US property and casualty insurer RLI Corp. has reported improved underwriting income during the second quarter of 2021, despite an overall decrease in net earnings.
Net earnings came to $81.8 million for the quarter, compared to $92.2 million for the same period last year, mostly due to lower unrealized gains.
But operating earnings grew from $34.8 million to $49.9 million, with underwriting income similarly improving from $24.2 million to $36.6 million.
The result was largely attributed to favorable development in prior years’ loss reserves, which resulted in a $27.5 million net increase in underwriting income and helped to outweigh $8.0 million of 2021 storm losses.
Performance was also helped by a 25% increase in gross premiums written, and the company’s combined ratio improved from 88.4% to 84.8%
Net investment income for the quarter decreased 1.5% to $16.7 million, compared to the same period in 2020. The investment portfolio’s total return was 2.8% for the quarter and 3.0% for the six months ended June 30, 2021.
“We are pleased to report excellent second quarter financial results,” said RLI Corp. Chairman and CEO Jonathan E. Michael. “All three product segments contributed to our strong performance in the quarter. We achieved an 85 combined ratio and 25% growth in gross written premiums.”
“Favorable market conditions and the continued economic recovery enabled our disciplined underwriters to find more niche opportunities that match our risk appetite,” Michael added. “Our capital base continues to grow, supported by our insurance operations and investment returns, and book value per share has increased 11% year to date.”