RLI's first quarter saw the company miss Wall Street’s revenue expectations, while adjusted earnings per share came in above consensus. The negative market reaction reflected investor concerns around softer premium growth and heightened catastrophe activity, both noted by management as key drivers of the quarter. CEO Craig Kliethermes cited a “dynamic” insurance market environment with growing competition from broker-owned facilities and managing general agents, emphasizing RLI’s focus on underwriting discipline and selective growth. Management acknowledged that catastrophe losses and competitive pressures, particularly in property and surety, tempered results even as core business performance remained steady.
Is now the time to buy RLI? Find out in our full research report (it’s free for active Edge members).
RLI (RLI) Q1 CY2026 Highlights:
- Revenue: $453.2 million vs analyst estimates of $446.5 million (4.3% year-on-year growth, 1.5% beat)
- Adjusted EPS: $0.83 vs analyst estimates of $0.78 (6.1% beat)
- Adjusted EBITDA: $74.77 million (16.5% margin, 11.2% year-on-year decline)
- Operating Margin: 15.5%, down from 18.4% in the same quarter last year
- Market Capitalization: $4.79 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From RLI’s Q1 Earnings Call
- Michael Phillips (Oppenheimer & Co.) asked about competitive dynamics in general liability and early impacts of California rate hikes. COO Jennifer Klobnak explained that regional differences and recent commission changes are moderating growth, but opportunities remain where RLI can dictate terms.
- Mark Hughes (Truist) inquired about the outlook for property pricing stability. Klobnak responded that competition remains intense, and while stabilization is hoped for, the market has yet to show signs of firming.
- Andrew Anderson (Jefferies) questioned underlying loss ratio trends in casualty and the balance between growth and severity risk. CFO Diefenthaler attributed changes primarily to business mix, while Klobnak emphasized risk selection and maintaining rate adequacy.
- Mitchell Rubin (Raymond James) sought clarification on the large contract surety loss. Klobnak assured that reserves for the loss reflect a worst-case scenario and do not indicate broader issues in the book.
- Hristian Getsov (Wells Fargo) asked about reinsurance cost savings and alternative capital trends in MGAs. Klobnak confirmed higher retention in property was due to lower reinsurance costs, while Diefenthaler noted that some MGAs are seeking new ownership as private capital cycles mature.
Catalysts in Upcoming Quarters
As we look to upcoming quarters, our analyst team will be monitoring (1) the pace of premium growth and rate adequacy in casualty and transportation, (2) signs of stabilization or further decline in property pricing and competition, and (3) the impact of macroeconomic conditions on construction-related insurance demand. Additionally, the effectiveness of RLI’s investment strategy and capital management actions will serve as important indicators of long-term profitability.
RLI currently trades at $52.14, down from $57.11 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
The Best Stocks for High-Quality Investors
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.