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RLI Q4 Earnings and Revenues Surpass, Premiums Increase
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RLI Corp.’s (RLI - Free Report) fourth-quarter 2017 operating earnings of 51 cents per share surpassed the Zacks Consensus Estimate by 6.3%. However, the bottom line deteriorated 8.9% year over year.
Lower underwriting income and higher expenses were primarily responsible for this downside. Nonetheless, the company witnessed a strong performance at its property and casualty segments.
Net income soared 79.2% year over year to $1.29 per share.
Full-Year Highlights
For 2017, RLI Corp. reported operating earnings per share of $1.60, beating the Zacks Consensus Estimate by 2.6% but declined 23.1% year over year.
Total revenues of $792.8 million rose 1.4% year over year.
Operational Performance
Operating revenues for the quarter totaled $202.7 million, up 0.9% year over year owing to higher net premiums earned as well as net investment income. Also, the top line outpaced the Zacks Consensus Estimate of $198 million by 2.4%.
Gross premiums written improved 11% year over year to $229.1 million on the back of a solid performance by the Property and Casualty segments.
Total expenses increased 6% year over year to $184.7 million due to higher loss and settlement expenses, policy acquisition costs, insurance operating expenses plus general corporate expenses.
The company reported underwriting income of $26.8 million, which plunged 64.8% year over year. Combined ratio deteriorated 690 basis points year over year to 96.4%.
The property and casualty (P&C) insurer’s net investment income improved nearly 9.8% year over year to $14.4 million. Total return from the investment portfolio was 1.4% while the bond portfolio returned 0.4%. The equity portfolio yielded 5.7%.
Financial Update
The company exited the fourth quarter with total investments and cash of $2.1 billion, up 5.9% from the year-end 2016.
Book value was $19.33 per share as of Dec 31, 2017, up 3.1% from Dec 31, 2016.
Long-term debt was $148.9 million, reflecting a 0.1% rise from the 2016-end level.
Statutory surplus nudged up 0.5% year over year to $864.6 million.
Net cash flow from operations inched up 0.3% to $51.6 million in the quarter.
Dividend Payout
On Dec 27, 2017, the company paid out a cash dividend of 21 cents per share for an aggregate amount of $86.5 million. In the last 10 years, the average annual growth rate of the P&C insurer’s quarterly dividend came up to 6.2%.
Interestingly, on the aforementioned date, the company paid a special cash dividend of $1.75 per share, resulting in a tax benefit of $1.9 million (4 cents per share).
Among other players from the insurance industry having reported fourth-quarter earnings, the bottom line of Brown & Brown, Inc. (BRO - Free Report) , MGIC Investment Corporation (MTG - Free Report) and The Progressive Corporation (PGR - Free Report) beat the respective Zacks Consensus Estimate.
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RLI Q4 Earnings and Revenues Surpass, Premiums Increase
RLI Corp.’s (RLI - Free Report) fourth-quarter 2017 operating earnings of 51 cents per share surpassed the Zacks Consensus Estimate by 6.3%. However, the bottom line deteriorated 8.9% year over year.
RLI Corp. Price, Consensus and EPS Surprise
RLI Corp. price-consensus-eps-surprise-chart | RLI Corp. Quote
Lower underwriting income and higher expenses were primarily responsible for this downside. Nonetheless, the company witnessed a strong performance at its property and casualty segments.
Net income soared 79.2% year over year to $1.29 per share.
Full-Year Highlights
For 2017, RLI Corp. reported operating earnings per share of $1.60, beating the Zacks Consensus Estimate by 2.6% but declined 23.1% year over year.
Total revenues of $792.8 million rose 1.4% year over year.
Operational Performance
Operating revenues for the quarter totaled $202.7 million, up 0.9% year over year owing to higher net premiums earned as well as net investment income. Also, the top line outpaced the Zacks Consensus Estimate of $198 million by 2.4%.
Gross premiums written improved 11% year over year to $229.1 million on the back of a solid performance by the Property and Casualty segments.
Total expenses increased 6% year over year to $184.7 million due to higher loss and settlement expenses, policy acquisition costs, insurance operating expenses plus general corporate expenses.
The company reported underwriting income of $26.8 million, which plunged 64.8% year over year. Combined ratio deteriorated 690 basis points year over year to 96.4%.
The property and casualty (P&C) insurer’s net investment income improved nearly 9.8% year over year to $14.4 million. Total return from the investment portfolio was 1.4% while the bond portfolio returned 0.4%. The equity portfolio yielded 5.7%.
Financial Update
The company exited the fourth quarter with total investments and cash of $2.1 billion, up 5.9% from the year-end 2016.
Book value was $19.33 per share as of Dec 31, 2017, up 3.1% from Dec 31, 2016.
Long-term debt was $148.9 million, reflecting a 0.1% rise from the 2016-end level.
Statutory surplus nudged up 0.5% year over year to $864.6 million.
Net cash flow from operations inched up 0.3% to $51.6 million in the quarter.
Dividend Payout
On Dec 27, 2017, the company paid out a cash dividend of 21 cents per share for an aggregate amount of $86.5 million. In the last 10 years, the average annual growth rate of the P&C insurer’s quarterly dividend came up to 6.2%.
Interestingly, on the aforementioned date, the company paid a special cash dividend of $1.75 per share, resulting in a tax benefit of $1.9 million (4 cents per share).
Zacks Rank
RLI Corp. has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other players from the insurance industry having reported fourth-quarter earnings, the bottom line of Brown & Brown, Inc. (BRO - Free Report) , MGIC Investment Corporation (MTG - Free Report) and The Progressive Corporation (PGR - Free Report) beat the respective Zacks Consensus Estimate.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>