RLI Q1 Earnings Outshine Estimates, Premiums Increase Y/Y

RLI Corp. RLI reported first-quarter 2025 operating earnings of 92 cents per share, which beat the Zacks Consensus Estimate by 4.5%. The bottom line, however, decreased 9.2% from the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The quarterly results reflect higher premiums and improved investment income, offset by higher expenses and poor underwriting income.

Operational Performance

Operating revenues for the reported quarter were $436 million, up 10.7% year over year, driven by higher net premiums earned and net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.9%.

RLI Corp. Price, Consensus and EPS Surprise

RLI Corp. price-consensus-eps-surprise-chart | RLI Corp. Quote

Gross premiums written increased 5% year over year to $491 million. This uptick can be attributed to the solid performance of the Casualty segment (up 13.5%). Our estimate was $577.9 million.

Net investment income increased 12% year over year to $36.7 million. The Zacks Consensus Estimate was pegged at $38.6 million, while our estimate for the metric was  $38.9 million. The investment portfolio’s total return was 1.3% in the quarter.

Total expenses rose 14.7% year over year to $332 million, primarily due to higher loss and settlement expenses and policy acquisition costs. Our estimate was $347 million.

Underwriting income of $70.5 million decreased 9.3% year over year. The combined ratio deteriorated 380 basis points (bps) year over year to 82.3. The Zacks Consensus Estimate for the metric was pegged at 84, while our estimate was 85.9.

Dividend Update

On March 20, 2025, RLI paid a regular quarterly dividend of 15 cents per share. RLI’s cumulative dividends totaled more than $967 million, paid over the last five years.

Zacks Rank

RLI currently has a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Performance

The Travelers Companies TRV reported first-quarter 2025 core income of $1.91 per share, which beat the Zacks Consensus Estimate of 69 cents. The bottom line, however, declined 29.3% year over year. Travelers’ total revenues increased 6.1% from the year-ago quarter to $11.9 billion, primarily driven by higher premiums, net investment income and other revenues. The top-line figure, however, missed the Zacks Consensus Estimate of $12.1 billion. 

Net written premiums increased 3% year over year to a record $10.5 billion, driven by strong growth across all three segments. Our estimate was $10.2 billion. Underlying underwriting income of $1.6 billion improved more than 30% year over year, driven by strong net earned premiums. The consolidated underlying combined ratio of 84.8 improved 290 basis points (bps) year over year. The combined ratio deteriorated 860 bps year over year to 102.5 due to higher catastrophe losses. The Zacks Consensus Estimate was pegged at 105.

The Progressive Corporation’s PGR first-quarter 2025 earnings per share of $4.65 missed the Zacks Consensus Estimate of $4.72. The bottom line, however, increased 24.6% year over year. Operating revenues increased 20.7% year over year to $20.6 billion, driven by 20.2% higher net premiums earned, a 31.7% increase in net investment income, a 21.6% rise in fees and 32.1% higher service revenues. The top line beat the Zacks Consensus Estimate of $20.4 billion.

Net premiums earned grew 20% to $19.4 billion. The reported figure surpassed the Zacks Consensus Estimate of $19.2 billion. Combined ratio — the percentage of premiums paid out as claims and expenses — improved 10 basis points (bps) from the prior-year quarter’s level to 86.

W.R. Berkley Corporation’s WRB first-quarter 2025 operating income of $1.01 per share matched the Zacks Consensus Estimate. The bottom line, however, declined 2.9% year over year. The insurer suffered due to higher catastrophe losses. Operating revenues came in at $3.5 billion, up 9.3% year over year, on the back of higher net premiums earned as well as improved net investment income, higher insurance service fees and other income. The top line beat the consensus estimate by 2.2%.

W.R. Berkley’s net premiums written were $3.1 billion, up 9.9% year over year. The figure was higher than our estimate of $3 billion. Catastrophe losses of $111.1 million in the quarter were wider than $30 million incurred in the year-ago quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 210 bps year over year to 90.9. The Zacks Consensus Estimate was 91.

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This article originally published on Zacks Investment Research (zacks.com).

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