RLI Corp (RLI, Financial) announced its first quarter 2025 financial results, revealing a revenue of $407.67 million, which fell short of the anticipated $441.99 million. Despite this, the company experienced positive momentum in various segments.
Gross premiums written increased by 5%, particularly driven by growth in RLI's casualty segment. The company also benefited from robust margins in its property and surety segments, contributing to a favorable combined ratio of 82.3. These factors, together with positive investment returns, resulted in a 6% rise in book value since the end of 2024.
RLI Corp's performance underscores the strengths of its diverse specialty portfolio and the dedication of its team. The firm remains committed to fulfilling customer needs while delivering satisfactory results for shareholders.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for RLI Corp (RLI, Financial) is $79.75 with a high estimate of $91.00 and a low estimate of $61.00. The average target implies an upside of 2.15% from the current price of $78.07. More detailed estimate data can be found on the RLI Corp (RLI) Forecast page.
Based on the consensus recommendation from 9 brokerage firms, RLI Corp's (RLI, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for RLI Corp (RLI, Financial) in one year is $79.34, suggesting a upside of 1.63% from the current price of $78.07. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the RLI Corp (RLI) Summary page.
Key Business Developments
Release Date: January 23, 2025
- Net Written Premium Growth: 12% growth for the year.
- Underwriting Profit Growth: 22% growth for the year.
- Operating Earnings: $0.41 per share for the fourth quarter.
- Combined Ratio: 94.4 for the fourth quarter; 86.2 for the full year.
- Gross Premiums Growth: 9% in the fourth quarter; 11% year-to-date.
- Net Earnings Per Share: $0.44 for the fourth quarter; $3.74 for the year.
- Casualty Segment Premium Growth: 18% in the fourth quarter.
- Casualty Combined Ratio: 97.9 for the calendar year.
- Surety Segment Growth: Flat in the quarter; 9% year-to-date.
- Property Segment Premium Change: Down 3% in the fourth quarter.
- Investment Income Growth: 19% rise contributing to operating earnings.
- Comprehensive Earnings: $3.66 per share.
- Book Value Per Share: $16.59, an increase of 24% from year-end 2023.
- Special Dividend: $2 per share, split adjusted.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- RLI Corp (RLI, Financial) reported its 29th consecutive year of underwriting profit, showcasing strong financial consistency.
- The company achieved a 12% growth in net written premium and a 22% growth in underwriting profits for the year.
- Operating earnings for the fourth quarter were $0.41 per share, supported by positive underwriting performance and a 19% rise in investment income.
- The casualty segment saw an 18% growth in premiums during the fourth quarter, driven by a 10% rate change in auto coverages.
- RLI Corp (RLI) declared a special dividend of $2 per share, reflecting its strong capital management strategy and consistent financial performance.
Negative Points
- The combined ratio for the fourth quarter was 94.4, influenced by hurricane losses and additions to current accident year casualty reserves.
- The property segment experienced a 3% decline in gross premiums for the quarter, primarily due to increased competition and rate softening in the E&S property market.
- RLI Corp (RLI) recorded a loss of $12.5 million from its investment in Prime due to reserve strengthening on prior accident years.
- The transportation and personal umbrella segments faced challenges with increased auto severity, prompting reserve additions to the current accident year.
- The equity portfolio underperformed the general market, partly due to a value-oriented portion of the allocation.
