AM Best Affirms Credit Ratings of RLI Corp. and Its Subsidiaries

AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” (Superior) of the members of RLI Group (RLI). In addition, AM Best has affirmed the Long-Term ICR of “a” (Excellent) of RLI’s publicly traded parent holding company, RLI Corp. [NYSE: RLI]. The outlook of these Credit Ratings (ratings) is stable. 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 ratings are supported by RLI’s risk-adjusted capitalization, which is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), despite the return of significant capital in the form of stockholder dividends to its parent. The overall balance sheet assessment reflects favorable reserve development trends, strong liquidity and prudent asset liability management practices. RLI’s ratings also reflect strong operating performance across extended time periods and multiple underwriting cycles. The consistency in the group’s underwriting results is driven by sound pricing discipline and risk optimization and continues to be augmented by solid investment returns. RLI’s sound risk management capabilities and focus on niche opportunities by concentrating on specialty markets that often are underserved, has helped insulate it from the various stages of the traditional property/casualty market cycle. Further supporting the ratings is the strong financial flexibility afforded by RLI Corp., as evidenced by its modest financial leverage and strong fixed-charge coverage.

The FSR of A+ (Superior) and the Long-Term ICRs of “aa” (Superior), each with a stable outlook, have been affirmed 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.

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