RLI Corp. announced its financial results for the third quarter of 2026 during an analyst conference call held on October 20, 2026. The company reported an overall combined ratio of 86.2 for the quarter, driven by a 2% increase in gross premiums written and a 13% rise in net investment income.
On a GAAP basis, third quarter net earnings totaled $0.88 per share, compared to $1.35 in the same period last year. This year-over-year difference was primarily attributed to changes in the value of equity securities. On an operating earnings basis, which excludes realized and unrealized gains or losses on equity securities, the company reported earnings of $0.86 per share, up from $0.82 in the prior year.
Underwriting income for the quarter was $58.8 million. The loss ratio increased by 1.3 points to 47.4, while the expense ratio improved to 38.8. The results benefited from favorable development on prior years' loss reserves, which totaled $22.9 million for the quarter, up from $15.5 million in Q3 2025. Current-year catastrophe losses were reported as approximately $4 million, primarily within the Property segment.
RLI operates across four segments, each reporting distinct performance metrics:
- Casualty: Premiums grew 4% with a combined ratio of 99.6. The segment benefited from $8.2 million in favorable reserve development.
- Property: Gross premiums decreased approximately 1%, resulting in a combined ratio of 60.1. The segment generated over $50 million in underwriting income and recorded $3.9 million in current-year catastrophe losses, with about half related to activity in Hawaii.
- Surety: Gross premiums increased approximately 1% on a combined ratio of 79.8. The segment saw $4.3 million in favorable reserve development and underwriting income of $7.3 million.
Regarding capital management, the company paid a regular quarterly dividend of $0.18 per share and repurchased just under 104,000 shares at an average price of $60.51. Adjusting for these activities, book value increased 10% from year-end 2025. Operating cash flow for the quarter was $195 million, up 9% from the prior year.
Within the portfolio, specific products showed varied performance. Marine delivered 11% premium growth, while E&S Property saw premiums decline 17% due to increased market capacity. Personal Umbrella premiums grew 22% with rates up 8%, though the pace of rate increases is expected to moderate in the near term before returning to double-digit levels in 2027.
