The following table highlights underwriting income and combined ratios by segment for the year.
| | | | | | | | | | | | |
Underwriting Income(1) | | | | | | | | Combined Ratio(1) | | | | |
(in millions) | | 2023 | | 2022 | | | | 2023 | | 2022 |
Casualty | | $ | 59.5 | | $ | 73.8 | | Casualty | | 92.2 | | 89.6 |
Property | | | 86.3 | | | 72.5 | | Property | | 78.5 | | 76.4 |
Surety | | | 27.4 | | | 31.9 | | Surety | | 79.6 | | 74.4 |
Total | | $ | 173.2 | | $ | 178.2 | | Total | | 86.6 | | 84.4 |
| (1) | See discussion below: Non-GAAP and Performance Measures. |
Other Income
Net investment income for the quarter increased 14.4% to $32.5 million, compared to the same period in 2022. For the year ended December 31, 2023, net investment income was $120.4 million, compared to $86.1 million for the same period in 2022. The investment portfolio’s total return was 6.4% for the quarter and 8.8% for the year.
RLI’s comprehensive earnings were $216.2 million for the quarter ($4.69 per share), compared to $113.3 million ($2.47 per share) for the same quarter in 2022. Full-year comprehensive earnings were $367.4 million ($7.97 per share), compared to $304.5 million ($6.65 per share) in 2022. In addition to net earnings, comprehensive earnings for 2023 included after-tax unrealized gains from the fixed income portfolio, due to declining interest rates.
Special and Regular Dividends
On December 20, 2023, the company paid a special cash dividend of $2.00 per share and a regular quarterly dividend of $0.27 per share for a combined total of $103.6 million. RLI has paid dividends for 190 consecutive quarters and increased regular dividends in each of the last 48 years. Over the last 10 years, the company has returned $1.41 billion to shareholders and the regular dividend has grown an average of 4.7% per year.
Non-GAAP and Performance Measures
Management has included certain non-generally accepted accounting principles (non-GAAP) financial measures in presenting the company’s results. Management believes that these non-GAAP measures further explain the company’s results of operations and allow for a more complete understanding of the underlying trends in the company’s business. These measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles (GAAP). In addition, our definitions of these items may not be comparable to the definitions used by other companies.
Operating earnings and operating earnings per share (EPS) consist of our GAAP net earnings adjusted by net realized gains/(losses), net unrealized gains/(losses) on equity securities and taxes related thereto. Additionally, equity in earnings of Maui Jim and the related taxes were excluded from operating earnings and operating EPS for 2022 due to the sale of RLI’s investment in the third quarter of 2022. Net earnings and net earnings per share are the GAAP financial measures that are most directly comparable to operating earnings and operating EPS. A reconciliation of the operating earnings and operating EPS to the comparable GAAP financial measures is included in the 2023 financial highlights below.
Underwriting income or profit represents the pretax profitability of our insurance operations and is derived by subtracting loss and settlement expenses, policy acquisition costs and insurance operating expenses from net premium earned, which are all GAAP financial measures. The combined ratio, which is derived from components of underwriting income, is a performance measure commonly used by property and casualty insurance companies and is calculated as the sum of loss and settlement expenses, policy acquisition costs and insurance operating expenses, divided by net premiums earned, which are all GAAP measures.
Other News
At 10 a.m. central standard time (CST) tomorrow, January 25, 2024, RLI management will hold a conference call to discuss quarterly results with insurance industry analysts. Interested parties may listen to the discussion at https://events.q4inc.com/attendee/112063672.
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