RLI (RLI) Stock Forecast & Price Target

RLI Corp has demonstrated strong financial performance, with net written premiums increasing by 10.7% year-over-year to $366.4 million, primarily driven by robust growth in its Casualty segment, which saw a notable rise of 19.2% in the fourth quarter. The company's investment income also showed a positive trend, increasing by 19% year-over-year to $38.8 million, signifying effective portfolio management and improved returns. Furthermore, RLI's Q4 retention ratio improved to 77.4%, reflecting enhanced customer loyalty and a solid operational foundation that supports ongoing premium growth and favorable margin development.

RLI Corporation reported a significant decline in earnings from its equity investees, posting a loss of $12.5 million compared to pretax earnings of $2.4 million in the prior year, which fell short of expectations for positive earnings. Additionally, the company's property net written premium (NWP) experienced a rare decline of 0.2% year-over-year, marking the first reduction in this metric in 28 quarters, and significantly underperformed against an estimated growth of 11.8%. Furthermore, while there was a decline in the expense ratio, dropping 280 basis points year-over-year to 37.6%, this was overshadowed by a notable decrease in reserve releases, which could signal underlying financial instability going forward.