OB is similar to RLI now, yes...but RLI is a far stronger company. RLI has a 13% ROE. OB is far less. RLI is more profitable. RLI has $100 million debt and $113 million cash. So by all measures, RLI is a far stronger and more profitable company with a bullet proof balance sheet....And RLI pays less than a 2% dividend.so they are able to reinvest and grow business. OB pays out almost all their profits to dividends, largely to WTM. So it's harder for them to grow.
"The expected sale of Essentia and termination of the Hagerty collector car and
boat business to Markel in early 2013 will represent a meaningful loss of a
profitable niche for OB. In 2011, the Hagerty niche represented $167 million,
or 16% of OB's total net writings of $1.1 billion.
If OB is paying out almost all it's earnings as dividends.....how can they continue to do so, if the Hagerty business they just sold, accounts for about $170 million of very profitable revenue?