Investor Presentation 2nd Quarter, 2024
Q2
2024
OUR PURPOSE, VISION, MISSION & STRATEGY
Our purpose, vision, mission and strategy serve as the foundation of our balanced growth plan.
Purpose Vision Mission Strategy
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Protect people and 
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Be the recognized |
Provide industry-leading |
Create sustainable value |
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organizations from life's |
performance leader of the |
specialty risk |
and differentiate RLI in the |
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uncertainties to help them |
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management solutions |
marketplace through |
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explore, create, build and |
industry. |
that are convenient, |
industry-leading products, |
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thrive. |
tailored and fill unmet |
unmatched expertise and |
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customer needs. |
exceptional customer |
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service. |
3
RLI OVERVIEW
RLI is a domestic, specialty insurance company that handles its own underwriting and claims.
Underwriting
Company
__________________
- Hire talented, entrepreneurial underwriters with narrow & deep knowledge
- Focus on difficult markets that require unique expertise
- Encourage a strong feedback loop between underwriting and claims
- Underwriting discipline and results are paramount
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Growth through |
Ownership |
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Culture & |
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Discipline |
Compensation |
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__________________ |
__________________ |
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• |
Emphasize profitable, |
• Underwriting leadership |
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organic product growth |
compensation is tied to |
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• |
Explore talent acquisition |
product specific |
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underwriting profit |
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& start-ups |
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- Selectively consider balance sheet acquisitions that preserve RLI's unique culture
91% Institutions & other public investors
9% Insiders & Employee Stock Ownership Plan ("ESOP")
Diversified
Insurance Product
Portfolio
__________________
- Products are run like stand-alone, largely- autonomous, businesses
- Maintain a highly diverse product portfolio to reduce corporate risk
- Many products are tailored to fill a void in the market
Capital
Management
__________________
- Retain enough capital to meet policyholder needs
- Lean into profitable underwriting opportunities when they arise
- Retuexcess capital to shareholders
- Maintain our ability to raise traditional third party capital as needed
4
OUR STRATEGY
Customer Focus
- Customer Experience
- Growth Adjacencies
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Trusted |
Ease of Use |
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Partnerships |
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Value Creation |
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Community |
Continuous |
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• |
People |
Improvement |
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• |
Cultural Adaptability |
• |
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Stability |
• |
Innovation |
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How We Create Value
By sharing our expertise and offering exceptional service to our customers, our highly engaged employees create lasting relationships and can see the impact they make on our business.
We incorporate our customers' feedback to ensure our products meet their needs and that we remain a stable, trusted partner that is easy to work with and fulfills our promise to pay claims owed.
Our shareholders benefit from our diversified, resilient business model, which produces consistent financial performance.
5
COMPETITIVE ADVANTAGES
RLI will capitalize on its competitive advantages to drive profitable growth.
WE
- Relationship oriented
- Community minded
- Responsible
- Sustainable
- Continuously improve
EMPOWERED
- Responsive
- Accountable
- Curious
- Distributed decision making
- Flat structure
PRUDENT
- Rational
- Principled
- Diversified
- Resilient
- Downside risk management
- Long-termoutlook
SERVICE ORIENTED
- Problem solvers
- Dedicated
- Transparent
- Authentic
- Humble
UNDERWRITE
FOR PROFIT
- Specialists
- Deep expertise
- Tailored products in niche markets
- Collaborative feedback
- Aligned compensation
- Shared rewards
REPUTATION
- People focused
- Disciplined
- Strive for excellence
- Consistent
- Stable
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6 |
Interwoven, complementary and fortified by a common DNA |
FINANCIAL STRENGTH AND STABILITY
Our financial track record has been stellar for decades - a testament to our ownership culture and reputation as an excellent underwriting company.
A+
SUPERIOR
4.9/5
STARS ON
A
STRONG
WARD'S 50
TOP P&C PERFORMER FOR 34 YEARS1
(1)Only insurer to be recognized every year since inception
7
SELECT MARKET INFORMATION
RLI has a rich history as a publicly traded company and has consistently created value for its shareholders.
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Ticker / Exchange |
RLI / NYSE |
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Share Price (as of 6/30/2024) |
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Annual Dividend / Yield (as of 6/30/2024) |
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Market Cap |
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Annual Gross Premium (Trailing 4 qtr.) |
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Employees |
1,089 |
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Leadership Average Industry Experience |
28 Years |
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20 Year Annual Shareholder Return |
15.6% |
8
Q2 2024 FINANCIAL UPDATE
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Second Quarter |
Year to Date |
||||||||||
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2024 |
2023 |
% Change |
2024 |
2023 |
% Change |
||||||
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Earnings Per Diluted Share |
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Net earnings |
$ |
1.78 |
$ |
1.69 |
5.3% |
$ |
4.55 |
$ |
3.83 |
18.8% |
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Operating earnings |
$ |
1.72 |
$ |
1.16 |
48.3% |
$ |
3.61 |
$ |
2.79 |
29.4% |
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Net Premiums Earned (in millions) |
|||||||||||
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Casualty |
$ |
209.1 |
$ |
187.1 |
11.8% |
$ |
407.4 |
$ |
373.1 |
9.2% |
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Property |
$ |
134.1 |
$ |
101.8 |
31.7% |
$ |
263.5 |
$ |
190.6 |
38.2% |
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Surety |
$ |
35.9 |
$ |
33.4 |
7.5% |
$ |
68.8 |
$ |
66.3 |
3.8% |
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Total |
$ |
379.1 |
$ |
322.3 |
17.6% |
$ |
739.7 |
$ |
630.0 |
17.4% |
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Underwriting Income (Loss) (in millions) |
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Casualty |
$ |
10.3 |
$ |
7.0 |
47.1% |
$ |
24.0 |
$ |
38.8 |
(38.1)% |
|
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Property |
$ |
53.2 |
$ |
25.9 |
105.4% |
$ |
110.9 |
$ |
54.3 |
104.2% |
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Surety |
$ |
6.5 |
$ |
8.3 |
(21.7)% |
$ |
12.8 |
$ |
16.0 |
(20.0)% |
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Total |
$ |
70.0 |
$ |
41.2 |
69.9% |
$ |
147.7 |
$ |
109.1 |
35.4% |
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Combined Ratio |
|||||||||||
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Casualty |
95.1 |
96.3 |
94.1 |
89.6 |
|||||||
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Property |
60.3 |
74.6 |
57.9 |
71.5 |
|||||||
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Surety |
81.8 |
75.0 |
81.4 |
75.8 |
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Total |
81.5 |
87.2 |
80.0 |
82.7 |
Other 2Q24 Highlights
- 11% increase in gross premiums written
- 18% increase in net investment income
- Favorable development in prior years' loss reserves, resulting in a
$19.8 million net increase in underwriting income - Book value per share of
$34.64 , an increase of 14% (inclusive of dividends) from year-end 2023
9
DIVERSIFIED PRODUCT PORTFOLIO: NET PREMIUM1
Product diversification has fueled our growth & financial success.
E&S: 39% of NWP1
Specialty Admitted: 61% of NWP1
E&S Property2
Earthquake2
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General Liability2 |
Excess Liability2 |
Other
Executive Products
Transportation
Casualty
Property(56%)Professional Services
(34%)
Surety
(10%)Commercial
Package
Marine
Hawaii Homeowners/Other
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Contract |
Personal |
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Commercial |
Umbrella |
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Transactional |
10(1) Trailing 4 Quarters Net Written Premium
- Exclusively E&S line
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