RLI Q3 Earnings Top, Revenues Lag Estimates, Premiums Up Y/Y


RLI Corp. RLI reported third-quarter 2023 operating earnings of 61 cents per share, beating the Zacks Consensus Estimate by 510%. The bottom line improved 22% from the prior-year quarter’s levels.

Shares gained 1.4% in the aftermarket trading session.

The quarterly results reflect higher gross premiums written and solid underwriting performance despite losses from Hawaiian wildfires.

RLI Corp. Price, Consensus and EPS Surprise

 

RLI Corp. price-consensus-eps-surprise-chart | RLI Corp. Quote

 

Operational Performance

Operating revenues for the reported quarter were $350.4 million, up 12.1% year over year, driven by 9.2% higher net premiums earned and 50.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 7.2%.

Gross premiums written increased 11.3% year over year to $449.3 million. This uptick can be attributed to the solid performance of the Casualty (up 5.8%) and Property (up 25.8%), partly offset by soft Surety segments (down 2.3%). Our estimate was $450.1 million.

Net investment income increased 50.3% year over year to $32 million. The Zacks Consensus Estimate for the metric was pegged at $30.5 million, while our estimate was $31.3 million. The investment portfolio’s total return was -1.7% in the quarter.

Total expenses increased 10.8% year over year to $318.4 million, primarily due to higher loss and settlement expenses, policy acquisition costs and insurance operating expenses. Our estimate was $275.4 million.

Underwriting income of $4.2 million plunged 52.3% due to Hawaiian wildfire losses. The combined ratio deteriorated 170 basis points (bps) year over year to 98.7. Our estimate was 90.8.

Financial Update

RLI exited the quarter with total investments and cash of $3.5 billion, up 5.6% from 2022 end.

Book value was $28.47 per share as of Sep 30, 2023, up 13% from the figure as of Dec 31, 2022.

Net cash flow from operations was $85 million, down 24.2% year over year.

The statutory surplus increased 5% from 2022 end to $1.5 billion as of Sep 30, 2023.

Return on equity was 20.3% versus 22% in the year-ago period.

Dividend Update

On Sep 20, 2023, RLI paid a quarterly dividend of 27 cents per share. Over the last five years, the insurer has returned $764 million to shareholders.

Zacks Rank

RLI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Performance of Other Insurers

The Travelers Companies TRV reported third-quarter 2023 core income of $1.95 per share, which missed the Zacks Consensus Estimate by 33.4%. The bottom line decreased 11.4% year over year, primarily attributable to higher catastrophe losses and net unfavorable prior-year reserve development. Travelers’ total revenues increased 14% from the year-ago quarter to $10.6 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 1.3%.

Net written premiums increased 14% year over year to a record $10.4 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.4 billion. Travelers witnessed an underwriting gain of $868 million, up 43% year over year, driven by record net earned premiums of $9.7 billion and a consolidated underlying combined ratio, which improved by 90.6%.

The Progressive Corporation’s PGR third-quarter 2023 earnings per share of $2.09 beat the Zacks Consensus Estimate of $1.71. The bottom line improved more than fourfold year over year. Net premiums written were $15.6 billion in the quarter, which grew 20% from $13 billion a year ago and beat our estimate of $14.2 billion.

Net premiums earned grew 20% to $14.9 billion, beating our estimate of $13.6 billion and the Zacks Consensus Estimate of $14.8 billion. Net realized losses on securities were $149 million, narrower than a loss of $216.4 million in the year-ago quarter. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 680 bps from the prior-year quarter’s level to 92.4.

W.R. Berkley Corporation’s WRB third-quarter 2023 operating income of $1.35 per share beat the Zacks Consensus Estimate by 18.4%. The bottom line increased 33.7% year over year. Operating revenues came in at $3.1 billion, up 3.4% year over year, on the back of higher net premiums earned as well as higher net investment income. The top line beat the consensus estimate by 1.4%.

W.R. Berkley’s net premiums written were a record $2.8 billion, up 10.5% year over year  as market conditions remained favorable for most lines of business. Figures were in line with our estimate. The consolidated combined ratio (a measure of underwriting profitability) improved 190 basis points to 90.2. The Zacks Consensus Estimate was 92. Our estimate for the combined ratio was 93.5.

Zacks Names “Single Best Pick to Double”

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It’s credited with a “watershed medical breakthrough” and is developing a bustling pipeline of other projects that could make a world of difference for patients suffering from diseases involving the liver, lungs, and blood. This is a timely investment that you can catch while it emerges from its bear market lows.

It could rival or surpass other recent Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

Free: See Our Top Stock And 4 Runners Up

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RLI Corp. (RLI) : Free Stock Analysis Report

The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report

W.R. Berkley Corporation (WRB) : Free Stock Analysis Report

The Progressive Corporation (PGR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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港元現報7.7722元貶值18點子,曾貶值最多34點子,報7.7738元,亦曾升值最多0點子,報7.7704元。 金管局貨幣基礎數據顯示,上日收市總結餘為447.53億元,較再上一日增0.31億元,總結餘是12月10日後最高。 港元拆息、港元存息(彭博纽约综合利率)可看附圖。彭博終端機於6月1日起停止提供港元隔夜平均指數(HONIA)數據。 短線拆息方面,隔夜HIBOR升2.52點子至4.32524%,是11月29日後最高;1星期HIBOR升8.51點子至4.45208%,是10月16日後最高;2星期HIBOR升2.63點子至4.6%,是10月8日後最高。 中長線拆息方面,3個月期HIBOR升0.09點子至4.35375%,是12月17日後最高;6個月期HIBOR升2.35點子至4.18363%,是12月3日後最高;12個月期HIBOR升7.26點子至4.18506%,是9月9日後最高。 美元指數現報108.056升值0.029點或0.03%。 按T+2顯示的最新美元1個月期LIBOR報4.96018%,將同一日的港元1個月期HIBOR減美元1個月期LIBOR的利差為-0.4867%,連續2日收窄,利差是2024年12月12日後最窄,當日差距為-0.4789%。 對上一次連續2日收窄,是2024年12月10日,當日利差報-0.5649%。 其他報道 美國最高法院將加急審理TikTok案 分析料勝算不大 日央行維持息率不變 日圓貶值見1個月最弱 中國金融時報:從「穩健」到「適度寬鬆」央行支持性貨幣政策立場不變 余偉文:利率仍將處於相對高水平 提醒注意風險 螞蟻集團:目前沒有上市計劃 不存在「借殼上市」 AlipayHK明年起被納入政府「公共交通費用補貼計劃」 提供自動領取補貼功能 寧德時代據報擬在港上市 集資逾50億美元 據報融創向萬達提仲裁獲受理 要求支付95億人幣股份回購款 滬深三大指數低開 人行進行806億人幣逆回購 恒指低開254點 科指跌1.7% 跌穿100天線 草姬上市升25% 金管局將基準利率從5%下調至4.75% 眾議院多數黨領袖:權宜法案資金措施已經失效 目前沒有新協議 港股ADR跌392點 美期升亞股跌 草姬上市 特朗普「反對」維持政府開支權宜法案 呼籲國會即討論債務上限問題 蘋果據報停止推動iPhone硬件訂閱服務 美股見4個月最大跌幅 道指跌1123點 美債息上升 息差擴闊 聯儲局減息25基點 明年只減兩次 鮑威爾言論偏鷹 道指挫1123點 50年最長跌浪 北水增持工行 減持盈富 Source link

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