AM Best upgrades outlook to positive for RLI Group and affirms strong financial ratings

AM Best, a credit rating agency specialising in the insurance industry, has revised the outlook for the insurance company RLI Group (RLI) to positive from stable while affirming its Financial Strength Rating (FSR) of A+ (Superior) and its Long-Term Issuer Credit Rating (Long-Term ICR) of “aa” (Superior).

The outlook for RLI’s publicly traded parent, RLI Corp., has also been revised to positive from stable, with its Long-Term ICR affirmed at “a” (Excellent). All entities are headquartered in Peoria, IL.

The revised outlook reflects RLI’s exceptional balance sheet strength, which AM Best assesses as the strongest level, along with its consistent operating performance, favourable business profile, and robust enterprise risk management.

Strong capital management, favourable reserve development, liquidity, and sound asset-liability management have supported the group’s financial stability.

Risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), remained at the strongest level as of year-end 2024 and is expected to remain there over the medium term.

Despite returning significant capital to shareholders through dividends, RLI’s policyholder surplus has nearly doubled, growing from $1.0 billion at year-end 2019 to $1.8 billion at year-end 2024, driven by strong internal capital generation.

RLI has demonstrated consistent underwriting profitability across market cycles, supported by disciplined pricing, portfolio diversification, and risk optimisation.

These strengths, combined with steady investment returns and a strategic focus on niche specialty markets, have helped insulate the company from broader property & casualty market volatility. Further reinforcing RLI’s position is the financial flexibility of RLI Corp., which benefits from low financial leverage and strong fixed-charge coverage.

AM Best has affirmed the FSR of A+ (Superior) and Long-Term ICRs of “aa” (Superior) for the members of RLI Group, with the outlooks revised to positive from stable. These companies include RLI Insurance Company, Contractors Bonding and Insurance Company, and Mt. Hawley Insurance Company.

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