RLI Corp. Q1 FY2026 earnings call

• Started 2026 well, feeling good about position. • Insurance marketplace dynamic, more competition in some areas from broker-owned facilities and MGAs. • Seeing rate acceleration and market disruption in wheels-based products. • Encouraged by AI as a tool, helping put better data in hands of decision makers. • Core values of community, customer focus, continuous improvement guiding efforts. • Casualty segment growth with contributions from personal umbrella and commercial transportation. • Property premium decline due to rate decreases in ENF property but offset by marine and Hawaii homeowners. • Surety segment impacted by variable results and one large prior period loss. • Marine had largest premium quarter since inception, Hawaii homeowners saw premium ad rate growth.

Casualty: growth totaled 10% for the quarter, 97 combined ratio, outperforming 2025 by two points, inclusive of higher levels of favorable prior year development at 14.5 million. Property: 9% decline in gross premium, 62 combined ratio, $20.6 million of favorable prior year's reserve development on shorter tailed lines. Marine: largest premium quarter since inception, almost $47 million of premium, increase of 4% from Q1 2025. Hawaii homeowners: premium ad rates each grew 12% in the quarter. Surety: top line growth premium was down about 1% from last year, 94 combined ratio, influenced by one large contract surety loss from prior period claims.

• Encouraged by start to 2026 and position, believe well positioned to continue delivering consistent, profitable results. • No specific upward/downward revision mentioned, but focus on underwriting discipline, risk understanding, appropriate pricing, seizing opportunities, and stepping back if conditions don't support risk-adjusted returns.

• Insurance marketplace competition in some areas with broker-owned facilities and MGAs not always aligned with long-term underwriting profitability. • Regulatory uncertainty with emergence and rapid adoption of artificial intelligence. • Catastrophe activity impacting results. • Variable surety loss activity with potential significant influence over shorter periods. • Property market still competitive with rate decreases continuing. • Admitted market competition affecting business in some lines.

Q: How to classify GL book competitive environment this quarter vs recent previous quarters?

A: Varies by region, construction industry paused in Northeast due to political environment and weather, West Coast has healthy spring with focus on project policies.

Q: Early impacts of state diversification in personal umbrella book, especially rate hike in California?

A: Rate hike effective Dec 1st, still seeing some growth in California but at smaller pace, changes like increased attachments and reduced commissions.

Q: Transportation claim count down, any cause for delay in claim reporting?

A: Likely due to reduced policy count and investment in loss control activities.

Q: Property business near-term trajectory?

A: Competition remains active, rate decreases continue, individually underwriting accounts, protecting renewals.

Q: Surety reserve development driver?

A: Variable results around small number of losses, one particular loss on contract side in prior years.

Q: Casualty ex-CAT, ex-PYD loss ratio?

A: Business mix more than anything else.

Q: Balancing exposure unit growth in transportation with severity concerns?

A: Risk selection, transportation team focused on risk selection and finding accounts with good risk management.

Q: Large surety loss development?

A: Retention around surety today is five million dollars, reinsurance picking up additional losses, further development somewhat contained.

Q: Property premium decline and underwriting expenses?

A: Looking for opportunities, ens property underwriters meeting with producers, Marine and Hawaii Homeowners growing to round out property exposure.

Q: Private credit concerns and MGA space?

A: Some MGAs with private capital coming to end of fund life, influencing MGA space.

Q: Increased admitted competition in other lines?

A: Seeing a little on casualty side, not to extent of property, but some standard markets covering auto as well for contractors.