Oct 20, 2026 earnings call — Consistent underwriting results and portfolio growth
RLI reported third quarter operating earnings of $0.86 per share and an 86% combined ratio.
Revenue $0.5B (est $0.5B) · EPS $0.86 (est $0.54)
Key quotes
"Behind that consistency is disciplined underwriting. Our underwriters are selective, discerning and exacting about the risks we take and the price and terms we require."
"Our partnership with Steadily, which specializes in landlord insurance, generated $9 million of premium and helped to offset some of the premium decline in parts of our property segment."
"Operating cash flow was $195 million in the quarter, up 9% from last year and providing meaningful support to portfolio activity."
Analyst Q&A 8
personal umbrella results and new partner
Q (Michael Phillips · Oppenheimer): Are recent rate actions and higher attachment points showing up in the business's current year loss ratios or are benefits offset by severity? Also, details on the Steadily relationship: who underwrites, how much risk retained, and is it distribution-focused?
A: Management said it is still early and they have taken many actions; rates on the book are up about 50% over the last 3 years and they are seeing positive signs in the current and prior accident year 2025 but are hesitant to change loss ratio assumptions yet. On Steadily, they see it as running like a branch office of RLI with strong cultural fit, input into coverage, claims vetted in-house, ongoing interaction, and no target top-line forecast.
"We are seeing positive signs in the current accident year as well as in the prior accident year 2025." — Jennifer Klobnak (COO)
property loss trend and AI on umbrella
Q (Hristian Getsov · Wells Fargo): Why was the property underlying loss ratio flat year-over-year despite earlier deterioration — any one-offs or changed loss trends? And have personal AI agents changed shopping behavior or distribution for personal umbrella?
A: Aaron said there was nothing one-off in the quarter and pointed to higher attritional loss activity across the portfolio in the first half of the year. Jen said they have not seen changes from agentic AI yet and that much of that capability so far is focused on home and auto, so they are monitoring but haven't seen impact to personal umbrella.
"I would point to the first half of the year as just having some higher attritional loss activity across the portfolio, and we mentioned that in the prior call." — Aaron Diefenthaler (CFO)
MGA costs and management liability
Q (Meyer Shields · Keefe, Bruyette, & Woods): Will the MGA relationship affect acquisition expenses or the expense ratio? Also, any update on management liability market trends?
A: Management said commissions are a little higher on that distribution partner and there is a profit commission component, so expenses on that particular book will be a couple of points higher. They also said the management liability market has stabilized and overall is flat now, with rate changes generally modest year-to-date.
"Yes, Meyer, you're correct in that commissions are a little bit higher when you work with a distribution partner like that, and they do have a profit commission component." — Jennifer Klobnak (COO)
excess casualty development and reinsurance
Q (Charles Peters · Raymond James): Which accident years drove the favorable development in excess casualty, how is competition in that market, and any early read on reinsurance for 2027?
A: Aaron said the favorable development is from longer-tailed accident years, primarily '20 and '21. Jen said competition in excess liability has increased this year, especially in the Northeast from MGAs and standard markets, and that reinsurance renewals are early but, as it's a buyer's market, they expect positive terms and conditions and a positive result for 1/1.
"So primarily accident years '20 and '21, driving some of that favorable result." — Aaron Diefenthaler (CFO)
casualty loss trends and surety competition
Q (Sidney Schultz · Jefferies): How much of the casualty underlying loss ratio deterioration was pricing and mix versus a change in loss trends? And what's the surety pipeline and whether increased activity can sustain positive growth?
A: Aaron said the current underlying casualty loss ratio is in line with the prior two quarters and sequentially fairly stable, setting aside a prior quarter with a one-time action. Jen said surety is a crowded market with competition focused on large data-center contractors while RLI targets small to middle market contractors; she warned some competitors are underwriting with little diligence and RLI remains disciplined while actively marketing to find selective opportunities.
"But what we've seen is some competitors are so hungry for surety premium that they're asking almost no questions and not requiring indemnity, which is unusual in the surety space and typically results eventually in some loss activity." — Jennifer Klobnak (COO)
excess liability, marine, and E&S property pricing
Q (Mark Hughes · Truist): Was the late-quarter uptick in excess liability binding rates due to RLI initiatives or broader market shifts? Where did marine top-line strength come from? How much further downside in E&S property pricing remains and what are signposts to watch?
A: Jen said it's hard to tell yet — there were some more binders at quarter end and the trend is region-specific (West and middle of country stronger, East slower), so it's too early to call. She said marine strength is broad and driven by local underwriters finding opportunities across the U.S., and that E&S property is in a softening market but remains attractive with rates roughly around 2022 levels, so there is still room for movement.
"Our rates are approximately around 2022 rates, which are up from prior years." — Jennifer Klobnak (COO)
transportation market competition and selection
Q (Michael Phillips · Oppenheimer): Is the increased competition in transportation late in the quarter random or something more fundamental?
A: Jen said competitors are coming back to the transportation market and targeting large consolidated accounts to chase top line even though the severity is high. She said RLI will focus on disciplined risk selection and choose accounts dedicated to loss control and priced appropriately for the underlying risk.
"I think people are coming back to that market." — Jennifer Klobnak (COO)
raising limits to retain renewals
Q (Hristian Getsov · Wells Fargo): How successful has increasing some limit sizes been to defend renewals, and are competitors undercutting so limit size matters less?
A: Jen said increasing limits has been successful at retaining business, but new entrants and MGAs are offering larger limits so RLI must stretch only in ways that make sense. She added inflation has increased location values and raising limits has helped, but competition remains intense so they keep evaluating market changes.
"It has been successful in that we've been able to retain business." — Jennifer Klobnak (COO)