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 PEORIA, Ill., Oct. 26 /PRNewswire/ -- RLI Corp. (NYSE: RLI) said that due to a lack of capacity in the property insurance markets and increasing rates, and RLI's growing acceptance in specialty line coverages, premium production advanced 39 percent in the third quarter 1993 compared to the same quarter last year. Gross sales during these same periods rose to $83.7 million from the $61.1 million reported in the previous year.
 Net investment income, excluding realized investment gains, for the third quarter 1993 increased to $4.5 million, 40.6 percent above last year's third quarter results of $3.2 million. For the first nine months, net investment income was $11.5 million compared to $9.5 million for the same period of the prior year. During the third quarter 1993, the company received a $920,000 interest payment on a federal income tax refund related to settlement of 1986 through 1988 tax returns. The advance in investment income (excluding the tax refund), in a period of declining interest rates, was due primarily to the growth in premiums creating more invested assets. Invested assets advanced to $372 million compared to $283 million at year end 1992. This growth includes $43 million of internally generated funds, and proceeds of this July's $46 million 6 percent convertible debenture issue.
 Midwestern flood claims previously announced in mid August are now estimated to cost $3.3 million, net after tax ($.57 per share). As a result of these claims, net earnings for the third quarter are $1.9 million ($.32 per share) compared to $4.1 million ($.71 per share) for the same period in 1992. Operating earnings are $.31 per share for the third quarter of 1993 compared to $.67 per share for the same period in 1992.
 Absent the flood claims, per share operating earnings would have recorded a 31 percent advance during the quarter over the same period last year. Recent property rate increases achieved by the company and increased value are beginning to have an impact.
 Net earnings for the nine month period are $10.3 million ($1.78 per share) as compared to $11.4 million ($1.99 per share) for the same period in 1992. Operating earnings, excluding realized investment gains and cumulative effect of accounting change, are $1.48 per share for the first nine months of 1993 compared to $1.93 per share reported for the same period in 1992. As discussed above, the decrease is primarily due to Midwestern flood claims, but is also affected by increased catastrophe reinsurance costs which were partially offset by increased property insurance rates.
 Gerald D. Stephens, president and CEO of the company, stated, "The quarter was encouraging because of the increased property rates achieved. The resulting increase in premium volume should bode well for future periods as our in-force book of business is earned."
 The company's board or?ectors, in recognition of the quality of earnings, increased the quarterly cash dividend from $.13 per share to $.14 per share effective with the Oct. 15, 1993 payment.
 RLI began paying dividends on its common shares in 1976, and has increased each year's cash dividend since that time. The company is in an elite and small group of U.S. companies (less than 400) that have paid and increased dividends 17 years in a row. Since 1976, the comp ? has paid approximately $25 million in dividends to shareholders, and has been able to increase its GAAP book value from $5.6 million in 1976 to the current $135 million.
 Other Financial Highlights for the third quarter include:
 -- RLI Corp. issued $46 million in 6 percent convertible debentures due July 15, 2003 through Merrill Lynch and Co. The majority of the proceeds have been contributed to the insurance subsidiaries to increase underwriting capacity and facilitate expansion of the business.
 -- The insurance operations' statutory combined ratio was 103.3 for the first nine months compared to 96.2 for the same period last year. The 1993 loss ratio for the first nine months increased to 64.4 from 59.4 for the same period in 1992, and the expense ratio also increased to 38.9 from 36.8 during the same period. The third quarter flood losses contributed 2.2 points to both the loss and combined ratios. (Note: The above ratios do not include contingent commission income from the company's multiple-year retrospectively rated reinsurance contracts. Such commissions have not been recorded under statutory accounting practices, which has resulted in higher statutory combined and expense ratios).
 -- Third quarter gross premiums written expanded 38.7 percent to $76 million from $54.8 million. Net premiums written increased 30.5 percent to $38 million from $29.1 million. Since written premiums are generally earned over a twelve month period, this year's increase will favorably impact next year's earned premium.
 -- At Sept. 30, 1993, shareholders' equity rose to $135 million ($22.91 per share) up 15 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., a wholesale optical goods distributor, markets practice automation systems, contact lenses and related products to the ophthalmic industry.
 Operating Results
 Nine months ended Sept. 30 1993 1992 Pct. change
 Gross sales $215,588,610 $176,275,828 22
 Total revenue 109,364,169 93,299,099 17
 Net earnings before
 cumulative effect of
 accounting change 8,651,500 11,375,780 (24)
 Net earnings 10,316,500 11,375,780 (9)
 Net earnings per share
 before cumulative effect
 of accounting change $ 1.49 $ 1.99 (25)
 Net earnings per share 1.78 1.99 (11)
 Weighted average no. of shares 5,803,467 5,715,708
 Third quarter ended Sept. 30 1993 1992 Pct. change
 Gross sales $ 83,710,642 $ 61,124,451 37
 Total revenue 38,860,184 $ 33,289,075 17
 Net earnings 1,867,414 $ 4,065,954 (54)
 Net earnings per share .32 .71 (55)
 Weighted average no. of shares 5,859,512 5,750,312
 RLI Corp. is traded on the New York Stock Exchange, symbol RLI.
 -0- 10/26/93
 /CONTACT: James E. Zogby, treasurer of RLI Corp., 309-693-5880/

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

LG-TS -- NY026 -- 6801 10/26/93 10:17 EDT
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Publication:PR Newswire
Date:Oct 26, 1993

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