A month has gone by since the last earnings report for RLI Corp. (RLI Quick QuoteRLI - Free Report) . Shares have added about 1% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is RLI Corp. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

RLI’s Q1 Earnings Top Estimates on Strong Segmental Results

RLI Corp. 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 reflect 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 segments (up 12.1%). 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.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

At this time, RLI Corp. has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

RLI Corp. has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

RLI Corp. belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Travelers (TRV Quick QuoteTRV - Free Report) , has gained 0.9% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.

Travelers reported revenues of $11.19 billion in the last reported quarter, representing a year-over-year change of +15.4%. EPS of $4.69 for the same period compares with $4.11 a year ago.

Travelers is expected to post earnings of $3.24 per share for the current quarter, representing a year-over-year change of +5300%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.8%.

Travelers has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.