BGB Securities Reports Premium Growth On RLI

According to BGB Securities, RLI Corp RLI saw premium growth through business mix shift. BGB Securities said that earnings for 1Q11 beat the consensus estimate once again with the aid of reserve releases. “Without reserve releases, the company's accident year combined ratio for 1Q11 was below 94%, which outperforms the industry. The company is not immune to the effects of softer premium rates, however a shifting business mix through new products and geographies has offset the decline in the company's casualty segment. The company expects to grow through its CBIC acquisition while holding the line on its current business. We would expect the company to remain disciplined in its underwriting approach while they await a pricing shift. Standard insurance carriers may continue to poach business from RLI but are likely doing so at poorly priced levels. RLI has been disciplined to walk away from business that is not adequately priced. The trend may be shifting as management believes pricing has bottomed, though they won't predict when pricing will begin to firm. We continue to rate RLI a HOLD with a $61 price target.” RLI Corp closed yesterday at $58.37.