RLI 2026年第三季度业绩电话会：综合成本率86.2%，投资收益增长13%

核心要点

• RLI Corp.公布2026年第三季度每股营运收益为0.86美元，高于去年同期的0.82美元。GAAP每股净收益从1.35美元降至0.88美元，主要原因是权益类证券价值变动。
• 总承保保费增长2%，承保利润达5880万美元。综合成本率为86.2%，而2025年第三季度为85.1%。
• 净投资收益增长13%，达到4670万美元。新购入固定收益投资的平均收益率为5.5%，比投资组合的账面收益率高出近100个基点。
• 尽管总保费下降了1%，财产险仍是盈利能力最强的承保业务板块，在60.1%的综合成本率下创造了超过5000万美元的承保利润。
• 责任险保费在个人伞险增长22%的带动下增长了4%，但该板块的综合成本率升至99.6%。管理层表示，过去三年个人伞险的累计费率上调幅度约为50%。
• 剔除股息和股票回购因素后，每股账面价值较2025年底增长10%。RLI在本季度以60.51美元的平均价格回购了近10.4万股股票。

核心财务数据

指标

2026年第三季度

对比 / 点评

营运每股收益

0.86美元

2025年第三季度为0.82美元

GAAP每股净收益

0.88美元

2025年第三季度为1.35美元；下降主因权益类证券价值变动

总承保保费增长率

2%

责任险领跑板块增长

承保利润

5880万美元

受益于往年准备金的有利释放

综合成本率

86.2%

去年同期为85.1%

赔付率

47.4%

上升1.3个百分点

费用率

38.8%

同比小幅改善

往年准备金有利释放

2290万美元

2025年第三季度为1550万美元

当年巨灾损失

约400万美元

主要集中在财产险

净投资收益

4670万美元

增长13%

经营性现金流

1.95亿美元

增长9%

综合亏损

3680万美元，或每股0.40美元

去年同期综合收益为1.52亿美元，或每股1.65美元

账面价值增长

较2025年底增长10%

剔除股息和股票回购影响

2026年前九个月，RLI在85.9%的综合成本率下创造了1.76亿美元的承保利润。净投资收益增长15%，营运每股收益为2.52美元，与去年同期基本持平。

业务与经营业绩

财产险

财产险总保费下降约1%，但该板块维持了60.1%的综合成本率，并创造了超过5000万美元的承保利润。业绩包含1040万美元的往年准备金有利释放，其中400万美元与往年风暴相关。当年巨灾损失总计390万美元，其中约一半与夏威夷的巨灾活动有关。

海事险保费增长11%，对承保利润作出了显著贡献。尽管价格基本持平，但投保申请量仍实现了两位数增长。

随着新产能进入市场以及标准承保商和零售商从批发渠道夺回业务，超额及剩余险（E&S）财产险保费下降了17%。在市场走弱周期中进入第二次续保的客户，其续保价格出现了两位数的下滑。管理层表示，目前的价格水平仍具有足够的吸引力，能在精选业务上创造两位数的投资回报，费率水平与2022年持平。

在费率上涨13%的推动下，夏威夷房东险保费增长了9%。保单数量略有减少，风暴活动频繁对RLI产生的财务影响微乎其微。

RLI与房东保险服务商Steadily的合作在本季度创造了900万美元的保费，部分抵消了财产险其他业务的疲软。RLI表示，公司否决了超过99%的MGA（管理型总代理）合作提议，并在运营上将Steadily视为分公司，对承保、理赔和报告进行严格监督。

责任险

责任险保费增长4%，而综合成本率从98.2%升至99.6%。该板块录得820万美元的往年准备金有利释放。前九个月的基础赔付率环比保持稳定，维持在67%略低水平。

个人伞险保费增长22%，费率上涨8%。管理层表示，整个业务组合的费率在三年内累计上涨了约50%。2025事故年及当前事故年的早期损失迹象较为乐观，但在积累更多数据前，RLI仍维持原有的赔付率假设。

由于竞争加剧（尤其是美东地区），E&S责任险保费下降10%。投保申请仍保持两位数增长，管理层注意到季度末超额责任险购买活动有所增强，但要判定这是否为持续趋势还为时过早。

尽管费率上涨12%，运输险保费仍下降了9%。RLI对未达到盈利或风控标准的部分客户不再续保。老牌保险公司以及重返市场的MGA带来的竞争加剧，导致续保留存率下降了近10个百分点。

担保险

担保险保费增长约1%，综合成本率从85.0%改善至79.8%。受430万美元往年准备金有利释放和赔付活动减少的支持，承保利润从560万美元增至730万美元。

受政府和可再生能源工程开工放缓影响，合同及商业担保险保费略有下降。交易型担保险则受益于大选之年对公职人员履约保证保险需求增加。管理层将市场现状形容为过度拥挤，部分竞争对手放宽了承保要求。

管理层指引

RLI表示，一项已获批准的个人伞险费率方案将于1月1日生效，管理层预计费率涨幅将在2027年重新回到两位数水平。

管理层还预计下一次续保时再保险条款和条件将较为有利，并将当前环境描述为买方市场。然而，目前谈判仍处于早期阶段，需要进一步磋商。

公司未为其与Steadily的合作设定保费目标，强调承保盈利能力而非保费规模。

风险与关注点

• 随着新MGA和其他产能提供商进入市场，E&S财产险价格继续软化。管理层预计市场将进一步软化，但尚未将当前状况归类为完全的软性市场。
• 责任险竞争在超额责任和商业运输领域有所加剧，对保费、留存率和承保条款构成压力。
• 尽管竞争对手为了保费增长而争夺大客户，但运输险仍面临损失程度趋严（loss-severity）的风险。
• 担保险业务受到政府和可再生能源项目放缓的逆风影响，同时部分竞争对手放宽了赔偿和承保要求。
• 收益率上升和债券价格下跌导致本季度总投资收益率为-2%，并带来3680万美元的综合亏损。
• 准备金的有利释放对本季度的承保业绩起到了实质性支撑，包括财产险、责任险和担保险的释放。

分析师问答亮点

• 个人伞险：管理层看到了费率上调和风险选择改善带来的积极信号，但认为目前下调事故年赔付率假设还为时过早。
• Steadily合作：由于佣金和利润分红机制，该特定业务组合的获得成本高出几个百分点。管理层澄清称，这并不意味RLI的整体费用率也会出现同等幅度的上升。
• 财产险赔付率：RLI表示本季度没有显著的一次性项目。上半年较高的磨损性损失解释了早期的恶化情况。
• 管理责任险：定价已趋于稳定，本季度费率持平，今年迄今下降1%。管理层认为，市场在维持价格底线方面变得更加有纪律。
• 超额责任险准备金：有利释放主要来自2020和2021事故年，这与该产品长尾险种的特征相符。
• 人工智能与分销：RLI尚未发现个人AI智能体影响其个人伞险业务的比价/购买行为。随着此类工具从房屋险和汽车险向外拓展，公司将继续监测其应用情况。

业绩电话会完整文本

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完整财报电话会议逐字稿

管理层陈述

Operator

Good morning, and welcome to the RLI Corp. Third Quarter Earnings Teleconference. After management's prepared remarks, we will open the conference up for question 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 third 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 are excluded from operating earnings and operating EPS to present a consistent approach in excluding all unrealized changes in values 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-K contains a reconciliation between operating earnings and net earnings. The Form 8-K 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.

Craig Kliethermes

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. We are pleased with another quarter of consistent profitable performance. We produced an 86% combined ratio, grew premiums 2%, increased net investment income 13% and grew book value 10% from year-end, inclusive of dividends and share repurchases. Those results may sound familiar. We're okay with that. Consistency may be boring to some. At RLI, we think boring is beautiful.

Behind that consistency is disciplined underwriting. Our underwriters are selective, discerning and exacting about the risks we take and the price and terms we require. We don't need every opportunity across our diverse portfolio of niche specialty products. We will look for the right opportunities where expertise and risk selection gives us an advantage.

Insurance remains a relationship business. People like doing business with people they like and more importantly, people and companies, they trust. Our customers and distribution partners know our people are accessible, genuine, empowered to solve problems and consistently show up. Our expertise gets us to the right answer. Our service and relationships help earn us the next opportunity. Markets change, our principles don't. We will continue to underwrite with discipline, invest in our people and relationships and pursue profitable opportunities where our expertise makes a difference.

With that, I'll turn it over to Aaron for more detail on the financials.

Aaron Diefenthaler

Thanks, Craig, and good morning. Yesterday, we reported third quarter operating earnings of $0.86 per share compared with $0.82 last year. The quarter reflected solid underwriting performance, a 13% increase in net investment income and 2% growth in gross premiums written. As we have noted in prior quarters, our definition of operating earnings changed in Q4 of 2025 and excludes equity in the earnings of unconsolidated investees and the related taxes. Prior period comparisons have been appropriately recast.

On a GAAP basis, third quarter net earnings totaled $0.88 per share compared with $1.35 in the year ago period. The year-over-year difference was primarily driven by comparable changes in the value of equity securities between periods. Underwriting income totaled $58.8 million for the quarter and our overall combined ratio was 86.2% compared with 85.1% last year. The loss ratio increased 1.3 points to 47.4% while the expense ratio improved modestly to 38.8%. Results benefited from favorable development on prior year's loss reserves which totaled $22.9 million in the current quarter, up from $15.5 million in the third quarter of 2025. Current year catastrophe losses were modest at approximately $4 million primarily in the Property segment.

Related to catastrophe losses, I want to mention a new display in our earnings press release on Page 4, where we now break out catastrophe losses by segment. As we have discussed in prior quarters, the Casualty segment can pick up some catastrophe activity related to packaged businesses. We believe the new disclosure will be helpful in determining changes in the underlying loss ratio. As discussed in the footnote, any development on prior year storms is included in the upper part of the table.

Turning to our segments results. Casualty again led on growth, up 4% in the quarter while posting a 99.6% combined ratio compared with 98.2% last year. Casualty's underwriting results benefited from $8.2 million of favorable development on prior year's reserves, roughly in line with Q3 of 2025. Several products contributed to the release, including excess casualty and commercial transportation. On a sequential basis, Casualty's underlying loss ratio was similar to the prior quarter and remains just under 67 on a year-to-date basis.

Property continued to generate very strong underwriting results. Gross premiums were down approximately 1% while the segment produced just over $50 million of underwriting income on a 60.1% combined ratio equivalent to last year. Property benefited from $10.4 million of favorable prior year reserve development inclusive of $4 million from prior year storms. During the quarter, properties current year catastrophe losses totaled $3.9 million, about half of which was represented by activity in Hawaii.

Surety also had a very good quarter with gross premiums up approximately 1% on a 79.8 combined ratio compared with 85 last year. The segment benefited from $4.3 million of favorable prior year reserve development and lower loss activity. Underwriting income for surety increased $7.3 million from $5.6 million in the prior year quarter. As usual, Jen will offer more detail on product level performance and market conditions.

Turning to cash and investments. Operating cash flow was $195 million in the quarter, up 9% from last year and providing meaningful support to portfolio activity. New purchases were largely concentrated in investment-grade fixed income with average yields of 5.5%, which is nearly 100 basis points above our book yield. As mentioned, net investment income increased 13% to $46.7 million and remains an important contributor to operating results. On a mark-to-market basis, rising yields, lower bond prices and a modest offset from equities resulted in a negative 2% total return for the quarter.

The movement in fixed income prices also affected comprehensive earnings. We recorded a comprehensive loss of $36.8 million or $0.40 a share for the quarter compared with comprehensive earnings of $152 million or $1.65 a share last year. From a capital management perspective, during the quarter, we paid our regular quarterly dividend of $0.18 per share, while repurchasing just under 104,000 shares at an average price of $60.51. At September 30, approximately $232 million remained available under our share repurchase authorization. Adjusting for dividends and share repurchases, book value increased 10% from year-end 2025.

Putting it all together through the first 9 months of 2026, we generated $176 million of underwriting income on an 85.9% combined ratio. Net investment income increased 15% and operating earnings were $2.52 a share, very consistent with the prior year. We are pleased with our third quarter performance and the balance of underwriting profitability, investment income and capital strength.

And with that, I'll turn the call over to Jen for more detail.

Jennifer Klobnak

Thank you, Aaron. I'll jump right into segment update. Property premium was down 1% in the quarter on a 60 combined ratio. Marine is a highlight within our portfolio, delivering 11% premium growth in the quarter, along with a meaningful contribution to underwriting profit. While the marine market remains competitive with rate change essentially flat for both the quarter and year, the team continues to proactively work with our producers and are known as problem solvers. Our partnership approach helped drive double-digit growth in submissions providing us with plenty of opportunities, so we can be selective in writing profitable business.

E&S Property continues to navigate a highly competitive environment with premium down 17% for the quarter as additional capacity enters the market and standard carriers and retailers reclaim business that had previously flowed through wholesalers. However, new business submission activity remained strong and increased again this quarter, providing us with plenty of opportunities to target profitable business.

Renewal pricing declined double digits on accounts experiencing their second renewal in this softening market cycle and retention remains slightly below historical levels. We continue to prioritize underwriting discipline over premium retention and are comfortable allowing business to move when pricing does not meet our return targets. The business we are binding is our rates we believe are adequate.

Hawaii Homeowners delivered solid rate-driven growth with premium increasing 9% for the quarter and rates up 13%. Policy count was modestly lower, reflecting a book roll completed earlier this year with renewal retention slightly below historical levels. Storm activity remained elevated during the quarter, and our local claims team responded to our insurers following these events. However, the associated financial impact to ROI was immaterial.

We continue to look for new opportunities for profitable growth across our insurance portfolio. Over the past several years, we planted a number of seeds including hiring underwriting talent, expanding into complementary products that leverage our existing underwriting expertise and more recently, developing strategic distribution partnerships that bring new capabilities to bear. This quarter, one of those investments began to meaningfully contribute to our top line.

Our partnership with Steadily, which specializes in landlord insurance, generated $9 million of premium and helped to offset some of the premium decline in parts of our property segment. We are pleased with the early results and remain disciplined in how we manage the partnerships. Our teams are closely aligned on underwriting and claims, and we actively monitor production through regular reporting, ongoing communication and on-site visits with the same rigor as all RLI products. This is a good example of how we maintain underwriting discipline while finding new opportunities to add to our diverse portfolio.

Surety delivered another strong quarter with a 79.8 combined ratio and premium growth of 1%. Competition has increased, particularly in the small to middle market where some competitors are reducing underwriting requirements. Contract and commercial surety premium was modestly lower, reflecting slower construction starts in government and renewable energy projects. Transactional surety was a bright spot with increased opportunities in public official bonds during this election year. Our team is actively marketing our capabilities and focusing on growing producer relationships, while maintaining the underwriting discipline and oversight that continue to drive strong results.

Casualty premium increased 4% on a 99.6% combined ratio. Personal umbrella delivered strong premium growth of 22% for the quarter, with rates increasing 8%. As forecast last quarter, the pace of rate increases moderated as several previously approved rate actions have now earned through the book. Our next approved rate filing is effective January 1, and we expect rate increases to return to double-digit levels during 2027.

In addition to rate, we continue to focus on improving the underlying risk profile of the book. We are closely monitoring new business characteristics and sharing those insights with our producer partners to reinforce our risk appetite and shape the growth. We are encouraged by the progress we are seeing, particularly in geographic mix and driver characteristics. Combined with the meaningful rate increases implemented over the past 3 years, we believe these improvements position the personal umbrella book well for more profitable growth.

E&S casualty, which includes both general and excess liability coverage, has seen an increase in competition, particularly in the Northeast. Premium declined 10% in the quarter, reflecting pressure from new entrants on both renewal retention and new business. Despite the evolving market conditions, underlying activity remains encouraging. Submissions increased double digits supported by continued engagement with our producer partners and a strong focus on maintaining those relationships.

While new capacity from MGAs and standard carriers has modestly impacted retention, we remain disciplined in our underwriting and focused on achieving adequate rate for the coverages we provide. We have a strong pipeline of quoted project business and saw increased buying activity on excess liability business at the end of the quarter. We hope this encouraging activity signals improving momentum.

Transportation delivered a profitable quarter, including recognizing favorable reserve development. As competition increased late in the quarter, we remain focused on underwriting discipline and maintaining an underwriting profit. Premium declined 9% for the quarter, while rates increased 12%. We proactively nonrenewed select accounts that did not meet our profit expectations or failed to address loss control recommendations. We also saw increased competition from both established markets and reemerging MGAs and which contributed to renewal retention declining almost 10 points.

Insurers continue to seek great relief and are increasingly shopping, which has contributed to higher new business submission activity and provides additional opportunities to selectively add attractive accounts. We remain disciplined and well positioned to capitalize on opportunities where we believe the insured invest in safety practices and we can obtain adequate premium for the risk.

The theme for 2026 has been maintaining discipline in an evolving environment. We have the benefit of a diverse product portfolio, where in some sectors, competitors are hungry for growth and aggressively cutting rates and expanding terms and conditions to write premium. We do not enforce top line budgets with our underwriters, and they are empowered to pull back when market conditions do not support our profitability objectives.

At the same time, the market continues to provide opportunities in other sectors. Our talented teams stay close to our customers to recognize where those opportunities exist. In an overall softening market, the team was able to grow premium 2% in the quarter and produced an 86% combined ratio. That is an outstanding result. With 3 quarters of underwriting profit on the books, we are well positioned for a strong finish to 2026.

And now I'll turn the call back to the moderator to open it up for questions.

Operator

\[Operator Instructions\] Your first question comes from Michael Phillips with Oppenheimer.

分析师问答

Michael Phillips

I wanted to first ask on personal umbrella. You've mentioned some rate actions and now it's going to moderate and pick back up, Jen, you said, in 2027. You've done a lot of stuff there that with rates recently and then, of course, higher underlying attachment points. I guess my question would be, are you seeing those benefits in that businesses current year loss ratios? Or are they holding steady because those benefits are maybe being offset by higher severity there?

Jennifer Klobnak

Yes. Thank you, Michael. I'd say it is early days. We have taken a lot of action. If you look at cumulatively over the last 3 years, rates overall on the book are up about 50%. In addition to that, we've changed a lot in regard to working with our producers to make sure that the business we're getting on the books meets our appetite and the risk profile we're looking for. So all that has been good action. We are seeing positive signs in the current accident year as well as in the prior accident year 2025. We are very hesitant to recognize those good signs yet. And so we are holding up our loss ratio picks in those accident years for now until we have a little longer period of time to make sure that all of those actions are truly resulting in a positive impact.

Michael Phillips

Okay. Could you give a little more detail on your relationship with Steadily that you mentioned? Who's doing the underwriting there? How much risk will you guys retain? Is that more of a distribution play? Just any details there.

Jennifer Klobnak

Sure. So as we look at these unique relationships, we see a lot, as you can imagine, a lot of MGAs want to have our paper. We say no to over 99% of them. But occasionally, there's a diamond in the rough. And so in this case, Steadily really impressed us with regard to the focus, the laser focus that they have as a company. We see them as running essentially like a branch office of ROI. We have a strong cultural fit. We have input into coverage, and we vetted the claims that they do, which they do in-house and we also have a lot of interaction with the team. We're actually doing a visit next week. But -- so there is constant interaction in terms of reporting and understanding what's going on in the book of business.

So the other thing is they don't have a top line focus in terms of -- we don't have a target for them. We really don't feel strongly about how much business they write. We just want to have business that we expect to be on the books and then we want the losses to come in as expected as well. And that has happened so far, even though it's early days. But that's the nature of that relationship.

Michael Phillips

Okay. And you haven't said how much kind of a top line that could be over the next year?

Jennifer Klobnak

We really don't forecast that because, again, we don't have strong feelings about having them produce a certain amount.

Operator

Your next question comes from Hristian Getsov with Wells Fargo.

Hristian Getsov

My first question is on the property underlying loss ratio. The ratio was flat year-over-year, which was surprising given the 400 bps of deterioration we saw in the first half. Is there anything one-off that we should be aware of or any change in loss assumptions as we kind of think about the trajectory going forward?

Aaron Diefenthaler

No. Hristian, this is Aaron. It -- there's nothing in the current quarter that's one-off necessarily. I would point to the first half of the year is just having some higher attritional loss activity across the portfolio and we mentioned that in the prior call.

Hristian Getsov

Got it. And then for my second question, with the increased adoption of personal AI agents by consumers, have you seen any change in shopping any parts of your business, particularly focusing on like the personal umbrella product where agentic AI can help consumers refine their coverages or shop around more easily? And any changes you're thinking about your distribution strategy?

Jennifer Klobnak

Good question. We have not seen any changes at this point in time. We have a very diverse group of producers on personal umbrella ranging from large personal lines carriers all the way to independent agents in your local talent. And so I think a lot of that agentic AI capabilities are really focused on the home and auto so far. And so as that evolves, we're obviously monitoring that, but we haven't seen it impact our personal umbrella book as of yet.

Operator

Your next question comes from the line of Meyer Shields with Keefe, Bruyette, & Woods.

Meyer Shields

Two really brief questions. First, with regard to the MGA relationship, should we think of that as having any expected impact on, I guess, acquisition expenses or the expense ratio?

Jennifer Klobnak

Yes, Meyer, you're correct in the commissions are a little bit higher when you work with a distribution partner like that, and they do have a profit commission component. So that will self-regulate depending on the results of the business. But yes, a couple of points higher, I would say.

Meyer Shields

A couple of points on that book, not that the overall impact is a couple of points?

Jennifer Klobnak

No, just -- yes, just on that particular book, you're right.

Meyer Shields

Okay. Sorry. I just want to make sure I understood it. I was hoping for an update on management liability. I was hearing some signs out there that might be turning, but I'm wondering what you're seeing?

Jennifer Klobnak

Yes. Meyer, I think that management liability market has stabilized. I'm going to use that word. It appears that our rate change, for example, is fairly flat for the year. And -- well, actually, for the quarter, it's flat. It's down just 1% for the year. But we are seeing, I'll say, some discipline in that market in terms of people understanding that the risk continues and involved. If you think about the artificial intelligence components of things, there's a need to have a floor on that pricing. And so I think the market has come to terms with flat is reasonable. And then you have to look at individual risk to determine if someone needs a rate increase or someone deserves a rate decrease. But overall, it's definitely a flat market at this point.

Meyer Shields

Okay. Perfect. And I also wanted to thank you for the additional disclosure.

Operator

Your next question comes from the line of C Gregory Peters with Raymond James.

Charles Peters

I wanted to just pivot back to the excess casualty, I think you had some favorable development there that you talked about. And I think you previously just described that book is primarily construction related. Can you talk about the years where you're getting the development? And then -- and just talk about how you think about the competitive pressures in that market right now?

Aaron Diefenthaler

Greg, it's Aaron. It tends to be a longer tail business for us, so primarily accident years '20 and '21, driving some of that favorable result.

Jennifer Klobnak

Yes. And this is Jen. As you think about the competitive environment, I would say the competition has picked up in the excess liability space. I'd say last year, there was less competition. People were pulling back or providing less limit. And this year, it seems like people are, again, looking for premium. And so particularly in the Northeast region, we've seen more competition from both MGAs as well as standard markets coming in, making a combinations on larger accounts taking advantage of offering the auto to package the liability with that. And so there is more competition this year.

Again, we're kind of, as Craig mentioned, boring, we have a stable appetite. We are consistent for our producers and our insurers. So the market knows what we offer. They know that we will be there. We wait for these other markets to have issues and pull back. And then again, we'll have more opportunity. This year just happens to be a little bit more crowded marketplace.

Charles Peters

Got it. My follow-up question is and I realize it's early days, but it feels like there's going to be another positive step change in reinsurance costs for you guys next year. Just curious how you're -- if you've had any early read on how you think reinsurance is going to play out for you guys for the '27 year?

Jennifer Klobnak

You're right. It is early days. We've had a few of our reinsurance trips happen already. So we're definitely in the market talking to our partners in that space. And as is well publicized, it's a buyer's market. So we expect to get some positive terms and conditions as we renew, but we have a couple more conferences and things to attend and a lot of negotiation yet to happen. But I do expect a positive result for ROI for one month.

Operator

Your next question comes from the line of Andrew Andersen with Jefferies.

Unknown Analyst

This is Sid on for Andrew. First, it looks like the year-over-year deterioration in the casualty underlying loss ratio accelerated this quarter. Can you just unpack how much of that was pricing and mix versus if there is any change in your underlying view of loss trends?

Aaron Diefenthaler

Yes. Sid, this is Aaron. I would say -- I would put the current underlying loss ratio for casualty kind of in line with the prior 2 quarters. So on a sequential basis, we're very much in line. And I would set aside the prior year quarter, where we had a little bit of action on the current accident year that helped that quarter. So I would just say we're fairly stable from an underlying standpoint when you look at the sequential trajectory.

Unknown Analyst

Okay. And then maybe pivoting to surety. I think growth turned positive this quarter, but you also mentioned some increased competition. So just curious if you can give us an update on what the pipeline looks like there and if you're seeing any signs of increased activity that could sustain positive growth?

Jennifer Klobnak

Yes. So surety, the market is crowded. There's a lot of competition. I would say in the construction part of the book, there's a lot of talk of construction in the United States regarding the data centers that's where a lot of the focus is, and there are a lot of large contractors in that space. And for that reason, we're not a big market for that space because we tend to target small to middle market sized contractors. So this year is kind of a headwind a bit in the other construction projects aren't as active as, I'll say, the data center part of the world.

On the commercial and transactional side, we've had several years of growth. And so this year, it might be a bit of a reset. We had some headwinds coming. Last year, we took some opportunities from -- in the last couple of years from investments in renewable energy projects, things of that nature. And this year, that has slowed given the change to tax advantage and things of that nature. So -- and then you have to balance that with the interest rates, which at first, I thought that was holding up some construction, but I think some people in different regions are tired of waiting for lower interest rates, so they're just starting projects. So it's kind of a mixed bag. You can't kind of do a broad brush.

I know there are also a couple of industry losses in surety, and we're hoping that, that brings a little discipline to the market. But what we've seen is some competitors are so hungry for surety premium that they're asking almost no questions and not requiring indemnity, which is unusual in the surety space and typically results eventually in some loss activity.

So we are remaining disciplined and continuing our underwriting practices as we have and hoping that, again, opportunity will knock down the road. But we have seen some bright spots this year so far, and we hope that we can continue. We're getting out and marketing often and trying to stay in front of people and asking for their business, which as simple as that sounds, tends to result in some positive opportunities.

Operator

Your next question comes from the line of Mark Hughes with Truist Securities.

Mark Hughes

You had mentioned in the excess liability that I think your binding rate was a little bit better at quarter end. And you thought maybe that was a potential green shoot if I heard you correctly. Do you think that was your initiatives, kind of your relationships? Or do you think there's anything more broadly that is influencing that?

Jennifer Klobnak

Well, it's hard to tell as we meet with our broker partners, which -- WSA was a big conference last week, we got to touch base with a lot of our producer partners. The first half of the year was a bit slower for us and for them and we're all banking on construction picking up. We're also kind of waiting. And so we're hoping that, that is a sign, but it's a little too early to tell. Again, it's kind of specific by region, so we're seeing strong business in the West and in the middle of the country. It's just really the East Coast that has been a bit slower. And so here, we saw a couple more binders at the end of the quarter. We're hoping that, that will continue. But it's hard to -- I mean, I'm hoping that's a trend, but it's hard to call it that yet.

Mark Hughes

Okay. In the Marine, you had nice acceleration top line. Any individual markets, kind of end markets, your geographies where you saw more strength?

Jennifer Klobnak

We have a great group of underwriters who are planted across the country. And that's really helping us just take advantage wherever there is some opportunity because a lot of marine is based on the construction industry as well. So wherever in the U.S., there is opportunity, we tend to find it because we do have people locally who are working with producers closely. So I'd say, it's really broad. We did start up a smaller product a couple of years ago, auto physical damage in that space. We've seen some big growth there. But there's nothing too specific to point to. I think it's just our team doing a great job.

Mark Hughes

Yes. If I might squeeze one more in the E&S property down 17%, talked about more capacity coming into the market, how much more downside do we have here? How is the pricing when you think about relative to earlier cycles? What are the signposts of the worse could be behind us or not?

Jennifer Klobnak

Yes. I would say we're assuming a softening market. It's not a soft market. We can still get -- we can find business at rates in terms that we're comfortable with and getting a double-digit return on. So we think the market is still very attractive. Our rates are approximately around 2022 rates, which are up from prior years. So there's still room to go. And I think with \[indiscernible\] not being a very big event, I think the market will continue to soften, again, new MGAs and people coming to the table. So we still have a ways to go. We like that business. We're going to keep writing it and we're going to try to stay as disciplined as possible as others try to attack different terms and conditions.

But it's still a very attractive market. And so I know it's disappointing because it's not what it used to be, but it's still got a lot of good business out there that we hope to be able to obtain.

Operator

Your next question comes from the line of Michael Phillips with Oppenheimer.

Michael Phillips

I wanted to follow up one more time. Jen, your comments on transportation. I think you said late in the quarter, you saw increased competition there from emerging players and some new MGAs, I think you said. Was that just more random fluctuations there? Or anything more fundamental do you think is happening?

Jennifer Klobnak

I think people are coming back to the market. This is just me thinking about it. But towards the end of the quarter, we -- and into this quarter, we're just seeing a lot more competition, people going after these large accounts. There's a lot of large accounts in the business given the consolidation that has occurred. And so when you're looking at an account with a $2 million premium, for example, there are people starting to want that just to help their top line. So I think it is a reemerging more competitive dynamic that we're going to have to deal with which is a little bit nonsensical given the severity and all the issues we've had in commercial transportation business.

But again, we're going to really lean into risk selection and pick the accounts that we think are, again, dedicated to loss control and are priced appropriately for the risk that happened because there are actions that happen every day. So you have to be disciplined around charging to cover those losses.

Operator

Your next question comes from the line of Hristian Getsov with Wells Fargo.

Hristian Getsov

One more for me. Last time, Jen, I think you talked about increasing some of the limit sizes. I think it was a comment around property to defend some of your renewals. Can you maybe kind of frame how successful has that been? Or is it people kind of still kind of undercutting by a decent margin where the limit size doesn't matter as much?

Jennifer Klobnak

It has been successful in that we've been able to retain business. But you look at some of the announcements of these new MGAs and people coming out to provide capacity, they have big limits they're providing, limits that are larger than what we provide. So we have to stretch in ways that makes sense for us. And one of those has been, again, increasing limits given inflation by itself has increased the value of these locations. So it has helped. But again, there's a lot going on in that market in terms of competition that is -- are things that we just have to fight against. And so it's a constant evaluation of what's changing the market and what we can do to continue to retain the accounts that we love and try to win new business.

Operator

If there are no further questions, I will now turn the conference over to Mr. Craig Kliethermes for some closing remarks.

Craig Kliethermes

Well, thanks, Aaron, and Jen, and thank you all for your questions today. Our objective is pretty simple, produce consistent underwriting profits, protect our financial strength, serve our customers and distribution partners exceptionally well and get a little better every day. That doesn't mean taking the least risk, it means taking the right risks selected by experienced underwriters who know their markets deeply and have the discipline to say, yes, when the opportunity is right, and no thank you when it isn't.

Our diverse portfolio gives us plenty of places to look for those opportunities, and our people, relationships and service give us an advantage when we find them. There will always be something newer, faster or more exciting in this business. We're comfortable adapting to things that make sense and that improve our value proposition while remaining true to who we are. We like our position, and we're optimistic about what's ahead being different, still works.

Thank you for your continued confidence in RLI. We look forward to speaking with you again next quarter.

Operator

Ladies and gentlemen, if you wish to access the replay for this call, you may do so on the RLI homepage at www.rlicorp.com. This concludes our conference for today. Thank you all for participating, and have a nice day. All parties may now disconnect.

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