RLI CORP
For the period ended Dec 31, 2025. Filed Feb 20, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 20, 2026
RLI$68.35-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-21.
0001558370-25-001301
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-20.
0001104659-26-018013
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 200 previous paragraphs and 200 current paragraphs.
134 unchanged; 52 reworded; 11 added; 14 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 42 previous and 42 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
A large portion of our reinsurance placements renewed on January 1, 2026. We secured 15 to 20 percent rate decreases on our catastrophe programs and more modest relief on our property working layers. With our reduced exposure and continuing soft market conditions, we purchased $150 million less catastrophe limit for 2026. However, we remain prepared to increase our exposure and procure additional reinsurance capacity should conditions improve. The risk-adjusted rate change for our casualty treaties was down approximately 5 percent, depending on the underlying coverage.
Current report
As we look ahead to 2026, we remain focused on underwriting for profitability in a competitive and evolving market environment. While loss severity trends remain elevated, particularly for auto-related coverages, we believe the rate increases we are taking across our portfolio have established a strong foundation for underwriting results moving forward. Our underwriters continue to be incentivized and empowered to prioritize underwriting profitability over premium growth, including pulling back from underpriced or volatile sectors when the risk-reward profile does not meet our standards. We continue to invest in technology, data infrastructure and specialized underwriting talent to support granular, real-time decision-making and operational efficiency. Supported by a diversified specialty portfolio, a strong balance sheet and disciplined execution, we are optimistic about our ability to navigate market cycles and pursue profitable underwriting opportunities as conditions evolve.
Current report
Gross premiums written for the casualty segment increased $83 million in 2025. We continued to benefit from positive rate movement across a significant portion of products within the segment. Market conditions in personal umbrella remained favorable as competitors adjusted their appetite and terms in response to loss trends. Our approach to growth reflects reduced new business in challenging states, where we implemented higher underlying limits. Rate increases have been secured, positioning the personal umbrella portfolio for continued growth into 2026.
Current report
Premium growth in commercial excess and general liability was driven by expanded marketing efforts and increased construction activity in targeted markets, as some competitors reduced their construction-related exposure. Transportation premiums declined for the year despite higher average rates, reflecting a challenging environment characterized by economic pressures and reduced demand resulting from insured consolidation. Small commercial premium declined as we took actions to improve the quality of the portfolio. Premiums for other casualty lines also decreased during 2025, as we exited from various captive programs and reduced our participation on the reinsurance agreement with Prime.
Current report
The casualty segment remains highly diversified, allowing some products to navigate market challenges while others generate profitable growth. We believe ongoing market disruption may present both challenges and opportunities. As with all of our segments, our investments in underwriting talent and strong producer relationships position us to capitalize on favorable market conditions as they arise.
Current report
Gross premiums written for the property segment decreased $71 million in 2025. After several consecutive years of rate increases, pricing for commercial property exposures declined during the year as competition intensified among carriers and managing general agents, and some insureds elected to retain more risk. We maintained underwriting discipline by selectively retaining high-quality accounts and forgoing opportunities that did not meet our underwriting standards. We believe this approach to risk selection, together with our focus on securing appropriate pricing and terms, positions us to navigate evolving market conditions and continue to write profitable business.
Current report
Marine premium increased during 2025, supported by new business opportunities, modest rate increases and expanded product offerings. Some competitors have reduced their appetite for select Hawaii homeowner coverages, which, along with rate increases, has allowed our other property premium to grow. We expect continued growth in Hawaii homeowners at a more moderate pace in 2026, through a combination of rate actions, strong local market presence and investments in customer experience.
Current report
Gross premiums written in the surety segment increased by $1 million in 2025. Growth in transactional surety was driven by targeted marketing initiatives and continued investment in our distribution capabilities. Commercial surety premium increased as we secured new accounts through collaboration with our distribution partners. These increases were partially offset by a decline in contract surety premium, reflecting a slowdown in construction spending. We remain well positioned to support future business as infrastructure projects at the federal, state and local levels receive funding. Our underwriters actively monitor the financial condition of principals and work collaboratively with them to support achievable projects. We believe this disciplined approach to underwriting and risk selection across economic cycles will enable us to generate profitable growth over the long term.
Current report
The segment’s loss ratio was 23.4 in 2025, compared to 37.4 in 2024. Catastrophe losses added 5 points to the loss ratio in 2025, compared to 19 points in 2024. Additionally, increased levels of favorable development on prior accident years improved the loss ratio in 2025, but the impact was partially offset by higher levels of current accident year attritional losses. The expense ratio for the
Current report
property segment increased to 33.8 in 2025, from 31.1 in 2024, as a result of continued investments in people and technology, as well as higher acquisition-related expenses, which can fluctuate between periods.
Current report
While the Federal Reserve began reducing rates in 2025, yields remained attractive relative to recent history, which supported investment income throughout the year. Entering 2026, the Federal Reserve has emphasized that further policy moves will be data-dependent, with projections and market pricing suggesting a measured easing path. A stable rate environment and larger invested asset base should support continued growth in investment income, though a sharper-than-expected decline in yields would limit the pace of that growth.
Removed paragraphs (14)
Previous report
On December 15, 2025, RLI Corp. effected a two-for-one split of its common stock and a proportionate increase in the number of authorized shares. All share and per share information throughout this report has been retroactively adjusted to reflect the stock split.
Previous report
Gross premiums written increased $206 million, or 11 percent, in 2024 when compared to 2023, with all three segments contributing. Despite competitive conditions, a relatively strong economy and positive rate movement benefited much of the insurance portfolio. Net premiums earned were up 18 percent in 2024.
Previous report
A large portion of our reinsurance placements renewed on January 1, 2025. For our property treaties, the risk-adjusted rate change was down 10 percent to 20 percent, with greater decreases in the higher layers. Prepaid reinstatements were added back to the bottom half of the catastrophe tower, which reduces the net loss impact on catastrophe events. The risk-adjusted rate change for our casualty treaties was plus or minus 5 percent, depending on the underlying coverage.
Previous report
Like most of the industry, we are closely monitoring the severity of auto losses, which adversely impacted our current and prior accident year losses in 2024. The goal of our business model has always been to underwrite for profit and our underwriters are incentivized to walk away from underpriced risks. We obtained rate increases across most of our insurance portfolio in 2024. However, we are not solely reliant on rate to pursue profitable underwriting. We utilize our in-house loss control team to encourage our commercial auto insureds to follow safe practices, work with producers to balance growth and exit classes of business or individual accounts that are driving loss severity. We have a strong feedback loop between our underwriting, claim and analytical teams that address new or prevailing topics, like legal system abuse. Overall, we remain optimistic about the potential underlying profitability of our product portfolio. Our investments in technology and specialized underwriting staff should put us in a position to take advantage of opportunities as we move forward.
Previous report
Gross premiums written for casualty were up $147 million in 2024. We continued to benefit from positive rate movement across a large portion of our casualty segment, as well as from new business growth within our personal umbrella and small commercial distribution channels. The commercial excess product grew as new project work resulted in more business opportunities and renewal retention improved. Commercial transportation benefited from an increase in new business submissions and new products, including moving and storage as well as an excess and surplus lines offering. Our executive products premium decreased, largely due to a continued soft management liability marketplace.
Previous report
The casualty segment remains highly diversified, allowing select products to work through challenges, while the success of other products allows us to achieve positive overall results. Rate filings for personal umbrella were approved in the second half of 2024, and where increases can be justified, we will be pursuing further rate increases for auto-exposed lines. With the broader industry experiencing higher loss severity trends, we see potential for ongoing market disruption. As with all our segments, our investments in underwriting talent and strong relationships with producers should put us in position to take advantage of market opportunities as they arise. However, our underwriters are incentivized and empowered to shrink our top line revenue to protect our bottom-line profitability when necessary.
Previous report
Gross premiums written for the property segment were up $46 million in 2024, with commercial property contributing $15 million of that growth. Property lines within the excess and surplus market are in transition and conditions began to change mid-year. Rates for wind coverages were down in the second half of the year after multiple years of double-digit rate increases. We have started to see more competition and the deterioration of terms and conditions, but are willing to forgo opportunities that do not meet our underwriting standards. The earthquake market has also been affected by intense competition and some businesses deciding not to procure coverage.
Previous report
We leverage our underwriting expertise by acting as a Lloyd’s coverholder and write coastal wind and earthquake exposures on a syndicated policy. While allowing us to diversify risk through a mechanism outside of reinsurance, this approach also allows us to generate fee income that offsets underwriting expense. Combined with the challenging property market, an increased percentage of premium being written by our syndicated partner resulted in a decline in earthquake and wind exposures for the Company. However, our fire and other peril coverage offerings experienced growth, resulting in overall premium expansion for commercial property. All coverages remain well priced and we believe there is opportunity to continue writing profitable business in these spaces.
Previous report
A strong construction market and an expansion of newer offerings led to increased submissions and $21 million of premium growth for our marine product. Additionally, some competitors have reduced their appetite for select Hawaii homeowner coverages, which, along with rate increases that became effective during the fourth quarter, has allowed our other property premium to grow.
Previous report
Gross premiums written for the surety segment were up $14 million in 2024 and we continue to invest in infrastructure to support long-term growth. Contract surety benefited from new agency relationships, new construction projects and elevated material costs, while transactional surety grew organically by leveraging existing relationships from complementary products. Despite a highly competitive commercial surety market, the expansion of existing accounts and new business also allowed for premium growth. Industry loss ratios have increased, particularly in the contract surety space. However, our underwriters monitor the financial condition of principals and partner with them to support achievable projects, which has helped us avoid material losses in the past. We believe this collaborative approach will help us write profitable business going forward.
Previous report
Underwriting income for the casualty segment was $18 million on a 97.9 combined ratio in 2024, compared to $59 million on a 92.2 combined ratio in 2023. The decline was the result of decreased favorable development on prior accident years’ reserves and an increase in current accident year losses, primarily on auto related exposures.
Previous report
A larger earned premium base resulted in higher levels of underwriting income as well as a lower expense ratio. The segment’s loss ratio was 37.4 in 2024, compared to 42.9 in 2023. Catastrophe losses added 19 points to the loss ratio in 2024, compared to 20 points of impact in 2023. Additionally, the current accident year attritional loss ratio improved in 2024. The expense ratio for the property segment declined to 31.1 in 2024, from 35.6 in 2023, as the growth in the earned premium base exceeded the growth in expense. Furthermore, the expense ratio benefited from an increase in fee income, which was the result of producing more premium for our syndicated partner.
Previous report
Investment income was aided by higher interest rates in 2024, as the Federal Reserve kept the Fed Funds target high relative to recent history. Entering 2025, consensus is the Federal Reserve’s current policy will continue balancing price stability against maximum employment, and result in two to three rate cuts over the coming year. A stable interest rate environment and a larger invested asset base should offer continued investment income growth. However, if yields decline dramatically from current levels, investment income growth may be limited.
Previous report
Dividends paid to our ESOP result in a tax deduction. Dividends paid to the ESOP in 2024 and 2023 resulted in tax benefits of $3 million and $2 million, respectively. These tax benefits reduced the effective tax rate for 2024 and 2023 by 0.6 percent and 0.4 percent, respectively.
Reworded paragraphs (52)
Previous wording
RLI Corp. is a U.S. based, specialty insurance company that underwrites select property, casualty and surety products through three major subsidiaries collectively known as RLI Insurance Group (Group). Our focus is on niche markets and developing unique products that are tailored to customers’ needs. We hire underwriters and claim examiners with deep expertise and provide exceptional customer service and support. We maintain a highly diverse product portfolio and underwrite for profit in all market conditions. In 2024, we achieved our 29th consecutive year of underwriting profitability. Over the 29-year period, we averaged an 88.1 combined ratio. This drives our ability to provide shareholder returns in three different ways: the underwriting income itself, net investment income from our investment portfolio and long-term appreciation in our equity portfolio.
Current wording
RLI Corp. is a U.S.-based, specialty insurance company that underwrites select property, casualty and surety products through three major subsidiaries collectively known as RLI Insurance Group (Group). Our focus is on niche markets and developing unique products that are tailored to customers’ needs. We hire underwriters and claim examiners with deep expertise and provide exceptional customer service and support. We maintain a highly diverse product portfolio and underwrite for profit in all market conditions. In 2025, we achieved our 30th consecutive year of underwriting profitability. Over the 30-year period, we averaged an 87.9 combined ratio. This drives our ability to provide shareholder returns in three different ways: the underwriting income itself, net investment income from our investment portfolio and long-term appreciation in our equity portfolio.
Previous wording
Following is a list of key performance measures found throughout this report with their definitions, relationships to GAAP measures and explanations of their importance to our operations.
Current wording
The following is a list of key performance measures found throughout this report, including definitions, relationships to GAAP measures and explanations of their importance to our operations.
Previous wording
In preparing the consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ significantly from those estimates.
Current wording
In preparing the consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the consolidated financial
Previous wording
Following is a table of significant risk factors involved in estimating losses grouped by major product line. We distinguish between loss ratio risk and reserve estimation risk. Loss ratio risk refers to the possible dispersion of loss ratios from year to year due to inherent volatility in the business, such as high severity or aggregating exposures. Reserve estimation risk recognizes the difficulty in estimating a given year’s ultimate loss liability. As an example, our property catastrophe business (included below in commercial and other property) has significant variance in year over year results; however, its reserving estimation risk is relatively moderate.
Current wording
The following is a table of significant risk factors involved in estimating losses grouped by major product line. We distinguish between loss ratio risk and reserve estimation risk. Loss ratio risk refers to the possible dispersion of loss ratios from year to year due to inherent volatility in the business, such as high severity or aggregating exposures. Reserve estimation risk recognizes the difficulty in estimating a given year’s ultimate loss liability. As an example, our property catastrophe business (included below in commercial and other property) has significant variance in year over year results; however, its reserving estimation risk is relatively moderate.
Previous wording
Our best estimate of ultimate loss and LAE reserves are proposed by our lead reserving actuary and then discussed and approved by our Loss Reserve Committee (LRC). The LRC is made up of various members of the management team including the lead reserving actuary, chief executive officer, chief operating officer, chief financial officer, chief claim officer, chief legal officer and other selected executives. As part of the discussion with the LRC, the analysis supporting the actuarial central estimate of the IBNR reserve by product is reviewed. The actuaries also present explanations supporting any changes to the underlying assumptions used to calculate the indicated central estimate. Our actuaries make a recommendation to management in regard to booked reserves that reflect both their analytical assessment and relevant qualitative factors, such as their view of estimation risk. After discussion of these analyses, recommendations and all relevant risk factors among the LRC, our actuaries determine whether the reserve balances require further adjustment.
Current wording
Our best estimate of ultimate loss and LAE reserves are proposed by our lead reserving actuary and then discussed and approved by our Loss Reserve Committee (LRC). The LRC is made up of various members of the management team including the appointed reserving actuary, corporate actuary, chief executive officer, chief operating officer, chief financial officer, chief claim officer, chief legal officer and other selected executives. As part of the discussion with the LRC, the analysis supporting the actuarial central estimate of the IBNR reserve by product is reviewed. The actuaries also present explanations supporting any changes to the underlying assumptions used to calculate the indicated central estimate. Our actuaries make a recommendation to management in regard to booked reserves that reflect both their analytical assessment and relevant qualitative factors, such as their view of estimation risk. After discussing these analyses with the LRC and considering all relevant risk factors, our actuaries determine whether the reserve balances require further adjustment.
Previous wording
There are three major parameters that have significant influence on our actuarial estimates of ultimate liabilities by product. They are the actual losses that are reported, the expected loss emergence pattern and the expected loss ratios used in the analyses. If the actual losses reported do not emerge as expected, it may cause the Company to challenge all or some of our previous assumptions. We may change expected loss emergence patterns, the expected loss ratios used in our analysis and/or the weights we place on a given actuarial method. The impact will be much greater and more leveraged for products with longer emergence patterns. Our general liability product is an example of a product with a relatively long emergence pattern. The following chart illustrates the sensitivity of our general liability reserve estimates to these key parameters. We believe the scenarios to be reasonable, as similar favorable variations have occurred in recent years. For example, our general liability calendar year emergence on prior accident years has ranged from 17 percent to 27 percent favorable and our transportation emergence has ranged from 30 percent adverse to 40 percent favorable over the last three calendar years, while our overall emergence for all products combined has ranged from 13 percent to 25 percent favorable. The numbers below are the changes in estimated ultimate loss and ALAE in millions of dollars as of December 31, 2024, resulting from the change in the parameters shown. These parameters were applied to a general liability net loss and LAE reserve balance, which was $209 million at December 31, 2024.
Current wording
There are three major parameters that have significant influence on our actuarial estimates of ultimate liabilities by product. They are the actual losses that are reported, the expected loss emergence pattern and the expected loss ratios used in the analyses. If the actual losses reported do not emerge as expected, it may cause the Company to challenge all or some of our previous assumptions. We may change expected loss emergence patterns, the expected loss ratios used in our analysis and/or the weights we place on a given actuarial method. The impact will be much greater and more leveraged for products with longer emergence patterns. Our general liability product is an example of a product with a relatively long emergence pattern. The following chart illustrates the sensitivity of our general liability reserve estimates to these key parameters. We believe the scenarios to be reasonable, as similar favorable variations have occurred in recent years. For example, our general liability calendar year emergence on prior accident years has ranged from 12 percent to 27 percent favorable and our transportation emergence has ranged from 30 percent adverse to 40 percent favorable over the last three calendar years, while our overall emergence for all products combined has ranged from 11 percent to 16 percent favorable. The numbers below are the changes in estimated ultimate loss and ALAE in millions of dollars as of December 31, 2025, resulting from the change in the parameters shown. These parameters were applied to a general liability net loss and LAE reserve balance, which was $221 million at December 31, 2025.
Previous wording
This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, incorporated herein by reference.
Current wording
This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Form 10-K, but can be found in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, incorporated herein by reference.
Previous wording
Consolidated revenue for 2024 totaled $1.8 billion, up $258 million from 2023. Net premiums earned for the Group increased 18 percent, driven primarily by growth from our property and casualty segments. Positive equity market returns during 2024 resulted in $82 million of unrealized gains on equity securities, building on a rally that led to $65 million of unrealized gains in our equity portfolio during 2023. Net investment income increased by 18 percent in 2024, primarily due to higher reinvestment rates and a larger average asset base relative to the prior year.
Current wording
Consolidated revenue for 2025 totaled $1.9 billion, up $112 million from 2024. Net premiums earned for the Group increased 6 percent, driven primarily by growth from our casualty segment. Positive equity market returns during 2025 resulted in $43 million of unrealized gains on equity securities, building on a rally that led to $82 million of unrealized gains in our equity portfolio during 2024. Net investment income increased by 12 percent in 2025, primarily due to higher reinvestment rates and a larger average asset base relative to the prior year.
Previous wording
Net earnings for 2024 totaled $346 million, up from $305 million in 2023. Improved underwriting income was bolstered by an increase in investment income and larger unrealized gains on equity securities.
Current wording
Net earnings for 2025 totaled $403 million, up from $346 million in 2024. Improved underwriting income was bolstered by an increase in investment income.
Previous wording
We surpassed $2 billion in gross premiums written for the first time and achieved our 29th consecutive year of underwriting profitability in 2024. Our track record of success is built on underwriting discipline and our diversified product portfolio, which allow us to navigate various markets.
Current wording
We achieved our 30th consecutive year of underwriting profitability in 2025. Gross premiums written increased 1 percent and net premiums earned increased 6 percent in 2025, when compared to 2024. Our track record of success is built on underwriting discipline and a diversified product portfolio that allows us to navigate evolving market conditions. While we may contract in some products when markets soften, we capitalize on growth opportunities in others.
Previous wording
Underwriting income was $211 million on an 86.2 combined ratio in 2024, compared to $173 million on an 86.6 combined ratio in 2023. Underwriting results for 2024 included $76 million of pretax losses from Hurricanes Beryl, Helene and Milton, as well as $30 million of other storm losses. Comparatively, 2023 included $49 million of pretax losses and $12 million of reinsurance reinstatement premium from the Hawaiian wildfires, as well as $31 million of other storm losses. Results for each period benefited from favorable development on prior years’ loss reserves, which provided additional pretax earnings of $95 million in 2024, compared to $109 million in 2023. Further discussion of reserve development can be found in note 5 to the consolidated financial statements within Item 8, Financial Statements and Supplementary Data.
Current wording
Underwriting income was $264 million on an 83.6 combined ratio in 2025, compared to $211 million on an 86.2 combined ratio in 2024. Underwriting results for 2025 included $30 million of losses from catastrophe events. Comparatively, 2024 included $76 million of pretax losses from Hurricanes Beryl, Helene and Milton, as well as $30 million of other storm losses. Results for each period benefited from favorable development on prior years’ loss reserves, which provided additional pretax earnings of $99 million in 2025, compared to $95 million in 2024. Further discussion of reserve development can be found in note 5 to the consolidated financial statements within Item 8, Financial Statements and Supplementary Data.
Previous wording
The loss ratio was 48.4 in 2024, compared to 46.7 in 2023. The increase reflects higher net retained catastrophe losses in 2024, lower prior period reserve releases and the strengthening of current accident year casualty reserves, primarily on auto exposures. An offsetting loss ratio benefit was a modest improvement in the property segment’s current accident year attritional, non-catastrophe loss ratio. The expense ratio decreased to 37.8 in 2024, from 39.9 in 2023. Growth of net premiums earned allowed for improved leveraging of our expense base, despite continued investments in our people and technology, as well as higher levels of bonus and profit-sharing expense that resulted from improved operating performance.
Current wording
The loss ratio was 45.0 in 2025, compared to 48.4 in 2024. The decrease reflects lower net retained catastrophe losses in 2025 and higher prior period reserve releases. The expense ratio increased to 38.6 in 2025, from 37.8 in 2024. Increased expenses were driven by continued investments in people and technology, as well as higher acquisition-related costs, which can fluctuate based on our mix of business. Additionally, higher levels of bonus and profit-sharing expense resulted from improved operating performance.
Previous wording
Favorable development on prior accident years’ loss reserves contributed to underwriting earnings in each of the past two years. The total benefit from favorable development on prior years’ reserves was $53 million for 2024, which was largely attributable to accident years 2019 through 2023. Favorable development was widespread, with notable amounts from commercial excess, general liability, executive products, professional services and our mortgage reinsurance program within other casualty. Commercial transportation and small commercial experienced adverse prior accident year development, largely related to auto exposures. Comparatively, results for the casualty segment in 2023 included favorable development of $78 million, with the majority attributable to commercial excess, general liability, personal umbrella, executive products and professional services across accident years 2015 through 2022. Hurricane and storm losses on casualty-oriented package policies that include property coverage resulted in $5 million of losses in 2024, compared to $2 million of storm losses in 2023.
Current wording
Underwriting income for the casualty segment was $16 million on a 98.3 combined ratio in 2025, compared to $18 million on a 97.9 combined ratio in 2024. The total benefit from favorable development on prior years’ reserves was $33 million for 2025, which was largely attributable to accident years 2019 through 2022 and 2024. Favorable development was widespread, with notable amounts from commercial excess, general liability, executive products, professional services and our mortgage reinsurance program within other casualty. Commercial transportation and small commercial experienced adverse prior accident year development. Comparatively, results for the casualty segment in 2024 included favorable development of $53 million, with the majority attributable to commercial excess, general liability, executive products, professional services and our mortgage reinsurance program across accident years 2019 through 2023. Hurricane and storm losses on casualty-oriented package policies that include property coverage resulted in $2 million of losses in 2025, compared to $5 million of storm losses in 2024.
Previous wording
The segment’s loss ratio was 61.5 in 2024, compared to 55.1 in 2023. The higher loss ratio in 2024 was due to lower amounts of favorable development on prior years’ reserves and strengthening our current accident year reserves for our personal umbrella, transportation and professional services products. The expense ratio for the casualty segment was 36.4 in 2024, compared to 37.1 in 2023.
Current wording
The segment’s loss ratio was 62.4 in 2025, compared to 61.5 in 2024. The higher loss ratio in 2025 was due to lower amounts of favorable development on prior years’ reserves. The expense ratio for the casualty segment was 35.9 in 2025, compared to 36.4 in 2024, as the growth in the earned premium base exceeded the growth in expense.
Previous wording
Underwriting income from the property segment was $168 million on a 68.5 combined ratio in 2024, compared to $86 million on a 78.5 combined ratio in 2023. Underwriting results for 2024 included $33 million of favorable development on prior years’ attritional and catastrophe loss reserves, largely from the marine and commercial property businesses; $73 million of losses from Hurricanes Beryl, Helene and Milton; as well as $28 million of other storm losses. Results for 2023 included $21 million of favorable development on prior years’ loss and catastrophe reserves, primarily from the commercial property business; $49 million of losses and $12 million of reinsurance reinstatement premium from Hawaiian wildfires; as well as $29 million of other storm losses.
Current wording
Underwriting income from the property segment was $219 million on a 57.2 combined ratio in 2025, compared to $168 million on a 68.5 combined ratio in 2024. Underwriting results for 2025 included $50 million of favorable development on prior years’ attritional and catastrophe loss reserves, largely from the commercial property and marine businesses, as well as $28 million of storm and other catastrophe losses. Results for 2024 included $33 million of favorable development on prior years’ attritional and catastrophe loss reserves, largely from the marine and commercial property businesses; $73 million of losses from Hurricanes Beryl, Helene and Milton; as well as $28 million of other storm losses.
Previous wording
Underwriting income for the surety segment totaled $25 million on an 82.2 combined ratio in 2024, compared to $27 million on a 79.6 combined ratio in 2023. Underwriting performance for each year reflects a combination of positive current accident year results and favorable development in prior accident years’ loss reserves. Favorable development on prior accident years’ reserves decreased loss and settlement expenses for the segment by $9 million for 2024 and 2023.
Current wording
Underwriting income for the surety segment totaled $29 million on an 80.3 combined ratio in 2025, compared to $25 million on an 82.2 combined ratio in 2024. Underwriting performance for each year reflects a combination of positive current accident year results and favorable development in prior accident years’ loss reserves. Favorable development on prior accident years’ reserves decreased loss and settlement expenses for the segment by $16 million for 2025 and $9 million for 2024.
Previous wording
The segment’s loss ratio was 11.2 in 2024, compared to 10.7 in 2023. An increase in the current accident year loss ratio led to the slightly higher overall loss ratio for the segment. The expense ratio for the surety segment was 71.0 in 2024, up from 68.9 in 2023, due to increases in select policy acquisition costs, as well as continued investments in technology and people to support growth and improve the customer experience.
Current wording
The segment’s loss ratio was 7.2 in 2025, compared to 11.2 in 2024. An increase in prior accident year favorable development led to the improved loss ratio for the segment. The expense ratio for the surety segment was 73.1 in 2025, up from 71.0 in 2024, due to continued investments in people and technology, as well as higher policy acquisition expenses.
Previous wording
During 2024, net investment income increased by 18 percent. The increase was primarily due to higher interest rates and an increased asset base relative to the prior year. The average annual yields on our investments were as follows for 2024 and 2023:
Current wording
During 2025, net investment income increased by 12 percent. The increase was primarily due to higher reinvestment rates and an increased asset base relative to the prior year. The average annual yields on our investments were as follows for 2025 and 2024:
Previous wording
The after-tax yield reflects the different tax rates applicable to each category of investment. Our taxable fixed income securities were subject to a corporate tax rate of 21 percent, our tax-exempt municipal securities were subject to a tax rate of 5.3 percent and our dividend income was generally subject to a tax rate of 13.1 percent. During 2024, the average after-tax yield on the taxable fixed income portfolio was 3.0 percent, an increase from 2.8 percent in the prior year. The average after-tax yield on the tax-exempt portfolio was 2.7 percent for both 2024 and 2023.
Current wording
The after-tax yield reflects the different tax rates applicable to each category of investment. Our taxable fixed income securities were subject to a corporate tax rate of 21 percent, our tax-exempt municipal securities were subject to a tax rate of 5.3 percent and our dividend income was generally subject to a tax rate of 13.1 percent. During 2025, the average after-tax yield on the taxable fixed income portfolio was 3.3 percent, an increase from 3.0 percent in the prior year. The average after-tax yield on the tax-exempt portfolio was 2.7 percent for both 2025 and 2024.
Previous wording
The fixed income portfolio increased by $320 million during the year, as we allocated the majority of available cash flow to investment grade bonds and experienced positive market performance throughout the year. The tax-adjusted total return on a mark-to-market basis was 3.4 percent. Our equity portfolio increased by $146 million to $736 million in 2024 as a result of strong equity market returns during the year. The total return for the year on the equity portfolio was 21.1 percent.
Current wording
The fixed income portfolio increased by $358 million during the year, as we allocated the majority of available cash flow to investment grade bonds and experienced positive market performance throughout the year. The tax-adjusted total return on a mark-to-market basis was 7.5 percent. Our equity portfolio increased by $163 million to $899 million in 2025 as a result of strong equity market returns during the year. The total return for the year on the equity portfolio was 16.7 percent.
Previous wording
In 2024, we recognized $31 million of net realized gains in the equity portfolio, $5 million of net realized losses in the fixed income portfolio and $6 million of other net realized losses. In 2023, we recognized $22 million of net realized gains in the equity portfolio, $3 million of net realized losses in the fixed income portfolio and $14 million of other net realized gains, primarily from the payout of the working capital escrow associated with our sale of Maui Jim.
Current wording
In 2025, we recognized $61 million of net realized gains in the equity portfolio, less than $1 million of net realized gains in the fixed income portfolio and $4 million of other net realized gains. In 2024, we recognized $31 million of net realized gains in the equity portfolio, $5 million of net realized losses in the fixed income portfolio and $6 million of other net realized losses.
Previous wording
We maintain a diversified investment portfolio with a prudent mix of fixed income and risk assets. We continually monitor economic conditions, our capital position, the insurance market and relative value in the capital markets to determine our tactical allocation. As of December 31, 2024, the portfolio had a fair value of $4.1 billion, an increase of $408 million from the end of 2023. Excluding U.S. government and agency issues, no single issuer in either the fixed income or equity portfolio represented more than 1 percent of invested assets.
Current wording
We maintain a diversified investment portfolio with a prudent mix of fixed income and risk assets. We continually monitor economic conditions, our capital position, the insurance market and relative value in the capital markets to determine our tactical allocation. As of December 31, 2025, the portfolio had a fair value of $4.7 billion, an increase of $579 million from the end of 2024. Excluding U.S. government and agency issues, no single issuer in either the fixed income or equity portfolio represented more than 1 percent of invested assets.
Previous wording
In selecting the maturity of securities in which we invest, we consider the relationship between the duration of our fixed income investments and the duration of our liabilities, including the expected ultimate payout patterns of our reserves. We believe that both liquidity and interest rate risk can be minimized by such asset/liability management. As of December 31, 2024, our fixed income portfolio’s duration was 4.9 years.
Current wording
In selecting the maturity of securities in which we invest, we consider the relationship between the duration of our fixed income investments and the duration of our liabilities, including the expected ultimate payout patterns of our reserves. We believe that both liquidity and interest rate risk can be minimized by such asset/liability management. As of December 31, 2025, our fixed income portfolio’s duration was 4.8 years.
Previous wording
Consistent underwriting income allows a portion of our investment portfolio to be invested in equity securities and other risk asset classes. Equities comprised 18 percent of our total 2024 portfolio, up from 16 percent at the end of 2023, as equity markets rose over the course of the year. Securities within the equity portfolio are well diversified and are primarily invested in broad index exchange traded funds (ETFs). Our actively managed equity strategy has a preference for dividend income and value-oriented security selection with low turnover, which minimizes transaction costs and taxes throughout our extended investment horizon.
Current wording
Consistent underwriting income allows a portion of our investment portfolio to be invested in equity securities and other risk asset classes. Equities comprised 19 percent of our total 2025 portfolio, up from 18 percent at the end of 2024, as equity markets rose over the course of the year. Securities within the equity portfolio are well diversified and are primarily invested in broad index exchange traded funds (ETFs). Our actively managed equity strategy has a preference for dividend income and value-oriented security selection with low turnover, which minimizes transaction costs and taxes throughout our extended investment horizon.
Previous wording
Agency MBS represented 12 percent of the fixed income portfolio, compared to 15 percent as of December 31, 2023. Our objective for the agency MBS portfolio is to provide reasonable cash flow stability where we are compensated for the call risk associated with residential mortgage refinancing. The agency MBS portfolio includes mortgage-backed pass-through securities and collateralized mortgage obligations (CMO), which include planned amortization classes and sequential pay structures. As of December 31, 2024, all the securities in our agency MBS portfolio were rated AA and issued by Government Sponsored Enterprises (GSEs) such as the Governmental National Mortgage Association, Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.
Current wording
Agency MBS represented 17 percent of the fixed income portfolio, compared to 12 percent as of December 31, 2024. Our objective for the agency MBS portfolio is to provide reasonable cash flow stability where we are compensated for the call risk associated with residential mortgage refinancing. The agency MBS portfolio includes mortgage-backed pass-through securities and collateralized mortgage obligations (CMO), which include planned amortization classes and sequential pay structures. As of December 31, 2025, all the securities in our agency MBS portfolio were rated AA and issued by Government Sponsored Enterprises (GSEs) such as the Governmental National Mortgage Association, Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.
Previous wording
flows. As of December 31, 2024, the agency MBS portfolio contained 68 percent of pure pass-throughs, up from 65 percent as of December 31, 2023. An additional 10 percent of the MBS portfolio was invested in sequential payer, down from 13 percent in 2023.
Current wording
flows. As of December 31, 2025, the agency MBS portfolio contained 80 percent of pure pass-throughs, up from 68 percent as of December 31, 2024. An additional 6 percent of the MBS portfolio was invested in sequential payer, down from 10 percent in 2024.
Previous wording
An ABS, CMBS or non-agency residential mortgage-backed security (RMBS) is a securitization collateralized by the cash flows from a specific pool of underlying assets. These asset pools can include items such as credit card payments, auto loans, structured bank loans in the form of collateralized loan obligations (CLOs) and residential or commercial mortgages. As of December 31, 2024, ABS/CMBS/RMBS investments were 13 percent of the fixed income portfolio, compared to 10 percent as of December 31, 2023. Fifty-five percent of the securities in the ABS/CMBS/RMBS portfolio were rated AAA as of December 31, 2024, while 85 percent were rated A or better. We believe that ABS/CMBS investments often add superior cash flow stability over mortgage pass-throughs or CMOs.
Current wording
An ABS, CMBS or non-agency residential mortgage-backed security (RMBS) is a securitization collateralized by the cash flows from a specific pool of underlying assets. These asset pools can include items such as credit card payments, auto loans, structured bank loans in the form of collateralized loan obligations (CLOs) and residential or commercial mortgages. As of December 31, 2025, ABS/CMBS/RMBS investments were 19 percent of the fixed income portfolio, compared to 13 percent as of December 31, 2024. Sixty-eight percent of the securities in the ABS/CMBS/RMBS portfolio were rated AAA as of December 31, 2025, while 93 percent were rated A or better. We believe that ABS/CMBS investments often add superior cash flow stability over mortgage pass-throughs or CMOs.
Previous wording
When making investments in MBS/ABS/CMBS, we evaluate the quality of the underlying collateral, the structure of the transaction, which dictates how any losses in the underlying collateral will be distributed, and prepayment risks. We had $63 million in unrealized losses in these asset classes as of December 31, 2024.
Current wording
When making investments in MBS/ABS/CMBS, we evaluate the quality of the underlying collateral, the structure of the transaction, which dictates how any losses in the underlying collateral will be distributed, and prepayment risks. We had $36 million in unrealized losses in these asset classes as of December 31, 2025.
Previous wording
As of December 31, 2024, municipal bonds comprised 14 percent of our fixed income portfolio, compared to 19 percent as of December 31, 2023. We believe municipal fixed income securities can provide diversification and additional tax-advantaged yield to our portfolio. Our objective for the municipal fixed income portfolio is to provide reasonable cash flow stability and increased after-tax yield.
Current wording
As of December 31, 2025, municipal bonds comprised 11 percent of our fixed income portfolio, compared to 14 percent as of December 31, 2024. We believe municipal fixed income securities can provide diversification and additional tax-advantaged yield to our portfolio. Our objective for the municipal fixed income portfolio is to provide reasonable cash flow stability and increased after-tax yield.
Previous wording
Our municipal fixed income portfolio is comprised of general obligation (GO) and revenue securities. The revenue sources include sectors such as sewer and water, public improvement, school, transportation and colleges and universities. As of December 31, 2024, approximately 50 percent of the municipal fixed income securities in the investment portfolio were GO and the remaining 50 percent were revenue based. The municipal portfolio is diversified amongst 282 issues.
Current wording
Our municipal fixed income portfolio is comprised of general obligation (GO) and revenue securities. The revenue sources include sectors such as sewer and water, public improvement, school, transportation and colleges and universities. As of December 31, 2025, approximately 49 percent of the municipal fixed income securities in the investment portfolio were GO and the remaining 51 percent were revenue based. The municipal portfolio is diversified amongst 222 issues.
Previous wording
Ninety-three percent of our municipal fixed income securities were rated AA or better, while 99 percent were rated A or better. The municipal portfolio includes 66 percent taxable and 34 percent tax-exempt securities.
Current wording
Ninety-two percent of our municipal fixed income securities were rated AA or better, while 100 percent were rated A or better. The municipal portfolio includes 73 percent taxable and 27 percent tax-exempt securities.
Previous wording
As of December 31, 2024, our corporate debt portfolio comprised 42 percent of the fixed income portfolio, compared to 43 percent as of December 31, 2023. The corporate allocation includes floating rate bank loans and bonds that are below investment grade in credit quality and offer incremental yield over our core fixed income portfolio. Non-investment grade bonds totaled $148 million while non-rated Regulation D securities totaled $90 million at the end of 2024. While these Regulation D securities are not rated by a traditional nationally recognized statistical rating organization, all but one carry an equivalent investment-grade rating from
Current wording
As of December 31, 2025, our corporate debt portfolio comprised 42 percent of the fixed income portfolio, consistent with its 42 percent weight as of December 31, 2024. The corporate allocation includes floating rate bank loans and bonds that are below investment grade in credit quality and offer incremental yield over our core fixed income portfolio. Non-investment grade bonds totaled $158 million while non-rated private placement securities totaled $108 million at the end of 2025. Although these private placement securities are not rated by a traditional nationally recognized statistical rating organization, all but one carry an equivalent
Previous wording
the Securities Valuation Office of the NAIC. The corporate debt portfolio has an overall quality rating of A- diversified among 954 issues.
Current wording
investment-grade rating from the Securities Valuation Office of the NAIC. The corporate debt portfolio has an overall quality rating of A- diversified among 981 issues.
Previous wording
The table below illustrates our corporate debt exposure as of December 31, 2024. Private placements include bank loan and Regulation D securities.
Current wording
The table below illustrates our corporate debt exposure as of December 31, 2025. Private placements include securities acquired through private offerings (e.g., Regulation D, Section 4(a)(2) and similar exemptions).
Previous wording
As of December 31, 2024, our equity portfolio comprised 18 percent of the investment portfolio, up from 16 percent at the end of the previous year. The securities within the equity portfolio are well diversified and are primarily invested in broad index ETFs that represent market indexes similar to the Russell 3000 Index, Russell 1000 Index and S&P 500 Index. The ETF portfolio is congruent with the actively managed equity portfolios and solves for exposures that line up with our overall benchmark index, the Russell 3000. In total, the equity portfolio is comprised of 89 securities.
Current wording
As of December 31, 2025, our equity portfolio comprised 19 percent of the investment portfolio, up from 18 percent at the end of the previous year. The securities within the equity portfolio are well diversified and are primarily invested in broad index ETFs that represent market indexes similar to the Russell 3000 Index, Russell 1000 Index and S&P 500 Index. The ETF portfolio is congruent with the actively managed equity portfolios and solves for exposures that line up with our overall benchmark index, the Russell 3000. In total, the equity portfolio is comprised of 84 securities.
Previous wording
We incurred $6 million of interest expense on outstanding debt during 2024 and $7 million in 2023. At December 31, 2024, our debt included $50 million from our revolving line of credit with PNC Bank, N.A. (PNC). The borrowing may be repaid at any time and carries an adjustable interest rate of 5.98 percent as of the end of 2024. Additionally, we borrowed $50 million from the Federal Home Loan Bank of Chicago (FHLBC) that matures on November 12, 2025 and pays interest monthly at an annualized rate of 4.44 percent. Comparatively, at December 31, 2023, our debt consisted of $50 million from our revolving line of credit with PNC and carried a floating interest rate of 7.07 percent, as well as $50 million of borrowings from the FHLBC that matured on November 10, 2024 and paid interest monthly at an annualized rate of 5.44 percent.
Current wording
We incurred $5 million of interest expense on outstanding debt during 2025 and $6 million in 2024. On December 31, 2025, our debt included $50 million from our revolving line of credit with PNC Bank, N.A. (PNC). The borrowing may be repaid at any time and carries an adjustable interest rate of 5.33 percent as of the end of 2025. Additionally, we borrowed $50 million from the Federal Home Loan Bank of Chicago (FHLBC) and pay interest monthly at an annualized rate of 4.21 percent. This borrowing matures on November 12, 2026, but may be repaid early at set quarterly dates. Comparatively, on December 31, 2024, our debt consisted of $50 million from our revolving line of credit with PNC and carried a floating interest rate of 5.98 percent, as well as $50 million of borrowings from the FHLBC that matured on November 10, 2025 and paid interest monthly at an annualized rate of 4.44 percent.
Previous wording
We incurred $16 million of general corporate expense during 2024 and 2023. General corporate expenses include director and shareholder relation costs and other compensation-related expenses incurred for the benefit of the corporation.
Current wording
We incurred $17 million of general corporate expense during 2025 and $16 million during 2024. General corporate expenses include director and shareholder relation costs and other compensation-related expenses incurred for the benefit of the corporation.
Previous wording
As of December 31, 2024, we had a 23 percent interest in the equity and earnings of Prime Holdings Insurance Services, Inc. (Prime). Prime writes business through two Illinois domiciled insurance carriers, Prime Insurance Company, an excess and surplus lines company, and Prime Property and Casualty Insurance Inc., an admitted insurance company. As a private company, the market for Prime’s stock is limited. While we have certain rights under our shareholder agreement and maintain a position on Prime’s board of directors, we are subject to the decisions of the controlling shareholder, which may impact the value of our investment. In 2024, we recorded $5 million in investee losses for Prime, compared to $10 million of investee earnings in 2023. The loss in 2024 is reflective of Prime strengthening loss reserves on a number of prior accident years. Additionally, we maintain a quota share reinsurance treaty with Prime, which contributed $9 million of gross premiums written and $8 million of net premiums earned during 2024, compared to $7 million of gross premiums written and $13 million of net premiums earned during 2023. The decrease in premiums earned is attributable to a reduction of our participation in the quota share reinsurance treaty, as well as the competitive market in which Prime operates.
Current wording
In 2025, we recorded $4 million in investee losses for Prime, compared to $5 million of investee losses in 2024. We perform annual impairment reviews of our investments in unconsolidated investees. During 2025, continued difficult trends for commercial auto exposures, including industry wide increases in loss costs and adverse development, resulted in a $10 million non-cash impairment charge, which was recognized in equity in earnings of unconsolidated investees. The loss in 2024 was reflective of Prime strengthening loss reserves on a number of prior accident years. Additionally, we had a quota share reinsurance treaty with Prime, which contributed $3 million of gross premiums written and $6 million of net premiums earned during 2025, compared to $9 million of gross premiums written and $8 million of net premiums earned during 2024. The decrease in premiums earned is attributable to a reduction of our participation in the quota share reinsurance treaty, as well as the competitive market in which Prime operates. Beginning in 2026, we will no longer be a participant on Prime’s reinsurance treaty.
Previous wording
Our effective tax rates were 19.1 percent and 19.3 percent for 2024 and 2023, respectively. Effective rates are dependent upon components of pretax earnings, which is impacted by the volatility of unrealized gains and losses in equity securities, and the related tax effects. The effective rate was slightly lower in 2024 due to higher levels of tax-favored adjustments, such as excess tax benefits on share-based compensation.
Current wording
Our effective tax rates were 20.3 percent and 19.1 percent for 2025 and 2024, respectively. Effective rates are dependent upon components of pretax earnings and the related tax effects. The effective rate was higher in 2025 due to lower levels of tax-favored adjustments, such as excess tax benefits on share-based compensation, and higher levels of pretax earnings, which decreased the percentage impact of the tax-favored adjustments.
Previous wording
The primary liability on our balance sheet relates to unpaid losses and settlement expenses, which represents our estimated liability for losses and related settlement expenses before considering offsetting reinsurance balances recoverable. The largest asset on our balance sheet, outside of investments, is the reinsurance balances recoverable on unpaid losses and settlement expenses, which serves to offset this liability. The liability can be split into two parts: (1) case reserves representing estimates of losses and settlement expenses on known claims and (2) IBNR reserves representing estimates of losses and settlement expenses on claims that have occurred but have not yet been reported to the Company. Our gross liability for both case and IBNR reserves is reduced by reinsurance balances recoverable on unpaid losses and settlement expenses to calculate our net reserve balance. This net reserve balance increased to $1.9 billion at December 31, 2024, from $1.7 billion as of December 31, 2023. This reflects net incurred losses of $739 million in 2024 offset by paid losses of $490 million, compared to net incurred losses of $604 million offset by $491 million paid in 2023. For more information on the changes in loss and LAE reserves by segment, see note 5 to the consolidated financial statements within Item 8, Financial Statements and Supplementary Data.
Current wording
The primary liability on our balance sheet relates to unpaid losses and settlement expenses, which represents our estimated liability for losses and related settlement expenses before considering offsetting reinsurance balances recoverable. The largest asset on our balance sheet, outside of investments, is the reinsurance balances recoverable on unpaid losses and settlement expenses, which serves to offset this liability. The liability can be split into two parts: (1) case reserves representing estimates of losses and settlement expenses on known claims and (2) IBNR reserves representing estimates of losses and settlement expenses on claims that have occurred but have not yet been reported to the Company. Our gross liability for both case and IBNR reserves is reduced by reinsurance balances recoverable on unpaid losses and settlement expenses to calculate our net reserve balance. This net reserve balance increased to $2.1 billion at December 31, 2025, from $1.9 billion as of December 31, 2024. This reflects net incurred losses of $726 million in 2025 offset by paid losses of $524 million, compared to net incurred losses of $739 million offset by $490 million paid in 2024. For more information on the changes in loss and LAE reserves by segment, see note 5 to the consolidated financial statements within Item 8, Financial Statements and Supplementary Data.
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Current report — wording carried from elsewhere
statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ significantly from those estimates.
Current report — wording carried from elsewhere
As of December 31, 2025, we had a 23 percent interest in the equity and earnings of Prime Holdings Insurance Services, Inc. (Prime). Prime writes business through two Illinois domiciled insurance carriers, Prime Insurance Company, an excess and surplus lines company, and Prime Property and Casualty Insurance Inc., an admitted insurance company. As a private company, the market for Prime’s stock is limited. While we have certain rights under our shareholder agreement and maintain a position on Prime’s board of directors, we are subject to the decisions of the controlling shareholder, which may impact the value of our investment.
Current report — wording carried from elsewhere
Ordinary dividends, which may be paid by our principal insurance subsidiary without prior regulatory approval, are subject to certain limitations based upon statutory income, surplus and earned surplus. The maximum ordinary dividend distribution from our principal insurance subsidiary in a rolling 12-month period is limited by Illinois law to the greater of 10 percent of RLI Ins. policyholder surplus, as of December 31 of the preceding year, or the net income of RLI Ins. for the 12-month period ending December 31 of the preceding year. Ordinary dividends are further restricted by the requirement that they be paid from earned surplus.