Shares of RLI Corp. RLI have rallied 31.5% year to date (YTD), outperforming the industry’s 31% growth. The insurer also outperformed the Zacks S&P 500 composite and the Finance sector’s return of 25.9% and 21.6%, respectively, YTD. With a market capitalization of $8.02 billion, the average volume of shares traded in the last three months was 0.1 million.

RLI Outperforms Industry, Sector & S&P YTD

Image Source: Zacks Investment Research

Shares of RLI closed at $175.07 on Thursday, near its 52-week high of $177.79. This proximity underscores investor confidence. It has the ingredients for further price appreciation.

This property and casualty insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 20.99%.

RLI Trading Above 50-Day and 200-Day Moving Average

This Zacks Rank #3 (Hold) insurance broker is trading above its 50-day and 200-day simple moving average (SMA) of $158.28 and $147.86, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

Growth Projection for RLI

The Zacks Consensus Estimate for RLI’s 2024 earnings per share indicates an increase of 18.4% from the year-ago reported number. The consensus estimate for revenues is pegged at $1.67 billion, implying a year-over-year improvement of 17.9%.

The consensus estimate for 2025 earnings per share and revenues indicates an increase of 7.3% and 9.5%, respectively, from the corresponding 2024 estimates.

Earnings have grown 18.7% in the past five years, better than the industry average of 11.4%.

Factors Favoring RLI

RLI continues to grow in product diversification. The top line is set to benefit from a compelling product portfolio, focus on introducing new products, re-underwriting several of its products, sturdy business expansion, sustained rate increase and expanded distribution. 

RLI is exposed to catastrophe losses that induce underwriting volatility by the nature of its operations. Recently, the insurer estimated third-quarter pretax net catastrophe losses in the range of $35-$40 million, primarily due to Hurricanes Beryl and Helene. Nonetheless, the insurer has a reinsurance program in place to cap its losses from catastrophes.  It maintains a conservative underwriting and reserving policy and continues to achieve favorable reserve releases from the prior years.

Despite exposure to cat loss, the combined ratio, which reflects its underwriting profitability, has been exemplary. It is continuously making efforts to boost underwriting results. To that end, RLI dropped the underperforming products from its property business.

With regards to wealth distribution, RLI boasts an impressive dividend track record. RLI has been paying dividends for 187 consecutive quarters and increased regular dividends in each of the last 49 years, increasing at a five-year (2019-2024) CAGR of 8.8%. Its dividend yield of 0.6% is better than the industry average of 0.2%, making the stock an attractive pick for yield-seeking investors. In addition, the insurer has also been paying special dividends since 2011.

The insurer has been strengthening its balance sheet by improving liquidity and leverage. A sound capital structure helps it meet the interests of its policyholders, enhance operations in the insurance sector and aid growth in its book value for the long term.