Specialty insurance provider RLI (NYSE: RLI) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 6.8% year on year to $465.7 million. Its non-GAAP profit of $0.94 per share was 17.1% above analysts’ consensus estimates.

Is now the time to buy RLI? Find out by accessing our full research report, it’s free.

Company Overview

Founded in 1965 and named after its original focus on "replacement lens insurance" for contact lens wearers, RLI (NYSE: RLI) is a specialty insurance company that underwrites property, casualty, and surety products through wholesale brokers, independent agents, and carrier partnerships.

Revenue Growth

Insurers earn revenue three ways. The core insurance business itself, often called underwriting and represented in the income statement as premiums earned, is one way. Investment income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities is the second way. Fees from various sources such as policy administration, annuities, or other value-added services is the third. Luckily, RLI’s revenue grew at an exceptional 13.9% compounded annual growth rate over the last five years. Its growth beat the average insurance company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. RLI’s annualized revenue growth of 12.5% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, RLI reported year-on-year revenue growth of 6.8%, and its $465.7 million of revenue exceeded Wall Street’s estimates by 2.8%.

Net premiums earned made up 91.7% of the company’s total revenue during the last five years, meaning RLI lives and dies by its underwriting activities because non-insurance operations barely move the needle.

Net premiums earned commands greater market attention due to its reliability and consistency, whereas investment and fee income are often seen as more volatile revenue streams that fluctuate with market conditions.

Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking. Go here for access to our full report.

Book Value Per Share (BVPS)

Insurance companies are balance sheet businesses, collecting premiums upfront and paying out claims over time. The float–premiums collected but not yet paid out–are invested, creating an asset base supported by a liability structure. Book value per share (BVPS) captures this dynamic by measuring these assets (investment portfolio, cash, reinsurance recoverables) less liabilities (claim reserves, debt, future policy benefits). BVPS is essentially the residual value for shareholders.

We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality. While other (and more commonly known) per-share metrics like EPS can sometimes be lumpy due to reserve releases or one-time items and can be managed or skewed while still following accounting rules, BVPS reflects long-term capital growth and is harder to manipulate.

RLI’s BVPS grew at a decent 9% annual clip over the last five years. BVPS growth has accelerated recently, growing by 11.8% annually over the last two years from $15.49 to $19.35 per share.

Over the next 12 months, Consensus estimates call for RLI’s BVPS to grow by 8.8% to $20.39, mediocre growth rate.

Key Takeaways from RLI’s Q4 Results

It was good to see RLI beat analysts’ EPS expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. On the other hand, its book value per share missed. Overall, this print had some key positives. The market seemed to be hoping for more, and the stock traded down 1.4% to $58.26 immediately following the results.

Should you buy the stock or not? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).