Peoria, Ill.-based surplus lines insurer RLI Corp. today received an upgrade of its senior debt rating to Baa2 from Baa3, and an insurance financial strength ratings of its insurance subsidiaries to A2 from A3 from Moody’s Investors Service.
The upgrade was based on the insurer’s continued strong operating performance and capital growth over the past several years, resulting in favorable comparisons to similarly-rated peers, according to Moody’s.
Although increased competition could mean RLI’s gross and net premiums written will continue to contract, Moody’s expects RLI to continue to produce good results, though combined ratios could go higher as the company further focuses on casualty business.
RLI’s adjusted debt-to-capital ratio ended second-quarter 2005 at 17.2 percent, down from 19.5 percent at year-end 2004.
For the six months ended June 30, 2005, RLI reported net income of $64 million and a combined ratio of 77.4 percent. As of June 30, 2005, shareholders’ equity was $677 million.
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