Fri, Apr 25, 4:32 PM (24 days ago)
**RLI Corp. (RLI) Q1 2025 Financial Summary** **Financial Health & Performance:** - **Revenue:** $407.7 million (Q1 2024: $444.8 million) - **Net Earnings:** $63.2 million (Q1 2024: $127.9 million) - **Comprehensive Earnings:** $93.2 million (Q1 2024: $115.2 million) - **Net Premiums Earned:** $398.3 million (Q1 2024: $360.7 million) - **Net Investment Income:** $36.7 million (Q1 2024: $32.8 million) - **Net Realized Gains:** $14.9 million (Q1 2024: $6.0 million) - **Net Unrealized Losses on Equity Securities:** -$42.3 million (Q1 2024: $45.3 million gain) **Profit Margins:** - **Underwriting Income:** $70.5 million (Q1 2024: $77.7 million) - **Combined Ratio:** 82.3% (Q1 2024: 78.5%) **Cash Flow:** - **Operating Cash Flow:** $103.5 million (Q1 2024: $70.9 million) - **Investing Cash Flow:** -$103.4 million (Q1 2024: -$53.1 million) - **Financing Cash Flow:** -$12.8 million (Q1 2024: -$9.7 million) **Earnings Changes:** - **Net Earnings Decrease:** -50.7% YoY - **Underwriting Income Decrease:** -9.4% YoY - **Combined Ratio Increase:** +3.8 points YoY **Quarterly Performance Discussion:** - **Revenue Decline:** Due to unrealized losses on equity securities. - **Underwriting Income:** Affected by lower levels of favorable development on prior years' loss reserves and a shift in business mix. - **Investment Income:** Increased due to higher reinvestment rates and an increased average asset base. - **Cash Flow:** Operating cash flow improved, while investing and financing cash flows were negative. **Trends & Uncertainties:** - **Market Performance:** Adverse equity market returns impacted book value growth. - **Interest Rates:** Lower interest rates increased the fair value of fixed income securities. - **Premium Growth:** Driven by the casualty segment, with property and surety segments showing mixed results. **Future Operations Impact:** - **Investment Strategy:** Focus on preserving capital, generating sufficient income, and growing book value. - **Underwriting Focus:** Continued emphasis on underwriting profitability and selective premium growth. - **Dividends:** Increased quarterly dividend to $0.15 per share, maintaining a 50-year streak of dividend increases. **Segment Performance (Q1 2025 vs. Q1 2024):** - **Casualty:** Underwriting income decreased to $2.1 million (Q1 2024: $13.7 million), combined ratio increased to 99.1% (Q1 2024: 93.1%). - **Property:** Underwriting income slightly decreased to $56.9 million (Q1 2024: $57.7 million), combined ratio increased to 57.1% (Q1 2024: 55.4%). - **Surety:** Underwriting income increased to $11.6 million (Q1 2024: $6.3 million), combined ratio decreased to 68.5% (Q1 2024: 80.9%). **Liquidity & Capital Resources:** - **Debt:** $100 million outstanding. - **Cash & Investments:** $429 million maturing within one year, $710 million between one to five years. - **Dividends:** Paid $0.15 per share, increased from the prior quarter. **Investment Portfolio (Q1 2025):** - **Fixed Income:** $3.3 billion (77.9% of total), average duration of 4.9 years. - **Equity Securities:** $725.9 million (17.3% of total). - **Short-Term Investments:** $116.6 million (2.8% of total). - **Other Invested Assets:** $60.4 million (1.4% of total). - **Cash:** $27.1 million (0.6% of total).