# EDGAR Filing Document

**Accession Number:** 0000084246
**File Stem:** 0001558370-25-009525
**Filing Date:** 2025-7
**Character Count:** 209878
**Document Hash:** 5e9c99354dfce11fba9b923c281d88cf
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001558370-25-009525.hdr.sgml**: 20250724

**ACCESSION NUMBER**: 0001558370-25-009525

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 73

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250724

**DATE AS OF CHANGE**: 20250724

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** RLI CORP
- **CENTRAL INDEX KEY:** 0000084246
- **STANDARD INDUSTRIAL CLASSIFICATION:** FIRE, MARINE & CASUALTY INSURANCE [6331]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 370889946
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-09463
- **FILM NUMBER:** 251146710

**BUSINESS ADDRESS:**
- **STREET 1:** 9025 N. LINDBERGH DRIVE
- **CITY:** PEORIA
- **STATE:** IL
- **ZIP:** 61615
- **BUSINESS PHONE:** 3096921000

**MAIL ADDRESS:**
- **STREET 1:** 9025 N. LINDBERGH DRIVE
- **CITY:** PEORIA
- **STATE:** IL
- **ZIP:** 61615

?xml version='1.0' encoding='ASCII'? RLI Corp_June 30, 2025

[**Table of Contents**](#TOC)

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

**(Mark One)**

&nbsp;&nbsp;&nbsp;&nbsp;**☒** **Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** 

**For the quarterly period ended June 30, 2025**

**or**

**☐** **Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**For the transition period from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to**

**Commission File Number:&nbsp;&nbsp;&nbsp;&nbsp; 001-09463**

**RLI Corp.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **37-0889946** |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
| **9025 North Lindbergh Drive, Peoria, IL** | **61615** |
| (Address of principal executive offices) | (Zip Code) |

---

**(309) 692-1000**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| **Common Stock $0.01 par value** | **RLI** | **New York Stock Exchange** |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ <br> Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of July 15, 2025, the number of shares outstanding of the registrant's Common Stock was 91,829,470.

------

[**Table of Contents**](#TOC)

**Table of Contents**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| [Part I - Financial Information](#PARTIFINANCIALINFORMATION_275692) | [Part I - Financial Information](#PARTIFINANCIALINFORMATION_275692) | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 1.](#Item1FinancialStatements_402671) | [Financial Statements](#Item1FinancialStatements_402671) | 3 |
|  | [Condensed Consolidated Statements of Earnings and Comprehensive Earnings for the Three and Six-Month Periods Ended June 30, 2025 and 2024 (unaudited)](#StatementsofEarningsandComprehensiveEarn) | 3 |
|  | [Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 (unaudited)](#ConsolidatedBalanceSheets_169475) | 4 |
|  | [Condensed Consolidated Statements of Shareholders' Equity for the Three and Six-Month Periods Ended June 30, 2025 and 2024 (unaudited)](#ShareholdersEquity_512397) | 5 |
|  | [Condensed Consolidated Statements of Cash Flows for the Six-Month Periods Ended June 30, 2025 and 2024 (unaudited)](#CashFlows_656103) | 6 |
|  | [Notes to Unaudited Condensed Consolidated Financial Statements](#NOTESTOUNAUDITEDCONDENSEDCONSOLIDATEDINT) | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 2.](#Item2ManagementsDiscussionandAnalysisofF) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#Item2ManagementsDiscussionandAnalysisofF) | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 3.](#Item3QuantitativeandQualitativeDisclosur) | [Quantitative and Qualitative Disclosures about Market Risk](#Item3QuantitativeandQualitativeDisclosur) | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 4.](#Item4ControlsandProcedures_60157) | [Controls and Procedures](#Item4ControlsandProcedures_60157) | 36 |
| [Part II - Other Information](#PARTIIOTHERINFORMATION_131534) | [Part II - Other Information](#PARTIIOTHERINFORMATION_131534) | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 1.](#Item1LegalProceedings) | [Legal Proceedings](#Item1LegalProceedings) | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 1a.](#Item1ARiskFactors) | [Risk Factors](#Item1ARiskFactors) | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 2.](#Item2UnregisteredSalesofEquitySecurities) | [Unregistered Sales of Equity Securities and Use of Proceeds](#Item2UnregisteredSalesofEquitySecurities) | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 3.](#Item3DefaultsUponSeniorSecurities) | [Defaults upon Senior Securities](#Item3DefaultsUponSeniorSecurities) | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 4.](#Item4MineSafetyDisclosures) | [Mine Safety Disclosures](#Item4MineSafetyDisclosures) | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 5.](#Item5OtherInformation_725022) | [Other Information](#Item5OtherInformation_725022) | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 6.](#Item6Exhibits_230751) | [Exhibits](#Item6Exhibits_230751) | 38 |
| [Signatures](#SIGNATURES_110124) | [Signatures](#SIGNATURES_110124) | 39 |

---

[**Table of Contents**](#TOC)

#### PART I - FINANCIAL INFORMATION

#### Item 1. Financial Statements
RLI Corp. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings

(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months** | **For the Three Months** | **For the Six Months** | **For the Six Months** |
| | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** |
| <br>**(in thousands, except per share data)** | **2025** | **2024** | **2025** | **2024** |
| Net premiums earned | $401904 | $379065 | $800249 | $739741 |
| Net investment income | 39418 | 33961 | 76144 | 66808 |
| Net realized gains (losses) | 15004 | (192) | 29916 | 5802 |
| Net unrealized gains on equity securities | 43500 | 3608 | 1182 | 48922 |
| &nbsp;&nbsp;Consolidated revenue | $499826 | $416442 | $907491 | $861273 |
| Losses and settlement expenses | 184578 | 167799 | 361816 | 311623 |
| Policy acquisition costs | 125502 | 113921 | 249189 | 224375 |
| Insurance operating expenses | 29594 | 27321 | 56468 | 56024 |
| Interest expense on debt | 1350 | 1604 | 2685 | 3222 |
| General corporate expenses | 4754 | 4140 | 7702 | 9150 |
| &nbsp;&nbsp;Total expenses | $345778 | $314785 | $677860 | $604394 |
| Equity in earnings of unconsolidated investees | 2467 | 1646 | 5515 | 6415 |
| Earnings before income taxes | $156515 | $103303 | $235146 | $263294 |
| Income tax expense | 32179 | 21311 | 47596 | 53402 |
| &nbsp;&nbsp;Net earnings | $124336 | $81992 | $187550 | $209892 |
| Other comprehensive earnings (loss), net of tax | 18701 | (7843) | 48731 | (20514) |
| &nbsp;&nbsp;Comprehensive earnings | $143037 | $74149 | $236281 | $189378 |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic net earnings per share | $1.35 | $0.90 | $2.04 | $2.30 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted net earnings per share | $1.34 | $0.89 | $2.03 | $2.27 |
| Weighted average number of common shares outstanding: |  |  |  |  |
| &nbsp;&nbsp;Basic | 91827 | 91474 | 91799 | 91417 |
| &nbsp;&nbsp;Diluted | 92518 | 92358 | 92512 | 92338 |

---

See accompanying notes to the unaudited condensed consolidated financial statements.

[**Table of Contents**](#TOC)

RLI Corp. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

---

| | | |
|:---|:---|:---|
| <br>**(in thousands, except share and per share data)** | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
| ASSETS |  |  |
| &nbsp;&nbsp;Investments and cash: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fixed income: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale, at fair value | $3420761 | $3175796 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(amortized cost of $3,573,679 and allowance for credit losses of $245 at 6/30/25) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(amortized cost of $3,391,159 and allowance for credit losses of $197 at 12/31/24) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity securities, at fair value (cost - $487,656 at 6/30/25 and $417,897 at 12/31/24) | 810959 | 736191 |
| &nbsp;&nbsp;&nbsp;&nbsp;Short-term investments, at cost which approximates fair value | 115662 | 74915 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other invested assets | 57266 | 57939 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash | 21414 | 39790 |
| &nbsp;&nbsp;Total investments and cash | $4426062 | $4084631 |
| &nbsp;&nbsp;Accrued investment income | 31113 | 28319 |
| &nbsp;&nbsp;Premiums and reinsurance balances receivable, net of allowances for uncollectible amounts of $23,325 at 6/30/25 and $22,932 at 12/31/24 | 252931 | 230534 |
| &nbsp;&nbsp;Ceded unearned premium | 121090 | 124955 |
| &nbsp;&nbsp;Reinsurance balances recoverable on unpaid losses and settlement expenses, net of allowances for uncollectible amounts of $10,174 at 6/30/25 and $9,580 at 12/31/24 | 761719 | 755425 |
| &nbsp;&nbsp;Deferred policy acquisition costs | 180765 | 166214 |
| &nbsp;&nbsp;Property and equipment, at cost, net of accumulated depreciation of $80,332 at 6/30/25 and $76,330 at 12/31/24 | 41722 | 43172 |
| &nbsp;&nbsp;Investment in unconsolidated investees | 61183 | 56477 |
| &nbsp;&nbsp;Goodwill and intangibles | 53562 | 53562 |
| &nbsp;&nbsp;Income taxes-deferred | - | 7793 |
| &nbsp;&nbsp;Other assets | 60660 | 77720 |
| TOTAL ASSETS | $5990807 | $5628802 |
| LIABILITIES AND SHAREHOLDERS' EQUITY |  |  |
| Liabilities |  |  |
| &nbsp;&nbsp;Unpaid losses and settlement expenses | $2806889 | $2693470 |
| &nbsp;&nbsp;Unearned premiums | 1034176 | 984140 |
| &nbsp;&nbsp;Reinsurance balances payable | 32773 | 44681 |
| &nbsp;&nbsp;Funds held  | 120019 | 97380 |
| &nbsp;&nbsp;Income taxes-current | 10009 | 749 |
| &nbsp;&nbsp;Income taxes-deferred | 3475 |  |
| &nbsp;&nbsp;Debt | 100000 | 100000 |
| &nbsp;&nbsp;Accrued expenses | 80958 | 124242 |
| &nbsp;&nbsp;Other liabilities | 67847 | 62173 |
| TOTAL LIABILITIES | $4256146 | $4106835 |
| Shareholders' Equity |  |  |
| &nbsp;&nbsp;Common stock ($0.01 par value) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;(Shares authorized - 400,000,000) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;(137,689,898 shares issued, 91,829,470 shares outstanding at 6/30/25) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;(137,598,560 shares issued, 91,738,132 shares outstanding at 12/31/24) | $1377 | $1376 |
| &nbsp;&nbsp;Paid-in capital | 372539 | 367645 |
| &nbsp;&nbsp;Accumulated other comprehensive earnings (loss) | (124992) | (173723) |
| &nbsp;&nbsp;Retained earnings | 1878736 | 1719668 |
| &nbsp;&nbsp;Deferred compensation | 12611 | 13498 |
| &nbsp;&nbsp;Less: Treasury shares, at cost (45,860,428 shares at 6/30/25 and 12/31/24) | (405610) | (406497) |
| TOTAL SHAREHOLDERS' EQUITY | $1734661 | $1521967 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $5990807 | $5628802 |

---

See accompanying notes to the unaudited condensed consolidated financial statements.

[**Table of Contents**](#TOC)

RLI Corp. and Subsidiaries

Condensed Consolidated Statements of Shareholders' Equity

(Unaudited)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>**(in thousands, except share and per share data)** | <br>**Common**<br>**Shares** | <br>**Total**<br>**Shareholders'**<br>**Equity** | <br>**Common**<br>**Stock** | <br>**Paid-in**<br>**Capital** | **Accumulated**<br>**Other**<br>**Comprehensive**<br>**Earnings**<br>**(Loss)** | <br>**Retained**<br>**Earnings** | <br>**Deferred**<br>**Compensation** | <br>**Treasury**<br>**Shares**<br>**at Cost** |
| Balance, January 1, 2024 | 91280094 | $1413514 | $1371 | $361660 | $(166303) | $1609785 | $13539 | $(406538) |
| Net earnings |  | 127900 |  |  |  | 127900 |  |  |
| Other comprehensive earnings (loss), net of tax |  | (12671) |  |  | (12671) |  |  |  |
| Deferred compensation |  |  |  |  |  |  | (790) | 790 |
| Share-based compensation | 139668 | 4357 | 2 | 4355 |  |  |  |  |
| Dividends and dividend equivalents ($0.14 per share) |  | (12348) |  |  |  | (12348) |  |  |
| Balance, March 31, 2024 | 91419762 | $1520752 | $1373 | $366015 | $(178974) | $1725337 | $12749 | $(405748) |
| Net earnings |  | 81992 |  |  |  | 81992 |  |  |
| Other comprehensive earnings (loss), net of tax |  | (7843) |  |  | (7843) |  |  |  |
| Deferred compensation |  |  |  |  |  |  | 434 | (434) |
| Share-based compensation | 72346 | 3084 | 1 | 3083 |  |  |  |  |
| Dividends and dividend equivalents ($0.15 per share) |  | (13278) |  |  |  | (13278) |  |  |
| Balance, June 30, 2024 | 91492108 | $1584707 | $1374 | $369098 | $(186817) | $1794051 | $13183 | $(406182) |
|  |  |  |  |  | **Accumulated** |  |  |  |
|  |  |  |  |  | **Other** |  |  |  |
|  |  | **Total** |  |  | **Comprehensive** |  |  | **Treasury** |
|  | **Common** | **Shareholders'** | **Common** | **Paid-in** | **Earnings** | **Retained** | **Deferred** | **Shares** |
| **(in thousands, except share and per share data)** | **Shares** | **Equity** | **Stock** | **Capital** | **(Loss)** | **Earnings** | **Compensation** | **at Cost** |
| Balance, January 1, 2025 | 91738132 | $1521967 | $1376 | $367645 | $(173723) | $1719668 | $13498 | $(406497) |
| Net earnings |  | 63214 |  |  |  | 63214 |  |  |
| Other comprehensive earnings (loss), net of tax |  | 30030 |  |  | 30030 |  |  |  |
| Deferred compensation |  |  |  |  |  |  | (1686) | 1686 |
| Share-based compensation | 34602 | 2777 |  | 2777 |  |  |  |  |
| Dividends and dividend equivalents ($0.15 per share) |  | (13776) |  |  |  | (13776) |  |  |
| Balance, March 31, 2025 | 91772734 | $1604212 | $1376 | $370422 | $(143693) | $1769106 | $11812 | $(404811) |
| Net earnings |  | 124336 |  |  |  | 124336 |  |  |
| Other comprehensive earnings (loss), net of tax |  | 18701 |  |  | 18701 |  |  |  |
| Deferred compensation |  |  |  |  |  |  | 799 | (799) |
| Share-based compensation | 56736 | 2118 | 1 | 2117 |  |  |  |  |
| Dividends and dividend equivalents ($0.16 per share) |  | (14706) |  |  |  | (14706) |  |  |
| Balance, June 30, 2025 | 91829470 | $1734661 | $1377 | $372539 | $(124992) | $1878736 | $12611 | $(405610) |

---

See accompanying notes to the unaudited condensed consolidated financial statements.

[**Table of Contents**](#TOC)

RLI Corp. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

---

| | | |
|:---|:---|:---|
| | **For the Six Months** | **For the Six Months** |
| | **Ended June 30,** | **Ended June 30,** |
| <br>**(in thousands)** | **2025** | **2024** |
| Net cash provided by operating activities  | $278233 | $212771 |
| Cash Flows from Investing Activities |  |  |
| &nbsp;&nbsp;Purchase of: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fixed income securities, available-for-sale | $(455880) | $(369888) |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity securities | (95537) | (45585) |
| &nbsp;&nbsp;&nbsp;&nbsp;Property and equipment | (2358) | (3840) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | (3610) | (3591) |
| &nbsp;&nbsp;Proceeds from sale of: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fixed income securities, available-for-sale | 29970 | 41543 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity securities | 55251 | 31473 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 2467 | 3952 |
| &nbsp;&nbsp;Proceeds from call or maturity of: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fixed income securities, available-for-sale | 241362 | 159869 |
| &nbsp;&nbsp;Net proceeds from sale (purchase) of short-term investments | (40747) | 9058 |
| Net cash used in investing activities | $(269082) | $(177009) |
| Cash Flows from Financing Activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash dividends paid | $(28453) | $(25604) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from stock option exercises | 926 | 3448 |
| Net cash used in financing activities | $(27527) | $(22156) |
| Net increase (decrease) in cash | $(18376) | $13606 |
| Cash at the beginning of the period | 39790 | 36424 |
| Cash at June 30, | $21414 | $50030 |

---

See accompanying notes to the unaudited condensed consolidated financial statements.

[**Table of Contents**](#TOC)

#### NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
&nbsp;&nbsp;&nbsp;&nbsp;**1.** **BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

A. BASIS OF PRESENTATION

The unaudited interim condensed consolidated financial statements of RLI Corp. (the Company) and subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP). These condensed consolidated financial statements do not include all the disclosures required by GAAP for annual financial statements and should be read in conjunction with our 2024 Annual Report on Form 10-K. In the opinion of the Company's management, the condensed consolidated financial statements reflect all adjustments, of a normal and recurring nature, that are necessary for fair financial statement presentation. The results of operations for any interim period are not necessarily indicative of the operating results for a full year.

The preparation of the unaudited condensed consolidated financial statements requires management to make estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the period. These estimates are inherently subject to change and actual results could differ significantly from these estimates.

On January 15, 2025, RLI Corp. effected a two-for-one split of its common stock and a proportionate increase in the number of authorized shares. All share and per share information throughout this report has been retroactively adjusted to reflect the stock split. The shares of common stock retain a par value of $0.01 per share.

B. ADOPTED ACCOUNTING STANDARDS

No new accounting standards applicable in 2025 materially impact our financial statements.

C. PROSPECTIVE ACCOUNTING STANDARDS

*2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures*

The guidance in ASU 2023-09 is designed to increase transparency about income tax information through improvements to the tax rate reconciliation and disclosure of income taxes paid, disaggregated by federal, state and foreign jurisdictions. This ASU is effective for fiscal years beginning after December 15, 2024. Although the Company continues to evaluate the impact of adopting this new accounting standard, the amendments are disclosure-related and should not have a material impact on our financial statements.

*2024-03—Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses*

The guidance in ASU 2024-03 requires disaggregation of certain expenses into specified categories in the notes to the financial statements. Each relevant expense caption on the face of the statement of earnings that includes specific expenses, such as employee compensation, depreciation and intangible asset amortization, are required to be separately disclosed in a tabular presentation. Additionally, a separate total of selling expenses is required to be disclosed, along with a definition of what is included in selling expenses.

This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Although the Company continues to evaluate the impact of adopting this new accounting standard, the amendments are disclosure-related and should not have a material impact on our financial statements.

D. REINSURANCE

Ceded unearned premiums and reinsurance balances recoverable on unpaid losses and settlement expenses are reported separately as an asset, rather than being netted with the related liability, since reinsurance does not relieve the Company of our liability to policyholders. Such balances are subject to the credit risk associated with the individual reinsurer. We continually monitor the financial condition of our reinsurers and actively follow up on any past due or disputed amounts. As part of our monitoring efforts, we review reinsurers' annual financial statements and Securities and Exchange Commission filings for

[**Table of Contents**](#TOC)

those that are publicly traded. We also review insurance industry developments that may impact the financial condition of our reinsurers. We analyze the credit risk associated with our reinsurance balances recoverable by monitoring the AM Best and Standard & Poor's (S&P) ratings of our reinsurers. We subject our reinsurance balances recoverable to detailed recoverability tests, including a segment-based analysis using the average default rating percentage by S&P rating, which assists the Company in assessing the sufficiency of its allowance. Additionally, we perform an in-depth reinsurer financial condition analysis prior to the renewal of our reinsurance placements.

Our policy is to charge to earnings, in the form of an allowance, an estimate of unrecoverable amounts from reinsurers. This allowance is reviewed on an ongoing basis to ensure that the amount makes a reasonable provision for reinsurance balances that we may be unable to recover. Once regulatory action (such as receivership, finding of insolvency, order of conservation or order of liquidation) is taken against a reinsurer, the paid and unpaid recoverable balances for the reinsurer are specifically identified and written off through the use of our allowance for estimated unrecoverable amounts from reinsurers. When we write-off such a balance, it is done in full. We then re-evaluate the overall allowance and determine whether the balance is sufficient and, if needed, an additional allowance is recognized.

The allowances for uncollectible amounts on paid and unpaid reinsurance balances recoverable were $17 million and $10 million, respectively, at June 30, 2025 and December 31, 2024. Changes in the allowances were due to changes in the amount of reinsurance balances outstanding, the composition of reinsurers from whom the balances were recoverable and their associated S&P default ratings. No write-offs were applied to the allowances in the first six months of 2025 and less than $1 million was recovered.

E. INTANGIBLE ASSETS

The composition of goodwill and intangible assets at June 30, 2025 and December 31, 2024 is detailed in the following table:

---

| | | |
|:---|:---|:---|
| <br>**(in thousands)** | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
| **Goodwill** |  |  |
| &nbsp;&nbsp;Surety | $40816 | $40816 |
| &nbsp;&nbsp;Casualty | 5246 | 5246 |
| **Total goodwill** | $46062 | $46062 |
| **Indefinite-lived intangibles** | 7500 | 7500 |
| **Total goodwill and intangibles** | $53562 | $53562 |

---

Annual impairment assessments were performed on our goodwill and state insurance license indefinite-lived intangible assets during the second quarter of 2025. Based upon these reviews, none of the assets were impaired. In addition, there were no triggering events as of June 30, 2025 that would suggest an updated impairment test would be needed for our goodwill and intangible assets.

F. EARNINGS PER SHARE

Basic earnings per share (EPS) is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the dilution that could occur if securities or other contracts to issue common stock or common stock equivalents were exercised or converted into common stock. When inclusion of these items increases the earnings per share or reduces the loss per share, the effect on earnings is anti-dilutive. Under these circumstances, the diluted net earnings or net loss per share is computed excluding these items. The following represents a reconciliation of the numerator and denominator of the basic and diluted EPS computations contained in the unaudited condensed consolidated financial statements:

[**Table of Contents**](#TOC)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the Three Months** | **For the Three Months** | **For the Three Months** | **For the Three Months** | **For the Three Months** | **For the Three Months** |
| | **Ended June 30, 2025** | **Ended June 30, 2025** | **Ended June 30, 2025** | **Ended June 30, 2024** | **Ended June 30, 2024** | **Ended June 30, 2024** |
| <br>**(in thousands, except per share data)** | **Income**<br>**(Numerator)** | **Shares**<br>**(Denominator)** | **Per Share**<br>**Amount** | **Income**<br>**(Numerator)** | **Shares**<br>**(Denominator)** | **Per Share**<br>**Amount** |
| **Basic EPS** |  |  |  |  |  |  |
| Earnings available to common shareholders | $124336 | 91827 | $1.35 | $81992 | 91474 | $0.90 |
| **Effect of Dilutive Securities** |  |  |  |  |  |  |
| Stock options and restricted stock units |  | 691 |  |  | 884 |  |
| **Diluted EPS** |  |  |  |  |  |  |
| Earnings available to common shareholders | $124336 | 92518 | $1.34 | $81992 | 92358 | $0.89 |
| Anti-dilutive securities excluded from diluted EPS |  | 48 |  |  |  |  |
|  | **For the Six Months** | **For the Six Months** | **For the Six Months** | **For the Six Months** | **For the Six Months** | **For the Six Months** |
|  | **Ended June 30, 2025** | **Ended June 30, 2025** | **Ended June 30, 2025** | **Ended June 30, 2024** | **Ended June 30, 2024** | **Ended June 30, 2024** |
|  | **Income** | **Shares** | **Per Share** | **Income** | **Shares** | **Per Share** |
| **(in thousands, except per share data)** | **(Numerator)** | **(Denominator)** | **Amount** | **(Numerator)** | **(Denominator)** | **Amount** |
| **Basic EPS** |  |  |  |  |  |  |
| Earnings available to common shareholders | $187550 | 91799 | $2.04 | $209892 | 91417 | $2.30 |
| **Effect of Dilutive Securities** |  |  |  |  |  |  |
| Stock options and restricted stock units |  | 713 |  |  | 921 |  |
| **Diluted EPS** |  |  |  |  |  |  |
| Earnings available to common shareholders | $187550 | 92512 | $2.03 | $209892 | 92338 | $2.27 |
| Anti-dilutive securities excluded from diluted EPS |  | 48 |  |  | 114 |  |

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G. COMPREHENSIVE EARNINGS

Our comprehensive earnings include net earnings plus after-tax unrealized gains and losses on our available-for-sale fixed income portfolio. In reporting the components of comprehensive earnings, we used the federal statutory tax rate of 21 percent. Other comprehensive earnings (loss), as shown in the consolidated statements of earnings and comprehensive earnings, is net of tax expense of $5 million for the second quarter of 2025, compared to $2 million of tax benefit for the same period in 2024. For the six-month period ended June 30, 2025, other comprehensive earnings (loss) is net of tax expense of $13 million, compared to $5 million of tax benefit for the same period in 2024.

Unrealized gains, net of tax, recognized in other comprehensive earnings (loss) were $49 million for the first six months of 2025. Comparatively, $21 million of unrealized losses, net of tax, were recognized in other comprehensive earnings (loss) in the first six months of 2024. The unrealized gains in 2025 were attributable to a decrease in interest rates, which increased the fair value of securities held in the fixed income portfolio. Interest rates increased during 2024, which decreased the fair value of securities held in the fixed income portfolio.

The following table illustrates the changes in the balance of each component of accumulated other comprehensive earnings (loss) for each period presented in the unaudited condensed consolidated financial statements:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months** | **For the Three Months** | **For the Six Months** | **For the Six Months** |
| | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** |
| **(in thousands)**<br>**Unrealized Gains (Losses) on Available-for-Sale Securities** | **2025** | **2024** | **2025** | **2024** |
| Beginning balance | $(143693) | $(178974) | $(173723) | $(166303) |
| Other comprehensive earnings (loss) before reclassifications | 17922 | (8571) | 47822 | (21846) |
| Amounts reclassified from accumulated other comprehensive earnings | 779 | 728 | 909 | 1332 |
| Net current-period other comprehensive earnings (loss) | $18701 | $(7843) | $48731 | $(20514) |
| Ending balance | $(124992) | $(186817) | $(124992) | $(186817) |
| Balance of securities for which an allowance for credit losses has been recognized in net earnings |  |  | $1102 | $1463 |

---

Credit losses on or the sale of an available-for-sale security results in amounts being reclassified from accumulated other comprehensive earnings (loss) to current period net earnings. The effects of reclassifications out of accumulated other comprehensive earnings (loss) by the respective line items of net earnings are presented in the following table:

[**Table of Contents**](#TOC)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Amount Reclassified from Accumulated Other** | **Amount Reclassified from Accumulated Other** | **Amount Reclassified from Accumulated Other** | **Amount Reclassified from Accumulated Other** | |
| | **Comprehensive Earnings (Loss)** | **Comprehensive Earnings (Loss)** | **Comprehensive Earnings (Loss)** | **Comprehensive Earnings (Loss)** | |
| | **For the Three Months** | **For the Three Months** | **For the Six Months** | **For the Six Months** | |
| | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** | |
| <br>**(in thousands)**<br>**Component of Accumulated** <br>**Other Comprehensive Earnings (Loss)** | **2025** | **2024** | **2025** | **2024** | <br>**Affected line item in the**<br>**Statement of Earnings** |
| Unrealized gains and losses on available-for-sale securities | $(898) | $(931) | $(1103) | $(1765) | Net realized gains (losses) |
|  | (88) | 9 | (48) | 79 | Credit gains (losses) presented within net realized gains |
|  | $(986) | $(922) | $(1151) | $(1686) | Earnings (loss) before income taxes |
|  | 207 | 194 | 242 | 354 | Income tax (expense) benefit |
|  | $(779) | $(728) | $(909) | $(1332) | Net earnings (loss) |

---

H. FAIR VALUE MEASUREMENTS

Fair value is defined as the price in the principal market that would be received for an asset to facilitate an orderly transaction between market participants on the measurement date. We determined the fair value of certain financial instruments based on their underlying characteristics and relevant transactions in the marketplace. We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The following are the levels of the fair value hierarchy and a brief description of the type of valuation inputs that are used to establish each level. Financial assets are classified based upon the lowest level of significant input that is used to determine fair value.

**Level 1** is applied to valuations based on readily available, unadjusted quoted prices in active markets for identical assets.

**Level 2** is applied to valuations based upon quoted prices for similar assets in active markets, quoted prices for identical or similar assets in inactive markets; or valuations based on models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities) or can be corroborated by observable market data.

**Level 3** is applied to valuations that are derived from techniques in which one or more of the significant inputs are unobservable.

As a part of management's process to determine fair value, we utilize widely recognized, third-party pricing sources to determine our fair values. We have obtained an understanding of the third-party pricing sources' valuation methodologies and inputs. The following is a description of the valuation techniques used for financial assets that are measured at fair value, including the general classification of such assets pursuant to the fair value hierarchy.

**Corporate, Agencies, Government and Municipal Bonds:** The pricing vendor employs a multi-dimensional model which uses standard inputs including (listed in approximate order of priority for use) benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers and other reference data. The pricing vendor also monitors market indicators, as well as industry and economic events. All bonds valued using these techniques are classified as Level 2. All corporate, agency, government and municipal securities are deemed Level 2.

**Mortgage-backed Securities (MBS)/Commercial Mortgage-backed Securities (CMBS) and Asset-backed Securities (ABS):** The pricing vendor evaluation methodology primarily includes interest rate movements and new issue data. Evaluation of the tranches (non-volatile, volatile or credit sensitivity) is based on the pricing vendors' interpretation of accepted modeling and pricing conventions. This information is then used to determine the cash flows for each tranche, benchmark yields, pre-payment assumptions and to incorporate collateral performance. To evaluate MBS and CMBS volatility, an option adjusted spread model is used in combination with models that simulate interest rate paths to determine market price information. This process allows the pricing vendor to obtain evaluations of a broad universe of securities in a way that reflects changes in yield curve, index rates, implied volatility, mortgage rates and recent trade activity. MBS/CMBS and ABS with corroborated, observable inputs are classified as Level 2. All of our MBS/CMBS and ABS are deemed Level 2.

**Regulation D Private Placement Securities:** All Regulation D privately-placed bonds are classified as corporate securities and deemed Level 3. The pricing vendor evaluation methodology for these securities includes a combination of

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observable and unobservable inputs. Observable inputs include public corporate spread matrices classified by sector, rating and average life, as well as investment and non-investment grade matrices created from fixed income indices. Unobservable inputs include a liquidity spread premium calculated based on public corporate spread and private corporate spread matrices. The quantitative detail of the liquidity spread premium is neither provided nor reasonably available to the Company. An increase to the credit spread assumptions would result in a lower fair value.

For all of our fixed income securities classified as Level 2, we periodically conduct a review to assess the reasonableness of the fair values provided by our pricing services. Our review consists of a two-pronged approach. First, we compare prices provided by our pricing services to those provided by an additional source. In some cases, we obtain prices from securities brokers and compare them to the prices provided by our pricing services. If discrepancies are found in our comparisons, we compare our prices to actual reported trade data for like securities. No changes to the fair values supplied by our pricing services have occurred as a result of our reviews. Based on these assessments, we have determined that the fair values of our Level 2 fixed income securities provided by our pricing services are reasonable.

**Equity Securities:** As of June 30, 2025, nearly all of our equity holdings were traded on an exchange. Exchange traded equities have readily observable price levels and are classified as Level 1 (fair value based on quoted market prices). Pricing for the equity securities not traded on an exchange is provided by a third-party pricing source using observable inputs and are classified as Level 2. Pricing for equity securities not traded on an exchange rely on one or more unobservable inputs and are classified as Level 3.

Due to the relatively short-term nature of cash, short-term investments, accounts receivable and accounts payable, their carrying amounts are reasonable estimates of fair value. Our investments in private funds, classified as other invested assets, are measured using the investments' net asset value per share and are not categorized within the fair value hierarchy.

2. INVESTMENTS

Our investments are primarily composed of fixed income debt securities and common stock equity securities. We carry our equity securities at fair value and categorize all of our debt securities as available-for-sale, which are carried at fair value.

Realized gains and losses on disposition of investments are based on the specific identification of the investments sold on the settlement date. The following is a summary of the disposition of fixed income and equity securities for the six-month periods ended June 30, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Gross Realized** | **Gross Realized** | |
| **Sales**<br>**(in thousands)** | **Proceeds**<br>**From Sales** | **Gains** | **Losses** | **Net Realized**<br>**Gain (Loss)** |
| **2025** |  |  |  |  |
| Fixed income securities - available-for-sale | $29579 | $188 | $(1000) | $(812) |
| Equity securities | 55251 | 30034 | (562) | 29472 |
| **2024** |  |  |  |  |
| Fixed income securities - available-for-sale | $41543 | $357 | $(1139) | $(782) |
| Equity securities | 31473 | 13344 | (340) | 13004 |
| **Calls/Maturities** |  | **Gross Realized** | **Gross Realized** | **Net Realized** |
| **(in thousands)** | **Proceeds** | **Gains** | **Losses** | **Gain (Loss)** |
| **2025** |  |  |  |  |
| Fixed income securities - available-for-sale | $241380 | $62 | $(72) | $(10) |
| **2024** |  |  |  |  |
| Fixed income securities - available-for-sale | $158472 | $79 | $(856) | $(777) |

---

[**Table of Contents**](#TOC)

FAIR VALUE MEASUREMENTS

Assets measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024 are summarized below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** |
| <br>**(in thousands)** | **Quoted Prices in**<br>**Active Markets for**<br>**Identical Assets**<br>**(Level 1)** | **Significant Other**<br>**Observable**<br>**Inputs**<br>**(Level 2)** | **Significant**<br>**Unobservable**<br>**Inputs**<br>**(Level 3)** | <br>**Total** |
| Fixed income securities - available-for-sale |  |  |  |  |
| &nbsp;&nbsp;U.S. government | $— | $702072 | $— | $702072 |
| &nbsp;&nbsp;U.S. agency |  | 55998 |  | 55998 |
| &nbsp;&nbsp;Non-U.S. government & agency |  | 11089 | 999 | 12088 |
| &nbsp;&nbsp;Agency MBS |  | 398548 |  | 398548 |
| &nbsp;&nbsp;ABS/CMBS/MBS\* |  | 418389 |  | 418389 |
| &nbsp;&nbsp;Corporate |  | 1309630 | 96297 | 1405927 |
| &nbsp;&nbsp;Municipal |  | 427739 |  | 427739 |
| Total fixed income securities - available-for-sale | $— | $3323465 | $97296 | $3420761 |
| Equity securities | 806721 |  | 4238 | 810959 |
| Total | $806721 | $3323465 | $101534 | $4231720 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
| <br>**(in thousands)** | **Quoted Prices in**<br>**Active Markets for**<br>**Identical Assets**<br>**(Level 1)** | **Significant Other**<br>**Observable**<br>**Inputs**<br>**(Level 2)** | **Significant**<br>**Unobservable**<br>**Inputs**<br>**(Level 3)** | <br>**Total** |
| Fixed income securities - available-for-sale |  |  |  |  |
| &nbsp;&nbsp;U.S. government | $— | $515635 | $— | $515635 |
| &nbsp;&nbsp;U.S. agency |  | 54338 |  | 54338 |
| &nbsp;&nbsp;Non-U.S. government & agency |  | 6898 | 973 | 7871 |
| &nbsp;&nbsp;Agency MBS |  | 396223 |  | 396223 |
| &nbsp;&nbsp;ABS/CMBS/MBS\* |  | 410248 |  | 410248 |
| &nbsp;&nbsp;Corporate |  | 1256991 | 89530 | 1346521 |
| &nbsp;&nbsp;Municipal |  | 444960 |  | 444960 |
| Total fixed income securities - available-for-sale | $— | $3085293 | $90503 | $3175796 |
| Equity securities | 731569 |  | 4622 | 736191 |
| Total | $731569 | $3085293 | $95125 | $3911987 |

---

\* Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities

The following table summarizes changes in the balance of securities whose fair value was measured using significant unobservable inputs (Level 3).

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| <br>**(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Beginning balance | $98945 | $64169 | $95125 | $62096 |
| Net realized and unrealized gains (losses) |  |  |  |  |
| &nbsp;&nbsp;Included in other comprehensive earnings (loss) | 899 | (44) | 1792 | (315) |
| Purchases | 3028 | 9575 | 8098 | 12310 |
| Sales / Calls / Maturities | (1338) | (1020) | (3481) | (1411) |
| Transfers into Level 3 |  |  |  |  |
| Transfers out of Level 3 |  |  |  |  |
| Balance as of June 30, | $101534 | $72680 | $101534 | $72680 |
| Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in other comprehensive earnings (loss) | $899 | $(44) | $1792 | $(315) |

---

[**Table of Contents**](#TOC)

The amortized cost and fair value of available-for-sale fixed income securities by contractual maturity as of June 30, 2025 were as follows:

---

| | | |
|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** |
| <br>**(in thousands)** | **Amortized Cost** | **Fair Value** |
| Due in one year or less | $246543 | $244682 |
| Due after one year through five years | 819878 | 812427 |
| Due after five years through 10 years | 1085099 | 1078613 |
| Due after 10 years | 556171 | 468102 |
| ABS/CMBS/MBS\* | 865988 | 816937 |
| Total available-for-sale | $3573679 | $3420761 |

---

\* Asset-backed, commercial mortgage-backed and mortgage-backed securities

The amortized cost and fair value of available-for-sale securities at June 30, 2025 and December 31, 2024 are presented in the tables below. Amortized cost does not include accrued interest receivable of $30 million as of June 30, 2025 and $27 million as of December 31, 2024.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
| <br>**(in thousands)** | **Cost or**<br>**Amortized**<br>**Cost** | **Allowance**<br>**for Credit**<br>**Losses** | **Gross**<br>**Unrealized**<br>**Gains** | **Gross**<br>**Unrealized**<br>**Losses** | <br>**Fair**<br>**Value** |
| U.S. government | $698528 | $— | $6173 | $(2629) | $702072 |
| U.S. agency | 56151 |  | 780 | (933) | 55998 |
| Non-U.S. government & agency | 12729 |  | 135 | (776) | 12088 |
| Agency MBS | 431849 |  | 2268 | (35569) | 398548 |
| ABS/CMBS/MBS\* | 434139 | (77) | 3008 | (18681) | 418389 |
| Corporate | 1430965 | (168) | 11450 | (36320) | 1405927 |
| Municipal | 509318 |  | 328 | (81907) | 427739 |
| Total Fixed Income | $3573679 | $(245) | $24142 | $(176815) | $3420761 |
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Cost or** | **Allowance** | **Gross** | **Gross** |  |
|  | **Amortized** | **for Credit** | **Unrealized** | **Unrealized** | **Fair** |
| **(in thousands)** | **Cost** | **Losses** | **Gains** | **Losses** | **Value** |
| U.S. government | $525608 | $— | $309 | $(10282) | $515635 |
| U.S. agency | 55921 |  | 261 | (1844) | 54338 |
| Non-U.S. government & agency | 8959 |  |  | (1088) | 7871 |
| Agency MBS | 438545 |  | 927 | (43249) | 396223 |
| ABS/CMBS/MBS\* | 430973 | (8) | 2208 | (22925) | 410248 |
| Corporate | 1397676 | (189) | 4737 | (55703) | 1346521 |
| Municipal | 533477 |  | 1003 | (89520) | 444960 |
| Total Fixed Income | $3391159 | $(197) | $9445 | $(224611) | $3175796 |

---

\* Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities

#### Allowance for Credit Losses and Unrealized Losses on Fixed Income Securities
A reversible allowance for credit losses is recognized on available-for-sale fixed income securities, if applicable. Several criteria are reviewed to determine if securities in the fixed income portfolio should be included in the allowance for expected credit loss evaluation, including:

● Changes in technology that may impair the earnings potential of the investment,

● The discontinuance of a segment of business that may affect future earnings potential,

● Reduction of or non-payment of interest and/or principal,

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● Specific concerns related to the issuer's industry or geographic area of operation,

● Significant or recurring operating losses, poor cash flows and/or deteriorating liquidity ratios and

● Downgrades in credit quality by a major rating agency.

If changes in interest rates and credit spreads do not reasonably explain the unrealized loss for an available-for-sale security, or if any of the criteria above indicate a potential credit loss, the security is subjected to a discounted cash flow analysis. Inputs into the discounted cash flow analysis include prepayment assumptions for structured securities, default rates and recoverability rates based on credit rating. The allowance for any security is limited to the amount that the security's fair value is below amortized cost. As of June 30, 2025, the discounted cash flow analysis resulted in an allowance for credit losses on 9 securities. The following table presents changes in the allowance for expected credit losses on available-for-sale securities:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| <br>**(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Beginning balance | $157 | $237 | $197 | $306 |
| Increase to allowance from securities for which credit losses were not previously recorded | 16 |  | 16 |  |
| Reduction from securities sold during the period | (2) | (27) |  | (89) |
| Reductions from intent to sell securities | (15) |  |  |  |
| Net increase (decrease) from securities that had an allowance at the beginning of the period | 89 | 18 | 32 | 11 |
| Balance as of June 30, | $245 | $228 | $245 | $228 |

---

We recognized less than $1 million of losses on securities for which we no longer had the intent to hold until recovery during the first six months of 2025. No such losses were recognized during the first six months of 2024.

As of June 30, 2025, in addition to the securities included in the allowance for credit losses, the fixed income portfolio contained 1,133 securities with an unrealized loss position for which an allowance for credit losses had not been recorded. The $177 million in associated unrealized losses represents 5 percent of the fixed income portfolio's cost basis and 4 percent of total invested assets. Isolated to these securities, unrealized losses decreased through the first six months of 2025, as bonds rallied on falling interest rates. Of the total 1,133 securities, 932 have been in an unrealized loss position for 12 consecutive months or longer. The following table illustrates the total value of fixed income securities that were in an unrealized loss position as of June 30, 2025 and December 31, 2024 after factoring in the allowance for credit losses. All fixed income securities continue to pay the expected coupon payments and we believe we will recover the amortized cost basis of available-for-sale securities that remain in an unrealized loss position.

[**Table of Contents**](#TOC)

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| <br>**(in thousands)** | **< 12 Mos.** | **12 Mos. &Greater** | **Total** | **< 12 Mos.** | **12 Mos. &Greater** | **Total** |
| **U.S. government** |  |  |  |  |  |  |
| &nbsp;&nbsp;Fair value | $60991 | $120340 | $181331 | $303226 | $157418 | $460644 |
| &nbsp;&nbsp;Amortized cost | 61484 | 122476 | 183960 | 309836 | 161090 | 470926 |
| Unrealized loss  | $(493) | $(2136) | $(2629) | $(6610) | $(3672) | $(10282) |
| **U.S. agency** |  |  |  |  |  |  |
| &nbsp;&nbsp;Fair value | $14696 | $18686 | $33382 | $24024 | $18330 | $42354 |
| &nbsp;&nbsp;Amortized cost | 15031 | 19284 | 34315 | 24910 | 19288 | 44198 |
| Unrealized loss  | $(335) | $(598) | $(933) | $(886) | $(958) | $(1844) |
| **Non-U.S. government** |  |  |  |  |  |  |
| &nbsp;&nbsp;Fair value | $2392 | $4028 | $6420 | $4075 | $3796 | $7871 |
| &nbsp;&nbsp;Amortized cost | 2395 | 4801 | 7196 | 4158 | 4801 | 8959 |
| Unrealized Loss  | $(3) | $(773) | $(776) | $(83) | $(1005) | $(1088) |
| **Agency MBS** |  |  |  |  |  |  |
| &nbsp;&nbsp;Fair value | $68809 | $227415 | $296224 | $108772 | $233625 | $342397 |
| &nbsp;&nbsp;Amortized cost | 70136 | 261657 | 331793 | 111674 | 273972 | 385646 |
| Unrealized loss  | $(1327) | $(34242) | $(35569) | $(2902) | $(40347) | $(43249) |
| **ABS/CMBS/MBS\*** |  |  |  |  |  |  |
| &nbsp;&nbsp;Fair value | $17352 | $157095 | $174447 | $43027 | $164433 | $207460 |
| &nbsp;&nbsp;Amortized cost | 17402 | 175726 | 193128 | 43395 | 186990 | 230385 |
| Unrealized loss  | $(50) | $(18631) | $(18681) | $(368) | $(22557) | $(22925) |
| **Corporate** |  |  |  |  |  |  |
| &nbsp;&nbsp;Fair value | $215519 | $593018 | $808537 | $378305 | $700574 | $1078879 |
| &nbsp;&nbsp;Amortized cost | 221224 | 623633 | 844857 | 389299 | 745283 | 1134582 |
| Unrealized loss  | $(5705) | $(30615) | $(36320) | $(10994) | $(44709) | $(55703) |
| **Municipal** |  |  |  |  |  |  |
| &nbsp;&nbsp;Fair value | $26009 | $360306 | $386315 | $48514 | $355475 | $403989 |
| &nbsp;&nbsp;Amortized cost | 26703 | 441519 | 468222 | 49491 | 444018 | 493509 |
| Unrealized loss  | $(694) | $(81213) | $(81907) | $(977) | $(88543) | $(89520) |
| **Total fixed income** |  |  |  |  |  |  |
| &nbsp;&nbsp;Fair value | $405768 | $1480888 | $1886656 | $909943 | $1633651 | $2543594 |
| &nbsp;&nbsp;Amortized cost | 414375 | 1649096 | 2063471 | 932763 | 1835442 | 2768205 |
| Unrealized loss  | $(8607) | $(168208) | $(176815) | $(22820) | $(201791) | $(224611) |

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\* Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities

The following table shows the composition of the fixed income securities in unrealized loss positions, after factoring in the allowance for credit losses, at June 30, 2025 by the National Association of Insurance Commissioners (NAIC) rating and the generally equivalent Standard & Poor's (S&P) and Moody's ratings. The vast majority of the securities are rated by S&P and/or Moody's.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | |
| <br>**NAIC**<br>**Rating** | **Equivalent**<br>**S&P**<br>**Rating** | **Equivalent**<br>**Moody's**<br>**Rating** | **Amortized**<br>**Cost** | <br>**Fair Value** | **Unrealized**<br>**Loss** | <br>**Percent**<br>**to Total** |
| 1 | AAA/AA/A | Aaa/Aa/A | $1693968 | $1534547 | $(159421) | 90.2% |
| 2 | BBB | Baa | 321576 | 306145 | (15431) | 8.7% |
| 3 | BB | Ba | 18928 | 18533 | (395) | 0.2% |
| 4 | B | B | 24173 | 23343 | (830) | 0.5% |
| 5 | CCC | Caa | 4006 | 3601 | (405) | 0.2% |
| 6 | CC or lower | Ca or lower | 820 | 487 | (333) | 0.2% |
|  |  | Total | $2063471 | $1886656 | $(176815) | 100.0% |

---

#### Other Invested Assets
We had $57 million of other invested assets at June 30, 2025, compared to $58 million at December 31, 2024. Other invested assets include investments in low-income housing tax credit partnerships (LIHTC) and historic tax credit partnerships (HTC), membership in the Federal Home Loan Bank of Chicago (FHLBC), and investments in private funds. Our LIHTC and

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HTC investments are carried at amortized cost and our investment in FHLBC stock is carried at cost. Due to the nature of the LIHTC, HTC and our membership in the FHLBC, their carrying amounts approximate fair value. The private funds are carried at fair value, using each investment's net asset value.

Our LIHTC interests increased to $11 million at June 30, 2025, compared to $7 million at December 31, 2024, as additional investments were made. Our LIHTC interests recognized amortization of $1 million as a component of income tax expense and a total tax benefit of $1 million during the second quarter of 2025 and 2024. For the six-months ended June 30, 2025 and 2024, our LIHTC interests recognized amortization of $1 million and a total tax benefit of $1 million. Our unfunded commitment for our LIHTC investments was $5 million at June 30, 2025 and will be paid out in installments through 2039.

Our HTC investment had a balance of $13 million at June 30, 2025, compared to $15 million at December 31, 2024. Our HTC investment recognized $1 million of amortization as a component of income tax expense and a total tax benefit of $1 million during the second quarter of 2025 and 2024. For the six-months ended June 30, 2025, our HTC investment recognized amortization of $2 million and a total tax benefit of $2 million, compared to $2 million of amortization and a total tax benefit of $3 million for the same period in 2024. Our unfunded commitment for our HTC investments was $4 million at June 30, 2025 and will be paid out in installments through 2027.

At June 30, 2025, $55 million of investments were pledged as collateral with the FHLBC to ensure timely access to the secured lending facility that ownership of FHLBC stock provides. At June 30, 2025, $50 million of borrowings were outstanding with the FHLBC.

Our investments in private funds totaled $18 million at June 30, 2025, down from $24 million at December 31, 2024, and had $3 million of associated unfunded commitments at June 30, 2025. Our interest in private funds is generally restricted from being transferred or otherwise redeemed without prior consent by the respective entities, and the timed dissolution of the partnerships would trigger redemption.

#### Investments in Unconsolidated Investees
We had $61 million of investments in unconsolidated investees at June 30, 2025, compared to $56 million at December 31, 2024. At June 30, 2025, our investment in Prime Holdings Insurance Services, Inc. (Prime) was $61 million and other investments in unconsolidated investees totaled less than $1 million.

#### Cash and Short-Term Investments
Cash consists of uninvested balances in bank accounts. Short-term investments consist of investments with original maturities of 90 days or less, primarily AAA-rated government money market funds. Short-term investments are carried at cost. We had a cash and short-term investment balance of $21 million and $116 million, respectively, at June 30, 2025, compared to $40 million and $75 million, respectively, at December 31, 2024.

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3. HISTORICAL LOSS AND LAE DEVELOPMENT

The following table is a reconciliation of our unpaid losses and settlement expenses (LAE) for the first six months of 2025 and 2024:

---

| | | |
|:---|:---|:---|
| | **For the Six Months** | **For the Six Months** |
| | **Ended June 30,** | **Ended June 30,** |
| <br>**(in thousands)** | **2025** | **2024** |
| Unpaid losses and LAE at beginning of year |  |  |
| &nbsp;&nbsp;Gross | $2693470 | $2446025 |
| &nbsp;&nbsp;Ceded | (755425) | (757349) |
| Net | $1938045 | $1688676 |
| Increase (decrease) in incurred losses and LAE |  |  |
| &nbsp;&nbsp;Current accident year | $420433 | $376546 |
| &nbsp;&nbsp;Prior accident years | (58617) | (64923) |
| Total incurred | $361816 | $311623 |
| Loss and LAE payments for claims incurred |  |  |
| &nbsp;&nbsp;Current accident year | $(35903) | $(40078) |
| &nbsp;&nbsp;Prior accident years | (218788) | (197887) |
| Total paid | $(254691) | $(237965) |
| Net unpaid losses and LAE at June 30, | $2045170 | $1762334 |
| Unpaid losses and LAE at June 30, |  |  |
| &nbsp;&nbsp;Gross | $2806889 | $2544622 |
| &nbsp;&nbsp;Ceded | (761719) | (782288) |
| Net | $2045170 | $1762334 |

---

For the first six months of 2025, incurred losses and LAE included $59 million of favorable development on prior years' loss reserves, largely from accident years 2019 through 2022 and 2024. Marine, commercial excess, surety, commercial property, general liability and our mortgage reinsurance program were drivers of the favorable development. While no products experienced significant adverse development, auto liability exposures developed adversely for some products, most notably in commercial transportation.

For the first six months of 2024, incurred losses and LAE included $65 million of favorable development on prior years' loss reserves, largely from accident years 2016, 2017, 2019, 2020, 2022 and 2023. Marine, surety, general liability, commercial property, executive products, personal umbrella, professional services and commercial excess were drivers of the favorable development. No products experienced significant adverse development.

4. INCOME TAXES

Our effective tax rate for the three and six months ended June 30, 2025 was 20.6 percent and 20.2 percent, compared to 20.6 percent and 20.3 percent for the same period in 2024. Effective rates are dependent upon components of pretax earnings and the related tax effects.

Income tax expense attributable to income from operations for the three and six-month periods ended June 30, 2025 and 2024 differed from the amounts computed by applying the U.S. federal tax rate of 21 percent to pretax income by the items detailed in the table below. In interim periods, income taxes are adjusted to reflect the effective tax rate we anticipate for the year, with adjustments flowing through the other items, net line.

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---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **For the Three Months Ended June 30,** | **For the Three Months Ended June 30,** | **For the Three Months Ended June 30,** | **For the Three Months Ended June 30,** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** |
| | **2025** | **2025** | **2024** | **2024** | **2025** | **2025** | **2024** | **2024** |
| <br>**(in thousands)** | **Amount** | **%** | **Amount** | **%** | **Amount** | **%** | **Amount** | **%** |
| Provision for income taxes at the statutory rate of 21% | $32868 | 21.0% | $21694 | 21.0% | $49381 | 21.0% | $55292 | 21.0% |
| Increase (reduction) in taxes resulting from: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Excess tax benefit on share-based compensation | (408) | (0.3)% | (422) | (0.4)% | (3159) | (1.4)% | (2297) | (0.8)% |
| &nbsp;&nbsp;Tax exempt interest income | (163) | (0.1)% | (249) | (0.2)% | (332) | (0.1)% | (509) | (0.2)% |
| &nbsp;&nbsp;Dividends received deduction | (247) | (0.2)% | (234) | (0.2)% | (499) | (0.2)% | (468) | (0.2)% |
| &nbsp;&nbsp;Tax credit | (645) | (0.4)% | (768) | (0.8)% | (1290) | (0.6)% | (1536) | (0.6)% |
| &nbsp;&nbsp;ESOP dividends paid deduction | (159) | (0.1)% | (151) | (0.2)% | (308) | (0.1)% | (290) | (0.1)% |
| &nbsp;&nbsp;Nondeductible expenses | 889 | 0.6% | 946 | 0.9% | 1566 | 0.7% | 1659 | 0.6% |
| &nbsp;&nbsp;Other items, net | 44 | 0.1% | 495 | 0.5% | 2237 | 0.9% | 1551 | 0.6% |
| Total tax expense | $32179 | 20.6% | $21311 | 20.6% | $47596 | 20.2% | $53402 | 20.3% |

---

We have recorded our deferred tax assets and liabilities using the statutory federal tax rate of 21 percent. We believe it is more likely than not that all deferred tax assets will be recovered, given the carry back availability as well as the result of future operations, which we believe will generate sufficient taxable income to realize the deferred tax asset.

The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025. The primary implications to the Company include the timing of when depreciation and other costs can be deducted for tax purposes. The Company does not expect the tax provisions in the OBBBA to have a material impact on our financial statements.

5. STOCK BASED COMPENSATION

Our RLI Corp. Long-Term Incentive Plan (2015 LTIP) was in place from 2015 to 2023. The 2015 LTIP provided for equity-based compensation, including stock options and restricted stock units, up to a maximum of 8,000,000 shares of common stock (subject to adjustment for changes in our capitalization and other events). Between 2015 and 2023, we granted 6,582,776 awards under the 2015 LTIP. The 2015 LTIP was replaced in 2023.

In 2023, our shareholders approved the 2023 RLI Corp. Long-Term Incentive Plan (2023, LTIP), which provides for equity-based compensation. In conjunction with the adoption of the 2023 LTIP, effective May 4, 2023, awards are no longer granted under the 2015 LTIP. Awards under the 2023 LTIP may be in the form of restricted stock, restricted stock units, stock options (incentive or non-qualified), stock appreciation rights, performance units as well as other stock-based awards. Eligibility under the 2023 LTIP is limited to employees, directors, consultants and independent contractors of the Company or any affiliate. The granting of awards under the 2023 LTIP is solely at the discretion of the Human Capital and Compensation Committee of the board of directors or its delegate. The maximum number of shares of common stock available for distribution under the 2023 LTIP is 8,009,782 shares (subject to adjustment for changes in our capitalization and other events). Since the plan's approval in 2023, we have granted 1,083,188 awards under the 2023 LTIP, including 270,006 thus far in 2025.

Compensation expense is based on the probable number of awards expected to vest. The total compensation expense related to equity awards was $2 million and $4 million in the three and six-month periods ended June 30, 2025 and 2024. The total income tax benefit was less than $1 million for the three and six-month periods ended June 30, 2025 and 2024. Total unrecognized compensation expense relating to outstanding and unvested awards was $9 million, which will be recognized over the weighted average vesting period of 2.57 years.

#### Stock Options
Under the 2023 LTIP, as under the 2015 LTIP, we grant stock options for shares with an exercise price equal to the fair market value of the shares at the date of grant (subject to adjustments for changes in our capitalization, special dividends and other events as set forth in such plans). Options generally vest and become exercisable over a five-year period and expire eight years after grant.

For most participants, the requisite service period and vesting period will be the same. For participants who are retirement eligible, defined by the plan as those individuals whose age and years of service equals 75 or greater, the requisite service period is deemed to be met and options are immediately expensed on the date of grant. For participants who will

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become retirement eligible during the vesting period, the requisite service period over which expense is recognized is the period between the grant date and the attainment of retirement eligibility. Shares issued upon option exercise are newly issued shares.

The following tables summarize option activity for the six-month period ended June 30, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**Options** | <br>**Weighted**<br>**Average**<br>**Exercise Price** | **Weighted**<br>**Average**<br>**Remaining**<br>**Contractual Life** | **Aggregate**<br>**Intrinsic**<br>**Value**<br>**(in 000's)** |
| Outstanding options at January 1, 2025 | 2837938 | $52.80 |  |  |
| Options granted | 233805 | 74.39 |  |  |
| Options exercised | (71350) | 28.30 |  |  |
| Options canceled/forfeited | (7990) | 63.67 |  |  |
| Outstanding options at June 30, 2025 | 2992403 | $55.05 | 4.33 | $52311 |
| Exercisable options at June 30, 2025 | 1803640 | $48.74 | 3.26 | $42367 |

---

The intrinsic value of options exercised, which is the difference between the fair value and the exercise price, was $3 million and $9 million during the first six months of 2025 and 2024, respectively.

The fair value of options was estimated using a Black-Scholes based option pricing model with the following weighted average grant-date assumptions and weighted average fair values as of June 30:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Weighted-average fair value of grants | $15.33 | $15.55 |
| Risk-free interest rates | 4.10% | 4.91% |
| Dividend yield | 2.52% | 2.30% |
| Expected volatility | 23.18% | 23.08% |
| Expected option life  | 5.04<br> years  | 5.00<br> years |

---

The risk-free rate was determined based on U.S. treasury yields that most closely approximated the options' expected life. The dividend yield was determined based on the average annualized quarterly dividends paid during the most recent five-year period and incorporated a consideration for special dividends paid in recent history. The expected volatility was calculated based on the median of the rolling volatilities for the expected life of the options. The expected option life was determined based on historical exercise behavior and the assumption that all outstanding options will be exercised at the midpoint of the current date and remaining contractual term, adjusted for the demographics of the current year's grant.

#### Restricted Stock Units
In addition to stock options, restricted stock units (RSUs) are granted with a value equal to the closing stock price of the Company's stock on the dates the units are granted. For employees, these units generally have a three-year cliff vesting, but have an accelerated vesting feature for participants who are retirement eligible, defined by the plan as those individuals whose age and years of service equals 75 or greater. For directors, these units vest on the earlier of one year from the date of grant or the next annual shareholders meeting. In addition, the RSUs have dividend participation, which accrue as additional units and are settled with granted stock units at the end of the vesting period. The total fair value of restricted stock units that vested was $3 million and $2 million during the first six months of 2025 and 2024, respectively.

---

| | | |
|:---|:---|:---|
|  | <br>**RSUs** | **Weighted**<br>**Average**<br>**Grant Date**<br>**Fair Value** |
| Nonvested at January 1, 2025 | 99095 | $67.54 |
| Granted | 36201 | 74.53 |
| Reinvested | 418 | 74.05 |
| Vested | (34687) | 64.40 |
| Forfeited | (1198) | 70.23 |
| Nonvested at June 30, 2025 | 99829 | $71.16 |

---

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6. OPERATING SEGMENT INFORMATION

The Company's chief operating decision maker (CODM) is the chief executive officer. The Company's CODM assesses the segments' performance by using earnings before income taxes (underwriting income) and the combined ratio. Underwriting income and combined ratio are analyzed at the segment level and influence how resources are allocated. Decisions are made based on what is likely to provide the best long-term return to the Company.

Amortization of deferred acquisition costs represents the recognition of commission and premium taxes over the life of insurance polices, in proportion to premium revenue recognized. The other policy acquisition costs line item includes other expenses associated with underwriting, but that cannot be specifically associated with the successful acquisition of a policy, including, but not limited to, employment costs for underwriters and underwriting support as well as costs for policy acquisition systems. Insurance operating expenses reflect allocated costs from various support departments, such as corporate technology, accounting, human resources and facilities, among others.

Net investment income consists of the interest and dividend income streams from our investments in fixed income and equity securities. Interest expense represents the cost of debt and lines of credit. General corporate expenses include director and shareholder relation costs and other compensation-related expenses incurred for the benefit of the corporation, but not attributable to the operations of our insurance segments. Investee earnings primarily represents our 23 percent share in earnings of Prime Holdings Insurance Services, Inc., a privately held insurance company which specializes in hard-to-place risks. Assets, and the revenues and expenses associated with investing and financing activities, are not managed at the segment level and therefore are not allocated to segments.

All segment revenues are from external customers and all long-lived assets are held domestically. We have no material foreign operations or customer concentrations and have no intersegment revenues.

The following table summarizes revenues by major product type within each operating segment:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months** | **For the Three Months** | **For the Six Months** | **For the Six Months** |
| | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** |
| <br>**Net Premiums Earned**<br>**(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| **Casualty** |  |  |  |  |
| &nbsp;&nbsp;Commercial excess and personal umbrella | $108911 | $85986 | $212120 | $166021 |
| &nbsp;&nbsp;Commercial transportation | 30015 | 29323 | 60274 | 56624 |
| &nbsp;&nbsp;General liability | 27589 | 26104 | 54307 | 51516 |
| &nbsp;&nbsp;Professional services | 26623 | 26000 | 53210 | 51085 |
| &nbsp;&nbsp;Small commercial | 20000 | 19459 | 39915 | 37796 |
| &nbsp;&nbsp;Executive products | 5521 | 5448 | 11464 | 11363 |
| &nbsp;&nbsp;Other casualty | 15979 | 16780 | 32396 | 32971 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $234638 | $209100 | $463686 | $407376 |
| **Property** |  |  |  |  |
| &nbsp;&nbsp;Commercial property | $76876 | $87400 | $159688 | $175005 |
| &nbsp;&nbsp;Marine | 41017 | 37069 | 78726 | 69637 |
| &nbsp;&nbsp;Other property | 12771 | 9628 | 24794 | 18866 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $130664 | $134097 | $263208 | $263508 |
| **Surety** |  |  |  |  |
| &nbsp;&nbsp;Transactional | $13096 | $12308 | $25756 | $24416 |
| &nbsp;&nbsp;Commercial | 12422 | 12700 | 25198 | 23325 |
| &nbsp;&nbsp;Contract | 11084 | 10860 | 22401 | 21116 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $36602 | $35868 | $73355 | $68857 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Grand Total** | $401904 | $379065 | $800249 | $739741 |

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The following tables present our operating results by segment, as evaluated by the CODM.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **For the Three Months Ended June 30, 2025** | **For the Three Months Ended June 30, 2025** | **For the Three Months Ended June 30, 2025** | **For the Three Months Ended June 30, 2025** | **For the Three Months Ended June 30, 2025** |
| **(in thousands)** | **Casualty** | **Property** | **Surety** | **Total** |
| Revenue |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net premiums earned | $234638 | $130664 | $36602 | $401904 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income | - | - | - | 39418 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gains (losses) | - | - | - | 15004 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gains on equity securities | - | - | - | 43500 |
| Consolidated revenue | $234638 | $130664 | $36602 | $499826 |
| Less: Expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Losses and settlement expenses | $141260 | $38459 | $4859 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred acquisition costs | 45761 | 26698 | 12656 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other policy acquisition costs | 22067 | 7320 | 11000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance operating expenses | 17261 | 8676 | 3657 |  |
| Segment earnings before income taxes | $8289 | $49511 | $4430 | $62230 |
| Depreciation and amortization expense | $1544 | $521 | $359 |  |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| **For the Three Months Ended June 30, 2024** | **For the Three Months Ended June 30, 2024** | **For the Three Months Ended June 30, 2024** | **For the Three Months Ended June 30, 2024** | **For the Three Months Ended June 30, 2024** |
| **(in thousands)** | **Casualty** | **Property** | **Surety** | **Total** |
| Revenue |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net premiums earned | $209100 | $134097 | $35868 | $379065 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income | - | - | - | 33961 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gains (losses) | - | - | - | (192) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gains on equity securities | - | - | - | 3608 |
| Consolidated revenue | $209100 | $134097 | $35868 | $416442 |
| Less: Expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Losses and settlement expenses | $121850 | $41382 | $4567 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred acquisition costs | 39904 | 27046 | 11827 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other policy acquisition costs | 21256 | 4227 | 9661 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance operating expenses | 15775 | 8262 | 3284 |  |
| Segment earnings before income taxes | $10315 | $53180 | $6529 | $70024 |
| Depreciation and amortization expense | $1391 | $469 | $253 |  |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** |
| **(in thousands)** | **Casualty** | **Property** | **Surety** | **Total** |
| Revenue |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net premiums earned | $463686 | $263208 | $73355 | $800249 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income | - | - | - | 76144 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gains (losses) | - | - | - | 29916 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gains on equity securities | - | - | - | 1182 |
| Consolidated revenue | $463686 | $263208 | $73355 | $907491 |
| Less: Expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Losses and settlement expenses | $287095 | $71184 | $3537 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred acquisition costs | 88664 | 53674 | 25258 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other policy acquisition costs | 44736 | 15277 | 21580 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance operating expenses | 32831 | 16647 | 6990 |  |
| Segment earnings before income taxes | $10360 | $106426 | $15990 | $132776 |
| Depreciation and amortization expense | $3049 | $1019 | $669 |  |

---

[**Table of Contents**](#TOC)

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| | | | | |
|:---|:---|:---|:---|:---|
| **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** |
| **(in thousands)** | **Casualty** | **Property** | **Surety** | **Total** |
| Revenue |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net premiums earned | $407376 | $263508 | $68857 | $739741 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income | - | - | - | 66808 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gains (losses) | - | - | - | 5802 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gains on equity securities | - | - | - | 48922 |
| Consolidated revenue | $407376 | $263508 | $68857 | $861273 |
| Less: Expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Losses and settlement expenses | $231322 | $73959 | $6342 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred acquisition costs | 76739 | 53265 | 23103 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other policy acquisition costs | 42855 | 8642 | 19771 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance operating expenses | 32471 | 16746 | 6807 |  |
| Segment earnings before income taxes | $23989 | $110896 | $12834 | $147719 |
| Depreciation and amortization expense | $2800 | $921 | $512 |  |

---

The following table reconciles segment earnings before income taxes to earnings before income taxes.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months** | **For the Three Months** | **For the Six Months** | **For the Six Months** |
| | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** |
| <br>**(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Reconciliation of earnings before income taxes |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Segment earnings before income taxes | $62230 | $70024 | $132776 | $147719 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income | 39418 | 33961 | 76144 | 66808 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized gains (losses) | 15004 | (192) | 29916 | 5802 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net unrealized gains on equity securities | 43500 | 3608 | 1182 | 48922 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense on debt | (1350) | (1604) | (2685) | (3222) |
| &nbsp;&nbsp;&nbsp;&nbsp;General corporate expenses | (4754) | (4140) | (7702) | (9150) |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity in earnings of unconsolidated investees | 2467 | 1646 | 5515 | 6415 |
| Earnings before income taxes | $156515 | $103303 | $235146 | $263294 |

---

7. LEASES

Right-of-use (ROU) assets are included in the other assets line item and lease liabilities are included in the other liabilities line item of the consolidated balance sheet. We determine if a contract contains a lease at inception and recognize operating lease ROU assets and operating lease liabilities based on the present value of the future minimum lease payments at the commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Lease agreements may include options to extend or terminate. The options are exercised at our discretion and are included in operating lease liabilities if it is reasonably certain the option will be exercised. Lease agreements have lease and non-lease components, which are accounted for as a single lease component. Operating lease costs for future minimum lease payments are recognized on a straight-line basis over the lease terms. Variable lease costs are expensed in the period in which the obligations are incurred. Sublease income is recognized on a straight-line basis over the sublease term.

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The Company's operating lease obligations are for branch office facilities. The components of lease expense and other lease-related information, as of and during the three and six-month periods ended June 30, 2025 and 2024, were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months** | **For the Three Months** | **For the Six Months** | **For the Six Months** |
| | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** |
| <br>**(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Operating lease cost | $1081 | $1153 | $2230 | $2334 |
| Variable lease cost | 459 | 260 | 787 | 508 |
| Sublease income | (42) | (42) | (85) | (85) |
| Total lease cost | $1498 | $1371 | $2932 | $2757 |
| Cash paid for amounts included in measurement of lease liabilities |  |  |  |  |
| &nbsp;&nbsp;Operating cash outflows from operating leases | $1017 | $1105 | $2245 | $2168 |
| ROU assets obtained in exchange for new operating lease liabilities | $467 | $333 | $480 | $3789 |

---

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **June 30, 2025** | **December 31, 2024** |
| Operating lease ROU assets | $12540 | $14016 |
| Operating lease liabilities | $14219 | $15711 |
| Weighted-average remaining lease term - operating leases | 5.89<br> years  | 6.01<br> years |
| Weighted-average discount rate - operating leases | 3.72% | 3.63% |

---

Future minimum lease payments under non-cancellable leases as of June 30, 2025 were as follows:

---

| | |
|:---|:---|
| **(in thousands)** | **June 30, 2025** |
| 2025 | $2143 |
| 2026 | 3947 |
| 2027 | 2529 |
| 2028 | 1617 |
| 2029 | 1470 |
| 2030 | 887 |
| Thereafter | 3602 |
| Total future minimum lease payments | $16195 |
| Less imputed interest | (1976) |
| Total operating lease liability | $14219 |

---

#### Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 appear throughout this report. These forward looking statements generally include words such as "expect," "predict," "estimate," "will," "should," "anticipate," "believe" and similar expressions. Such assumptions are, in turn, based on information available and internal estimates and analyses of general economic conditions, competitive factors, conditions specific to the property and casualty insurance and reinsurance industries, claims development and the impact thereof on our loss reserves, the adequacy and financial security of our reinsurance programs, developments in the securities market and the impact on our investment portfolio, regulatory changes and conditions and other factors. These assumptions are subject to various risks, uncertainties and other factors, including, without limitation those set forth in "Item 1A. Risk Factors" within the Annual Report on Form 10-K for the year ended December 31, 2024 and Part II within this report. Actual results could differ materially from those expressed in, or implied by, these forward looking statements. Forward looking statements reflect the Company's expectations, plans or forecasts of future events and views as of the date of this report. While the Company may elect to update these forward looking statements at some point in the future, the Company specifically disclaims any obligation to do so. You should review the various risks, uncertainties and other factors listed from time to time in our Securities and Exchange Commission filings.

#### OVERVIEW
RLI Corp. is a U.S.-based, specialty insurance company that underwrites select property, casualty and surety products through three major subsidiaries. Our focus is on niche markets and developing unique products that are tailored to customers' needs. We hire underwriters and claim examiners with deep expertise and provide exceptional customer service and support.

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We maintain a highly diverse product portfolio and underwrite for profit in all market conditions. In 2024, we achieved our 29th consecutive year of underwriting profitability. Over the 29-year period, we averaged an 88.1 combined ratio. This drives our ability to provide shareholder returns in three different ways: the underwriting income itself, net investment income from our investment portfolio and long-term appreciation in our equity portfolio.

We measure the results of our insurance operations by monitoring growth and profitability across three distinct business segments: property, casualty and surety. Growth is measured in terms of gross premiums written, and profitability is analyzed through underwriting income and combined ratios.

The property and casualty insurance business is cyclical and influenced by many factors, including price competition, economic conditions, natural or man-made disasters (for example, earthquakes, hurricanes, pandemics and terrorism), interest rates, state regulations, court decisions and changes in the law. One of the unique and challenging features of the property and casualty insurance business is that coverages must be priced before costs have fully developed, because premiums are charged before claims are incurred. This requires that liabilities be estimated and recorded in recognition of future loss and settlement obligations. Due to the inherent uncertainty in estimating these liabilities, there can be no assurance that actual liabilities will equal recorded amounts. If actual liabilities differ from recorded amounts, there will either be an adverse or favorable effect on net earnings.

The casualty portion of our business consists largely of commercial excess, personal umbrella, general liability, transportation and management liability coverages, as well as package business and other specialty coverages, such as professional liability and workers' compensation for office-based professionals. We also assume a limited amount of risks through quota share and excess of loss reinsurance agreements. The casualty business is subject to the risk of estimating losses and related loss reserves because the ultimate settlement of a casualty claim may take several years to fully develop.

Our property segment is comprised primarily of commercial fire, hurricane, earthquake, difference in conditions and marine coverages. We also offer homeowners' coverages in Hawaii. Property insurance results are subject to the variability introduced by perils such as earthquakes, fires, hurricanes and other storms. Our major catastrophe exposure is to losses caused by windstorms, affecting commercial properties in coastal regions of the United States, and earthquakes, primarily on the West Coast. We limit our net aggregate exposure to a catastrophic event by managing the total policy limits written in a particular region, purchasing reinsurance and maintaining policy terms and conditions throughout all insurance cycles. We also use computer-assisted modeling techniques to provide estimates that help the Company carefully manage the concentration of risks exposed to catastrophic events.

The surety segment specializes in writing small to medium-sized contract surety coverages, including payment and performance bonds. We offer a variety of commercial surety bonds for medium to large-sized businesses across a broad spectrum of industries, including the financial, healthcare, energy and renewable energy industries. We also offer a variety of transactional bonds, including but not limited to license and permit, notary and court bonds. Often, our surety coverages involve a statutory requirement for bonds. While these bonds typically maintain a relatively low loss ratio, losses may fluctuate due to adverse economic conditions affecting the financial viability of our insureds. The contract surety product guarantees commercial contractors' contractual obligations for a specific construction project. Generally, losses occur due to the deterioration of a contractor's financial condition.

The insurance marketplace is competitive across all of our segments. However, we believe that our business model is built to create underwriting income by focusing on sound risk selection and discipline. Our primary focus will continue to be on underwriting profitability, with a secondary focus on premium growth where we believe underwriting profit exists, as opposed to general premium growth or market share measurements.

#### Key Performance Measures
The following is a list of key performance measures found throughout this report with their definitions, relationships to GAAP measures and explanations of their importance to our operations.

*Underwriting Income*

Underwriting income or profit represents one measure of the pretax profitability of our insurance operations, and is derived by subtracting losses and settlement expenses, policy acquisition costs and insurance operating expenses from net premiums earned, which are all GAAP financial measures. Each of these components are presented in the statements of earnings but are not subtotaled. However, this information is available in total and by segment in note 6 to the unaudited

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condensed consolidated financial statements in this quarterly report on Form 10-Q, and in note 11 to the consolidated financial statements in our 2024 Annual Report on Form 10-K, regarding operating segment information. The nearest comparable GAAP measure is earnings before income taxes which, in addition to underwriting income, includes net investment income, net realized gains or losses, net unrealized gains or losses on equity securities, general corporate expenses, debt costs and our portion of earnings from unconsolidated investees. A reconciliation of net earnings to underwriting income follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months** | **For the Three Months** | **For the Six Months** | **For the Six Months** |
| | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** | **Ended June 30,** |
| <br>**(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Net earnings | $124336 | $81992 | $187550 | $209892 |
| Income tax expense | 32179 | 21311 | 47596 | 53402 |
| &nbsp;&nbsp;Earnings before income taxes | $156515 | $103303 | $235146 | $263294 |
| Equity in earnings of unconsolidated investees | (2467) | (1646) | (5515) | (6415) |
| General corporate expenses | 4754 | 4140 | 7702 | 9150 |
| Interest expense on debt | 1350 | 1604 | 2685 | 3222 |
| Net unrealized gains on equity securities | (43500) | (3608) | (1182) | (48922) |
| Net realized (gains) losses | (15004) | 192 | (29916) | (5802) |
| Net investment income | (39418) | (33961) | (76144) | (66808) |
| &nbsp;&nbsp;Net underwriting income | $62230 | $70024 | $132776 | $147719 |

---

*Combined Ratio*

The combined ratio, which is derived from components of underwriting income, is a common industry performance measure of profitability for underwriting operations and is calculated in two components. First, the loss ratio is losses and settlement expenses divided by net premiums earned. The second component, the expense ratio, reflects the sum of policy acquisition costs and insurance operating expenses divided by net premiums earned. All items included in these components of the combined ratio are presented in our GAAP consolidated financial statements. The sum of the loss and expense ratios is the combined ratio. The difference between the combined ratio and 100 reflects the per-dollar rate of underwriting income or loss.

#### Critical Accounting Policies
In preparing the unaudited condensed consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. Actual results could differ significantly from those estimates.

The most critical accounting policies involve significant estimates and include those used in determining the liability for unpaid losses and settlement expenses, investment valuation, recoverability of reinsurance balances, deferred policy acquisition costs and deferred taxes. For a detailed discussion of each of these policies, refer to our 2024 Annual Report on Form 10-K.

There have been no significant changes to critical accounting policies during the year.

#### RESULTS OF OPERATIONS

#### Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Net premiums earned increased 8 percent, driven primarily by products in our casualty and surety segments. Investment income was up 14 percent, due to an increased average asset base and higher reinvestment rates. Positive market performance resulted in $1 million of unrealized gains on equity securities in the first six months of 2025, compared to $49 million in 2024. Realized gains during the first six months of 2025 were comprised of $29 million of realized gains on equity securities, primarily due to rebalancing within our equity strategies, $1 million of realized losses on the fixed income portfolio and $2 million of other realized gains. This compares to $13 million of realized gains on the equity portfolio, $2 million of realized losses on the fixed income portfolio and $5 million of other realized losses during the first six months of 2024.

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| | | |
|:---|:---|:---|
| | **For the Six Months** | **For the Six Months** |
| | **Ended June 30,** | **Ended June 30,** |
| <br>**Consolidated Revenues (in thousands)** | **2025** | **2024** |
| Net premiums earned | $800249 | $739741 |
| Net investment income | 76144 | 66808 |
| Net realized gains (losses) | 29916 | 5802 |
| Net unrealized gains on equity securities | 1182 | 48922 |
| Total consolidated revenue | $907491 | $861273 |

---

Underwriting income was $133 million on an 83.4 combined ratio for the first six months of 2025, compared to $148 million on an 80.0 combined ratio in the same period of 2024. Underwriting results for 2025 were impacted by $26 million of pretax losses from catastrophe events, compared to $28 million in 2024. Results for each period benefited from favorable development on prior years' loss reserves, which provided additional pretax earnings of $59 million in the first six months of 2025, compared to $65 million in 2024.

The loss ratio increased to 45.2 from 42.1 due to lower levels of favorable development on prior years' loss reserves. Additionally, the loss ratio increased from a shift in the mix of business towards casualty lines, which tend to have higher loss ratios than our property and surety products, particularly in periods with lower catastrophe losses. The expense ratio increased to 38.2 from 37.9. Increased expenses were driven by continued investments in people and technology, as well as higher acquisition-related costs, which can fluctuate between periods.

Bonus and profit-sharing amounts earned by executives, managers and associates are predominantly influenced by corporate performance, including operating earnings, combined ratio and return on capital. Favorable development and other drivers of growth in book value will increase bonus and profit-sharing expenses, while catastrophe losses, adverse development and decreased investment portfolio returns would lead to expense reductions. These performance-related expenses affect policy acquisition, insurance operating and general corporate expenses.

Our equity in earnings of unconsolidated investees primarily relates to our investment in Prime Holdings Insurance Services, Inc. (Prime), a specialty insurance company. We recognized $5 million of investee earnings from Prime in the first six months of 2025 and $6 million in 2024.

Net earnings for the first six months of 2025 totaled $188 million, compared to $210 million for the same period in 2024. An increase in investment income and realized gains partially offset a decline in unrealized gains on equity securities and underwriting income, which resulted in the overall reduction in earnings.

Comprehensive earnings totaled $236 million for the first six months of 2025, compared to $189 million for the first six months of 2024. Other comprehensive earnings (loss) primarily included net after-tax unrealized gains (losses) from the fixed income portfolio. Other comprehensive earnings of $49 million in the first six months of 2025 was primarily attributable to lower interest rates, which increased the fair value of securities held in the fixed income portfolio. Comparatively, $21 million of other comprehensive loss was recognized in 2024, as higher interest rates decreased the fair value of securities held in the fixed income portfolio.

#### Premiums
Gross premiums written increased $21 million for the first six months of 2025, compared to the same period of 2024, primarily from our casualty segment. Net premiums earned increased $61 million, driven by our casualty and surety segments.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Gross Premiums Written** | **Gross Premiums Written** | **Gross Premiums Written** | **Net Premiums Earned** | **Net Premiums Earned** | **Net Premiums Earned** |
| | **For the Six Months** | **For the Six Months** | | **For the Six Months** | **For the Six Months** | |
| | **Ended June 30,** | **Ended June 30,** | | **Ended June 30,** | **Ended June 30,** | |
| <br>**(in thousands)** | **2025** | **2024** | <br>**% Change** | **2025** | **2024** | <br>**% Change** |
| **Casualty** |  |  |  |  |  |  |
| &nbsp;&nbsp;Commercial excess and personal umbrella | $284962 | $225219 | 27% | $212120 | $166021 | 28% |
| &nbsp;&nbsp;Commercial transportation | 65698 | 67875 | (3)% | 60274 | 56624 | 6% |
| &nbsp;&nbsp;General liability | 62035 | 55568 | 12% | 54307 | 51516 | 5% |
| &nbsp;&nbsp;Professional services | 59732 | 57600 | 4% | 53210 | 51085 | 4% |
| &nbsp;&nbsp;Small commercial | 43242 | 44769 | (3)% | 39915 | 37796 | 6% |
| &nbsp;&nbsp;Executive products | 38363 | 38093 | 1% | 11464 | 11363 | 1% |
| &nbsp;&nbsp;Other casualty | 31032 | 42761 | (27)% | 32396 | 32971 | (2)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $585064 | $531885 | 10% | $463686 | $407376 | 14% |
| **Property** |  |  |  |  |  |  |
| &nbsp;&nbsp;Commercial property | $259416 | $305671 | (15)% | $159688 | $175005 | (9)% |
| &nbsp;&nbsp;Marine | 90938 | 85996 | 6% | 78726 | 69637 | 13% |
| &nbsp;&nbsp;Other property | 31515 | 24711 | 28% | 24794 | 18866 | 31% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $381869 | $416378 | (8)% | $263208 | $263508 | (0)% |
| **Surety** |  |  |  |  |  |  |
| &nbsp;&nbsp;Commercial | $32357 | $29906 | 8% | $25198 | $23325 | 8% |
| &nbsp;&nbsp;Transactional | 28851 | 27390 | 5% | 25756 | 24416 | 5% |
| &nbsp;&nbsp;Contract | 25246 | 26489 | (5)% | 22401 | 21116 | 6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $86454 | $83785 | 3% | $73355 | $68857 | 7% |
| &nbsp;&nbsp;&nbsp;&nbsp;**Grand Total** | $1053387 | $1032048 | 2% | $800249 | $739741 | 8% |

---

#### Casualty
Gross premiums written for the casualty segment increased $53 million in the first six months of 2025. We continued to benefit from positive rate movement across a large portion of our casualty segment, as well as from new business growth within our personal umbrella distribution channels. Premium growth for commercial excess and general liability was driven by expanded marketing efforts, while some of our competitors pulled back from the construction market, and increased construction spending in targeted markets. Other casualty premium was down for the first six months of 2025, as we exited from various captive programs, reduced our participation on the reinsurance agreement with Prime and experienced increased competition within our binding authority product.

#### Property
Gross premiums written for the property segment decreased $35 million in the first six months of 2025. After several consecutive years of rate increases, rates on commercial property exposures declined in the first half of 2025, driven by more intense competition. However, new opportunities, rate increases and strong sections of the construction market led to $5 million of premium growth for our marine product. Additionally, some competitors have reduced their appetite for select Hawaii homeowner coverages, which, along with rate increases, has allowed our other property premium to grow.

#### Surety
Gross premiums written for the surety segment increased $3 million for the first six months of 2025. Transactional and commercial surety grew as result of continued marketing efforts and new regional bonding requirements. However, a slowdown in bid activity for larger public construction projects resulted in a decline in contract surety premium.

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#### Underwriting Income

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| | | |
|:---|:---|:---|
|  | **For the Six Months** | **For the Six Months** |
|  | **Ended June 30,** | **Ended June 30,** |
|  | **2025** | **2024** |
| **Underwriting Income (in thousands)** |  |  |
| Casualty | $10360 | $23989 |
| Property | 106426 | 110896 |
| Surety | 15990 | 12834 |
| Total | $132776 | $147719 |
| **Combined Ratio** |  |  |
| Casualty | 97.8 | 94.1 |
| Property | 59.6 | 57.9 |
| Surety | 78.2 | 81.4 |
| Total | 83.4 | 80.0 |

---

#### Casualty
The casualty segment recorded underwriting income of $10 million in the first six months of 2025, compared to $24 million for the same period last year. Prior accident years' reserve releases reduced loss and settlement expenses for the casualty segment by $20 million in 2025, primarily on accident years 2019 through 2022 and 2024. Larger drivers of the favorable development were commercial excess, general liability and subsegments within professional liability, while auto liability exposures developed adversely for some products, most notably in commercial transportation. In comparison, $32 million of prior accident years' reserves were released in the first six months of 2024. General liability, executive products, personal umbrella, professional services and commercial excess drove the favorable development in 2024. Storm losses on casualty-oriented package policies that include property coverage resulted in $2 million of losses in 2025 and 2024.

The combined ratio for the casualty segment was 97.8 in 2025, compared to 94.1 in 2024. The segment's loss ratio was 61.9 in 2025, up from 56.8 in 2024. Lower levels of reserve releases on prior accident years and higher current year loss reserves, primarily in auto exposed lines, resulted in the higher loss ratio in 2025. The expense ratio for the casualty segment was 35.9, down from 37.3 for the same period last year, as the growth in the earned premium base exceeded the growth in expense.

#### Property
The property segment recorded underwriting income of $106 million for the first six months of 2025, compared to $111 million for the same period last year. Underwriting results for 2025 included $28 million of favorable development on prior years' loss and catastrophe reserves, offset by $24 million of storm and other catastrophe losses. Comparatively, the 2024 underwriting results included $25 million of favorable development on prior years' loss and catastrophe reserves, as well as $26 million of storm losses.

Underwriting results for the first six months of 2025 translated into a combined ratio of 59.6, compared to 57.9 for the same period last year. The segment's loss ratio was 27.0 in 2025, down from 28.1 in 2024, as a result of larger releases on prior accident years' loss reserves and lower current accident year storm losses. The segment's expense ratio increased to 32.6 in 2025 from 29.8 in the prior year, as a result of changes in our reinsurance cost and structure, as well as higher acquisition-related expenses, which can fluctuate between periods.

#### Surety
The surety segment recorded underwriting income of $16 million for the first six months of 2025, compared to $13 million for the same period last year. Both periods reflected positive current accident year underwriting performance and benefited from favorable development on prior years' loss reserves. Results for 2025 included favorable development on prior accident years' reserves, which decreased loss and settlement expenses for the segment by $11 million. Results for 2024 included $8 million of favorable development on prior accident years' reserves. Additionally, $2 million of reinsurance reinstatement premium was recorded in 2024 on a prior year loss, which reduced net premiums earned and underwriting income.

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The combined ratio for the surety segment totaled 78.2 for the first six months of 2025, compared to 81.4 for the same period in 2024. The segment's loss ratio was 4.8 in 2025, down from 9.2 in 2024, due to higher levels of favorable prior accident years' reserve development. The expense ratio was 73.4, up from 72.2 in the prior year.

#### Investment Income
Our investment portfolio generated net investment income of $76 million during the first six months of 2025, an increase of 14 percent from the same period in 2024. The increase in investment income was due to higher reinvestment rates, as well as an increased average asset base relative to the prior year.

Yields on our fixed income investments for the first six months of 2025 and 2024 were as follows:

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Pretax Yield |  |  |
| Taxable | 4.04% | 3.74% |
| Tax-Exempt | 2.91% | 2.86% |
| After-Tax Yield |  |  |
| Taxable | 3.19% | 2.95% |
| Tax-Exempt | 2.76% | 2.71% |

---

The following table depicts the composition of our investment portfolio at June 30, 2025 as compared to December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in thousands)** | **June 30, 2025** | **June 30, 2025** | **December 31, 2024** | **December 31, 2024** |
| Fixed income | $3420761 | 77.3% | $3175796 | 77.8% |
| Equity securities | 810959 | 18.3% | 736191 | 18.0% |
| Short-term investments | 115662 | 2.6% | 74915 | 1.8% |
| Other invested assets | 57266 | 1.3% | 57939 | 1.4% |
| Cash | 21414 | 0.5% | 39790 | 1.0% |
| Total investments and cash | $4426062 | 100.0% | $4084631 | 100.0% |

---

We believe our overall asset allocation supports our strategy to preserve capital for policyholders, provide sufficient income to support our insurance operations and effectively grow book value over a long-term investment horizon.

The fixed income portfolio increased by $245 million in the first six months of 2025, as bonds rallied and cash flows were largely allocated to the fixed income portfolio. Average fixed income duration was 4.9 years at June 30, 2025, reflecting our liability structure and sound capital position. The equity portfolio increased by $75 million during the first six months of 2025, primarily due to strength in the equity markets. Short-term investments increased by $41 million, as yields on AAA-rated government money market funds remained relatively attractive.

#### Income Taxes
Our effective tax rate for the first six months of 2025 was 20.2 percent, compared to 20.3 percent for the same period in 2024. Effective rates are dependent upon components of pretax earnings or losses and the related tax effects.

#### Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Net premiums earned increased 6 percent, driven primarily by products in our casualty segment. Investment income was up 16 percent, due to an increased average asset base and higher reinvestment rates. Positive market performance resulted in $44 million of unrealized gains on equity securities in the second quarter of 2025, compared to $4 million in 2024. Realized gains during the second quarter of 2025 were comprised of $14 million of realized gains on equity securities, primarily due to rebalancing within our equity strategies, $1 million of realized losses on the fixed income portfolio and $2 million of other realized gains. This compares to $6 million of realized gains on the equity portfolio, $1 million of realized losses on the fixed income portfolio and $5 million of other realized losses during the second quarter of 2024.

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| | | |
|:---|:---|:---|
| | **For the Three Months** | **For the Three Months** |
| | **Ended June 30,** | **Ended June 30,** |
| <br>**Consolidated Revenues (in thousands)** | **2025** | **2024** |
| Net premiums earned | $401904 | $379065 |
| Net investment income | 39418 | 33961 |
| Net realized gains (losses) | 15004 | (192) |
| Net unrealized gains on equity securities | 43500 | 3608 |
| Total consolidated revenue | $499826 | $416442 |

---

Underwriting income was $62 million on an 84.5 combined ratio for the second quarter of 2025, compared to $70 million on an 81.5 combined ratio in the same period of 2024. Underwriting results for 2025 were impacted by $14 million of pretax losses from catastrophe events, compared to $16 million in 2024. Results for each period benefited from favorable development on prior years' loss reserves, which provided additional pretax earnings of $28 million in the second quarter of 2025, compared to $23 million in 2024.

The loss ratio increased to 45.9 from 44.3 due to a shift in the mix of business towards casualty lines, which tend to have higher loss ratios than our property and surety products, particularly in periods with lower catastrophe losses. The expense ratio increased to 38.6 from 37.2. Positive equity market returns resulted in more book value growth in 2025 and a corresponding increase in bonus expense accruals when compared to 2024. Increased expenses were also driven by continued investments in people and technology, as well as higher acquisition-related costs, which can fluctuate between periods.

Bonus and profit-sharing amounts earned by executives, managers and associates are predominantly influenced by corporate performance, including operating earnings, combined ratio and return on capital. Favorable development and other drivers of growth in book value will increase bonus and profit-sharing expenses, while catastrophe losses, adverse development and decreased investment portfolio returns would lead to expense reductions. These performance-related expenses affect policy acquisition, insurance operating and general corporate expenses.

Our equity in earnings of unconsolidated investees primarily relates to our investment in Prime. We recognized $3 million of investee earnings from Prime in the second quarter of 2025 and $2 million in 2024.

Net earnings for the second quarter of 2025 totaled $124 million, compared to $82 million for the same period in 2024. Unrealized gains on equity securities and an increase in investment income offset a decline in underwriting income, which resulted in the overall increase in earnings.

Comprehensive earnings totaled $143 million for the second quarter of 2025, compared to $74 million for the second quarter of 2024. Other comprehensive earnings (loss) primarily included net after-tax unrealized gains (losses) from the fixed income portfolio. Other comprehensive earnings of $19 million in the second quarter of 2025 was primarily attributable to lower interest rates, which increased the fair value of securities held in the fixed income portfolio. Comparatively, $8 million of other comprehensive loss was recognized in 2024, as higher interest rates decreased the fair value of securities held in the fixed income portfolio.

#### Premiums
Gross premiums written decreased $1 million for the second quarter of 2025, compared to the same period of 2024. Declines in the property segment offset growth in our casualty and surety segments. Net premiums earned increased $23 million, driven by the casualty segment.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Gross Premiums Written** | **Gross Premiums Written** | **Gross Premiums Written** | **Net Premiums Earned** | **Net Premiums Earned** | **Net Premiums Earned** |
| | **For the Three Months** | **For the Three Months** | | **For the Three Months** | **For the Three Months** | |
| | **Ended June 30,** | **Ended June 30,** | | **Ended June 30,** | **Ended June 30,** | |
| <br>**(in thousands)** | **2025** | **2024** | <br>**% Change** | **2025** | **2024** | <br>**% Change** |
| **Casualty** |  |  |  |  |  |  |
| &nbsp;&nbsp;Commercial excess and personal umbrella | $149632 | $123037 | 22% | $108911 | $85986 | 27% |
| &nbsp;&nbsp;Commercial transportation | 34782 | 38746 | (10)% | 30015 | 29323 | 2% |
| &nbsp;&nbsp;General liability | 31561 | 28808 | 10% | 27589 | 26104 | 6% |
| &nbsp;&nbsp;Professional services | 31320 | 30808 | 2% | 26623 | 26000 | 2% |
| &nbsp;&nbsp;Small commercial | 22097 | 23143 | (5)% | 20000 | 19459 | 3% |
| &nbsp;&nbsp;Executive products | 21536 | 21680 | (1)% | 5521 | 5448 | 1% |
| &nbsp;&nbsp;Other casualty | 15682 | 20334 | (23)% | 15979 | 16780 | (5)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $306610 | $286556 | 7% | $234638 | $209100 | 12% |
| **Property** |  |  |  |  |  |  |
| &nbsp;&nbsp;Commercial property | $148544 | $176977 | (16)% | $76876 | $87400 | (12)% |
| &nbsp;&nbsp;Marine | 46212 | 45422 | 2% | 41017 | 37069 | 11% |
| &nbsp;&nbsp;Other property | 17061 | 13615 | 25% | 12771 | 9628 | 33% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $211817 | $236014 | (10)% | $130664 | $134097 | (3)% |
| **Surety** |  |  |  |  |  |  |
| &nbsp;&nbsp;Transactional | $14143 | $13276 | 7% | $13096 | $12308 | 6% |
| &nbsp;&nbsp;Commercial | 16363 | 14275 | 15% | 12422 | 12700 | (2)% |
| &nbsp;&nbsp;Contract | 13348 | 13252 | 1% | 11084 | 10860 | 2% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $43854 | $40803 | 7% | $36602 | $35868 | 2% |
| &nbsp;&nbsp;&nbsp;&nbsp;**Grand Total** | $562281 | $563373 | (0)% | $401904 | $379065 | 6% |

---

#### Casualty
Gross premiums written for the casualty segment increased $20 million in the second quarter of 2025. We continued to benefit from positive rate movement across a large portion of our casualty segment, as well as from new business growth within our personal umbrella distribution channels. Premium growth for commercial excess and general liability was driven by expanded marketing efforts, while some of our competitors pulled back from the construction market, and increased construction spending in targeted markets. Other casualty premium was down for the quarter as we exited from various captive programs and reduced our participation on the reinsurance agreement with Prime. Additionally, heightened competition resulted in a decrease in commercial transportation premium.

#### Property
Gross premiums written for the property segment decreased $24 million in the second quarter of 2025. After several consecutive years of rate increases, rates on commercial property exposures declined in the second quarter of 2025, driven by more intense competition. However, some competitors have reduced their appetite for select Hawaii homeowner coverages, which, along with rate increases, has allowed our other property premium to grow.

#### Surety
Gross premiums written for the surety segment increased $3 million for the second quarter of 2025. Transactional and commercial surety grew as result of continued marketing efforts and new regional bonding requirements.

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#### Underwriting Income

---

| | | |
|:---|:---|:---|
|  | **For the Three Months** | **For the Three Months** |
|  | **Ended June 30,** | **Ended June 30,** |
|  | **2025** | **2024** |
| **Underwriting Income (in thousands)** |  |  |
| Casualty | $8289 | $10315 |
| Property | 49511 | 53180 |
| Surety | 4430 | 6529 |
| Total | $62230 | $70024 |
| **Combined Ratio** |  |  |
| Casualty | 96.5 | 95.1 |
| Property | 62.1 | 60.3 |
| Surety | 87.9 | 81.8 |
| Total | 84.5 | 81.5 |

---

#### Casualty
The casualty segment recorded underwriting income of $8 million in the second quarter of 2025, compared to $10 million for the same period last year. Prior accident years' reserve releases reduced loss and settlement expenses for the casualty segment by $15 million in 2025, primarily on accident years 2018 through 2020, 2022 and 2024. Larger drivers of the favorable development were commercial excess, personal umbrella, general liability and subsegments within professional liability. In comparison, $14 million of prior accident years' reserves were released in the second quarter of 2024. Professional services, commercial excess, executive products and general liability were drivers of the favorable development in 2024. Storm losses on casualty-oriented package policies that include property coverage resulted in $1 million of losses in 2025 and 2024.

The combined ratio for the casualty segment was 96.5 in 2025, compared to 95.1 in 2024. The segment's loss ratio was 60.2 in 2025, up from 58.3 in 2024. Higher current year loss reserves, primarily in auto exposed lines, and an overall shift in mix towards higher loss ratio products resulted in the higher loss ratio in 2025. The expense ratio for the casualty segment was 36.3, down from 36.8 for the same period last year, as the growth in the earned premium base exceeded the growth in expense.

#### Property
The property segment recorded underwriting income of $50 million for the second quarter of 2025, compared to $53 million for the same period last year. Underwriting results for 2025 included $10 million of favorable development on prior years' loss and catastrophe reserves, as well as $13 million of storm losses. Comparatively, the 2024 underwriting results included $6 million of favorable development on prior years' loss and catastrophe reserves, as well as $15 million of storm losses.

Underwriting results for the second quarter of 2025 translated into a combined ratio of 62.1, compared to 60.3 for the same period last year. The segment's loss ratio was 29.4 in 2025, down from 30.9 in 2024, as a result of larger releases on prior accident years' loss reserves and less current accident year storm losses. The segment's expense ratio increased to 32.7 in 2025, up from 29.4 in the prior year, driven by changes in our reinsurance cost and structure, along with higher acquisition-related expenses, which can fluctuate between periods.

#### Surety
The surety segment recorded underwriting income of $4 million for the second quarter of 2025, compared to $7 million for the same period last year. Results for 2025 and 2024 included favorable development on prior accident years' reserves, which decreased loss and settlement expenses for the segment by $2 million in each period.

The combined ratio for the surety segment totaled 87.9 for the second quarter of 2025, compared to 81.8 for the same period in 2024. The segment's loss ratio was 13.3 in 2025, up from 12.7 in 2024. The expense ratio was 74.6, up from 69.1 in the prior year, due to continued investments in people and technology, as well as higher acquisition expenses.

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#### Investment Income
Our investment portfolio generated net investment income of $39 million during the second quarter of 2025, an increase of 16 percent from the same period in 2024. The increase in investment income was due to higher reinvestment rates, as well as an increased average asset base relative to the prior year.

Yields on our fixed income investments for the second quarter of 2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Pretax Yield |  |  |
| Taxable | 4.06% | 3.75% |
| Tax-Exempt | 2.95% | 2.90% |
| After-Tax Yield |  |  |
| Taxable | 3.21% | 2.96% |
| Tax-Exempt | 2.80% | 2.75% |

---

#### Income Taxes
Our effective tax rate for the second quarter of 2025 and 2024 was 20.6 percent. Effective rates are dependent upon components of pretax earnings or losses and the related tax effects.

#### LIQUIDITY AND CAPITAL RESOURCES
We have three primary types of cash flows: (1) cash flows from operating activities, which consist mainly of cash generated by our underwriting operations and income earned on our investment portfolio, (2) cash flows from investing activities related to the purchase, sale and maturity of investments and (3) cash flows from financing activities that impact our capital structure, such as shareholder dividend payments and changes in debt and shares outstanding.

The following table summarizes cash flows provided by (used in) our activities for the six-month periods ended June 30, 2025 and 2024:

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **2025** | **2024** |
| Operating cash flows | $278233 | $212771 |
| Investing cash flows | (269082) | (177009) |
| Financing cash flows | (27527) | (22156) |
| &nbsp;&nbsp;Total | $(18376) | $13606 |

---

Our largest source of cash is premiums received from customers and our largest cash outflow is claim payments on insured losses. Cash flows from operating activities can vary among periods due to the timing in which these payments are made or received. Operating cash flows in the first six months of 2025 benefited from increased premium and investment income receipts relative to the first six months of 2024.

As of June 30, 2025, we had $100 million in debt outstanding. On September 15, 2023, we accessed $50 million from our revolving line of credit with PNC Bank, N.A. (PNC). The borrowing may be repaid at any time and carries an adjustable interest rate of 5.92 percent, which will reset during the third quarter of 2025. The credit facility with PNC was entered into during the first quarter of 2023 and replaced the previous $60 million facility with Bank of Montreal, Chicago Branch, which expired on March 27, 2023. The line of credit permits us to borrow up to an aggregate principal amount of $100 million, but may be increased up to an aggregate principal amount of $130 million under certain conditions. The facility has a three-year term that expires on May 29, 2026. Further, RLI Insurance Company borrowed $50 million from the Federal Home Loan Bank of Chicago (FHLBC) on November 12, 2024. The borrowing matures on November 12, 2025. Interest is paid monthly at an annualized rate of 4.44 percent.

Two of our insurance companies, RLI Insurance Company (RLI Ins.) and Mt. Hawley Insurance Company, are members of the FHLBC. Membership in the Federal Home Loan Bank system provides both companies access to an additional source of liquidity via a secured lending facility. Our membership allows each insurance subsidiary to determine tenor and structure at the time of borrowing. As of June 30, 2025, $55 million of investments were pledged as collateral with the FHLBC to ensure timely access to the secured lending facility.

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As of June 30, 2025, we had cash and other investments maturing within one year of approximately $383 million and an additional $828 million maturing between one to five years. Whereas our strategy is to be fully invested at all times, short-term investments in excess of demand deposit balances are considered a component of investment activities, and thus are classified as investments in our consolidated balance sheets.

We believe that cash generated by operations and investments will provide sufficient sources of liquidity to meet our anticipated needs over the next 12 to 24 months. In the event they are not sufficient, we believe cash available from financing activities and other sources will provide sufficient additional liquidity.

We maintain a diversified investment portfolio representing policyholder funds that have not yet been paid out as claims, as well as the capital we hold for our shareholders. Invested assets at June 30, 2025 have increased $341 million from December 31, 2024. As of June 30, 2025, our investment portfolio had the following asset allocation breakdown:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**(in thousands)** | **Cost or**<br>**Amortized Cost** | **Fair**<br>**Value** | **Unrealized**<br>**Gain/(Loss)** | **% of Total**<br>**Fair Value** | <br>**Quality\*** |
| U.S. government | $698528 | $702072 | $3544 | 15.8% | AA+ |
| U.S. agency | 56151 | 55998 | (153) | 1.3% | AA+ |
| Non-U.S. government & agency | 12729 | 12088 | (641) | 0.3% | A- |
| Agency MBS | 431849 | 398548 | (33301) | 9.0% | AA+ |
| ABS/CMBS/MBS\*\* | 434139 | 418389 | (15750) | 9.4% | AA |
| Corporate | 1430965 | 1405927 | (25038) | 31.8% | A- |
| Municipal | 509318 | 427739 | (81579) | 9.7% | AA+ |
| Total fixed income | $3573679 | $3420761 | $(152918) | 77.3% | AA- |
| Equity | 487656 | 810959 | 323303 | 18.3% |  |
| Short-term investments | 115662 | 115662 |  | 2.6% |  |
| Other invested assets | 58563 | 57266 | (1297) | 1.3% |  |
| Cash | 21414 | 21414 |  | 0.5% |  |
| &nbsp;&nbsp;Total portfolio | $4256974 | $4426062 | $169088 | 100.0% |  |

---

\* Quality ratings provided by Moody's, S&P and Fitch

\*\* Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities

Quality is an average of each bond's credit rating, adjusted for its relative weighting in the portfolio. As of June 30, 2025, our fixed income portfolio had the following rating distribution:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | <br>**AAA** | <br>**AA** | <br>**A** | <br>**BBB** | **Below** <br>**Investment**<br>**Grade** | <br>**No Rating** | <br>**Fair Value** |
| U.S. government | - | 702072 | - | - | - | - | 702072 |
| U.S. agency | - | 55998 | - | - | - | - | 55998 |
| Non-U.S. government & agency | - | 1393 | 4344 | 5352 | - | 999 | 12088 |
| Agency MBS | - | 398548 | - | - | - | - | 398548 |
| ABS/CMBS/MBS\* | 215439 | 38811 | 111993 | - | 9172 | 42974 | 418389 |
| Corporate | 25842 | 179637 | 587549 | 360953 | 155649 | 96297 | 1405927 |
| Municipal | 123814 | 275546 | 27818 | - | - | 561 | 427739 |
| Total | 365095 | 1652005 | 731704 | 366305 | 164821 | 140831 | 3420761 |

---

\* Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities

As of June 30, 2025, our fixed income portfolio remained well diversified, with 1,886 individual issues.

Our investment portfolio has limited exposure to structured asset-backed securities. As of June 30, 2025, we had $225 million in ABS, which are pools of assets collateralized by cash flows from several types of loans, including home equity, credit cards, autos and structured bank loans in the form of collateralized loan obligations (CLOs).

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As of June 30, 2025, we had $191 million in commercial and non-agency MBS and $399 million in MBS backed by government sponsored enterprises (GSEs - Freddie Mac, Fannie Mae and Ginnie Mae). Excluding the GSE-backed MBS, our exposure to ABS and CMBS was 9.4 percent of our investment portfolio at quarter end.

We had $1,406 million in corporate fixed income securities as of June 30, 2025, which includes $133 million invested in a high-yield credit strategy. This high-yield portfolio consists of floating rate bank loans and bonds that are below investment grade in credit quality and offer incremental yield over our core fixed income portfolio.

The municipal portfolio includes approximately 69 percent taxable securities and 31 percent tax-exempt securities. Approximately 93 percent of our municipal bond portfolio maintains an 'AA' or better rating, while 100 percent of the municipal bond portfolio is rated 'A' or better.

Securities within the equity portfolio are well diversified and are primarily invested in broad index exchange traded funds (ETFs). Our actively managed equity strategy has a preference for dividend income and value oriented security selection with low turnover, which minimizes transaction costs and taxes throughout our long investment horizon.

As of June 30, 2025, our equity portfolio had a dividend yield of 1.6 percent, compared to 1.3 percent for the S&P 500 index. Because of the corporate dividend-received-deduction applicable to our dividend income, we pay an effective tax rate of 13.1 percent on dividends, compared to 21.0 percent on taxable interest and 5.3 percent on municipal bond interest income. The equity portfolio is managed in a diversified and granular manner, with 79 individual securities and five ETF positions. No single company exposure in the equity portfolio represents more than 1 percent of invested assets.

Other invested assets include investments in low-income housing tax credit and historic tax credit partnerships, membership in the FHLBC and investments in private funds.

We had $61 million of investments in unconsolidated investees at June 30, 2025, compared to $56 million at December 31, 2024.

Our investment portfolio does not have any exposure to derivatives.

As of June 30, 2025, our capital structure consisted of $100 million in debt and $1.7 billion of shareholders' equity. Debt outstanding comprised 5 percent of total capital as of June 30, 2025. Interest and fees on debt obligations totaled $3 million for the first six months of 2025 and 2024. We incurred interest expense on debt at an average annual interest rate of 5.18 percent during the first six months of 2025, compared to 6.21 percent during the same period last year.

We paid a regular quarterly cash dividend of $0.16 per share on June 20, 2025, an increase of $0.01 from the prior quarter. We have increased dividends in each of the last 50 years.

Our three insurance companies are subsidiaries of RLI Corp, with RLI Ins. as the first-level, or principal, insurance company. At the holding company (RLI Corp.) level, we rely largely on dividends from our insurance subsidiaries to meet our obligations for paying principal and interest on outstanding debt, corporate expenses and dividends to RLI Corp. shareholders. As discussed further below, dividend payments to RLI Corp. from our principal insurance subsidiary are restricted by state insurance laws as to the amount that may be paid without prior approval of the insurance regulatory authorities of Illinois. As a result, we may not be able to receive dividends from such subsidiary at times and in amounts necessary to pay desired dividends to RLI Corp. shareholders. On a GAAP basis, as of June 30, 2025, our holding company had $1.7 billion in equity. This includes amounts related to the equity of our insurance subsidiaries, which is subject to regulatory restrictions under state insurance laws. The unrestricted portion of holding company net assets is comprised primarily of investments and cash, including $121 million in liquid assets. Unrestricted funds at the holding company are available to fund debt interest, general corporate obligations and dividend payments to our shareholders. If necessary, the holding company also has other potential sources of liquidity that could provide for additional funding to meet corporate obligations or pay shareholder dividends, which include a revolving line of credit, as well as access to capital markets.

Ordinary dividends, which may be paid by our principal insurance subsidiary without prior regulatory approval, are subject to certain limitations based upon statutory income, surplus and earned surplus. The maximum ordinary dividend distribution from our principal insurance subsidiary in a rolling 12-month period is limited by Illinois law to the greater of 10 percent of RLI Ins. policyholder surplus, as of December 31 of the preceding year, or the net income of RLI Ins. for the 12-month period ending December 31 of the preceding year. Ordinary dividends are further restricted by the requirement that they be paid from earned surplus. Any dividend distribution in excess of the ordinary dividend limits is deemed extraordinary

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and requires prior approval from the Illinois Department of Insurance (IDOI). In the first six months of 2025, RLI Ins. paid $110 million in ordinary dividends to RLI Corp. In 2024, RLI Ins. paid ordinary dividends totaling $152 million. As of June 30, 2025, $13 million of the net assets of our principal insurance subsidiary were not restricted and could be distributed to RLI Corp. as ordinary dividends without prior approval from the IDOI. Because the limitations are based upon a rolling 12-month period, the amount and impact of these restrictions vary over time. In addition to restrictions from our principal subsidiary's insurance regulator, we also consider internal models and how capital adequacy is defined by our rating agencies in determining amounts available for distribution.

#### Item 3. Quantitative and Qualitative Disclosures about Market Risk
There have been no material changes to our exposure to market risk from that reported in our 2024 Annual Report on Form 10-K.

Historically, our primary market risks have been equity price risk associated with investments in equity securities and interest rate risk associated with investments in fixed income securities. We have consistently invested in high credit quality, investment grade securities. See "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" of our 2024 Annual Report on Form 10-K for more information.

#### Item 4. Controls and Procedures
We maintain a system of controls and procedures designed to provide reasonable assurance as to the reliability of the financial statements and other disclosures included in this report, as well as to safeguard assets from unauthorized use or disposition. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures was performed, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective, as of the end of the period covered by this report.

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurances of achieving the desired control objective, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We believe that our disclosure controls and procedures provide such reasonable assurance.

No changes were made to our internal control over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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#### PART II - OTHER INFORMATION

#### Item 1. Legal Proceedings – There were no material changes to report .

#### Item 1A. Risk Factors – There were no material changes to report.

#### Item 2. Unregistered Sales of Equity Securities and Use of Proceeds - not applicable.

#### Item 3. Defaults Upon Senior Securities - Not applicable.

#### Item 4. Mine Safety Disclosures - Not applicable.

#### Item 5. Other Information –
Securities Trading Plans of Executive Officers and Directors

Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables prearranged transactions in Company securities in a manner that avoids concerns about initiating transactions at a future date while possibly in possession of material nonpublic information. Our Insider Trading Policy permits our executive officers and directors to enter into trading plans designed to comply with Rule 10b5-1.

During the three months ended June 30, 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

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#### Item 6. Exhibits

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Incorporated by Reference** | **Incorporated by Reference** | |
| **Exhibit**<br>**Number** | <br>**Description of Document** | **Form** | **Filing Date** | **Filed or Furnished**<br>**Herewith** |
| 10.1 | [2025 Stock Option Agreement\*](rli-20250630xex10d1.htm) |  |  | X |
| 10.2 | [2025 Non-Employee Director Restricted Stock Unit Agreement\*](rli-20250630xex10d2.htm) |  |  | X |
| 31.1 | [Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](rli-20250630xex31d1.htm) |  |  | X |
| 31.2 | [Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](rli-20250630xex31d2.htm) |  |  | X |
| 32.1 | [Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](rli-20250630xex32d1.htm) |  |  | X |
| 32.2 | [Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](rli-20250630xex32d2.htm) |  |  | X |
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |  |  | X |
| 101.SCH | Inline XBRL Taxonomy Extension Schema |  |  | X |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase |  |  | X |
| 101.DEF | Inline XBRL Taxonomy Definition Linkbase |  |  | X |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase |  |  | X |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase |  |  | X |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |  |  | X |

---

\* Management contract or compensatory plan

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#### SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | |
|:---|:---|
|  | RLI Corp.<br>/s/ Todd W. Bryant |
|  | Todd W. Bryant |
|  | Chief Financial Officer |
|  | (Principal Financial and Chief Accounting Officer) |
| Date: July 24, 2025 |  |

---

## Exhibit 10.1

**Exhibit 10.1**

**RLI CORP.**

**2023 Long-Term Incentive Plan**

**Stock Option Agreement**

**(May 13, 2025 Form of Agreement)**

---

| | |
|:---|:---|
| Name of Participant: | Name of Participant: |
| Number of Shares of Common Stock Covered: | &nbsp;&nbsp;Date of Grant: |
| Exercise Price Per Share of Common Stock: | &nbsp;&nbsp;Expiration Date: |
| Exercise Schedule (Cumulative):<br>***Actual vesting dates and corresponding shares incorporated as follows:*** | Exercise Schedule (Cumulative):<br>***Actual vesting dates and corresponding shares incorporated as follows:*** |
| Date(s) of<br><u>Exercisability</u><br>***[Date of Grant plus one year]***<br>***[Date of Grant plus two years]***<br>***[Date of Grant plus three years]***<br>***[Date of Grant plus four years]***<br>***[Date of Grant plus five years]***<br>| &nbsp;&nbsp;Number of Shares as to Which<br><u>Option Becomes Exercisable</u><br>***[20%]***<br>***[20%]***<br>***[20%]***<br>***[20%]***<br>***[20%]***<br>|

---

Effective as of the "Date of Grant" specified above, RLI Corp., a Delaware corporation (the "**Company**"), grants to the individual named above (the "**Participant**") an option representing the right to purchase shares of common stock, par value $0.01 per share, of the Company ("Common Stock") at the "Exercise Price Per Share of Common Stock" stated above (the "**Option**"). The Option shall be subject to the terms and conditions set forth in this Stock Option Agreement (the "**Agreement**") and in the RLI Corp. 2023 Long-Term Incentive Plan (the "**Plan**"). In the event of any conflict between the terms of the Agreement and the Plan, the terms of the Plan shall govern. Capitalized terms used but not defined shall have the meaning ascribed thereto in the Plan.

**Background**

A.The Company maintains the Plan (i) to align the interests of the Company's stockholders and the recipients of awards under the Plan by increasing the proprietary interest of such recipients in the Company's growth and success, (ii) to advance the interests of the Company by attracting and retaining officers, other employees, Non-Employee Directors, consultants and independent contractors and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders.

B.Under the Plan, the Human Capital & Compensation Committee of the Board of Directors of the Company (the "**Committee**") administers the Plan and has the authority to determine the awards granted under the Plan or delegate to specific persons authority to make certain awards.

C.The Committee or its delegee has determined that the Participant is eligible to receive an award under the Plan in the form of an **Option**.

D.The Company hereby grants the Option to the Participant under the following terms and conditions:

------

**Terms and Conditions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **Grant**. The Participant is granted the Option to purchase the number of shares of Common Stock specified at the beginning of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **Exercise Price**. The purchase price of each share of Common Stock subject to the Option will be the Exercise Price Per Share of Common Stock specified at the beginning of this Agreement (which price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **Non-Qualified Stock Option**. The Option is not intended to be and is not an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "**Code** "). Accordingly, the Option does not qualify for the tax treatment specified therein. The Option is a Nonqualified Stock Option for purposes of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **Exercise Schedule**. The Option will become vested and exercisable with respect to twenty percent (20%) of the shares of Common Stock covered under the Option annually over each of the five years from the Date of Grant as specified in the exercise schedule at the beginning of this Agreement. The exercise schedule will be cumulative; thus, to the extent the Option has not already been exercised and has not expired, terminated or been cancelled, the Participant or the person otherwise entitled to exercise the Option as to vested shares of Common Stock as provided herein may at any time, and from time to time, purchase all or any portion of the whole shares of Common Stock then purchasable under the exercise schedule.

Notwithstanding the foregoing or any other provision of this Agreement, the Participant may not exercise all or any portion of the Option (in any manner) during the Company's quiet periods in accordance with the Company's Insider Trading Policy in effect at such time.

The Option may also be exercised in full (notwithstanding the exercise schedule) under the circumstances described in Section 8 of this Agreement if it has not expired prior thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **Expiration**. The Option shall expire at 5:00 p.m. Central Time on the "Expiration Date" specified at the beginning of this Agreement. In no event may anyone exercise the Option, in whole or in part, after it has expired, notwithstanding any other provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **Procedure to Exercise Option**.

(a) *Notice of Exercise*. The Company partners with Solium Capital for the management and administration of its long-term incentives program using Solium's web-based application, Shareworks by Morgan Stanley®. The Option may be exercised by initiating an exercise through the Company's Shareworks by Morgan Stanley® site, https://rli.solium.com, or by delivering written notice of exercise to the Company at the principal executive office of the Company, to the attention of the Company's Secretary or other designated Company employees or representative. The notice shall be in writing and state the Grant Date and number of whole shares of Common Stock subject to such Option to be exercised. If the person exercising the Option is not the Participant, he/she also must submit appropriate proof that is satisfactory to the Committee in its sole discretion of his/her right to exercise the Option.

(b) *Tender of Payment*. Upon giving notice of any exercise hereunder, the Participant shall provide for payment of the purchase price of the shares of Common Stock being purchased through one or a combination of the following methods:

(i)Purchase. Cash (including check paid to the Company, wire transfer, bank draft, or money order);

(ii)Broker-Assisted Cashless Exercise (may be used for net cash only). By directing, via an irrevocable notice of exercise, a stockbroker designated by the Company through Shareworks by Morgan Stanley to effect a broker assisted cashless exercise to sell shares of Common Stock issued on exercise of the Option and remitting the proceeds of such sale to the Company to pay the exercise price and taxes, and remitting the net cash to the Participant; or

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(iii) Net Exercise (may be used for net shares only). By instructing the Company to withhold whole shares of Common Stock having an aggregate Fair Market Value, determined as of the date of exercise, less than or equal to the purchase price of the Shares acquired upon exercise and any applicable withholding taxes in accordance with Section 6(d) of this Agreement; provided that this method of exercise may only be used to deliver net shares to the Participant and no cash compensation may be provided, other than cash in lieu of a fractional share.

Notice of an exercise by Net Exercise by a Participant other than a designated executive officer of the Company must be provided to the Company by 3:00 p.m. Central Time on a trading day of the New York Stock Exchange (a "Trading Day") in order for the exercise to be effective on the date of such notice. Any notice to exercise by Net Exercise provided to the Company after 3:00 p.m. central time on a Trading Day, or on a day that is not a Trading Day, will be processed on the next Trading Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Designated executive officers of the Company are required to obtain pre-clearance in writing from the RLI Chief Legal Officer pursuant to the RLI Corp. Insider Trading Policy prior to exercising an Option and must provide notice of exercise to the Company in the manner and at the times specified by the Company.

Notwithstanding the foregoing, the Participant shall not be permitted to pay any portion of the purchase price with Shares, though a broker-assisted cashless exercise or through net exercise, if the Committee, in its sole discretion, determines that payment in such manner could have adverse tax or financial accounting consequences for the Company.

(c) *Company's Option to Cash-Out.* Upon receipt of notice of exercise, the Committee may elect to cash out all or part of the portion of the shares of Common Stock for which an Option is being exercised by paying Participant an amount, in cash or shares of Common Stock, equal to the excess of the Fair Market Value of the shares of Common Stock over the aggregate purchase price for the shares of Common Stock for which the Option is being exercised on the effective date of such cash-out.

(d) *Withholding Taxes*. Participant is responsible for payment of any federal, state, local or other taxes which must be withheld or paid in connection with the Option, and Participant must promptly pay to the Company any such taxes. The Participant hereby authorizes the Company and any Subsidiary to deduct from any payment owed to Participant any taxes required to be withheld or paid in connection with the Option, including social security and Medicare (FICA) taxes and federal, state and local taxes. The Company shall have the right to require that the Participant satisfy such obligations by making a cash payment to the Company. In lieu of all or any part of such a cash payment, the Participant may elect to authorize the Company to withhold whole shares of Common Stock which would otherwise be issuable upon the settlement of the Option equal to the amount necessary to satisfy any such tax obligations. Shares of Common Stock to be withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the maximum individual statutory tax rate in the Participant's applicable jurisdiction; provided that the Company shall be permitted to limit the number of shares so withheld to a lesser number if necessary, in the judgment of the Committee, to avoid adverse accounting consequences or for administrative convenience. Any fraction of a share of Common Stock which would be required to satisfy such an obligation shall be disregarded and the remaining amount due shall be withheld.

(d) *Delivery of Certificates*. As soon as practicable after the Company receives the notice and purchase price in full and payment for applicable taxes as provided above, it shall deliver to the person exercising the Option, in the name of such person, a certificate or certificates representing the shares of Common Stock being purchased; provided, however, that the Company may deliver the shares of Common Stock electronically in book-entry form. The Company shall pay any original issue or transfer taxes with respect to the issue or transfer of the shares of Common Stock and all fees and expenses incurred by it in connection therewith. All shares of Common Stock so issued shall be fully paid and nonassessable. Notwithstanding anything to the contrary in this Agreement, no certificate for shares of Common Stock distributable under the Plan shall be issued and delivered unless the issuance of such certificate complies with all applicable legal requirements including, without limitation, compliance with the provisions of applicable state securities laws, the federal Securities Act of 1933 and the Securities Exchange Act of 1934, and related regulations, and the Company may may further require that any such certificates bear a legend indicating that the sale, transfer or other disposition thereof by the holder is

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prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **Termination of Employment**. The Option may be exercised at any time prior to the Expiration Date only while the Participant remains employed with the Company or a parent or subsidiary thereof, and only if the Participant has been continuously so employed since the date the Option was granted; *provided that*:

(a)Except as otherwise provided below, the Option may be exercised for three months after termination of the Participant's employment, but only to the extent that it was exercisable immediately prior to termination of employment; provided that if the Participant dies within such three-month period, the Option may be exercised until the first anniversary of the Participant's termination of employment;

(b)The Option may be exercised for one year after termination of the Participant's employment if such termination is because of death of the Participant;

(c)The Option may be exercised for three years after the date of Participant's termination of employment if such termination of employment is because of the Participant's Disability;

(d)The Option may be exercised for three years after termination of the Participant's employment if such termination is because of the Participant's Retirement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)The Option may be exercised at any time prior to the expiration of the Option pursuant to Section 5 of this Agreement if such termination is because of the Participant's Qualifying Termination (pursuant to Section 18(a) of the Agreement).

Notwithstanding the above, in no event will any Option be exercisable at any time after the Expiration Date. When an Option is no longer exercisable, it shall be deemed to have lapsed or terminated. **The Company has no duty to inform Participant of the imminent expiration of the Option. The Option will expire as provided in this Section 7 and the term of the Option will not be extended, even if the Option expires during a period when the Option is unexercisable (i.e., during a "quiet period" or on a date on which the NYSE is closed for trading).**

*Termination for Cause.* Notwithstanding the foregoing, the Option shall terminate immediately if Participant is notified that Participant's employment is being terminated or has been terminated for Cause. Participant's termination shall be deemed to have been for Cause if, before or after such termination, facts and circumstances are discovered that would have justified a termination for Cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **Acceleration of Vesting**. In the event of the death, Disability, Retirement or Qualifying Termination of the Participant, any portion of the Option that has not expired or otherwise been terminated and was not previously exercisable shall become immediately exercisable in full if the Participant shall have been continuously employed by the Company or a parent or subsidiary thereof between the date the Option was granted and the date of such Disability, Retirement or Qualifying Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **Limitation on Transfer**. During the lifetime of the Participant, only the Participant or his/her guardian or legal representative may exercise the Option. The Option may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process otherwise than by will, the laws of descent and distribution, pursuant to beneficiary designation procedures approved by the Committee, or pursuant to a qualified domestic relations order. Notwithstanding the foregoing, the Participant may transfer the Option, without payment or consideration from the transferee, (a) to any one or more of the Participant's spouse or issue, (b) to one or more trusts established solely for the benefit of the Participant's spouse or issue or (c) to one or more partnerships in which the only partners are the Participant's spouse or issue. For purpose of this provision, the term "spouse" shall include a former spouse who receives a transfer pursuant to a qualified domestic relations order, and the term issue shall include stepchildren, step-grandchildren and adopted children. No such transfer shall be effective unless reasonable prior notice thereof is delivered to the Company. Any such permitted transferee shall be subject to all of the terms and conditions applicable to the person transferring the Option including the terms and conditions

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set forth in the Plan and this Agreement. Any attempt to sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Option other than in accordance with this Section 9 shall be null and void.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **No Stockholder Rights Before Exercise**. No person shall have any of the rights of a stockholder of the Company with respect to any share of Common Stock subject to the Option unless and until the share of Common Stock actually is issued to him/her upon valid exercise of the Option and such person becomes a stockholder of record with respect to such shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **Adjustment**. The Option is subject to adjustment, without the consent of the Participant, pursuant to Section 5.7 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **Interpretation of this Agreement**. All decisions and interpretations made by the Committee (or, as applicable, the Board) with regard to any question arising hereunder or under the Plan shall be binding and conclusive upon the Company and the Participant. If there is any inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan shall govern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **Discontinuance of Employment**. This Agreement shall not give the Participant a right to continued employment with the Company or any parent or subsidiary of the Company, and the Company or any such parent or subsidiary employing the Participant may terminate his/her employment at any time and otherwise deal with the Participant without regard to the effect it may have upon him/her under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **Binding Effect**. This Agreement shall be binding in all respects on the heirs, representatives, successors and assigns of the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. **Choice of Law; Jurisdiction**. This Agreement is entered into under the laws of the State of Delaware and shall be construed and interpreted thereunder (without regard to its conflict of law principles) , provided that Sections 16, 17, 20, 22 and 23 shall be construed and interpreted under the laws of the State of Illinois (without regard to its conflicts of law principles) . All disputes under this Agreement shall be heard in the federal and state courts located in Peoria, Illinois.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **Restrictions on Solicitation of Company Employee(s)**. Participant understands and acknowledges that the Company and its Subsidiaries have expended and continues to expend significant time and expense in recruiting and training its employees and that the loss of employees would cause significant and irreparable harm to the Company and any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Solicitation of Company Employee(s) During Participant's Employment</u>*.* Unless otherwise prohibited by applicable law, in return for this Option grant and by virtue of Participant's ongoing duty of loyalty to the Company, the Participant – while Participant remains employed by the Company – shall not, directly, indirectly, or through the direction or control of others, solicit, hire, recruit, attempt to hire or recruit, encourage, or induce any employee(s) of the Company or any Subsidiary to terminate their employment with the Company or any Subsidiary (collectively, "**Solicitation of Company Employee(s) During Participant's Employment**"), unless Participant's Solicitation of Company Employee(s) during Participant's Employment is in the best interest of the Company and prior consent for the Solicitation of Company Employee(s) During Participant's Employment has been received from an authorized officer of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Solicitation of Company Employee(s) Following Participant's Employment</u>. Unless otherwise prohibited by applicable law, in return for this Option grant, the Participant – during the twelve (12) month period that immediately follows the Participant's termination of employment with the Company, regardless of the reason for termination and whether it is initiated by the Participant, the Company or otherwise – shall not, directly, indirectly, or through the direction or control of others, solicit, hire, recruit, attempt to hire or recruit, encourage, or induce any employee(s) of the Company or any Subsidiary whom Participant supervised or with whom Participant directly worked (regardless of whether such individuals worked in the same location) during the last two (2) years of Participant's employment by the Company and/or with respect to whom Participant received confidential employment or background information during the last two (2) years of Participant's employment by the Company to terminate their employment with the Company or any Subsidiary (collectively, "**Solicitation of Company Employee(s) Following Participant's Employment**"), unless Participant's Solicitation of Company Employee(s) Following Participant's Employment is in the best

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interest of the Company and prior consent for the Solicitation of Company Employee(s) Following Participant's Employment has been received from an authorized officer of the Company. Participant's obligations under this Section 16(b) shall not apply to soliciting any individual(s) formerly employed by or who otherwise provided services to the Company or any Subsidiary whose employment was terminated or whose services were disengaged by the Company or any Subsidiary; or to any individual(s) who voluntarily terminated their employment with or ceased providing services to the Company or any Subsidiary at least six (6) months prior to any solicitation by Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Violation(s) of Section 16</u>. If Participant has received or been entitled to payment of cash, delivery of shares of Common Stock, or a combination thereof pursuant to this Option grant within six (6) months before the Participant's termination of employment with the Company or any Subsidiary, the Committee, in its sole discretion, may require Participant to return or forfeit the cash and/or shares of Common Stock received with respect to the Option (or its economic value as of the date of the exercise of Option) in the event of a violation of this Section 16. The Committee's right to require forfeiture must be exercised within ninety (90) days after discovery of such an occurrence but in no event later than fifteen (15) months after Participant's termination of employment with the Company or any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Solicitation of Company Customer(s) During Participant's Employment</u>*.* Unless otherwise prohibited by applicable law, in return for this Option grant and by virtue of Participant's ongoing duty of loyalty to the Company, the Participant – while Participant remains employed by the Company – shall not, directly or indirectly, solicit or otherwise induce any person or entity engaged in a business relationship with Company, including, but not limited to, any policyholder, or any reinsurer, producer, broker, or other third party business partner of the Company (collectively, "**Company Customer(s)**") to: (a) discontinue or diminish its or their relationship with the Company and/or any Subsidiary ; (b) conduct with any person or entity other than the Company or any Subsidiary any business that such Company Customer(s) conducts or could conduct with the Company and/or any Subsidiary; or (c) otherwise interfere with or disrupt, or in any manner attempt to interfere with or disrupt, any of the Company's and/or any Subsidiary relationships with Company Customer(s) (collectively, "**Solicitation of Company Customer(s) During Participant's Employment**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Solicitation of Company Customer(s) Following Participant's Employment</u>*.* Unless otherwise prohibited by applicable law, in return for this Option grant, the Participant – during the twelve (12) month period that immediately follows the Participant's termination of employment with the Company, regardless of the reason for termination and whether it is initiated by the Participant, the Company or otherwise – shall not, as proprietor, partner, joint venturer, stockholder, director, officer, trustee, principal, agent, member, consultant, servant, employee, or in any other capacity whatsoever, directly or indirectly, solicit or otherwise induce any Company Customer(s) to: (a) discontinue or diminish its or their relationship with the Company and/or any Subsidiary; (b) conduct with any person or entity other than the Company or any Subsidiary any business that such Company Customer(s) conducts or could conduct with the Company and/or any Subsidiary; or (c) otherwise interfere with or disrupt, or in any manner attempt to interfere with or disrupt, any of the Company's and/or any Subsidiary's relationships with Company Customer(s) (collectively, "**Solicitation of Company Customer(s) Following Participant's Employment**"); provided, however, Participant's obligations under this Section 17(b) shall apply only to any Company Customer(s) doing business with the Company and/or any Subsidiary at any time during the last twelve (12) months of the Participant's employment with the Company (or at any time during the Participant's employment with the

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Company, if the length of employment is less than twelve (12) months): <u>and</u> either (i) with which Participant had material personal dealings during the last twelve (12) months of the Participant's employment with the Company (or at any time during the Participant's employment with the Company, if the length of employment is less than twelve (12) months); (ii) with which someone under Participant's direct supervision had material personal dealings during the last twelve (12) months of the Participant's employment with the Company (or at any time during the Participant's employment with the Company, if the length of employment is less than twelve (12) months); or (iii) about which Participant received Confidential Information, or other information that is not publicly available, by or through their relationship to the Company or any Subsidiary. The Company and any Subsidiary, on the one hand, and Participant, on the other, expressly acknowledge and agree that this Section 17(b) in itself is not intended to, and will not, function as a covenant against competition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Violation(s) of Section 17</u>. If Participant has received or been entitled to payment of cash, delivery of shares of Common Stock, or a combination thereof pursuant to this Option grant within six (6) months before the Participant's termination of employment with the Company or any Subsidiary, the Committee, in its sole discretion, may require Participant to return or forfeit the cash and/or shares of Common Stock received with respect to the Option (or its economic value as of the date of the exercise of Option) in the event of a violation of this Section 17. The Committee's right to require forfeiture must be exercised within ninety (90) days after discovery of such an occurrence but in no event later than fifteen (15) months after Participant's termination of employment with the Company or any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. **Change in Control**. In the event of a Change in Control, the Committee shall take one of the actions described in Sections 18(a) or (b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Substitution</u>. If the Change in Control is a merger, consolidation or statutory share exchange, the Committee may make appropriate provision for the replacement of the Option by the substitution of an option to purchase stock of the corporation surviving any merger or consolidation with substantially similar terms and conditions (or, if appropriate, an option to purchase stock of the parent corporation of the Company or such surviving corporation), provided such option preserves the full economic value of the Option (to the extent permitted under Code Section 409A, or, if applicable, the stock rights exemption from Code Section 409A) and provides for full vesting of the option in the event Participant experiences a Qualifying Termination; provided that if the Company continues to be a publicly traded corporation immediately after a Change in Control, the Committee may provide for the Option to continue in effect in accordance with its terms, in which case the Option shall become fully vested in the event Participant experiences a Qualifying Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Acceleration of Vesting and Payment of Awards</u>. At least ten days before the occurrence of the Change in Control, the Committee may declare, and provide written notice to Participant of the declaration that the Option, whether or not then exercisable, shall be cancelled at the time of, or immediately before the occurrence of, the Change in Control in exchange for payment to Participant, within ten (10) days after the Change in Control of cash equal to, for each share of Common Stock covered by the canceled Option, the amount, if any, by which the Fair Market Value per share of Common Stock exceeds the purchase price per share of Common Stock covered by the Option. Alternatively, at least ten days before the occurrence of the Change in Control, the Committee may cause the Option to become immediately become exercisable in full and Participant shall have the right, during the period preceding the time of cancellation of the Option, to exercise the Option as to all or any part of the shares of Common Stock covered thereby in whole or in part. In the event the Committee takes the actions contemplated by the preceding sentence, to the extent the Option shall not have been exercised before the Change in Control, the Option shall be cancelled at the time of, or immediately before, the Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. **Amendment**. Subject to the terms of the Plan, the Committee may amend the terms and conditions of this Agreement. Amendments to the Agreement may be unilaterally made by the Company (with the approval of the Committee) unless such amendments are deemed by the Committee to be materially impair the rights of Participant and not required as a matter of law.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. **Confidential Information**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Restrictions on Use/Disclosure of Confidential Information</u>. Pursuant to this Agreement, the Company's Confidential Information Protection Policy, the Company's Code of Conduct, and any additional confidentiality policy and/or agreement governing Participant's use/disclosure of confidential information, the Participant understands and acknowledges that during the course of employment by the Company, Participant will have access to and learn about confidential, secret, and proprietary documents, materials, data, and other information, in tangible and intangible form, of and relating to the Company and any Subsidiary, and the foregoing's businesses and existing and prospective customers, suppliers, and other associated third parties **("Confidential Information")**. The parties specifically recognize that the Company's Confidential Information includes, without limitation: (i) business/financial information (preliminary financial results that have not been made available to the public, investment information; financial data, budgets, and projections; the terms and conditions of contracts and the existence of other actual or potential relationships between the Company and other persons or entities); (ii) strategies and plans (strategic plans; marketing plans and data; business development plans and objectives; and management reports); (iii) personal information (employee information; personally-identifiable information concerning any person – such as address, date of birth, social security number, etc. – that can be used to identify, contact, or locate a person; and medical or health information concerning any person); (iv) underwriting/claims information (the identity of RLI's agents, brokers, insureds, or customers; the types of policies or bonds sold through a particular agency or producer; claims, loss history, reserves, litigation plans and similar or related information; policy forms and other forms or agreements created or used by the Company; underwriting guidelines or requirements, forms, templates, training and support materials; rates, rate manuals, and commissions); and (v) other confidential information (information related to the Company's cyber security measures, attorney-client privileged information, software code, and any other information that has not been made public by RLI). For purposes of this Agreement, Confidential Information shall not include any information that (i) is or becomes generally available to the public other than as a result of a disclosure or wrongful act of Employee or any of Employee's agents; (ii) was available to Employee on a non-confidential basis before its disclosure by a member of the Company Group; or (iii) becomes available to Employee on a non-confidential basis from a source other than a member of the Company Group; *provided, however,* that such source is not bound by a confidentiality agreement with, or other obligation with respect to confidentiality to, a member of the Company Group.

Participant further understands and acknowledges that this Confidential Information and the Company's ability to reserve it for the exclusive knowledge and use of the Company and any Subsidiary is of great competitive importance and commercial value to the Company, and that improper use or disclosure of the Confidential Information by Participant will cause irreparable harm to the Company, for which remedies at law will not be adequate, and may also cause the Company to incur financial costs, loss of business advantage, liability under confidentiality agreements with third parties, and civil damages.

Participant acknowledges and agrees that Participant, shall not, without the express prior written consent of an authorized officer of the Company, directly or indirectly use, disclose, communicate, publish, copy, or make available any Confidential Information, including any work in which the Participant may have been engaged on behalf of the Company, to any person, firm, corporation, association or other entity, for any reason or purpose whatsoever, except as required in the performance of Participant's authorized employment duties to the Company. At the conclusion of employment with the Company, the Participant is required to return or destroy all Company documents and records in his or her possession or control, including those containing Confidential Information. The Participant further acknowledges that Participant's obligations to maintain and protect Confidential Information pursuant to this Agreement, the Company's Confidential Information Protection Policy, the Company's Code of Conduct, and any additional confidentiality policy and/or agreement governing Participant's use/disclosure of confidential information, will continue after Participant's employment termination date. However, unless otherwise prohibited by applicable law, Participant's nondisclosure obligation shall extend for three (3) years after Participant's employment termination date as to Confidential Information that does not qualify as a trade secret or is not otherwise protected under applicable law; trade secret information shall be protected from disclosure as long as the information at issue continues to qualify as a trade secret.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Exceptions to Confidentiality Obligations</u>. Notwithstanding, the foregoing, nothing in this Agreement shall prohibit or restrict Participant from lawfully: (i) initiating communications directly with, cooperating with, providing information to, causing information to be provided to, or otherwise assisting in an investigation by, any governmental authority regarding a possible violation of any law; (ii) responding to any inquiry or legal process directed to Participant from any such governmental authority; (iii) testifying, participating or otherwise assisting in any action or proceeding by any such governmental authority relating to a possible violation of law; or (iv) making any other disclosures that are protected under the whistleblower provisions of any applicable law. Additionally, as provided by the Federal Defend Trade Secrets Act, Participant will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; (ii) to the individual's attorney in relation to a lawsuit for retaliation against the individual for reporting a suspected violation of law; or (iii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Violation(s) of Section 20</u>. If Participant has received or been entitled to payment of cash, delivery of shares of Common Stock, or a combination thereof pursuant to this Option grant within six (6) months before the Participant's termination of employment with the Company or any Subsidiary, the Committee, in its sole discretion, may require Participant to return or forfeit the cash and/or shares of Common Stock received with respect to the Option (or its economic value as of the date of the exercise of Option) in the event of a violation of this Section 20. The Committee's right to require forfeiture must be exercised within ninety (90) days after discovery of such an occurrence but in no event later than fifteen (15) months after Participant's termination of employment with the Company or any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. **Consideration**. Participant acknowledges that the Option provided pursuant to this Agreement is in exchange for the promises made in this Agreement, including the confidentiality and non-solicitation obligations. Participant agrees that the Company has business interests which are legitimately in need of the protections provided for herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. **Specific Performance** <u>.</u> Because of the difficulty of measuring economic losses to the

Company as a result of a breach or threatened breach of the covenants set forth in Sections 16, 17 and 20 of this Agreement, and because of the immediate and irreparable damage that would be caused to the Company for which it would have no other adequate remedy, the Company shall be entitled to enforce the foregoing covenants in the event of a breach or threatened breach, by injunctions and restraining orders from any arbitrator or court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall not be the Company's exclusive remedy for a breach but instead shall be in addition to all other rights and remedies available to the Company, at law and equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. **Survival; Third Party Beneficiaries** <u>.</u> Participant's obligations under Sections 16, 17, and 20 of this Agreement will continue in effect after the termination of Participant's

employment, regardless of the reason or reasons for termination, and whether such termination is voluntary or involuntary. Participant's obligations under this Agreement

will be binding upon Participant's heirs, executors, assigns, and administrators and will

inure to the benefit of each Subsidiary of the Company and their respective subsidiaries,

successors, and assigns. Each Subsidiary of the Company that is not a signatory hereto shall be a third-party beneficiary of Employee's representations and covenants hereunder and shall be entitled to enforce this Agreement as if a party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. **Modification**. Should any provision of this Agreement be declared or be determined by any court of competent jurisdiction to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby, and said illegal or invalid part, term, or provision shall be deemed not be a part of this Agreement. The parties expressly empower a court of competent jurisdiction to modify any term or provision of this Agreement to the extent necessary to comply with existing law and to enforce the Agreement as modified.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25. **Advice of Counsel**. Certain statutes and/or other regulations require that Participant be provided with an opportunity to consult with an attorney before signing this Agreement, including the covenants not to solicit in Section 16-17. Participant acknowledges that they have been given at least fourteen (14) calendar days from the time they receive this Agreement to consider whether to sign this Agreement.

The Participant and the Company have executed this Agreement as of **###TODAY'S DATE AND TIME OF ACCEPTANCE###.** 

RLI Corp.

By

Name

Title____________________________________

I, **###PARTICIPANT_NAME###,** by clicking on the "Accept" button below do hereby electronically accept the Stock Option Award ("**Award**") as of today's date and agree to the terms and conditions set forth in the Stock Option Agreement included above.

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## Exhibit 10.2

**Exhibit 10.2**

**RLI CORP.**

**2023 Long-Term Incentive Plan**

**Non-Employee Director Restricted Stock Unit Agreement**

**(May 13, 2025 Form of Agreement)**

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|:---|:---|
| Name of Participant: | Name of Participant: |
| Number of Units: | &nbsp;&nbsp;Date of Grant: |
| Restriction Period: | Restriction Period: |
| <u>Date of Vesting</u><br>***[______]*** | &nbsp;&nbsp;<u>Percentage of Units that Become Vested</u><br>***100%***<br>|

---

Effective as of the "Date of Grant" specified above, RLI Corp., a Delaware corporation (the "**Company**"), grants to the individual named above (the "**Participant**") Restricted Stock Units ("**Restricted Stock Units**"), each of which represents the right to receive one share of common stock, par value $0.01 per share, of the Company ("**Common Stock**") at the time and subject to the terms and conditions set forth in this Restricted Stock Unit Agreement (the "**Agreement**") and in the RLI Corp. 2023 Long-Term Incentive Plan (the "**Plan**"). In the event of any conflict between the terms of the Agreement and the Plan, the terms of the Plan shall govern. Capitalized terms used but not defined shall have the meaning ascribed thereto in the Plan.

**Background**

A.The Company maintains the Plan (i) to align the interests of the Company's stockholders and the recipients of awards under the Plan by increasing the proprietary interest of such recipients in the Company's growth and success, (ii) to advance the interests of the Company by attracting and retaining officers, other employees, Non-Employee Directors, consultants and independent contractors and (iii) to motivate such persons to act in the long term best interests of the Company and its stockholders.

B.Under the Plan, the Human Capital & Compensation Committee of the Board of Directors of the Company, or such other committee designated by the Board in accordance with the Plan (the "**Committee**"), administers the Plan and has the authority to determine the awards to be granted under the Plan.

C.Pursuant to the outside director compensation program recommended by the Nominating/Corporate Governance Committee and approved by the Board of Directors, the Committee has determined that the Participant is eligible to receive an award of Restricted Stock Units under the Plan (the "**Restricted Stock Unit Award**").

D.The Company grants the Restricted Stock Unit Award to the Participant under the following terms and conditions:

**Terms and Conditions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **Grant**. The Participant is granted the Restricted Stock Unit Award with respect to the number of Restricted Stock Units specified at the beginning of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **Restriction Period**. One hundred percent (100%) of the Restricted Stock Units subject to the Award will become vested on the Date of Vesting as specified at the beginning of this Agreement, provided that the Participant continuously serves as a Non-Employee Director or otherwise provides services to the Company as an employee or service provider through such Date of Vesting.

The Restricted Stock Units shall also become vested in full (notwithstanding the vesting schedule) under the circumstances described in Section 3 of this Agreement or in the event of a Qualifying Termination in accordance with Section 14 of this Agreement if they have not been forfeited prior thereto. Except as provided in Sections 3 or 14 of this Agreement, the Restricted Stock Units shall be forfeited in their entirety the Participant's service as a Non-Employee Director, employee or service provider of the Company terminates prior to the Date of Vesting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **Acceleration of Vesting**. In the event of the death or Disability of the Participant, the Units shall immediately become vested in full if the Participant continuously served as a Non-Employee Director or otherwise provided services to the Company as an employee or service provider between the date the Award was granted and the date of such death or Disability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **Dividend Equivalents .** As of each date on which the Company pays a cash dividend to record owners of Shares of Stock (a "**Dividend Date** "), the number of Restricted Stock Units subject to the Restricted Stock Unit Award shall increase by (i) the product of the total number of Restricted Stock Units subject to the Restricted Stock Unit Award which remain unsettled by shares of Common Stock issued to the Participant in accordance with Section 5 hereof (as reflected in the records of the Company's transfer agent) immediately prior to such Dividend Date multiplied by the dollar amount of the cash dividend paid per share of Common Stock by the Company on such Dividend Date, divided by (ii) the Fair Market Value on such Dividend Date and rounded down to the nearest whole share ; provided that any fractional shares shall be paid to the Participant in cash . Any such additional Restricted Stock Units shall be subject to the same vesting conditions and payment terms set forth herein as the Restricted Stock Units to which they relate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **Delivery of Certificates .** Except to the extent deferred in accordance with a deferred compensation program established by the Company and Section 409A of the Internal Revenue Code of 1986, as amended (the "**Code** "), as soon as practicable, but not more than 30 days, after the date of vesting in accordance with Sections 2 or 3, the Company shall deliver to the Participant or his or her beneficiary, in the name of such person, a certificate or certificates representing a number of shares of Common Stock equal to the number of Restricted Stock Units subject to the Restricted Stock Unit Award (including any dividend equivalents pursuant to Section 4 of this Agreement) that have become vested pursuant to Section 2 or Section 3 of this Agreement; provided, however, that the Company may deliver the shares of Common Stock electronically in book-entry form. The Company shall pay any original issue or transfer taxes with respect to the issue or transfer of the shares of Common Stock and all fees and expenses incurred by it in connection therewith. All shares of Common Stock so issued shall be fully paid and nonassessable. Notwithstanding anything to the contrary in this Agreement, no certificate for shares of Common Stock distributable under the Plan shall be issued and delivered unless the issuance of such certificate complies with all applicable legal requirements including, without limitation, compliance with the provisions of applicable state securities laws, the federal Securities Act of 1933 and the Securities Exchange Act of 1934, and related regulations, and the Company may further require that any such certificates bear a legend indicating that the sale, transfer or other disposition thereof by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **Withholding Taxes .** Except as required by applicable law, no federal, state, local or other taxes will be withheld or paid in connection with the Restricted Stock Unit Award, and the Participant is responsible for the payment of all such taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **Limitation on Transfer**. The Restricted Stock Unit Award may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process otherwise than by will, the laws of descent and distribution, pursuant to beneficiary designation procedures approved by the Committee, or pursuant to a qualified domestic relations order . Notwithstanding the foregoing, the Participant may transfer the Restricted Stock Unit Award, without payment or consideration from the transferee, (a) to any one or more of the Participant's spouse or issue, (b) to one or more trusts established solely for the benefit of the Participant's spouse or issue or (c) to one or more partnerships in which the only partners are the Participant's spouse or issue. For purpose of this provision, the

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term "spouse" shall include a former spouse who receives a transfer pursuant to a qualified domestic relations order, and the term issue shall include stepchildren, step-grandchildren and adopted children. No such transfer shall be effective unless reasonable prior notice thereof is delivered to the Company. Any such permitted transferee shall be subject to all of the terms and conditions applicable to the person transferring the Restricted Stock Unit Award including the terms and conditions set forth in the Plan and this Agreement. Any attempt to sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Restricted Stock Unit Award other than in accordance with this Section 7 shall be null and void.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **No Stockholder Rights Before Issuance of Shares**. No person shall have any of the rights of a stockholder of the Company with respect to any share of Common Stock subject to the Restricted Stock Unit Award unless and until the share of Common Stock actually is issued to him/her following the vesting and settlement of the Restricted Stock Unit Award and such person becomes a stockholder of record with respect to such shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **Adjustment**. The Restricted Stock Unit Award is subject to adjustment, without the consent of the Participant, pursuant to Section 5.7 of the Plan .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **Interpretation of this Agreement**. All decisions and interpretations made by the Committee (or, as applicable, the Board) with regard to any question arising hereunder or under the Plan shall be binding and conclusive upon the Company and the Participant. If there is any inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan shall govern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **Discontinuance of Service**. This Agreement shall not give the Participant a right to continued service with the Company, and the Company may terminate his/her service at any time and otherwise deal with the Participant without regard to the effect it may have upon him/her under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **Binding Effect**. This Agreement shall be binding in all respects on the heirs, representatives, successors and assigns of the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **Choice of Law; Jurisdiction**. This Agreement is entered into under the laws of the State of Delaware and shall be construed and interpreted thereunder (without regard to its conflict of law principles). All disputes hereunder shall be heard in the federal and state courts located in Peoria, Illinois .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **Change in Control**. In the event of a Change in Control, the Committee shall take one of the actions described in Sections 14(a) or (b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Substitution</u>. If the Change in Control is a merger, consolidation or statutory share exchange, the Committee may make appropriate provision for the replacement of the Restricted Stock Unit Award by the substitution of an award relating to the stock of the corporation surviving any merger or consolidation with substantially similar terms and conditions (or, if appropriate, an award relating to the stock of the parent corporation of the Company or such surviving corporation), provided such award preserves the full economic value of the Restricted Stock Unit Award (to the extent permitted under Section 409A of the Code) and provides for full vesting of the award in the event the Participant experiences a Qualifying Termination; provided that if the Company continues to be a publicly traded corporation immediately after a Change in Control, the Committee may provide for the Award to continue in effect in accordance with its terms, in which case the Restricted Stock Unit Award shall become fully vested in the event the Participant experiences a Qualifying Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Acceleration of Vesting and Payment of Awards</u>. The Committee may declare, and provide written notice to the Participant of the declaration, that the Restricted Stock Unit Award, whether or not then vested, shall be cancelled at the time of, or immediately before the occurrence of, the Change in Control in exchange for payment to the Participant, within ten (10) days after the Change in Control, of cash equal to, for each Restricted Stock Unit covered by the canceled Restricted Stock Unit Award, an amount equal to the Fair Market Value per share of Common Stock; provided, however, that if the Restricted Stock Unit Award is deferred compensation, within the meaning of Section 409A of the Code, and the Change in Control is not a "change in control event," within the meaning of Section 409A of the Code, the Restricted Stock Unit

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Award shall become immediately vested upon the Change in Control, but the cash payment pursuant to this Section 14(b) shall be made in accordance with Section 5 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. **Amendment**. Subject to the terms of the Plan, the Committee may amend the terms and conditions of this Agreement. Amendments to the Agreement may be unilaterally made by the Company (with the approval of the Committee) unless such amendments are deemed by the Committee to be materially impair the rights of the Participant and not required as a matter of law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **Section 409A**. This Agreement is intended to comply with, or be exempt from, the applicable requirements of Section 409A of the Code, and limited, construed and interpreted in accordance with such intent. Although the Company does not guarantee any particular tax treatment, to the extent that the Restricted Stock Unit Award is subject to Section 409A of the Code, it shall be paid in a manner that is intended to comply with Section 409A of the Code, including regulations and any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto. In no event whatsoever shall the Company be liable for any additional tax, interest or penalties that may be imposed on the Participant by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code. Notwithstanding anything in the Plan or this Agreement to the contrary, the Participant shall be solely responsible for the tax consequences of the Restricted Stock Unit Award, and in no event shall the Company have any responsibility or liability if the Restricted Stock Unit Award does not meet any applicable requirements of Section 409A of the Code. Although the Company intends to administer the Plan to prevent taxation under Section 409A of the Code, the Company does not represent or warrant that the Plan or the Restricted Stock Unit Award complies with Section 409A or any other provision of federal, state, local or other tax law. To the extent any amounts under this Agreement are payable by reference to the Participant's termination of employment, such term shall be deemed to refer to the Participant's "separation from service," within the meaning of Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. **Plan Administration .** The Company partners with Solium Capital for the management and administration of its long-term incentives program using Solium's web-based application, Shareworks by Morgan Stanley®. The Participant may access information pertaining to the Restricted Stock Unit Award via the Company's Shareworks by Morgan Stanley® site, https://rli.solium.com .

*\*\*\*\*Signatures Appear on the Following Page\*\*\*\**

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*\*\*\*\*Signature Page to [NAME] Restricted Stock Unit Agreement\*\*\*\**

The Participant and the Company have executed this Agreement as of the [__] day of [__], [___].

PARTICIPANT

RLI Corp.

By

Name<u> </u> 

Title_______________________________________

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## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Craig W. Kliethermes, certify that:

I have reviewed this quarterly report on Form 10-Q of RLI Corp.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 24, 2025

---

| |
|:---|
| /s/ Craig W. Kliethermes |
| Craig W. Kliethermes |
| President & CEO |

---

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## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Todd W. Bryant, certify that:

I have reviewed this quarterly report on Form 10-Q of RLI Corp.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 24, 2025

---

| |
|:---|
| /s/ Todd W. Bryant |
| Todd W. Bryant |
| Chief Financial Officer |

---

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## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of RLI Corp. (the "Company") on Form 10-Q for the period ending June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Craig W. Kliethermes, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ Craig W. Kliethermes |
| Craig W. Kliethermes |
| President & CEO |
| July 24, 2025 |

---

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## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of RLI Corp. (the "Company") on Form 10-Q for the period ending June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Todd W. Bryant, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ Todd W. Bryant |
| Todd W. Bryant |
| Chief Financial Officer |
| July 24, 2025 |

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