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.