RLI Corp.

Good morning, and welcome to RLI Corp. Second 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 of 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 second quarter results. During the call, RLI management may refer to operating earnings and earnings per share from operations, which are non-GAAP measures of the financial results. RLIs operating in 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 in earnings of unconsolidated investees and related taxes are excluded from operating earnings and operating EPS to present a consistent approach in excluding all unrealized changes in value from equity investment. 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 8K contains a reconciliation between operating earnings and net earnings. The Form 8K 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 Kliethermes. Please go ahead.

Well, good morning, everyone, and thank you for joining us today. With me are Aaron Diefenthaler, our Chief Financial Officer, and Jen Klobnak, our Chief Operating Officer. Before we begin, I'd like to thank our associate owners. Their hard work and excellence helped RLI earn recognition as a Ward's Top 50 Property and Casualty Performer for the 36th consecutive year, the only company to achieve that distinction every year. We are pleased with another quarter of profitable growth. We generated an 86 combined ratio, grew gross premiums written by 3%, increased net investment income by 17%, produced a 25% return on equity, and returned significant capital to our shareholders through both a special dividend and share repurchases. Those results reflect another quarter of disciplined execution across our diversified specialty portfolio. Markets change, our principles don't. One other thing that hasn't changed, insurance is still a relationship business. Our business partners choose RLI because they know our people are accessible, empowered to solve problems, and consistently show up through every phase of the insurance cycle. We help customers better understand risk, tailor coverage to their needs, and deliver better claim outcomes, lowering their cost of risk. That's how trusted relationships are built and it's become one of our greatest competitive advantages. When we step back, this quarter reinforces what we have believed for more than 60 years. Strong relationships, disciplined underwriting, sensible capital management, and continuous improvement remain the foundation of our long-term success. Those principles are producing results today and they leave us optimistic about the opportunities ahead. With that, I'll turn it over to Aaron to walk through the financial results.

Thanks, Craig, and good morning, everyone. Yesterday, we reported second quarter operating earnings of 83 cents per share versus 82 cents last year. The results reflect solid underwriting performance and a consistent increase in investment income. As a reminder, and as referenced by the operator, Beginning in the fourth quarter of 2025, we changed our definition of operating earnings to exclude equity in the earnings of unconsolidated investees and the related taxes. All prior period comparisons in the release reflect that change. On a gap basis, second quarter net earnings totaled $1.82 per share compared with $1.34 in the year-ago period. The difference between net earnings and operating earnings was primarily influenced by the strong performance of our equity portfolio. We recognized 103 million of unrealized gains on equity securities during the quarter, compared with 44 million last year. Realized gains were 9 million in the quarter, reflective of modest portfolio rebalancing. Underwriting income totaled 59.9 million for the quarter and our overall combined ratio was 85.6 compared to 84.5 last year. The loss ratio improved 0.4% to 45.5 while the expense ratio increased 1.5% to 40.1 due to personnel related costs, acquisition expense and investments in technology. Results benefited from 39.8 million of favorable development on prior years loss reserves Compared with $27.6 million in the second quarter of 2025. The quarter also included $10 million of net incurred losses from 2026 catastrophe events. As Craig mentioned, overall growth in gross premium was 3% in line with the first quarter and again led by casualty, which was up 11%. Growth in this segment was also on trend with personal umbrella and transportation being the primary drivers. Underwriting profit for casualty resulted in a 99.3 combined ratio, bolstered by $13 million of favorable development on prior year's reserves. For clarity, in casualty, the $13.7 million of favorable development disclosed in the earnings release was modestly offset by a half million of reserve strengthening on prior year CAT activity. Notable contributors to casualty's overall favorable development were I'll also note that there was about 1 million of 2026 catastrophe losses in casualty associated with our package businesses. For property, the combined ratio was very strong at 56.8 on lighter catastrophe activity at 9 million and 23 million of favorable prior year development from both marine and Cat Events in years 2025 and prior. While the competitive dynamics for E&S property persist and the segment's gross premium was down 6%, we continue to see opportunities to bind business at an adequate rate and have experienced persistent growth in Hawaii homeowners and marine. Surety posted a solid 87.2 combined ratio, modestly better than last year, and supported by 3.4 million of favorable development. The loss ratio improvement for surety was partly offset by a three-point increase in the expense ratio due to continued investments in infrastructure and higher acquisition expenses. Growth in the segment was muted down 6% in the quarter as commercial surety faced some headwinds related to a slowdown in our renewable energy business. As usual, Jen will go into more detail at the product level. Turning to investments, our activity during the quarter was supported by $145 million of operating cash flow. While this is down compared to last year on higher levels of paid loss, it offered meaningful support to fixed income purchase activity, which was accretive, with yields averaging 4.9% in the quarter. Net investment income increased 17% to $46 million and continued to be an important contributor to our results. The investment portfolio produced a 3.4% total return for the quarter and a 3% return for the first six months of the year. At quarter end, total investments and cash were approximately $4.9 billion. From a capital management perspective, in addition to our regular quarterly dividend of 18 cents per share, we paid a $2 special dividend in total returning just over $200 million to shareholders. We also added flexibility in how we return capital with a newly authorized $250 million share repurchase program. During the quarter, we were active in the market and repurchased approximately 235,000 shares at an average price of $51.25. At June 30, around $238 million remained available under the authorization. Putting it all together, Comprehensive earnings were $166 million or $1.80 per share compared with $143 million or $1.55 per share last year. Adjusting this result for dividends and share repurchases, book value per share increased 11% from year-end 2025. We are pleased with our second quarter and first half performance. On a year-to-date basis, our results are very consistent between quarters in terms of both top line and underwriting profitability. We generated another quarter of combined ratios in the mid 80s, continued to benefit from higher investment income and return a meaningful amount of capital to shareholders while maintaining a strong balance sheet. And with that, I'll turn it over to Jen for more detail.