RLI Corp. has announced a slight improvement in its underwriting income in the second-quarter of 2019, as gains in casualty and surety business offset a property segment underwriting loss in the period.
For the second-quarter of 2019, RLI has reported net earnings of $40.5 million, compared with $33.3 million a year earlier. Operating earnings increased year-on-year from $26.7 million to $29.7 million.
Underwriting income improved slightly in the period, jumping from $14.1 million in Q2 2018 to $14.9 million in Q2 2019, resulting in a combined ratio of 92.8%, which is in line with Q2 2018.
By segment, RLI reveals that its property business fell to a $0.4 million underwriting loss in the period as a result of $4 million in spring storm activity, which resulted in a property combined ratio of 101%. In Q2 2018, RLI announced underwriting income of $3.6 million and a combined ratio of 90.2% within its property segment.
Despite the loss in the property segment, improved underwriting income of $6.9 million in its casualty segment and $8.4 million in its surety segment, resulting in a combined ratio of 95% and 71.2%, respectively, helped RLI record a slightly higher underwriting profit in the period.
The underwriting results for both 2018 and 2019 include favourable development of prior years’ loss reserves, which amounted to $17.8 million in 2019 and $12.4 million in 2018.
The company’s Chairman and Chief Executive Officer (CEO), Jonathan Michael, said: “We produced solid earnings, continued organic growth and strong book value growth in the second quarter.
“Gross premium grew 5% in the quarter, driven by our casualty and property segments. Underwriting income was strong in our casualty and surety segments, while our property segment was impacted by $4 million in spring storm activity. Investment income was up over last year as we continue to invest operating cash flow.
“Declining interest rates and favorable equity market conditions also contributed to book value growth, which is up 21% year to date. Our product portfolio remains healthy and we continue to focus on providing superior service to our customers while advancing profitable growth initiatives.”
As well as a 5% jump in gross premiums written, net investment income also improved for RLI in the quarter, by 17% year-on-year to $17 million.