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RLI's Q1 Earnings Top Estimates on Strong Segmental Results
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RLI Corp. (RLI - Free Report) reported first-quarter 2024 operating earnings of $1.89 per share, beating the Zacks Consensus Estimate as well as the year-ago number by 16%.
The quarterly results reflected continued premium growth across all product segments.
Operational Performance
Operating revenues for the reported quarter were $394 million, up 17.6% year over year, driven by 17% higher net premiums earned and 21.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.1%.
Gross premiums written increased 13% year over year to $468 million. This uptick can be attributed to the solid performance of the Casualty (up 12.6%), Property (up 13.5%) and Surety (up 12.1%) segments. Our estimate was $511 million.
Net investment income increased 21% year over year to $32.8 million. Our estimate was $38.8 million. The investment portfolio’s total return was 1.8% in the quarter.
Total expenses increased 17.7% year over year to $289.6 million, primarily due to higher loss and settlement expenses, and higher policy acquisition costs, insurance operating expenses and general corporate expenses. Our estimate was $279.4 million.
Underwriting income of $77.7 million increased 16%. Combined ratio deteriorated 60 basis points (bps) year over year to 78.5. The Zacks Consensus Estimate for the metric was pegged at 85, while our estimate was 77.7.
Financial Update
RLI exited the quarter with total investments and cash of $3.8 billion, up 2.2% from 2023 end.
Book value was $33.27 per share as of Mar 31, 2024, up 8% from the figure as of Dec 31, 2023.
Net cash flow from operations was $70.9 million, up 2.5% year over year.
The statutory surplus increased 9.9% from 2023 end to $1.7 billion as of Mar 31, 2024.
Return on equity was 24.2%, contracting 2800 bps from the year-ago period.
Dividend Update
On Mar 20, 2024, RLI paid a dividend of 27 cents. RLI’s cumulative dividends totaled more than $816 million over the last five years.
The Travelers Companies (TRV - Free Report) reported first-quarter 2024 core income of $4.69 per share, which missed the Zacks Consensus Estimate of $4.75 on higher-than-expected catastrophe loss. The bottom line increased 14.1% year over year, driven by higher underlying underwriting gain and higher net investment income, partially offset by higher catastrophe losses. Travelers’ total revenues increased 15.3% from the year-ago quarter to $11.2 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.1%.
Net written premiums increased 8% year over year to about $10.2 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.9 billion. Travelers witnessed an underwriting gain of $1.4 billion, up 57.3% year over year, driven by higher business volumes. Consolidated underlying combined ratio of 87.7 improved 290 bps year over year. The combined ratio improved 150 bps year over year to 93.9 due to an improvement in the underlying combined ratio, partially offset by higher catastrophe losses and lower net favorable prior-year reserve development. The Zacks Consensus Estimate was pegged at 94.
Progressive Corporation’s (PGR - Free Report) first-quarter 2024 earnings per share of $3.83 beat the Zacks Consensus Estimate of $3.20. The bottom line improved nearly eight times year over year. Operating revenues of $17.1 billion beat the Zacks Consensus Estimate by 2.4% and increased 20.1% year over year.
Net premiums earned grew 19% to $16 billion and beat our estimate of $14.4 billion. Combined ratio — the percentage of premiums paid out as claims and expenses — improved 1290 bps from the prior-year quarter’s level to 86.1.
Brown & Brown, Inc.’s (BRO - Free Report) first-quarter 2024 adjusted earnings of $1.14 per share beat the Zacks Consensus Estimate by 6.5%. The bottom line increased 18.7% year over year. Total revenues of $1.25 billion beat the Zacks Consensus Estimate by 3.8%. The top line improved 12.7% year over year.
Organic revenues improved 8.6% to $1.15 billion in the quarter under review. Adjusted EBITDAC was $466 million, up 17.1% year over year. EBITDAC margin increased to 37% from 35.7% in the year-ago period.
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RLI's Q1 Earnings Top Estimates on Strong Segmental Results
RLI Corp. (RLI - Free Report) reported first-quarter 2024 operating earnings of $1.89 per share, beating the Zacks Consensus Estimate as well as the year-ago number by 16%.
The quarterly results reflected continued premium growth across all product segments.
Operational Performance
Operating revenues for the reported quarter were $394 million, up 17.6% year over year, driven by 17% higher net premiums earned and 21.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.1%.
RLI Corp. Price, Consensus and EPS Surprise
RLI Corp. price-consensus-eps-surprise-chart | RLI Corp. Quote
Gross premiums written increased 13% year over year to $468 million. This uptick can be attributed to the solid performance of the Casualty (up 12.6%), Property (up 13.5%) and Surety (up 12.1%) segments. Our estimate was $511 million.
Net investment income increased 21% year over year to $32.8 million. Our estimate was $38.8 million. The investment portfolio’s total return was 1.8% in the quarter.
Total expenses increased 17.7% year over year to $289.6 million, primarily due to higher loss and settlement expenses, and higher policy acquisition costs, insurance operating expenses and general corporate expenses. Our estimate was $279.4 million.
Underwriting income of $77.7 million increased 16%. Combined ratio deteriorated 60 basis points (bps) year over year to 78.5. The Zacks Consensus Estimate for the metric was pegged at 85, while our estimate was 77.7.
Financial Update
RLI exited the quarter with total investments and cash of $3.8 billion, up 2.2% from 2023 end.
Book value was $33.27 per share as of Mar 31, 2024, up 8% from the figure as of Dec 31, 2023.
Net cash flow from operations was $70.9 million, up 2.5% year over year.
The statutory surplus increased 9.9% from 2023 end to $1.7 billion as of Mar 31, 2024.
Return on equity was 24.2%, contracting 2800 bps from the year-ago period.
Dividend Update
On Mar 20, 2024, RLI paid a dividend of 27 cents. RLI’s cumulative dividends totaled more than $816 million over the last five years.
Zacks Rank
RLI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Travelers Companies (TRV - Free Report) reported first-quarter 2024 core income of $4.69 per share, which missed the Zacks Consensus Estimate of $4.75 on higher-than-expected catastrophe loss. The bottom line increased 14.1% year over year, driven by higher underlying underwriting gain and higher net investment income, partially offset by higher catastrophe losses. Travelers’ total revenues increased 15.3% from the year-ago quarter to $11.2 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.1%.
Net written premiums increased 8% year over year to about $10.2 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.9 billion. Travelers witnessed an underwriting gain of $1.4 billion, up 57.3% year over year, driven by higher business volumes. Consolidated underlying combined ratio of 87.7 improved 290 bps year over year. The combined ratio improved 150 bps year over year to 93.9 due to an improvement in the underlying combined ratio, partially offset by higher catastrophe losses and lower net favorable prior-year reserve development. The Zacks Consensus Estimate was pegged at 94.
Progressive Corporation’s (PGR - Free Report) first-quarter 2024 earnings per share of $3.83 beat the Zacks Consensus Estimate of $3.20. The bottom line improved nearly eight times year over year. Operating revenues of $17.1 billion beat the Zacks Consensus Estimate by 2.4% and increased 20.1% year over year.
Net premiums earned grew 19% to $16 billion and beat our estimate of $14.4 billion. Combined ratio — the percentage of premiums paid out as claims and expenses — improved 1290 bps from the prior-year quarter’s level to 86.1.
Brown & Brown, Inc.’s (BRO - Free Report) first-quarter 2024 adjusted earnings of $1.14 per share beat the Zacks Consensus Estimate by 6.5%. The bottom line increased 18.7% year over year. Total revenues of $1.25 billion beat the Zacks Consensus Estimate by 3.8%. The top line improved 12.7% year over year.
Organic revenues improved 8.6% to $1.15 billion in the quarter under review. Adjusted EBITDAC was $466 million, up 17.1% year over year. EBITDAC margin increased to 37% from 35.7% in the year-ago period.