RLI - Earnings call transcript Q3 2017

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Operator

Good morning, and welcome ladies and gentlemen to the RLI Corp Third Quarter Earnings Teleconference. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open the conference up for questions and answers after the presentation.

Before we get started, let me remind everyone that through the course of the teleconference, RLI management may make comments that reflect their intentions, beliefs and expectations for the future.

As always, these forward-looking statements are subject to certain risk factors, which could cause actual results to differ materially. listed Annual company’s be Form are including SEC reviewed factors the in XX-K, risk in various the filings, carefully. These which should Securities contains has Exchange third company filed Form with The a quarter results. Commission press the the that release announcing X-K and share make financial per results. operations, management and may to earnings non-GAAP during references RLI which call are the operating earnings from of measures or earnings net after-tax earnings and per gains earnings realized the operating operations of share RLI’s consist of after elimination investment losses. from believes but comparable management operating reporting companies’ gauging is core operating in RLI’s of this useful may measure performance definitions earnings. across to periods, be not other The Form earnings net X-K earnings. operating and reconciliation contains between available The the at company’s Form website and X-K release are at www.rlicorp.com. press President Development, will of Corporate I the RLI’s turn now Mr. conference over Vice to Jacoby. Aaron sir. go Please ahead,

Aaron Jacoby

to to Good earnings XXXX. the Thank quarter for the Welcome you. RLI morning everyone. of third call

Michael, Financial call President and Brown, opening on Chief today’s some and Joining to market Craig call brief going quarter’s results. will and Tom first Operating comments over Then, are Senior conditions. Officer Chief about Kliethermes, to talk financial me and Tom give Officer. turn to and operations Jon the CEO; the on Craig President I’m Vice Chairman

and Next, some we’ll the Jon call Tom? will questions open finish with comments. up to closing

Tom Brown

you, Thank Aaron morning everyone. and good

activity Stating of million million net in hurricane points, in taking noted these $X.XX our ratio million recorded million After net to million consideration Maria was drove of experienced contributed the the was from reserve primarily share. of announced hitting impact performance by modestly. be last expenses in although quarter. As net the events. from the the previously development HIM experienced to hurricanes, of earnings segment, $XX.X quarter, our the XX losses combined to in this which $XX per high our earnings evening, It or issued combined short losses for $XX property within $XX.X level pretax XXX obvious, overshadowed we ratio. Not release decreases which $XX order. equates We and range quarter to bonus casualty Irma and favorable operating third a in Harvey, also share achieved sharing-related we loss $X.XX and driven surety both per profit of a into with quarter

both property such segment Our are activity. $XX hurricane loss these after into player our driven Craig more But we the all add will underwriting within reported detail minutes. will as go a events these; these the in losses million on a were markets for E&S was a treaty driven events the by by strength long-term few property of Meanwhile I expectations in this and been quarter in property absent us. Florida last premium have down the product up X% major Texas versus gross exits marine. the year. and This X% and our RV segment property impact discussed segments would from was are previously for on

a continues the modest by up Turning XX% our from many space to relationship X% in our down to re-underwriting which unit, be the Premium transportation premium efforts to X% segment was for this to casualty. influenced was quarter, Casualty compared second in our Prime. decline of reinsurance continues quarter. with products E&S and in we the premium saw the particularly benefit new for in

certain ancillary a also amount include the two in losses X% had XX as a casually Excluding turned products oriented property points transportation exposures. highlighting Worth development. quarter that transportation the Casualty hurricane grew ratio, net last gross favorable reserve small written of of premium quarter. consist includes combined is in in which

which be quarter last drove these the by top Unfortunately year. competition, third turned XX versus Finally, plagued an our products surety during line impressive to segment X% in ratio. the decline combined continue

our businesses of surety many in as However, wins race. in steady the

good very as a income investments. X% quarter of and return by to X.X%. in We the a evidence had investment total growth Turning

that recently. income be for exchange. asset investment the a modest also base to disciplined slightly long-term revenue improved book key We the contributor have approach or effective tax allocation to invested year-to-date larger third value yields FX our higher benefit and the catastrophe While in remain quarter. believe portfolio Prime asset minority our and experienced But Not income. our as of year-to-date lower profile our achieved to to would reflective the with losses. in, pretax from income reductions positions continue some trend declined growth. in more due is All grow. levels majority underwriting quarter I given that to operating overlooked, Maui the Maui be in current million Jim to Jim, has $X.X contributed are I’ll earnings these The which operating we our of XX%, nine foreign $X.XX and businesses growth losses and months their in earnings the to rate has associated for related from note of offer resulting to rate of

For share portfolio model our the testaments that, I’ll with over And per is inclusive discipline. benefits and to dividends. business our X% underwriting of are of book of Craig? Each months, the call a figures up nine value and to these turn Craig. diversified the product

Craig Kliethermes

you, Thank morning Good Tom. everyone.

Despite soft grow operating in was managed events, couple quarter underperforming value result intentional a in to products. the mentioned, a these positive I’ll as well by book impacted Tom more from the From in X% quarter heavy which activity. As our of a continued of post as losses the discuss we the bit, top line standpoint, of pruning earnings. market quarter’s declined reflective conditions and premium storm

recreational Excluding our the X% and grew quarter. vehicle for top line the businesses catastrophe treaty, of discontinued

now efforts the top most behind us up in is improvement X%. you passed line of look which transportation If are

market impact products broadly rates non-catastrophe to very exposed testing expanding the exposed in broadening it profitability talent, basis, are on Whether is will and increases a our large underlying on get focus Our rate On rate positive development loss overall seen an feel continue coverages and be where solid products. is very On our but wherever majority most events relationships of available. to our yet and catastrophe the we and improving businesses, will adding quarter. to underwriters experience is to quarter’s needed. systems, getting underwriters not continue the favorable be

Our succeed footprint as broad itself. presents us opportunities differentiate underwriting market and to on in diversified all it turmoil themselves. positions our gives ready best discipline the underwriting that market conditions with coupled companies and to capitalize the Disruption

a Let by bit me provide detail more segment.

X% up segments the top XX X% was We up ratio quarter casualty posted combined Our line year-to-date. quarter. is and the for a for

rate has any in a closely stabilized. those products is for new obtained cautious unusual to where continue to as product quarter our activity. Transportation increase of experienced our has we loss continue adjust third and take our that We business to a added loss and portfolio products one approach We this consecutive well to as development necessary. double-digit monitor

re-underwriting completed for we it and now has have a near of feel down year-to-date. million full had the XX% the top is performing $XX quarter on significant the transportation a underwriting book We premium. breakeven. segment The and X% This was year now line casualty impact

care, approach cyber Hurricane landfall for last products and million this the loss the for quota authority, top also impact Insurance. Excluding pushed for from this have future. Collectively, adversely history, will quarter net have up a in products the The by health several line Maria category arrangement newer year-to-date. distant was property Irma significant The aggregate we segment that show quarter. recorded from have the was in into result position. line, including X% three our the added the with our our but result a years loss $XX X% yet cautious of storms for several underlying Prime and $XX to largest quarter liability, the be three new million products in loss Driving to quarter hurricanes million contribute to loss to Because was this obviously These had the added the our made largest resulted a year-to-date and season they they our the net as share bottom $XX binding the energy and impacted four segment third. growth impact we a in hurricane year-to-date. added and company’s casualty events. underlying the promise

products felt Based on in would current affected these decision. E&S assessment events our surprises. of were property of property exposure our we severe our All no impact most with the say were with there

South taking business estimated concentrations concentration. U.S. It risks. measured that among relatively losses and our Florida exposures business. industry areas both large insured are the Central of The We largest P&C and catastrophe the of to the exposed and product are are ROI for and proportional is in the at geographic Houston by true

of we commercial We our businesses number directly to also marine of We from rain wind limited Puerto offer almost hurricanes. and The to amount by driven damage a majority geographies cargo as have small write date the only impacted interruption wind in exclusively resulted Rico. coverage. coverages losses have flood, business in

Our detail resources us allowing significant, customer location it the to is and the to the gives resolution most high severely monitor deploy the storm where most data triage to happens, impacted us expected as be level damage reach sooner.

insured have limited service, provided adjusters we exceptional independent getting only to in Our locations. issues our as had have

and quickly to working diligently possible. claims inspect are pay and wherever We

their catastrophes as get Our customers number customers. they can make possible, in these soon one is mission so business of to serve as to type in our back sure continue

a the quarter but ratio down to Our for quarter. exceptional combined surety segments results, was top XX for continue line underwriting X% post the

exit Continued reduction the programs and to few accounts drive continue a the in and premium. competition of larger miscellaneous

keep deliver Overall positive to These us The our year. losses, discipline catastrophe underwriting results diversity Aaron. customers value turn quarter in opportunities well and you. our earnings, I’ll of support financial of us they post and resilience. portfolio, quarter as underwriting And tough make quality Our that our we our pretty position of grow and consistent in most ability Thank of discipline profit the positioned needed the managed continue financial for back while an remaining for in to the terms to risk to natural and despite the to different. product arise. operating demonstrate when book underwriters it our appetite management

Aaron Jacoby

call now the open for up can questions. We Craig. Thanks,

Operator

[Operator question Woods. Bruyette first you. And comes our Thank Arash Soleimani & Keefe, from Instructions] with

Arash Soleimani

just on Good loss in I morning. based wanted Hi. to casualty. the ratio touch core

you loss Tom came But still about actually year-over-year? up points. even think CAT loss I Can of two uptick when ratio points there driving what’s said that I back you basis core is from So think about talk XXX the ratio exposure.

Craig Kliethermes

Arash. This Sure, Craig. is

I approach of very not premium to – contributing my We products those new earn certainly a new take are that have those. and tend now number we notes, a premium with to think record we that products. segment, don’t I fair we’re in long track cautious have new since starting to casualty just the So mentioned products, to book we’re a

little and a looked our wheels the a to area, cautiously recall would businesses. at all little after And and since booked broader Our offers typically business book that businesses personal and package third that a quarter had our of we’ve we we’ve then, also last higher. much in development taken if our – in we some which little health adverse any than more with umbrella energy our transportation, that product of have actually you care, cautious cyber, coverage businesses auto approach which include are And of our transportation wheels-exposed a bit exposure.

Arash Soleimani

property, Okay. yet rates Thanks. be big are How going there? And what’s I of on up meaningfully there. rates the hardening appetite know happen don’t if know in your we would to terms potentially

Craig Kliethermes

to we far as double could obviously, us tag for significant opportunity mean, say. book I as of if appetite, pretty I that mean, there’s again. Craig the But double it our I a would think size exposures, arises. the size our to our would have I – an the would CAT size then, And be decide is price book. double to the This of opportunity to that along Arash. of

Arash Soleimani

a large get Would get you increase there? excited? Would that rate get there? you So you X% even would of how XX%

Craig Kliethermes

No.

XX%. Let’s XX% where gets us last were talk XX% just we year. or back to

we think like were growing last crazy crazy don’t it year. I weren’t year, we to grow get like where to back it we just would last So

Arash Soleimani

what $XX.X And – it you you had was for the a All had different in was the $XX press you through between exposure, the but again? that was the release, said storm math? What million. right. go that Can million you

Tom Brown

ratio. the presented Consistent whether is prior we’ve we reserve years, Sure. Good profit-sharing how always related of net. obviously Brown. loss driven bonus Tom activity, are that it it’s as And define the combined development largely always the Arash and morning expense I the on and it’s net off ratio, the of that guess, ratio with expenses

net, million bonus the we’ve so So $XX effects performance-driven there large expenditures. with reported those the this of million, event, $XX.X delta is and

Arash Soleimani

Okay.

– it’s expense the actually products were on – casualty that rather within And the you So you can impacted that side, than about part that okay. savings some the talk loss would have of then of by storms? be

Craig Kliethermes

is Arash sure, this Craig.

are So rolled businesses, package our they get predominantly any of liability so those up casualty. coverages, into

offer they property some coverage. So – also do but

our that architects So operation liability we package through offered business, was and our other and professional engineers impacted. professionals, to

in so impacted. Our Florida, but Texas, CBIC package not was much business, in

small one business we authority our Our – had because had offer the losses. transportation And it some limited some recently binding started, some losses business, property coverages. also they property

Arash Soleimani

then in requeue that strength the remarks? prepared the driving I’ll you and what’s question about last earlier in is, And talking marine Okay. were

Craig Kliethermes

space. rate That we’re And and mean, was we’re – getting I inland construction seeing there. marine, it’s opportunity there’s some the in mostly

Arash Soleimani

the very Great, much Okay. you answers. thank for

Operator

from FBR. Randy with next And Binner question we’ll take now our

Randy Binner

Yes. Thanks. Good morning.

G&A. one So on

level, Was there? corporate really was at quarter. the anything low Just the in unusual it there

Tom Brown

it’s I’d back previous related. Randy, about go to bonus the the and Tom. morning, good profit-sharing question

home would, basically the employees would for some the majority that driver probably that decrease. So of the that corporate office, driver of – be

Randy Binner

then that was because of casualty, I wasn’t board. to And see it to across in I – loss go the on picks, it kind guess the I back Okay. want it just

think I’m to Your business, energy growth care, and be as mix focused I health increasingly is areas. of hearing, cyber going on

is a XX% new – the this to business an good. so going swing market? I underlying of aren’t should forward earnings a loss their of going running of kind assume it reflection ratio both? Or that suspect model, is this as soft is pretty something mix? around folks So in we is that’s part it Or

future the the loss to understand outcome might be? that Is want just the So out it trend new expected would understand – better. bit that to would season? those little kind better. ratio in when on What how Something risks a of

Craig Kliethermes

particularly that are let’s this growing want have do to, excess they is liability Randy, amount our say, liability products than faster mean, large the impact dollar those businesses, though, are they From aren’t an pure Craig. others. I probably a continue general or relative but you as cautious going mean, of mean better them. you take I come or said, start we’re better than as in when to to to mean, expected. approach. a seasoning, at think I make we losses grow to I fairly I sure

back we to a and don’t won’t get we growing to we them. take them First, where if up. have they But be don’t, reserves two, then into want position down put

to taken exposures. So approach really increase – again, saw quarter. and saw – that of little transportation if as look, – you of half we Things back activity our we go we about mentioned, after half of want the business. but have in is personal stabilized, very and third I a cautious driven And we’ve We’ve think don’t again. bit also what that happen last from I a in auto-related umbrella

successful cautious be to we’ve exposures. continue we been the that getting where in to try rate going And we’re get can. in in to auto-related continue area, So to rate

Randy Binner

have on one I Last cyber. is

me me risk get to for a because really for is it. around there’s precedent my cyber lot difficult head not of So to

approaching – frankly are see how cyber can your interested because an all track in you insured it’s of be we’d have a the it’s of And to – losses. because mitigate work as I probably much I’d record because underwriters, I unknown on risk. that approach growing So in cyber RLI area excellent have it I’d think you kind Kind with of and to lot didn’t in just just there’s doesn’t areas. other do not a you’re

Craig Kliethermes

want new, I tend over I we too mean, we end then you it toe – So our might and to into me deep fearful be in the to end anything time. sure not let Randy, like – the dip don’t wade here. let me make shallow

know, as million $X of now, cyber worth or right So we’ve don’t coverage. I written, $X million of

to I want And you fairly cautiously. So booking going don’t we’re again, think here. it nuts we’re

fairly high on it’s so it’s D&O highly cyber, excess focused of It’s now are out right regulated. industries And that really operation. basically writing sitting We’re our attachment.

that So like with have regulations. contractors, financial institutions, defense people government comply to

a that it a can’t amount They also with way, mean a certainly reinsurance. – We’re we’re doing have fair you in cautious want don’t it to doing it doesn’t very loss. of

we XX% in we willing – of I a here as don’t in, in But doing gain be we this anything will take don’t take crazy to premium going cede RLI, we of well over at profitable grow product, out will convinced be to you and And take line. we losses as more of think So character. as or think anything to the obviously, we’re XX% comfort, we as product it’s that risk like I want it. more time we’re

Tom Brown

Tom. to add Craig is inception. $X million. just million I’d $X did since This say That’s

the more range So think I $X it’s in million year-to-date.

Randy Binner

is comments. got All Okay, the helpful. Appreciate the it. colors

Operator

Dwelle take question our Markets. now RBC we’ll from And Capital with next Mark

Mark Dwelle

spend just Good a on you Yes. tax ##% morning. I rate truing Am full to the tax mentioned? understand kind of of the that really was the the to in benefit that quarter some tax I wanted portion the up comments second effective your Tom, first, to year-to-date rate.

Tom Brown

a good yes. that’s Mark, characterization,

to right? it the true is the loss of then attributing two If for quarter, here. compensation you the that earlier, third bit of have go a position. runs underwriting that slight or much about back a which as the quarter in position, talk mentioned, to is, is And did through It’s little months, effect the the up change in get things, the it equity-based nine a of didn’t part That XX% It there. accounting rate. effective stock-based really about we Craig is appreciation second loss to in full really

that’s many in then, there. largely investment left much, got tax-preferenced income items you’re so And the with

tax then million to you about month take, the full provision. the we nine result, And had it’s look So or $XX.X $XX.X QX, if of – a, give at look in about million. back you

there running the the delta what’s through So is quarter. third

Mark Dwelle

sense. Got it. That make

question, like question. time right? I Craig them both a been Tom and and times. premium excluding amount other, the wrong second The X% of one heard I feel property the And heard Maybe what X% number-ish one and I RV. of which growth was would both kind mentioned have the

Tom Brown

bit have x X% of Yes. a little had It’s might those We inconsistency. items.

Mark Dwelle

And wanted of got question. the reinsurance-oriented I then is last a kind question X%, to it. ask

if you’re property. to those during it general First, events. treaties remind me just your performed of in kind that about CAT thinking previously you how comment, renew in guess light reinsurance you of main when able relates then And to as for treaties you’re this how year’s

Craig Kliethermes

So is per-risk The Mark property and our this that’s main Kliethermes. renews both catastrophe Craig treaty treaty. X/X, our

treaty earthquake another We interested the are renews for property But X/X. X/X. also that you’re most have ones in

per As mean, I we I mean, with have going that far are relates we’re losses some – the as coverage we happy it the storm. to pretty or to the – performed expected. how loss as bought. as it And per-risk we think I

Our think is attachment as million point, earlier, on I that. $X we’ve disclosed

larger time So and treaty, – CAT approach some going we’re as – it’ll to be that the Irma, it’s that roofs, storm. will two, I can’t far CAT not But the fairly things treaty. to was we other that, treaty. wind get If largest there. It’s this determine. our the losses had to like And as wind-affected at actually as it be going CAT I’m we not I whether opine really anything, because close of mentioned, into take a going on event had in that to couple time, point

Mark Dwelle

much. very helpful Thanks color. Okay. That’s

Operator

Bobman question Capital And we’ll take from our next Returns. Ron now with

Ron Bobman

Thanks. Hi.

is the been maybe storytelling. to the your your have cyber your putting think shallow then and illustration toe end, end. the into than better in deep Thankfully, your underwriting I wading future, should

reinsurance so sort your numbers sounds little book program. storms? follow-up Mark’s current on loss I reported It per-risk question. the What on a the reinsurance had So of reflect recovery is recoverables reinsurance from only far, just as assume that the some reinsurance far like, side as it, of

Craig Kliethermes

number – and is what gross that our our Is effectively? between asking asking? you’re the You’re what’s difference which net

Ron Bobman

Yes. reinsurance the to Attributable recovery.

Craig Kliethermes

million. Less than $XX

Ron Bobman

thus it’s – whether reinsurers? it by more sort nontraditional Okay. is relatedly, collateral? any participants although per your property Thank traditional it’s then of treaty, you. risk, the are of broad CAT posting and your your I Or sort provided all And sort assume of

Craig Kliethermes

collateralized don’t We is reinsurance. of now, really don’t this as again, we use Craig – right

A traditional all CAT, using our We’re reinsurers, for rated A rated. plus highly or very rated mostly higher,

Ron Bobman

Appreciate Best luck. details. Thanks. the of

Operator

next And Billingsley Ken our question Point. with we’ll take from Compass now

Ken Billingsley

going you ahead to Good get morning. they lower how trying it just of set when range, are I be people it. you to were range wide, CAT your fare have watching and see guys that up. It wanted follow and to initial I the Obviously, others seems end initially, at you with was given. were the that the range of imagine early pretty to

different those Can end high the talk the kind of Another came came those maybe going early set about at of impact you – Travelers end. setting why what lower and out near when range? forward? estimates in that you was you will how the And

Jon Michael

Hey, that Ken, the Jon Michael. especially, early I came sense relatively in happened. just Yes, had we think, Maria early, out

it’s $XX And at to That’s we in we’re what done actually past, $XX the believe exact to to losses million. think came And think about million set our same not at the million. we we’ve I that $XX I I $XX ratio. within million, the set in Katrina, for – which range range it so where, dissimilar same at $XX it’s million ratio, that

them be We’re million. to $XX estimating

the wasn’t it midpoint above that of at of range, at it So was the just lower end the range.

Ken Billingsley

you’re so Or… this in time – For for – saying around?

Jon Michael

Yes.

million, our range we’re $XX this million. time the to For was pegging $XX million $XX and around, losses at

Ken Billingsley

for… adjusted that’s and then And for – then

Jon Michael

$XX.X the bonus other came out variable-type items to whatever For $XX.X down and compensation number million, million today.

Ken Billingsley

Okay.

was from what already that bonus accruals – anticipated. you had from adjusted the all that’s and loss down, moving million $XX So or

California for know your fires. then different fires. or out is California And earthquake. got standpoint question with a and the exposures you And there, Any I have business other Okay. regarding conditions just commercial I for

Craig Kliethermes

risks. in we I do Ken, mean, commercial Again, California. mostly exposures have

So – fairly and it’s spread.

concentration. matter significant But losses. have amount expect won’t will losses. I a already we’ve few out. any some fire the gets small we fact, it’s of have it think think as I I’d think size the of to hurricanes And had anything as going long the don’t don’t I put – So we to

Ken Billingsley

Great. Thank you.

Craig Kliethermes

gets long fire out. As put as the

Ken Billingsley

you. Thank right. All

Operator

And Bobman with next we’ll our take now Capital Returns. Ron from

Ron Bobman

Hi, thanks.

prepared you some You Obviously, And think I cargo don’t mentioned the and sort of mentioned I island, information, general gotten the the Rico But I’m assume some in business. devastation made color Puerto et provide remarks. just cetera. briefly, I your feedback. you I sort has nearly of communication, the know, you’ve impossible. of think, could sort Thanks. if of about claim some curious sort adjusters’ efforts access to access logistics

Craig Kliethermes

Sure. Ron Craig. this is

storms Now us. location. interruption so we – only a coverage, by it’s as the most access write that smallest stock it coverages or even buildings matter. would marine I third mentioned, to the was it’s for doesn’t not that Maria far, cargo only was of say there, distant difficult the business We cover has for and But

were side south to of late really independent we the the enough as the was don’t because side the to island, adjusters quickly the week. north claims able independent little south we last say, The on adjusters challenging. island island. did They finally about get the use staff. as a I’ll side just Now of more short adjust have our But of fairly

again, least to there. of we talked that claims pretty at about claims insured. where the So And the somebody the or the potential And at or have, to we have didn’t has there. that all either comfortable we’re we exposure – of location have lot a feel been we

somebody there’s not large portion there So the speak might a I my island interruption, and is understanding that of have can’t electricity. a that does lot covered because exposure that of to still I have business –

Ron Bobman

gentlemen. Thanks Right.

Operator

next take And Gutterman our question from Ian Balyasny. we’ll now with

Ian Gutterman

Hi. Thank you.

there First, know, And segment. can noticeably transportation the the guess of coming points higher I get margin. year-over-year? of profitable, that then you I are sort things transportation understand than I if obviously back through think can underlying, point maybe are starting that about goal the is issue? lot Is other Year-over-year, But the as to a, the bit it me secondly, to that call we’re see being you is segment us help mostly a I really on when a of business. guess we little accident there give three don’t without up, increases things better, to a year it transportation your and get And price reserves? as far a casualty

Craig Kliethermes

Craig. is this Ian,

booked scenario ask about said – spoke And we we businesses. products on we approach of since the to – to last a you – booking this the – several cautious To a are and book certainly, And mean, usually have new profitability, we middle case wheels-based those late year. – I never that took mentioned, We then You’d as products particularly the being year a more best product. do conservatively. book is underwriting fairly never underwriting – I brand-new breakeven. ever

And I the product. All as driving I be that, profit some mix mean, by continue that’s to you’re help. you is tell we’re really underwriting could to So obviously to driver. doesn’t adding focused on that going

there’s don’t our sense. that no We’re think, part incentive I not going long to grow any products and we motto, do mean, of anyway. that’s to not term, that makes

So and going can we’re is I the to tell going we’re get continue to could all you best can. to rate we continue drive where to we

Ian Gutterman

Jim’s Okay. also bit little growth lot you a of benefit. Got FX mentioned it, I The a year, got and of it. obviously Maui seen think this

type event. opposed As as guess, I onetime is do to a year year expect new well run we doing a – of think I assume But beyond we this first, rate it’s forward? we what plateau not XXXX? here? going kind similar should about level that maybe of in of Just how same strong similar and Or the of piece this growth think we is new this a sort

Jon Michael

future, Yes, the the what year, going Jim’s happens. Maui future. do just Jon to for you’re And had see what Michael. right. speak as They it’s have we’ll Really to a good have to can’t in

So.

Ian Gutterman

enough, enough. quickly then Fair the fair on surety. just And

curious You mentioned, did it that of kind this Or of I at even couple I’m the degree of get the think, competitive about tougher as competitiveness that. same quarter? conditions. last quarters? Is sort of just

Craig Kliethermes

it’s Yes, about regards in No, willing this credit there to mean, profile that – the in this level, other accounts and based do again. some is market do on to those I same it’s their are are people just things. risk Craig we’re willing not to that, just what terms,

effect that’s there had lost miscellaneous accounts. program some that wasn’t anymore exited. and was competitive us throughout that And then fit a a smaller in decided that’s – side particularly surety and we we’ve lingering good we’ve in larger And really the So a the for just – year.

Ian Gutterman

the to one, on – then some maybe to Okay. answer, Is just in it you’re you you would given of requires any I – material assume reinsurance reinsurers last to increase. take Got it. maybe And main your will this. treaty, not will listen price hitting treaty. question unreasonable think given But your kind – posturing be the back it your just this your if wouldn’t

Craig Kliethermes

stressed Obviously, our expect we’ve is that market. we the It’s again. what order reinsurers in with Craig

in well, pay as the say Florida – as we based more. we’ve still companies We of mean, some the a market, those certainly lower-attaching that we’re those on much of expect rate regards results, differentiation is obviously, little get some should can. that I underwriters going as been to would arguing and probably to I delivered in And

So rate so to to. have don’t we’re going they get

Ian Gutterman

right. Thank All sense. Make Right. you.

Operator

with And we’ll take Arash Woods. question our Soleimani next now & from Bruyette Keefe,

Arash Soleimani

loss wanted ratio. touch again to just I on the base Yes. casualty

out transportation. again, in CAT a get casualty. the comments the products about like ratio loss backing new And to XX% core So losses made the I there, around know you we and

for the kind term? that a reasonable of is near run So rate

Craig Kliethermes

quickly that’s I that the is as do probably mix I given we run the – – rate I didn’t mean it’s currently mean, have. the math but mean, Craig, Arash. as I probably this you,

jump then market more book loss well you we think obviously, certainly third If way what we last our conservative the we inflation and to be to We get we if than we quarter, again, most, as getting. businesses projections rate, we little in that I down. is, do cost something are the from and price our to But and as down. expect wheels-based would given before loss want before by to in up take the assumptions given it’s the get Now show-me I and true I now. so what we’re the a nature are would are than the getting price to we’re you – more changes see in think state, little happened to make that’s more trends cautious assume things going be better I’m cost a grew and – what right it things better. long-term go we impacted Missouri, regards sure think

Arash Soleimani

premiums that sense. segment casualty in Right. now remind That you’ve me, percentage book. annual your of And come you can after the of of kind kind pruned transportation what from make

Craig Kliethermes

Well, probably they’re of the is. about out whatever $XX million total

Arash Soleimani

Thank much. very you Okay.

Craig Kliethermes

I’d just an number. in-force say that’s

roughly. million $XX premium, in-force of So

Arash Soleimani

Okay.

basis an then. on that’s annual So

Okay, you. perfect. Thank

Operator

Jonathan are no if Mr. And back Michael. conference to I there further the questions, now turn will

Jon Michael

our in put get we’re us to their in to talk hurricanes in We’ll need, especially all you that I that as back that’s say Bye. you businesses in Thank and all back that’s for to care together, all attending. you business. the an to what their to Thanks for, their customers us be wildfires provide risks of earthquake – manage to fall The and to that. to and our our them associates, for the we’ve and rebuild they’ve business at take team, this independent claims reminds our in thank for them time quarter. California that next again listening. of to certainly experienced and Mexico opportunity our there of with helped customers adjusters rebuild help want and

Operator

wish And All XXX-XXX-XXXX, do our Thank conference concludes so you for with replay have may This an a participating ladies of by and and gentlemen, nice for this disconnect. the all number dialing ID call, you today. day. now parties access for to if XXXXXXX. you may

RLI (RLI) 19 Oct 172017 Q3 Earnings call transcript