Slide 1: Investor Presentation
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Slide 2: Disclaimer
DISCLAIMER Except for historical information, this presentation 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 expectation
Slide 3: Our Purpose, Vision, Mission & Strategy
OUR PURPOSE, VISION, MISSION & STRATEGY Our purpose, vision, mission and strategy serve as the foundation of our balanced growth plan. Purpose Vision Mission Strategy Protect people and Be the recognized Provide industry-leading Create sustainable value organizations from life’s performance leader o
Slide 4: RLI Overview
RLI OVERVIEW RLI is a domestic, specialty insurance company that handles its own underwriting and claims. Ownership Diversified Underwriting Growth through Culture & Insurance Product Capital Company Discipline Compensation Portfolio Management __________________ __________________ _________________
Slide 5: Our Strategy
OUR STRATEGY How We Create Value By sharing our expertise and offering exceptional service Customer Focus to our customers, our highly engaged employees create • Customer Experience • Growth Adjacencies lasting relationships and can see the impact they make on our business. We incorporate our custom
Slide 6: Competitive Advantages
COMPETITIVE ADVANTAGES RLI will capitalize on our competitive advantages to drive profitable growth. WE CARE • Relationship oriented SERVICE ORIENTED • Community minded • Responsible • Innovative problem solvers • Sustainable • Dedicated • Continuously improve • Transparent • Authentic • Humble EMPO
Slide 7: Financial Strength and Stability
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 A STRONG WARD’S 50 TOP P&C PERFORMER FOR 34 YEARS1 (1)Only insurer to be recognized every year since incept
Slide 8: Select Market Information
SELECT MARKET INFORMATION RLI has a rich history as a publicly traded company and has consistently created value for its shareholders. Ticker / Exchange RLI / NYSE Share Price (as of 9/30/2024) $154.98 Annual Dividend / Yield (as of 9/30/2024) $1.16 / 0.75% Market Cap $7.10 billion Annual Gross Prem
Slide 9: Q3 2024 Financial Update
Q3 2024 FINANCIAL UPDATE Third Quarter Year to Date 2024 2023 % Change 2024 2023 % Change Earnings Per Diluted Share Net earnings $ 2.06 $ 0.29 610.3% $ 6.60 $ 4.12 60.2% Operating earnings $ 1.31 $ 0.61 114.8% $ 4.92 $ 3.40 44.7% Net Premiums Earned (in millions) Casualty $ 219.6 $ 189.3 16.0% $ 62
Slide 10: Diversified Product Portfolio: Net Premium
DIVERSIFIED PRODUCT PORTFOLIO: NET PREMIUM 1 Product diversification has fueled our growth & financial success. E&S: 39% of NWP1 General Liability2 Excess Liability2 Specialty Admitted: 61% of NWP1 Other Executive Products E&S Property2 Transportation Casualty Professional Services Property (56%) (3
Slide 11: Product Distribution
PRODUCT DISTRIBUTION Our strong customer relationships extend across a diverse distribution network. General Agency / Casualty Retail Agent / Broker Wholesale Broker Carrier Partner General liability Excess liability Personal umbrella Transportation Executive products Professional services Commercia
Slide 12: Market Cycle Management
MARKET CYCLE MANAGEMENT RLI’s strong people, products & processes allow us to effectively manage through different market cycles, which vary by product. • INVEST in people, $2,000 $600 products & processes Gross Premium (in millions) in all markets $500 • EMPOWER RLI Total (LHS) underwriters to $1,5
Slide 13: Reserve Development
RESERVE DEVELOPMENT RLI has had a history of disciplined and prudent reserving. Total Development Favorable/(Unfavorable) (LHS) % of Earned Premium (RHS) $140M 14.0% $120M 12.0% $100M 10.0% $80M 8.0% $60M 6.0% $40M 4.0% Favorable $20M 2.0% $0M 0.0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 (
Slide 14: Underwriting Profit
UNDERWRITING PROFIT RLI has achieved 28 straight years of a combined ratio below 100 and has beaten the industry ratio by an average of 12 points1 over the last 10 years. 120 RLI RLI Industry Industry(1) 2,3 (2) 110 100 90 80 RLI Industry2,3 3-year average 84.3% 101.5% 70 5-year average 87.2% 100.5%
Slide 15: Investment Portfolio
INVESTMENT PORTFOLIO Investing for the long term: A diversified, highly-rated bond portfolio complemented by active and passive equities. • Target Asset Allocation: 80% Bonds / 20% Equities Portfolio Allocation • Bonds: AA- quality; 4.8 duration (as of 9/30/2024) • Equities: ETFs and active large-ca
Slide 16: Measurements of Our Success
MEASUREMENTS OF OUR SUCCESS Combined Book Value Operating Capital Reserve Ratio Growth3 Return on Management Consistency Equity3 28 19.7% 12.5% 49 $543 consecutive years under 100 average annual growth in book average OROE consecutive years of increased million combined ratio1 value per share divide
Slide 17: Operating Return on Equity
OPERATING RETURN ON EQUITY 1 Over the previous 10 years, RLI has averaged a 13.3% operating return on equity including Maui Jim earnings and a 12.5% operating return on equity exclusive of Maui Jim earnings. Inclusive of Maui Jim earnings Exclusive of Maui Jim earnings 19.7% 17.9% 17.4% 14.7% 3 13.0
Slide 18: Dividend Growth
DIVIDEND GROWTH RLI has a distinguished track record of sharing our success: 49 straight years of dividend increases1, a 5% growth rate over the last 10 years, and 15 years of special dividends. Regular Dividend $7.00 2 $5.00 Special Dividend $4.00 $4.00 $3.50 $3.00 $3.00 $2.50 $2.50 $2.00 $2.00 $2.
Slide 19: Total Shareholder Return
TOTAL SHAREHOLDER RETURN 1 Shareholder returns validate the RLI story. $2,000 RLI S&P 500 S&P P&C Index RLI S&P 500 1 year 16.7% 36.3% 56.3% 5 year 14.2% 15.9% 17.3% $1,500 10 year 18.1% 13.4% 16.9% 20 year 16.0% 10.7% 11.3% through 9/30/24 $1,000 $500 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 20: Value Creation Opportunities
VALUE CREATION OPPORTUNITIES RLI is pursuing multiple initiatives designed to create value. Disciplined Cycle Platform Talent pursuit of Management Enhancements Acquisition opportunities in adjacent products Maximize margins Invest in Growth supported Capitalize on throughout the cycle, technology b
Slide 21: Selected Financial Data
SELECTED FINANCIAL DATA (Amounts in millions) OPERATING RESULTS 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q3 24 Gross premiums written 863.8 853.6 874.9 885.3 983.2 1,065.0 1,136.4 1,347.4 1,565.5 1,806.7 1,539.8 Consolidated revenue 775.2 794.6 816.3 797.2 818.1 1,003.6 983.6 1,179.2 1,698.
Slide 22: Selected Financial Data
SELECTED FINANCIAL DATA (Amounts in thousands, except per share data) SHARE INFORMATION 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q3 24 Net earnings per share: Diluted 3.09 3.12 2.59 2.36 1.43 4.23 3.46 6.11 12.74 6.61 6.60 Comprehensive earning (losses) 3.90 2.04 2.56 3.15 0.67 5.72 4.70 4.
Slide 23: Appendix – Non-GAAP Reconciliation
APPENDIX – NON-GAAP RECONCILIATION (Amounts in thousands, except per share data) Third Quarter Year to Date OPERATING EARNINGS: 2024 2023 2024 2023 Net earnings 95,027 13,536 304,919 189,999 Less: Net realized (gains) losses (5,420) (6,558) (11,222) (26,758) Income tax on realized gains 1,139 1,377
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