US property and casualty (P&C) insurer RLI has posted a net loss of $61.3 million for the first quarter of 2020, driven by “stress in the capital markets” owing to the coronavirus (COVID-19) pandemic.
This loss compares to net earnings of $53.4 million in the fourth quarter of 2019, and net earnings of $65.5 million in the first quarter of last year.
Despite the COVID-19 driven losses, RLI achieved $17.2 million of underwriting income in the first quarter of 2020 on a 92.0 combined ratio, compared to $22.4 million on an 89.0 combined ratio in 2019.
Results for both years include net favourable development in prior years’ loss reserves, which totalled $12.9 million and $16.6 million for 2020 and 2019, respectively.
“While stress in the capital markets drove a net loss and a decline in book value in the first quarter, we achieved growth in gross premiums written across all product segments and an underwriting profit,” said RLI Corp. Chairman & CEO Jonathan E. Michael.
“Amid rapidly changing dynamics, we’ve focused on providing strong service to our customers and support to our employee owners,” he went on, adding: “We will continue to maintain focus on serving all of our stakeholders while navigating the current climate.”
RLI’s net investment income for the quarter increased 7.3% to $17.8 million, compared to the same period in 2019. The investment portfolio’s total return was -4.3% for the quarter.
The comprehensive loss totalled $74.3 million for the quarter, compared to comprehensive earnings of $94.8 million for the same quarter in 2019.
In addition to net earnings, comprehensive earnings (loss) included after-tax unrealized gains/(losses) from the fixed income portfolio.
