Specialty insurer RLI has reported underwriting income of $67.9 million on a combined ratio of 77.9% for the first quarter of 2023, as well as a 16% increase in gross premiums written.
This compares with $59.5 million underwriting income also on a 77.9% combined ratio for the same period last year, as income increased by $5.9 million for property lines and by $4.2 million for casualty.
Results for both years include favourable development in prior years’ loss reserves, which resulted in a $44.5 million and $39.6 million net increase to underwriting income from 2023 and 2022, respectively.
Accordingly, the company reported operating earnings of $75.0 million for Q1 2023, versus $60.4 million for the respective period in 2022.
The increase in RLI’s net earnings, however, was more dramatic as the figure more than doubled from $47.9 million last year to $98.8 million in 2023.
This was largely due to a recovery in net investment income, which increase by 51.5% to $27.1 million for the quarter, with a total return of 2.8%.
Also notable were RLI’s comprehensive earnings $136.5 million for the most recent quarter, compared to a $67.7 million comprehensive loss for Q1 2022. In addition to net earnings, comprehensive earnings in 2023 included after-tax unrealized gains from the fixed income portfolio, due to declining interest rates.
“After ending 2022 with strong results and delivering our 27th consecutive year of underwriting profit, we are pleased to be off to a solid start in the first quarter of 2023,” said RLI President and CEO Craig Kliethermes.
“We achieved a 78 combined ratio and top line premium growth of 16%, which was driven by our property and surety segments,” he added. “Investment income continued to support growth in operating earnings, and positive portfolio returns contributed to 12% growth in book value.”
