US property and casualty (P&C) insurer RLI Corp. has reported a 17.9% decrease in net earnings during the third quarter of 2019, despite significant improvements in its underwriting performance.
RLI recorded net earnings of $32.3 million in Q3 2019, down from $39.4 million for the same period last year.
However, the company did see growth of 24.5% in its operating earnings, largely due to a reduced impact from realized gains.
Underwriting income for the quarter came out at $13.7 million on a combined ratio of 93.5%, compared to $7.8 million on a combined ratio of 96.1% in 2018.
Results for both years include favourable development in prior years’ loss reserves which totalled $12.1 million and $9.7 million for 2019 and 2018, respectively.
Analysts noted that the property loss ratio in particular was lower than expected at 42%, primarily due to a minimal impact from weather and catastrophe losses in the quarter.
Gross written premiums were recorded at $277.0 million in Q3 2019, up from $239.1 million last year, with property premiums increasing by 24.5% and casualty by 16.4%.
RLI also saw considerable improvement in its investment income, which increased by 7.5% from $16.3 million to $17.5 million.
“We are pleased with our sound financial results and continued top line growth during the quarter,” said RLI Corp. Chairman & CEO Jonathan E. Michael.
“We achieved a 93.5 combined ratio overall, with contributions from each major product segment. Throughout 2019, we have been focused on using capital generated from our businesses to selectively expand our existing footprint,” Michael explained.
“Quarterly operating earnings of $0.57 per share, in addition to positive investment returns, generated strong book value growth of 27% from year-end 2018.”
“We remain well positioned to take advantage of favorable market conditions, while providing exceptional service to our customers and delivering value to our shareholders.”