RLI Reports Fourth Quarter and Year-End 2020 Results

PEORIA, Ill.–(BUSINESS WIRE)–RLI Corp. (NYSE: RLI) – RLI Corp. reported fourth quarter 2020 net earnings of $83.8 million ($1.84 per share), compared to $53.4 million ($1.18 per share) for the fourth quarter of 2019. Operating earnings(1) for the fourth quarter of 2020 were $34.0 million ($0.75 per share), compared to $28.6 million ($0.63 per share) for the same period in 2019.

 

Fourth Quarter

 

Year to Date

Earnings Per Diluted Share

2020

 

2019

 

2020

 

2019

Net earnings

$

1.84

 

$

1.18

 

$

3.46

 

$

4.23

Operating earnings (1)

$

0.75

 

$

0.63

 

$

2.59

 

$

2.57

(1) See discussion below: Non-GAAP and Performance Measures.

Highlights for the quarter included:

  • Underwriting income(1) of $27.0 million on a combined ratio(1) of 88.0.
  • 10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} increase in gross premiums written.
  • Net favorable development in prior years’ loss reserves, resulting in a $24.7 million net increase in underwriting income.
  • Special dividend of $1.00 per share, representing $45.1 million returned to shareholders.

Highlights for the year included:

  • Underwriting income(1) of $69.6 million on a combined ratio(1) of 92.0.
  • 7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} increase in gross premiums written.
  • Net favorable development in prior years’ loss reserves, resulting in a $84.0 million net increase in underwriting income.
  • 25th consecutive year of underwriting profit(1).
  • Book value per share of $25.16, an increase of 22{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} (inclusive of dividends) from year-end 2019.

“Despite the many uncertainties RLI faced in 2020, we achieved strong results, provided superior service to our customers and delivered value to our shareholders,” said RLI Corp. Chairman and CEO Jonathan E. Michael. “We posted a 92 combined ratio for the year, inclusive of 5 points of hurricane activity, which marked our 25th consecutive year of underwriting profit. During the fourth quarter, we achieved profitability in all product segments including property, which experienced headwinds from an active catastrophe season. Our strong underwriting performance, combined with investment income, resulted in $2.59 per share of operating income.”

“We believe the successful execution of our strategy is validated by growth in book value, which was up 22{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in 2020. This achievement allowed us to share the rewards of our success with shareholders through a $1 per share special dividend. We will continue to position RLI for long-term growth through sustained financial strength, underwriting discipline and customer focus. I want to thank our talented associates for their outstanding efforts over the past year. Their willingness to adapt and readily take on the challenges of 2020 speaks to the resilience and strength of our team and culture.”

Underwriting Income

RLI achieved $27.0 million of underwriting income in the fourth quarter of 2020 on a 88.0 combined ratio, compared to $16.5 million on a 92.4 combined ratio in 2019.

For the year, RLI achieved $69.6 million of underwriting income on a 92.0 combined ratio, compared to $67.6 million on a 91.9 combined ratio in 2019. Results for both years include net favorable development in prior years’ loss reserves, which totaled $84.0 million and $62.8 million for 2020 and 2019, respectively. The favorable development in 2020 was partially offset by a $45.1 million net reduction to underwriting income from hurricane losses.

The following table highlights underwriting income and combined ratios by segment for the year.

Underwriting Income (Loss)(1)

 

 

Combined Ratio(1)

 

(in millions)

 

2020

 

 

2019

 

 

 

 

2020

 

 

2019

 

Casualty

 

$

44.4

 

 

$

20.6

 

 

Casualty

 

 

92.2

 

 

 

96.3

 

Property

 

 

(3.2

)

 

 

18.2

 

 

Property

 

 

101.7

 

 

 

88.9

 

Surety

 

 

28.4

 

 

 

28.8

 

 

Surety

 

 

74.8

 

 

 

75.3

 

Total

 

$

69.6

 

 

$

67.6

 

 

Total

 

 

92.0

 

 

 

91.9

 

 

(1) See discussion below: Non-GAAP and Performance Measures.

Other Income

Net investment income for the quarter decreased 6.3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} to $16.7 million, compared to the same period in 2019. For the year ended December 31, 2020, net investment income was $67.9 million, compared to $68.9 million for the same period in 2019. The investment portfolio’s total return was 3.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} for the quarter and 7.5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} for the year.

RLI’s comprehensive earnings were $89.9 million for the quarter ($1.97 per share), compared to $47.9 million ($1.06 per share) for the same quarter in 2019. Full-year comprehensive earnings were $213.3 million ($4.70 per share), compared to $258.7 million ($5.72 per share) in 2019. In addition to net earnings, comprehensive earnings (loss) included after-tax unrealized gains/(losses) from the fixed income portfolio.

Equity in earnings of Maui Jim, Inc., a producer of premium sunglasses, was $(1.1) million for the quarter, influenced by seasonal sales results. Equity in earnings of Prime Holdings Insurance Services, Inc., a specialty insurance company, was $3.1 million. Comparatively, for the fourth quarter of 2019, equity in earnings of unconsolidated investees from Maui Jim and Prime was $0.7 million and $2.5 million, respectively. For the year ended December 31, 2020, equity in earnings of unconsolidated investees was $10.4 million from Maui Jim and $10.8 million from Prime, compared to $13.6 million and $7.4 million, respectively, for the prior year. During the quarter, RLI received a $4.7 million dividend from Prime, which resulted in a tax benefit on dividends received from affiliates of $0.5 million ($0.01 per share).

Special and Regular Dividends

On December 18, 2020, the company paid a special cash dividend of $1.00 per share and a regular quarterly dividend of $0.24 per share for a combined total of $56.0 million. RLI has paid dividends for 178 consecutive quarters and increased regular dividends in each of the last 45 years. Over the last 10 years, the company has returned nearly $1.14 billion to shareholders and the regular quarterly dividend has grown an average of 5.2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per year.

Non-GAAP and Performance Measures

Management has included certain non-generally accepted accounting principles (non-GAAP) financial measures in presenting the company’s results. Management believes that these non-GAAP measures further explain the company’s results of operations and allow for a more complete understanding of the underlying trends in the company’s business. These measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles (GAAP). In addition, our definitions of these items may not be comparable to the definitions used by other companies.

Operating earnings and earnings per share (EPS) from operations consist of our GAAP net earnings adjusted by the net realized gains/(losses), net unrealized gains/(losses) on equity securities and taxes related thereto. Net earnings and net earnings per share are the GAAP financial measures that are most directly comparable to operating earnings and EPS from operations. A reconciliation of the operating earnings and EPS from operations to the comparable GAAP financial measures is included in the 2020 financial highlights below.

Underwriting income or profit represents the pretax profitability of our insurance operations and is derived by subtracting loss and settlement expenses, policy acquisition costs and insurance operating expenses from net premium earned, which are all GAAP financial measures. The combined ratio, which is derived from components of underwriting income, is a performance measure commonly used by property and casualty insurance companies and is calculated as the sum of loss and settlement expenses, policy acquisition costs and insurance operating expenses, divided by net premiums earned, which are all GAAP measures.

Other News

During the fourth quarter, the company’s A+ (Superior) financial strength rating was affirmed by AM Best Company for the company’s insurance subsidiaries – RLI Insurance Company, Mt. Hawley Insurance Company and Contractors Bonding and Insurance Company.

At 10 a.m. central standard time (CST) tomorrow, January 28, 2021, RLI management will hold a conference call to discuss quarterly results with insurance industry analysts. Interested parties may listen to the discussion through the Internet at https://edge.media-server.com/mmc/p/2scgys4w.

Except for historical information, this news release may include forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) including, without limitation, statements reflecting our current expectations about the future performance of our company or our business segments or about future market conditions. These statements are subject to certain risk factors that could cause actual results to differ materially. Various risk factors that could affect future results are listed in the company’s filings with the Securities and Exchange Commission, including the Form 10-K Annual Report for the year ended December 31, 2019.

About RLI

RLI Corp. (NYSE: RLI) is a specialty insurer serving niche property, casualty and surety markets. The company provides deep underwriting expertise and superior service to commercial and personal lines customers nationwide. RLI’s products are offered through its insurance subsidiaries – RLI Insurance Company, Mt. Hawley Insurance Company and Contractors Bonding and Insurance Company. All of RLI’s insurance subsidiaries are rated A+ (Superior) by AM Best Company. RLI has paid and increased regular dividends for 45 consecutive years and delivered underwriting profits for 25 consecutive years. To learn more about RLI, visit www.rlicorp.com.

Supplemental disclosure regarding the earnings impact of specific items:

 

 

Operating Earnings Per Share

 

 

2020

 

2019

 

2020

 

2019

 

4th Qtr

 

4th Qtr

 

12 Mos.

 

12 Mos.

Operating Earnings Per Share(1)

$

0.75

 

 

$

0.63

 

 

$

2.59

 

 

$

2.57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specific items included in operating earnings per share:(2) (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net favorable development in casualty prior years’ reserves

$

0.40

 

 

$

0.30

 

 

$

1.15

 

 

$

0.98

 

Net favorable (unfavorable) development in property prior years’ reserves

$

 

 

$

(0.03

)

 

$

0.05

 

 

$

(0.01

)

Net favorable development in surety prior years’ reserves

$

0.02

 

 

$

 

 

$

0.19

 

 

$

0.11

 

Net incurred losses related to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

▪2020 Hurricanes

$

(0.21

)

 

$

 

 

$

(0.78

)

 

$

 

▪2020 storms and civil unrest

$

 

 

$

 

 

$

(0.10

)

 

$

 

▪COVID-19

$

(0.05

)

 

$

 

 

$

(0.27

)

 

$

 

▪2019 and prior catastrophe events

$

 

 

$

(0.01

)

 

$

0.05

 

 

$

(0.12

)

Gain from tax benefit applicable to equity method dividends(4)

$

0.01

 

 

$

0.04

 

 

$

0.01

 

 

$

0.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

See discussion above: Non-GAAP and Performance Measures.

(2)

Includes incentive and profit sharing-related impacts which affected policy acquisition, insurance operating and general corporate expenses.

(3)

Reserve development reflects changes from previously estimated losses.

(4)

As required under the accounting standard for income taxes, the gain reflects the tax benefit of applying the lower tax rate applicable to dividends received from an affiliate (10.8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in 2020 and 7.4{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in 2019) as compared to the corporate capital gains tax rate (21{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}) on which tax estimates were based.

RLI CORP

2020 FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

SUMMARIZED INCOME STATEMENT DATA:

 

 

2020

 

 

 

2019

 

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Change

 

 

2020

 

 

 

 

2019

 

 

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Change

Net premiums earned

 

$

224,801

 

 

$

215,626

 

 

 

4.3

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

865,747

 

 

 

$

839,111

 

 

 

 

3.2

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Net investment income

 

 

16,655

 

 

 

17,775

 

 

 

(6.3

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

67,893

 

 

 

 

68,870

 

 

 

 

(1.4

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Net realized gains

 

 

3,330

 

 

 

477

 

 

NM

 

 

 

 

17,885

 

 

 

 

17,520

 

 

 

 

2.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Net unrealized gains on equity securities

 

 

59,665

 

 

 

30,876

 

 

 

93.2

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

32,101

 

 

 

 

78,090

 

 

 

 

(58.9

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Consolidated revenue

 

$

304,451

 

 

$

264,754

 

 

 

15.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

983,626

 

 

 

$

1,003,591

 

 

 

 

(2.0

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Loss and settlement expenses

 

 

103,065

 

 

 

106,210

 

 

 

(3.0

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

442,884

 

 

 

 

413,416

 

 

 

 

7.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Policy acquisition costs

 

 

73,002

 

 

 

74,111

 

 

 

(1.5

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

286,438

 

 

 

 

288,697

 

 

 

 

(0.8

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Insurance operating expenses

 

 

21,691

 

 

 

18,833

 

 

 

15.2

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

66,828

 

 

 

 

69,430

 

 

 

 

(3.7

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Interest expense on debt

 

 

1,902

 

 

 

2,005

 

 

 

(5.1

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

7,603

 

 

 

 

7,588

 

 

 

 

0.2

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

General corporate expenses

 

 

3,848

 

 

 

3,544

 

 

 

8.6

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

10,265

 

 

 

 

12,686

 

 

 

 

(19.1

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Total expenses

 

$

203,508

 

 

$

204,703

 

 

 

(0.6

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

814,018

 

 

 

$

791,817

 

 

 

 

2.8

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Equity in earnings of unconsolidated investees

 

 

1,874

 

 

 

3,167

 

 

 

(40.8

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

20,233

 

 

 

 

20,960

 

 

 

 

(3.5

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Earnings before income taxes

 

$

102,817

 

 

$

63,218

 

 

 

62.6

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

189,841

 

 

 

$

232,734

 

 

 

 

(18.4

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Income tax expense

 

 

19,012

 

 

 

9,840

 

 

 

93.2

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

32,750

 

 

 

 

41,092

 

 

 

 

(20.3

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Net earnings

 

$

83,805

 

 

$

53,378

 

 

 

57.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

157,091

 

 

 

$

191,642

 

 

 

 

(18.0

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive earnings (loss), net of tax

 

 

6,129

 

 

 

(5,461

)

 

NM

 

 

 

 

56,219

 

 

 

 

67,045

 

 

 

 

(16.1

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Comprehensive earnings

 

$

89,934

 

 

$

47,917

 

 

 

87.7

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

213,310

 

 

 

$

258,687

 

 

 

 

(17.5

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

83,805

 

 

$

53,378

 

 

 

57.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

157,091

 

 

 

$

191,642

 

 

 

 

(18.0

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized gains

 

 

(3,330

)

 

 

(477

)

 

NM

 

 

 

 

(17,885

)

 

 

 

(17,520

)

 

 

 

2.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Income tax on realized gains

 

 

699

 

 

 

100

 

 

NM

 

 

 

 

3,756

 

 

 

 

3,679

 

 

 

 

2.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Unrealized gains on equity securities

 

 

(59,665

)

 

 

(30,876

)

 

 

93.2

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

(32,101

)

 

 

 

(78,090

)

 

 

 

(58.9

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Income tax on unrealized gains on equity securities

 

 

12,531

 

 

 

6,484

 

 

 

93.3

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

6,741

 

 

 

 

16,399

 

 

 

 

(58.9

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Operating earnings

 

$

34,040

 

 

$

28,609

 

 

 

19.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

117,602

 

 

 

$

116,110

 

 

 

 

1.3

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

20.6

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

Comprehensive earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20.5

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

27.8

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding (in 000’s)

 

 

45,565

 

 

 

45,409

 

 

 

 

 

 

 

 

45,376

 

 

 

 

45,257

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings per share

 

$

1.84

 

 

$

1.18

 

 

 

55.9

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

3.46

 

 

 

$

4.23

 

 

 

 

(18.2

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized gains

 

 

(0.07

)

 

 

(0.01

)

 

NM

 

 

 

 

(0.39

)

 

 

 

(0.38

)

 

 

 

2.6

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Income tax on realized gains

 

 

0.02

 

 

 

 

 

NM

 

 

 

 

0.08

 

 

 

 

0.08

 

 

 

 

0.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Unrealized gains on equity securities

 

 

(1.32

)

 

 

(0.68

)

 

 

94.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

(0.71

)

 

 

 

(1.72

)

 

 

 

(58.7

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Income tax on unrealized gains on equity securities

 

 

0.28

 

 

 

0.14

 

 

 

100.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

0.15

 

 

 

 

0.36

 

 

 

 

(58.3

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

EPS from operations(1)

 

$

0.75

 

 

$

0.63

 

 

 

19.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

2.59

 

 

 

$

2.57

 

 

 

 

0.8

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive earnings per share

 

$

1.97

 

 

$

1.06

 

 

 

85.8

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

4.70

 

 

 

$

5.72

 

 

 

 

(17.8

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends per share – ordinary

 

$

0.24

 

 

$

0.23

 

 

 

4.3

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

0.95

 

 

 

$

0.91

 

 

 

 

4.4

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Cash dividends per share – special

 

$

1.00

 

 

$

1.00

 

 

 

0.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

1.00

 

 

 

$

1.00

 

 

 

 

0.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Flow provided by Operations

 

$

100,015

 

 

$

90,155

 

 

 

10.9

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

263,259

 

 

 

$

276,917

 

 

 

 

(4.9

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

(1) See discussion above: Non-GAAP and Performance Measures.

NM = Not Meaningful

RLI CORP

2020 FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

 

 

 

2020

 

 

 

2019

 

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Change

SUMMARIZED BALANCE SHEET DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed income, at fair value

 

$

2,196,626

 

 

$

1,983,086

 

 

 

10.8

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

(amortized cost – $2,061,467 at 12/31/20)

 

 

 

 

 

 

 

 

 

 

 

 

 

(amortized cost – $1,915,278 at 12/31/19)

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities, at fair value

 

 

524,006

 

 

 

460,630

 

 

 

13.8

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

(cost – $293,190 at 12/31/20)

 

 

 

 

 

 

 

 

 

 

 

 

 

(cost – $262,131 at 12/31/19)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other invested assets

 

 

54,232

 

 

 

70,441

 

 

 

(23.0

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Cash and cash equivalents

 

 

62,217

 

 

 

46,203

 

 

 

34.7

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Total investments and cash

 

$

2,837,081

 

 

$

2,560,360

 

 

 

10.8

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premiums and reinsurance balances receivable

 

 

174,628

 

 

 

160,369

 

 

 

8.9

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Ceded unearned premiums

 

 

113,488

 

 

 

93,656

 

 

 

21.2

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Reinsurance balances recoverable on unpaid losses

 

 

443,729

 

 

 

384,517

 

 

 

15.4

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Deferred policy acquisition costs

 

 

88,425

 

 

 

85,044

 

 

 

4.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Property and equipment

 

 

51,406

 

 

 

53,121

 

 

 

(3.2

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Investment in unconsolidated investees

 

 

128,382

 

 

 

103,836

 

 

 

23.6

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Goodwill and intangibles

 

 

53,719

 

 

 

54,127

 

 

 

(0.8

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Other assets

 

 

47,627

 

 

 

50,691

 

 

 

(6.0

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Total assets

 

$

3,938,485

 

 

$

3,545,721

 

 

 

11.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unpaid losses and settlement expenses

 

$

1,750,049

 

 

$

1,574,352

 

 

 

11.2

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Unearned premiums

 

 

586,386

 

 

 

540,213

 

 

 

8.5

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Reinsurance balances payable

 

 

42,265

 

 

 

25,691

 

 

 

64.5

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Funds held

 

 

81,747

 

 

 

83,358

 

 

 

(1.9

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Income taxes – deferred

 

 

80,235

 

 

 

56,727

 

 

 

41.4

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Bonds payable, long-term debt

 

 

149,489

 

 

 

149,302

 

 

 

0.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Accrued expenses

 

 

75,925

 

 

 

66,626

 

 

 

14.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Other liabilities

 

 

36,411

 

 

 

54,064

 

 

 

(32.7

)

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Total liabilities

 

$

2,802,507

 

 

$

2,550,333

 

 

 

9.9

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Shareholders’ equity

 

 

1,135,978

 

 

 

995,388

 

 

 

14.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Total liabilities & shareholders’ equity

 

$

3,938,485

 

 

$

3,545,721

 

 

 

11.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding (in 000’s)

 

 

45,143

 

 

 

44,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

25.16

 

 

$

22.18

 

 

 

13.4

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Closing stock price per share

 

$

104.15

 

 

$

90.02

 

 

 

15.7

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statutory surplus

 

$

1,121,592

 

 

$

1,029,671

 

 

 

8.9

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

RLI CORP

2020 FINANCIAL HIGHLIGHTS

UNDERWRITING SEGMENT DATA

(Unaudited)

(Dollars in thousands, except per share amounts)

 

Three Months Ended December 31,

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

GAAP

 

 

 

 

 

GAAP

 

 

 

 

 

GAAP

 

 

 

Casualty

 

 

Ratios

 

Property

 

 

Ratios

 

Surety

 

 

Ratios

 

Total

 

 

Ratios

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

 

 

$

196,118

 

 

 

 

 

 

 

$

74,227

 

 

 

 

 

 

 

$

30,239

 

 

 

 

 

 

 

$

300,584

 

 

 

 

 

 

Net premiums written

 

 

 

146,623

 

 

 

 

 

 

 

 

54,718

 

 

 

 

 

 

 

 

28,506

 

 

 

 

 

 

 

 

229,847

 

 

 

 

 

 

Net premiums earned

 

 

 

147,884

 

 

 

 

 

 

 

 

48,605

 

 

 

 

 

 

 

 

28,312

 

 

 

 

 

 

 

 

224,801

 

 

 

 

 

 

Net loss & settlement expenses

 

 

 

72,107

 

 

 

48.8

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

26,961

 

 

 

55.5

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

3,997

 

 

 

14.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

103,065

 

 

 

45.8

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Net operating expenses

 

 

 

53,753

 

 

 

36.3

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

20,950

 

 

 

43.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

19,990

 

 

 

70.6

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

94,693

 

 

 

42.2

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Underwriting income (loss)(1)

 

 

$

22,024

 

 

 

85.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

694

 

 

 

98.6

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

4,325

 

 

 

84.7

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

27,043

 

 

 

88.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

 

 

$

179,542

 

 

 

 

 

 

 

$

64,638

 

 

 

 

 

 

 

$

29,650

 

 

 

 

 

 

 

$

273,830

 

 

 

 

 

 

Net premiums written

 

 

 

141,963

 

 

 

 

 

 

 

 

47,956

 

 

 

 

 

 

 

 

27,945

 

 

 

 

 

 

 

 

217,864

 

 

 

 

 

 

Net premiums earned

 

 

 

142,791

 

 

 

 

 

 

 

 

43,828

 

 

 

 

 

 

 

 

29,007

 

 

 

 

 

 

 

 

215,626

 

 

 

 

 

 

Net loss & settlement expenses

 

 

 

82,994

 

 

 

58.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

20,680

 

 

 

47.2

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

2,536

 

 

 

8.7

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

106,210

 

 

 

49.3

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Net operating expenses

 

 

 

53,848

 

 

 

37.7

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

19,017

 

 

 

43.4

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

20,079

 

 

 

69.3

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

92,944

 

 

 

43.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Underwriting income (loss)(1)

 

 

$

5,949

 

 

 

95.8

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

4,131

 

 

 

90.6

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

6,392

 

 

 

78.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

16,472

 

 

 

92.4

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

GAAP

 

 

 

 

 

GAAP

 

 

 

 

 

GAAP

 

 

 

Casualty

 

 

Ratios

 

Property

 

 

Ratios

 

Surety

 

 

Ratios

 

Total

 

 

Ratios

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

 

 

$

749,409

 

 

 

 

 

 

 

$

268,769

 

 

 

 

 

 

 

$

118,254

 

 

 

 

 

 

 

$

1,136,432

 

 

 

 

 

 

Net premiums written

 

 

 

583,244

 

 

 

 

 

 

 

 

196,603

 

 

 

 

 

 

 

 

112,241

 

 

 

 

 

 

 

 

892,088

 

 

 

 

 

 

Net premiums earned

 

 

 

569,521

 

 

 

 

 

 

 

 

183,720

 

 

 

 

 

 

 

 

112,506

 

 

 

 

 

 

 

 

865,747

 

 

 

 

 

 

Net loss & settlement expenses

 

 

 

322,099

 

 

 

56.6

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

111,356

 

 

 

60.6

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

9,429

 

 

 

8.4

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

442,884

 

 

 

51.2

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Net operating expenses

 

 

 

202,995

 

 

 

35.6

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

75,546

 

 

 

41.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

74,725

 

 

 

66.4

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

353,266

 

 

 

40.8

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Underwriting income (loss)(1)

 

 

$

44,427

 

 

 

92.2

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

(3,182

)

 

 

101.7

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

28,352

 

 

 

74.8

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

69,597

 

 

 

92.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

 

 

$

704,192

 

 

 

 

 

 

 

$

241,425

 

 

 

 

 

 

 

$

119,385

 

 

 

 

 

 

 

$

1,065,002

 

 

 

 

 

 

Net premiums written

 

 

 

564,979

 

 

 

 

 

 

 

 

181,974

 

 

 

 

 

 

 

 

113,384

 

 

 

 

 

 

 

 

860,337

 

 

 

 

 

 

Net premiums earned

 

 

 

558,458

 

 

 

 

 

 

 

 

164,022

 

 

 

 

 

 

 

 

116,631

 

 

 

 

 

 

 

 

839,111

 

 

 

 

 

 

Net loss & settlement expenses

 

 

 

330,156

 

 

 

59.1

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

73,614

 

 

 

44.9

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

9,646

 

 

 

8.3

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

413,416

 

 

 

49.3

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Net operating expenses

 

 

 

207,701

 

 

 

37.2

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

72,265

 

 

 

44.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

78,161

 

 

 

67.0

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

358,127

 

 

 

42.6

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

Underwriting income (loss)(1)

 

 

$

20,601

 

 

 

96.3

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

18,143

 

 

 

88.9

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

28,824

 

 

 

75.3

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

$

67,568

 

 

 

91.9

 

{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

(1) See discussion above: Non-GAAP and Performance Measures.

Category: Earnings Release