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RLI's Q2 Earnings Beat Estimates on Premium Growth, Investment Income
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Key Takeaways
RLI beat Q2 earnings and revenue estimates on premium growth and higher investment income.
Favorable reserve development supported Property and Surety results despite higher catastrophe losses.
Weaker Casualty underwriting and higher expenses partly offset strength, while share buybacks continued.
RLI Corp. (RLI - Free Report) reported second-quarter 2026 operating earnings of 83 cents per share, which beat the Zacks Consensus Estimate by 16.9%. The bottom line increased 1.2% from the prior-year quarter.
The quarterly results reflect continued premium growth, higher investment income and favorable prior-year reserve development. However, weaker underwriting performance in the casualty segment partly offset these positives.
Operational Performance
Operating revenues for the reported quarter were $463 million, up 4.9% year over year, driven by higher net premiums earned and net investment income. The top line beat the Zacks Consensus Estimate by 1.6%.
Gross premiums written (GPW) increased 3.1% year over year to $579.7 million, driven by strong growth in the casualty segment. Our estimate was $592.9 million.
Net investment income increased 16.8% year over year to $46 million. The Zacks Consensus Estimate was $42.7 million, while our estimate for the metric was pegged at $40.7 million. The investment portfolio’s total return was 3.4% in the second quarter.
Total expenses increased 6.4% year over year to $367.9 million, primarily due to higher policy acquisition costs, insurance operating expenses and interest expense on debt. Our estimate was $376.8 million.
Underwriting income fell 3.7% year over year to $59.9 million. Our estimate was $53.1 million. The combined ratio deteriorated 110 basis points year over year to 85.6, reflecting higher catastrophe losses. Our estimate was 87.2.
Segmental Results
Casualty lines’ GPW rose 10.6% year over year to $339 million. The figure was above our estimate of $338.1 million.
The underwriting income decreased significantly to $1.7 million from $8.3 million, down 79% year over year. The combined ratio deteriorated 280 bps year over year to 99.3%. The figure was above our estimate of 98.4%.
Property lines’ GPW fell 5.9% year over year to $199.3 million. The figure was below our estimate of $207.7 million.
The underwriting income increased to $53.5 million, up 8.1%, supported by favorable reserve development. The combined ratio improved 530 bps year over year to 56.8%. Our estimate was 65.2%.
Surety lines’ GPW declined 5.7% year over year to $41.4 million. The figure was below our estimate of $47.1 million.
The underwriting income improved 5.4% year over year to $4.7 million. The combined ratio improved 70 bps year over year to 87.2%. Our estimate was 84.8%.
RLI's Financial Update
RLI exited the second quarter with total investments and cash of $4.9 billion, up 4.5% from 2025-end level.
Book value was $19.09 per share as of June 30, 2026, up 11% from Dec. 31, 2025.
Net cash flow from operations was $145.2 million, down 16.9% year over year.
The statutory surplus increased 5.2% from 2025-end to $1.94 billion as of June 30, 2026.
Return on equity was 24.5%, expanding 480 bps from the year-ago period.
RLI’s Capital Deployment Update
On June 12, 2026, the insurer paid a regular quarterly dividend of 18 cents per share for the second quarter. RLI’s cumulative dividends totaled more than $1.3 billion over the last five years.
On May 14, 2026, the board of directors approved a $250 million share repurchase program. The company repurchased 0.2 million shares for $12 million during the second quarter. As of June 30, 2026, $238 million remained available under the authorization.
First American Financial Corporation (FAF - Free Report) reported second-quarter 2026 operating earnings of $2.08 per share, which beat the Zacks Consensus Estimate by 15.6% and rose 35.9% year over year. Operating revenues climbed 15% to $2.1 billion, driven by growth in direct premiums, escrow fees, and Information and other revenues. The top line surpassed the consensus estimate by 4.4%.
Direct premiums and escrow fees reached $794.1 million, marking a 14.8% increase from the prior-year level. Investment income totaled $183.7 million in the second quarter, up 14.7% year over year. The figure exceeded both our estimate and the Zacks Consensus Estimate of $182.3 million.
The Travelers Companies, Inc. (TRV - Free Report) reported second-quarter 2026 core income of $10.04 per share, which beat the Zacks Consensus Estimate of $5.21 by 92.7%. The bottom line climbed 54% year over year. Revenues of $12.09 billion missed the Zacks Consensus Estimate of $12.27 billion by 1.5%.
Net investment income rose 14% year over year to $1.07 billion pre-tax ($883 million after tax). The combined ratio improved 670 basis points year over year to 83.6%, reflecting lower catastrophe losses, stronger reserve development and a better underlying combined ratio.
W.R. Berkley Corporation (WRB - Free Report) reported second-quarter 2026 operating income of $1.27 per share, which beat the Zacks Consensus Estimate by 16.5%. The bottom line increased 21% year over year. Operating revenues totaled $3.8 billion, up 3.6% year over year. The top line surpassed the consensus estimate by 1.87%.
W.R. Berkley’s net premiums written were about $3.4 billion, up 2.4% year over year. The figure surpassed our estimate of $3.4 billion. The consolidated combined ratio (a measure of underwriting profitability) improved 160 basis points year over year to 90, missing the Zacks Consensus Estimate of 92.
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RLI's Q2 Earnings Beat Estimates on Premium Growth, Investment Income
Key Takeaways
RLI Corp. (RLI - Free Report) reported second-quarter 2026 operating earnings of 83 cents per share, which beat the Zacks Consensus Estimate by 16.9%. The bottom line increased 1.2% from the prior-year quarter.
The quarterly results reflect continued premium growth, higher investment income and favorable prior-year reserve development. However, weaker underwriting performance in the casualty segment partly offset these positives.
Operational Performance
Operating revenues for the reported quarter were $463 million, up 4.9% year over year, driven by higher net premiums earned and net investment income. The top line beat the Zacks Consensus Estimate by 1.6%.
RLI Corp. Price, Consensus and EPS Surprise
RLI Corp. price-consensus-eps-surprise-chart | RLI Corp. Quote
Gross premiums written (GPW) increased 3.1% year over year to $579.7 million, driven by strong growth in the casualty segment. Our estimate was $592.9 million.
Net investment income increased 16.8% year over year to $46 million. The Zacks Consensus Estimate was $42.7 million, while our estimate for the metric was pegged at $40.7 million. The investment portfolio’s total return was 3.4% in the second quarter.
Total expenses increased 6.4% year over year to $367.9 million, primarily due to higher policy acquisition costs, insurance operating expenses and interest expense on debt. Our estimate was $376.8 million.
Underwriting income fell 3.7% year over year to $59.9 million. Our estimate was $53.1 million. The combined ratio deteriorated 110 basis points year over year to 85.6, reflecting higher catastrophe losses. Our estimate was 87.2.
Segmental Results
Casualty lines’ GPW rose 10.6% year over year to $339 million. The figure was above our estimate of $338.1 million.
The underwriting income decreased significantly to $1.7 million from $8.3 million, down 79% year over year. The combined ratio deteriorated 280 bps year over year to 99.3%. The figure was above our estimate of 98.4%.
Property lines’ GPW fell 5.9% year over year to $199.3 million. The figure was below our estimate of $207.7 million.
The underwriting income increased to $53.5 million, up 8.1%, supported by favorable reserve development. The combined ratio improved 530 bps year over year to 56.8%. Our estimate was 65.2%.
Surety lines’ GPW declined 5.7% year over year to $41.4 million. The figure was below our estimate of $47.1 million.
The underwriting income improved 5.4% year over year to $4.7 million. The combined ratio improved 70 bps year over year to 87.2%. Our estimate was 84.8%.
RLI's Financial Update
RLI exited the second quarter with total investments and cash of $4.9 billion, up 4.5% from 2025-end level.
Book value was $19.09 per share as of June 30, 2026, up 11% from Dec. 31, 2025.
Net cash flow from operations was $145.2 million, down 16.9% year over year.
The statutory surplus increased 5.2% from 2025-end to $1.94 billion as of June 30, 2026.
Return on equity was 24.5%, expanding 480 bps from the year-ago period.
RLI’s Capital Deployment Update
On June 12, 2026, the insurer paid a regular quarterly dividend of 18 cents per share for the second quarter. RLI’s cumulative dividends totaled more than $1.3 billion over the last five years.
On May 14, 2026, the board of directors approved a $250 million share repurchase program. The company repurchased 0.2 million shares for $12 million during the second quarter. As of June 30, 2026, $238 million remained available under the authorization.
RLI’s 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 Another Insurer
First American Financial Corporation (FAF - Free Report) reported second-quarter 2026 operating earnings of $2.08 per share, which beat the Zacks Consensus Estimate by 15.6% and rose 35.9% year over year. Operating revenues climbed 15% to $2.1 billion, driven by growth in direct premiums, escrow fees, and Information and other revenues. The top line surpassed the consensus estimate by 4.4%.
Direct premiums and escrow fees reached $794.1 million, marking a 14.8% increase from the prior-year level. Investment income totaled $183.7 million in the second quarter, up 14.7% year over year. The figure exceeded both our estimate and the Zacks Consensus Estimate of $182.3 million.
The Travelers Companies, Inc. (TRV - Free Report) reported second-quarter 2026 core income of $10.04 per share, which beat the Zacks Consensus Estimate of $5.21 by 92.7%. The bottom line climbed 54% year over year. Revenues of $12.09 billion missed the Zacks Consensus Estimate of $12.27 billion by 1.5%.
Net investment income rose 14% year over year to $1.07 billion pre-tax ($883 million after tax). The combined ratio improved 670 basis points year over year to 83.6%, reflecting lower catastrophe losses, stronger reserve development and a better underlying combined ratio.
W.R. Berkley Corporation (WRB - Free Report) reported second-quarter 2026 operating income of $1.27 per share, which beat the Zacks Consensus Estimate by 16.5%. The bottom line increased 21% year over year. Operating revenues totaled $3.8 billion, up 3.6% year over year. The top line surpassed the consensus estimate by 1.87%.
W.R. Berkley’s net premiums written were about $3.4 billion, up 2.4% year over year. The figure surpassed our estimate of $3.4 billion. The consolidated combined ratio (a measure of underwriting profitability) improved 160 basis points year over year to 90, missing the Zacks Consensus Estimate of 92.