<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FINANCIAL STATEMENTS IN THE RLI CORP. FORM 10Q FOR THE PERIOD
ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
                             
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1998
<PERIOD-END>                               SEP-30-1998
<DEBT-HELD-FOR-SALE>                            42,604
<DEBT-CARRYING-VALUE>                          293,669
<DEBT-MARKET-VALUE>                            306,547
<EQUITIES>                                     257,989
<MORTGAGE>                                           0
<REAL-ESTATE>                                        0
<TOTAL-INVEST>                                 623,203
<CASH>                                               0
<RECOVER-REINSURE>                              42,643
<DEFERRED-ACQUISITION>                          22,473
<TOTAL-ASSETS>                                 958,002
<POLICY-LOSSES>                                248,886
<UNEARNED-PREMIUMS>                            136,298
<POLICY-OTHER>                                       0
<POLICY-HOLDER-FUNDS>                                0
<NOTES-PAYABLE>                                 38,791
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                        12,935
<OTHER-SE>                                     254,735
<TOTAL-LIABILITY-AND-EQUITY>                   958,002
<PREMIUMS>                                     105,951
<INVESTMENT-INCOME>                             17,866
<INVESTMENT-GAINS>                                 671
<OTHER-INCOME>                                   1,428
<BENEFITS>                                      47,805
<UNDERWRITING-AMORTIZATION>                     34,411
<UNDERWRITING-OTHER>                            12,324
<INCOME-PRETAX>                                 26,952
<INCOME-TAX>                                     6,772
<INCOME-CONTINUING>                             20,180
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    20,180
<EPS-PRIMARY>                                     1.91
<EPS-DILUTED>                                     1.89
<RESERVE-OPEN>                                 242,554
<PROVISION-CURRENT>                             47,812
<PROVISION-PRIOR>                                  800
<PAYMENTS-CURRENT>                               7,381
<PAYMENTS-PRIOR>                                34,899
<RESERVE-CLOSE>                                248,886
<CUMULATIVE-DEFICIENCY>                              0