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RLI Q1 Earnings and Revenues Beat on Solid Underwriting
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RLI Corp. (RLI - Free Report) reported first-quarter 2022 operating earnings of $1.43 per share, beating the Zacks Consensus Estimate by 40.2%. The bottom line improved 64.4% from the prior-year quarter.
The quarterly results benefited from solid performance across all its segments and favorable reserve development, which aided underwriting results, and higher net investment income.
Operating revenues for the reported quarter were $287 million, up 17.1% year over year, driven by 17.7% higher net premiums earned and 9% higher net investment income. The top line beat the Zacks Consensus Estimate of $276 million by 0.8%.
Gross premiums written increased 22% year over year to $359.2 million. This uptick can be attributed to the solid performance of Casualty (up 14.3%), Surety (up 47%) and Property segments (up 7.2%).
Net investment income increased about 9% year over year to $17.9 million.
Total expenses increased 5.5% year over year to $215 million, primarily due to higher policy acquisition costs, operating expenses, loss and settlement expenses, general corporate expenses and interest expense on debt.
Underwriting income of $59.5 million nearly doubled from the year-ago period, primarily due to the strong performance of the Property, Casualty and Surety segments.
The combined ratio improved 900 basis points (bps) year over year to 77.9.
Financial Update
RLI exited the first quarter of 2022 with total investments and cash of $3 billion, down 4.4% from 2021 end.
Book value was $25.45 per share as of Mar 31, 2022, down 6.2% from the figure as of Dec 31, 2021.
Long-term debt was $199.7 million, flat from 2021 end.
The statutory surplus increased 1.7% from 2021 end to $1.12 billion as of Mar 31, 2022.
Return on equity was 10.3%, reflecting a contraction of 1920 bps year over year.
Dividend Update
RLI paid a quarterly dividend of 25 cents in the first quarter. RLI’s cumulative dividends total more than $508 million paid over the last five years.
Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) beat the Zacks Consensus Estimate for earnings while that of The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year. Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.
Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter. Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.
An Upcoming Release
W.R. Berkley Corporation (WRB - Free Report) will report first-quarter 2022 results on Apr 25. The Zacks Consensus Estimate for the first quarter is pegged at 92 cents, indicating an increase of 27.8% from the year-ago reported figure.
W.R. Berkley beat estimates in all four quarters of 2021.
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RLI Q1 Earnings and Revenues Beat on Solid Underwriting
RLI Corp. (RLI - Free Report) reported first-quarter 2022 operating earnings of $1.43 per share, beating the Zacks Consensus Estimate by 40.2%. The bottom line improved 64.4% from the prior-year quarter.
The quarterly results benefited from solid performance across all its segments and favorable reserve development, which aided underwriting results, and higher net investment income.
RLI Corp. Price, Consensus and EPS Surprise
RLI Corp. price-consensus-eps-surprise-chart | RLI Corp. Quote
Operational Performance
Operating revenues for the reported quarter were $287 million, up 17.1% year over year, driven by 17.7% higher net premiums earned and 9% higher net investment income. The top line beat the Zacks Consensus Estimate of $276 million by 0.8%.
Gross premiums written increased 22% year over year to $359.2 million. This uptick can be attributed to the solid performance of Casualty (up 14.3%), Surety (up 47%) and Property segments (up 7.2%).
Net investment income increased about 9% year over year to $17.9 million.
Total expenses increased 5.5% year over year to $215 million, primarily due to higher policy acquisition costs, operating expenses, loss and settlement expenses, general corporate expenses and interest expense on debt.
Underwriting income of $59.5 million nearly doubled from the year-ago period, primarily due to the strong performance of the Property, Casualty and Surety segments.
The combined ratio improved 900 basis points (bps) year over year to 77.9.
Financial Update
RLI exited the first quarter of 2022 with total investments and cash of $3 billion, down 4.4% from 2021 end.
Book value was $25.45 per share as of Mar 31, 2022, down 6.2% from the figure as of Dec 31, 2021.
Long-term debt was $199.7 million, flat from 2021 end.
The statutory surplus increased 1.7% from 2021 end to $1.12 billion as of Mar 31, 2022.
Return on equity was 10.3%, reflecting a contraction of 1920 bps year over year.
Dividend Update
RLI paid a quarterly dividend of 25 cents in the first quarter. RLI’s cumulative dividends total more than $508 million paid over the last five years.
Zacks Rank
RLI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other P&C Insurers
Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) beat the Zacks Consensus Estimate for earnings while that of The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year. Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.
Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter. Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.
An Upcoming Release
W.R. Berkley Corporation (WRB - Free Report) will report first-quarter 2022 results on Apr 25. The Zacks Consensus Estimate for the first quarter is pegged at 92 cents, indicating an increase of 27.8% from the year-ago reported figure.
W.R. Berkley beat estimates in all four quarters of 2021.