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Think of RLI as **Chubb** but with an even sharper focus on very specific, often unique, and complex specialty insurance niches.

RLI is like the **'custom shop' for insurance policies**, specializing in unique, complex, and hard-to-place business and professional risks that larger, general insurers like **State Farm** might bypass.

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• General Liability Insurance: Provides coverage for third-party liability risks for various commercial insureds.
• Professional Liability Insurance (E&O): Offers errors and omission coverage to professionals such as designers, technical, computer, and miscellaneous professionals.
• Commercial Automobile Insurance: Covers liability and physical damage for local, intermediate and long haul truckers, public transportation, and specialty commercial automobile risks.
• Environmental Liability Insurance: Addresses risks related to underground storage tanks, contractors, asbestos, and environmental remediation specialists.
• Management Liability Insurance: Includes Directors & Officers (D&O), fiduciary, and employment practice liability coverages for businesses.
• Healthcare Liability Insurance: Provides specialized liability coverage for healthcare-related risks.
• Commercial Property Insurance: Protects businesses against damage or loss to their commercial properties.
• Marine Insurance: Offers various coverages including cargo, hull, protection and indemnity, and marine liability.
• Homeowners' and Dwelling Fire Insurance: Provides property insurance for personal residences.
• Surety Bonds: Guarantees performance or compliance for commercial businesses, individuals, and contractors.
• Reinsurance: Underwrites insurance coverages for other insurance companies.

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Major Customers of RLI Corp.

RLI Corp. primarily serves a diverse range of commercial entities and other insurance companies rather than a few specific named corporate clients. Its major customers can be categorized as:

• Diverse Commercial and Industrial Businesses: This broad category includes a wide array of businesses across various sectors such as manufacturers, contractors, apartment owners, mercantile businesses, security guard services, onshore energy-related businesses, environmental remediation specialists, truckers, public transportation entities, and other public and private businesses requiring general liability, commercial auto, commercial property, and management liability (e.g., Directors & Officers, Fiduciary, Employment Practices Liability) coverages.
• Professional Services Firms and Healthcare Providers: RLI provides professional liability coverages, including Errors & Omissions (E&O) insurance, to small to medium-sized design, technical, computer, and miscellaneous professionals. It also offers healthcare liability products to healthcare providers.
• Other Insurance Companies: RLI underwrites various reinsurance coverages, making other insurance companies its customers for these specialized products.

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Craig W. Kliethermes, President & Chief Executive Officer

Mr. Kliethermes became President and Chief Executive Officer of RLI Corp. on January 1, 2022. He joined RLI in 2006 and has over 36 years of experience in the insurance industry. Prior to his appointment as CEO, he served as President and Chief Operating Officer from 2016 and as Senior Vice President, Risk Services since 2013. Before joining RLI, Mr. Kliethermes held various actuarial and leadership positions with Lockton Companies, GE Insurance/Employers Reinsurance, and John Deere Insurance Company. He holds a Bachelor's degree in Mathematics from Maryville University.

Aaron Diefenthaler, Chief Financial Officer

Mr. Diefenthaler assumed the role of Chief Financial Officer, effective January 1, 2026, succeeding Todd Bryant. He joined RLI in 2012 as Vice President and Chief Investment Officer and was named Treasurer in 2014. Before his tenure at RLI, Mr. Diefenthaler held leadership positions at Asset Allocation and Management LLC, SS&C Technologies, and Northern Trust. He earned a bachelor's degree in finance from Indiana University, an MBA from DePaul University's Kellstadt Graduate School of Business, and holds the Chartered Financial Analyst (CFA) designation.

Jennifer L. Klobnak, Chief Operating Officer

Ms. Klobnak was appointed Chief Operating Officer on January 1, 2022. She joined RLI in 2000 and has 21 years of experience in the insurance industry. Prior to her current role, she served as Senior Vice President, Operations since 2016, and as Senior Vice President, Risk Services since 2014. Before joining RLI, Ms. Klobnak worked in an audit role with PwC.

Jeffrey D. Fick, Chief Legal Officer & Corporate Secretary

Mr. Fick serves as the Chief Legal Officer and Corporate Secretary for RLI Corp. He previously held the position of Senior Vice President/Chief Legal Ofcr/Secretary and also served as VP:Human Resources at RLI CORP. His prior experience includes leadership roles in human resources at HNI CORP and SNAP-ON INC. Mr. Fick studied at the University of Iowa College of Law.

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The key risks to RLI Corp.'s business, an insurance holding company specializing in property and casualty insurance, include its exposure to catastrophic events and underwriting inaccuracies, significant regulatory and legal challenges, and intense competition within the specialty insurance markets.

1. Exposure to Catastrophic Events and Underwriting Risk (including Social Inflation): As a property and casualty insurer, RLI Corp. is highly susceptible to financial losses stemming from large-scale natural disasters such as hurricanes, earthquakes, and wildfires, as well as severe weather events. These events can lead to significant claim payouts, directly impacting the company's profitability and financial stability. Beyond natural catastrophes, RLI Corp. faces a material risk from "social inflation," which refers to the rising cost of claims due to broader societal trends, particularly legal system abuse and larger jury awards. This trend is especially pronounced in auto-related insurance lines, where RLI has exposure, and requires continuous, proactive adjustments in pricing and reserves.

2. Regulatory and Legal Risks: The insurance industry, and RLI Corp. by extension, operates within a highly regulated environment, primarily at the state level in the U.S. This state-based regulatory system can create friction in product approval and pricing adjustments, especially when rate increases are necessary to cover rising loss costs. Changes in insurance laws, regulations, or accounting standards, as well as potential legal system abuse beyond social inflation, pose ongoing challenges that can impact RLI's operations, compliance costs, and profitability. Furthermore, the company faces risks related to regulatory disclosures, where omissions could raise concerns among stakeholders regarding compliance and potentially harm investor confidence and market reputation.

3. Intense Competition and Pricing Pressure: RLI Corp. operates within a dynamic and competitive specialty insurance sector, contending with both large, diversified insurance groups and other specialized providers. This intense competition across its various commercial and personal lines can lead to aggressive pricing strategies from competitors, pressure on premium rates, potential reductions in market share, and ultimately, decreased profitability. While RLI's strategic focus on niche markets and disciplined underwriting helps mitigate some of this pressure, a prolonged "soft" market with declining premium rates could stifle its growth prospects.

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RLI Corp. participates in several segments of the insurance market. The addressable market sizes for its main products and services, primarily for the U.S. and global regions, are detailed below:

• Reinsurance: The global reinsurance market was valued at approximately USD 621.39 billion in 2025 and is projected to grow to about USD 673.28 billion in 2026 and USD 1,403.7 billion by 2034. North America is anticipated to account for nearly 39% of the global market share in 2026. The U.S. market for reinsurance generated approximately USD 137.7 billion in revenue in 2025.
• Surety Bonds: The global surety market was estimated at USD 19.14 billion in 2024 and is projected to grow from USD 19.79 billion in 2025. The U.S. surety industry writes approximately USD 7-9 billion in premiums annually. North America is the largest market for surety bonds, accounting for approximately 60% of the global share.
• Commercial General Liability Insurance: The U.S. liability insurance market was approximately USD 107.40 billion in 2024. Commercial general liability insurance made up 35% of the total U.S. liability insurance sector in 2023, which was over $140 billion, indicating a market size of approximately $49 billion for U.S. commercial general liability in 2023. The global liability insurance market size was calculated at USD 291.86 billion in 2024.
• Professional Liability/Errors and Omissions (E&O) Insurance: The global professional liability insurance market size is estimated at USD 51.42 billion in 2026 and is expected to reach USD 69.23 billion by 2035. The U.S. market for professional liability accounted for 45% of the total U.S. liability insurance market in 2024, representing approximately USD 48.33 billion.
• Commercial Auto Insurance: The market size of commercial auto insurance in the U.S. was $79.3 billion in 2024 and is estimated at $80.1 billion in 2025. The global commercial auto insurance market is projected to grow from USD 188.44 billion in 2025.
• Commercial Property Insurance: The global commercial property insurance market size reached USD 332.1 billion in 2025 and is expected to reach USD 711.4 billion by 2034. The commercial property insurance market in the U.S. generated US$254.9 billion in 2023.
• Marine Insurance (including Cargo, Hull, Protection & Indemnity, Marine Liability, Inland Marine): The global marine insurance market was valued at USD 32.31 billion in 2024 and is expected to reach USD 46.13 billion by 2032. The U.S. marine insurance market was valued at USD 8.76 billion in 2024. U.S. inland marine direct premiums written increased to $29.82 billion in 2021.
• Homeowners' and Dwelling Fire Insurance: The U.S. homeowners insurance market size was approximately $171.7 billion in 2024 and $173.1 billion in 2024. It is expected to increase from USD 175.60 billion in 2025 to USD 184.59 billion in 2026.
• Management Liability (Directors and Officers Liability, Fiduciary Liability, Employment Practice Liability): Null
• Environmental Liability: Null

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• Sustained Rate Increases Across Product Lines: RLI anticipates continued revenue growth through diligent rate increases, particularly in its Casualty segment. Management has expressed intentions to pursue double-digit rate increases in auto-related lines, building on recent hikes in auto liability and transportation rates. Furthermore, additional personal umbrella rate filings are planned, following a 12% increase in Q4 2025. The Property segment has also seen significant rate increases contributing to its growth.
• Strategic Expansion in Niche Specialty Markets and Product Diversification: RLI's growth strategy is underpinned by its continued focus on identifying and capitalizing on market opportunities within niche specialty insurance segments. This includes deepening its presence in core markets and introducing new products, such as those for moving and storage, to expand its diversified product portfolio. Personal umbrella and surety segments have been highlighted as key engines for growth and profitability.
• Growth in Net Investment Income: A significant contributor to RLI's overall earnings and indirectly to its capacity for growth is its expanding net investment income. The company aims to capitalize on fixed-income opportunities, with purchase yields currently exceeding the portfolio's existing book yield. This disciplined investment approach, supported by strong operating cash flow and a favorable interest rate environment, is expected to continue enhancing net investment income.
• Strategic Investments in Technology and Operational Efficiency: RLI is committed to ongoing technology investments aimed at enhancing customer experience and improving operational efficiency. The company also pursues strategic technology partnerships, such as leveraging telematics data. These investments are crucial for maintaining a competitive edge and supporting profitable growth.
• Strengthening and Leveraging Distribution Partnerships: RLI emphasizes strengthening relationships with its existing distribution partners, including wholesale brokers, independent agents, and carrier partners. These alliances are vital for expanding market reach and driving premium generation within its specialized markets.

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Capital Allocation Decisions (Last 3-5 Years)

Share Repurchases

• RLI's net common equity issued/repurchased figures have been minimal or near zero over the last few years. For instance, in 2025, net common equity issued/repurchased was $0.001 billion, and in 2024, it was -$0.002 billion, indicating very limited net share repurchase activity.
• "Share buy-backs" are listed as a use of cash flow from financing activities, though specific dollar amounts for authorized or executed repurchases beyond the net common equity figures were not readily available in the provided information.

Share Issuance

• RLI offers a Direct Stock Purchase and Dividend Reinvestment Plan, allowing for ongoing share issuance, though no specific dollar amounts for overall issuances were provided.
• Shares are also issued under stock option plans as a source of cash flow from financing activities.
• On January 15, 2025, RLI executed a two-for-one stock split, which increased the number of shares outstanding but did not represent a capital-raising share issuance.

Outbound Investments

• RLI maintains a conservative investment portfolio with a target allocation of 80% bonds and 20% equities. As of June 30, 2025, the actual allocation included 31.8% corporate bonds, 17.4% government/agency securities, and 18.3% equities.
• As of December 31, 2025, 51% of RLI's shareholders' equity was invested in equities, an increase from 48% at year-end 2024, reflecting its strategy to grow book value through total return while prioritizing capital preservation.
• The company engages in strategic technology partnerships, such as with TruckerCloud for telematics data, to enhance its specialized insurance products and market expansion efforts.

Capital Expenditures

• RLI invested $1.8 million in capital expenditures in the fourth quarter of 2025, primarily to fund long-term assets and infrastructure.
• The company has consistently invested in technology, operational efficiencies, and data infrastructure to streamline processes and expand capabilities.