On this page of StockholderLetter.com we present the 2/24/2023 shareholder letter from RLI CORP — ticker symbol RLI. Reading current and past RLI letters to shareholders can bring important insights into the investment thesis.

 •  2/24/2023 Letter Continued (Full PDF)
 •  2/23/2024 RLI Stockholder Letter
 •  2/21/2025 RLI Stockholder Letter
 •  2/20/2026 RLI Stockholder Letter
 •  More "Insurance Brokers" Category Stockholder Letters
 •  RLI Benford's Law Stock Score = 98

RLI 2/24/2023 Shareholder/Stockholder Letter Transcript:

2022
RLI CORP. ANNUAL
REPORT ON FORM 10K

2022 YEAR IN REVIEW
FINANCIAL HIGHLIGHTS   02
OUR MISSION, VISION & VALUES
03
LETTER TO SHAREHOLDERS  
04
OUR LEADERSHIP TEAM   06
SELECTED FINANCIAL DATA  
08
INVESTOR INFORMATION   10
1

FINANCIAL HIGHLIGHTS
In thousands, except combined ratio, per-share data and return on equity
2022
Gross premiums written

1,565,486
2021

% Change
1,347,354
16.2%
Net premiums written
1,241,536
1,057,533
17.4%
Consolidated revenue
1,697,992
1,179,245
44.0%
Net earnings
583,411
279,354
108.8%
Operating earnings1
214,636
159,063
34.9%
84.4
86.8
-2.8%
1,177,341
1,229,361
-4.2%


GAAP combined ratio
Total shareholders    equity
Per-share data:
Net earnings (diluted)
12.74
6.11
108.5%
4.69
3.48
34.8%
Regular
1.03
0.99
4.0%
Special
7.00
2.00
250.0%
Book value2
25.89
27.14
-4.6%
131.27
112.10
17.1%
48.6%
23.2%
109.5%
 Operating earnings (diluted)1
Cash dividends declared:
 Year-end closing stock price
Return on equity
See discussion of non-GAAP measures in note 1 of the SELECTED FINANCIAL DATA section on page 9 of the YEAR IN REVIEW wrap.
1
With the inclusion of dividends paid (regular and special), book value per share growth was 25% year over year.
2
2

OUR MISSION
Provide industry-leading specialty risk management solutions that are convenient,
tailored and fill unmet customer needs.
OUR VISI0N
Be the recognized performance leader of the U.S. specialty insurance industry.
OUR VALUES
We are talented.
We are innovative.
We are customer focused.
We are driven.
We act with integrity.
We are respectful.
We are owners.
3

LETTER TO SHAREHOLDERS
DEAR SHAREHOLDERS,
On behalf of our associate-owners, I am proud to share our 2022
achievements with you.
The past year was marked by growth and change. Foremost among
the changes was Jon Michael   s retirement as Chief Executive Officer.
On behalf of our team members, as well as our Board of Directors,
I want to thank Jon for all he has done and continues to do as
Chairman of the Board. It is a privilege to succeed him and lead RLI
through the next chapter of our storied history.
As a U.S.-based specialty insurance company, RLI maintains a
diverse portfolio of niche property, casualty and surety products. Our
products are designed to give our customers security and peace of
mind by protecting what   s important to them. We continue to focus
on growing our existing products, while exploring opportunities to
expand our customer base and serve new markets.
Our products are primarily distributed through a trusted network
of wholesale and retail brokers and agents. These partnerships,
which are integral to RLI   s success, have been forged and reinforced
over time through investment in personal connections that build
mutual trust.
Our commitment to underwriting discipline and profitability is core
to our business model. We have demonstrated that specialized
knowledge and expertise, partnered with consistent underwriting
discipline and prudent management of our business, leads to
positive results and outcomes.
Finally, the dedication of our associate-owners is second to
none. We hire the best and the brightest who care about our
customers and have a vested interest in our shared success. That
entrepreneurial spirit has fueled our business for nearly 60 years.
Our focus on these fundamentals   diversification, distribution,
discipline and dedication   contributed to another year of
outstanding financial results.
UNDERWRITING RESULTS
We posted underwriting income of $178.2 million on an 84.4
combined ratio in 2022, compared to $129.9 million on an 86.8
combined ratio in 2021. In addition to achieving profitability, we
succeeded in significantly growing our top line. Gross premiums
written grew 16 percent in 2022, fueled by growth in all three major
product segments.
Our casualty segment achieved 6 percent growth in gross premiums
written and an 89.6 combined ratio. Premium growth occurred
across most products within the segment, aided by favorable
market conditions that supported rate increases and an expanded
distribution base. Our outlook on the future growth potential of our
casualty business remains positive.
The property segment experienced 44 percent growth and posted
a 76.4 combined ratio despite experiencing significant catastrophe
losses during the year. Property premium growth was driven by
hard market conditions that resulted in rate increases and strong
submission flow. We are optimistic that new business opportunities
and rate momentum will continue in the property space, though
increased reinsurance costs could introduce some volatility to
segment underwriting results.
Our surety business achieved 9 percent growth in gross premiums
written and a 74.4 combined ratio. Despite the highly competitive
surety environment, all products within this segment benefitted from
new business and partnership opportunities. In the year ahead, we
will continue to carefully pursue growth opportunities in this market,
while closely monitoring the financial viability of the principals we
provide bonds to as the economic environment evolves.
Overall, our underwriting performance was strong. We provided
exceptional service to our customers, advanced our strategic
priorities and made investments in our business to support
continued profitable growth.
STATUTORY COMBINED RATIO
Our average statutory combined ratio has outperformed the industry average by 12 points over the last decade.
110
P&C Industry*
RLI
100
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90
80
RLI
P&C Industry*
2013
2014
2015
2016
82.2
95.8
84.1
97.2
83.9
97.9
89.0
100.7
2017
96.2
103.9
2018
2019
2020
2021
94.0
99.2
91.1
98.9
91.8
98.8
85.3
99.7
2022 10-YEAR AVG.
83.2
107.4
*Sources:
(1)
 A.M. Best (2022). Aggregate & Averages     Property/Casualty, United States & Canada. 2013     2022.
(2)
 Conning (2022). Property-Casualty Forecast & Analysis: By Line of Insurance, Fourth Quarter 2022.
Estimated for the year ended December 31, 2022.
4
88.1
100.0

2/24/2023 Letter Continued (Full PDF)

 

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