RLI's operating earnings edge up to 86 cents as reserve releases support an 86 combined ratio

RLI squeezed out a small gain in core profit in the third quarter. The specialty insurer said Monday operating earnings rose to $79.3 million, or $0.86 a share, from $75.8 million, or $0.82, a year earlier.

Net earnings dropped to $81.0 million, or $0.88 a share, from $124.6 million, or $1.35, according to its earnings release filed with an 8-K. Operating earnings exclude realized gains and losses and unrealized changes in equity investments.

Underwriting

Underwriting income was $58.8 million on a combined ratio of 86.2, compared with $60.5 million on an 85.1 combined ratio a year ago. Favorable development on prior years' loss reserves added a net $20.1 million to underwriting income, up from $13.7 million.

Property was again the biggest contributor, with $50.5 million of underwriting income on a 60.1 combined ratio. Surety improved to a 79.8 combined ratio, while casualty ran at 99.6 and earned $1.0 million.

"We delivered an 86 combined ratio, with strong underwriting performance in our property and surety segments," President and CEO Craig Kliethermes said. Gross premiums written increased 2%, led by casualty.

Investments and capital

Net investment income rose 13% to $46.7 million. But the portfolio's total return was negative 2.0% for the quarter, and RLI posted a comprehensive loss of $36.8 million, or $0.40 a share, which it attributed in part to unrealized losses on fixed income holdings as interest rates rose.

RLI paid a quarterly dividend of $0.18 a share and repurchased 103,573 shares for $6.3 million, leaving $231.7 million under its buyback program.

By the numbers

• Operating EPS: $0.86, vs. $0.82
• Net EPS: $0.88, vs. $1.35
• Combined ratio: 86.2
• Net investment income: $46.7 million, up 13%
• Comprehensive loss: $36.8 million
• Buyback capacity remaining: $231.7 million

Sources

1. RLI Corp., Form 8-K with Exhibit 99.1 earnings release for the third quarter of 2026, filed Oct. 19, 2026, accession 0001104659-26-116895

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