RLI's Q2 Earnings Beat Estimates on Premium Growth, Investment Income

Operational Performance

Operating revenues for the reported quarter were $463 million, up 4.9% year over year, driven by higher net premiums earned and net investment income. The top line beat the Zacks Consensus Estimate by 1.6%.

Gross premiums written (GPW) increased 3.1% year over year to $579.7 million, driven by strong growth in the casualty segment. Our estimate was $592.9 million.

Net investment income increased 16.8% year over year to $46 million. The Zacks Consensus Estimate was $42.7 million, while our estimate for the metric was pegged at $40.7 million. The investment portfolio’s total return was 3.4% in the second quarter.

Total expenses increased 6.4% year over year to $367.9 million, primarily due to higher policy acquisition costs, insurance operating expenses and interest expense on debt. Our estimate was $376.8 million.

Underwriting income fell 3.7% year over year to $59.9 million. Our estimate was $53.1 million. The combined ratio deteriorated 110 basis points year over year to 85.6, reflecting higher catastrophe losses. Our estimate was 87.2.

Segmental Results

Casualty lines’ GPW rose 10.6% year over year to $339 million. The figure was above our estimate of $338.1 million.

The underwriting income decreased significantly to $1.7 million from $8.3 million, down 79% year over year. The combined ratio deteriorated 280 bps year over year to 99.3%. The figure was above our estimate of 98.4%.

Property lines’ GPW fell 5.9% year over year to $199.3 million. The figure was below our estimate of $207.7 million.

The underwriting income increased to $53.5 million, up 8.1%, supported by favorable reserve development. The combined ratio improved 530 bps year over year to 56.8%. Our estimate was 65.2%.

Surety lines’ GPW declined 5.7% year over year to $41.4 million. The figure was below our estimate of $47.1 million.

The underwriting income improved 5.4% year over year to $4.7 million. The combined ratio improved 70 bps year over year to 87.2%. Our estimate was 84.8%.

RLI's Financial Update

RLI exited the second quarter with total investments and cash of $4.9 billion, up 4.5% from 2025-end level.

Book value was $19.09 per share as of June 30, 2026, up 11% from Dec. 31, 2025.

Net cash flow from operations was $145.2 million, down 16.9% year over year.

The statutory surplus increased 5.2% from 2025-end to $1.94 billion as of June 30, 2026.

Return on equity was 24.5%, expanding 480 bps from the year-ago period.

RLI’s Capital Deployment Update

On June 12, 2026, the insurer paid a regular quarterly dividend of 18 cents per share for the second quarter. RLI’s cumulative dividends totaled more than $1.3 billion over the last five years.

On May 14, 2026, the board of directors approved a $250 million share repurchase program. The company repurchased 0.2 million shares for $12 million during the second quarter. As of June 30, 2026, $238 million remained available under the authorization.

RLI’s Zacks Rank

RLI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Another Insurer

First American Financial Corporation FAF reported second-quarter 2026 operating earnings of $2.08 per share, which beat the Zacks Consensus Estimate by 15.6% and rose 35.9% year over year. Operating revenues climbed 15% to $2.1 billion, driven by growth in direct premiums, escrow fees, and Information and other revenues. The top line surpassed the consensus estimate by 4.4%.

Direct premiums and escrow fees reached $794.1 million, marking a 14.8% increase from the prior-year level. Investment income totaled $183.7 million in the second quarter, up 14.7% year over year. The figure exceeded both our estimate and the Zacks Consensus Estimate of $182.3 million.

The Travelers Companies, Inc. TRV reported second-quarter 2026 core income of $10.04 per share, which beat the Zacks Consensus Estimate of $5.21 by 92.7%. The bottom line climbed 54% year over year. Revenues of $12.09 billion missed the Zacks Consensus Estimate of $12.27 billion by 1.5%.

Net investment income rose 14% year over year to $1.07 billion pre-tax ($883 million after tax). The combined ratio improved 670 basis points year over year to 83.6%, reflecting lower catastrophe losses, stronger reserve development and a better underlying combined ratio.

W.R. Berkley Corporation WRB reported second-quarter 2026 operating income of $1.27 per share, which beat the Zacks Consensus Estimate by 16.5%. The bottom line increased 21% year over year. Operating revenues totaled $3.8 billion, up 3.6% year over year. The top line surpassed the consensus estimate by 1.87%.

W.R. Berkley’s net premiums written were about $3.4 billion, up 2.4% year over year. The figure surpassed our estimate of $3.4 billion. The consolidated combined ratio (a measure of underwriting profitability) improved 160 basis points year over year to 90, missing the Zacks Consensus Estimate of 92.

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