RLI Continues An Aristocratic Tradition But Is Construction Exposed

Aug. 24, 2022 9:05 PM ETRLI Corp. (RLI) StockRLI

Summary

  • RLI's property segment grows massively due to lacking capacity in the market. They've taken as much business as they could, even taking out more reinsurance for it.
  • Supply chain issues are creating further push for the surety segment, which continues with nice growth as limits grow.
  • Casualty is less exciting because the company is exiting orderly from some businesses. This is also more inflation levered as contracts are longer-term.
  • Construction is one-third of the company's business, so while RLI continues to ace, new premiums in construction might become harder to write.
  • Superb company and continuously good execution, but the valuation doesn't give us much to work with.
  • Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More »
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RLI Corp. (NYSE:RLI) is pretty unstoppable, again raising dividends and producing phenomenal growth in earnings. The company has some of the best execution we've seen, and their underwriting discipline continues to be evident. While a superb company, they are exposed to construction in the

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The Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.

They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions.

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