A.M. Best Co. has upgraded the issuer credit ratings (ICR) to “aa” from “aa-” and affirmed the financial strength rating (FSR) of A+ (Superior) of the members of RLI Group (RLI). Concurrently, A.M. Best has upgraded the ICR to “a” from “a-” of RLI’s publicly traded parent holding company, RLI Corp. [NYSE: RLI]. Additionally, A.M. Best has upgraded the ICR to “a” from “a-” of the $100 million 5.95% senior unsecured notes due 2014 of RLI Corp. The outlook for the ICRs and debt has been revised to stable from positive, while the outlook for the FSR is stable. All of the companies are domiciled in Peoria, IL. (See below for a detailed listing of companies).
In addition, A.M. Best has upgraded the FSR to A+ (Superior) from A (Excellent) and ICR to “aa-” from “a+” of Contractors Bonding and Insurance Company (CBIC) (Seattle, WA). The outlook for these ratings is stable.
The ICR upgrades of the members of RLI reflect RLI’s outstanding long-term operating profitability, superior capitalization and excellent business profile as one of the leading specialty property/casualty insurers in the United States. The excellent long-term operating performance is attributable to RLI’s well developed underwriting platform and strict adherence to established underwriting and pricing principles. Given the strong level of organic earnings, RLI has been able to dividend over $350 million over the last two years to return excess capital to RLI Corp. shareholders while maintaining a strong level of risk-adjusted capitalization.
The ratings also reflect RLI’s financial flexibility, which is derived from RLI Corp.’s low financial leverage and strong fixed charge coverage. At March 31, 2012, RLI Corp.’s unadjusted debt-to-capital ratio stood at a modest 12.5%.Partially offsetting these favorable rating factors is RLI’s above average equity leverage and the resulting susceptibility of earnings to the volatility of the financial markets.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV