RLI Now Has ‘A++’ Rating from AM Best

AM Best announced upgrades to the financial strength ratings of the members of RLI Group on Friday, pushing the grades up to A++ (superior) from A+ (superior).

The rating upgrades reflect RLI’s exceptional balance sheet strength fundamentals, effective capital management strategies, historically positive reserve development, strong underwriting controls and RLI’s quality reinsurance program, AM Best said.

In January, RLI Corp., the publicly traded holding company of the group’s specialty insurers, reported underwriting income was $264.2 million for 2025, translating to a combined ratio of 83.6 and representing the 30th straight year of underwriting profit for the insurance group.

“The consistency in the group’s underwriting results is driven by rigorous pricing discipline and diversification, augmented by solid investment returns,” AM Best said in the rating announcement. Best also noted that “perpetual internal capital generation has enabled RLI to grow its capital size over the past five years”—even while the insurer has returned “substantial capital in the form of stockholder dividends to RLI Corp.”

At the end of the third-quarter policyholder surplus stood at $1.9 billion, AM Best said.

AM Best’s rating actions also included upward bumps for the Long-Term Issuer Credit Ratings (Long-Term ICR) to “aa+” (superior) from “aa” (superior) and an upgrade of the Long-Term ICR of the holding company RLI Corp. to “a+” (excellent) from “a” (excellent).

In conjunction with the upgrades, AM Best revised the outlook of all the ratings to stable from positive.

Overall, the ratings reflect RLI’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and very strong enterprise risk management, AM Best said.

AM Best expects that RLI’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), will remain at the strongest level, with favorable operating performance trends benefiting from management’s niche specialty market expertise and robust risk management program. RLI’s risk management program places emphasis on safeguarding the balance sheet from capital risks and meeting corporate profitability goals, according to AM Best.

The ratings announcement also noted that RLI’s overall liquidity ratios outperform the industry benchmarks, despite the group’s elevated level of common stock leverage and significant earthquake exposure.

A week before the AM Best rating announcement, Kettle, an AI-enabled insurance and reinsurance underwriter, announced a strategic partnership with RLI to launch a new multi-peril commercial property insurance product that includes wildfire coverage in regions where commercial property coverage has become increasingly difficult to obtain.

The non-admitted product, available through a select group of wholesalers and underwritten by RLI’s Mt. Hawley Insurance Company subsidiary, will initially target the California and Nevada commercial property markets, providing comprehensive protection, including wildfire and all other perils, for commercial properties.

“Kettle brings a differentiated offering to the market through its proprietary risk modeling, offering an innovative approach to wildfire underwriting that complements RLI’s existing commercial property solutions,” said RLI Corp. Chief Operating Officer Jen Klobnak in a Kettle media statement.

In addition to underwriting the CMP coverage, RLI also made a strategic equity investment in the company (amount undisclosed) to support Kettle’s continued growth and innovation in risk modeling and underwriting.

Both the distribution partnership and the strategic investment reflect RLI’s confidence in the technology, and a “shared commitment to delivering sustainable insurance solutions in underserved markets,” Klobnak said.

Isaac Espinoza, CEO of Kettle, noted Kettle’s mission “to leverage data and artificial intelligence to better protect people and businesses from the growing threat of climate change.”

“This partnership combines our advanced AI and deep learning models for catastrophic risk with RLI’s financial strength, commercial property insurance expertise, and superior customer service,” he said in a media statement.

Sources: AM Best, Kettle

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