AM Best Upgrades Credit Ratings for RLI Corp. and Its Subsidiaries
MWN-AI** Summary
AM Best has recently upgraded the credit ratings of RLI Corp. and its subsidiaries, reflecting strong financial performance and robustness within the organization. The Financial Strength Rating (FSR) for RLI Group has been elevated to A++ (Superior) from A+ (Superior), while the Long-Term Issuer Credit Ratings (Long-Term ICR) have improved to “aa+” (Superior) from “aa” (Superior). Additionally, RLI Corp.'s Long-Term ICR was upgraded from “a” (Excellent) to “a+” (Excellent), with all outlooks now stable, down from positive.
These ratings underscore RLI's exceptional balance sheet strength, characterized by effective capital management and strong underwriting controls. RLI's liquidity ratios outperform industry benchmarks, aided by favorable reserve developments and a quality reinsurance program. Despite challenges such as significant earthquake exposure and a higher common stock leverage, RLI’s capital management strategy, anchored in risk-adjusted capitalization, remains robust.
Moreover, AM Best emphasizes management’s expertise in niche specialty markets, alongside rigorous pricing discipline and a diversified portfolio, as key factors for RLI’s consistent underwriting performance. Internal capital generation has contributed to an increase in policyholder surplus, which reached $1.9 billion as of Q3 2025, despite substantial capital returned to shareholders in dividends.
The outlooks at stable indicate AM Best's confidence that RLI will continue to maintain strong underwriting and operational profitability, supported by a favorable business profile and peer-level balance sheet strength. Ratings also applied to members of RLI Group, including RLI Insurance Company, Contractors Bonding, and Mt. Hawley Insurance Company. This upgrade reinforces RLI's position as a leader in the insurance market, showcasing its resilient financial structure and strategic operational performance.
MWN-AI** Analysis
RLI Corp. (NYSE: RLI) recently experienced an upgrade from AM Best, with its Financial Strength Rating lifted to A++ (Superior) and Long-Term Issuer Credit Ratings adjusted to “aa+” (Superior). This commendable shift not only underscores the robust financial stature of RLI and its subsidiaries but also sets a favorable landscape for current and prospective investors.
The enhancements in credit ratings highlight RLI's exceptional balance sheet strength, bolstered by prudent capital management, robust underwriting, and effective risk management frameworks. With an emphasis on safeguarding the balance sheet and a penchant for consistently generating internal capital, RLI has cultivated a risk-adjusted capitalization that remains at the industry's strongest level, a reassuring proposition for stakeholders.
Moreover, RLI’s rigorous pricing discipline and diversification strategies have led to resilient underwriting results and strong operating performance over time. As of Q3 2025, the company boasts a policyholder surplus of $1.9 billion, indicating solid liquidity and risk management practices—even in light of elevated common stock leverage and earthquake exposures.
For investors, RLI represents a compelling opportunity amid a stable outlook reflecting expected sustained profitability. The company’s historical performance, driven by niche market expertise, enhances its investment appeal. Additionally, RLI's financial flexibility, characterized by modest leverage and strong fixed-charge coverage, further endorses its long-term viability.
In conclusion, with these latest ratings upgrades, RLI Corp. positions itself as a strong investment candidate within the insurance sector. Investors should consider capitalizing on this growth potential while remaining cognizant of market dynamics. The robust underlying fundamentals provide a strong rationale for the company’s upward trajectory, making it an attractive addition to a diversified portfolio.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
AM Best has upgraded the Financial Strength Rating (FSR) to A++ (Superior) from A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “aa+” (Superior) from “aa” (Superior) for the members of RLI Group (RLI). In addition, AM Best has upgraded the Long-Term ICR to “a+” (Excellent) from “a” (Excellent) of RLI’s publicly traded parent holding company, RLI Corp. [NYSE: RLI]. The outlook of these Credit Ratings (ratings) has been revised to stable from positive. All companies are headquartered in Peoria, IL. (See below for a detailed listing of the companies and ratings.)
The ratings reflect RLI’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and very strong enterprise risk management.
The rating upgrades reflect RLI’s exceptional balance sheet strength fundamentals, buttressed by the group’s effective capital management strategies, historically positive reserve development, strong underwriting controls and RLI’s quality reinsurance program. RLI’s overall liquidity ratios outperform the industry benchmarks, despite the group’s elevated level of common stock leverage and significant earthquake exposure. AM Best expects that RLI’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), will remain at the strongest level, with favorable operating performance trends benefiting from management’s niche specialty market expertise and robust risk management program, which places an ardent emphasis on safeguarding the balance sheet from capital risks and meeting corporate profitability goals.
The consistency in the group’s underwriting results is driven by rigorous pricing discipline and diversification, augmented by solid investment returns. Perpetual internal capital generation has enabled RLI to grow its capital size over the past five years (albeit the return of substantial capital in the form of stockholder dividends to RLI Corp.), with policyholder surplus reaching $1.9 billion as of the third quarter of 2025. Further supporting the ratings is the strong financial flexibility afforded by RLI Corp., as demonstrated by its modest financial leverage and very strong fixed-charge coverage.
The stable outlooks reflect AM Best’s expectation that RLI will maintain strong underwriting and operating profitability, a favorable business profile along with an overall balance sheet strength assessment that is comparable to other companies in the composite assessed at strongest.
The FSR has been upgraded to A++ (Superior) from A+ (Superior) and the Long-Term ICRs to “aa+” (Superior) from “aa” (Superior), with the outlooks revised to stable from positive for the members of RLI Group:
- RLI Insurance Company
- Contractors Bonding and Insurance Company
- Mt. Hawley Insurance Company
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings . For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments .
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com .
Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260220226818/en/
Christine DePalma, CPCU, ASLI
Financial Analyst
+1 908 882 1732
christine.depalma@ambest.com
Rosemarie Mirabella
Director
+1 908 882 2125
rosemarie.mirabella@ambest.com
Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com
FAQ**
How does the upgrade of RLI Corp. (DE) RLI’s Financial Strength Rating to A++ reflect its overall capital management strategies and operational performance compared to industry peers?
With RLI Corp. (DE) RLI's elevated common stock leverage, how does AM Best assess its ability to manage significant risks like earthquake exposure while maintaining strong financial stability?
What specific factors contributed to the stable outlook revision for RLI Corp. (DE) RLI, and how do these factors correlate with its long-term profitability goals?
How does RLI Corp. (DE) RLI's rating upgrade impact its competitive position within the insurance industry, particularly given its strong underwriting discipline and niche market focus?
**MWN-AI FAQ is based on asking OpenAI questions about RLI Corp. (DE) (NYSE: RLI).
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