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RLI's Q3 Earnings and Revenues Surpass Estimates, Rise Y/Y
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RLI Corp. (RLI - Free Report) reported third-quarter 2021 operating earnings of 65 cents per share, which outpaced the Zacks Consensus Estimate by 58.5%. The bottom line increased 54.8% from the prior-year quarter.
RLI witnessed improved premiums from Casualty, Surety and Property segments along with improving combined ratio in the reported quarter.
Operating revenues in the reported quarter were $271 million, up 16.3% year over year. This upside can be attributed to higher net premiums earned and higher net investment income. The top line beat the Zacks Consensus Estimate by 1.5%.
Gross premiums written increased 18% year over year to $356.2 million. This uptick can be attributed to solid performance of the Casualty, Surety and Property segments. Net premiums written of $278.6 million increased 18.6% on a year-over-year basis, primarily due to higher premiums written in the Casualty, Surety and Property segments.
Net investment income increased 7.9% year over year to $17.8 million.
Total expenses increased 10.9% year over year to $224 million, primarily due to higher loss and settlement expenses, policy acquisition costs and interest expense on debt.
The company reported underwriting income of $13.7 million, which increased more than 11-fold from the year-ago period, primarily due to solid performance of the Casualty and Surety segments, partially offset by weak performance at the Property segment.
Combined ratio improved 490 basis points (bps) year over year to 94.6%.
Financial Update
The company exited the third quarter with total investments and cash of $3.1 billion, up 9.3% from 2020 end.
Book value was $27.63 per share as of Sep 30, 2021, up 9.8% from the figure as of Dec 31, 2020.
Long-term debt was $149.6 million, which inched up 0.1% from 2020 end.
Statutory surplus increased 8.8% to $1.2 billion as of Sep 30, 2021 from the figure as of Dec 31, 2020.
Return on equity was 19.7%, reflecting expansion of 280 bps year over year.
Net cash flow provided by operations was $115.9 million in the quarter under review, up 45.9% from the year-ago period.
Dividend Update
On Sep 20, the company paid out a cash dividend of 25 cents per share, the same amount as the prior quarter. Dividends totaled more than $500 million in the last five years.
Among other insurance industry players, which have reported third-quarter earnings so far, the bottom line of The Travelers Companies (TRV - Free Report) beat the Zacks Consensus Estimate for earnings while The Progressive Corporation (PGR - Free Report) missed the same.
Upcoming Release
W. R. Berkley Corporation (WRB - Free Report) is scheduled to release third-quarter earnings on Oct 21 after market close.
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RLI's Q3 Earnings and Revenues Surpass Estimates, Rise Y/Y
RLI Corp. (RLI - Free Report) reported third-quarter 2021 operating earnings of 65 cents per share, which outpaced the Zacks Consensus Estimate by 58.5%. The bottom line increased 54.8% from the prior-year quarter.
RLI witnessed improved premiums from Casualty, Surety and Property segments along with improving combined ratio in the reported quarter.
RLI Corp. Price, Consensus and EPS Surprise
RLI Corp. price-consensus-eps-surprise-chart | RLI Corp. Quote
Operational Performance
Operating revenues in the reported quarter were $271 million, up 16.3% year over year. This upside can be attributed to higher net premiums earned and higher net investment income. The top line beat the Zacks Consensus Estimate by 1.5%.
Gross premiums written increased 18% year over year to $356.2 million. This uptick can be attributed to solid performance of the Casualty, Surety and Property segments. Net premiums written of $278.6 million increased 18.6% on a year-over-year basis, primarily due to higher premiums written in the Casualty, Surety and Property segments.
Net investment income increased 7.9% year over year to $17.8 million.
Total expenses increased 10.9% year over year to $224 million, primarily due to higher loss and settlement expenses, policy acquisition costs and interest expense on debt.
The company reported underwriting income of $13.7 million, which increased more than 11-fold from the year-ago period, primarily due to solid performance of the Casualty and Surety segments, partially offset by weak performance at the Property segment.
Combined ratio improved 490 basis points (bps) year over year to 94.6%.
Financial Update
The company exited the third quarter with total investments and cash of $3.1 billion, up 9.3% from 2020 end.
Book value was $27.63 per share as of Sep 30, 2021, up 9.8% from the figure as of Dec 31, 2020.
Long-term debt was $149.6 million, which inched up 0.1% from 2020 end.
Statutory surplus increased 8.8% to $1.2 billion as of Sep 30, 2021 from the figure as of Dec 31, 2020.
Return on equity was 19.7%, reflecting expansion of 280 bps year over year.
Net cash flow provided by operations was $115.9 million in the quarter under review, up 45.9% from the year-ago period.
Dividend Update
On Sep 20, the company paid out a cash dividend of 25 cents per share, the same amount as the prior quarter. Dividends totaled more than $500 million in the last five years.
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.
Among other insurance industry players, which have reported third-quarter earnings so far, the bottom line of The Travelers Companies (TRV - Free Report) beat the Zacks Consensus Estimate for earnings while The Progressive Corporation (PGR - Free Report) missed the same.
Upcoming Release
W. R. Berkley Corporation (WRB - Free Report) is scheduled to release third-quarter earnings on Oct 21 after market close.