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RLI's Q2 Earnings, Revenues Top Estimates on Strong Underwriting
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RLI Corp. (RLI - Free Report) reported second-quarter 2024 operating earnings of $1.72 per share, beating the Zacks Consensus Estimate by 27.4%. The bottom line improved 48.3% year over year.
The quarterly results reflect the continued underwriting-focused business model and the strength of its diversified portfolio.
Shares gained 4.8% in the after-market trading session to reflect the outperformance.
Operating revenues for the reported quarter were $413 million, up 17.6% year over year, driven by 17.6% higher net premiums earned and 18% higher net investment income. The top line beat the Zacks Consensus Estimate of $403 million.
Gross premiums written increased 11% year over year to $563.4 million. This uptick can be attributed to the solid performance of the Casualty (up 14.1%), Property (up 6.4%) and Surety segments (up 16.5%). Our estimate was $664 million.
Net investment income increased 18% year over year to $34 million. Our estimate was $39.1 million. The investment portfolio’s total return was 0.9% in the quarter. The Zacks Consensus Estimate was pegged at $37.4 million.
Total expenses increased 9.5% year over year to $314.8 million, due to higher loss and settlement expenses, higher policy acquisition costs, insurance operating expenses and general corporate expenses. Our estimate was $331.7 million.
Underwriting income increased 70% year over year to $70 million. The combined ratio improved 570 basis points (bps) year over year to 81.5. The Zacks Consensus Estimate for the metric was pegged at 95.3, while our estimate was 89.9.
Financial Update
RLI exited the quarter with total investments and cash of $3.9 billion, up 5.7% from 2023 end.
Book value was $34.64 per share as of Jun 30, 2024, up 11.9% from the figure as of Dec 31, 2023.
Net cash flow from operations was $141.8 million, down 18.7% year over year.
The statutory surplus increased 12.4% from the end of 2023 to $1.7 billion as of Jun 30, 2024.
Return on equity was 25.3%, down 2780 bps from the year-ago period.
Dividend Update
On Jun 20, 2024, RLI paid a dividend of 29 cents, an increase of 2 cents from the last payout. RLI’s cumulative dividends totaled more than $819 million in the last five years.
The Travelers Companies (TRV - Free Report) reported second-quarter 2024 core income of $2.51 per share, which beat the Zacks Consensus Estimate by 25.5%. The bottom line skyrocketed from 6 cents earned in the year-ago quarter, driven by solid underlying results, net favorable prior year reserve development and higher net investment income, partially offset by higher catastrophe losses. Travelers’ total revenues increased 12.4% from the year-ago quarter to $11.3 billion, primarily driven by higher premiums. The top-line figure, however, missed the Zacks Consensus Estimate by 1%.
Net written premiums increased 8% year over year to a record $11.1 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.4 billion. Travelers witnessed an underwriting loss of $65 million, narrower than a loss of $640 million incurred in the year-ago quarter. The combined ratio improved from 630 bps year over year to 100.2 attributed to an improvement in the underlying combined ratio, higher net favorable prior-year reserve development and lower catastrophe losses as a percentage of net earned premiums. The Zacks Consensus Estimate was pegged at 97.
The Progressive Corporation’s (PGR - Free Report) second-quarter 2024 earnings per share of $2.65 beat the Zacks Consensus Estimate of $1.99. The bottom line improved more than five times year over year. Operating revenues of $18.3 billion beat the Zacks Consensus Estimate by 1.4% and increased 18.9% year over year.
Net premiums earned grew 19% to $17.2 billion and beat our estimate of $16.7 billion. The combined ratio improved 850 bps from the prior-year quarter’s level to 91.9.
Selective Insurance Group, Inc. (SIGI - Free Report) reported a second-quarter 2024 operating loss of $1.10 per share against the Zacks Consensus Estimate for earnings of $1.56. The company had reported an operating income of 99 cents per share in the prior year quarter. The quarterly results reflected poor underwriting performance, unfavorable prior-year casualty reserve development and escalating costs, offset by higher premiums and net investment income. Total revenues of $1.2 billion increased 15% from the year-ago quarter’s figure, primarily attributed to higher premiums earned, net investment income and net premiums written. The top line missed the Zacks Consensus Estimate by 1.3%.
On a year-over-year basis, net premium written (NPW) increased 13% to $1.22 billion, driven by new business growth and effective management of renewal portfolio and growth across all three insurance segments. The figure matched our estimate. Net underwriting loss was $137.2 million against the year-ago underwriting income of $1.2 million. Pre-tax catastrophe losses of $91 million were narrower than a loss of $100 million reported in the year-ago quarter. Non-catastrophe property loss and loss expenses of $185.5 million increased 18% year over year. The combined ratio deteriorated 1,590 bps on a year-over-year basis to 116.1, primarily due to prior year casualty reserve development.
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RLI's Q2 Earnings, Revenues Top Estimates on Strong Underwriting
RLI Corp. (RLI - Free Report) reported second-quarter 2024 operating earnings of $1.72 per share, beating the Zacks Consensus Estimate by 27.4%. The bottom line improved 48.3% year over year.
The quarterly results reflect the continued underwriting-focused business model and the strength of its diversified portfolio.
Shares gained 4.8% in the after-market trading session to reflect the outperformance.
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 $413 million, up 17.6% year over year, driven by 17.6% higher net premiums earned and 18% higher net investment income. The top line beat the Zacks Consensus Estimate of $403 million.
Gross premiums written increased 11% year over year to $563.4 million. This uptick can be attributed to the solid performance of the Casualty (up 14.1%), Property (up 6.4%) and Surety segments (up 16.5%). Our estimate was $664 million.
Net investment income increased 18% year over year to $34 million. Our estimate was $39.1 million. The investment portfolio’s total return was 0.9% in the quarter. The Zacks Consensus Estimate was pegged at $37.4 million.
Total expenses increased 9.5% year over year to $314.8 million, due to higher loss and settlement expenses, higher policy acquisition costs, insurance operating expenses and general corporate expenses. Our estimate was $331.7 million.
Underwriting income increased 70% year over year to $70 million. The combined ratio improved 570 basis points (bps) year over year to 81.5. The Zacks Consensus Estimate for the metric was pegged at 95.3, while our estimate was 89.9.
Financial Update
RLI exited the quarter with total investments and cash of $3.9 billion, up 5.7% from 2023 end.
Book value was $34.64 per share as of Jun 30, 2024, up 11.9% from the figure as of Dec 31, 2023.
Net cash flow from operations was $141.8 million, down 18.7% year over year.
The statutory surplus increased 12.4% from the end of 2023 to $1.7 billion as of Jun 30, 2024.
Return on equity was 25.3%, down 2780 bps from the year-ago period.
Dividend Update
On Jun 20, 2024, RLI paid a dividend of 29 cents, an increase of 2 cents from the last payout. RLI’s cumulative dividends totaled more than $819 million in 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 second-quarter 2024 core income of $2.51 per share, which beat the Zacks Consensus Estimate by 25.5%. The bottom line skyrocketed from 6 cents earned in the year-ago quarter, driven by solid underlying results, net favorable prior year reserve development and higher net investment income, partially offset by higher catastrophe losses. Travelers’ total revenues increased 12.4% from the year-ago quarter to $11.3 billion, primarily driven by higher premiums. The top-line figure, however, missed the Zacks Consensus Estimate by 1%.
Net written premiums increased 8% year over year to a record $11.1 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $10.4 billion. Travelers witnessed an underwriting loss of $65 million, narrower than a loss of $640 million incurred in the year-ago quarter. The combined ratio improved from 630 bps year over year to 100.2 attributed to an improvement in the underlying combined ratio, higher net favorable prior-year reserve development and lower catastrophe losses as a percentage of net earned premiums. The Zacks Consensus Estimate was pegged at 97.
The Progressive Corporation’s (PGR - Free Report) second-quarter 2024 earnings per share of $2.65 beat the Zacks Consensus Estimate of $1.99. The bottom line improved more than five times year over year. Operating revenues of $18.3 billion beat the Zacks Consensus Estimate by 1.4% and increased 18.9% year over year.
Net premiums earned grew 19% to $17.2 billion and beat our estimate of $16.7 billion. The combined ratio improved 850 bps from the prior-year quarter’s level to 91.9.
Selective Insurance Group, Inc. (SIGI - Free Report) reported a second-quarter 2024 operating loss of $1.10 per share against the Zacks Consensus Estimate for earnings of $1.56. The company had reported an operating income of 99 cents per share in the prior year quarter. The quarterly results reflected poor underwriting performance, unfavorable prior-year casualty reserve development and escalating costs, offset by higher premiums and net investment income. Total revenues of $1.2 billion increased 15% from the year-ago quarter’s figure, primarily attributed to higher premiums earned, net investment income and net premiums written. The top line missed the Zacks Consensus Estimate by 1.3%.
On a year-over-year basis, net premium written (NPW) increased 13% to $1.22 billion, driven by new business growth and effective management of renewal portfolio and growth across all three insurance segments. The figure matched our estimate. Net underwriting loss was $137.2 million against the year-ago underwriting income of $1.2 million. Pre-tax catastrophe losses of $91 million were narrower than a loss of $100 million reported in the year-ago quarter. Non-catastrophe property loss and loss expenses of $185.5 million increased 18% year over year. The combined ratio deteriorated 1,590 bps on a year-over-year basis to 116.1, primarily due to prior year casualty reserve development.