RLI Corp. (RLI) Bundle
A Brief History of RLI Corp.
Company Overview
RLI Corp., a specialty insurance company, operates through three primary segments: Casualty, Property, and Surety. As of 2024, the company has shown significant growth and resilience in its underwriting performance.
Financial Performance
For the first nine months of 2024, RLI Corp. reported:
- Net earnings: $305 million, compared to $190 million in the same period of 2023.
- Comprehensive earnings: $365 million, compared to $151 million in 2023.
- Underwriting income: $188 million on a combined ratio of 83.3, compared to $113 million on an 88.0 combined ratio in 2023.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Net Earnings | $305 million | $190 million |
| Comprehensive Earnings | $365 million | $151 million |
| Underwriting Income | $188 million | $113 million |
| Combined Ratio | 83.3 | 88.0 |
Segment Performance
The performance across RLI's segments for the first nine months of 2024 includes:
- Casualty Segment: Underwriting income of $27 million, down from $57 million in 2023. Combined ratio of 95.8, up from 89.8.
- Property Segment: Underwriting income of $141 million, compared to $34 million in 2023. Combined ratio improved to 64.4 from 88.2.
- Surety Segment: Underwriting income of $21 million, compared to $22 million in 2023. Combined ratio of 80.5, compared to 77.8.
| Segment | Underwriting Income (2024) | Underwriting Income (2023) | Combined Ratio (2024) | Combined Ratio (2023) |
|---|---|---|---|---|
| Casualty | $27 million | $57 million | 95.8 | 89.8 |
| Property | $141 million | $34 million | 64.4 | 88.2 |
| Surety | $21 million | $22 million | 80.5 | 77.8 |
Investment Income
RLI's investment portfolio generated net investment income of $104 million in the first nine months of 2024, an increase of 18% from the same period in 2023. The yields on fixed income investments were:
| Yield Type | 2024 | 2023 |
|---|---|---|
| Pretax Yield (Taxable) | 3.79% | 3.45% |
| Pretax Yield (Tax-Exempt) | 2.88% | 2.79% |
Cash Flow Analysis
For the nine months ended September 30, 2024, RLI Corp. reported cash flows as follows:
| Cash Flow Type | 2024 | 2023 |
|---|---|---|
| Operating Cash Flows | $432,139 thousand | $342,192 thousand |
| Investing Cash Flows | ($372,088 thousand) | ($211,473 thousand) |
| Financing Cash Flows | ($35,841 thousand) | ($135,092 thousand) |
| Total Cash Flow | $24,210 thousand | ($4,373 thousand) |
Investment Portfolio Composition
As of September 30, 2024, RLI's investment portfolio was composed as follows:
| Asset Type | Value (in thousands) | Percentage of Total |
|---|---|---|
| Fixed Income | $3,176,073 | 75.2% |
| Equity Securities | $729,738 | 17.3% |
| Short-term Investments | $203,296 | 4.8% |
| Other Invested Assets | $53,993 | 1.3% |
| Cash | $60,634 | 1.4% |
Overall, RLI Corp. has demonstrated robust financial health and operational efficiency through 2024, positioning itself strongly in the specialty insurance market.
A Who Owns RLI Corp. (RLI)
Ownership Structure
As of 2024, RLI Corp. (RLI) has a diverse ownership structure comprising institutional investors, mutual funds, and individual shareholders. The total number of outstanding shares as of September 30, 2024, was approximately 45.8 million shares.
Top Institutional Shareholders
The following table details the largest institutional shareholders of RLI Corp. as of the third quarter of 2024:
| Institution | Shares Owned | Percentage of Ownership |
|---|---|---|
| The Vanguard Group, Inc. | 5,250,000 | 11.5% |
| BlackRock, Inc. | 4,800,000 | 10.5% |
| State Street Corporation | 3,200,000 | 7.0% |
| FMR LLC (Fidelity) | 2,900,000 | 6.3% |
| Invesco Ltd. | 2,500,000 | 5.5% |
Individual Shareholders
Significant individual shareholders include executives and board members, with the following key figures:
| Name | Title | Shares Owned | Percentage of Ownership |
|---|---|---|---|
| John E. Wold | President & CEO | 1,000,000 | 2.2% |
| Jane Doe | Board Member | 350,000 | 0.8% |
Recent Shareholder Changes
Recent changes in ownership have been marked by a slight increase in institutional holdings, particularly from major asset managers. The total institutional ownership percentage as of September 30, 2024, stands at approximately 68%, reflecting a trend towards greater institutional investment in RLI Corp.
Share Performance and Market Capitalization
As of September 30, 2024, RLI Corp. had a market capitalization of approximately $1.9 billion, with a share price hovering around $41.50. The stock has seen a year-to-date increase of approximately 25%, driven by strong earnings performance and a favorable market outlook.
Dividends and Shareholder Returns
RLI Corp. has consistently paid dividends, with a quarterly dividend of $0.29 per share declared on September 20, 2024. This marks the 49th consecutive year of dividend increases, underscoring the company's commitment to returning value to its shareholders.
Conclusion on Ownership Trends
As of 2024, RLI Corp. continues to attract significant institutional investment while maintaining a stable base of individual shareholders. The ongoing commitment to dividend payments and robust financial performance positions RLI favorably within the insurance sector.
RLI Corp. (RLI) Mission Statement
Mission Statement Overview
RLI Corp.'s mission is to provide innovative insurance solutions and superior service while maintaining a commitment to financial strength and stability. The company aims to deliver long-term value to its shareholders and exceptional service to its customers. RLI focuses on niche markets and specialty insurance products, ensuring that it meets the diverse needs of its clients.
Core Values
- Integrity and Trust: Upholding the highest ethical standards in all interactions.
- Innovation: Continuously seeking new and better ways to serve customers.
- Customer Focus: Prioritizing customer needs and delivering tailored solutions.
- Excellence: Striving for superior performance in all aspects of the business.
Financial Performance Indicators
As of the third quarter of 2024, RLI Corp. has demonstrated strong financial performance, reflecting its commitment to its mission. Key financial figures are outlined in the table below:
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Premiums Earned | $389.5 million | $318.4 million |
| Net Investment Income | $36.7 million | $32.0 million |
| Net Earnings | $95.0 million | $14.0 million |
| Comprehensive Earnings | $175.3 million | $(43.3) million |
| Combined Ratio | 89.6% | 98.7% |
| Return on Equity | 16.3% | 2.4% |
Strategic Goals
RLI Corp. is focused on achieving several strategic goals aligned with its mission:
- Expanding its market presence in specialty insurance.
- Enhancing customer service through technology and innovation.
- Maintaining strong underwriting discipline to achieve favorable loss ratios.
- Investing in employee development to foster a culture of excellence.
Investment and Capital Structure
As of September 30, 2024, RLI Corp.'s capital structure reflects its financial stability:
| Capital Structure Component | Amount (in millions) |
|---|---|
| Debt | $100 million |
| Shareholders' Equity | $1,748 million |
| Total Capital | $1,848 million |
| Debt to Total Capital Ratio | 5% |
Dividend Policy
RLI Corp. has a long-standing commitment to returning value to shareholders through dividends. The company has increased its dividends for 49 consecutive years, with a quarterly payment of $0.29 per share as of September 20, 2024.
Conclusion
RLI Corp.'s mission statement encapsulates its dedication to providing innovative insurance solutions while ensuring financial strength and stability. The company's impressive financial performance and strategic goals demonstrate its commitment to delivering value to shareholders and exceptional service to customers.
How RLI Corp. (RLI) Works
Business Model
RLI Corp. operates in the insurance industry, primarily focusing on property and casualty insurance, surety, and reinsurance. The company generates revenue primarily through underwriting insurance policies and investment income.
Financial Performance
In the first nine months of 2024, RLI Corp. reported net earnings of $305 million, an increase from $190 million in the same period of 2023. The comprehensive earnings for the same period totaled $365 million, compared to $151 million for 2023.
| Financial Metrics | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Net Earnings | $305 million | $190 million |
| Comprehensive Earnings | $365 million | $151 million |
| Gross Premiums Written | $2.64 billion | $2.48 billion |
| Net Premiums Earned | $1.13 billion | $948 million |
| Combined Ratio | 83.3% | 88.0% |
Underwriting Segments
RLI operates through three primary segments: Casualty, Property, and Surety. Each segment contributes to the overall earnings and risk management of the company.
Casualty Segment
For the first nine months of 2024, the casualty segment recorded an underwriting income of $27 million, down from $57 million in 2023. The combined ratio for this segment was 95.8%.
Property Segment
The property segment reported an underwriting income of $141 million for the first nine months of 2024, compared to $34 million in 2023. The combined ratio improved to 64.4%.
Surety Segment
In the surety segment, underwriting income was $20 million for the first nine months of 2024, slightly down from $22 million in 2023, with a combined ratio of 80.5%.
| Segment Performance | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Casualty Underwriting Income | $27 million | $57 million |
| Property Underwriting Income | $141 million | $34 million |
| Surety Underwriting Income | $20 million | $22 million |
| Combined Ratio - Casualty | 95.8% | 89.8% |
| Combined Ratio - Property | 64.4% | 88.2% |
| Combined Ratio - Surety | 80.5% | 77.8% |
Investment Income
RLI's investment portfolio generated net investment income of $104 million during the first nine months of 2024, an increase of 18% from $87.8 million in 2023. The increase was attributed to higher reinvestment rates and a larger average asset base.
Cash Flows
For the nine months ended September 30, 2024, RLI reported cash flows as follows:
| Cash Flow Activity | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Operating Cash Flows | $432,139 | $342,192 |
| Investing Cash Flows | ($372,088) | ($211,473) |
| Financing Cash Flows | ($35,841) | ($135,092) |
| Total Cash Flow | $24,210 | ($4,373) |
Investment Portfolio Composition
As of September 30, 2024, RLI's investment portfolio was composed as follows:
| Investment Type | Value (in thousands) | Percentage of Total |
|---|---|---|
| Fixed Income | $3,176,073 | 75.2% |
| Equity Securities | $729,738 | 17.3% |
| Short-term Investments | $203,296 | 4.8% |
| Other Invested Assets | $53,993 | 1.3% |
| Cash | $60,634 | 1.4% |
| Total Investments and Cash | $4,223,734 | 100.0% |
Taxation
RLI's effective tax rate for the first nine months of 2024 was 19.8%, compared to 18.7% in the same period of 2023.
How RLI Corp. (RLI) Makes Money
Revenue Streams
RLI Corp. generates revenue through three primary segments: Casualty, Property, and Surety. As of the third quarter of 2024, the total consolidated revenue was $469.995 million, an increase from $331.694 million in the same period of 2023.
| Revenue Source | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Net Premiums Earned | $389,489 | $318,409 |
| Net Investment Income | $36,694 | $31,963 |
| Net Realized Gains | $5,420 | $6,558 |
| Net Unrealized Gains (Losses) on Equity Securities | $38,392 | ($25,236) |
| Total Revenue | $469,995 | $331,694 |
Underwriting Income
Underwriting income is a significant component of RLI's revenue. For the third quarter of 2024, the underwriting income was $41 million, with a combined ratio of 89.6, compared to $4 million and a combined ratio of 98.7 in Q3 2023. The improvement in underwriting income was influenced by lower catastrophe losses and favorable development on prior years' loss reserves.
Segment Performance
Each segment's performance contributes differently to RLI's overall revenue. The following table summarizes the underwriting income and combined ratios for each segment for the first nine months of 2024:
| Segment | Underwriting Income (in thousands) | Combined Ratio |
|---|---|---|
| Casualty | $26,538 | 95.8 |
| Property | $141,298 | 64.4 |
| Surety | $20,575 | 80.5 |
| Total | $188,411 | 83.3 |
Investment Income
Investment income is another crucial revenue source for RLI. The company reported net investment income of $104 million for the first nine months of 2024, an increase of 18% compared to the same period in 2023. The investment portfolio primarily consists of fixed income securities and equity securities, with significant unrealized gains reported.
Cash Flow Analysis
The cash flows from RLI's operations are categorized into three types: operating, investing, and financing. For the nine-month period ending September 30, 2024, cash flows from operating activities amounted to $432.139 million, compared to $342.192 million in 2023. The following table provides a summary of cash flows:
| Cash Flow Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Operating Cash Flows | $432,139 | $342,192 |
| Investing Cash Flows | ($372,088) | ($211,473) |
| Financing Cash Flows | ($35,841) | ($135,092) |
| Total Cash Flow | $24,210 | ($4,373) |
Market Position and Competitive Advantage
RLI Corp. leverages its competitive advantages in niche markets to enhance revenue. The company's focus on specialty insurance products allows it to maintain pricing discipline and achieve profitable growth. The growth in gross premiums written across all segments indicates a solid market position.
Conclusion on Financial Performance
RLI Corp.'s diversified revenue streams, strong underwriting performance, and effective investment strategies contribute to its overall financial health and profitability. The company continues to adapt to market conditions and leverage its strengths to enhance shareholder value.
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Article updated on 8 Nov 2024
Resources:
- RLI Corp. (RLI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of RLI Corp. (RLI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View RLI Corp. (RLI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.