Specialty insurer for property, casualty and surety markets, RLI Corp., has reported underwriting income for Q3 2023 of $4.2 million and a combined ratio of 98.7%, compared year over year to $8.8 million and a 97% combined ratio.
The company’s Q3 2023 net earnings of $13.5 million, translated to $0.29 per share, compared year over year to $439.9 million or $9.61 per share in Q3 2022, which included $437.7 million from the sale of RLI’s investment in Maui Jim, Inc.
Craig Kliethermes, RLI Corp. President and Chief Executive Officer, commented, “We have been working diligently to help our policyholders recover from the devastating Hawaiian wildfires that occurred in the quarter. This event contributed 17 points to our combined ratio. Despite this impact, our diversified portfolio delivered underwriting profitability and an 11% increase in gross premiums written.
“Growth in investment income supported $0.61 per share of operating income, while book value per share increased to $28.47. Recent catastrophes reinforce RLI’s purpose to protect and serve policyholders in times of need. I would like to thank our associate owners, and especially our claim and Hawaii-based teams, for providing unparalleled service to our insureds and agents.”
According to the report, favourable development in prior years’ loss reserves resulted in a $19.8 million net increase in underwriting income, although this was more than offset by losses from the Hawaii wildfires, which resulted in a $58.2 million net decrease in underwriting income.
Divided by segment, casualty saw an increase in underwriting income year over year at $18.7 million, compared to $11.3 million in Q3 2022.
RLI’s surety business also performed better in Q3 2023 with underwriting income of $6.2 million compared with $5.8 million a year earlier.
However, the property segment fell to an underwriting loss of $20.7 million in Q3 2023, higher than Q3 2022’s $8.3 million loss.
In terms of growth, the company’s gross written premiums increased from $404 million in Q3 2022 to $449 million in Q3 2023, while net premiums written rose to $335 million from $319 million.
On the asset side of the balance sheet, net investment income rose more than 50% to $32 million.
But despite the improved investment result and underwriting profit, RLI has reported a comprehensive loss of $43.3 million for Q3 2023 compared with a gain of $358.6 million a year earlier, driven by after-tax unrealized losses from the fixed income portfolio, as a result of rising interest rates. The company notes that comprehensive earnings in Q3 2022 were elevated from the sale of its Maui Jim investment.
