RLI Reports Third Quarter 2026 Results

Operating earnings increased even as lower investment gains and an underwriting decline accompanied a drop in quarterly net earnings.

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PEORIA, Ill.--(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 CORP 2026 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 CORP 2026 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 CORP 2026 FINANCIAL HIGHLIGHTS UNDERWRITING 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/

Media Contact
Aaron Diefenthaler
Chief Financial Officer
309-693-5846
Investors@rlicorp.com

Source: RLI Corp.

Key Terms

non-gaap financial

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

gaap financial

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

combined ratio financial

The combined ratio is a way insurance companies measure how well they are doing by adding up all their costs and claims and comparing them to the money they earn from premiums. If the ratio is below 100%, it means the company is making a profit; if it's above 100%, they are losing money. It helps see if an insurance company is financially healthy or not.

reinsurance financial

Reinsurance is when insurance companies buy insurance for themselves to protect against very big losses. It’s like a car owner getting extra coverage from another company so that if there's a serious accident, the financial hit isn’t all on one company. This helps insurance companies stay stable and able to pay out when disasters happen.