RLI (RLI) AI Stock Analysis

• Market Cap: $5.82B
• Dividend Yield: 4.05%
• Average Volume (3M): 870.43K
• Price to Earnings (P/E): 14.6
• Beta (1Y): 0.16
• Revenue Growth: 3.72%
• EPS Growth: -16.23%
• Country: US
• Employees: 1,147
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Property & Casualty
• EPS (TTM): 0.94
• Shares Outstanding: 91,920,170
• 10 Day Avg. Volume: 779,286
• 30 Day Avg. Volume: 870,430
• PEG Ratio: 0.92
• Price to Book (P/B): 3.32
• Price to Sales (P/S): 3.13
• P/FCF Ratio: 9.69
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 3.06
• Enterprise Value/Gross Profit: 10.28
• Enterprise Value/Ebitda: 11.04
• 1Y Price Target: $59.75
• Price Target Upside: -5.59% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): 2.87
• Revenue Forecast (FY): $2.07B

• Rating: 78 Outperform
• Price Target: $72.00 ▲(13.76% Upside)
• Action: Reiterated Date: 03/04/26
• Date: Action: Reiterated 03/04/26

The score is driven primarily by strong financial performance (profitability, low leverage, and strong cash conversion). Valuation is supportive (mid-teens P/E and strong yield), while technicals are only moderately positive due to the 200-day trend still overhead. Earnings-call commentary remains constructive but tempered by premium pressure and casualty/expense headwinds; recent financing is a modest mixed factor.

Positive Factors

Cash generation

Reliable operating and free cash flow (≈$614M in 2025) that tracks net income closely signals high earnings quality. This durable cash conversion funds dividends, special payouts, reinsurance/timing flexibility and investments in underwriting and analytics without relying on external financing.

Conservative balance sheet

Very low leverage (debt/equity ≈0.02) provides long-term financial flexibility to absorb underwriting volatility, fund catastrophe protection and maintain capital returns. A conservative balance sheet supports disciplined underwriting and reduces solvency risk over multi-quarter horizons.

Underwriting discipline & track record

A multi-decade streak of underwriting profitability and a sub-85 combined ratio reflect durable pricing discipline, selective risk appetite and effective loss control. This structural strength underpins sustainable underwriting margins across cycles, especially in niche specialty lines.

Negative Factors

Weak premium growth

Modest to negative premium trends (Q4 -2%, FY +1%) indicate constrained organic growth and pressure from competitive markets. Over several quarters this limits leverage of fixed costs, reduces ability to expand scale profitably, and forces reliance on rate actions or selective contraction.

Casualty reserve & severity risk

Elevated casualty combined ratios and uncertain prior‑year development (auto and transportation severity) create persistent earnings volatility and potential reserve strengthening. Such reserve risk can erode capital and constrain deployment unless offset by pricing or reinsurance actions.

Rising expense ratio

A rising expense ratio (39.3% vs 37.6%) signals structural cost pressure from compensation and technology investments. If persistent, higher operating costs reduce underwriting margins and require higher premium yields or efficiency gains to preserve long-term profitability.

RLI Business Overview & Revenue Model

Company Description

RLI Corp., an insurance holding company, underwrites property and casualty insurance in the United States and internationally. Its Casualty segment provides commercial and personal coverage products; and general liability products, such as coverage for third-party liability of commercial insureds, including manufacturers, contractors, apartments, and mercantile. It also offers coverages for security guards and in the areas of onshore energy-related businesses and environmental liability for underground storage tanks, contractors and asbestos, and environmental remediation specialists; and professional liability coverages focuses on providing errors and omission coverage to small to medium-sized design, technical, computer, and miscellaneous professionals. This segment provides commercial automobile liability and physical damage insurance to local, intermediate and long haul truckers, public transportation entities, and other types of specialty commercial automobile risks; incidental and related insurance coverages; inland marine coverages; management liability coverages, such as directors and officers liability insurance, fiduciary liability and coverages, employment practice liability, and for various classes of risks, including public and private businesses; and healthcare liability and home business insurance products. The company's Property segment offers commercial property, cargo, hull, protection and indemnity, marine liability, inland marine, homeowners' and dwelling fire, and other property insurance products. Its Surety segment offers commercial surety bonds for medium to large-sized businesses; small bonds for businesses and individuals; and bonds for small to medium-sized contractors. The company also underwrites various reinsurance coverages. It markets its products through branch offices, brokers, carrier partners, and underwriting and independent agents. RLI Corp. was founded in 1965 and is headquartered in Peoria, Illinois.

How the Company Makes Money

RLI generates revenue primarily through the underwriting of insurance policies and the collection of premiums from its policyholders. The company employs a disciplined underwriting approach, which helps it achieve profitability by managing risk effectively. Key revenue streams include premiums from its property, casualty, and surety insurance segments. Additionally, RLI earns investment income from its portfolio of invested assets, which consists of fixed-income securities and equity investments. Strategic partnerships with brokers and agents also enhance its distribution network, contributing to policy sales and overall revenue growth.

RLI Financial Statement Overview

Summary

Strong overall financial quality: revenue growth, consistently healthy profitability, very conservative leverage, and excellent operating/free-cash-flow conversion. Main offsets are margin volatility (notably post-2022 normalization) and reduced comparability from a sharp reported equity shift.

Income Statement

Revenue has expanded over the period (from ~$988M in 2020 to ~$1.88B in 2025), including a very strong jump in 2025, indicating solid top-line momentum. Profitability is consistently strong with healthy net margins (roughly ~16% to ~34%) and robust operating margins, though results show meaningful volatility—2022 stands out as an unusually high-margin year followed by lower (but still strong) margins in 2023–2025. Overall, the income profile is attractive, but earnings power appears somewhat cyclical.

Balance Sheet

Leverage is very conservative, with total debt held low and debt-to-equity improving materially versus earlier years (down to ~0.02 in 2025). Return on equity is generally solid but has become less consistent, stepping down from exceptionally high levels in 2022 to a more moderate level in 2025. One notable watch item is the sharp change in reported equity between 2024 and 2025, which suggests a structural shift in the balance sheet presentation and makes year-to-year comparability less clean.

Cash Flow

Cash generation is a clear strength: operating cash flow and free cash flow are strong and rising (to ~$614M in 2025). Free cash flow closely tracks net income (near 1.0 across years), indicating good earnings quality and limited apparent cash-to-profit distortion. While free cash flow growth has been uneven (including a decline in 2022), the recent trajectory is favorable and cash conversion remains consistently strong.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.88B	1.77B	1.51B	1.70B	1.18B
Gross Profit	561.42M	454.63M	390.87M	731.77M	459.60M
EBITDA	530.45M	441.55M	393.11M	736.71M	359.39M
Net Income	403.34M	345.78M	304.61M	583.41M	279.35M
Balance Sheet
Total Assets	6.16B	5.63B	5.18B	4.77B	4.51B
Cash, Cash Equivalents and Short-Term Investments	172.13M	114.70M	3.03B	2.73B	2.50B
Total Debt	100.00M	100.00M	200.00M	399.73M	199.68M
Total Liabilities	4.38B	4.11B	3.77B	3.59B	3.28B
Stockholders Equity	1.78B	1.52B	1.41B	1.18B	1.23B
Cash Flow
Free Cash Flow	608.70M	555.51M	458.34M	244.56M	376.60M
Operating Cash Flow	614.22M	560.22M	464.26M	250.45M	384.90M
Investing Cash Flow	-362.13M	-318.87M	-211.80M	48.88M	-274.83M
Financing Cash Flow	-240.32M	-237.98M	-238.85M	-365.31M	-83.49M

RLI Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 63.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RLI, the sentiment is Positive. The current price of 63.29 is above the 20-day moving average (MA) of 61.32, above the 50-day MA of 61.05, and below the 200-day MA of 63.83, indicating a neutral trend. The MACD of 0.54 indicates Negative momentum. The RSI at 62.18 is Neutral, neither overbought nor oversold. The STOCH value of 87.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RLI.

RLI Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WTM	80 Outperform	$5.46B	4.80	2.95%	0.05%	-4.24%	-78.10%
RLI	78 Outperform	$5.82B	14.63	24.44%	4.05%	3.72%	-16.23%
SIGI	77 Outperform	$5.04B	10.96	13.86%	1.85%	10.98%	74.87%
THG	77 Outperform	$6.30B	9.88	20.60%	1.97%	5.26%	72.46%
MCY	74 Outperform	$5.06B	9.63	24.80%	1.34%	6.18%	-21.28%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
KMPR	56 Neutral	$1.90B	17.54	9.03%	3.15%	4.51%	-8.29%

RLI Corporate Events

RLI Completes $300 Million Senior Notes Offering

On March 3, 2026, RLI Corp. completed a public offering of $300 million of 5.375% senior notes due 2036, issued under a new indenture with Computershare Trust Company as trustee, with semiannual interest payments beginning June 1, 2026 and flexible redemption terms before and after March 1, 2036. The indenture restricts certain actions involving subsidiary stock, mergers and asset sales but allows additional debt and dividends and does not mandate financial covenants or change-of-control protections, shaping RLI’s capital structure and creditor protections.

On February 26, 2026, RLI amended and restated its credit agreement with PNC Bank, extending the facility’s maturity to February 26, 2031, increasing committed capacity to $150 million with a $50 million accordion, and adjusting interest rates and fees to support liquidity and growth. The same day, RLI also entered into an underwriting agreement with BofA Securities and PNC Capital Markets for the senior notes issuance, underscoring a coordinated effort to diversify funding sources and extend its debt maturity profile.

The most recent analyst rating on (RLI) stock is a Buy with a $70.00 price target. To see the full list of analyst forecasts on RLI stock, see the RLI Stock Forecast page.

RLI Maintains Quarterly Dividend, Extends 50-Year Streak

On February 18, 2026, RLI Corp. said its board declared an unchanged first-quarter regular cash dividend of $0.16 per share, payable March 16, 2026, to shareholders of record as of March 2, 2026. Based on an indicated annual dividend of $0.64 and a prior closing share price of $60.77, the payout implies a dividend yield of about 1.05%.

The announcement underscores RLI’s commitment to shareholder returns, extending a 50-year streak of annual dividend increases and signaling continued confidence in its earnings power and capital position. For investors, the move reinforces the company’s reputation for disciplined underwriting and consistent capital management in the specialty insurance sector.

The most recent analyst rating on (RLI) stock is a Hold with a $62.00 price target. To see the full list of analyst forecasts on RLI stock, see the RLI Stock Forecast page.