RLI Corp.’s RLI first-quarter 2018 operating earnings of 60 cents per share surpassed the Zacks Consensus Estimate by 15.4%. Moreover, the bottom line improved 36.4% year over year.

RLI Corp. Price, Consensus and EPS Surprise

 

RLI Corp. Price, Consensus and EPS Surprise | RLI Corp. Quote

 

Higher underwriting income coupled with improved net investment income was primarily responsible for this upside. Also, the company witnessed a strong performance at its property and casualty segments.

Net income plunged 40% year over year to 27 cents per share.

Operational Performance

Operating revenues for the quarter totaled $204.3 million, up 4.1% 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 $203 million by 0.6%.

Gross premiums written improved 11.3% year over year to $216.9 million on the back of a solid performance by the Property and Casualty segments.

Total expenses inched up 0.7% year over year to $176.7 million due to higher policy acquisition costs and insurance operating expenses.
 
The company reported underwriting income of $17.5 million, which surged 33.6% year over year. Combined ratio improved 210 basis points year over year to 90.8%.
 
The property and casualty (P&C) insurer’s net investment income improved nearly 9.4% year over year to $14.2 million. Total return from the investment portfolio was (1.5%).

Financial Update

The company exited the first quarter with total investments and cash of $2.1 billion, down 2.1% from the year-end 2017.

Book value was $18.82 per share as of Mar 31, 2018, down 2.6% from Dec 31, 2017.

Long-term debt was $148.9 million, remaining flat with the 2017-end level.

Statutory surplus grew 3.6% year over year to $895.5 million.

Net cash flow from operations surged 36.6% to $15.4 million in the quarter.

Dividend Payout

On Mar 20, 2018, the company paid out a cash dividend of 21 cents per share, same as the amount disbursed in the year-ago quarter. Over the past five years, the P&C insurer’s total cumulative dividends amounted to more than $611 million.

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 first-quarter earnings so far, the bottom line of The Progressive Corporation PGR, MGIC Investment Corporation MTG and Torchmark Corporation TMK beat the respective Zacks Consensus Estimate.

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Torchmark Corporation (TMK): Free Stock Analysis Report
 
MGIC Investment Corporation (MTG): Free Stock Analysis Report
 
RLI Corp. (RLI): Free Stock Analysis Report
 
The Progressive Corporation (PGR): Free Stock Analysis Report
 
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