RLI CORP

Previous wording

RLI Corp. is a U.S.-based, specialty insurance company that underwrites select property, casualty and surety products through three major subsidiaries. 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 2023, we achieved our 28th consecutive year of underwriting profitability. Over the 28-year period, we averaged an 88.2 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 casualty, property and surety products through three major subsidiaries. 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 2023, we achieved our 28th consecutive year of underwriting profitability. Over the 28-year period, we averaged an 88.2 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

Our property segment is comprised primarily of commercial fire, hurricane, earthquake, difference in conditions and marine coverages. We also offer homeowners’ coverages in Hawaii. Property insurance results are subject to the variability introduced by perils such as earthquakes, fires, hurricanes and other storms. Our major catastrophe exposure is to losses caused by earthquakes, primarily on the West Coast, and windstorms affecting commercial properties in coastal regions of the United States. We limit our net aggregate exposure to a catastrophic event by managing the total policy limits written in a particular region, purchasing reinsurance and maintaining policy terms and conditions throughout insurance cycles. We also use computer-assisted modeling techniques to provide estimates that help the Company carefully manage the concentration of risks exposed to catastrophic events.

Current wording

Our property segment is comprised primarily of commercial fire, hurricane, earthquake, difference in conditions and marine coverages. We also offer homeowners’ coverages in Hawaii. Property insurance results are subject to the variability introduced by perils such as earthquakes, fires, hurricanes and other storms. Our major catastrophe exposure is to losses caused by earthquakes, primarily on the West Coast, and windstorms affecting commercial properties in coastal regions of the United

Previous wording

The surety segment specializes in writing small to medium-sized contract surety coverages, including payment and performance bonds. We offer a variety of commercial surety bonds for medium to large-sized businesses across a broad spectrum of industries, including the financial, healthcare, energy and renewable energy industries. We also offer a variety of transactional bonds including, but not limited to license and permit, notary and court bonds. Often, our surety coverages involve a statutory requirement for bonds. While these bonds typically maintain a relatively low loss ratio, losses may fluctuate due to adverse economic conditions affecting the financial viability of our insureds. The contract surety product guarantees commercial contractors’ contractual obligations for a specific construction project. Generally, losses occur due to the deterioration of a contractor’s financial condition. This line has historically produced marginally higher loss ratios than other surety lines during economic downturns.

Current wording

The surety segment specializes in writing small to medium-sized contract surety coverages, including payment and performance bonds. We offer a variety of commercial surety bonds for medium to large-sized businesses across a broad spectrum of industries, including the financial, healthcare, energy and renewable energy industries. We also offer a variety of transactional bonds including, but not limited to license and permit, notary and court bonds. Often, our surety coverages involve a statutory requirement for bonds. While these bonds typically maintain a relatively low loss ratio, losses may fluctuate due to adverse economic conditions affecting the financial viability of our insureds. The contract surety product guarantees commercial contractors’ contractual obligations for a specific construction project. Generally, losses occur due to the deterioration of a contractor’s financial condition.

Previous wording

Underwriting income or profit represents one measure of the pretax profitability of our insurance operations, and is derived by subtracting losses and settlement expenses, policy acquisition costs and insurance operating expenses from net premiums earned, which are all GAAP financial measures. Each of these components are presented in the statements of earnings but is not subtotaled. However, this information is available in total and by segment in note 6 to the unaudited condensed consolidated financial statements in this quarterly report on Form 10-Q, and in note 12 to the consolidated financial statements in our 2023 Annual Report on Form 10-K, regarding operating segment information. The nearest comparable GAAP measure is earnings before income taxes which, in addition to underwriting income, includes net investment income, net realized gains or losses, net unrealized gains or losses on equity securities, general corporate expenses, debt costs and our portion of earnings from unconsolidated investees. A reconciliation of net earnings to underwriting income follows:

Current wording

Underwriting income or profit represents one measure of the pretax profitability of our insurance operations, and is derived by subtracting losses and settlement expenses, policy acquisition costs and insurance operating expenses from net premiums earned, which are all GAAP financial measures. Each of these components are presented in the statements of earnings but are not subtotaled. However, this information is available in total and by segment in note 6 to the unaudited condensed consolidated financial statements in this quarterly report on Form 10-Q, and in note 12 to the consolidated financial statements in our 2023 Annual Report on Form 10-K, regarding operating segment information. The nearest comparable GAAP measure is earnings before income taxes which, in addition to underwriting income, includes net investment income, net realized gains or losses, net unrealized gains or losses on equity securities, general corporate expenses, debt costs and our portion of earnings from unconsolidated investees. A reconciliation of net earnings to underwriting income follows:

Previous wording

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Current wording

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Previous wording

Net premiums earned increased 17 percent, driven by products in our property and casualty segments. Positive market performance resulted in $49 million of unrealized gains on equity securities in the first six months of 2024, compared to $41 million in 2023. Investment income was up 20 percent, due to an increased average asset base and higher reinvestment rates. Realized gains during the first six months of 2024 were comprised of $13 million of realized gains on equity securities, primarily due to rebalancing within our equity strategies, $2 million of realized losses on the fixed income portfolio and $5 million of other realized losses. This compares to $9 million of realized gains on the equity portfolio, $3 million of realized losses on the fixed income portfolio and $14 million of other realized gains from the payout of the working capital escrow from our sale of Maui Jim, Inc. (Maui Jim) in the previous year.

Current wording

Net premiums earned increased 19 percent, driven primarily by products in our property and casualty segments. Positive market performance resulted in $87 million of unrealized gains on equity securities in the first nine months of 2024, compared to $15 million in 2023. Investment income was up 18 percent, due to an increased average asset base and higher reinvestment rates. Realized gains during the first nine months of 2024 were comprised of $20 million of realized gains on equity securities, primarily due to rebalancing within our equity strategies, $3 million of realized losses on the fixed income portfolio and $6 million of other realized losses. This compares to $16 million of realized gains on the equity portfolio, $3 million of realized losses on the fixed income portfolio and $14 million of other realized gains from the payout of the working capital escrow from our sale of Maui Jim, Inc. (Maui Jim) in the previous year.

Previous wording

Underwriting income was $148 million on an 80.0 combined ratio for the first six months of 2024, compared to $109 million on an 82.7 combined ratio in the same period of 2023. A larger earned premium base resulted in higher levels of underwriting income. Underwriting results were impacted by $28 million of pretax storm losses in 2024 and $22 million of pretax storm losses in 2023. Results for each period benefited from favorable development on prior years’ loss reserves, which provided additional pretax earnings of $65 million in the first six months of 2024, compared to $72 million in 2023.

Current wording

Underwriting income was $188 million on an 83.3 combined ratio for the first nine months of 2024, compared to $113 million on an 88.0 combined ratio in the same period of 2023. A larger earned premium base resulted in higher levels of underwriting income. Underwriting results for 2024 were impacted by $37 million of pretax losses from Hurricanes Beryl and Helene, as well as $30 million of pretax storm losses. Comparatively, 2023 included $52 million of pretax losses and $14 million of reinsurance reinstatement premium from the Hawaiian wildfires, as well as $27 million of pretax storm losses. Results for each period benefited from favorable development on prior years’ loss reserves, which provided additional pretax earnings of $85 million in the first nine months of 2024, compared to $94 million in 2023.

Previous wording

The loss ratio decreased to 44.3 from 47.8, due to an increase in favorable development on prior accident years’ loss reserves, lower levels of catastrophe losses and low levels of attritional, non-catastrophe property losses on a higher earned premium base in 2024. The expense ratio decreased to 37.2 from 39.4. Despite continued investments in our people and technology, as well as higher levels of bonus and profit-sharing expenses that resulted from improved operating performance, growth of net premiums earned allowed for improved leveraging of our expense base.

Current wording

The loss ratio decreased to 45.5 from 48.3, due to lower levels of catastrophe losses and low levels of attritional, non-catastrophe property losses on a higher earned premium base in 2024. The expense ratio decreased to 37.8 from 39.7. Despite continued investments in our people and technology, as well as higher levels of bonus and profit-sharing expenses that resulted from improved operating performance, growth of net premiums earned allowed for improved leveraging of our expense base.

Previous wording

Our equity in earnings of unconsolidated investees primarily relates to our investment in Prime Holdings Insurance Services, Inc. (Prime), a specialty insurance company. We recognized $6 million of investee earnings from Prime in the first six months of 2024 and 2023.

Current wording

Our equity in earnings of unconsolidated investees primarily relates to our investment in Prime Holdings Insurance Services, Inc. (Prime), a specialty insurance company. We recognized $8 million of investee earnings from Prime in the first nine months of 2024 and $7 million in 2023.

Previous wording

Net earnings for the first six months of 2024 totaled $210 million, compared to $176 million for the same period in 2023. Higher levels of underwriting income, investment income and unrealized gains on equity securities all contributed to the improved results.

Current wording

Net earnings for the first nine months of 2024 totaled $305 million, compared to $190 million for the same period in 2023. Higher levels of underwriting income, investment income and unrealized gains on equity securities all contributed to the improved results.

Previous wording

Comprehensive earnings totaled $189 million for the first six months of 2024, compared to $194 million for the first six months of 2023. Other comprehensive earnings (loss) primarily included net after-tax unrealized gains (losses) from the fixed income portfolio. Other comprehensive loss of $21 million in the first six months of 2024 was attributable to higher interest rates, which decreased the fair value of securities held in the fixed income portfolio. Comparatively, $18 million of other comprehensive earnings was recognized in 2023, as modestly tighter credit spreads on relatively steady interest rates increased the fair value of securities held in the fixed income portfolio.

Current wording

Comprehensive earnings totaled $365 million for the first nine months of 2024, compared to $151 million for the first nine months of 2023. Other comprehensive earnings (loss) primarily included net after-tax unrealized gains (losses) from the fixed income portfolio. Other comprehensive earnings of $60 million in the first nine months of 2024 was attributable to lower interest rates, which increased the fair value of securities held in the fixed income portfolio. Comparatively, $39 million of other comprehensive loss was recognized in 2023, as higher interest rates decreased the fair value of securities held in the fixed income portfolio.

Previous wording

Gross premiums written increased $109 million for the first six months of 2024, compared to the same period of 2023. Growth was achieved in all three segments. Net premiums earned increased $110 million, driven by products in our property and casualty segments.

Current wording

Gross premiums written increased $168 million for the first nine months of 2024, compared to the same period of 2023. Growth was achieved in all three segments. Net premiums earned increased $181 million, driven primarily by products in our property and casualty segments.

Previous wording

Gross premiums written for the casualty segment increased $63 million in the first six months of 2024. We continued to benefit from positive rate movement across a large portion of our casualty segment, as well as from new business growth across our personal umbrella and small commercial distribution channels. Commercial transportation benefited from an increase in submissions. However, executive products premium continued to decline as a result of competitive market conditions.

Current wording

Gross premiums written for the casualty segment increased $103 million in the first nine months of 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. Commercial transportation benefited from an increase in new business submissions. Our executive products premium decreased, largely due to the continued soft management liability marketplace.

Previous wording

Gross premiums written for the property segment increased $36 million in the first six months of 2024. Our commercial property business was up $21 million, as rates continued to increase. New opportunities led to $11 million of premium growth for our marine product. Additionally, some competitors have reduced their appetite for select Hawaii homeowner coverages, which has allowed our other property premium to grow.

Current wording

Gross premiums written for the property segment increased $51 million in the first nine months of 2024. Our commercial property business was up $26 million in premium, benefiting from rate increases, particularly in the first half of the year. New opportunities led to $19 million of premium growth for our marine product. Additionally, some competitors have reduced their appetite for select Hawaii homeowner coverages, which has allowed our other property premium to grow.

Previous wording

Gross premiums written for the surety segment increased $10 million for the first six months of 2024. Contract surety benefited from new agency relationships, new construction projects and elevated material costs. The expansion of existing accounts and new business resulted in increased premium for commercial surety.

Current wording

Gross premiums written for the surety segment increased $14 million for the first nine months of 2024. Contract surety benefited from new agency relationships, new construction projects and elevated material costs. The expansion of existing accounts and new business resulted in increased premium for commercial surety.

Previous wording

The casualty segment recorded underwriting income of $24 million in the first six months of 2024, compared to $39 million for the same period last year. Prior accident years’ reserve releases reduced loss and settlement expenses for the casualty segment by $32 million, primarily on accident years 2016 and 2019 through 2023. Favorable development was widespread, with notable amounts from general liability, executive products, personal umbrella, professional services and commercial excess. In comparison, $47 million of prior accident years’ reserves were released in the first six months of 2023. Commercial excess, professional services, general liability and personal umbrella were drivers of the favorable development in 2023.

Current wording

The casualty segment recorded underwriting income of $27 million in the first nine months of 2024, compared to $57 million for the same period last year. Prior accident years’ reserve releases reduced loss and settlement expenses for the casualty segment by $42 million, primarily on accident years 2019, 2020, 2022 and 2023. Favorable development was widespread, with notable amounts from commercial excess, general liability, professional services, executive products and personal umbrella. In comparison, $69 million of prior accident years’ reserves were released in the first nine months of 2023. Commercial excess, executive products, general liability, personal umbrella and professional services were drivers of the favorable development in 2023. Hurricane and storm losses on casualty-oriented package policies that include property coverage resulted in $3 million of losses in 2024, compared to less than $2 million of storm losses in 2023.

Previous wording

The combined ratio for the casualty segment was 94.1 in 2024, compared to 89.6 in 2023. The segment’s loss ratio was 56.8 in 2024, up from 52.2 in 2023. Lower levels of reserve releases on prior accident years resulted in the higher loss ratio in 2024. The expense ratio for the casualty segment was 37.3, down from 37.4 for the same period last year.

Current wording

The combined ratio for the casualty segment was 95.8 in 2024, compared to 89.8 in 2023. The segment’s loss ratio was 58.9 in 2024, up from 52.7 in 2023. Lower levels of reserve releases on prior accident years and current accident year reserve strengthening on select products resulted in the higher loss ratio in 2024. The expense ratio for the casualty segment was 36.9, down from 37.1 for the same period last year.

Previous wording

The property segment recorded underwriting income of $111 million for the first six months of 2024, compared to $54 million for the same period last year. Underwriting results for 2024 included $25 million of favorable development on prior years’ loss and catastrophe reserves and $26 million of storm losses in the current year. Comparatively, the 2023 underwriting results included $17 million of favorable development on prior years’ loss and catastrophe reserves and $20 million of other storm losses.

Current wording

The property segment recorded underwriting income of $141 million for the first nine months of 2024, compared to $34 million for the same period last year. Underwriting results for 2024 included $33 million of favorable development on prior years’ loss and catastrophe reserves, $35 million of losses from Hurricanes Beryl and Helene, as well as $28 million of storm losses. Comparatively, the 2023 underwriting results included $17 million of favorable development on prior years’ loss and catastrophe reserves, $25 million of storm losses, as well as $52 million of losses and $14 million of reinsurance reinstatement premium from the Hawaiian wildfires.

Previous wording

Underwriting results for the first six months of 2024 translated into a combined ratio of 57.9, compared to 71.5 for the same period last year. The segment’s loss ratio was 28.1 in 2024, down from 35.5 in 2023. Larger releases on prior years’ loss reserves and low attritional, non-catastrophe losses more than offset the impact of higher storm losses. The segment’s expense ratio decreased to 29.8 in 2024 from 36.0 in the prior year, as the growth in the earned premium base exceeded the growth in expense. Additionally, the expense ratio benefited from an increase in the expense override we earn for writing business on behalf of other carriers.

Current wording

Underwriting results for the first nine months of 2024 translated into a combined ratio of 64.4, compared to 88.2 for the same period last year. The segment’s loss ratio was 34.0 in 2024, down from 52.3 in 2023. Larger releases on prior years’ loss reserves, lower catastrophe losses, and low attritional, non-catastrophe losses on a higher earned premium base resulted in the lower loss ratio. The segment’s expense ratio decreased to 30.4 in 2024 from 35.9 in the prior year, as the growth in the earned premium base exceeded the growth in expense. Additionally, the expense ratio benefited from an increase in the expense override we earn for writing business on behalf of other carriers.

Previous wording

The surety segment recorded underwriting income of $13 million for the first six months of 2024, compared to $16 million for the same period last year. Both periods reflected positive current accident year underwriting performance and benefited from favorable development on prior years’ loss reserves. Results for 2024 included favorable development on prior accident years’ reserves, which decreased loss and settlement expenses for the segment by $8 million. Results for 2023

Current wording

The surety segment recorded underwriting income of $21 million for the first nine months of 2024, compared to $22 million for the same period last year. Both periods reflected positive current accident year underwriting performance and benefited from favorable development on prior years’ loss reserves. Results for 2024 included favorable development on prior accident years’ reserves, which decreased loss and settlement expenses for the segment by $11 million. Results for 2023 included $8 million of favorable development on prior accident years’ reserves. Additionally, $2 million of reinsurance reinstatement premium was recorded in 2024 on a prior year loss, which reduced net premiums earned and underwriting income.

Previous wording

The combined ratio for the surety segment totaled 81.4 for the first six months of 2024, compared to 75.8 for the same period in 2023. The segment’s loss ratio was 9.2 in 2024, up from 9.0 in 2023. The expense ratio was 72.2, up from 66.8 in the prior year. The impact of the reinsurance reinstatement premium on the earned premium base increased the loss ratio by 0.3 points and the expense ratio by 2.0 points. In addition, the increase in expense ratio was the result of continued investments in technology and people to support growth and improve customer experiences.

Current wording

The combined ratio for the surety segment totaled 80.5 for the first nine months of 2024, compared to 77.8 for the same period in 2023. The segment’s loss ratio was 9.0 in 2024, down from 11.8 in 2023. The expense ratio was 71.5, up from 66.0 in the prior year. The impact of the reinsurance reinstatement premium on the earned premium base increased the loss ratio by 0.1 points and the expense ratio by 1.4 points. In addition, the increase in expense ratio was the result of increases in select policy acquisition costs, as well as continued investments in technology and people to support growth and improve customer experiences.

Previous wording

Our investment portfolio generated net investment income of $67 million during the first six months of 2024, an increase of 20 percent from the same period in 2023. The increase in investment income was due to higher reinvestment rates, as well as an increased average asset base relative to the prior year.

Current wording

Our investment portfolio generated net investment income of $104 million during the first nine months of 2024, an increase of 18 percent from the same period in 2023. The increase in investment income was due to higher reinvestment rates, as well as an increased average asset base relative to the prior year.

Previous wording

Yields on our fixed income investments for the first six months of 2024 and 2023 were as follows:

Current wording

Yields on our fixed income investments for the first nine months of 2024 and 2023 were as follows:

Previous wording

The fixed income portfolio increased by $134 million in the first six months of 2024, as cash flows were allocated to the fixed income portfolio. Average fixed income duration was 4.7 years at June 30, 2024, reflecting our liability structure and sound capital position. The equity portfolio increased by $77 million during the first six months of 2024, due to the positive performance of equity markets. Short-term investments decreased by $9 million, as we deployed cash to manage reinvestment risk.

Current wording

The fixed income portfolio increased by $320 million in the first nine months of 2024, as cash flows were largely allocated to the fixed income portfolio. Average fixed income duration was 4.8 years at September 30, 2024, reflecting our liability structure and sound capital position. The equity portfolio increased by $140 million during the first nine months of 2024, due to the positive performance of equity markets. Short-term investments increased by $68 million, as yields on AAA-rated government money market funds remained relatively attractive.

Previous wording

Our effective tax rate for the first six months of 2024 was 20.3 percent, compared to 19.4 percent for the same period in 2023. Effective rates are dependent upon components of pretax earnings or losses and the related tax effects. The effective tax rate was higher for the six-month period in 2024 due to lower levels of tax-favored adjustments, such as tax credits and excess tax benefits on share-based compensation, and higher levels of pretax income, which decreased the percentage impact of tax-favored adjustments.

Current wording

Our effective tax rate for the first nine months of 2024 was 19.8 percent, compared to 18.7 percent for the same period in 2023. Effective rates are dependent upon components of pretax earnings or losses and the related tax effects. The effective tax

Previous wording

Net premiums earned increased 18 percent, driven by products in our property and casualty segments. Positive market performance resulted in $4 million of unrealized gains on equity securities in the second quarter of 2024, compared to $25 million in 2023. Investment income was up 18 percent, due to an increased average asset base and higher reinvestment rates. Realized gains during the second quarter of 2024 were comprised of $6 million of realized gains on equity securities, primarily due to rebalancing within our equity strategies, $1 million of realized losses on the fixed income portfolio and $5 million of other realized losses. This compares to $6 million of realized gains on the equity portfolio and less than $1 million of realized losses on the fixed income portfolio in the second quarter of 2023.

Current wording

Net premiums earned increased 22 percent, driven primarily by products in our property and casualty segments. Positive market performance resulted in $38 million of unrealized gains on equity securities in the third quarter of 2024, compared to unrealized losses of $25 million for the same period in 2023. Investment income was up 15 percent, due to an increased average asset base and higher reinvestment rates. Realized gains during the third quarter of 2024 were comprised of $7 million of realized gains on equity securities, primarily due to rebalancing within our equity strategies, $1 million of realized losses on the fixed income portfolio and less than $1 million of other realized gains. This compares to $7 million of realized gains on the equity portfolio and less than $1 million of realized losses on the fixed income portfolio in the third quarter of 2023.

Previous wording

Underwriting income was $70 million on an 81.5 combined ratio for the second quarter of 2024, compared to $41 million on an 87.2 combined ratio in the same period of 2023. A larger earned premium base resulted in higher levels of underwriting income. Underwriting results were impacted by $16 million of pretax storm losses in 2024 and $18 million of pretax storm losses in 2023. Results for each period benefited from favorable development on prior years’ loss reserves, which provided additional pretax earnings of $23 million in the second quarter of 2024, compared to $20 million in 2023.

Current wording

Underwriting income was $41 million on an 89.6 combined ratio for the third quarter of 2024, compared to $4 million on a 98.7 combined ratio in the same period of 2023. Underwriting results for 2024 were impacted by $37 million of pretax losses from Hurricanes Beryl and Helene, as well as $2 million of pretax storm losses. Comparatively, 2023 included $52 million of pretax losses and $14 million of reinsurance reinstatement premium from the Hawaiian wildfires, as well as $5 million of pretax storm losses. Results for each period benefited from favorable development on prior years’ loss reserves, which provided additional pretax earnings of $21 million in the third quarter of 2024, compared to $22 million in 2023.

Previous wording

The loss ratio decreased to 42.1 from 42.6, due to low levels of attritional, non-catastrophe property losses on a higher earned premium base in 2024. The expense ratio decreased to 37.9 from 40.1. Despite continued investments in our people and technology, as well as higher levels of bonus and profit-sharing expenses that resulted from improved operating performance, growth of net premiums earned allowed for improved leveraging of our expense base.

Current wording

The loss ratio decreased to 51.9 from 59.5, due to lower levels of catastrophe losses on a higher earned premium base in 2024. The expense ratio decreased to 37.7 from 39.2. Despite continued investments in our people and technology, as well as higher levels of bonus and profit-sharing expenses that resulted from improved operating performance, growth of net premiums earned allowed for improved leveraging of our expense base.

Previous wording

Our equity in earnings of unconsolidated investees primarily relates to our investment in Prime Holdings Insurance Services, Inc. (Prime), a specialty insurance company. We recognized $2 million of investee earnings from Prime in the second quarter of 2024 and 2023.

Current wording

Our equity in earnings of unconsolidated investees primarily relates to our investment in Prime Holdings Insurance Services, Inc. (Prime), a specialty insurance company. We recognized $1 million of investee earnings from Prime in the third quarter of 2024 and $2 million in 2023.

Previous wording

Net earnings for the second quarter of 2024 totaled $82 million, compared to $78 million for the same period in 2023. Higher levels of underwriting income and investment income more than offset a decline in unrealized gains on equity securities.

Current wording

Net earnings for the third quarter of 2024 totaled $95 million, compared to $14 million for the same period in 2023. Higher levels of underwriting income, investment income and unrealized gains on equity securities all contributed to the improved results.

Previous wording

Comprehensive earnings totaled $74 million for the second quarter of 2024, compared to $58 million for the same period of 2023. Other comprehensive earnings (loss) primarily included net after-tax unrealized gains (losses) from the fixed income portfolio. Other comprehensive loss of $8 million in the second quarter of 2024 was attributable to higher interest rates, which decreased the fair value of securities held in the fixed income portfolio. Comparatively, $20 million of other comprehensive loss was recognized in 2023, as interest rates increased.

Current wording

Comprehensive earnings totaled $175 million for the third quarter of 2024, compared to $43 million of comprehensive loss for the same period of 2023. Other comprehensive earnings (loss) primarily included net after-tax unrealized gains (losses) from the fixed income portfolio. Other comprehensive earnings of $80 million in the third quarter of 2024 was attributable to lower interest rates, which increased the fair value of securities held in the fixed income portfolio. Comparatively, $57 million of other comprehensive loss was recognized in 2023, as higher interest rates decreased the fair value of securities held in the fixed income portfolio.

Previous wording

Gross premiums written increased $55 million for the second quarter of 2024, compared to the same period of 2023. Growth was achieved in all three segments. Net premiums earned increased $57 million, driven by products in our property and casualty segments.

Current wording

Gross premiums written increased $58 million for the third quarter of 2024, compared to the same period in 2023. Growth was achieved in all three segments. Net premiums earned increased $71 million, driven primarily by products in our property and casualty segments.

Previous wording

Gross premiums written for the casualty segment increased $35 million in the second quarter of 2024. We continued to benefit from positive rate movement across a large portion of our casualty segment, as well as from new business growth across our personal umbrella and small commercial distribution channels. However, a reduction of available projects and our exit from energy casualty business resulted in a decline in general liability premium, while competitive market conditions continued to negatively impact executive products.

Current wording

Gross premiums written for the casualty segment increased $40 million in the third quarter of 2024. We continued to benefit from positive rate movement across a large portion of our casualty segment, as well as from new business growth across our personal umbrella and small commercial distribution channels. New project work resulted in growth for general liability. Taking advantage of market disruption, rate increases and expanding distribution led to growth in commercial transportation. Competitive market conditions continued to negatively impact executive products.

Previous wording

Gross premiums written for the property segment increased $14 million in the second quarter of 2024. New opportunities and improved retention led to $8 million of premium growth for our marine product. Rate increases as well as new opportunities on fire and other peril lines resulted in a $4 million increase in our commercial property business. Wind rates declined slightly in the second quarter, after four consecutive years of double-digit increases. Additionally, some competitors have reduced their appetite for select Hawaii homeowner coverages, which has allowed our other property premium to grow.

Current wording

Gross premiums written for the property segment increased $15 million in the third quarter of 2024. New opportunities and improved retention led to $8 million of premium growth for our marine product. Rate increases, as well as new opportunities on fire and other peril lines, resulted in a $6 million increase in our commercial property business. Wind rates declined in the third quarter, after four consecutive years of double-digit increases. Additionally, some competitors have reduced their appetite for select Hawaii homeowner coverages, which has allowed our other property premium to grow.

Previous wording

Gross premiums written for the surety segment increased $6 million for the second quarter of 2024. Contract surety benefited from new agency relationships, new construction projects and continued increases in material costs. The expansion of existing accounts and new business resulted in increased premium for commercial surety.

Current wording

Gross premiums written for the surety segment increased $3 million for the third quarter of 2024. Contract surety benefited from new agency relationships, new construction projects and continued increases in material costs.

Previous wording

The casualty segment recorded underwriting income of $10 million in the second quarter of 2024, compared to $7 million for the same period last year. Prior accident years’ reserve releases reduced loss and settlement expenses for the casualty segment by $14 million, primarily on accident years 2019 through 2023. Favorable development was widespread, with notable amounts from professional services, commercial excess, executive products and general liability. In comparison, $11 million of prior accident years’ reserves were released in the second quarter of 2023. Small commercial, commercial excess and personal umbrella were drivers of the favorable development in 2023.

Current wording

The casualty segment recorded underwriting income of $3 million in the third quarter of 2024, compared to $19 million for the same period last year. Prior accident years’ reserve releases reduced loss and settlement expenses for the casualty segment by $10 million, primarily on accident years 2017 through 2020, 2022 and 2023. Favorable development was widespread, with notable amounts from commercial excess, professional services, general liability, personal umbrella and executive products. In comparison, $22 million of prior accident years’ reserves were released in the third quarter of 2023. Executive products, commercial excess, general liability and personal umbrella were drivers of the favorable development in 2023. Hurricane and storm losses on casualty-oriented package policies that include property coverage resulted in $2 million of losses in 2024, compared to less than $1 million of storm losses in 2023.

Previous wording

The combined ratio for the casualty segment was 95.1 in 2024, compared to 96.3 in 2023. The segment’s loss ratio was 58.3 in 2024, down from 58.9 in 2023. Larger levels of reserve releases on prior accident years resulted in the lower loss ratio in 2024. The expense ratio for the casualty segment was 36.8, down from 37.4 for the same period last year.

Current wording

The combined ratio for the casualty segment was 98.8 in 2024, compared to 90.1 in 2023. The segment’s loss ratio was 62.8 in 2024, up from 53.7 in 2023. Lower levels of reserve releases on prior accident years and current accident year reserve strengthening on select products resulted in the higher loss ratio in 2024. The expense ratio for the casualty segment was 36.0, down from 36.4 for the same period last year.

Previous wording

The property segment recorded underwriting income of $53 million for the second quarter of 2024, compared to $26 million for the same period last year. Underwriting results for 2024 included $6 million of favorable development on prior years’ loss and catastrophe reserves and $15 million of storm losses in the current year. Comparatively, the 2023 underwriting results included $4 million of favorable development on prior years’ loss and catastrophe reserves and $17 million of other storm losses.

Current wording

The property segment recorded underwriting income of $30 million for the third quarter of 2024, compared to $21 million of underwriting loss for the same period last year. Underwriting results for 2024 included $8 million of favorable development on prior years’ loss and catastrophe reserves, $35 million of losses from Hurricanes Beryl and Helene, as well as $2 million of storm losses. Comparatively, the 2023 underwriting results included less than $1 million of unfavorable development on prior years’ loss and catastrophe reserves, $5 million of storm losses, as well as $52 million of losses and $14 million of reinsurance reinstatement premium from the Hawaiian wildfires.

Previous wording

Underwriting results for the second quarter of 2024 translated into a combined ratio of 60.3, compared to 74.6 for the same period last year. The segment’s loss ratio was 30.9 in 2024, down from 40.4 in 2023. Larger releases on prior years’ loss reserves, lower levels of storm losses and low attritional, non-catastrophe losses all contributed to the decline the loss ratio. The segment’s expense ratio decreased to 29.4 in 2024 from 34.2 in the prior year, as the growth in the earned premium base exceeded the growth in expense. Additionally, the expense ratio benefited from an increase in the expense override we earn for writing business on behalf of other carriers.

Current wording

Underwriting results for the third quarter of 2024 translated into a combined ratio of 77.2, compared to 121.8 for the same period last year. The segment’s loss ratio was 45.8 in 2024, down from 86.3 in 2023. Larger releases on prior years’ loss reserves and lower levels of catastrophe losses contributed to the decline in loss ratio. The segment’s expense ratio decreased to 31.4 in 2024 from 35.5 in the prior year, as the growth in the earned premium base exceeded the growth in expense. Additionally, the expense ratio benefited from an increase in the expense override we earn for writing business on behalf of other carriers.

Previous wording

The surety segment recorded underwriting income of $7 million for the second quarter of 2024, compared to $8 million for the same period last year. Both periods reflected positive current accident year underwriting performance and benefited from favorable development on prior years’ loss reserves. Results for 2024 included favorable development on prior accident years’ reserves, which decreased loss and settlement expenses for the segment by $2 million. Results for 2023 included $4 million of favorable development on prior accident years’ reserves.

Current wording

The surety segment recorded underwriting income of $8 million for the third quarter of 2024, compared to $6 million for the same period last year. Both periods reflected positive current accident year underwriting performance and benefited from favorable development on prior years’ loss reserves. Results for 2024 included favorable development on prior accident years’ reserves, which decreased loss and settlement expenses for the segment by $3 million. Results for 2023 included $1 million of favorable development on prior accident years’ reserves.