 | ) | | NM | | | | | (0.02 | ) | | | (0.08 | ) | | | (75.0 | ) | % Income tax on equity in earnings of unconsolidated investees | | | (0.01 | ) | | | — | | | NM | | | | | — | | | | 0.01 | | | | (100.0 | ) | % Operating earnings per share(1)(2) | | $ | 0.86 | | | $ | 0.82 | | | 4.9 | | % | | $ | 2.52 | | | $ | 2.53 | | | | (0.4 | ) | % | | | | | | | | | | | | | | | | | | | Comprehensive earnings (loss) per share | | $ | (0.40 | ) | | $ | 1.65 | | | NM | | | | $ | 1.72 | | | $ | 4.20 | | | | (59.0 | ) | % | | | | | | | | | | | | | | | | | | | Cash dividends per share - ordinary | | $ | 0.18 | | | $ | 0.16 | | | 12.5 | | % | | $ | 0.52 | | | $ | 0.47 | | | | 10.6 | | % Cash dividends per share - special | | $ | — | | | $ | — | | | NM | | | | $ | 2.00 | | | $ | — | | | | NM | | | | | | | | | | | | | | | | | | | | | Net cash flow provided by operations | | $ | 194,659 | | | $ | 179,220 | | | 8.6 | | % | | $ | 382,708 | | | $ | 457,453 | | | | (16.3 | ) | % (1) | See discussion above: Non-GAAP and Performance Measures. (2) | Equity in earnings of unconsolidated investees and the related taxes were removed from operating earnings and operating earnings per share beginning in the fourth quarter of 2025, resulting in consistent exclusion of unrealized changes in equity investments from operating results. Prior period amounts have been recast to conform to the current definition. | NM = Not Meaningful RLI CORP2026 FINANCIAL HIGHLIGHTS(Unaudited)(Dollars in thousands, except per share amounts) | | | | | | | | | | | September 30, | | December 31, | | | | | 2026 | | 2025 | | % Change | SUMMARIZED BALANCE SHEET DATA: | | | | | | | | | Fixed income, at fair value | | $ | 3,600,969 | | $ | 3,533,336 | | 1.9 | | % (amortized cost - $3,892,806 at 9/30/26) | | | | | | | | | (amortized cost - $3,642,362 at 12/31/25) | | | | | | | | | Equity securities, at fair value | | | 948,319 | | | 898,876 | | 5.5 | | % (cost - $523,206 at 9/30/26) | | | | | | | | | (cost - $534,311 at 12/31/25) | | | | | | | | | Short-term investments | | | 254,273 | | | 120,562 | | 110.9 | | % Other invested assets | | | 57,608 | | | 59,281 | | (2.8 | ) | % Cash and cash equivalents | | | 46,212 | | | 51,565 | | (10.4 | ) | % Total investments and cash | | $ | 4,907,381 | | $ | 4,663,620 | | 5.2 | | % | | | | | | | | | Accrued investment income | | | 32,205 | | | 30,026 | | 7.3 | | % Premiums and reinsurance balances receivable | | | 231,730 | | | 212,226 | | 9.2 | | % Ceded unearned premiums | | | 124,169 | | | 124,669 | | (0.4 | ) | % Reinsurance balances recoverable on unpaid losses | | | 727,036 | | | 746,798 | | (2.6 | ) | % Deferred policy acquisition costs | | | 191,393 | | | 172,648 | | 10.9 | | % Property and equipment | | | 41,032 | | | 40,733 | | 0.7 | | % Investment in unconsolidated investees | | | 54,455 | | | 53,521 | | 1.7 | | % Goodwill and intangibles | | | 53,562 | | | 53,562 | | 0.0 | | % Income taxes - deferred | | | 9,508 | | | — | | NM | | Other assets | | | 73,088 | | | 63,683 | | 14.8 | | % Total assets | | $ | 6,445,559 | | $ | 6,161,486 | | 4.6 | | % | | | | | | | | | Unpaid losses and settlement expenses | | $ | 2,997,555 | | $ | 2,886,819 | | 3.8 | | % Unearned premiums | | | 1,069,378 | | | 991,636 | | 7.8 | | % Reinsurance balances payable | | | 30,535 | | | 40,580 | | (24.8 | ) | % Funds held | | | 140,441 | | | 127,242 | | 10.4 | | % Income taxes - current | | | 1,842 | | | 29,724 | | (93.8 | ) | % Income taxes - deferred | | | — | | | 21,769 | | (100.0 | ) | % Short-term debt | | | — | | | 100,000 | | (100.0 | ) | % Long-term debt | | | 297,044 | | | — | | NM | | Accrued expenses | | | 110,054 | | | 128,597 | | (14.4 | ) | % Other liabilities | | | 102,537 | | | 56,923 | | 80.1 | | % Total liabilities | | $ | 4,749,386 | | $ | 4,383,290 | | 8.4 | | % Shareholders' equity | | | 1,696,173 | | | 1,778,196 | | (4.6 | ) | % Total liabilities & shareholders' equity | | $ | 6,445,559 | | $ | 6,161,486 | | 4.6 | | % | | | | | | | | | OTHER DATA: | | | | | | | | | Common shares outstanding (in 000's) | | | 91,732 | | | 91,879 | | | | | | | | | | | | Book value per share | | $ | 18.49 | | $ | 19.35 | | (4.4 | ) | % Closing stock price per share | | $ | 55.31 | | $ | 63.98 | | (13.6 | ) | % | | | | | | | | | Statutory surplus | | $ | 1,964,770 | | $ | 1,846,615 | | 6.4 | | % NM = Not Meaningful RLI CORP2026 FINANCIAL HIGHLIGHTSUNDERWRITING SEGMENT DATA(Unaudited)(Dollars in thousands, except per share amounts) | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | | | | | | | | | | | | | | | | | | | | | | | | | GAAP | | | | | GAAP | | | | | GAAP | | | | | GAAP | | | Casualty | | Ratios | | Property | | Ratios | | Surety | | Ratios | | Total | | Ratios | 2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gross premiums written | | $ | 330,937 | | | | $ | 152,373 | | | | $ | 38,937 | | | | $ | 522,247 | | | Net premiums written | | | 275,573 | | | | | 118,302 | | | | | 35,408 | | | | | 429,283 | | | Net premiums earned | | | 262,177 | | | | | 126,520 | | | | | 36,217 | | | | | 424,914 | | | Net loss & settlement expenses | | | 168,087 | | 64.1 | % | | 31,103 | | 24.6 | % | | 2,151 | | 5.9 | % | | 201,341 | | 47.4 | % Net operating expenses | | | 93,050 | | 35.5 | % | | 44,991 | | 35.5 | % | | 26,763 | | 73.9 | % | | 164,804 | | 38.8 | % Underwriting income (1) | | $ | 1,040 | | 99.6 | % | $ | 50,426 | | 60.1 | % | $ | 7,303 | | 79.8 | % | $ | 58,769 | | 86.2 | % | | | | | | | | | | | | | | | | | | | | | 2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gross premiums written | | $ | 317,063 | | | | $ | 154,631 | | | | $ | 38,527 | | | | $ | 510,221 | | | Net premiums written | | | 263,395 | | | | | 109,007 | | | | | 34,924 | | | | | 407,326 | | | Net premiums earned | | | 243,508 | | | | | 126,689 | | | | | 37,498 | | | | | 407,695 | | | Net loss & settlement expenses | | | 150,912 | | 62.0 | % | | 32,815 | | 25.9 | % | | 4,271 | | 11.4 | % | | 187,998 | | 46.1 | % Net operating expenses | | | 88,110 | | 36.2 | % | | 43,450 | | 34.3 | % | | 27,592 | | 73.6 | % | | 159,152 | | 39.0 | % Underwriting income (1) | | $ | 4,486 | | 98.2 | % | $ | 50,424 | | 60.2 | % | $ | 5,635 | | 85.0 | % | $ | 60,545 | | 85.1 | % | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, | | | | | | | | | | | | | | | | | | | | | | | | | | GAAP | | | | | GAAP | | | | | GAAP | | | | | GAAP | | | Casualty | | Ratios | | Property | | Ratios | | Surety | | Ratios | | Total | | Ratios | 2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gross premiums written | | $ | 976,950 | | | | $ | 506,412 | | | | $ | 122,421 | | | | $ | 1,605,783 | | | Net premiums written | | | 821,080 | | | | | 398,369 | | | | | 112,188 | | | | | 1,331,637 | | | Net premiums earned | | | 767,665 | | | | | 376,684 | | | | | 109,047 | | | | | 1,253,396 | | | Net loss & settlement expenses | | | 480,605 | | 62.6 | % | | 91,682 | | 24.3 | % | | 12,193 | | 11.2 | % | | 584,480 | | 46.6 | % Net operating expenses | | | 276,985 | | 36.1 | % | | 132,892 | | 35.3 | % | | 82,574 | | 75.7 | % | | 492,451 | | 39.3 | % Underwriting income (1) | | $ | 10,075 | | 98.7 | % | $ | 152,110 | | 59.6 | % | $ | 14,280 | | 86.9 | % | $ | 176,465 | | 85.9 | % | | | | | | | | | | | | | | | | | | | | | 2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gross premiums written | | $ | 902,127 | | | | $ | 536,500 | | | | $ | 124,981 | | | | $ | 1,563,608 | | | Net premiums written | | | 755,247 | | | | | 391,662 | | | | | 114,567 | | | | | 1,261,476 | | | Net premiums earned | | | 707,194 | | | | | 389,897 | | | | | 110,853 | | | | | 1,207,944 | | | Net loss & settlement expenses | | | 438,007 | | 61.9 | % | | 103,999 | | 26.7 | % | | 7,808 | | 7.0 | % | | 549,814 | | 45.5 | % Net operating expenses | | | 254,341 | | 36.0 | % | | 129,048 | | 33.1 | % | | 81,420 | | 73.5 | % | | 464,809 | | 38.5 | % Underwriting income (1) | | $ | 14,846 | | 97.9 | % | $ | 156,850 | | 59.8 | % | $ | 21,625 | | 80.5 | % | $ | 193,321 | | 84.0 | % (1) | See discussion above: Non-GAAP and Performance Measures. Category: Earnings Release View source version on businesswire.com: https://www.businesswire.com/news/home/20261019118592/en/ Contacts Media Contact Aaron Diefenthaler Chief Financial Officer 309-693-5846 [email protected]

RLI Corp. (RLI) reported $471.61 million in revenue for the quarter ended September 2026, representing a year-over-year increase of 5%. EPS of $0.86 for the same period compares to $0.83 a year ago. The reported revenue represents a surprise of +1.07% over the Zacks Consensus Estimate of $466.64 million. With the consensus EPS estimate being $0.58, the EPS surprise was +48.28%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how RLI Corp. performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: - Net operating expenses - Total: 38.8% versus 39.4% estimated by four analysts on average. - Net loss & settlement expenses - Total: 47.4% compared to the 53.3% average estimate based on four analysts. - Underwriting income (loss) - Total: 86.2% versus the four-analyst average estimate of 92.7%. - Net operating expenses - Casualty: 35.5% compared to the 36.7% average estimate based on three analysts. - Net operating expenses - Property: 35.5% compared to the 34.9% average estimate based on three analysts. - Underwriting income (loss) - Casualty: 99.6% versus the three-analyst average estimate of 100.4%. - Underwriting income (loss) - Property: 60.1% compared to the 76.9% average estimate based on three analysts. - Net premiums earned: $424.91 million compared to the $421.8 million average estimate based on four analysts. The reported number represents a change of +4.2% year over year. - Net investment income: $46.69 million versus $46.09 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +13.1% change. - Net premiums earned- Property: $126.52 million versus $119.8 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a -0.1% change. - Net premiums earned- Surety: $36.22 million compared to the $36.1 million average estimate based on three analysts. The reported number represents a change of -3.4% year over year. - Net premiums earned- Casualty: $262.18 million compared to the $265.76 million average estimate based on three analysts. The reported number represents a change of +7.7% year over year. View all Key Company Metrics for RLI Corp. here>>> Shares of RLI Corp. have returned +2.8% over the past month versus the Zacks S&P 500 composite's +1.5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RLI Corp. (RLI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

RLI Corp. (RLI) came out with quarterly earnings of $0.86 per share, beating the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.83 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +48.28%. A quarter ago, it was expected that this specialty insurance company would post earnings of $0.71 per share when it actually produced earnings of $0.83, delivering a surprise of +16.9%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. RLI Corp., which belongs to the Zacks Insurance - Property and Casualty industry, posted revenues of $471.61 million for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 1.07%. This compares to year-ago revenues of $448.96 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. RLI Corp. shares have lost about 4.6% since the beginning of the year versus the S&P 500's gain of 11.9%. While RLI Corp. has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for RLI Corp. was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.69 on $476.22 million in revenues for the coming quarter and $2.90 on $1.86 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Insurance - Property and Casualty is currently in the top 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Chubb (CB), another stock in the same industry, has yet to report results for the quarter ended September 2026. The results are expected to be released on October 20. This insurer is expected to post quarterly earnings of $6.53 per share in its upcoming report, which represents a year-over-year change of -12.8%. The consensus EPS estimate for the quarter has been revised 0.1% lower over the last 30 days to the current level. Chubb's revenues are expected to be $16.72 billion, up 3.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RLI Corp. (RLI) : Free Stock Analysis Report Chubb Limited (CB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research