RLI Corp

The Federal Reserve's Sept. 16, 2026 rate hike, which raised the federal funds target range by 25 basis points to 3.75-4%, stands to benefit U.S. property and casualty insurers with large fixed-income portfolios and meaningful reinvestment opportunities. The Zacks Property and Casualty Insurance industry sits in the top 29% of the 247 Zacks industries, carrying a Zacks Industry Rank #71. Among the names most sensitive to the move are The Travelers Companies, Selective Insurance Group and RLI Corp, each cited for large fixed-income holdings and the ability to reinvest maturing securities at higher prevailing yields. Travelers had $92.9 billion in fixed-maturity investments as of June 30, 2026, with an average effective duration of five years and about 25% of that portfolio maturing over the next three years; its second-quarter 2026 net investment income rose 14% to $1.07 billion, and it expects after-tax fixed-income net investment income of approximately $840 million in the third quarter and $870 million in the fourth quarter of 2026. Selective Insurance, whose fixed-income portfolio including short-term investments had an effective duration of 4.1 years as of Dec. 31, 2025, raised its 2026 after-tax net investment income guidance to $480 million from $465 million after second-quarter after-tax net investment income rose 18% year over year to $119 million. RLI held about $4.87 billion of investments and cash as of June 30, 2026, with bonds at roughly 80% of its target asset allocation and an average fixed-income duration of 4.7 years. The benefit is expected to build gradually as bonds mature and operating cash is reinvested, and higher yields can also cushion earnings as P&C pricing growth moderates.

RLI Corp has declared a quarterly dividend of $0.18 per share, payable on September 15, 2026, with an ex-dividend date of August 31, 2026, marking another milestone in its 51-year streak of annual dividend increases. The company, which underwrites property and casualty insurance, has maintained a consistent dividend payment record since 1975 and is recognized as a dividend king. As of June 30, 2026, RLI's dividend payout ratio stands at 0.17, indicating it retains about 83% of earnings, providing a substantial buffer for future payouts. The company's profitability rank is 7 out of 10, with positive net income for each of the past decade, and its three-year earnings per share growth rate is approximately 14% per year, outpacing its dividend growth. The current 12-month trailing dividend yield is 1.03%, while the forward yield is 1.12%, suggesting expected increases in payouts. RLI's five-year dividend growth rate is 5.50% per year, and its five-year yield on cost is approximately 1.35%.

RLI Corp. shares have climbed about 6.4% in the month since its second-quarter earnings report, outperforming the S&P 500. The insurer posted operating earnings of 83 cents per share, beating the Zacks Consensus Estimate by 16.9% and rising 1.2% year over year. Operating revenues grew 4.9% to $463 million, driven by higher net premiums earned and net investment income, while gross premiums written increased 3.1% to $579.7 million. Underwriting income fell 3.7% to $59.9 million as the combined ratio deteriorated 110 basis points to 85.6, reflecting higher catastrophe losses. The company also announced a $250 million share repurchase program on May 14, 2026, and paid a regular quarterly dividend of 18 cents per share on June 12, 2026.

RLI declared a quarterly dividend of $0.18 per share, in line with the previous payout. The dividend is payable September 15 to shareholders of record on August 31, with the ex-dividend date also August 31. Based on the current share price, the forward yield is 1.13%.

RLI Corp. reported second-quarter 2026 operating earnings of 83 cents per share, beating the Zacks Consensus Estimate by 16.9% and rising 1.2% from a year earlier. Operating revenues grew 4.9% to $463 million, driven by higher net premiums earned and a 16.8% increase in net investment income to $46 million. Gross premiums written rose 3.1% to $579.7 million, with casualty segment premiums up 10.6% to $339 million, while property and surety premiums declined. Underwriting income fell 3.7% to $59.9 million as the combined ratio weakened 110 basis points to 85.6, reflecting higher catastrophe losses. The company ended the quarter with total investments and cash of $4.9 billion, book value per share of $19.09, and a return on equity of 24.5%.

RLI Corp. announced that James H. Bradshaw has been appointed to its Board of Directors, effective July 15, 2026. His term expires at the next shareholders' meeting in May 2027, when he will stand for re-election. Bradshaw is Chairman of Gallagher Re North America, a role he assumed in 2024 after more than a decade as CEO of Gallagher Re North America and its predecessor, Willis Re North America. He brings over 40 years of insurance industry leadership experience, having also held positions at Guy Carpenter and Chubb. Board Chairman Dave Duclos said Bradshaw's extensive industry experience and strategic perspective will bring valuable insight to the board.