We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
RLI Rises 6.2% in 3 Months: Time to Hold or Fold the Stock?
Read MoreHide Full Article
Key Takeaways
RLI generated $59.9 million of underwriting income with an 85.6 combined ratio in the second quarter.
Net investment income rose 16% to $88.4 million in the first half of 2026.
RLI paid a $2 special dividend and authorized a $250 million share repurchase program.
RLI Corp. (RLI - Free Report) shares have risen 6.2% over the past three months, outperforming the industry's 1.4% growth. The Finance sector and the Zacks S&P 500 index have returned 3% and 5.2%, respectively, in the same time frame.
RLI has outperformed its peers, including Arch Capital Group Ltd. (ACGL - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . Shares of ACGL have gained 0.01%, while WRB and CINF shares have lost 2.7% and 7.1%, respectively, over the past three months.
Image Source: Zacks Investment Research
With a market capitalization of $5.34 billion, the average trading volume over the last three months was 0.8 million shares.
RLI’s Growth Projection Encourages
The Zacks Consensus Estimate for RLI’s 2026 revenues is pegged at $1.86 billion, implying a year-over-year improvement of 4.8%. The consensus estimate for 2027 revenues indicates an increase of 1.5% from the corresponding 2026 estimates.
RLI surpassed earnings estimates in three of the last four quarters and missed in one, delivering an average surprise of 18.03%.
RLI’s Favorable Return on Capital
RLI’s return on equity (ROE) has also been improving over the last few quarters, reflecting its efficiency in utilizing shareholders’ funds. The trailing 12-month ROE was 17.6%, which compared favorably with the industry average of 7.5%.
Average Target Price for RLI Suggests Upside
Based on short-term price targets offered by five analysts, the Zacks average price target is $63.80 per share. The average suggests a potential 9.75% upside from the last closing price.
Factors Acting in Favor of RLI
RLI continues to benefit from disciplined underwriting, rising investment income, strong capital and shareholder-friendly capital allocation. These strengths should help the specialty property and casualty insurer navigate moderating market pricing while preserving profitability. RLI delivered its 30th consecutive year of underwriting profit in 2025. In the second quarter of 2026, the company generated $59.9 million of underwriting income, with an 85.6 combined ratio. Results benefited from $35.1 million of favorable prior-year reserve development. Casualty growth remains focused on personal umbrella and transportation, where RLI is combining rate increases with targeted geographic and account selection. Property and surety also remained profitable despite softer market conditions. Its decentralized underwriting model, specialized expertise, reinsurance protection and willingness to exit inadequately priced business should help sustain underwriting margins through market cycles.
Investment income remains an important earnings contributor. Net investment income rose 16% year over year to $88.4 million in the first half of 2026. Fixed-income purchase yields averaged 4.9%, approximately 60 basis points above the current book yield, supporting further improvement as securities mature and are reinvested. A growing asset base and favorable reinvestment yields should support investment income if rates remain elevated.
RLI’s investments in underwriting systems, automation and digital capabilities complement its experienced underwriting teams. Transportation loss-control services using telematics, driver training and equipment data further strengthen risk selection and producer relationships.
RLI has increased its regular dividend for 51 consecutive years and paid dividends for 200 consecutive quarters. It paid a $2 special dividend in June 2026 and authorized a $250 million share repurchase program. More than $1.3 billion has been returned through dividends and buybacks over the past five years.
End Notes
RLI’s disciplined underwriting, improving investment income, strong capitalization and consistent capital returns provide a solid foundation for durable profitability as P&C market conditions evolve.
Its solid growth projections, higher target price and favorable return on capital should continue to benefit RLI over the long term. It is, therefore, wise to hold on to this Zacks Rank #3 (Hold) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
Image: Bigstock
RLI Rises 6.2% in 3 Months: Time to Hold or Fold the Stock?
Key Takeaways
RLI Corp. (RLI - Free Report) shares have risen 6.2% over the past three months, outperforming the industry's 1.4% growth. The Finance sector and the Zacks S&P 500 index have returned 3% and 5.2%, respectively, in the same time frame.
RLI has outperformed its peers, including Arch Capital Group Ltd. (ACGL - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . Shares of ACGL have gained 0.01%, while WRB and CINF shares have lost 2.7% and 7.1%, respectively, over the past three months.
Image Source: Zacks Investment Research
With a market capitalization of $5.34 billion, the average trading volume over the last three months was 0.8 million shares.
RLI’s Growth Projection Encourages
The Zacks Consensus Estimate for RLI’s 2026 revenues is pegged at $1.86 billion, implying a year-over-year improvement of 4.8%.
The consensus estimate for 2027 revenues indicates an increase of 1.5% from the corresponding 2026 estimates.
RLI surpassed earnings estimates in three of the last four quarters and missed in one, delivering an average surprise of 18.03%.
RLI’s Favorable Return on Capital
RLI’s return on equity (ROE) has also been improving over the last few quarters, reflecting its efficiency in utilizing shareholders’ funds. The trailing 12-month ROE was 17.6%, which compared favorably with the industry average of 7.5%.
Average Target Price for RLI Suggests Upside
Based on short-term price targets offered by five analysts, the Zacks average price target is $63.80 per share. The average suggests a potential 9.75% upside from the last closing price.
Factors Acting in Favor of RLI
RLI continues to benefit from disciplined underwriting, rising investment income, strong capital and shareholder-friendly capital allocation. These strengths should help the specialty property and casualty insurer navigate moderating market pricing while preserving profitability.
RLI delivered its 30th consecutive year of underwriting profit in 2025. In the second quarter of 2026, the company generated $59.9 million of underwriting income, with an 85.6 combined ratio. Results benefited from $35.1 million of favorable prior-year reserve development.
Casualty growth remains focused on personal umbrella and transportation, where RLI is combining rate increases with targeted geographic and account selection. Property and surety also remained profitable despite softer market conditions. Its decentralized underwriting model, specialized expertise, reinsurance protection and willingness to exit inadequately priced business should help sustain underwriting margins through market cycles.
Investment income remains an important earnings contributor. Net investment income rose 16% year over year to $88.4 million in the first half of 2026. Fixed-income purchase yields averaged 4.9%, approximately 60 basis points above the current book yield, supporting further improvement as securities mature and are reinvested. A growing asset base and favorable reinvestment yields should support investment income if rates remain elevated.
RLI’s investments in underwriting systems, automation and digital capabilities complement its experienced underwriting teams. Transportation loss-control services using telematics, driver training and equipment data further strengthen risk selection and producer relationships.
RLI has increased its regular dividend for 51 consecutive years and paid dividends for 200 consecutive quarters. It paid a $2 special dividend in June 2026 and authorized a $250 million share repurchase program. More than $1.3 billion has been returned through dividends and buybacks over the past five years.
End Notes
RLI’s disciplined underwriting, improving investment income, strong capitalization and consistent capital returns provide a solid foundation for durable profitability as P&C market conditions evolve.
Its solid growth projections, higher target price and favorable return on capital should continue to benefit RLI over the long term. It is, therefore, wise to hold on to this Zacks Rank #3 (Hold) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.