By James Thaler

Jan 22 - (The Insurer) - RLI’s Q4 underwriting gain fell by 63 percent to $22mn following a sharp drop in its property unit’s result, which included $39mn of Hurricanes Beryl, Helene and Milton-driven catastrophe losses, while its casualty unit swung to a loss after earning a small profit in the prior year period.

The Illinois-based company reported $0.41 in fourth-quarter operating profits per share after markets closed on Wednesday, down from the $0.77 it earned in Q4:23, and missing analysts’ $0.52 consensus estimate as per MarketWatch.

RLI’s consolidated combined ratio rose sharply to 94.4 percent in Q4:24, up from 82.7 percent in Q4:23, which was largely driven by the property unit, where RLI reported an 80.5 percent combined ratio in Q4:24, up from 54.5 percent in Q4:23.

The insurer’s casualty unit’s Q4:24 combined ratio worsened to 103.9 percent – versus 99.0 percent in the prior period – while the same figure for the surety unit crept up to 87.1 percent from 84.9 percent.

The property division’s overall underwriting gain fell to $26.2mn from $52.72mn in Q4:23, while the casualty unit shifted to a $8.75mn underwriting loss from a $2.0mn profit a year ago.

The surety segment’s underwriting gain largely held steady, at $4.75mn, versus $5.12mn in Q4:23.

For the full year in 2024, RLI’s property underwriting profits nearly doubled to $167.6mn from $86.3mn, and were essentially flat for surety at $25.3mn in 2024 versus $27.4mn in 2023, while casualty underwriting profits plummeted by 70 percent in 2024 to $17.8mn from $59.5mn.

RLI’s overall consolidated underwriting gain for full-year 2024 improved by 22 percent to $210.7mn from $173.1mn.

For the fourth quarter, RLI reported $11.5mn in favourable development in casualty, compared with $9.0mn in Q4:23, and released $0.1mn in property compared with $2.0mn in the prior year period. The surety segment took a $1.7mn reserve charge, compared with $0.6mn in releases in Q4:23.

The $39mn in fourth-quarter cat losses RLI absorbed were down substantially from the $76mn recorded in Q4:23.

RLI’s overall reported loss ratio grew to 56.8 percent in the fourth quarter – up from 42.3 percent from the year before, with the increase largely driven by the property division, where the loss ratio climbed to 47.4 percent from 19.5 percent.

The casualty segment’s loss ratio ticked higher to 68.7 percent from 62.0 percent, but the unit improved its expense ratio to 35.2 percent from 37.0 percent.

The surety loss ratio in the quarter weakened to 17.5 percent from 7.3 percent, though the unit’s expense ratio improved to 69.6 percent from 77.6 percent.

RLI’s overall expense ratio in the quarter was better, at 37.6 percent, down from 40.4 percent in Q4:23. The insurer also improved its full-year expense ratio in 2024 to 37.8 percent, down from 39.9 percent in 2023.

RLI grew consolidated gross premiums written (GPW) by 8.9 percent in Q4:24 to $473.2mn, driven by 18.3 percent growth in casualty GPW to $282.20mn from $238.47mn, while property GPW dipped by 3.0 percent to $153.3mn and surety fell by 0.4 percent to $37.71mn from $37.84mn.

RLI grows GPW 11% for FY:24, surpassing $2bn for the first time

For the full year in 2024, RLI’s overall GPW was up by 11.4 percent to $2.01bn from $1.81bn, led by 15.3 growth in casualty GPW to $1.12bn from $961.67mn and 9.2 percent growth in surety to $161.21mn from $147.62mn.

Property GPW for the year was up by 6.6 percent to $743.49mn from $697.37mn.

Fourth-quarter net investment income grew by 19 percent to $38.78mn from $32.55mn, and the year by 18.2 percent to $142.28mn from $120.38mn.

In total, RLI improved its full-year reported consolidated combined ratio to 86.2 percent in 2024 from 86.6 percent in 2023.

In a statement, RLI president and CEO Craig Kliethermes said the firm’s customer service, consistent financial performance and prudent capital management “distinguished” the insurer in 2024.

“Despite an active hurricane season and highly competitive environment, we achieved an 86 combined ratio, marking our 29th consecutive year of underwriting profitability,” Kliethermes said in a statement.

“Gross premiums written grew by 11 percent, surpassing $2bn for the first time, with all three product segments contributing to this growth,” the CEO added.

“Our positive underwriting and investment results allowed us to return $236mn to shareholders through special and regular dividends,” he continued.

“I want to thank our associate-owners for their contributions throughout the year, which helped differentiate RLI,” Kliethermes concluded.