RLI Corp. (RLI) Business Profile

What it does

RLI Corp. is a U.S. specialty insurer that sells property, casualty and surety products. It was founded in 1965 and is headquartered in Peoria. Craig Kliethermes is its president and chief executive officer.

Specialty insurance covers risks that do not fit the underwriting criteria of standard insurers. RLI offers coverage in both the admitted market, where insurers face state requirements such as rate and policy-form filings, and the excess and surplus market, which covers hard-to-place risks using more flexible policy forms and unregulated premium rates. It also writes specialty reinsurance, taking on portions of other insurers’ risks.

Its casualty products include liability coverage for businesses, transportation operators and professionals, as well as personal umbrella insurance that generally sits above a customer’s homeowners’ and automobile liability policies. Property products include commercial property and marine coverage, plus specialized homeowners’ insurance in Hawaii. Surety products include bonds that guarantee a contractor’s obligations on a construction project and other bonds for businesses and individuals.

RLI distributes most products through brokers, independent agents and carrier partners, although it also offers some coverage directly. Its underwriting and claims staff work with customers across the United States. The company had 1,193 employees as of December 31, 2025.

How it makes money

RLI earns premiums for accepting insurance and surety risks. It records underwriting income when net premiums earned exceed losses, settlement expenses, policy acquisition costs and insurance operating expenses. It also earns investment income and can gain or lose value on its investments. Its portfolio provides a resource for paying claims as well as income to support operations.

The business has three reporting segments. Casualty includes commercial excess and personal umbrella coverage, transportation, general liability and professional services. Commercial excess policies sit above primary liability coverage. Property includes commercial property, marine and other property coverages. Surety includes transactional, commercial and contract bonds.

RLI prices many specialty risks individually and tailors coverage to their characteristics. In excess and surplus lines, it can use more flexible policy forms and unregulated premium rates. Policies can be renewed, but RLI must compete to retain them, and renewal prices and terms can change. It also transfers some risk to reinsurers and pays them part of the premiums it receives.

For 2025, the combined ratio was 83.6. In the third quarter of 2026, underwriting income totaled $58.8 million and the combined ratio was 86.2. A combined ratio below 100 indicates an underwriting profit; it measures losses and expenses against net premiums earned.

The third-quarter result benefited from favorable development on prior-year loss reserves. Investment income also increased, while changes in the value of equity securities affected reported net earnings.

Customers and how it sells

RLI serves businesses and individuals with specialized insurance or bonding needs. Commercial customers include manufacturers, contractors, apartment owners, transportation operators and professionals. Its surety customers range from individuals needing small bonds to medium and large businesses, as well as contractors seeking performance and payment bonds.

The company distributes products nationwide through wholesale and retail brokers, independent agents, carrier partners, underwriting agents and digital platforms. Brokers are the primary channel for several commercial lines, including property, general liability and commercial excess. Independent agents distribute products such as personal umbrella, professional services and surety. Carrier partners place home business and personal umbrella customers with RLI when the underlying risk falls outside their own underwriting appetite.

RLI’s insurance subsidiaries operate across all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands and Guam, although their admitted and non-admitted authorities differ. The company has no material foreign operations. Marine coverages have some incidental international exposure.

RLI also works with Steadily, a landlord insurer. The partnership generated $9 million of premium in the third quarter of 2026. RLI has input into coverage and reviews the claims handled by Steadily.

Suppliers and costs

RLI’s principal operating costs are claims and settlement expenses, policy acquisition costs and insurance operating expenses. Acquisition and operating costs include the expenses associated with obtaining and servicing business; the company uses its own underwriting, claims and support staff for its specialized products. It also uses third-party contractors in limited circumstances.

Reinsurers are an important source of capacity. RLI pays them a portion of premiums to share risks, limit losses from catastrophes and large individual risks, and reduce volatility. It buys both treaty coverage, which applies to specified groups of risks, and facultative coverage for individual risks. Reinsurance does not remove RLI’s primary obligation to its policyholders.

The company evaluates the balance between its capital position and the cost of reinsurance each year. Reinsurance contracts can include limits on recovery for a single event or over the contract term, and RLI may have to pay an additional premium to restore coverage after a loss. The company also assesses reinsurers’ ability to pay.

RLI’s investment portfolio is managed both internally and externally. Its investment policy is overseen by senior officers and the board, and its insurance operations are subject to state regulatory requirements.

Competitive position

RLI operates in a competitive, cyclical insurance market. Its casualty competitors include AIG, Arch, Kinsale and Markel. In property, it competes with companies including Arch, Liberty Mutual, Markel and Travelers. Its surety competitors include AIG, Arch, Chubb and Travelers. Managing general agents also add capacity and competition across property and casualty markets.

Specialty insurance competition involves availability, coverage and service as well as price. RLI uses individually underwritten risks and tailored coverage, and its distribution network connects it with brokers, agents and carrier partners. Financial strength ratings also matter to policyholders and intermediaries assessing an insurer’s ability to meet obligations.

Our reading: Specialized underwriting knowledge and tailored coverage are meaningful competitive assets, but their strength depends on selecting and pricing risks accurately. Our reading: Distribution relationships and financial strength support RLI’s ability to win business, but they do not insulate it from competing capacity.

Competition increased in excess liability in 2026, particularly from managing general agents and standard markets on larger accounts. RLI also faced pressure from new entrants in excess and surplus casualty, while additional capacity and business moving back to standard carriers and retailers affected excess and surplus property.

Growth opportunities

RLI looks for opportunities across niche insurance markets and introduces coverages and programs when it sees opportunities to transfer risk profitably. Its distribution channels include brokers, agents, carrier partners and digital platforms, and it can expand or reduce catastrophe exposure as expected returns and reinsurance costs change.

In 2025, specialty admitted operations produced gross premiums written of $1.2 billion. Excess and surplus operations wrote $783 million, while specialty reinsurance wrote $23 million. These markets give RLI different ways to reach risks that standard insurers may not cover or that need specialized underwriting.

In the third quarter of 2026, personal umbrella premium grew 22%, with rates increasing 8%. Marine premium grew 11%, and Hawaii homeowners premium increased 9%, with rates up 13%. RLI’s partnership with Steadily generated $9 million of premium in the quarter and helped offset declines in parts of the property segment.

Growth varied by product. Excess and surplus casualty premium declined 10% in the quarter as new entrants put pressure on retention and new business. Excess and surplus property premium fell 17% amid additional capacity and business returning to standard carriers and retailers. Contract and commercial surety premium was modestly lower as construction starts slowed in government and renewable energy projects.

Structural risks

• Pricing and competition: Profitability depends on underwriters selecting and pricing risks accurately. Competitive pressure can affect RLI’s ability to write or retain business at an adequate rate, while loss costs can rise beyond what was anticipated when coverage was priced.

• Catastrophes: Weather-related and other catastrophes can produce volatile losses. Catastrophe models are uncertain, and RLI could retain losses above its reinsurance limits if an event is larger than anticipated.

• Reserves: Loss reserves are estimates of the eventual cost of reported and unreported claims. Inflation, legal trends, changing claim patterns and other factors can cause final payments to differ from those estimates; changes are reflected in results when estimates are revised.

• Reinsurance: Reinsurance may become more costly or less available. Reinsurers may also fail to pay losses promptly or at all, while RLI remains liable to its policyholders for the full policy obligations.

• Regulation and investments: State rules govern rates, policy forms, capital, investments and subsidiary dividends. Restrictions can also limit RLI’s ability to exit unprofitable markets. Changes in securities values affect the investment portfolio and reported results.

Bottom line

Our reading

RLI is a specialty insurer built around selecting individual risks, distributing through intermediaries and earning both underwriting and investment income. Its underwriting expertise and relationships support that model, but competition can quickly change prices and retention in individual product lines. Its results also depend on claims estimates, catastrophe exposure and the availability and reliability of reinsurance.