RLI - RLI Corp.: Competition Mounting In E&S
2025-02-02 03:48:11 ET
Summary
- RLI delivered an alright quarter, but there has been some mounting competition in major areas like hurricanes and earthquakes.
- There is also a major move they've taken to drive up rates for automotive insurance due to higher repair costs and severity of events.
- End markets have absorbed this well so far, and at least the frequency of events has not been up.
- Surety is also seeing continued growth in construction costs, which drives worry and demand. The shorter-lived book mitigates potential risks from wage inflation if deportations get more serious.
- We note that challengers in E&S are lower valued than RLI, at least on a P/B basis. We are worried about mounting competition, and the ease of growth for challengers.