RLI Corp. estimates $35-40 million in Q3 catastrophe losses

PEORIA, Ill. - RLI Corp . (NYSE:RLI), a specialty insurance company, has announced estimated pretax net catastrophe losses of $35 to $40 million due to Hurricanes Beryl and Helene. These losses, net of reinsurance recoverables, are expected to be reflected in the company's financial results for the third quarter of 2024.

The President & CEO of RLI Corp., Craig Kliethermes, expressed solidarity with those affected by the hurricanes and highlighted the company's rapid response to assess the damage and assist policyholders in their recovery. He emphasized RLI Corp.'s commitment to providing superior customer support.

RLI Corp. is scheduled to release its third-quarter earnings after the market closes on Monday, October 21, 2024. The following day, Tuesday, October 22, 2024, at 10 a.m. CDT, the company will conduct a conference call to discuss the quarterly results.

The company has cautioned that the current loss estimates are subject to change due to the complexity and preliminary nature of the information available regarding the claims. RLI Corp. has also referred to various risk factors that could impact future results, as detailed in its filings with the SEC, including the Annual Report on Form 10-K for the year ended December 31, 2023.

RLI Corp. is known for its specialization in property, casualty, and surety insurance, serving both commercial and personal lines customers nationwide. The company's subsidiaries, including RLI Insurance Company, Mt. Hawley Insurance Company, and Contractors Bonding and Insurance Company, all hold an A+ Superior rating from AM Best Company. Notably, RLI has a track record of paying and increasing regular dividends for 49 consecutive years and has reported underwriting profits for 28 consecutive years.

This news is based on a press release statement from RLI Corp. and reflects the company's current expectations regarding the financial impact of the recent hurricanes on its upcoming quarterly results.

In other recent news, RLI Corp reported a robust financial performance in Q2 2024. The company disclosed an 11% growth in premiums and a combined ratio of 81.5, indicating strong underwriting profitability. RLI Corp's Property, Surety, and Casualty segments all saw significant growth, with the Property segment growing by 6% due to successful initiatives in Marine and Hawaii Homeowners, and the Surety segment experiencing a 17% increase in premiums driven by Contract Surety and renewable energy.

RBC Capital maintained its Sector Perform rating on RLI Corp with a steady price target of $155.00, highlighting the company's strong results and commendable underwriting. The company's financial outcomes included substantial reserve releases, which were higher than many of its peers.

RLI Corp is also addressing challenges in the package business, particularly elevated auto loss activity, by implementing a strategy of increased rates and risk scrutiny. Despite facing challenges in the primary business within the Casualty segment and the public D&O space in the Executive Products Group, RLI Corp anticipates continued organic growth by maintaining close relationships with producers.

Analysts noted that RLI Corp is expanding into market niches like moving and storage to counter competition in traditional trucking, and highlighted the company's disciplined underwriting and diversified portfolio as key factors in its consistent financial outcomes. These recent developments suggest that RLI Corp is well-positioned for the second half of the year with a healthy insurance product portfolio.

InvestingPro Insights

As RLI Corp. braces for the financial impact of Hurricanes Beryl and Helene, investors might find comfort in the company's solid financial footing. According to InvestingPro data, RLI boasts a market capitalization of $6.98 billion, reflecting its significant presence in the specialty insurance sector.

Despite the anticipated losses from the recent hurricanes, RLI's financial resilience is evident in its ability to maintain dividend payments for 49 consecutive years, as highlighted by an InvestingPro Tip. This consistency in dividend payments, coupled with a current dividend yield of 1.97%, underscores the company's commitment to shareholder returns even in challenging times.

Another InvestingPro Tip reveals that RLI's cash flows can sufficiently cover interest payments, which is particularly reassuring given the expected financial hit from the hurricanes. This financial stability is further reinforced by the company's strong profitability, with a reported operating income margin of 25.68% for the last twelve months as of Q2 2024.

Investors seeking a deeper understanding of RLI's financial health and future prospects can access additional insights through InvestingPro, which offers 7 more tips for this stock. These additional tips could provide valuable context for assessing RLI's ability to navigate the aftermath of the hurricanes and maintain its long-standing track record of underwriting profits.

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