RLI's Q2 Earnings Beat Estimates on Strong Net Investment Income
The quarterly results reflect higher net premiums earned and higher net investment income, partially offset by higher loss and settlement expenses.
Operational Performance
Operating revenues for the reported quarter were $441 million, up 6.9% year over year, driven by 6% higher net premiums earned and 16% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.5%.
RLI Corp. Price, Consensus and EPS Surprise
RLI Corp. price-consensus-eps-surprise-chart | RLI Corp. Quote
Gross premiums written remained flat at $562.3 million. The improvement in the performance of the Casualty and Property segments was offset by the decline in the Surety segment. Our estimate was $662 million.
Net investment income increased 16% year over year to $39.4 million, which is in line with our estimate. The Zacks Consensus Estimate was pegged at $38.9 million. The investment portfolio's total return was 2.9% in the quarter.
Total expenses rose 9.8% year over year to $345.8 million, primarily due to higher loss and settlement expenses and policy acquisition costs. Our estimate was $366.7 million.
Underwriting income of $62.2 million decreased 11.14% year over year. The combined ratio deteriorated 300 basis points (bps) year over year to 84.5. The Zacks Consensus Estimate for the metric was pegged at 88, while our estimate was 42.9
Financial Update
RLI exited the quarter with total investments and cash of $4.4 billion, up 8.4% from 2024-end.
Book value was $18.89 per share, up 13.9% from the figure as of Dec. 31, 2024.
Net cash flow from operations was $174.7 million, up 23.2% year over year.
The statutory surplus increased 2.3% from the end of 2024 to $1.8 billion as of June 30, 2025.
Return on equity was 23.5%, down 180 bps from the year-ago period.
Dividend Update
On June 20, 2025, RLI paid a dividend of 16 cents, an increase of 1 cent from the last payout. RLI's cumulative dividends total more than $971 million in the last five years.
Zacks Rank
RLI currently has a Zacks Rank #4 (Sell).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Peer Performances
The Travelers Companies TRV reported second-quarter 2025 core income of $6.51 per share, which beat the Zacks Consensus Estimate by 83.8%.Travelers' total revenues increased 6.7% from the year-ago quarter to $12.1 billion, primarily driven by higher premiums, improved net investment income, higher fee income and other revenues. The top-line figure, however, missed the Zacks Consensus Estimate by 0.7%. Net written premiums increased 4% year over year to a record $11.5 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.9 billion.
The Progressive Corporation's PGR second-quarter 2025 earnings per share of $4.88 beat the Zacks Consensus Estimate by 10.1%. The bottom line increased 84.1% year over year.Operating revenues increased 19.5% year over year to $42.2 billion, driven by 19% higher net premiums earned, a 29.3% increase in net investment income, an 18.9% rise in fees and 28% higher service revenues. The top line beat the Zacks Consensus Estimate by 96.4%.Net premiums written were $20 billion in the quarter, up 12% from $17.9 billion a year ago.
W.R. Berkley's WRB second-quarter 2025 operating income of $1.05 per share beat the Zacks Consensus Estimate of $1.03 per share. The bottom line increased about 1% year over year. Operating revenues came in at $3.6 billion, up 7.9% year over year, on the back of higher net premiums earned as well as improved net investment income, higher insurance service fees and other income. The top line beat the consensus estimate by 1.8%.
Catastrophe losses of $99.2 million in the quarter were wider than $89.7 million incurred in the year-ago quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 50 bps year over year to 92.1. The Zacks Consensus Estimate was 91.
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