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RLI CORP.: SECOND QUARTER EARNINGS INCREASE 11 PERCENT FROM SAME PERIOD IN 1992

 PEORIA, Ill., July 29 /PRNewswire/ -- RLI Corp. (NYSE: RLI) reported today net earnings for the second quarter 1993 of $3.8 million ($.66 per share) on gross sales (consisting of gross premiums written, non- insurance sales revenue and net investment income) of $70.4 million.
 For the same period in 1992, net earnings were $3.4 million ($.60 per share) on gross sales of $59.4 million. Operating earnings, net of realized capital gains (losses) were $.65 per share for the second quarter 1993 compared $.60 per share during the same period last year.
 For the first six months of 1993, consolidated net income was $8.4 million ($1.46 per share) on gross sales of $131.9 million. For the same period in 1992, net earnings were $7.3 million ($1.28 per share) on gross sales of $115.2 million. Operating earnings, excluding realized capital gains (losses) and cumulative effect of an accounting change, totalled $1.17 per share for the first six months of 1993, compared to $1.26 per share reported for the same period in 1992. The decrease in operating earnings was primarily due to an increase in catastrophe reinsurance costs, which were partially offset by increased investment income.
 On July 23, 1993, RLI Corp. commenced a public offering through Merrill Lynch & Company of $46 million of 6 percent convertible debentures due July 15, 2003. The majority of the proceeds will be contributed to RLI's insurance subsidiaries to increase underwriting capacity and facilitate expansion of the business. In connection with the offering, the company restated its 1990, 1991, 1992, and 1993 financial statements to recognize as an asset for amounts due from reinsurers related to experience to date under multiple-year retrospectively rated reinsurance contracts.
 During the second quarter of 1993, Mt. Hawley Insurance Company, an insurance subsidiary, had its A.M. Best Company, Inc. rating upgraded to "A" (Excellent) from "A-" (Excellent). The other insurance subsidiary, RLI Insurance Company had its rating upgraded to "A" (Excellent) during 1992.
 Net investment income, excluding realized gains (losses) for the second quarter 1993 reached $3.6 million, rising 12.9 percent above last year's second quarter $3.2 million. For the six months 1993, net investment income reached $7.1 million, a 12.4 percent increase over the $6.3 million reported during the first six months of 1992.
 "Gross premium, especially in the commercial property lines, during the last quarter improved in volume and price. Premium written was up 21.5 percent," said Gerald D. Stephens, president and chief executive officer. "With our new higher statutory surplus made available by the recent bond issue, the company will be able to absorb a much higher rate of growth at a time when prices are rising."
 Other financial highlights for the second quarter include:
 -- Gross sales grew 18.5 percent to $70.4 million from $59.4 million the same quarter the year before. Gross insurance premiums written expanded 21.5 percent to $63.9 million from $52.6 million. Net premiums written increased 24.1 percent to $36.0 million from $29.0 million.
 -- Realized investment gains during the second quarter were $55,000 compared with $56,000 posted in the second quarter last year.
 -- The insurance operations combined ratio was 99.3 percent for the first six months compared to 95.8 percent for the same period last year and for the entire year 1992. The 1993 loss ratio for the first six months increased to 61.5 percent from 58.6 percent for the same period in 1992, and the expense ratio also increased to 37.8 percent from 37.2 percent during the same period.
 -- At June 30, 1993, shareholders' equity rose to $130.4 million ($22.30 per share) up 11.1 percent compared to year-end 1992.
 RLI Corp., through its insurance subsidiaries underwrites selected property and casualty insurance products. Another subsidiary, RLI Professional Technologies, Inc., markets practice automation systems, contact lenses and related products to the ophthalmic industry.
 RLI Corp.
 Operating Results
 Six months ended
 June 30 1993 1992 Pct. Change
 Gross sales $131,877,968 $115,151,377 15
 Total revenue 70,503,985 60,010,024 17
 Net earnings before
 cumulative effect of
 accounting change 6,784,086 7,309,826 (7)
 Net earnings 8,449,086 7,309,826 16
 Net earnings per share
 before cumulative effect
 of accounting change 1.17 1.28 (9)
 Net earnings per share 1.46 1.28 14
 Weighted average number of
 shares 5,781,149 5,698,216 ---
 Second quarter ended
 June 30 1993 1992 Pct. Change
 Gross sales 70,382,403 $59,384,632 19
 Total revenue 36,749,810 31,917,547 15
 Net earnings 3,813,451 3,438,444 11
 Net earnings per share .66 .60 10
 Weighted average number of
 shares 5,800,202 5,717,193 ---
 RLI Corp. is traded on the New York Stock Exchange, symbol RLI.
 -0- 7/29/93
 /CONTACT: James E. Zogby, treasurer of RLI, 309-693-5880/
 (RLI)


CO: RLI Corp. ST: Illinois IN: INS SU: ERN

MP-MJ -- PH010 -- 7428 07/29/93 10:58 EDT
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Date:Jul 29, 1993
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