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RLI Corp.’s (RLI - Free Report) first-quarter 2019 operating earnings of 71 cents per share surpassed the Zacks Consensus Estimate by 20.3%. The bottom line improved 18.3% from the prior-year quarter.
RLI witnessed improved premiums across most of its product lines along with increase in net investment income in the reported quarter.
Operational Performance
Operating revenues for the reported quarter totaled $221 million, up 8.3% year over year. This upside can be attributed to higher net premiums earned and net investment income. Also, the top line beat the Zacks Consensus Estimate by 0.9%.
Gross premiums written increased 6.5% year over year to $230.9 million. This uptick can be attributed to solid performance of Casualty and Property segments.
Total expenses increased 6.1% year over year to $187.4 million, primarily due to increased insurance operating expenses, loss and settlement expenses, policy acquisition costs, interest expense and general corporate expense.
Net investment income rose nearly 16.4% year over year to $16.6 million. Total return from the investment portfolio was 4.5%.
The company reported underwriting income of $22.4 million, which increased 28% from the year-ago period. This upside was due to solid results at the Property and Casualty segments, partially offset by soft performance of the Surety segment.
Combined ratio improved 180 basis points year over year to 89%.
Among other insurance industry players who have reported first-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and Torchmark Corporation beat the respective Zacks Consensus Estimate.
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Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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RLI Q1 Earnings Surpass Estimates, Revenues Increase Y/Y
RLI Corp.’s (RLI - Free Report) first-quarter 2019 operating earnings of 71 cents per share surpassed the Zacks Consensus Estimate by 20.3%. The bottom line improved 18.3% from the prior-year quarter.
RLI witnessed improved premiums across most of its product lines along with increase in net investment income in the reported quarter.
Operational Performance
Operating revenues for the reported quarter totaled $221 million, up 8.3% year over year. This upside can be attributed to higher net premiums earned and net investment income. Also, the top line beat the Zacks Consensus Estimate by 0.9%.
Gross premiums written increased 6.5% year over year to $230.9 million. This uptick can be attributed to solid performance of Casualty and Property segments.
Total expenses increased 6.1% year over year to $187.4 million, primarily due to increased insurance operating expenses, loss and settlement expenses, policy acquisition costs, interest expense and general corporate expense.
Net investment income rose nearly 16.4% year over year to $16.6 million. Total return from the investment portfolio was 4.5%.
The company reported underwriting income of $22.4 million, which increased 28% from the year-ago period. This upside was due to solid results at the Property and Casualty segments, partially offset by soft performance of the Surety segment.
Combined ratio improved 180 basis points year over year to 89%.
RLI Corp. Price, Consensus and EPS Surprise
RLI Corp. Price, Consensus and EPS Surprise | RLI Corp. Quote
Financial Update
The company exited the first quarter with total investments and cash of $2.3 billion, up 5.1% from 2018 end.
Book value was $20.08 per share as of Mar 31, 2019, up 12% from the figure as of Mar 31, 2018.
Long-term debt was $149.2 million.
Statutory surplus improved 9.7% to $910.2 million as of Mar 31, 2019 from the number as of Dec 31, 2018.
Return on equity was 16.3%, reflecting an increase of 530 basis points.
Net cash flow from operations doubled year over year to $30.8 million in the quarter under review.
Dividend Update
On Mar 20, 2019, the company paid out a cash dividend of 22 cents per share. Dividends totaled $601 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
Among other insurance industry players who have reported first-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and Torchmark Corporation beat the respective Zacks Consensus Estimate.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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