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Jun 30, 2022
Rli Q2 2022 Earnings Report
RLI's financial performance reflected a mixed outcome, marked by a net loss but strong operating earnings and underwriting profitability.
Key Takeaways
RLI Corp. reported a net loss of $2.2 million for Q2 2022, a shift from the $81.8 million net earnings in Q2 2021. However, operating earnings increased to $67.4 million, and the company achieved an underwriting income of $56.0 million with a combined ratio of 80.2. Gross premiums written also saw a 17% increase.
Underwriting income was $56.0 million, with a combined ratio of 80.2.
Gross premiums written increased by 17%.
Net investment income increased by 11%.
Favorable development in prior years’ loss reserves resulted in a $20.9 million net increase in underwriting income.
Forward Guidance
RLI management expressed optimism about market conditions and the opportunities they present for their underwriters, despite a decline in book value due to investment portfolio impacts. The company's strong operating performance is attributed to the dedication of its employee owners and their commitment to customers.
Positive Outlook
- Top line premium and underwriting profitability remained strong.
- All underwriting segments positively contributed to gross premium growth.
- Market conditions continue to offer opportunities for underwriters.
- Capital continues to be generated through operating earnings.
- Sale of minority interest in Maui Jim, Inc. expected to close in the second half of 2022, with net after-tax proceeds of approximately $500 million.
Challenges Ahead
- Net loss reported for the quarter.
- Decline in book value due to the impact from the investment portfolio.
- Comprehensive loss reported for the quarter due to after-tax unrealized losses from the fixed income portfolio.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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