Specialty insurer RLI Corp. saw its 2016 third quarter net earnings drop versus a year ago due to higher loss expenses, though its combined ratio remains at a respectable level.
Net earnings for RLI came in at $22.3 million, or $0.50 per share for Q3, versus nearly $36 million, or $0.81 per share over the 2015 third quarter. The insurer’s combined ratio for the quarter was at 94.2, still below the 100, break-even threshold, but much higher than the 8.13 combined ratio from Q3 2015.
The Illinois-based insurer said its net investment income came in at $13.5 million during Q3, a 3.3 percent drop over the same period in 2015. RLI saw a $1.4 million net dip in underwriting income during the quarter due to unfavorable development in prior years’ loss reserves, something that RLI Chairman and CEO Jonathan Michael argued in his earnings comments that long-term trends are still favorable.
“For the only time in over a decade, we experienced unfavorable development on prior years’ reserves in the quarter,” Michael said in prepared remarks. But “we remain confident in our team’s underwriting discipline and will continue to focus on selectively pursuing growth opportunities.”
Other result highlights:
- Net premiums earned landed at nearly $183.6 million, up from $179.44 million in the 2015 third quarter.
- Loss and settlement expenses nearly hit the $97.9 million mark, versus $73 million over the same period in 2015.
Source: RLI Corp.