RLI Reports First Quarter 2021 Results
RLI Corp. (NYSE: RLI) – RLI Corp. reported first quarter 2021 net earnings of
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First Quarter |
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Earnings Per Diluted Share |
2021 |
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2020 |
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Net earnings (loss) |
$ |
1.60 |
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$ |
(1.36 |
) |
Operating earnings (1) |
$ |
0.87 |
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$ |
0.66 |
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(1) See discussion below: Non-GAAP and Performance Measures. |
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Highlights for the quarter included:
-
Underwriting income(1) of
$29.9 million on a combined ratio(1) of 86.9. -
Gross premiums written increased
20% , up10% when adjusting for the return of premium to transportation customers impacted by the pandemic in 2020. -
Net favorable development in prior years’ loss reserves, resulting in a
$31.4 million net increase in underwriting income. -
Losses from winter storms, resulting in a
$13.6 million net decrease in underwriting income. -
Book value per share of
$25.55 , an increase of2% (inclusive of dividends) from year-end 2020.
“We are proud to report excellent first quarter results,” said RLI Corp. Chairman and CEO Jonathan E. Michael. “Despite an active winter storm season, we achieved an 87 combined ratio while continuing to find growth opportunities across our portfolio. Premium volume was up over last year in all three segments, primarily driven by rate increases and expanded distribution. Looking ahead, we will continue to build on our 25 consecutive years of underwriting profitability and focus on growing book value, which is possible through the dedication of our employee owners.”
Underwriting Income
RLI achieved
Results for both years include net favorable development in prior years’ loss reserves, which totaled
The following table highlights underwriting income and combined ratios by segment.
Underwriting Income (Loss)(1) |
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Combined Ratio(1) |
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(in millions) |
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2021 |
|
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2020 |
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2021 |
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2020 |
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Casualty |
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$ |
24.9 |
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$ |
(1.3 |
) |
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Casualty |
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83.3 |
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100.9 |
|
Property |
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(1.0 |
) |
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9.9 |
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Property |
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101.9 |
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|
77.7 |
|
Surety |
|
|
6.0 |
|
|
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8.6 |
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|
Surety |
|
|
78.5 |
|
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|
68.9 |
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Total |
|
$ |
29.9 |
|
|
$ |
17.2 |
|
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Total |
|
|
86.9 |
|
|
|
92.0 |
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(1) See discussion below: Non-GAAP and Performance Measures. |
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Other Income
Net investment income for the quarter decreased
RLI’s comprehensive earnings were
Equity in earnings of Maui Jim, Inc., a producer of premium sunglasses, was
Dividends Paid in the First Quarter of 2021
On March 19, 2021, the company paid a regular quarterly dividend of
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 earnings per share (EPS) from operations consist of our GAAP net earnings adjusted by the net realized gains/(losses), net unrealized gains/(losses) on equity securities and taxes related thereto. Net earnings and net earnings per share are the GAAP financial measures that are most directly comparable to operating earnings and EPS from operations. A reconciliation of the operating earnings and EPS from operations to the comparable GAAP financial measures is included in the 2021 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) tomorrow, April 22, 2021, RLI management will hold a conference call to discuss quarterly results with insurance industry analysts. Interested parties may listen to the discussion through the Internet at https://edge.media-server.com/mmc/p/32ig7qpn.
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, 2020.
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 45 consecutive years and delivered underwriting profits for 25 consecutive years. To learn more about RLI, visit www.rlicorp.com.
Supplemental disclosure regarding the earnings impact of specific items:
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Reserve Development and
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Three Months Ended March 31, |
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(Dollars in thousands, except per share amounts) |
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2021 |
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2020 |
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Net favorable development in casualty prior years' reserves |
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$ |
28.2 |
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$ |
6.4 |
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Net favorable development in property prior years' reserves |
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$ |
6.1 |
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$ |
4.8 |
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Net favorable development in surety prior years' reserves |
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$ |
2.8 |
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$ |
4.0 |
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Net incurred losses related to: |
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RLI Corp.
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RLI Stock Data
6.56B
39.53M
4.31%
81.17%
1.35%
Direct Property and Casualty Insurance Carriers
Finance and Insurance
United States of America
PEORIA
About RLIrli is a specialty insurance company that offers a diversified portfolio of property and casualty coverages and surety bonds serving niche or underserved markets. we combine profitable underwriting, solid investment returns and effective capital management to deliver consistent, long-term growth in shareholder value. rli has more than 850 employees in 50 locations across the united states. at rli, our talent distinguishes us and that makes us different. we hire smart people, including the best underwriters in the business, and then give them the resources and freedom to drive profitable growth. our niche, market-driven products exceed customer expectations; satisfying demands where other insurance companies do not compete. our vision for the future is to remain focused on building and managing a portfolio of innovative products and solutions that meet and surpass the expectations of shareholders. for more information, please visit www.rlicorp.com.
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