RLI Corp. reported second-quarter 2026 net earnings of $168 million, or $1.82 per diluted share, up from $124.3 million, or $1.34 per share, in the same period a year earlier.
Operating earnings for the quarter were $76.9 million, or $0.83 per share, compared with $76.2 million, or $0.82 per share, in the second quarter of 2025.
The specialty insurer posted underwriting income of $59.9 million on a combined ratio of 85.6, versus $62.2 million and an 84.5 combined ratio in the prior-year period. Results in both years benefited from favorable development on prior years' loss reserves, which added $35.1 million to underwriting income in 2026 and $24.4 million in 2025.
Gross premiums written rose 3% for the quarter, driven primarily by RLI's casualty segment, even as casualty underwriting income fell to $1.7 million from $8.3 million a year earlier, with the segment's combined ratio rising to 99.3 from 96.5. Property delivered the strongest underwriting performance, with income of $53.5 million and a combined ratio of 56.8, improved from 62.1 in the second quarter of 2025. Surety underwriting income rose slightly to $4.7 million on a combined ratio of 87.2.
RLI Corp. president and CEO Craig Kliethermes (pictured) said gross premiums written increased 3%, driven by the casualty segment, while strong margins in property and surety contributed to an 86 combined ratio.
He added that a 17% increase in net investment income complemented underwriting results and contributed to an 11% rise in book value per share since year-end 2025, including dividends returned to shareholders, and that the results reflected disciplined execution and a continued focus on specialized expertise and service.
Book value per share stood at $19.09 at quarter-end, up 11% from year-end 2025 inclusive of dividends and share repurchases.
Meanwhile, the board authorized a new $250.0 million share repurchase program on May 14, and RLI repurchased 234,973 shares during the quarter at an average price of $51.25, for a total cost of $12.0 million, leaving $238.0 million of remaining capacity.
The company also paid a special cash dividend of $2.00 per share on June 12, alongside a regular quarterly dividend of $0.18 per share, a 12.5% increase over the prior quarter.
Over the past five years, RLI has returned more than $1.3 billion to shareholders through dividends and buybacks combined.
RLI's results also arrive as the broader US excess and surplus lines market, where much of the company's specialty book is written, moves into a more measured growth phase.
AM Best recently revised its outlook on the segment to stable from positive, citing moderating premium growth and rate softening after several years of rapid expansion. E&S premium growth had already slowed to 9.7% through the first nine months of 2025, down from 13.5% in the same period of 2024.
At the same time, AM Best and other industry observers note that admitted carriers continue to retreat from harder-to-price risks in casualty, property and emerging exposures such as cyber and artificial intelligence, pushing more business toward specialty and surplus lines writers like RLI even as overall growth rates ease.
RLI's casualty segment softened even as premiums grew, a pattern consistent with wider industry trends.
AM Best's most recent market segment report found that US commercial lines insurers have posted underwriting profits consistently over the past five years, aided by strong pricing and improved investment returns, but flagged elevated casualty claims tied to social inflation as an ongoing pressure on underwriting and reserve margins across the industry.
According to the Swiss Re Institute, annual liability claim costs linked to social inflation grew by roughly 7% in 2024, the highest increase in two decades, underscoring the pressure many specialty and commercial casualty writers are managing even as reserve releases continue to support current results.
With property underwriting margins improving, casualty growth continuing despite a higher combined ratio, and capital return commitments extending further, RLI's second-quarter results suggest a company positioning for continued casualty growth at a point when much of the specialty market is watching reserve adequacy closely amid ongoing social inflation pressures across the wider casualty landscape.
