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RLI's Q4 Earnings and Revenues Surpass Estimates, Rise Y/Y
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RLI Corp. (RLI - Free Report) reported fourth-quarter 2020 operating earnings of 75 cents per share, beating the Zacks Consensus Estimate by 33.9%. The bottom line improved 19% from the prior-year quarter.
The company’s Casualty, Property and Surety segments delivered solid performances in the quarter. Nonetheless, an active hurricane season weighed on the upside.
The company’s results benefited from higher premiums and lower expenses.
Operating revenues for the reported quarter were $241.5 million, up 3.5% year over year driven by 4.3% higher net premiums earned. The top line beat the Zacks Consensus Estimate of $239 million.
Gross premiums written increased 10% year over year to $300.6 million. This uptick can be attributed to solid performance of Casualty (up 9.2%), Surety (up about 2%) and Property segments (up 14.8%).
However, net investment income declined 6.3% year over year to $16.7 million.
Total expenses decreased 0.6% year over year to $203.5 million, primarily due to lower loss and settlement expenses, policy acquisition costs and interest expense on debt.
The company reported underwriting income of $27 million, which increased 6.1% from the year-ago period primarily due to strong performance of the Property, Casualty and Surety segments.
Combined ratio improved 440 basis points (bps) year over year to 88.
Full-Year Highlights
Adjusted income of $2.59 per share beat the Zacks Consensus Estimate of $2.45. The bottom line increased 0.4% year over year.
Total revenues increased 2.8% from the year-ago quarter to about $933.6 million and beat the Zacks Consensus Estimate of $932.5 million.
The last year marked the 25th consecutive year of underwriting profit. Combined ratio however deteriorated 10 bps to 92.
Financial Update
The company exited 2020 with total investments and cash of $2.8 billion, up 10.8% from 2019 end.
Book value was $2516 per share as of Dec 31, 2020, up 22% from the figure as of Dec 31, 2019.
Long-term debt was $149.5 million, which inched up 0.1% from 2019 end.
Statutory surplus increased 1.7% year over year to $1.12 billion as of Dec 31.
Return on equity was 20.5%, reflecting a contraction of 730 bps year over year.
Net cash flow provided by operations was $263.3 million in 2020, down 4.9% from 2019.
Dividend Update
RLI paid out a special dividend of $1.00 per share or $45.1 million and quarterly dividend of 24 cents or $10.9 million to shareholders
RLI has paid out 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 about $1.14 billion to shareholders and the regular quarterly dividend has grown 5.2% per year on average.
Of the insurance industry players that have reported fourth-quarter results so far, The Travelers Companies (TRV - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Brown & Brown (BRO - Free Report) beat the respective Zacks Consensus Estimate for earnings.
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RLI's Q4 Earnings and Revenues Surpass Estimates, Rise Y/Y
RLI Corp. (RLI - Free Report) reported fourth-quarter 2020 operating earnings of 75 cents per share, beating the Zacks Consensus Estimate by 33.9%. The bottom line improved 19% from the prior-year quarter.
The company’s Casualty, Property and Surety segments delivered solid performances in the quarter. Nonetheless, an active hurricane season weighed on the upside.
The company’s results benefited from higher premiums and lower expenses.
RLI Corp. Price, Consensus and EPS Surprise
RLI Corp. price-consensus-eps-surprise-chart | RLI Corp. Quote
Operational Performance
Operating revenues for the reported quarter were $241.5 million, up 3.5% year over year driven by 4.3% higher net premiums earned. The top line beat the Zacks Consensus Estimate of $239 million.
Gross premiums written increased 10% year over year to $300.6 million. This uptick can be attributed to solid performance of Casualty (up 9.2%), Surety (up about 2%) and Property segments (up 14.8%).
However, net investment income declined 6.3% year over year to $16.7 million.
Total expenses decreased 0.6% year over year to $203.5 million, primarily due to lower loss and settlement expenses, policy acquisition costs and interest expense on debt.
The company reported underwriting income of $27 million, which increased 6.1% from the year-ago period primarily due to strong performance of the Property, Casualty and Surety segments.
Combined ratio improved 440 basis points (bps) year over year to 88.
Full-Year Highlights
Adjusted income of $2.59 per share beat the Zacks Consensus Estimate of $2.45. The bottom line increased 0.4% year over year.
Total revenues increased 2.8% from the year-ago quarter to about $933.6 million and beat the Zacks Consensus Estimate of $932.5 million.
The last year marked the 25th consecutive year of underwriting profit. Combined ratio however deteriorated 10 bps to 92.
Financial Update
The company exited 2020 with total investments and cash of $2.8 billion, up 10.8% from 2019 end.
Book value was $2516 per share as of Dec 31, 2020, up 22% from the figure as of Dec 31, 2019.
Long-term debt was $149.5 million, which inched up 0.1% from 2019 end.
Statutory surplus increased 1.7% year over year to $1.12 billion as of Dec 31.
Return on equity was 20.5%, reflecting a contraction of 730 bps year over year.
Net cash flow provided by operations was $263.3 million in 2020, down 4.9% from 2019.
Dividend Update
RLI paid out a special dividend of $1.00 per share or $45.1 million and quarterly dividend of 24 cents or $10.9 million to shareholders
RLI has paid out 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 about $1.14 billion to shareholders and the regular quarterly dividend has grown 5.2% per year on average.
Zacks Rank & Performance of Other Insurers
RLI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Of the insurance industry players that have reported fourth-quarter results so far, The Travelers Companies (TRV - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Brown & Brown (BRO - Free Report) beat the respective Zacks Consensus Estimate for earnings.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>