Illinois-based RLI Corp. announced first quarter net earnings of $29.3 million ($1.12 per diluted share), which were 73% better than the $16.9 million ($0.65 per diluted share) reported in the same quarter last year.
Quarterly operating earnings of $27.4 million ($1.05 per share) were a 78% improvement over last year’s $15.4 million ($0.59 per share) result. Both the per-share and total dollar results set quarterly net and operating earnings records.
The quarter’s results include certain favorable developments from prior
year loss reserves. During the quarter, positive development on prior accident year casualty loss reserves resulted in additional earnings of $9.1 million, or $0.23 per share.
Additionally, losses related to the four Florida and Southeast U.S. hurricanes did not develop as expected, improving the first quarter’s pretax results by $3.8 million (affecting casualty by $2.8 million
and property by $1.0 million), or $0.10 per share. These developments include bonus-related accruals which affected other insurance and general corporate expenses.
RLI reported a first quarter underwriting profit of $26.4 million on a
78.8 net GAAP combined ratio versus the $10.8 million gain on a 91.5 combined ratio for the same period last year. Casualty recorded an 80.5 combined ratio. Prior to the reserve changes noted above, the casualty segment would have produced a 93.7 combined ratio. The property segment improved nearly seven points to register a 61.8 combined ratio. The surety segment recorded a 94.5 combined ratio.
Net premiums earned were down 1% in the quarter, to $124.0 million.
Consolidated revenue of $141.6 million was up 1%. Gross premiums written of $166.1 million were down 9% for the quarter. Through three months, segment performance included an increase in surety gross premiums of 7%, a rise in casualty writings of 1%, and a 37% reduction in property business.
During the quarter, RLI announced the opening of a marine insurance
division in New York City. The new division will focus on marine classes of cargo, hull, protection and indemnity, primary and excess liabilities, yachts and other marine coverages. The division plans to have a presence in several other current RLI offices.
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