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Here's Why You Should Retain RLI Corp (RLI) Stock Right Now
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RLI Corp. (RLI - Free Report) is an industry-leading property and casualty (P&C) writer in the United States. The company has an impressive track record of underwriting profits in 37 of the past 41 years, particularly the last 21 years.
RLI Corp. has been able to retain its profitability on the back of its strong local branch office network, broad range of product offerings and focus on specialty insurance lines. This apart, the company is committed toward the expansion of its business through new professional liability products. To that end, the company has formed a new unit – RLI Corp. Fidelity.
Notably, the P&C insurer has been displaying sustained revenue growth over a considerable period, primarily due to continued improvement in premiums. Given the company’s compelling product portfolio, we expect the momentum to continue.
Also, the Zacks Rank #3 (Hold) P&C insurer has forayed into the cyber insurance space with the introduction of a new cyber liability insurance. This particular insurance will protect medium to large sized firms from financial damage associated with cyber attacks and data breaches.
Moreover, the company has an excellent track record of combined ratio over the past several years. Despite a challenging operating environment, the company has been able to exhibit superior underwriting discipline owing to continued favorable combined ratio. Hence, RLI Corp. will continue to focus on strengthening its underwriting results, which in turn, will help in boosting overall results.
In addition, the company has maintained a solid capital position, which has enabled it to return about $1.2 billion to shareholders in the last decade. Interestingly, the company has been paying special dividends to investors since the last few years. In Dec 2016, the insurer paid a special dividend of $2.00 per share.
However, RLI Corp.’s exposure to catastrophe losses will continue to adversely impact results. Further, escalating expenses will remain a concern as it is likely to restrict operating margin expansion.
Though shares of RLI Corp. lost 8.17% year to date, underperforming the Zacks categorized Property and Casualty industry’s increase of 3.25%, we expect expanded product offerings and focus on specialty insurance lines, exemplary underwriting profitability, and prudent capital deployment should drive share higher.
American Financial offers P&C insurance products in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 6.45%.
Argo Group International Holdings underwrites specialty insurance and reinsurance products in the P&C market worldwide. The company delivered positive surprises in all of the last four quarters with an average beat of 36.54%.
The Progressive Corporation offers personal and commercial P&C insurance, and other specialty P&C insurance and related services primarily in the United States. The company delivered a positive surprise in two of the last four quarters with an average beat of 1.32%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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Here's Why You Should Retain RLI Corp (RLI) Stock Right Now
RLI Corp. (RLI - Free Report) is an industry-leading property and casualty (P&C) writer in the United States. The company has an impressive track record of underwriting profits in 37 of the past 41 years, particularly the last 21 years.
RLI Corp. has been able to retain its profitability on the back of its strong local branch office network, broad range of product offerings and focus on specialty insurance lines. This apart, the company is committed toward the expansion of its business through new professional liability products. To that end, the company has formed a new unit – RLI Corp. Fidelity.
Notably, the P&C insurer has been displaying sustained revenue growth over a considerable period, primarily due to continued improvement in premiums. Given the company’s compelling product portfolio, we expect the momentum to continue.
Also, the Zacks Rank #3 (Hold) P&C insurer has forayed into the cyber insurance space with the introduction of a new cyber liability insurance. This particular insurance will protect medium to large sized firms from financial damage associated with cyber attacks and data breaches.
Moreover, the company has an excellent track record of combined ratio over the past several years. Despite a challenging operating environment, the company has been able to exhibit superior underwriting discipline owing to continued favorable combined ratio. Hence, RLI Corp. will continue to focus on strengthening its underwriting results, which in turn, will help in boosting overall results.
In addition, the company has maintained a solid capital position, which has enabled it to return about $1.2 billion to shareholders in the last decade. Interestingly, the company has been paying special dividends to investors since the last few years. In Dec 2016, the insurer paid a special dividend of $2.00 per share.
However, RLI Corp.’s exposure to catastrophe losses will continue to adversely impact results. Further, escalating expenses will remain a concern as it is likely to restrict operating margin expansion.
Though shares of RLI Corp. lost 8.17% year to date, underperforming the Zacks categorized Property and Casualty industry’s increase of 3.25%, we expect expanded product offerings and focus on specialty insurance lines, exemplary underwriting profitability, and prudent capital deployment should drive share higher.
Stocks to Consider
Some better-ranked stocks from the same space include American Financial Group, Inc. (AFG - Free Report) , Argo Group International Holdings, Ltd. and The Progressive Corporation (PGR - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
American Financial offers P&C insurance products in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 6.45%.
Argo Group International Holdings underwrites specialty insurance and reinsurance products in the P&C market worldwide. The company delivered positive surprises in all of the last four quarters with an average beat of 36.54%.
The Progressive Corporation offers personal and commercial P&C insurance, and other specialty P&C insurance and related services primarily in the United States. The company delivered a positive surprise in two of the last four quarters with an average beat of 1.32%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>