RLI Q2 net earnings rise as net investment income increases

Overview

• US specialty insurer's Q2 revenue rose 15% yr/yr, net earnings up 35%

• Operating earnings for Q2 grew 1% from prior year

• Company authorized $250 mln share buyback and paid $2.00 per share special dividend

Outlook

• Company did not provide specific guidance or forecasts for the current or future periods

Result Drivers

• INVESTMENT INCOME - Net investment income increased 17% from the prior year, supporting overall results

• RESERVE DEVELOPMENT - Favorable development in prior years’ loss reserves added $35.1 mln to underwriting income

• PREMIUM GROWTH - Gross premiums written rose 3%, led by the casualty segment

Company press release: ID:nBw9bQMyYa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the property casualty insurance peer group is "buy."

• Wall Street's median 12-month price target for RLI Corp is $58.00, about 3.7% below its July 21 closing price of $60.20

• The stock recently traded at 22 times the next 12-month earnings vs. a P/E of 19 three months ago

Reuters Recommended Reads

• July 21 - Insurer Chubb posts higher second-quarter profit on strong underwriting business

• July 20 - W. R. Berkley second-quarter profit rises on strong underwriting

• July 21 - Neptune Insurance Q2 revenue rises 33% on record new business sales

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)