Third quarter 2026
Filed Oct 19, 2026RLI reported third quarter 2026 net earnings of $81.0 million ($0.88 per share) and operating earnings of $79.3 million ($0.86 per share).
Operating earnings increased 4.6% and operating EPS increased 4.9%, supported by underwriting income and 13.1% growth in net investment income. GAAP net earnings declined 35.0%, consolidated revenue declined 6.3%, and the combined ratio increased to 86.2 from 85.1.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Consolidated revenue, three months ended September 30GAAP | $477.0M | – | (6.3) % |
| Consolidated revenue, nine months ended September 30GAAP | $1,476,402 | – | 4.2 % |
| Net premiums earned, three months ended September 30GAAP | $424.9M | – | 4.2 % |
| Net premiums earned, nine months ended September 30GAAP | $1.25B | – | 3.8 % |
| Gross premiums written, three months ended September 30GAAP | $522.2M | – | 2% |
| Gross premiums written, nine months ended September 30GAAP | $1.61B | – | – |
| Net premiums written, three months ended September 30GAAP | $429.3M | – | – |
| Net premiums written, nine months ended September 30GAAP | $1.33B | – | – |
| Net investment income, three months ended September 30GAAP | $46.69M | – | 13.1 % |
| Net investment income, nine months ended September 30GAAP | $135,057 | – | 15.0 % |
| Net realized gains, three months ended September 30GAAP | $8.64M | – | (52.8) % |
| Net unrealized gains (losses) on equity securities, three months ended September 30GAAP | −$3.28M | – | NM |
| Loss and settlement expenses, three months ended September 30GAAP | $201.3M | – | 7.1 % |
| Policy acquisition costs, three months ended September 30GAAP | $134.1M | – | 4.0 % |
| Insurance operating expenses, three months ended September 30GAAP | $30.66M | – | 1.5 % |
| Interest expense on debt, three months ended September 30GAAP | $4.2M | – | NM |
| General corporate expenses, three months ended September 30GAAP | $3.39M | – | (32.8) % |
| Total expenses, three months ended September 30GAAP | $373.7M | – | 5.7 % |
| Earnings before income taxes, three months ended September 30GAAP | $100.1M | – | (36.3) % |
| Income tax expense, three months ended September 30GAAP | $19.08M | – | (41.5) % |
| Net earnings, three months ended September 30GAAP | $81.01M | – | (35.0) % |
| Net earnings, nine months ended September 30GAAP | $303,922 | – | (2.6) % |
| Operating earnings, three months ended September 30non-GAAP | $79.26M | – | 4.6 % |
| Operating earnings, nine months ended September 30non-GAAP | $232,878 | – | (0.6) % |
| Net earnings per share, three months ended September 30GAAP | $0.88 | – | (34.8) % |
| Net earnings per share, nine months ended September 30GAAP | $3.29 | – | (2.7) % |
| Operating earnings per share, three months ended September 30non-GAAP | $0.86 | – | 4.9 % |
| Operating earnings per share, nine months ended September 30non-GAAP | $2.52 | – | (0.4) % |
| Underwriting income, three months ended September 30non-GAAP | $58.77M | – | – |
| Combined ratio, three months ended September 30non-GAAP | 86.2 | – | – |
| Underwriting income, nine months ended September 30non-GAAP | $176,465 | – | – |
| Combined ratio, nine months ended September 30non-GAAP | 85.9 | – | – |
| Comprehensive earnings (loss), three months ended September 30GAAP | −$36.8M | – | NM |
| Comprehensive earnings (loss) per share, three months ended September 30GAAP | $(0.40) | – | NM |
| Net cash flow provided by operations, three months ended September 30GAAP | $194.7M | – | 8.6 % |
| Net cash flow provided by operations, nine months ended September 30GAAP | $382,708 | – | (16.3) % |
| Book value per share, September 30GAAP | $18.49 | – | (4.4) % |
| Total investments and cash, September 30GAAP | $4,907,381 | – | 5.2 % |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Casualty, three months ended September 30Underwriting income was $1,040 and the combined ratio was 99.6. | $262,177 net premiums earned | – | – |
| Property, three months ended September 30Underwriting income was $50,426 and the combined ratio was 60.1. | $126,520 net premiums earned | – | – |
| Surety, three months ended September 30Underwriting income was $7,303 and the combined ratio was 79.8. | $36,217 net premiums earned | – | – |
| Casualty, nine months ended September 30Underwriting income was $10,075 and the combined ratio was 98.7. | $767,665 net premiums earned | – | – |
| Property, nine months ended September 30Underwriting income was $152,110 and the combined ratio was 59.6. | $376,684 net premiums earned | – | – |
| Surety, nine months ended September 30Underwriting income was $14,280 and the combined ratio was 86.9. | $109,047 net premiums earned | – | – |
Capital returns
- On September 15, 2026, the company paid a regular quarterly dividend of $0.18 per share, the same amount as the prior quarter.
- During the third quarter, RLI repurchased 103,573 shares at an average price of $60.51 per share for a total cost of $6.3 million.
- As of September 30, 2026, $231.7 million of capacity remained available under the share repurchase program.
- Cash dividends per share - ordinary were $0.18 for the three months ended September 30, compared with $0.16, a 12.5 % increase.
- Cash dividends per share - special were $2.00 for the nine months ended September 30, compared with $—.
What drove it
- Favorable development in prior years' loss reserves resulted in a $20.1 million net increase in underwriting income, compared with $13.7 million in 2025.
- Net favorable development in prior accident years' casualty reserves was $8.2 million, property reserves was $10.4 million, and surety reserves was $4.3 million for the three months ended September 30, 2026.
- Net incurred losses from current accident year catastrophe events were $(0.1) million in casualty and $(3.9) million in property for the three months ended September 30, 2026.
- Property underwriting income was $50.5 million, compared with $50.4 million, while the property combined ratio was 60.1 compared with 60.2.
- Surety underwriting income was $7.3 million, compared with $5.6 million, and the surety combined ratio was 79.8 compared with 85.0.
- Net investment income increased 13.1 % to $46,694.
Concerns
- Consolidated revenue declined (6.3) % to $476,963 as net realized gains declined to $8,637 from $18,318 and net unrealized gains (losses) on equity securities were $(3,282) versus $41,981.
- The total combined ratio increased to 86.2 from 85.1, while casualty's combined ratio increased to 99.6 from 98.2.
- GAAP net earnings declined (35.0) % to $81,009 and net earnings per share declined (34.8) % to $0.88.
- Other comprehensive earnings (loss), net of tax, was $(117,809), compared with $27,674. The company cited after-tax unrealized losses from the fixed income portfolio due to rising interest rates.
- Nine-month operating earnings declined (0.6) % to $232,878 and nine-month operating earnings per share declined (0.4) % to $2.52.
What to watch
- Casualty underwriting performance, following a 99.6 combined ratio and $1.0 million of underwriting income in the third quarter.
- The level of favorable development in prior years' loss reserves, which contributed a $20.1 million net increase to third-quarter underwriting income.
- Current accident year property catastrophe losses, which were $(3.9) million in the third quarter and $(27.4) million in the nine months ended September 30, 2026.
- Fixed-income portfolio performance following a -2.0% total return for the quarter and $(117,809) of other comprehensive earnings (loss), net of tax.
- Debt and capital deployment following the shift from $100,000 of short-term debt at December 31, 2025 to $297,044 of long-term debt at September 30, 2026.
Balance sheet and cash flow
- Cash and cash equivalents were $46,212 at September 30, 2026, compared with $51,565 at December 31, 2025.
- Fixed income, at fair value, was $3,600,969 at September 30, 2026, compared with $3,533,336 at December 31, 2025.
- Equity securities, at fair value, were $948,319 at September 30, 2026, compared with $898,876 at December 31, 2025.
- Short-term investments were $254,273 at September 30, 2026, compared with $120,562 at December 31, 2025.
- Total assets were $6,445,559 at September 30, 2026, compared with $6,161,486 at December 31, 2025.
- Short-term debt was $— at September 30, 2026, compared with $100,000 at December 31, 2025.
- Long-term debt was $297,044 at September 30, 2026, compared with $— at December 31, 2025.
- Total liabilities were $4,749,386 at September 30, 2026, compared with $4,383,290 at December 31, 2025.
- Shareholders' equity was $1,696,173 at September 30, 2026, compared with $1,778,196 at December 31, 2025.
- Statutory surplus was $1,964,770 at September 30, 2026, compared with $1,846,615 at December 31, 2025.
- The investment portfolio's total return was -2.0% for the quarter and 0.9% for the nine months ended September 30, 2026.
Analysis
RLI's third-quarter operating result improved despite a lower GAAP result. Operating earnings increased 4.6% to $79,257 and operating earnings per share increased 4.9% to $0.86. Net premiums earned increased 4.2% to $424,914 and net investment income increased 13.1% to $46,694. Consolidated revenue declined 6.3% to $476,963 because net realized gains declined to $8,637 from $18,318 and net unrealized gains (losses) on equity securities were $(3,282), compared with $41,981.
Underwriting remained profitable, with $58,769 of underwriting income and an 86.2 combined ratio. That compared with $60,545 and an 85.1 combined ratio in the prior-year quarter. Property was the main underwriting contributor, producing $50,426 of underwriting income at a 60.1 combined ratio. Surety improved to $7,303 of underwriting income at a 79.8 combined ratio. Casualty generated $1,040 of underwriting income and its combined ratio increased to 99.6 from 98.2.
Reserve development materially supported the quarter. Favorable development in prior years' loss reserves added $20.1 million to underwriting income, compared with $13.7 million in 2025. Net incurred current accident year property catastrophe losses were $(3.9) million, while current accident year casualty catastrophe losses were $(0.1) million. The nine-month underwriting result was $176,465 at an 85.9 combined ratio, compared with $193,321 at an 84.0 combined ratio, and nine-month operating earnings declined 0.6% to $232,878.
GAAP net earnings declined 35.0% to $81,009, or $0.88 per share, while comprehensive earnings (loss) was $(36,800). Other comprehensive earnings (loss), net of tax, was $(117,809), which the company attributed to after-tax unrealized losses from the fixed income portfolio due to rising interest rates. The investment portfolio's total return was -2.0% for the quarter. Book value per share was $18.49 at September 30, 2026, compared with $19.35 at December 31, 2025, although the company stated book value increased 10% from year-end 2025 inclusive of dividends and share repurchases.
RLI paid a $0.18 per-share regular quarterly dividend and repurchased 103,573 shares for $6.3 million during the quarter. Remaining repurchase capacity was $231.7 million at September 30, 2026. Cash and cash equivalents were $46,212, total investments and cash were $4,907,381, and long-term debt was $297,044. The filing did not provide forward guidance.
Management, verbatim
Our third-quarter results reflect consistent, disciplined execution across the business.
Craig Kliethermes, President & CEO
We delivered an 86 combined ratio, with strong underwriting performance in our property and surety segments.
Craig Kliethermes, President & CEO
As market conditions evolve across our portfolio, we remain focused on risk selection and profitable growth.
Craig Kliethermes, President & CEO
Not in the filing
stated, not guessed- Forward revenue, earnings, combined ratio, expense, tax-rate, capital-return, or other financial guidance was not provided.
- Prior-quarter comparisons for reported income statement, underwriting, cash-flow, and per-share metrics were not provided.
- Free cash flow was not provided.
- Gross margin was not provided.
- Operating income was not provided.
- A reported income tax rate was not provided.
- A prior-year percentage change for gross premiums written, net premiums written, underwriting income, combined ratios, and segment net premiums earned was not provided on their respective rows.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.