RLI Reports Record Earnings

NU Online News Service, July 14, 12:14 p.m.EST?With a combined ratio of just 90.7 for the secondquarter, Peoria, Ill.-based RLI Corp. announced recordsecond-quarter net earnings of $18.4 million.[@@]

The earnings figure, which translated to 71 cents per share, was19 percent higher than the $15.4 million earnings for last year'ssecond quarter.

In terms of underwriting results for the quarter, the property,casualty and surety segments of the company all contributed to anearly 3-point drop in the second-quarter overall combined ratio,which improved to 90.7 from 93.4 in last year's second quarter.

Among the segment, only the surety combined ratio revealed aslightly unprofitable result, with a combined ratio of 100.8 on$14.4 million of net written premiums. The surety actually improvedmore than 11 points from a 112 level for second-quarter 2003.

"Our disciplined property underwriters have been able tocontinue posting outstanding, profitable results," said RLIPresident & CEO Jonathan E. Michael in a statement. "Casualtywritings are still benefiting from a strong marketplace that offersopportunity for both growth and positive results," he said.

For RLI, the property book was clearly its most profitable, witha 66.1 combined ratio for the quarter. Casualty posted a 95.9ratio, down from 98.5 in last year's second quarter.

While net written premiums for the property book remainedessentially flat, at roughly $28 million in the quarter, casualtypremiums grew 19 percent to $96 million.

"We like the way 2004 is going; it is still an attractive marketfor specialty writers such as RLI," Mr. Michael said.

In addition to underwriting profits, investment incomecontributed to the company's record results?reaching $13.4 million.The company attributed the 23 percent gain in investment income tothe strength of cash flows and proceeds from a December 2003 debtoffering.

Through six months, RLI posted net earnings of $35.3 million, or$1.35 per share?an 18 percent gain over last year's $29.8million.