If You Invested $1000 in RLI Corp. 10 Years Ago, This Is How Much You'd Have Now
For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in RLI Corp. (RLI) ten years ago? It may not have been easy to hold on to RLI for all that time, but if you did, how much would your investment be worth today?
RLI Corp.'s Business In-Depth
With that in mind, let's take a look at RLI Corp.'s main business drivers.
Headquartered in Peoria, IL, RLI Corp. is a specialty property-casualty (P&C) underwriter that caters primarily to niche markets through its main operating subsidiary, RLI Insurance Company. Other subsidiaries include Mt. Hawley Insurance Company and RLI Indemnity Company. The company, founded in 1965, serves 50 states and the District of Columbia.
RLI Corp. classifies its operations into three distinct segments − Casualty, Property, and Surety.
Casualty (62.2% of 2022 Net Premium Earned) – The segment comprises general liability, personal umbrella, transportation, executive products, commercial umbrella, multi-peril program business, and other specialty coverage. In addition, the segment provides employers’ indemnity and in-home business owners’ coverage.
Property (26.9%) – The segment provides commercial property coverage, including excess and surplus (E&S) lines and specialty insurance such as fire, earthquake, flood and inland marine. Marine operations include cargo, hull, protection and indemnity, primary and excess liabilities, yachts, and other marine coverage.
Surety (10.9%) – The segment specializes in writing small-to-large commercial and small contract surety coverage, as well as those for the energy (plugging and abandonment of oil wells), petrochemical and refining industries.
RLI Corp. distributes its products through branch offices to wholesale and retail brokers, independent agents and e-commerce channels throughout the United States including Puerto Rico, the Virgin Islands and Guam.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in RLI Corp. ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in July 2013 would be worth $3,311.80, or a 231.18% gain, as of July 12, 2023, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
The S&P 500 rose 165.03% and the price of gold increased 44.57% over the same time frame in comparison.
Analysts are forecasting more upside for RLI too.
RLI is one of the industry’s most profitable property and casualty writers with an impressive track record of underwriting profits. Shares of RLI have outperformed the industry in the past year. A strong local branch-office network, broad range of product offerings, focus on specialty insurance lines contribute to its profits. Maintaining the combined ratio at favorable levels even in the toughest operating environment reflects superior underwriting discipline. Its decision to drop the underperforming products from its property business also bodes well. Strong capital position provides financial flexibility to operating subsidiaries. It has been paying special dividends apart from hiking dividend each year. Yet, exposure to catastrophe loss inducing volatility in results and high expenses concerns as it can strain margin expansion.
Shares have gained 5.05% over the past four weeks and there have been 1 higher earnings estimate revisions for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
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RLI Corp. (RLI) : Free Stock Analysis Report
