RLI Corporation Achieves Strong Financial Performance in 2025
RLI Corporation (NYSE: RLI) concluded 2025 with remarkable success, highlighted by consistent underwriting gains for three decades. CEO Craig Kliethermes emphasized sustained underwriting profitability, significant growth in book value, and a lucrative fourth quarter marked by minimal storm-related losses and elevated investment returns. This performance underscores RLI's commitment to regulatory compliance and strategic risk management.
The company reported $264 million in underwriting income for 2025, maintaining a robust combined ratio of 84. The book value per share saw a 33% increase, including dividend payouts. Kliethermes highlighted a conservative approach focused on quality and profitability amid a competitive insurance industry, favoring moderate premium growth over aggressive expansion.
Quarterly and Annual Financial Insights
Chief Financial Officer Aaron Diefenthaler unveiled comprehensive earnings of $5.29 per share for the year. These results supported a special dividend of $2 per share alongside the regular quarterly dividend. Fourth-quarter operating earnings surged to $0.94 per share, compared to $0.52 in the previous year, driven by enhanced underwriting performance, minimal storm impact, and increased investment income. The quarter yielded $71 million in underwriting income at a combined ratio of 82.6, a marked improvement from the prior year’s $22 million and 94.4 ratio.
Throughout 2025, RLI's net earnings reached $4.37 per share on a GAAP basis, reflecting a 17% increase from the previous year. The company's accounting practices now exclude earnings from unconsolidated investees to better reflect core operational performance. Adjustments on minority interest impacts from Prime Holdings resulted in a $53 million reflection on RLI's balance sheet.
Strategic Underwriting and Market Environment
Diefenthaler noted a 2% decline in premiums during the fourth quarter and a 1% increase year-over-year, underscoring competitive challenges requiring strategic underwriting prudence. Increased expenses in the fourth quarter, primarily in bonus and profit-sharing, accompanied strategic business investments. Vice President Angela Klobnak reported on market conditions, particularly in the Excess and Surplus (E&S) property market, where premiums dropped by 18% due to competition and reduced rates for catastrophe-prone lines.
The reinsurance space exhibited favorable conditions, with property coverage obtaining rate reductions of 15%-20%, maintaining existing attachment points and improving terms. CEO Kliethermes reiterated RLI's commitment to measured growth, addressing market demands to adjust transportation rates in line with rising loss severity trends.
Commitment to Niche Markets and Innovation
RLI Corporation, headquartered in Peoria, Illinois, remains dedicated to niche insurance markets, executing disciplined underwriting and targeted product innovation strategies. Since its inception in 1965, transitioning from contact lens insurance to a leader in specialty property and casualty insurance, RLI focuses on adapting to industry trends, regulatory compliance requirements, and evolving market conditions, solidifying its position within the insurance industry landscape.