RLI (RLI) Stock Forecast & Price Target

RLI Corp demonstrated strong financial performance with a year-over-year increase in net written premiums of 10.7%, totaling $366.4 million, primarily driven by robust growth in the Casualty segment, which saw an impressive 19.2% rise in Q4. The company also experienced a 19% increase in investment income, reaching $38.8 million, indicating effective management of its investment portfolio alongside its insurance operations. Additionally, RLI's Q4 retention ratio improved to 77.4%, coupled with expectations for further margin enhancement due to favorable reserve development and solid combined ratios.

RLI Corp experienced a significant negative shift in its financial performance, highlighted by a loss of $12.5 million in equity investee earnings compared to the previous year's pretax earnings of $2.4 million, deviating from earlier projections. Additionally, the company's property net written premiums (NWP) fell by 0.2% year-over-year to $103.9 million, marking the first decline in 28 quarters and falling short of expectations for an 11.8% increase. Furthermore, while the Q4 expense ratio improved to 37.6%, it still reflected weaker overall operational efficiency, coupled with reserve releases that were notably below previous levels, indicating potential future financial instability.