Jan 30 - (The Insurer) - AM Best has revised the outlooks to positive from stable for RLI Group members’ financial strength rating $(FSR)$ of A+ (Superior) and long-term issuer credit ratings $(ICR.AU)$ of “aa” (Superior).

In addition, AM Best has revised the outlook to positive from stable and affirmed the long-term ICR of “a” (Excellent) of RLI’s publicly traded parent holding company, RLI Corp.

The positive outlooks reflect Peoria, Illinois-based RLI’s consistently favourable balance sheet strength fundamentals, supported by the group’s prudent capital management strategy, favourable reserve development trends, strong liquidity and sound asset liability management practices.

The group’s risk-adjusted capitalization remained at the strongest level as of year-end 2024, and is expected to be maintained at this level over the medium term, AM Best said.

“Strong and consistent internal capital generation has enabled RLI to grow its capital size considerably over the last five years (despite the return of significant capital in the form of stockholder dividends to RLI Corp), with policyholder surplus reaching $1.8bn as of year-end 2024, from $1.0bn as of year-end 2019,” the rating agency noted.

RLI’s ratings also reflect strong operating performance across extended time periods and multiple underwriting cycles.

The ratings apply to member companies RLI Insurance Company, Contractors Bonding and Insurance Company and Mt Hawley Insurance Company.

RLI last week reported operating profit per share of $0.41 for the fourth quarter of 2024, down from the prior year period’s $0.77, and missing the $0.52 analysts’ consensus forecast.

The carrier recorded a Q4 underwriting gain that fell by 63 percent to $22mn owing to a strong decline in its property unit’s performance, while its casualty unit swung to a loss after earning a small profit in the prior-year period.

Its Q4 combined ratio worsened to 94.4 percent from 82.7 percent in the fourth quarter of 2023.