Credit ratings agency AM Best upgraded the financial strength ratings of specialty insurer RLI Corp.’s insurance subsidiaries RLI Insurance Company, Mt. Hawley Insurance Company and Contractors Bonding and Insurance Company to A++ (senior) from A+ (senior).
In addition, the rating agency also upgraded the company’s long-term issuer credit rating from “aa” (senior) to “aa+” (senior).
Driven by this, AM Best upgraded the long-term ICR of RLI Corp’s listed parent company from “a” (excellent) to “a+” (excellent). The outlook on all of these ratings has been revised to stable from positive.
AM Best said the ratings reflected RLI’s “strongest” balance sheet strength, strong operating performance, favorable business profile and very strong enterprise risk management.
The ratings agency explained: “The upgrade reflects RLI’s superior balance sheet strength fundamentals and is underpinned by the group’s effective capital management strategy, historically aggressive reserve development, strong underwriting controls and RLI’s high-quality reinsurance program.
“Despite RLI’s high common equity leverage levels and exposure to major earthquakes, the group’s overall liquidity ratios still outperform the industry benchmark.”
AM Best expects RLI’s risk-adjusted capital, as measured by Best’s Capital Adequacy Ratio (BCAR), to remain at the highest levels and that favorable operating performance trends will benefit from management’s niche specialist market expertise and strong risk management programs.
In addition, strong pricing discipline and diversification have driven RLI’s consistent underwriting performance, complemented by solid investment returns, AM Best said.
The credit rating agency highlighted that “continued internal capital generation has allowed RLI to expand its capital base over the past five years (despite the return of significant capital to RLI companies in the form of shareholder dividends), with policyholder surplus reaching $1.9 billion as of the third quarter of 2025.”
The ratings are supported by the strong financial flexibility provided by RLI Corp., as evidenced by its modest financial leverage and very strong fixed charge coverage.
