BlackRock Inc. purchased a new stake in RLI Corp. (NYSE:RLI – Free Report) in the second quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The firm purchased 8,332,056 shares of the insurance provider’s stock, valued at approximately $492,175,000. BlackRock Inc. owned approximately 9.08% of RLI at the end of the most recent reporting period.
Several other institutional investors have also recently bought and sold shares of RLI. UBS Group AG lifted its stake in shares of RLI by 8.7% during the fourth quarter. UBS Group AG now owns 607,176 shares of the insurance provider’s stock valued at $38,847,000 after acquiring an additional 48,563 shares during the period. Wasatch Advisors LP increased its position in RLI by 33.1% in the first quarter. Wasatch Advisors LP now owns 2,579,955 shares of the insurance provider’s stock worth $147,161,000 after purchasing an additional 641,769 shares during the period. Hingham Institution for Savings bought a new stake in RLI during the 4th quarter worth about $1,919,000. Chase Investment Counsel Corp bought a new stake in RLI during the 4th quarter worth about $1,535,000. Finally, Vanguard Group Inc. lifted its position in RLI by 3.4% during the 4th quarter. Vanguard Group Inc. now owns 9,448,929 shares of the insurance provider’s stock valued at $604,542,000 after purchasing an additional 310,857 shares during the period. Institutional investors own 77.89% of the company’s stock.
Wall Street Analyst Weigh In Several equities analysts recently weighed in on the stock. Weiss Ratings upgraded shares of RLI from a “sell (d+)” rating to a “hold (c-)” rating in a report on Wednesday, July 29th. Wall Street Zen raised shares of RLI from a “sell” rating to a “hold” rating in a report on Saturday, August 1st. UBS Group set a $74.00 target price on shares of RLI in a research report on Tuesday, July 28th. Wells Fargo & Company cut RLI from an “equal weight” rating to an “underweight” rating and set a $57.00 price objective for the company. in a research note on Wednesday, July 29th. Finally, Keefe, Bruyette & Woods reiterated an “outperform” rating and issued a $74.00 price objective (up from $70.00) on shares of RLI in a report on Tuesday, July 28th. One analyst has rated the stock with a Buy rating, five have assigned a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, RLI has an average rating of “Hold” and a consensus target price of $63.00.
Get Our Latest Research Report on RLI RLI Trading Up 1.9% RLI stock opened at $66.64 on Tuesday. RLI Corp. has a 1-year low of $47.26 and a 1-year high of $68.69. The firm has a market cap of $6.12 billion, a PE ratio of 14.00 and a beta of 0.38. The business’s 50-day moving average price is $60.78 and its two-hundred day moving average price is $58.07.
RLI (NYSE:RLI – Get Free Report) last announced its quarterly earnings results on Wednesday, July 22nd. The insurance provider reported $0.83 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.72 by $0.11. RLI had a return on equity of 17.61% and a net margin of 22.22%.The company had revenue of $575.57 million during the quarter, compared to the consensus estimate of $568.70 million. During the same period in the prior year, the company earned $0.82 earnings per share. The company’s revenue for the quarter was up 15.2% compared to the same quarter last year. On average, analysts forecast that RLI Corp. will post 2.88 earnings per share for the current year.
RLI Dividend Announcement The business also recently announced a quarterly dividend, which will be paid on Tuesday, September 15th. Shareholders of record on Monday, August 31st will be issued a dividend of $0.18 per share. This represents a $0.72 annualized dividend and a yield of 1.1%. The ex-dividend date is Monday, August 31st. RLI’s dividend payout ratio (DPR) is 15.13%.
Insider Activity at RLI In related news, CEO Craig W. Kliethermes purchased 2,000 shares of the business’s stock in a transaction on Wednesday, May 27th. The shares were purchased at an average price of $52.00 per share, with a total value of $104,000.00. Following the completion of the purchase, the chief executive officer owned 150,990 shares in the company, valued at $7,851,480. This represents a 1.34% increase in their position. The acquisition was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, Director David B. Duclos purchased 2,500 shares of RLI stock in a transaction dated Thursday, May 28th. The stock was bought at an average price of $51.99 per share, with a total value of $129,975.00. Following the acquisition, the director directly owned 9,780 shares of the company’s stock, valued at approximately $508,462.20. This trade represents a 34.34% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. Over the last 90 days, insiders have bought 9,500 shares of company stock valued at $492,115. Corporate insiders own 2.39% of the company’s stock.
RLI Company Profile (Free Report)
RLI Corporation (NYSE:RLI) is a specialty property and casualty insurance company focused on underwriting niche risks for businesses and individuals. Headquartered in Peoria, Illinois, the company operates through a network of independent agents and brokers, offering customized coverage solutions. RLI’s approach emphasizes disciplined underwriting, targeted product development and strong customer service to maintain profitability and long-term growth.
Founded in 1965 as Replacement Lens, Inc, RLI initially provided insurance for contact lens manufacturers before shifting its focus to specialty insurance in the 1980s.
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Key Takeaways RLI's Q2 net investment income rose 16.8% to $46 million, while first-half NII increased 16%. RLI's taxable fixed-income portfolio yield increased to 4.4%, supporting higher investment income. $145 million of Q2 operating cash flow funded investments averaging 4.9% yields, aiding future NII. RLI Corp.’s (RLI - Free Report) increase in net investment income (NII) appears reasonably sustainable in the near term, although the current growth rate is unlikely to persist indefinitely. In the second quarter of 2026, NII increased 16.8% to $46 million, while first-half NII rose 16% to $88.4 million.
The growth in NII has a fundamental basis rather than being driven purely by investment gains. RLI benefited from higher reinvestment rates and a larger average asset base. Its taxable fixed-income portfolio yield increased to 4.4% from 4.06%, while tax-exempt yields rose to 3.04% from 2.95%.
NII should continue to benefit from RLI's ability to reinvest operating cash flows into fixed-income securities. In the second quarter of 2026, operating cash flow of $145 million supported investment purchases carrying average yields of 4.9%, creating an opportunity to generate additional investment income over time. Investments and cash totaled approximately $4.9 billion as of June 30, 2026, providing a substantial asset base for recurring NII generation. Moreover, as older securities mature, RLI can reinvest proceeds into newer securities, although the benefit will depend on prevailing interest rates.
Even if interest rates decline, RLI could continue growing NII through portfolio expansion and strong underwriting-generated cash flows. The existing investment portfolio provides some protection against an immediate decline in NII because securities already held continue to generate contractual income. However, over time, lower rates would reduce the yields available on new investments, making asset growth increasingly important to offset reinvestment-rate pressure.
RLI's NII growth appears fundamentally supported by its sizable investment portfolio, strong operating cash generation and attractive reinvestment opportunities. While the 16-17% growth rate is unlikely to be sustained indefinitely, NII should remain a meaningful and increasingly important contributor to earnings, with future growth likely driven more by portfolio expansion and underwriting cash flows than by higher investment yields.
What About Other Insurers?Chubb Limited's (CB - Free Report) net investment income is an important earnings contributor. The metric benefits from higher interest rates and stronger portfolio yields, providing a steady source of earnings beyond underwriting profits. This helps improve profitability, offset claim volatility and strengthen overall financial performance.
The Travelers Companies, Inc.’s (TRV - Free Report) net investment income is a material contributor to the company’s results of operations, consistently providing a reliable source of earnings that complements its underwriting activities. Net investment income acts as a second earnings engine for this property and casualty insurer after underwriting profit. Thus, even if underwriting profit weakens because of higher catastrophe losses, solid net investment income can help offset earnings pressure.
RLI’s Price PerformanceShares of RLI have lost 5% in the past year against the industry’s growth of 2.5%.
Image Source: Zacks Investment Research
RLI’s Expensive ValuationThe stock is overvalued compared with its industry. It is currently trading at a price-to-book ratio of 3.36, above the industry average of 1.43.
Image Source: Zacks Investment Research
Estimate Movement for RLIThe Zacks Consensus Estimate for RLI’s third quarter of 2026 has moved down 1.8% in the past 30 days. The estimate for RLI’s fourth quarter of 2026 has moved up 1.5% in the past 30 days. The same for the full-year 2026 and 2027 EPS has moved up 1% and 0.7%, respectively, in the past 30 days.
RLI za měsíc po poslední výsledkové zprávě vzrostla asi o 6,4 % díky lepšímu než očekávanému zisku, růstu pojistného a vyšším investičním výnosům. Tržby za 2. čtvrtletí stouply na 463 milionů USD.
A month has gone by since the last earnings report for RLI Corp. (RLI - Free Report) . Shares have added about 6.4% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is RLI Corp. due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for RLI Corp. before we dive into how investors and analysts have reacted as of late.
RLI's Q2 Earnings Beat Estimates on Premium Growth, Investment Income
RLI Corp. reported second-quarter 2026 operating earnings of 83 cents per share, which beat the Zacks Consensus Estimate by 16.9%. The bottom line increased 1.2% from the prior-year quarter.
The quarterly results reflect continued premium growth, higher investment income and favorable prior-year reserve development. However, weaker underwriting performance in the casualty segment partly offset these positives.
Operational PerformanceOperating revenues for the reported quarter were $463 million, up 4.9% year over year, driven by higher net premiums earned and net investment income. The top line beat the Zacks Consensus Estimate by 1.6%.
Gross premiums written (GPW) increased 3.1% year over year to $579.7 million, driven by strong growth in the casualty segment. Our estimate was $592.9 million.
Net investment income increased 16.8% year over year to $46 million. The Zacks Consensus Estimate was $42.7 million, while our estimate for the metric was pegged at $40.7 million. The investment portfolio’s total return was 3.4% in the quarter.
Total expenses increased 6.4% year over year to $367.9 million, primarily due to higher policy acquisition costs, insurance operating expenses and interest expense on debt. Our estimate was $376.8 million.
Underwriting income fell 3.7% year over year to $59.9 million. Our estimate was $53.1 million. The combined ratio deteriorated 110 basis points year over year to 85.6, reflecting higher catastrophe losses. Our estimate was 87.2.
Segmental ResultsCasualty lines’ GPW rose 10.6% year over year to $339 million. The figure was above our estimate of $338.1 million.
The underwriting income decreased significantly to $1.7 million from $8.3 million, down 79% year over year. The combined ratio deteriorated 280 bps year over year to 99.3%. The figure was above our estimate of 98.4%.
Property lines’ GPW fell 5.9% year over year to $199.3 million. The figure was below our estimate of $207.7 million.
The underwriting income increased to $53.5 million, up 8.1% supported by favorable reserve development. The combined ratio improved 530 bps year over year to 56.8%. Our estimate was 65.2%.
Surety lines’ GPW declined 5.7% year over year to $41.4 million. The figure was below our estimate of $47.1 million.
The underwriting income improved 5.4% year over year to $4.7 million. The combined ratio improved 70 bps year over year to 87.2%. Our estimate was 84.8%.
Financial UpdateRLI exited the second quarter with total investments and cash of $4.9 billion, up 4.5% from 2025-end.
Book value was $19.09 per share as of June 30, 2026, up 11% from the figure as of Dec. 31, 2025.
Net cash flow from operations was $145.2 million, down 16.9% year over year.
The statutory surplus increased 5.2% from 2025-end to $1.94 billion as of June 30, 2026.
Return on equity was 24.5%, expanding 480 bps from the year-ago period.
Capital Deployment UpdateOn June 12, 2026, the insurer paid a regular quarterly dividend of 18 per cent per share for the second quarter. RLI’s cumulative dividends totaled more than $1.3 billion, paid over the last five years.
On May 14, 2026, the board of directors approved a $250 million share repurchase program. The company repurchased 0.2 million shares for $12 million during the second quarter. As of June 30, 2026, $238 million remained available under the authorization.
How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended downward during the past month.
VGM ScoresCurrently, RLI Corp. has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, RLI Corp. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
RLI vykázala ve 2. čtvrtletí kombinovaný poměr 85,6 a zisk z upisování ve výši 59,9 mil. USD, čímž prodloužila sérii ziskového upisování na 30 let. Akcie za poslední tři měsíce vzrostly o 23,3 %.
Key Takeaways RLI posted its 30th consecutive year of underwriting profit, with an 85.6 combined ratio in Q2.Casualty premiums rose 11%, led by 19% growth in Transportation and 26% in Personal Umbrella.RLI faces catastrophe risks, elevated valuation and rising E&S property competition. RLI Corp. (RLI - Free Report) shares have gained 23.3% over the past three months compared with the industry’s return of 5.2%.
The performance was driven by strong underwriting, higher investment income and premium growth. Shareholder-friendly capital returns also aided the rally. RLI had already announced a special dividend, a dividend hike and a share buyback in May.
Shares of some other industry players like The Travelers Companies, Inc. (TRV - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) have gained 20.4%, 2.4% and 2.1%, respectively, over the past three months.
3-Month Price Performance: RLI, TRV, WRB, CINF & Industry
Image Source: Zacks Investment Research
RLI’s Growth ProjectionThe Zacks Consensus Estimate for RLI’s 2026 revenues is pegged at $1.86 billion, implying a year-over-year improvement of 4.7%. The consensus estimate for 2026 earnings per share (EPS) indicates a year-over-year decrease of 17%. The consensus estimate for 2027 EPS indicates a decrease of 3.7%, while revenues indicate an increase of 1.7% from the corresponding 2026 estimates.
Optimistic Analyst Sentiment on RLIThe company has witnessed five upward earnings estimate revisions for 2026 over the past 30 days, while 2027 estimates have seen two upward and two downward revisions in the same time frame. Thus, the Zacks Consensus Estimate for 2026 moved 4.7% north, while the 2027 earnings estimate remained unchanged over the same period.
RLI’s Favorable Return on EquityRLI’s return on equity has also been improving over the last few quarters, reflecting its efficiency in utilizing shareholders’ funds. The trailing 12-month ROE was 17.6%, better than the industry average of 7.5%.
Factors Acting in Favor of RLIRLI is one of the industry’s most profitable P&C writers and delivered its 30th consecutive year of underwriting profit in 2025. The company generated $59.9 million of underwriting income in the second quarter of 2026 with a 85.6 combined ratio, while the first-half 2026 combined ratio was 85.8.
RLI’s Casualty segment remained a key growth driver. In the second quarter of 2026, gross premiums increased 11% year over year, led by 19% growth in transportation and 26% growth in personal umbrella. Growth was supported by favorable pricing, with rates rising 17% in personal umbrella and 8% in transportation. Reduced competitive activity among some competitors is creating new business opportunities for RLI, allowing it to selectively expand its portfolio while maintaining pricing discipline.
Investment income has been improving over the last several years, primarily driven by higher reinvestment rates and a larger average asset base. Net investment income increased 16% to $88.4 million in the first half of 2026. Fixed-income purchase yields averaged 4.9%, about 60 basis points above the current book yield. Management expects investment income to keep growing if rates hold and the portfolio expands.
This insurer has been enhancing shareholders' value by distributing wealth in the form of dividend hikes, special dividends and share buybacks. It boasts an impressive dividend track record. Over the past five years, the company has returned more than $1.3 billion through dividends and buybacks, while preserving capital for profitable underwriting opportunities. It has paid dividends for 199 consecutive quarters and increased regular dividends in each of the last 51 years, making the stock an attractive pick for yield-seeking investors.
The insurer has been strengthening its balance sheet by improving liquidity and leverage. As of June 30, 2026, total investments and cash reached $4.87 billion, up 4.5% from year-end 2025. A sound capital structure helps it meet the interests of its policyholders, enhance operations in the insurance sector and drive its book value for the long term.
RLI's Premium ValuationRLI trades at 3X book value versus 1.47 X for the industry. This premium raises sensitivity to softer pricing, catastrophe losses or slower earnings growth.
Image Source: Zacks Investment Research
Risks for RLIRLI remains exposed to catastrophe risks, incurring $26 million in first-half 2026 catastrophe losses. Unpredictable events could raise loss costs, pressure underwriting income, and increase earnings volatility.
RLI faces rising competition in E&S property, with second quarter 2026 property GPW down 6% year over year and renewal retention falling below 70%. Softer hurricane and earthquake pricing could further pressure premium growth and underwriting margins.
End NotesRLI is one of the industry’s most profitable P&C writers, with an impressive track record of delivering 30 consecutive years of underwriting profitability. A strong local branch office network, a broad range of product offerings, higher investment income and improving liquidity poise the company’s growth. Impressive dividend history, higher returns and optimistic analyst sentiment are other positives. However, catastrophe risks and rising E&S property competition remain risks.
Given its premium valuation, the risk-reward profile appears balanced, making it prudent to wait for a better entry point for this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways RLI's decentralized model enables specialized risk selection and pricing while adapting to market conditions. RLI delivered $59.9 million of underwriting income and an 85.6 combined ratio in Q2 2026. RLI's underwriting profits support dividends, share repurchases and investment income from insurance float. RLI Corp.’s (RLI - Free Report) decentralized underwriting model supports strong underwriting profitability by giving individual business units significant autonomy to assess risks, price policies and select accounts based on specialized expertise. This approach enables RLI to respond quickly to changing market conditions while maintaining disciplined risk selection rather than pursuing premium growth at the expense of margins. The model has contributed to a long track record of underwriting profitability, with RLI recording its 30th consecutive year of underwriting income in 2025, generating $264.2 million of underwriting income at an 83.6 combined ratio.
The momentum continued in 2026, with RLI producing $59.9 million of underwriting income and an 85.6 combined ratio in the second quarter, supported by strong margins in its Property and Surety businesses.
Underwriting profit is a core earnings driver and competitive advantage for RLI because it allows the company to generate profits directly from its insurance operations, rather than relying primarily on investment income.
Profitable underwriting allows RLI to earn money from premiums while retaining the premiums and reserves for investment, creating a dual earnings engine of underwriting income plus investment income. RLI specifically identifies these as two of the ways it generates shareholder returns.
Strong underwriting earnings increase financial flexibility, supporting regular dividends, special dividends and share repurchases. In 2025, RLI returned $184 million through a $2-per-share special dividend, while its strong financial performance helped drive a 33% increase in book value per share.
Underwriting profit enables RLI to compound earnings, strengthen capital, generate investment income from insurance float and return more capital to shareholders. Its long record of sub-100% combined ratios makes underwriting profitability a particularly important differentiator for RLI.
What About Its Peers?The Travelers Companies’ (TRV - Free Report) underwriting income is one of the most important earnings drivers. It allows the company to generate profit from its core P&C insurance operations while also producing investment income from the premiums and reserves it holds. Higher underwriting profitability contributes to stronger core income and cash generation, which gives Travelers greater capacity to pay dividends and repurchase shares.
Chubb Limited’s (CB - Free Report) profitable underwriting directly increases its earnings. Chubb Limited benefits from both underwriting income and investment income. Consistent underwriting profits increase the amount of capital Chubb Limited can retain within the business. This supports balance-sheet strength, business expansion and investments in technology, data and AI.
RLI’s Price PerformanceShares of RLI have lost 4.6% in the past year against the industry.
Image Source: Zacks Investment Research
RLI’s Expensive ValuationThe stock is overvalued compared with its industry. It is currently trading at a price-to-book ratio of 3.34, above the industry average of 1.42.
Image Source: Zacks Investment Research
Estimate Movement for RLIThe Zacks Consensus Estimate for RLI’s fourth-quarter 2026 has moved up 4.5% in the past 30 days. The same for the full-year 2026 EPS has moved up 4.7% in the past 30 days.
The consensus estimate for RLI’s 2026 and 2027 EPS indicates year-over-year decreases. The consensus estimate for RLI’s 2026 and 2027 revenues indicates year-over-year increases.
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RLI stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
RLI Corp. (RLI - Free Report) came out with quarterly earnings of $0.83 per share, beating the Zacks Consensus Estimate of $0.71 per share. This compares to earnings of $0.84 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +16.90%. A quarter ago, it was expected that this specialty insurance company would post earnings of $0.85 per share when it actually produced earnings of $0.83, delivering a surprise of -2.35%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
RLI Corp., which belongs to the Zacks Insurance - Property and Casualty industry, posted revenues of $463.14 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.61%. This compares to year-ago revenues of $441.32 million. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
RLI Corp. shares have lost about 5.9% since the beginning of the year versus the S&P 500's gain of 9.7%.
What's Next for RLI Corp.?While RLI Corp. has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for RLI Corp. was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.54 on $458.53 million in revenues for the coming quarter and $2.75 on $1.83 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Insurance - Property and Casualty is currently in the bottom 36% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
HCI Group (HCI - Free Report) , another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6.
This property and casualty insurance holding company is expected to post quarterly earnings of $5.08 per share in its upcoming report, which represents a year-over-year change of -1.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
HCI Group's revenues are expected to be $240.67 million, up 8.5% from the year-ago quarter.
RLI zvýšila čtvrtletní dividendu o 12,5 % na 18 centů na akcii a schválila nový zpětný odkup akcií za 250 milionů USD. Zároveň vyplatila mimořádnou dividendu 2,00 USD na akcii.
Key Takeaways RLI has raised its regular dividend for 51 straight years and hiked quarterly payout by 12.5% in May 2026. RLI declared a $2.00-per-share special dividend and approved a new $250 million share repurchase program. Strong underwriting, operating cash flow and disciplined capital management aid shareholder returns. RLI Corp. (RLI - Free Report) has a disciplined and shareholder-friendly capital deployment strategy that balances investments in business growth with consistent capital returns. The company generates strong underwriting profits and operating cash flow, enabling it to return excess capital while maintaining a conservatively capitalized balance sheet.
RLI has increased its regular dividend for 51 consecutive years, demonstrating a long-standing commitment to returning cash to shareholders. In May 2026, the board increased the quarterly dividend by 12.5% to 18 cents per share. When capital exceeds business needs, RLI distributes excess cash through special dividends. The company declared a $2.00-per-share special dividend in May 2026, totaling approximately $184 million, continuing its history of periodic special dividend payments.
RLI's board of directors authorized a new share repurchase program to return more value to investors. With the latest authorization, the board approved the issuance of up to $250 million of the company’s outstanding common stock in May 2026.
Management emphasizes maintaining financial flexibility and capital adequacy before distributing excess capital, ensuring the company can support underwriting growth and withstand catastrophe losses. Strong underwriting profitability, recurring operating cash flow, investment income, a conservatively capitalized balance sheet and disciplined risk management provide RLI with the financial strength and flexibility to deploy capital efficiently while creating long-term shareholder value.
RLI's capital allocation strategy is a key investment strength. The combination of regular dividend increases, periodic special dividends, opportunistic share repurchases and continued investment in the business reflects disciplined capital management that has consistently enhanced long-term shareholder value.
What About Its Peers?First American Financial Corporation (FAF - Free Report) follows a balanced capital-return strategy that combines a steadily growing dividend with opportunistic share repurchases. FAF generally uses a combination of regular dividend increases and selective share repurchases to distribute excess capital. FAF has increased its dividend for more than 15 consecutive years, reflecting management's commitment to returning capital through various housing market environments.
American Financial Group, Inc. (AFG - Free Report) has one of the most shareholder-friendly capital allocation policies in the U.S. insurance sector. AFG regularly generates capital that is needed to support underwriting operations. Returning excess capital to shareholders in the form of regular and special cash dividends and through opportunistic share repurchases is an important and effective component of American Financial’s capital management strategy. The combination of growing regular dividends, frequent special dividends, opportunistic buybacks and strong underwriting profitability has enabled the company to deliver substantial cash returns to investors over time.
RLI’s Price PerformanceShares of RLI have lost 14.2% in the past year against the industry.
Image Source: Zacks Investment Research
RLI’s Expensive ValuationThe stock is overvalued compared with its industry. It is currently trading at a price-to-book ratio of 3.11, above the industry average of 1.49.
Image Source: Zacks Investment Research
Estimate Movement for RLIThe Zacks Consensus Estimate for RLI’s third-quarter 2026 has moved down 1.8% in the past 60 days. The same for the full-year 2026 and 2027 EPS has moved up 1.8% and 2.6%, respectively, in the past 60 days.
