GICS Sector : Financial Services
RLI Corp., an insurance holding company, underwrites property and casualty insurance in the United States and internationally.Its Casualty segment provides commercial and personal coverage products; and general liability products, such as coverage for third-party liability of commercial insureds, including manufacturers, contractors, apartments, and mercantile.It also offers coverages for security guards and in the areas of onshore energy-related businesses and environmental liability for underground storage tanks, contractors and asbestos, and environmental remediation specialists; and professional liability coverages focuses on providing errors and omission coverage to small to medium-sized design, technical, computer, and miscellaneous professionals.
RLI Corp.'s third-quarter 2025 earnings report showcased the company's strong underwriting discipline, with an 85 combined ratio indicating underwriting profitability across all segments. Operating earnings came in at $0.83 per share, beating estimates of $0.62, and were supported by a solid underwriting performance and a 12% increase in investment income. Net earnings per share were $1.35, up from $1.03 in Q3 2024. The company's book value per share grew 26% year-to-date, inclusive of dividends, and return on equity was over 20%.
Publication Date: Oct -21
The property segment reported a 60 combined ratio, despite an 11% decline in gross premiums, which was influenced by rate and exposure declines in U.S. Property. However, Hawaii homeowners premium grew 33% in the quarter. The casualty segment achieved a 98 combined ratio, with gross premiums advancing 8%, and benefited from $8 million of favorable prior year's reserve development. The surety segment reported an 85 combined ratio, with premium down modestly for the quarter. As Craig Kliethermes highlighted, the company's strong balance sheet, diversified product and investment portfolios, and consistent profitability led to growth in book value for shareholders.
Given RLI Corp.'s strong performance, its valuation metrics appear reasonable. The Price-to-Book Ratio stands at 0.91, indicating that the stock is trading slightly below its book value. The Dividend Yield is 4.27%, providing a relatively stable source of return for investors. Analysts estimate next year's revenue growth at 3.9%. With its focus on underwriting discipline, adaptability, and investing in expertise, RLI Corp. is well-positioned to drive long-term success.
The company is navigating a complex environment marked by market volatility, political uncertainty, and increased competition. Management remains focused on underwriting discipline and investing in talent, product offerings, and technology to counteract headwinds in various segments. The personal umbrella book has seen changes in attachment points, leading to improved loss trends, and a 17% rate increase in the quarter. The surety business is also adapting to a changing competitive environment, with a focus on service, technology, and people to maintain its competitive advantage.
This Dividend King Just Raised Its Payout for the 50th Time
Dec -02
First Look: CME outage, Black Friday shifts, AI job impact
Nov -28
Fund Rotates Into Insurance Stock With Big Purchase
Nov -25
AXQ Capital LP Trims Stock Position in RLI Corp. $RLI
Nov -25
RLI Corp. $RLI Shares Sold by Aviva PLC
Nov -14
Todd Bryant, RLI Chief Financial Officer to Retire; Aaron Diefenthaler Named Successor Effective January 1, 2026
Nov -13
RLI Declares Regular & Special Dividends
Nov -13
RLI Transportation Announces Partnership With Netradyne
Nov -11
RLI Corp's 10% growth in Casualty segment is driven by increasing demand for specialty insurance products, expansion into new markets, and strategic partnerships. Additionally, favorable market conditions, improved underwriting discipline, and effective risk management practices contribute to the segment's growth.
RLI Corp's 12% growth in Property segment is driven by increasing demand for specialty insurance products, expansion into new markets, and strategic partnerships. Additionally, favorable underwriting results, improved pricing, and a strong capital position contribute to the segment's growth.
RLI Corp's surety segment growth is driven by increasing demand for construction bonds, expansion into new markets, and strategic partnerships. Additionally, the company's strong underwriting discipline, diversified product offerings, and favorable regulatory environment contribute to its 9% growth rate.
RLI Corp.'s Casualty segment offers a range of liability insurance products, including general liability, umbrella, and excess liability coverage to protect businesses from unforeseen events.
RLI Corp.'s Property segment provides insurance coverage for commercial and personal property, including buildings, equipment, and inventory, against damage or loss.
RLI Corp.'s Transportation segment offers insurance products for the transportation industry, including trucking, public transportation, and logistics companies.
RLI Corp.'s Professional Services segment provides insurance coverage for professionals, including lawyers, doctors, and accountants, against errors and omissions.
RLI Corp.'s Reinsurance segment offers reinsurance products to other insurance companies, providing additional coverage and risk management solutions.
RLI Corp. operates in a niche market, providing specialty insurance products. While there are substitutes available, they are not easily accessible, and the company's products are highly specialized, reducing the threat of substitutes.
RLI Corp.'s customers are primarily businesses and individuals who require specialized insurance products. The company's strong relationships with its customers and the complexity of its products reduce the bargaining power of customers.
RLI Corp. has a diversified supplier base, and the company is not heavily dependent on a single supplier. This reduces the bargaining power of suppliers.
The specialty insurance market has high barriers to entry, including regulatory hurdles and the need for specialized expertise. This reduces the threat of new entrants.
RLI Corp. operates in a competitive market, but the company's specialized products and strong relationships with its customers help to mitigate the intensity of rivalry.
| Value | |
|---|---|
| Debt Weight | 12.62% |
| Debt Cost | 5.66% |
| Equity Weight | 87.38% |
| Equity Cost | 5.66% |
| WACC | 5.66% |
| Leverage | 14.44% |
Value: 5.3
Growth: 7.9
Quality: 6.5
Yield: 4.0
Momentum: 8.5
Volatility: 10.0
1-Year Total Return ->
Value: 7.3
Growth: 6.9
Quality: 6.6
Yield: 6.0
Momentum: 8.0
Volatility: 6.3
1-Year Total Return ->
Value: 7.3
Growth: 4.8
Quality: 6.6
Yield: 4.0
Momentum: 8.5
Volatility: 9.3
1-Year Total Return ->
Value: 6.0
Growth: 6.9
Quality: 8.2
Yield: 7.0
Momentum: 1.5
Volatility: 9.3
1-Year Total Return ->
Value: 7.0
Growth: 7.2
Quality: 7.1
Yield: 0.0
Momentum: 8.0
Volatility: 9.3
1-Year Total Return ->
Value: 6.2
Growth: 6.8
Quality: 5.3
Yield: 0.0
Momentum: 8.0
Volatility: 10.0
1-Year Total Return ->