PEORIA, Ill.--(BUSINESS WIRE)--July 22, 2026--
RLI Corp. $(RLI)$ reported second quarter 2026 net earnings of $168.0 million ($1.82 per share), compared to $124.3 million ($1.34 per share) for the second quarter of 2025. Operating earnings(1) for the second quarter of 2026 were $76.9 million ($0.83 per share), compared to $76.2 million ($0.82 per share) for the same period in 2025.
Second Quarter Year to Date
--------------------------- ------------------ ----------------
Earnings Per Diluted Share 2026 2025 2026 2025
--------------------------- ---------- ------ --------- -----
Net earnings $ 1.82 $ 1.34 $ 2.42 $2.03
Operating earnings (1)(2) $ 0.83 $ 0.82 $ 1.67 $1.71
---------------------------- ------ ----- ----- ----
(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 $59.9 million on a combined ratio(1) of
85.6.
-- Net investment income increased 17%, and gross premiums written
increased 3%.
-- Favorable development in prior years' loss reserves resulted in a $35.1
million net increase in underwriting income.
-- Book value per share of $19.09, an increase of 11% (inclusive of
dividends and share repurchases) from year-end 2025.
-- Authorized a $250.0 million share repurchase program and repurchased
$12.0 million of common stock.
-- Paid a special dividend of $2.00 per share, returning $184.0 million to
shareholders.
"We are pleased to report another quarter of premium growth and profitability," said RLI Corp. President & CEO Craig Kliethermes. "Gross premiums written increased 3%, driven by our casualty segment, while strong margins in our property and surety segments contributed to an 86 combined ratio. Net investment income increased 17%, complementing our underwriting results and contributing to an 11% increase in book value per share since year-end 2025, including dividends returned to shareholders. These results reflect our disciplined execution and continued focus on delivering specialized expertise and exceptional service to our customers."
Underwriting Income
RLI achieved $59.9 million of underwriting income in the second quarter of 2026 on an 85.6 combined ratio, compared to $62.2 million on an 84.5 combined ratio in 2025.
Results for both years include favorable development in prior years' loss reserves, which resulted in a $35.1 million and $24.4 million net increase to underwriting income in 2026 and 2025, respectively.
The following table highlights underwriting income and combined ratios by segment for the second quarter.
Underwriting
Income(1) Combined Ratio(1)
(in millions) 2026 2025 2026 2025
------------------ ----- ----- ----------------- ---- ----
Casualty $ 1.7 $ 8.3 Casualty 99.3 96.5
Property 53.5 49.5 Property 56.8 62.1
Surety 4.7 4.4 Surety 87.2 87.9
------------------- ---- ---- ----------------- ---- ----
Total $59.9 $62.2 Total 85.6 84.5
------------------- ---- ---- ----------------- ---- ----
(1) See discussion below: Non-GAAP and Performance Measures.
Other Income
Net investment income for the quarter increased 17% to $46.0 million, compared to the same period in 2025. The investment portfolio's total return was 3.4% for the quarter and 3.0% for the six months ended June 30, 2026.
RLI's comprehensive earnings were $165.7 million for the quarter ($1.80 per share), compared to $143.0 million ($1.55 per share) for the same quarter in 2025. In addition to net earnings, comprehensive earnings for 2026 included after-tax unrealized losses from the fixed income portfolio, due to rising interest rates.
Dividends and Share Repurchase Program
On June 12, 2026, the company paid a special cash dividend of $2.00 per share and a regular quarterly dividend of $0.18 per share, a 12.5% increase over the prior quarter.
On May 14, 2026, the company's Board of Directors authorized a share repurchase program of up to $250.0 million of the company's outstanding common stock. During the second quarter, RLI repurchased 234,973 shares at an average price of $51.25 per share for a total cost of $12.0 million. As of June 30, 2026, $238.0 million of remaining capacity was 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
On July 9, 2026, RLI was named one of the insurance industry's top-performing companies for the 36th consecutive year by Ward Benchmarking, a business unit of Aon. RLI is the only property & casualty insurance company to be recognized as a Ward's 50$(R)$ P&C Top Performer every year since the list's inception in 1991.
At 10 a.m. central daylight time $(CDT)$ on July 23, 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/465043342.
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 Six Months Ended
June 30, June 30,
(Dollars in millions,
except per share
amounts) 2026 2025 2026 2025
---------------------- ---------- ------- ------- ---------
Favorable development
in casualty prior
years' reserves $ 13.7 $ 15.4 $ 28.2 $ 20.5
Favorable development
in property prior
years' reserves $ 9.0 $ 4.9 $ 29.6 $ 22.5
Favorable development
in surety prior years'
reserves $ 3.4 $ 2.3 $ 3.8 $ 10.6
Net incurred losses
related to:
2026 catastrophe
events $(10.0) $ -- $(26.0) $ --
2025 and prior
catastrophe events $ 13.7 $ (9.0) $ 13.7 $(21.0)
Operating Earnings Per Share
---------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
2026 2025 2026 2025
---------- ------- ------- ---------
Operating Earnings Per
Share(2)(3) $ 0.83 $ 0.82 $ 1.67 $ 1.71
Specific items
included in operating
earnings per
share:(1)(4)
Net favorable
development in
casualty prior
years' reserves $ 0.09 $ 0.11 $ 0.20 $ 0.14
Net favorable
development in
property prior
years' reserves $ 0.08 $ 0.04 $ 0.24 $ 0.17
Net favorable
development in
surety prior years'
reserves $ 0.02 $ 0.02 $ 0.02 $ 0.08
Net incurred losses
related to:
2026 catastrophe
events $(0.07) $ -- $(0.19) $ --
2025 and prior
catastrophe
events $ 0.10 $(0.07) $ 0.10 $(0.15)
(1) Reserve development reflects changes from previously estimated losses.
(2) See discussion above: Non-GAAP and Performance Measures.
(3) 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.
(4) Items included in operating earnings per share are after tax and
incorporates 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 June 30, Six Months Ended June 30,
SUMMARIZED INCOME
STATEMENT DATA: 2026 2025 % Change 2026 2025 % Change
------------------ ---------- --------- -------- --------- --------- ----------
Net premiums earned $ 417,096 $401,904 3.8 % $828,482 $800,249 3.5 %
Net investment
income 46,042 39,418 16.8 % 88,363 76,144 16.0 %
Net realized gains 9,407 15,004 (37.3) % 18,966 29,916 (36.6) %
Net unrealized
gains on equity
securities 103,024 43,500 136.8 % 63,628 1,182 NM
-------- ------- ------- ------- ------- ------
Consolidated
revenue $ 575,569 $499,826 15.2 % $999,439 $907,491 10.1 %
-------- ------- ------- ------- ------- ------
Loss and settlement
expenses 189,895 184,578 2.9 % 383,139 361,816 5.9 %
Policy acquisition
costs 134,675 125,502 7.3 % 266,750 249,189 7.0 %
Insurance operating
expenses 32,617 29,594 10.2 % 60,897 56,468 7.8 %
Interest expense on
debt 4,441 1,350 NM 6,794 2,685 153.0 %
General corporate
expenses 6,223 4,754 30.9 % 8,947 7,702 16.2 %
-------- ------- ------- ------- ------- ------
Total expenses $ 367,851 $345,778 6.4 % $726,527 $677,860 7.2 %
-------- ------- ------- ------- ------- ------
Equity in earnings
of unconsolidated
investees 2,970 2,467 20.4 % 5,117 5,515 (7.2) %
-------- ------- ------- ------- ------- ------
Earnings before
income taxes $ 210,688 $156,515 34.6 % $278,029 $235,146 18.2 %
Income tax expense 42,660 32,179 32.6 % 55,116 47,596 15.8 %
-------- ------- ------- ------- ------- ------
Net earnings $ 168,028 $124,336 35.1 % $222,913 $187,550 18.9 %
======== ======= ======= ======= ======= ======
Other comprehensive
earnings (loss),
net of tax (2,314) 18,701 NM (27,680) 48,731 NM
-------- ------- ------- ------- ------- ------
Comprehensive
earnings $ 165,714 $143,037 15.9 % $195,233 $236,281 (17.4) %
======== ======= ======= ======= ======= ======
Operating
earnings(1) :
Net earnings $ 168,028 $124,336 35.1 % $222,913 $187,550 18.9 %
Less:
Net realized
gains (9,407) (15,004) (37.3) % (18,966) (29,916) (36.6) %
Income tax on
realized gains 1,976 3,150 (37.3) % 3,983 6,282 (36.6) %
Net unrealized
gains on equity
securities (103,024) (43,500) 136.8 % (63,628) (1,182) NM
Income tax on
unrealized
gains on equity
securities 21,634 9,136 136.8 % 13,361 248 NM
Equity in
earnings of
unconsolidated
investees (2,970) (2,467) 20.4 % (5,117) (5,515) (7.2) %
Income tax on
equity in
earnings of
unconsolidated
investees 624 517 20.7 % 1,075 1,158 (7.2) %
-------- ------- ------- ------- ------- ------
Operating
earnings(2) $ 76,861 $ 76,168 0.9 % $153,621 $158,625 (3.2) %
======== ======= ======= ======= ======= ======
Return on Equity:
Net earnings
(trailing four
quarters) 24.5 % 19.7 %
======= =======
Comprehensive
earnings
(trailing four
quarters) 25.1 % 23.5 %
======= =======
Per Share Data:
Diluted:
------------------
Weighted average
shares outstanding
(in 000's) 92,160 92,518 92,257 92,512
Net earnings per
share $ 1.82 $ 1.34 35.8 % $ 2.42 $ 2.03 19.2 %
Less:
Net realized
gains (0.10) (0.16) (37.5) % (0.21) (0.32) (34.4) %
Income tax on
realized gains 0.02 0.03 (33.3) % 0.05 0.06 (16.7) %
Net unrealized
gains on equity
securities (1.12) (0.47) 138.3 % (0.69) (0.01) NM
Income tax on
unrealized
gains on equity
securities 0.24 0.10 140.0 % 0.14 -- NM
Equity in
earnings of
unconsolidated
investees (0.03) (0.03) -- % (0.06) (0.06) -- %
Income tax on
equity in
earnings of
unconsolidated
investees -- 0.01 (100.0) % 0.02 0.01 100.0 %
-------- ------- ------- ------- ------- ------
Operating earnings
per share(1)(2) $ 0.83 $ 0.82 1.2 % $ 1.67 $ 1.71 (2.3) %
======== ======= ======= ======= ======= ======
Comprehensive
earnings per
share $ 1.80 $ 1.55 16.1 % $ 2.12 $ 2.55 (16.9) %
======== ======= ======= ======= ======= ======
Cash dividends per
share - ordinary $ 0.18 $ 0.16 12.5 % $ 0.34 $ 0.31 9.7 %
Cash dividends per
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