RLI Corp.

Good morning and welcome to the RLI-Corp Fourth Quarter Earnings Teleconference. After management's prepared remarks, we will open the conference up for questions and answers. Before we get started, let me remind everyone that through the course of the teleconference, RLI management may make comments that reflect their intentions, beliefs, and expectations for the future. As always, these forward-looking statements are subject to certain factors and uncertainties which could cause actual results to differ materially. please refer to the risk factors described in the company's various SEC filings, including in the annual report on Form 10-K, as supplemented in Forms 10-Q, all of which should be reviewed carefully. The company has filed a Form 8-K with the Securities and Exchange Commission that contains the press release announcing fourth quarter results. During the call, RLI management may refer to operating earnings and earnings per share from operations, which are non-GAAP measures of financial results. RLI's operating earnings and earnings per share from operations consist of net earnings after the elimination of after-tax realized gains or losses and after-tax unrealized gains or losses on equity securities. Additionally, equity and earnings of unconsolidated investees and related taxes were removed from operating earnings and operating EPS to present a consistent approach in excluding all unrealized changes in value from equity investments. RLI's management believes these measures are useful in gauging core operating performance across reporting periods but may not be comparable to other companies' definitions of operating earnings. The Form 8 contains a reconciliation between operating earnings and net earnings. The Form 8 and press release are available at the company's website at www.rlicorp.com. I will now turn the conference over to RLI's President and Chief Executive Officer, Mr. Craig Clithermis. Please go ahead.

Good morning, everyone. We appreciate you being with us today, and I'd like to introduce Erin Diepenthaler, our Chief Financial Officer, and Jen Klovnok, our Chief Operating Officer, who will join me. I'll start by saying we feel very good about where RLI is today, and just as importantly, where we're headed. 2025 was another strong year for our company. We delivered underwriting income of $264 million on an 84 combined ratio. grew book value per share by 33% inclusive of dividends, and achieved our 30th consecutive year of underwriting profitability. That kind of consistency is extremely rare in our industry, and it certainly doesn't happen by accident. It's too long to be considered a hot streak. It reflects disciplined execution over time and the principles we work to uphold every day. The environment remains competitive. And premium growth was modest, but that's exactly when our model tends to show its strength. We don't measure success by how fast we grow. We measure it by how well we grow and whether today's decisions stand the test of time. Jerry Stevens, our founder, used to remind us that you don't win the long game by swinging at every pitch. You win it by knowing which ones to let go by. That mindset is deeply ingrained at ROI. We're comfortable pulling back when the risk-reward equation doesn't work, and we're confident leaning in where we have the expertise and when the market supports it. Our diversified specialty portfolio, strong balance sheet, and ownership culture give us a lot of flexibility and a lot of confidence as we look ahead. We're well-positioned and optimistic about the opportunities in front of us, And with that, I'll turn it over to Aaron to walk through the financials in more detail.

Thanks, Craig, and good morning, everyone. Yesterday, we reported fourth quarter operating earnings of 94 cents per share, up from 52 cents in the year-ago period. Better underwriting performance, minimal storm activity, and increases in investment income drove most of the improvement compared to last year. For the quarter, we generated $71 million of underwriting income on an 82.6 combined ratio versus $22 million on a 94.4 combined ratio in Q4 last year. For the full year, we delivered $264 million of underwriting income on, as Craig mentioned, an 83.6 combined ratio, marking our 30th consecutive year of underwriting profits. I wanted to call your attention to a change we made to our definition of operating earnings. As referenced in a footnote on page 1 of our release and in the non-GAAP disclosures on page 2, operating earnings now exclude equity in earnings of unconsolidated investees and related taxes. Prior periods were recast to conform to that definition for comparability. unconsolidated investees only includes our minority investment in prime holdings. We believe excluding these investments from operating earnings better reflects RLI's core operations where we maintain full operational control and aligns the treatment of investee results with other equity investments. On a GAAP basis, net earnings were $0.99 in the quarter and $4.37 for the year. an increase of 17% over full year 2024. In addition to operating earnings, net earnings include net realized gains and losses, net unrealized gains and losses from equity securities, and now earnings of unconsolidated investees from Prime. Our Q4 net earnings reflect Prime's core operating results based on our minority ownership and a reduction to Prime's value on our balance sheet to $53 million. Turning to premium, top line growth was down 2% for Q4 and up 1% for the full year as competitive dynamics necessitated heightened discipline in several businesses, while other products continued to find opportunities. Property premium was down 11% during the quarter, consistent with the rate environment for catastrophe-exposed commercial property, although other parts of the segment, marine and Hawaii homeowners, continued to grow. Property's underwriting profitability was supported by $17 million of favorable loss emergence on prior year's catastrophes, modestly offset by $4 million of storm activity in the quarter. Inclusive of these net benefits, property's combined ratio was 49.2 in Q4 and 57.2 on the year. Casualty premium was up 2% in the quarter and 7% on the year with strong contributions from personal umbrella. The bottom line for casualty benefited from $4 million of favorable prior year's loss development. Just under $2 million of this release was related to prior year catastrophe activity. surety premium remains flat in the current period and up slightly on a year-to-date basis. The segment's quarterly underwriting results included 2.7 of favorable loss emergence from prior years, which improved surety loss ratio by seven points in the quarter. On the expense ratio, Q4 came in at 39.3, up from 37.6 a year ago. Bonus and profit sharing expenses were higher on strong results and business level expenses were up as we've continued to invest in people and technology. On the investment side, net investment income increased 9% in the quarter and the portfolio generated 1.5% total return in Q4 and 9% for the year. The yield environment has been relatively stable for intermediate maturity and we continue to find accretive fixed income opportunities. Purchase yields averaged 4.9% in the quarter, which was 70 basis points above our book yield. Putting it all together, we produced $5.29 of comprehensive earnings for the year, driving 33% growth in book value per share inclusive of dividends. This level of generated capital again allowed for a special dividend to shareholders of $2 per share in addition to our ordinary fourth quarter dividend. Overall, a solidly profitable championship caliber close to 2025. With that, I'll turn it over to Jen for more color on market conditions.