Slide 1: RLI Investor Presentation Quarter 3, 2023
RLI INVESTOR PRESENTATION Quarter 3, 2023
Slide 2: Introduction
RL DIFFERENT WORKS
Slide 3: Strategy
STRATEGY From our niche product offerings to our business model, our culture to our results — we’re different. We will continue to: Be a premier specialty underwriting Seek out difficult markets while company that achieves long-term maintaining a highly diverse product industry leading combined rati
Slide 4: Financial Strength and Stability
FINANCIAL STRENGTH AND STABILITY Our financial track record has been stellar for decades — a testament to our culture and reputation as an excellent underwriting company. A+ SUPERIOR A STRONG WARD’S 50 TOP 4.9/5 STARS ON P&C PERFORMER FOR 33 YEARS
Slide 5: Select Market Information
SELECT MARKET INFORMATION RLI has a rich history as a publicly traded company and consistently creates value for its shareholders. Ticker / Exchange RLI / NYSE Share Price (as of 9/30/2023) $135.89 Annual Dividend / Yield (as of 9/30/2023) $1.08 / 0.8% Market Cap $6.20 billion Annual Gross Premium (
Slide 6: The RLI Story
THE RLI STORY RLI is a specialty insurance company with more than 50 years of experience serving diverse niche, property, casualty and surety markets. 1961 1961 Founded contact lens insurance agency, Replacement Lens Inc. 1965 1965 RLI Corp. holding company formed 1970 1975 RLI becomes an Employee S
Slide 7: Diversified Product Portfolio – Net Premium
DIVERSIFIED PRODUCT PORTFOLIO – NET PREMIUM Product diversification has fueled our growth & financial success. General Liability Excess Liability E&S Property Personal Umbrella PROPERTY (35%) CASUALTY Executive Products (55%) Earthquake Transportation SURETY (10%) Marine Professional Services Other
Slide 8: Product Distribution
PRODUCT DISTRIBUTION Our strong customer relationships extend across a diverse distribution network. General Agency / Retail Agent / Broker Wholesale Broker Carrier Partner General liability Excess liability Personal umbrella CASUALTY Transportation Executive products Professional services Commercia
Slide 9: Strategy
STRATEGY RL DIFFERENT WORKS
Slide 10: RLI's Business Model
RLI’S BUSINESS MODEL RLI is a domestic, specialty insurance company that does its own underwriting. Underwriting Ownership Culture & Diversified Insurance Growth by Company Compensation Product Portfolio Design • We hire experienced, • Underwriting leadership • Our products are run like • Organic pr
Slide 11: Market Cycle Management
MARKET CYCLE MANAGEMENT RLI’s strong people, products & processes allow us to effectively manage through any kind of market. Gross Premium • INVEST in new people, products ($ millions) & processes in all markets $2,000 $1,800 • EMPOWER underwriters to capitalize to the fullest during $1,600 hard mar
Slide 12: Environmental, Social & Governance Principles
ENVIRONMENTAL, SOCIAL & GOVERNANCE PRINCIPLES We are committed to integrating sound Environmental, Social and Governance (“ESG”) principles into our business, and our approach to sustainability reflects our focus on doing the right thing – for our customers, our employees, our communities and the en
Slide 13: Financial Results
FINANCIAL RESULTS
Slide 14: Measurements of Our Success
MEASUREMENTS OF OUR SUCCESS Combined Book Value Operating Return Capital Reserve Ratio Growth(2) on Equity(2) Management Consistency 27 18.0% 12.1% 48 $518 consecutive average annual growth consecutive years years under 100 in book average OROE of increased million combined ratio(1) value per share
Slide 15: Underwriting Profit
UNDERWRITING PROFIT RLI has achieved 27 straight years of a combined ratio below 100, and has beaten the industry ratio by an average of 12 points(1) over the last 10 years 120 110 100 90 80 70 60 RLI RLI Industry (2)(3)(2) Industry(1) (1)Statutory basis as of year-end 2022 (2) AM Best (2022). Aggre
Slide 16: Operating Return on Equity
OPERATING RETURN ON EQUITY (1) Over the previous 10 full years, RLI has averaged a 12.9% operating return on equity including Maui Jim earnings and a 12.1% operating return on equity exclusive of Maui Jim earnings. Inclusive of Maui Jim earnings Exclusive of Maui Jim earnings 17.9% 17.4% 14.7% 13.5%
Slide 17: Dividend Growth
DIVIDEND GROWTH RLI has a distinguished track record of success: 48 straight years of dividend increases(1) and a 5% growth rate over the last 10 years. SPECIAL DIVIDENDS 1.08 $3.50/share Dec 2010 $1.75/share Dec 2017 1.03 $2.50/share Dec 2011 $1.00/share Dec 2018 0.99 0.95 $2.50/share Dec 2012 $1.0
Slide 18: Investment Portfolio
INVESTMENT PORTFOLIO Investing for the long term: A diversified, highly-rated bond portfolio complemented by active and passive equities. TARGET ASSET ALLOCATION PORTFOLIO ALLOCATION (as of 9/30/2023) 80% Other Invested Assets 1.7% Equities 15.5% Corporate 33.4% 20% Cash 4.1% BONDS EQUITIES $3.46 Bi
Slide 19: Total Shareholder Return
TOTAL SHAREHOLDER RETURN Shareholder returns validate the RLI story. $2,500 S&P P&C $2,000 RLI S&P 500 Index 1 year 41.2% 21.6% 16.0% 5 year 15.1% 9.9% 11.1% $1,500 10 year 16.7% 11.9% 13.1% 20 year 15.9% 9.7% 9.6% through 9.30.23 $1,000 $500 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 20: The Future
THE FUTURE RL DIFFERENT WORKS
Slide 21: Value Creation Opportunities
VALUE CREATION OPPORTUNITIES RLI is pursuing multiple initiatives designed to create value. Cycle management • Maximize margins throughout the cycle, organic growth enriched by market conditions Platform enhancements • Investing in technology to leverage distribution and increase efficiency Talent a
Slide 22: Competitive Advantages
COMPETITIVE ADVANTAGES RLI will capitalize on its competitive advantages to drive profitable growth. Capital strength Underwriting expertise Leverageable infrastructure Ownership mentality & Product & distribution to support existing and aligned compensation diversification new product growth A repu
Slide 23: Selected Financial Data
SELECTED FINANCIAL DATA (Amounts in millions) OPERATING RESULTS 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q3 23 Gross premiums written 843.2 863.8 853.6 874.9 885.3 983.2 1,065.0 1,136.4 1,347.4 1,565.5 1,372.3 Consolidated revenue 705.6 775.2 794.6 816.3 797.2 818.1 1,003.6 983.6 1,179.2 1,
Slide 24: Selected Financial Data
SELECTED FINANCIAL DATA (Amounts in thousands, except per share data) SHARE INFORMATION 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q3 23 Net earnings per share: Diluted 2.90 3.09 3.12 2.59 2.36 1.43 4.23 3.46 6.11 12.74 4.12 Comprehensive earning (losses) 2.74 3.90 2.04 2.56 3.15 0.67 5.72 4.
Slide 25: RLICORP.COM
RLICORP.COM