Key Highlights

● Second-quarter net earnings rose 35.1 per cent year over year to $168.0 million.

● The combined ratio was 85.6, extending a streak of underwriting profit to 30 years.

● Net investment income rose 16.8 per cent to $46.0 million.

● A special dividend of $2.00 per share, totalling $184.0 million, was paid in June.

RLI Corp. (NYSE:RLI) , based in Peoria, Illinois, is a specialty insurer serving niche property, casualty and surety markets through RLI Insurance Company, Mt. Hawley Insurance Company and Contractors Bonding and Insurance Company, all rated A++ (Superior) by AM Best. The company reported second-quarter 2026 results on 22 July 2026. Net earnings were $168.0 million, or $1.82 per share, up 35.1% from $124.3 million, or $1.34. Operating earnings were $76.9 million, or $0.83 per share, against $76.2 million, or $0.82. Net earnings exceeded operating earnings by a wide margin, so the two measures should be read separately. Trailing four-quarter comprehensive return on equity was 25.1%, and the company has reported underwriting profits for 30 consecutive years. Comprehensive earnings in the quarter were $165.7 million, or $1.80 per share. For the six months, net earnings were $222.9 million and operating earnings $153.6 million.

Underwriting and investment income

Underwriting remained profitable. The combined ratio was 85.6 against 84.5 a year earlier, and underwriting income was $59.9 million versus $62.2 million. Favourable prior-year reserve development added $35.1 million, compared with $24.4 million in 2025. By segment, property produced $53.5 million of underwriting income at a 56.8 combined ratio, surety $4.7 million at 87.2, and casualty $1.7 million at 99.3, up from 96.5. Gross premiums written rose 3% to $579.7 million, and net premiums earned rose 3.8% to $417.1 million. Net investment income rose 16.8% to $46.0 million. Catastrophe losses from 2026 events were $10.0 million in the quarter, or $26.0 million year to date. Shareholders' equity was $1.75 billion, and statutory surplus was $1.94 billion. Shareholders' equity and statutory surplus provide a capital cushion relative to premiums written.

Dividends, buybacks and balance sheet

Capital returns were prominent. A special dividend of $2.00 per share, returning $184.0 million, was paid on 12 June 2026. The regular quarterly dividend is $0.18 per share, up 12.5% from $0.16, with the third-quarter payment due on 15 September 2026; the company says it has raised regular dividends for 51 consecutive years. A repurchase programme of up to $250.0 million was authorised on 14 May 2026, and $12.0 million had been used by 30 June, leaving $238.0 million. Book value per share was $19.09, and long-term debt was $297.0 million, up from zero at year-end 2025 as a $100.0 million short-term borrowing was retired. The release describes book value as up 11% including dividends and buybacks, whereas the balance sheet table shows a 1.3% fall from $19.35. Total assets stood at $6.41 billion, with investments and cash of $4.87 billion. The investment portfolio returned 3.4% in the quarter and 3.0% for the six months.

Casualty Margins Are the Segment to Watch

RLI Corp's net earnings comfortably outpaced its operating earnings, so the two measures should be read separately, with favourable prior-year reserve development adding $35.1 million to the quarter. Property and surety both posted strong underwriting margins, but casualty's combined ratio widened to 99.3 from 96.5, the thinnest margin of the three segments and, in editorial terms, the one most worth watching as the company extends a 30-year run of underwriting profitability alongside 51 consecutive years of raised regular dividends.