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?
New lines to offset Hagarty? Where is the breakdown of the "very profitable business"? OB's ROI is history. Mgt tells me RLI is their goal. Will they match ? That is a bet at 6+% dividend. 2 other points: I have been fortunate to visit with both Buffett and Byrnes. Your statement on Obama? I was down in my accounts during the Bush years. Both my corporate and pension accounts are up 147% during Obama despite a huge Bush carryover disaster at the beginning -- very similar to the 800,000 monthly drop in employment. If you didn't match -- bummer. My strategy? All in OB if the c.s war monger Romney family (& hide behind the trees sons) wins -- de je vous. Once burnt with Bush shame on GW; if burnt again with Romney shame on me.