PEORIA, Ill.--(BUSINESS WIRE)-- RLI Corp. (NYSE: RLI) – RLI Corp. reported third quarter 2018 net earnings of $39.4 million ($0.88 per share), compared to $1.7 million ($0.04 per share) for the third quarter of 2017. Operating earnings⁽¹⁾ for the third quarter of 2018 were $20.8 million ($0.46 per share) compared to $1.7 million ($0.04 per share) for the same period in 2017.

		Third Quarter								Year to Date
Earnings Per Diluted Share		2018				2017				2018				2017
Net earnings (2)		$		0.88		$		0.04		$		1.90		$		1.07
Operating earnings (1)		$		0.46		$		0.04		$		1.66		$		1.08

(1)		See discussion below: Non-GAAP and Performance Measures.
(2)		Unrealized losses on equity securities and the related taxes were included in net earnings in 2018. See discussion below: Recently Adopted Accounting Standard and Tax Reform.

Highlights for the quarter included:

• Underwriting income⁽¹⁾ of $7.8 million, resulting in a combined ratio⁽¹⁾ of 96.1.
• 8% increase in gross premiums written and 15% increase in investment income.
• Favorable development in prior years’ loss reserves resulting in a $9.7 million net increase in underwriting income.
• Losses from Hurricane Florence resulting in a $6.4 million net decrease to underwriting income.
• Book value per share of $19.60, an increase of 5% from year-end 2017, inclusive of dividends.

“In the third quarter, our business continued to exhibit strong momentum,” said RLI Corp. Chairman & CEO Jonathan E. Michael. “Premium was up across much of our product portfolio, while underwriting results were modestly impacted by Hurricane Florence. Investment income growth supported our underwriting results and contributed to our $0.46 of operating income per share in the quarter. We have expanded our presence in new niches and markets that value our underwriting expertise, continue to successfully grow our more established products and remain consistently focused on our trademark underwriting discipline.”

Underwriting Income

RLI achieved $7.8 million of underwriting income in the third quarter of 2018 on a 96.1 combined ratio, compared to $14.9 million of underwriting loss on a 108.2 combined ratio in the same quarter for 2017. Results for both years include favorable development in prior years’ loss reserves which totaled $9.7 million and $14.9 million for 2018 and 2017, respectively.

The following table highlights underwriting income and combined ratios by segment.

Underwriting Income(1)		Third Quarter										Combined Ratio(1)		Third Quarter
(in millions)		2018				2017								2018		2017
Casualty		$	(1.9	)		$	3.6					Casualty		101.5		97.0
Property			2.6				(27.5	)				Property		93.3		182.0
Surety			7.1				9.0					Surety		76.4		69.9
Total		$	7.8			$	(14.9	)				Total		96.1		108.2

(1)

See discussion below: Non-GAAP and Performance Measures.

Other Income

RLI’s net investment income for the quarter increased 15.0% to $16.3 million, compared to the same period in 2017. For the nine-month period ended September 30, 2018, investment income was $45.1 million versus $40.4 million for the same period in 2017. The investment portfolio’s total return was 1.5% for the quarter and 0.7% through the nine-month period.

Comprehensive earnings were $31.7 million for the quarter ($0.70 per share) compared to $10.2 million ($0.23 per share) for the same quarter in 2017. In addition to net earnings, comprehensive earnings included after-tax unrealized gains/losses from the fixed income portfolio in 2018 and after-tax unrealized gains/losses from the fixed income and equity portfolios in 2017. See Recently Adopted Accounting Standard and Tax Reform discussion below.

Equity in earnings of unconsolidated investees was $3.6 million for the quarter compared to $3.7 million from the same period last year. These results are related to Maui Jim, Inc. ($2.6 million), a producer of premium sunglasses, and Prime Holdings Insurance Services, Inc. ($1.0 million), a specialty insurance company. For the third quarter of 2017, equity in earnings of unconsolidated investees from Maui Jim and Prime was $3.1 million and $0.6 million, respectively. For the nine-month period ended September 30, 2018, equity in earnings of unconsolidated investees was $15.9 million versus $15.4 million in 2017.

Dividends Paid in the Third Quarter of 2018

On September 20, 2018, the company paid an ordinary dividend of $0.22 per share, the same amount as the prior quarter. RLI’s cumulative dividends total more than $616 million paid over the last five years.

Recently Adopted Accounting Standard and Tax Reform

As disclosed in RLI’s Annual Report on Form 10-K for the year ended December 31, 2017, accounting guidance for financial instruments changed in 2018 under ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. We adopted this accounting standard update, effective January 1, 2018, using a cumulative-effect adjustment. This adjustment moved the historical unrealized gains and losses, net of tax, on the equity portfolio from accumulated other comprehensive earnings to retained earnings, but had no impact on overall shareholders’ equity. In addition, for 2018 and forward, the change in fair value for equity securities is required to be recognized through net earnings rather than through other comprehensive income. As defined below, we exclude these unrealized gains and losses in arriving at operating earnings and earnings per share from operations. For the third quarter of 2018, $4.8 million of unrealized gains, gross of tax, were recognized within pre-tax earnings and the income tax expense was increased by $1.0 million. The impact to our income statement will vary depending upon the level of volatility in the performance of the securities held in our equity portfolio and the overall market.

The change in the federal corporate tax rate from 35% to 21% commencing January 1, 2018, as enacted by the Tax Cuts and Jobs Act of 2017 (TCJA), contributed to a lower effective tax rate for 2018 as compared to 2017.

Non-GAAP and Performance Measures

Management has included certain non-generally accepted accounting principles (“non-GAAP”) financial measures in presenting the Company’s results. Management believes that these non-GAAP measures better explain the Company’s results of operations and allow for a more complete understanding of the underlying trends in the Company’s business. These measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles (“GAAP”). In addition, our definitions of these items may not be comparable to the definitions used by other companies.

Operating earnings and earnings per share (EPS) from operations consist of our GAAP net earnings adjusted by the net realized gains/(losses), net unrealized gains/(losses) on equity securities for 2018 only and taxes related thereto. The adjustment for net unrealized gains/(losses) on equity securities is only applicable for 2018 due to the adoption of the above mentioned accounting standard update. Net earnings and net earnings per share are the GAAP financial measures that are most directly comparable to operating earnings and EPS from operations. A reconciliation of the operating earnings and EPS from operations to the comparable GAAP financial measures is included in the 2018 financial highlights below.

Underwriting income or profit represents the pretax profitability of our insurance operations and is derived by subtracting loss and settlement expenses, policy acquisition costs and insurance operating expenses from net premium earned, which are all GAAP financial measures. The combined ratio, which is derived from components of underwriting income, is a performance measure commonly used by property and casualty insurance companies and is calculated as the sum of loss and settlement expenses, policy acquisition costs and insurance operating expenses, divided by net premiums earned, which are all GAAP measures.

Other News

On July 18, 2018, RLI was named as one of the insurance industry’s top performing companies by Ward Group for the 28^th consecutive year. RLI is one of only two property-casualty insurers to be recognized as a Ward’s 50^® Top P&C Performer every year since the list’s inception in 1991.

At 10 a.m. central daylight time (CDT) tomorrow, October 18, 2018, RLI management will hold a conference call to discuss quarterly results with insurance industry analysts. Interested parties may listen to the discussion through the Internet at https://edge.media-server.com/m6/p/pb3a8j4k.

Except for historical information, this news release may include forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) including, without limitation, statements reflecting our current expectations about the future performance of our company or our business segments or about future market conditions. These statements are subject to certain risk factors that could cause actual results to differ materially. Various risk factors that could affect future results are listed in the company's filings with the Securities and Exchange Commission, including the Form 10-K Annual Report for the year ended December 31, 2017.

About RLI

RLI Corp. (NYSE: RLI) is a specialty insurer serving diverse, niche property, casualty and surety markets. The company provides deep underwriting expertise and superior service to commercial and personal lines customers nationwide. RLI’s products are offered through its insurance subsidiaries RLI Insurance Company, Mt. Hawley Insurance Company and Contractors Bonding and Insurance Company. All of RLI’s insurance subsidiaries are rated A+ (Superior) by A.M. Best Company. RLI has paid and increased regular dividends for 43 consecutive years and delivered underwriting profits for 22 consecutive years. To learn more about RLI, visit www.rlicorp.com.

Supplemental disclosure regarding the earnings impact of specific items:

				Operating Earnings Per Share
				2018				2017				2018				2017
				3rd Qtr				3rd Qtr				9 Mos.				9 Mos.
Operating Earnings Per Share(1)				$	0.46			$	0.04			$	1.66			$	1.08
Specific items included in operating earnings per share:(2) (3)
•	Favorable development in casualty prior years' reserves			$	0.11			$	0.15			$	0.36			$	0.23
•	Favorable development in property prior years' reserves			$	0.01			$	0.02			$	0.07			$	0.06
•	Favorable development in surety prior years' reserves			$	0.03			$	0.04			$	0.16			$	0.16
•	Catastrophe impact
	▪	Hurricane Florence		$	(0.11	)		$	-			$	(0.11	)		$	-
	▪	2018 Hawaii volcanic activity		$	-			$	-			$	(0.10	)		$	-
	▪	2018 storms		$	-			$	-			$	(0.05	)		$	-
	▪	Hurricanes Harvey, Irma and Maria		$	-			$	(0.46	)		$	-			$	(0.46	)
	▪	2017 and prior events		$	0.02			$	0.01			$	0.02			$	(0.02	)

(1)		See discussion above: Non-GAAP and Performance Measures.
(2)		Includes incentive and profit sharing-related impacts which affected policy acquisition, insurance operating and general corporate expenses.
(3)		Reserve development reflects changes from previously estimated losses.

RLI CORP.
2018 FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
		Three Months Ended September 30,													Nine Months Ended September 30,
SUMMARIZED INCOME STATEMENT DATA:		2018				2017				% Change					2018					2017					% Change
Net premiums earned		$	200,815			$	182,025			10.3		%			$	587,364				$	549,641				6.9		%
Net investment income			16,314				14,187			15.0		%				45,123					40,430				11.6		%
Net realized gains (losses)			18,647				35			-						47,900					(700	)			-
Net unrealized gains (losses) on equity securities			4,848				-			-						(34,535	)				-				-
Consolidated revenue		$	240,624			$	196,247			22.6		%			$	645,852				$	589,371				9.6		%
Loss and settlement expenses		$	110,231			$	123,190			(10.5	)	%			$	304,305				$	306,927				(0.9	)	%
Policy acquisition costs			68,414				62,066			10.2		%				201,473					186,264				8.2		%
Insurance operating expenses			14,408				11,701			23.1		%				42,191					38,582				9.4		%
Interest expense on debt			1,862				1,856			0.3		%				5,576					5,569				0.1		%
General corporate expenses			2,947				1,956			50.7		%				7,871					7,816				0.7		%
Total expenses		$	197,862			$	200,769			(1.4	)	%			$	561,416				$	545,158				3.0		%
Equity in earnings of unconsolidated investees			3,587				3,660			(2.0	)	%				15,853					15,404				2.9		%
Earnings (loss) before income taxes		$	46,349			$	(862	)		-					$	100,289				$	59,617				68.2		%
Income tax expense (benefit)			6,977				(2,596	)		-						15,450					11,847				30.4		%
Net earnings		$	39,372			$	1,734			-					$	84,839				$	47,770				77.6		%
Other comprehensive earnings (loss), net of tax			(7,696	)			8,444			-						(41,769	)				30,812				-
Comprehensive earnings		$	31,676			$	10,178			211.2		%			$	43,070				$	78,582				(45.2	)	%
Operating earnings(1):
Net earnings		$	39,372			$	1,734			-					$	84,839				$	47,770				77.6		%
Less:
Realized (gains) losses			(18,647	)			(35	)		-						(47,900	)				700				-
Income tax on realized gains (losses)			3,916				12			-						10,059					(245	)			-
Unrealized (gains) losses on equity securities			(4,848	)			-			-						34,535					-				-
Income tax on unrealized gains (losses) on equity securities			1,018				-			-						(7,252	)				-				-
Operating earnings		$	20,811			$	1,711			-					$	74,281				$	48,225				54.0		%
Return on Equity:
Net earnings (trailing four quarters)																16.6		%			9.2		%
Comprehensive earnings (trailing four quarters)																12.2		%			8.7		%
Per Share Data:
Diluted:
Weighted average shares outstanding (in 000's)			44,940				44,515									44,760					44,517
Net earnings per share		$	0.88			$	0.04			-					$	1.90				$	1.07				77.6		%
Less:
Realized (gains) losses			(0.42	)			-			-						(1.07	)				0.02				-
Income tax on realized gains (losses)			0.09				-			-						0.22					(0.01	)			-
Unrealized (gains) losses on equity securities			(0.11	)			-			-						0.77					-				-
Income tax on unrealized gains (losses) on equity securities			0.02				-			-						(0.16	)				-				-
EPS from operations(1)		$	0.46			$	0.04			-					$	1.66				$	1.08				53.7		%
Comprehensive earnings per share		$	0.70			$	0.23			204.3		%			$	0.96				$	1.77				(45.8	)	%
Cash dividends per share - ordinary		$	0.22			$	0.21			4.8		%			$	0.65				$	0.62				4.8		%
Net Cash Flow provided by Operations		$	63,369			$	71,363			(11.2	)	%			$	163,369				$	145,933				11.9		%
(1) See discussion above: Non-GAAP and Performance Measures.

RLI CORP.
2018 FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)
		September 30,			December 31,
		2018			2017			% Change
SUMMARIZED BALANCE SHEET DATA:
Fixed income		$	1,719,617		$	1,672,239		2.8	%
(amortized cost - $1,745,648 at 9/30/18)
(amortized cost - $1,646,411 at 12/31/17)
Equity securities			394,375			400,492		(1.5)	%
(cost - $210,119 at 9/30/18)
(cost - $182,002 at 12/31/17)
Other invested assets			38,777			33,808		14.7	%
Cash and cash equivalents			77,995			34,251		127.7	%
Total investments and cash		$	2,230,764		$	2,140,790		4.2	%
Premiums and reinsurance balances receivable			138,480			134,351		3.1	%
Ceded unearned premiums			66,400			57,928		14.6	%
Reinsurance balances recoverable on unpaid losses			320,027			301,991		6.0	%
Deferred policy acquisition costs			84,232			77,716		8.4	%
Property and equipment			55,469			55,849		(0.7)	%
Investment in unconsolidated investees			95,007			90,067		5.5	%
Goodwill and intangibles			54,626			59,302		(7.9)	%
Other assets			28,517			29,250		(2.5)	%
Total assets		$	3,073,522		$	2,947,244		4.3	%
Unpaid losses and settlement expenses		$	1,377,111		$	1,271,503		8.3	%
Unearned premiums			483,305			451,449		7.1	%
Reinsurance balances payable			18,396			21,624		(14.9)	%
Funds held			73,304			74,560		(1.7)	%
Income taxes - deferred			38,260			53,768		(28.8)	%
Bonds payable, long-term debt			149,068			148,928		0.1	%
Accrued expenses			45,420			52,848		(14.1)	%
Other liabilities			16,802			18,966		(11.4)	%
Total liabilities		$	2,201,666		$	2,093,646		5.2	%
Shareholders' equity			871,856			853,598		2.1	%
Total liabilities & shareholders' equity		$	3,073,522		$	2,947,244		4.3	%
OTHER DATA:
Common shares outstanding (in 000's)			44,485			44,148
Book value per share		$	19.60		$	19.33		1.4	%
Closing stock price per share		$	78.58		$	60.66		29.5	%
Cash dividends per share - ordinary (annualized)		$	0.87		$	0.83		4.8	%
Cash dividends per share - special		$	-		$	1.75		-
Statutory surplus		$	978,886		$	864,554		13.2	%

RLI CORP.
2018 FINANCIAL HIGHLIGHTS
UNDERWRITING SEGMENT DATA
(Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended September 30,
					GAAP						GAAP						GAAP						GAAP
			Casualty		Ratios				Property		Ratios				Surety		Ratios				Total		Ratios
2018
Gross premiums written		$	157,553					$	50,933					$	30,648					$	239,134
Net premiums written			131,611						39,606						29,353						200,570
Net premiums earned			131,605						39,067						30,143						200,815
Net loss & settlement expenses			85,992		65.3	%			20,144		51.6	%			4,095		13.6	%			110,231		54.9	%
Net operating expenses			47,587		36.2	%			16,302		41.7	%			18,933		62.8	%			82,822		41.2	%
Underwriting income (loss) (1)		$	(1,974)		101.5	%		$	2,621		93.3	%		$	7,115		76.4	%		$	7,762		96.1	%
2017
Gross premiums written		$	145,016					$	44,613					$	30,804					$	220,433
Net premiums written			122,421						35,207						29,499						187,127
Net premiums earned			118,393						33,559						30,073						182,025
Net loss & settlement expenses			73,895		62.4	%			46,037		137.2	%			3,258		10.8	%			123,190		67.7	%
Net operating expenses			40,944		34.6	%			15,041		44.8	%			17,782		59.1	%			73,767		40.5	%
Underwriting income (loss) (1)		$	3,554		97.0	%		$	(27,519)		182.0	%		$	9,033		69.9	%		$	(14,932)		108.2	%
Nine Months Ended September 30,
					GAAP						GAAP						GAAP						GAAP
			Casualty		Ratios				Property		Ratios				Surety		Ratios				Total		Ratios
2018
Gross premiums written		$	476,529					$	155,095					$	94,189					$	725,813
Net premiums written			399,562						120,891						90,294						610,747
Net premiums earned			387,068						111,439						88,857						587,364
Net loss & settlement expenses			246,391		63.7	%			50,393		45.2	%			7,521		8.5	%			304,305		51.8	%
Net operating expenses			138,236		35.7	%			48,896		43.9	%			56,532		63.6	%			243,664		41.5	%
Underwriting income (loss) (1)		$	2,441		99.4	%		$	12,150		89.1	%		$	24,804		72.1	%		$	39,395		93.3	%
2017
Gross premiums written		$	431,874					$	131,791					$	92,582					$	656,247
Net premiums written			365,653						103,016						88,293						556,962
Net premiums earned			354,636						103,849						91,156						549,641
Net loss & settlement expenses			227,103		64.0	%			72,050		69.4	%			7,774		8.5	%			306,927		55.8	%
Net operating expenses			122,212		34.5	%			47,651		45.9	%			54,983		60.3	%			224,846		40.9	%
Underwriting income (loss) (1)		$	5,321		98.5	%		$	(15,852)		115.3	%		$	28,399		68.8	%		$	17,868		96.7	%
(1) See discussion above: Non-GAAP and Performance Measures.

View source version on businesswire.com: https://www.businesswire.com/news/home/20181017005722/en/

RLI Corp.

Aaron Jacoby
Vice President, Corporate Development

309-693-5880

Aaron.Jacoby@rlicorp.com

Source: RLI Corp.

BELLEVUE, Wash. & NEW YORK--(BUSINESS WIRE)-- Symetra Life Insurance Company, a leading provider of life, retirement and employee benefit insurance products, and Teachers Insurance and Annuity Association of America (TIAA), a long-standing leader in lifetime income, today announced the launch of Mariner Re Ltd., a Class E licensed reinsurer domiciled in Bermuda.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20261026485030/en/

Mariner Re will provide committed growth capital to support Symetra’s annuity business through a flow reinsurance arrangement, effective Oct. 1, 2026. As part of the transaction, Mariner Re will be supported by a $750 million equity investment from TIAA.

Symetra Investment Management Company (SIM) and Nuveen, the global asset management firm wholly owned by TIAA, will serve as Mariner Re’s investment managers. The dual-manager structure combines SIM’s established insurance asset management capabilities with Nuveen’s institutional expertise, providing Mariner Re with broadened access to asset classes and investment strategies.

“Symetra’s strategic relationship with TIAA, a well-regarded company, pairs our combined financial strength and insurance expertise with a strong cultural alignment and collaborative approach,” said Margaret Meister, president and chief executive officer of Symetra Financial Corporation. “Mariner Re supports our ability to grow annuity sales, enhancing our competitive positioning and enabling us to serve more customers.”

“This transaction allows TIAA to expand and diversify our balance sheet, strengthening our ability to meet the long-term obligations we have to the retirement plan participants who count on us, while deepening our long-standing relationship with Symetra and its parent company, Sumitomo Life,” said Dave Dowrich, chief financial officer at TIAA.

Symetra Chief Investment Officer Nicholas Mocciolo said, “SIM’s lead role as investment manager reflects our commitment and investment partnership with Mariner Re and Symetra. We are pleased to be working with Nuveen, a strong investment partner that brings breadth and depth to this relationship.”

"This mandate demonstrates the continued growth of Nuveen's insurance asset management capabilities," said Bill Huffman, CEO of Nuveen. “We're proud to bring the breadth of our public to private capabilities to Mariner Re's portfolio and to deepen our long-standing relationship with Symetra and Sumitomo Life."

Deutsche Bank Securities Inc. acted as structuring agent and placement agent for the transaction. PJT Partners served as financial advisor for TIAA. Willkie Farr & Gallagher LLP served as legal counsel for Symetra and Mayer Brown LLP and Simpson Thacher & Bartlett LLP served as co-lead legal counsel for TIAA and Conyers as Bermuda counsel for the transaction.

About Symetra

Symetra Life Insurance Company is a subsidiary of Symetra Financial Corporation, a diversified financial services company based in Bellevue, Washington. In business since 1957, Symetra provides employee benefits, annuities and life insurance through a national network of benefit consultants, financial institutions, and independent financial professionals and insurance producers. For more information, visit https://www.symetra.com/.

About Symetra Investment Management

Symetra Investment Management Company (SIM) is a Registered Investment Adviser offering discretionary investment advisory services to institutional clients. Founded in 2019 and headquartered in Farmington, Conn., SIM manages approximately $93.8 billion in assets across Investment Grade Corporate Credit, High Yield, Bank Loans, Commercial Mortgage Loans, Private Placements, Structured Credit, Hedging and Alternatives. SIM is a wholly owned subsidiary of Symetra Financial Corporation. For more information, visit https://www.symetra.com/symetra-investment-management/.

About TIAA

Our mission is to provide a more secure financial future for all. As a leading retirement, wealth and asset manager, the company has delivered investment options and guidance to help people pursue prosperity that lasts across market cycles and generations. TIAA has nearly $1.6 trillion in assets under management (as of 06/30/2026)*. For more information, visit www.tiaa.org/about.

About Nuveen

Nuveen, a TIAA Company, is a global investment leader, managing $1.4 trillion in public and private assets for clients around the world, as of June 30, 2026. With broad expertise across income and alternatives, we invest in the growth of businesses, real estate, infrastructure, and natural capital, providing clients with the reliability, access, and foresight unique to our 125+ year heritage. Our prevailing perspective on the future drives our ambition to innovate and adapt our business to the changing needs of investors — all to pursue lasting performance for our clients, our communities, and our global economy. For more information, please visit www.nuveen.com.

*As of June 30, 2026, assets under management across Nuveen Investments affiliates and TIAA investment management teams are $1,599 billion.

View source version on businesswire.com: https://www.businesswire.com/news/home/20261026485030/en/

Symetra
Diana McSweeney
Diana.McSweeney@symetra.com

TIAA
John McCool
John.McCool2@tiaa.org

Source: Symetra Life Insurance Company