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Why Is RLI Corp. (RLI) Down 3.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for RLI Corp. (RLI - Free Report) . Shares have lost about 3.5% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is RLI Corp. due for a breakout? 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 drivers.
RLI Q1 Earnings Miss Estimates, Investment Income Increases Y/Y
RLI Corp. reported first-quarter 2026 operating earnings of 83 cents per share, which missed the Zacks Consensus Estimate by 2.3%. The bottom line decreased 13.2% from the prior-year quarter. The quarterly results reflect underwriting strain from catastrophe losses, though investment income and casualty growth offer resilience.
Operational Performance
Operating revenues for the reported quarter were $454 million, up 4.4% year over year, driven by higher net premiums earned and net investment income. The top line beat the Zacks Consensus Estimate by 1%. Gross premiums written (GPW) increased 3% year over year to $503.9 million, driven by strong growth in the casualty segment (up 10%). Our estimate was $523.9 million.
Net investment income increased 15.2% year over year to $42.3 million. The Zacks Consensus Estimate was $40.2 million, while our estimate for the metric was pegged at $38.3 million. The investment portfolio’s total return was -0.4% in the quarter. Total expenses increased 8% year over year to $385.7 million, primarily due to higher loss and settlement expenses and interest expense on debt. Our estimate was $349.4 million.
Underwriting income fell 18% year over year to $57.8 million. Our estimate was $71.4 million. The combined ratio deteriorated 370 basis points (bps) year over year to 86, reflecting higher catastrophe losses. Our estimate was 82.
Segmental Results
Casualty lines’ GPW rose 10.3% year over year to $307.0 million. The figure was below our estimate of $300.9 million. The underwriting income increased significantly to $7.3 million from $2.1 million, up 249% year over year, supported by strong premium growth. The combined ratio improved 200 bps year over year to 97.1%. The figure was below our estimate of 99%.
Property lines’ GPW fell 9.0% year over year to $154.8 million. The figure was below our estimate of $180.1 million. The underwriting income declined to $48.2 million, down 15.3% primarily due to catastrophe losses and lower premium volumes. The combined ratio deteriorated 480 bps year over year to 61.9%. Our estimate was 55%.
Surety lines’ GPW remained largely flat at $42.1 million. The figure was on par with our estimate. The underwriting income dropped sharply to $2.3 million from $11.6 million, reflecting weaker reserve development and higher expenses. The combined ratio worsened significantly to 93.7% from 68.5%, up 2,520 bps year over year. Our estimate was 74.7%.
Financial Update
RLI exited the quarter with total investments and cash of $4.9 billion, up 4.8% from 2025-end. Book value was $19.54 per share as of March. 31, 2026, up 1% from the figure as of Dec. 31, 2025. Net cash flow from operations was $42.8 million, down 58.6% year over year. The statutory surplus decreased 1.7% from 2025-end to $1.8 billion as of March. 31, 2025. Return on equity was 22.5%, expanding 490 bps from the year-ago period.
Dividend Update
On March 16, 2026, the insurer paid a regular quarterly dividend of 16 per cent per share for the first quarter. RLI’s cumulative dividends totaled more than $1.1 billion, paid over the last five years.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, RLI Corp. has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock has a score of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise RLI Corp. has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is RLI Corp. (RLI) Down 3.5% Since Last Earnings Report?
A month has gone by since the last earnings report for RLI Corp. (RLI - Free Report) . Shares have lost about 3.5% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is RLI Corp. due for a breakout? 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 drivers.
RLI Q1 Earnings Miss Estimates, Investment Income Increases Y/Y
RLI Corp. reported first-quarter 2026 operating earnings of 83 cents per share, which missed the Zacks Consensus Estimate by 2.3%. The bottom line decreased 13.2% from the prior-year quarter. The quarterly results reflect underwriting strain from catastrophe losses, though investment income and casualty growth offer resilience.
Operational Performance
Operating revenues for the reported quarter were $454 million, up 4.4% year over year, driven by higher net premiums earned and net investment income. The top line beat the Zacks Consensus Estimate by 1%.
Gross premiums written (GPW) increased 3% year over year to $503.9 million, driven by strong growth in the casualty segment (up 10%). Our estimate was $523.9 million.
Net investment income increased 15.2% year over year to $42.3 million. The Zacks Consensus Estimate was $40.2 million, while our estimate for the metric was pegged at $38.3 million. The investment portfolio’s total return was -0.4% in the quarter.
Total expenses increased 8% year over year to $385.7 million, primarily due to higher loss and settlement expenses and interest expense on debt. Our estimate was $349.4 million.
Underwriting income fell 18% year over year to $57.8 million. Our estimate was $71.4 million. The combined ratio deteriorated 370 basis points (bps) year over year to 86, reflecting higher catastrophe losses. Our estimate was 82.
Segmental Results
Casualty lines’ GPW rose 10.3% year over year to $307.0 million. The figure was below our estimate of $300.9 million. The underwriting income increased significantly to $7.3 million from $2.1 million, up 249% year over year, supported by strong premium growth. The combined ratio improved 200 bps year over year to 97.1%. The figure was below our estimate of 99%.
Property lines’ GPW fell 9.0% year over year to $154.8 million. The figure was below our estimate of $180.1 million. The underwriting income declined to $48.2 million, down 15.3% primarily due to catastrophe losses and lower premium volumes. The combined ratio deteriorated 480 bps year over year to 61.9%. Our estimate was 55%.
Surety lines’ GPW remained largely flat at $42.1 million. The figure was on par with our estimate. The underwriting income dropped sharply to $2.3 million from $11.6 million, reflecting weaker reserve development and higher expenses. The combined ratio worsened significantly to 93.7% from 68.5%, up 2,520 bps year over year. Our estimate was 74.7%.
Financial Update
RLI exited the quarter with total investments and cash of $4.9 billion, up 4.8% from 2025-end. Book value was $19.54 per share as of March. 31, 2026, up 1% from the figure as of Dec. 31, 2025. Net cash flow from operations was $42.8 million, down 58.6% year over year. The statutory surplus decreased 1.7% from 2025-end to $1.8 billion as of March. 31, 2025. Return on equity was 22.5%, expanding 490 bps from the year-ago period.
Dividend Update
On March 16, 2026, the insurer paid a regular quarterly dividend of 16 per cent per share for the first quarter. RLI’s cumulative dividends totaled more than $1.1 billion, paid over the last five years.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, RLI Corp. has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock has a score of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise RLI Corp. has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.