RLI CORP 10-Q

Item 1. Financial Statements ​ RLI Corp. and Subsidiaries Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ For the Nine Months ​ ​ Ended September 30, ​ Ended September 30, (in thousands, except per share data) 2025 2024 2025 2024 Net premiums earned ​ $ 407,695 ​ $ 389,489 ​ $ 1,207,944 ​ $ 1,129,230 Net investment income ​ ​ 41,270 ​ ​ 36,694 ​ ​ 117,414 ​ ​ 103,502 Net realized gains ​ ​ 18,318 ​ ​ 5,420 ​ ​ 48,234 ​ ​ 11,222 Net unrealized gains on equity securities ​ ​ 41,981 ​ ​ 38,392 ​ ​ 43,163 ​ ​ 87,314 Consolidated revenue ​ $ 509,264 ​ $ 469,995 ​ $ 1,416,755 ​ $ 1,331,268 Losses and settlement expenses ​ ​ 187,998 ​ ​ 202,118 ​ ​ 549,814 ​ ​ 513,741 Policy acquisition costs ​ ​ 128,937 ​ ​ 117,811 ​ ​ 378,126 ​ ​ 342,186 Insurance operating expenses ​ ​ 30,215 ​ ​ 28,868 ​ ​ 86,683 ​ ​ 84,892 Interest expense on debt ​ ​ 1,364 ​ ​ 1,617 ​ ​ 4,049 ​ ​ 4,839 General corporate expenses ​ ​ 5,045 ​ ​ 3,994 ​ ​ 12,747 ​ ​ 13,144 Total expenses ​ $ 353,559 ​ $ 354,408 ​ $ 1,031,419 ​ $ 958,802 Equity in earnings of unconsolidated investees ​ ​ 1,540 ​ ​ 1,238 ​ ​ 7,055 ​ ​ 7,653 Earnings before income taxes ​ $ 157,245 ​ $ 116,825 ​ $ 392,391 ​ $ 380,119 Income tax expense ​ ​ 32,635 ​ ​ 21,798 ​ ​ 80,231 ​ ​ 75,200 Net earnings ​ $ 124,610 ​ $ 95,027 ​ $ 312,160 ​ $ 304,919 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive earnings (loss), net of tax ​ ​ 27,674 ​ ​ 80,293 ​ ​ 76,405 ​ ​ 59,779 Comprehensive earnings ​ $ 152,284 ​ $ 175,320 ​ $ 388,565 ​ $ 364,698 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic net earnings per share ​ $ 1.36 ​ $ 1.04 ​ $ 3.40 ​ $ 3.33 Diluted net earnings per share ​ $ 1.35 ​ $ 1.03 ​ $ 3.38 ​ $ 3.30 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ 91,849 ​ ​ 91,559 ​ ​ 91,816 ​ ​ 91,467 Diluted ​ ​ 92,310 ​ ​ 92,441 ​ ​ 92,460 ​ ​ 92,370 ​ See accompanying notes to the unaudited condensed consolidated financial statements. ​ 3 ​ Table of Contents RLI Corp. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, (in thousands, except share and per share data) 2025 2024 ASSETS ​ ​ ​ ​ ​ ​ Investments and cash: ​ ​ ​ ​ ​ ​ Fixed income: ​ ​ ​ ​ ​ ​ Available-for-sale, at fair value ​ $ 3,536,484 ​ $ 3,175,796 (amortized cost of $ 3,655,954 and allowance for credit losses of $ 899 at 9/30/25) ​ ​ ​ ​ ​ ​ (amortized cost of $ 3,391,159 and allowance for credit losses of $ 197 at 12/31/24) ​ ​ ​ ​ ​ ​ Equity securities, at fair value (cost - $ 513,255 at 9/30/25 and $ 417,897 at 12/31/24) ​ ​ 878,872 ​ ​ 736,191 Short-term investments, at cost which approximates fair value ​ ​ 165,706 ​ ​ 74,915 Other invested assets ​ ​ 56,494 ​ ​ 57,939 Cash ​ ​ 52,621 ​ ​ 39,790 Total investments and cash ​ $ 4,690,177 ​ $ 4,084,631 Accrued investment income ​ ​ 29,584 ​ ​ 28,319 Premiums and reinsurance balances receivable, net of allowances for uncollectible amounts of $ 23,452 at 9/30/25 and $ 22,932 at 12/31/24 ​ ​ 231,530 ​ ​ 230,534 Ceded unearned premium ​ ​ 123,039 ​ ​ 124,955 Reinsurance balances recoverable on unpaid losses and settlement expenses, net of allowances for uncollectible amounts of $ 11,063 at 9/30/25 and $ 9,580 at 12/31/24 ​ ​ 769,611 ​ ​ 755,425 Deferred policy acquisition costs ​ ​ 181,488 ​ ​ 166,214 Property and equipment, at cost, net of accumulated depreciation of $ 82,340 at 9/30/25 and $ 76,330 at 12/31/24 ​ ​ 41,094 ​ ​ 43,172 Investment in unconsolidated investees ​ ​ 63,652 ​ ​ 56,477 Goodwill and intangibles ​ ​ 53,562 ​ ​ 53,562 Income taxes-deferred ​ ​ - ​ ​ 7,793 Other assets ​ ​ 63,263 ​ ​ 77,720 TOTAL ASSETS ​ $ 6,247,000 ​ $ 5,628,802 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ Unpaid losses and settlement expenses ​ $ 2,873,054 ​ $ 2,693,470 Unearned premiums ​ ​ 1,035,756 ​ ​ 984,140 Reinsurance balances payable ​ ​ 35,951 ​ ​ 44,681 Funds held ​ ​ 113,753 ​ ​ 97,380 Income taxes-current ​ ​ 9,792 ​ ​ 749 Income taxes-deferred ​ ​ 23,157 ​ ​ — Debt ​ ​ 100,000 ​ ​ 100,000 Accrued expenses ​ ​ 110,660 ​ ​ 124,242 Other liabilities ​ ​ 70,701 ​ ​ 62,173 TOTAL LIABILITIES ​ $ 4,372,824 ​ $ 4,106,835 ​ ​ ​ ​ ​ ​ ​ Shareholders’ Equity ​ ​ ​ ​ ​ ​ Common stock ($ 0.01 par value) ​ ​ ​ ​ ​ ​ (Shares authorized - 400,000,000 ) ​ ​ ​ ​ ​ ​ ( 137,698,263 shares issued, 91,837,835 shares outstanding at 9/30/25) ​ ​ ​ ​ ​ ​ ( 137,598,560 shares issued, 91,738,132 shares outstanding at 12/31/24) ​ $ 1,377 ​ $ 1,376 Paid-in capital ​ ​ 374,468 ​ ​ 367,645 Accumulated other comprehensive earnings (loss) ​ ​ ( 97,318 ) ​ ​ ( 173,723 ) Retained earnings ​ ​ 1,988,648 ​ ​ 1,719,668 Deferred compensation ​ ​ 12,713 ​ ​ 13,498 Less: Treasury shares, at cost ( 45,860,428 shares at 9/30/25 and 12/31/24) ​ ​ ( 405,712 ) ​ ​ ( 406,497 ) TOTAL SHAREHOLDERS’ EQUITY ​ $ 1,874,176 ​ $ 1,521,967 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ​ $ 6,247,000 ​ $ 5,628,802 ​ See accompanying notes to the unaudited condensed consolidated financial statements. ​ 4 ​ Table of Contents RLI Corp. and Subsidiaries Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2024 ​ 91,280,094 ​ $ 1,413,514 ​ $ 1,371 ​ $ 361,660 ​ $ ( 166,303 ) ​ $ 1,609,785 ​ $ 13,539 ​ $ ( 406,538 ) Net earnings ​ — ​ ​ 127,900 ​ ​ — ​ ​ — ​ ​ — ​ ​ 127,900 ​ ​ — ​ ​ — Other comprehensive earnings (loss), net of tax ​ — ​ ​ ( 12,671 ) ​ ​ — ​ ​ — ​ ​ ( 12,671 ) ​ ​ — ​ ​ — ​ ​ — Deferred compensation ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 790 ) ​ ​ 790 Share-based compensation ​ 139,668 ​ ​ 4,357 ​ ​ 2 ​ ​ 4,355 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Dividends and dividend equivalents ($ 0.14 per share) ​ — ​ ​ ( 12,348 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 12,348 ) ​ ​ — ​ ​ — Balance, March 31, 2024 ​ 91,419,762 ​ $ 1,520,752 ​ $ 1,373 ​ $ 366,015 ​ $ ( 178,974 ) ​ $ 1,725,337 ​ $ 12,749 ​ $ ( 405,748 ) Net earnings ​ — ​ ​ 81,992 ​ ​ — ​ ​ — ​ ​ — ​ ​ 81,992 ​ ​ — ​ ​ — Other comprehensive earnings (loss), net of tax ​ — ​ ​ ( 7,843 ) ​ ​ — ​ ​ — ​ ​ ( 7,843 ) ​ ​ — ​ ​ — ​ ​ — Deferred compensation ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 434 ​ ​ ( 434 ) Share-based compensation ​ 72,346 ​ ​ 3,084 ​ ​ 1 ​ ​ 3,083 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Dividends and dividend equivalents ($ 0.15 per share) ​ — ​ ​ ( 13,278 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 13,278 ) ​ ​ — ​ ​ — Balance, June 30, 2024 ​ 91,492,108 ​ $ 1,584,707 ​ $ 1,374 ​ $ 369,098 ​ $ ( 186,817 ) ​ $ 1,794,051 ​ $ 13,183 ​ $ ( 406,182 ) Net earnings ​ — ​ ​ 95,027 ​ ​ — ​ ​ — ​ ​ — ​ ​ 95,027 ​ ​ — ​ ​ — Other comprehensive earnings (loss), net of tax ​ — ​ ​ 80,293 ​ ​ — ​ ​ — ​ ​ 80,293 ​ ​ — ​ ​ — ​ ​ — Deferred compensation ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,266 ) ​ ​ 1,266 Share-based compensation ​ 127,732 ​ ​ 1,613 ​ ​ 1 ​ ​ 1,612 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Dividends and dividend equivalents ($ 0.15 per share) ​ — ​ ​ ( 13,290 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 13,290 ) ​ ​ — ​ ​ — Balance, September 30, 2024 ​ 91,619,840 ​ $ 1,748,350 ​ $ 1,375 ​ $ 370,710 ​ $ ( 106,524 ) ​ $ 1,875,788 ​ $ 11,917 ​ $ ( 404,916 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ 91,738,132 ​ $ 1,521,967 ​ $ 1,376 ​ $ 367,645 ​ $ ( 173,723 ) ​ $ 1,719,668 ​ $ 13,498 ​ $ ( 406,497 ) Net earnings ​ — ​ ​ 63,214 ​ ​ — ​ ​ — ​ ​ — ​ ​ 63,214 ​ ​ — ​ ​ — Other comprehensive earnings (loss), net of tax ​ — ​ ​ 30,030 ​ ​ — ​ ​ — ​ ​ 30,030 ​ ​ — ​ ​ — ​ ​ — Deferred compensation ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,686 ) ​ ​ 1,686 Share-based compensation ​ 34,602 ​ ​ 2,777 ​ ​ — ​ ​ 2,777 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Dividends and dividend equivalents ($ 0.15 per share) ​ — ​ ​ ( 13,776 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 13,776 ) ​ ​ — ​ ​ — Balance, March 31, 2025 ​ 91,772,734 ​ $ 1,604,212 ​ $ 1,376 ​ $ 370,422 ​ $ ( 143,693 ) ​ $ 1,769,106 ​ $ 11,812 ​ $ ( 404,811 ) Net earnings ​ — ​ ​ 124,336 ​ ​ — ​ ​ — ​ ​ — ​ ​ 124,336 ​ ​ — ​ ​ — Other comprehensive earnings (loss), net of tax ​ — ​ ​ 18,701 ​ ​ — ​ ​ — ​ ​ 18,701 ​ ​ — ​ ​ — ​ ​ — Deferred compensation ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 799 ​ ​ ( 799 ) Share-based compensation ​ 56,736 ​ ​ 2,118 ​ ​ 1 ​ ​ 2,117 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Dividends and dividend equivalents ($ 0.16 per share) ​ — ​ ​ ( 14,706 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 14,706 ) ​ ​ — ​ ​ — Balance, June 30, 2025 ​ 91,829,470 ​ $ 1,734,661 ​ $ 1,377 ​ $ 372,539 ​ $ ( 124,992 ) ​ $ 1,878,736 ​ $ 12,611 ​ $ ( 405,610 ) Net earnings ​ — ​ ​ 124,610 ​ ​ — ​ ​ — ​ ​ — ​ ​ 124,610 ​ ​ — ​ ​ — Other comprehensive earnings (loss), net of tax ​ — ​ ​ 27,674 ​ ​ — ​ ​ — ​ ​ 27,674 ​ ​ — ​ ​ — ​ ​ — Deferred compensation ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 102 ​ ​ ( 102 ) Share-based compensation ​ 8,365 ​ ​ 1,929 ​ ​ — ​ ​ 1,929 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Dividends and dividend equivalents ($ 0.16 per share) ​ — ​ ​ ( 14,698 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 14,698 ) ​ ​ — ​ ​ — Balance, September 30, 2025 ​ 91,837,835 ​ $ 1,874,176 ​ $ 1,377 ​ $ 374,468 ​ $ ( 97,318 ) ​ $ 1,988,648 ​ $ 12,713 ​ $ ( 405,712 ) ​ See accompanying notes to the unaudited condensed consolidated financial statements. ​ 5 ​ Table of Contents RLI Corp. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months ​ ​ Ended September 30, (in thousands) 2025 2024 Net cash provided by operating activities ​ $ 457,453 ​ $ 432,139 Cash Flows from Investing Activities ​ ​ ​ ​ ​ ​ Purchase of: ​ ​ ​ ​ ​ ​ Fixed income securities, available-for-sale ​ $ ( 982,958 ) ​ $ ( 591,291 ) Equity securities ​ ​ ( 137,744 ) ​ ​ ( 76,568 ) Property and equipment ​ ​ ( 3,736 ) ​ ​ ( 4,187 ) Other ​ ​ ( 4,453 ) ​ ​ ( 4,356 ) Proceeds from sale of: ​ ​ ​ ​ ​ ​ Fixed income securities, available-for-sale ​ ​ 383,181 ​ ​ 80,245 Equity securities ​ ​ 87,874 ​ ​ 44,863 Other ​ ​ 2,790 ​ ​ 4,624 Proceeds from call or maturity of: ​ ​ ​ ​ ​ ​ Fixed income securities, available-for-sale ​ ​ 343,319 ​ ​ 242,955 Net proceeds from sale (purchase) of short-term investments ​ ​ ( 90,791 ) ​ ​ ( 68,373 ) Net cash used in investing activities ​ $ ( 402,518 ) ​ $ ( 372,088 ) Cash Flows from Financing Activities ​ ​ ​ ​ ​ ​ Cash dividends paid ​ $ ( 43,146 ) ​ $ ( 38,882 ) Proceeds from stock option exercises ​ ​ 1,042 ​ ​ 3,041 Net cash used in financing activities ​ $ ( 42,104 ) ​ $ ( 35,841 ) Net increase in cash ​ $ 12,831 ​ $ 24,210 Cash at the beginning of the period ​ ​ 39,790 ​ ​ 36,424 Cash at September 30, ​ $ 52,621 ​ $ 60,634 ​ See accompanying notes to the unaudited condensed consolidated financial statements. ​ 6 ​ Table of Contents NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ​ 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. ​ 2025-06—Intangibles-Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal -Use Software ​ The guidance in ASU 2025-06 removes the concept of project stages and requires the capitalization of software costs when management has committed to funding the software project and it is probable that the project will be completed. This ASU is effective for fiscal years beginning after December 15, 2027, but early adoption is permitted as of the beginning of an 7 ​ Table of Contents annual reporting period. The Company continues to evaluate the impact of adopting this new accounting standard, but does not expect the standard will 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 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 $ 11 million, respectively, at September 30, 2025 and $ 17 million and $ 10 million, respectively, at 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 nine months of 2025 and less than $ 1 million was recovered. ​ E. INTANGIBLE ASSETS ​ The composition of goodwill and intangible assets at September 30, 2025 and December 31, 2024 is detailed in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, (in thousands) 2025 2024 Goodwill ​ ​ ​ ​ ​ ​ Surety ​ $ 40,816 ​ $ 40,816 Casualty ​ ​ 5,246 ​ ​ 5,246 Total goodwill ​ $ 46,062 ​ $ 46,062 Indefinite-lived intangibles ​ ​ 7,500 ​ ​ 7,500 Total goodwill and intangibles ​ $ 53,562 ​ $ 53,562 ​ 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 September 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 8 ​ Table of Contents represents a reconciliation of the numerator and denominator of the basic and diluted EPS computations contained in the unaudited condensed consolidated financial statements: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ For the Three Months ​ ​ Ended September 30, 2025 ​ Ended September 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 ​ $ 124,610 ​ 91,849 ​ $ 1.36 ​ $ 95,027 ​ 91,559 ​ $ 1.04 Effect of Dilutive Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options and restricted stock units ​ ​ — ​ 461 ​ ​ ​ ​ ​ — ​ 882 ​ ​ ​ Diluted EPS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings available to common shareholders ​ $ 124,610 ​ 92,310 ​ $ 1.35 ​ $ 95,027 ​ 92,441 ​ $ 1.03 Anti-dilutive securities excluded from diluted EPS ​ ​ ​ ​ ​ 819 ​ ​ ​ ​ ​ ​ ​ ​ 48 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months ​ For the Nine Months ​ ​ Ended September 30, 2025 ​ Ended September 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 ​ $ 312,160 ​ 91,816 ​ $ 3.40 ​ $ 304,919 ​ 91,467 ​ $ 3.33 Effect of Dilutive Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options and restricted stock units ​ ​ — ​ 644 ​ ​ ​ ​ ​ — ​ 903 ​ ​ ​ Diluted EPS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings available to common shareholders ​ $ 312,160 ​ 92,460 ​ $ 3.38 ​ $ 304,919 ​ 92,370 ​ $ 3.30 Anti-dilutive securities excluded from diluted EPS ​ ​ ​ ​ ​ 209 ​ ​ ​ ​ ​ ​ ​ ​ 48 ​ ​ ​ ​ 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 $ 7 million for the third quarter of 2025, compared to $ 21 million for the same period in 2024. For the nine-month period ended September 30, 2025, other comprehensive earnings (loss) is net of tax expense of $ 20 million, compared to $ 16 million for the same period in 2024. ​ Unrealized gains, net of tax, recognized in other comprehensive earnings (loss) were $ 76 million for the first nine months of 2025, compared to $ 60 million in the first nine months of 2024. The unrealized gains were attributable to a decrease in interest rates, which increased 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ For the Three Months ​ For the Nine Months ​ ​ Ended September 30, ​ Ended September 30, Unrealized Gains (Losses) on Available-for-Sale Securities 2025 2024 2025 2024 Beginning balance ​ $ ( 124,992 ) ​ $ ( 186,817 ) ​ $ ( 173,723 ) ​ $ ( 166,303 ) Other comprehensive earnings (loss) before reclassifications ​ ​ 29,431 ​ ​ 79,210 ​ ​ 77,253 ​ ​ 57,364 Amounts reclassified from accumulated other comprehensive earnings ​ ​ ( 1,757 ) ​ ​ 1,083 ​ ​ ( 848 ) ​ ​ 2,415 Net current-period other comprehensive earnings (loss) ​ $ 27,674 ​ $ 80,293 ​ $ 76,405 ​ $ 59,779 Ending balance ​ $ ( 97,318 ) ​ $ ( 106,524 ) ​ $ ( 97,318 ) ​ $ ( 106,524 ) Balance of securities for which an allowance for credit losses has been recognized in net earnings ​ ​ ​ ​ ​ ​ ​ $ 1,715 ​ $ 1,813 ​ 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: ​ 9 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount Reclassified from Accumulated Other ​ ​ ​ (in thousands) ​ Comprehensive Earnings (Loss) ​ ​ ​ ​ ​ For the Three Months ​ For the Nine Months ​ ​ ​ Component of Accumulated ​ Ended September 30, ​ Ended September 30, ​ ​ Affected line item in the Other Comprehensive Earnings (Loss) 2025 2024 2025 2024 Statement of Earnings Unrealized gains and losses on available-for-sale securities ​ $ 2,878 ​ $ ( 1,365 ) ​ $ 1,775 ​ $ ( 3,129 ) ​ ​ Net realized gains (losses) ​ ​ ​ ( 654 ) ​ ​ ( 6 ) ​ ​ ( 702 ) ​ ​ 72 ​ ​ Credit gains (losses) presented within net realized gains ​ ​ $ 2,224 ​ $ ( 1,371 ) ​ $ 1,073 ​ $ ( 3,057 ) ​ ​ Earnings (loss) before income taxes ​ ​ ​ ( 467 ) ​ ​ 288 ​ ​ ( 225 ) ​ ​ 642 ​ ​ Income tax (expense) benefit ​ ​ $ 1,757 ​ $ ( 1,083 ) ​ $ 848 ​ $ ( 2,415 ) ​ ​ 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 10 ​ Table of Contents 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 September 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 nine-month periods ended September 30, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales ​ Proceeds ​ Gross Realized ​ Net Realized (in thousands) From Sales Gains Losses Gain (Loss) 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income securities - available-for-sale ​ $ 383,956 ​ $ 5,076 ​ $ ( 3,219 ) ​ $ 1,857 Equity securities ​ ​ 87,874 ​ ​ 46,478 ​ ​ ( 991 ) ​ ​ 45,487 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income securities - available-for-sale ​ $ 98,696 ​ $ 538 ​ $ ( 2,489 ) ​ $ ( 1,951 ) Equity securities ​ ​ 44,863 ​ ​ 20,276 ​ ​ ( 340 ) ​ ​ 19,936 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Calls/Maturities ​ ​ ​ ​ Gross Realized ​ Net Realized (in thousands) Proceeds Gains Losses Gain (Loss) 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income securities - available-for-sale ​ $ 344,629 ​ $ 271 ​ $ ( 72 ) ​ $ 199 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income securities - available-for-sale ​ $ 240,200 ​ $ 89 ​ $ ( 1,062 ) ​ $ ( 973 ) ​ 11 ​ Table of Contents FAIR VALUE MEASUREMENTS ​ Assets measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, 2025 ​ ​ Quoted Prices in ​ Significant Other ​ Significant ​ ​ ​ ​ ​ Active Markets for ​ Observable ​ Unobservable ​ ​ ​ ​ ​ Identical Assets ​ Inputs ​ Inputs ​ ​ ​ (in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities - available-for-sale ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government ​ $ — ​ $ 399,593 ​ $ — ​ $ 399,593 U.S. agency ​ ​ — ​ ​ 55,483 ​ ​ — ​ ​ 55,483 Non-U.S. government & agency ​ ​ — ​ ​ 11,376 ​ ​ 1,001 ​ ​ 12,377 Agency MBS ​ ​ — ​ ​ 604,351 ​ ​ — ​ ​ 604,351 ABS/CMBS/MBS* ​ ​ — ​ ​ 563,754 ​ ​ — ​ ​ 563,754 Corporate ​ ​ — ​ ​ 1,393,777 ​ ​ 96,258 ​ ​ 1,490,035 Municipal ​ ​ — ​ ​ 410,891 ​ ​ — ​ ​ 410,891 Total fixed income securities - available-for-sale ​ $ — ​ $ 3,439,225 ​ $ 97,259 ​ $ 3,536,484 Equity securities ​ ​ 874,621 ​ ​ — ​ ​ 4,251 ​ ​ 878,872 Total ​ $ 874,621 ​ $ 3,439,225 ​ $ 101,510 ​ $ 4,415,356 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2024 ​ ​ Quoted Prices in ​ Significant Other ​ Significant ​ ​ ​ ​ ​ Active Markets for ​ Observable ​ Unobservable ​ ​ ​ ​ ​ Identical Assets ​ Inputs ​ Inputs ​ ​ ​ (in thousands) (Level 1) (Level 2) (Level 3) Total Fixed income securities - available-for-sale ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government ​ $ — ​ $ 515,635 ​ $ — ​ $ 515,635 U.S. agency ​ ​ — ​ ​ 54,338 ​ ​ — ​ ​ 54,338 Non-U.S. government & agency ​ ​ — ​ ​ 6,898 ​ ​ 973 ​ ​ 7,871 Agency MBS ​ ​ — ​ ​ 396,223 ​ ​ — ​ ​ 396,223 ABS/CMBS/MBS* ​ ​ — ​ ​ 410,248 ​ ​ — ​ ​ 410,248 Corporate ​ ​ — ​ ​ 1,256,991 ​ ​ 89,530 ​ ​ 1,346,521 Municipal ​ ​ — ​ ​ 444,960 ​ ​ — ​ ​ 444,960 Total fixed income securities - available-for-sale ​ $ — ​ $ 3,085,293 ​ $ 90,503 ​ $ 3,175,796 Equity securities ​ ​ 731,569 ​ ​ — ​ ​ 4,622 ​ ​ 736,191 Total ​ $ 731,569 ​ $ 3,085,293 ​ $ 95,125 ​ $ 3,911,987 * 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 September 30, ​ Nine Months Ended September 30, (in thousands) ​ 2025 2024 2025 2024 Beginning balance ​ $ 101,534 ​ $ 72,680 ​ $ 95,125 ​ $ 62,096 Net realized and unrealized gains (losses) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Included in other comprehensive earnings (loss) ​ ​ 1,130 ​ ​ 3,104 ​ ​ 2,922 ​ ​ 2,789 Purchases ​ ​ 6,995 ​ ​ 16,069 ​ ​ 15,093 ​ ​ 28,379 Sales / Calls / Maturities ​ ​ ( 8,149 ) ​ ​ ( 326 ) ​ ​ ( 11,630 ) ​ ​ ( 1,737 ) Transfers into Level 3 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Transfers out of Level 3 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Balance as of September 30, ​ $ 101,510 ​ $ 91,527 ​ $ 101,510 ​ $ 91,527 Change in unrealized gains (losses) during the period for Level 3 assets held at period-end - included in other comprehensive earnings (loss) ​ $ 1,244 ​ $ 3,104 ​ $ 2,899 ​ $ 2,789 ​ 12 ​ Table of Contents The amortized cost and fair value of available-for-sale fixed income securities by contractual maturity as of September 30, 2025 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 (in thousands) Amortized Cost Fair Value Due in one year or less ​ $ 263,214 ​ $ 262,065 Due after one year through five years ​ ​ 743,950 ​ ​ 739,290 Due after five years through 10 years ​ ​ 890,177 ​ ​ 891,802 Due after 10 years ​ ​ 548,742 ​ ​ 475,222 ABS/CMBS/MBS* ​ ​ 1,209,871 ​ ​ 1,168,105 Total available-for-sale ​ $ 3,655,954 ​ $ 3,536,484 * Asset-backed, commercial mortgage-backed and mortgage-backed securities ​ The amortized cost and fair value of available-for-sale securities at September 30, 2025 and December 31, 2024 are presented in the tables below. Amortized cost does not include accrued interest receivable of $ 28 million as of September 30, 2025 and $ 27 million as of December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 ​ ​ Cost or ​ Allowance ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ for Credit ​ Unrealized ​ Unrealized ​ Fair (in thousands) Cost Losses Gains Losses Value U.S. government ​ $ 395,751 ​ $ — ​ $ 5,165 ​ $ ( 1,323 ) ​ $ 399,593 U.S. agency ​ ​ 55,268 ​ ​ — ​ ​ 850 ​ ​ ( 635 ) ​ ​ 55,483 Non-U.S. government & agency ​ ​ 12,730 ​ ​ — ​ ​ 261 ​ ​ ( 614 ) ​ ​ 12,377 Agency MBS ​ ​ 632,284 ​ ​ — ​ ​ 3,532 ​ ​ ( 31,465 ) ​ ​ 604,351 ABS/CMBS/MBS* ​ ​ 577,587 ​ ​ ( 614 ) ​ ​ 3,570 ​ ​ ( 16,789 ) ​ ​ 563,754 Corporate ​ ​ 1,501,345 ​ ​ ( 285 ) ​ ​ 17,536 ​ ​ ( 28,561 ) ​ ​ 1,490,035 Municipal ​ ​ 480,989 ​ ​ — ​ ​ 883 ​ ​ ( 70,981 ) ​ ​ 410,891 Total Fixed Income ​ $ 3,655,954 ​ $ ( 899 ) ​ $ 31,797 ​ $ ( 150,368 ) ​ $ 3,536,484 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Cost or ​ Allowance ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ for Credit ​ Unrealized ​ Unrealized ​ Fair (in thousands) Cost Losses Gains Losses Value U.S. government ​ $ 525,608 ​ $ — ​ $ 309 ​ $ ( 10,282 ) ​ $ 515,635 U.S. agency ​ ​ 55,921 ​ ​ — ​ ​ 261 ​ ​ ( 1,844 ) ​ ​ 54,338 Non-U.S. government & agency ​ ​ 8,959 ​ ​ — ​ ​ — ​ ​ ( 1,088 ) ​ ​ 7,871 Agency MBS ​ ​ 438,545 ​ ​ — ​ ​ 927 ​ ​ ( 43,249 ) ​ ​ 396,223 ABS/CMBS/MBS* ​ ​ 430,973 ​ ​ ( 8 ) ​ ​ 2,208 ​ ​ ( 22,925 ) ​ ​ 410,248 Corporate ​ ​ 1,397,676 ​ ​ ( 189 ) ​ ​ 4,737 ​ ​ ( 55,703 ) ​ ​ 1,346,521 Municipal ​ ​ 533,477 ​ ​ — ​ ​ 1,003 ​ ​ ( 89,520 ) ​ ​ 444,960 Total Fixed Income ​ $ 3,391,159 ​ $ ( 197 ) ​ $ 9,445 ​ $ ( 224,611 ) ​ $ 3,175,796 * 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, ​ 13 ​ Table of Contents ● 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 September 30, 2025, the discounted cash flow analysis resulted in an allowance for credit losses on 12 securities. The following table presents changes in the allowance for expected credit losses on available-for-sale securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Beginning balance ​ $ 245 ​ $ 228 ​ $ 197 ​ $ 306 Increase to allowance from securities for which credit losses were not previously recorded ​ ​ 717 ​ ​ 30 ​ ​ 720 ​ ​ 30 Reduction from securities sold during the period ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 89 ) Net increase (decrease) from securities that had an allowance at the beginning of the period ​ ​ ( 63 ) ​ ​ ( 24 ) ​ ​ ( 18 ) ​ ​ ( 13 ) Balance as of September 30, ​ $ 899 ​ $ 234 ​ $ 899 ​ $ 234 ​ 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 nine months of 2025. No such losses were recognized during the first nine months of 2024. ​ As of September 30, 2025, in addition to the securities included in the allowance for credit losses, the fixed income portfolio contained 1,077 securities with an unrealized loss position for which an allowance for credit losses had not been recorded. The $ 150 million in associated unrealized losses represents 4 percent of the fixed income portfolio’s cost basis and 3 percent of total invested assets. Isolated to these securities, unrealized losses decreased through the first nine months of 2025, as bonds rallied on falling interest rates. Of the total 1,077 securities, 926 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 September 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. 14 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2025 ​ December 31, 2024 (in thousands) < 12 Mos. 12 Mos. & Greater Total < 12 Mos. 12 Mos. & Greater Total U.S. government ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 11,055 ​ $ 105,375 ​ $ 116,430 ​ $ 303,226 ​ $ 157,418 ​ $ 460,644 Amortized cost ​ ​ 11,078 ​ ​ 106,675 ​ ​ 117,753 ​ ​ 309,836 ​ ​ 161,090 ​ ​ 470,926 Unrealized loss ​ $ ( 23 ) ​ $ ( 1,300 ) ​ $ ( 1,323 ) ​ $ ( 6,610 ) ​ $ ( 3,672 ) ​ $ ( 10,282 ) U.S. agency ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ — ​ $ 30,621 ​ $ 30,621 ​ $ 24,024 ​ $ 18,330 ​ $ 42,354 Amortized cost ​ ​ — ​ ​ 31,256 ​ ​ 31,256 ​ ​ 24,910 ​ ​ 19,288 ​ ​ 44,198 Unrealized loss ​ $ — ​ $ ( 635 ) ​ $ ( 635 ) ​ $ ( 886 ) ​ $ ( 958 ) ​ $ ( 1,844 ) Non-U.S. government ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ — ​ $ 4,188 ​ $ 4,188 ​ $ 4,075 ​ $ 3,796 ​ $ 7,871 Amortized cost ​ ​ — ​ ​ 4,802 ​ ​ 4,802 ​ ​ 4,158 ​ ​ 4,801 ​ ​ 8,959 Unrealized Loss ​ $ — ​ $ ( 614 ) ​ $ ( 614 ) ​ $ ( 83 ) ​ $ ( 1,005 ) ​ $ ( 1,088 ) Agency MBS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 149,151 ​ $ 273,022 ​ $ 422,173 ​ $ 108,772 ​ $ 233,625 ​ $ 342,397 Amortized cost ​ ​ 149,737 ​ ​ 303,901 ​ ​ 453,638 ​ ​ 111,674 ​ ​ 273,972 ​ ​ 385,646 Unrealized loss ​ $ ( 586 ) ​ $ ( 30,879 ) ​ $ ( 31,465 ) ​ $ ( 2,902 ) ​ $ ( 40,347 ) ​ $ ( 43,249 ) ABS/CMBS/MBS* ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 72,227 ​ $ 149,479 ​ $ 221,706 ​ $ 43,027 ​ $ 164,433 ​ $ 207,460 Amortized cost ​ ​ 72,333 ​ ​ 166,162 ​ ​ 238,495 ​ ​ 43,395 ​ ​ 186,990 ​ ​ 230,385 Unrealized loss ​ $ ( 106 ) ​ $ ( 16,683 ) ​ $ ( 16,789 ) ​ $ ( 368 ) ​ $ ( 22,557 ) ​ $ ( 22,925 ) Corporate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 141,450 ​ $ 622,539 ​ $ 763,989 ​ $ 378,305 ​ $ 700,574 ​ $ 1,078,879 Amortized cost ​ ​ 142,776 ​ ​ 649,774 ​ ​ 792,550 ​ ​ 389,299 ​ ​ 745,283 ​ ​ 1,134,582 Unrealized loss ​ $ ( 1,326 ) ​ $ ( 27,235 ) ​ $ ( 28,561 ) ​ $ ( 10,994 ) ​ $ ( 44,709 ) ​ $ ( 55,703 ) Municipal ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 8,179 ​ $ 349,045 ​ $ 357,224 ​ $ 48,514 ​ $ 355,475 ​ $ 403,989 Amortized cost ​ ​ 8,462 ​ ​ 419,743 ​ ​ 428,205 ​ ​ 49,491 ​ ​ 444,018 ​ ​ 493,509 Unrealized loss ​ $ ( 283 ) ​ $ ( 70,698 ) ​ $ ( 70,981 ) ​ $ ( 977 ) ​ $ ( 88,543 ) ​ $ ( 89,520 ) Total fixed income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ $ 382,062 ​ $ 1,534,269 ​ $ 1,916,331 ​ $ 909,943 ​ $ 1,633,651 ​ $ 2,543,594 Amortized cost ​ ​ 384,386 ​ ​ 1,682,313 ​ ​ 2,066,699 ​ ​ 932,763 ​ ​ 1,835,442 ​ ​ 2,768,205 Unrealized loss ​ $ ( 2,324 ) ​ $ ( 148,044 ) ​ $ ( 150,368 ) ​ $ ( 22,820 ) ​ $ ( 201,791 ) ​ $ ( 224,611 ) * 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 September 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equivalent ​ Equivalent ​ (dollars in thousands) ​ ​ ​ NAIC S&P Moody’s ​ Amortized ​ ​ ​ ​ Unrealized ​ Percent ​ Rating Rating Rating Cost Fair Value Loss to Total ​ 1 ​ AAA/AA/A ​ Aaa/Aa/A ​ $ 1,675,642 ​ $ 1,539,255 ​ $ ( 136,387 ) ​ 90.7 % 2 ​ BBB ​ Baa ​ ​ 327,018 ​ ​ 315,660 ​ ​ ( 11,358 ) ​ 7.6 % 3 ​ BB ​ Ba ​ ​ 32,804 ​ ​ 32,154 ​ ​ ( 650 ) ​ 0.4 % 4 ​ B ​ B ​ ​ 26,763 ​ ​ 25,279 ​ ​ ( 1,484 ) ​ 1.0 % 5 ​ CCC ​ Caa ​ ​ 3,652 ​ ​ 3,330 ​ ​ ( 322 ) ​ 0.2 % 6 ​ CC or lower ​ Ca or lower ​ ​ 820 ​ ​ 653 ​ ​ ( 167 ) ​ 0.1 % ​ ​ ​ ​ Total ​ $ 2,066,699 ​ $ 1,916,331 ​ $ ( 150,368 ) ​ 100.0 % ​ Other Invested Assets ​ We had $ 56 million of other invested assets at September 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 15 ​ Table of Contents LIHTC and 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 $ 10 million at September 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 third quarter of 2025 and 2024. For the nine-months ended September 30, 2025 and 2024, our LIHTC interests recognized amortization of $ 2 million and a total tax benefit of $ 2 million. Our unfunded commitment for our LIHTC investments was $ 4 million at September 30, 2025 and will be paid out in installments through 2039. ​ Our HTC investment had a balance of $ 12 million at September 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 third quarter of 2025, compared to $ 1 million of amortization and $ 2 million of tax benefit for the same period in 2024. For the nine-months ended September 30, 2025, our HTC investment recognized amortization of $ 3 million and a total tax benefit of $ 3 million, compared to $ 3 million of amortization and a total tax benefit of $ 4 million for the same period in 2024. Our unfunded commitment for our HTC investments was $ 4 million at September 30, 2025 and will be paid out in installments through 2027. ​ At September 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 September 30, 2025, $ 50 million of borrowings were outstanding with the FHLBC. ​ Our investments in private funds totaled $ 18 million at September 30, 2025, down from $ 24 million at December 31, 2024, and had $ 3 million of associated unfunded commitments at September 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 $ 64 million of investments in unconsolidated investees at September 30, 2025, compared to $ 56 million at December 31, 2024. At September 30, 2025, our investment in Prime Holdings Insurance Services, Inc. (Prime) was $ 63 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 $ 53 million and $ 166 million, respectively, at September 30, 2025, compared to $ 40 million and $ 75 million, respectively, at December 31, 2024. ​ ​ 16 ​ Table of Contents 3. HISTORICAL LOSS AND LAE DEVELOPMENT ​ The following table is a reconciliation of our unpaid losses and settlement expenses (LAE) for the first nine months of 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months ​ ​ Ended September 30, (in thousands) 2025 2024 Unpaid losses and LAE at beginning of year ​ ​ ​ ​ ​ ​ Gross ​ $ 2,693,470 ​ $ 2,446,025 Ceded ​ ​ ( 755,425 ) ​ ​ ( 757,349 ) Net ​ $ 1,938,045 ​ $ 1,688,676 ​ ​ ​ ​ ​ ​ ​ Increase (decrease) in incurred losses and LAE ​ ​ ​ ​ ​ ​ Current accident year ​ $ 623,926 ​ $ 599,183 Prior accident years ​ ​ ( 74,112 ) ​ ​ ( 85,442 ) Total incurred ​ $ 549,814 ​ $ 513,741 ​ ​ ​ ​ ​ ​ ​ Loss and LAE payments for claims incurred ​ ​ ​ ​ ​ ​ Current accident year ​ $ ( 74,868 ) ​ $ ( 76,148 ) Prior accident years ​ ​ ( 309,548 ) ​ ​ ( 273,868 ) Total paid ​ $ ( 384,416 ) ​ $ ( 350,016 ) ​ ​ ​ ​ ​ ​ ​ Net unpaid losses and LAE at September 30, ​ $ 2,103,443 ​ $ 1,852,401 ​ ​ ​ ​ ​ ​ ​ Unpaid losses and LAE at September 30, ​ ​ ​ ​ ​ ​ Gross ​ $ 2,873,054 ​ $ 2,611,941 Ceded ​ ​ ( 769,611 ) ​ ​ ( 759,540 ) Net ​ $ 2,103,443 ​ $ 1,852,401 ​ For the first nine months of 2025, incurred losses and LAE included $ 74 million of favorable development on prior years’ loss reserves, largely from accident years 2019 through 2022 and 2024. Commercial excess liability, marine, 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 nine months of 2024, incurred losses and LAE included $ 85 million of favorable development on prior years’ loss reserves, largely from accident years 2016, 2017, 2019, 2020, 2022 and 2023. Marine, surety, commercial property, commercial excess liability, general liability, professional services, executive products and personal umbrella were drivers of the favorable development. No products experienced significant adverse development. ​ 4. INCOME TAXES ​ Our effective tax rate for the three and nine months ended September 30, 2025 was 20.8 percent and 20.4 percent, compared to 18.7 percent and 19.8 percent for the same periods in 2024. Effective rates are dependent upon components of pretax earnings and the related tax effects. The effective tax rate was higher for the three and nine month periods in 2025 due to lower levels of tax-favored adjustments and higher levels of pretax income, which decreased the percentage impact of the tax-favored adjustments. ​ Income tax expense attributable to income from operations for the three and nine-month periods ended September 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. ​ 17 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended September 30, ​ For the Nine Months Ended September 30, 2025 ​ ​ ​ 2025 ​ 2024 ​ 2025 ​ 2024 ​ (in thousands) Amount % Amount % Amount % Amount % ​ Provision for income taxes at the statutory rate of 21 % ​ $ 33,021 ​ 21.0 % $ 24,533 ​ 21.0 % $ 82,402 ​ 21.0 % $ 79,825 ​ 21.0 % Increase (reduction) in taxes resulting from: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Excess tax benefit on share-based compensation ​ ​ ( 50 ) ​ ( 0.0 ) % ​ ( 1,967 ) ​ ( 1.7 ) % ​ ( 3,208 ) ​ ( 0.8 ) % ​ ( 4,264 ) ​ ( 1.1 ) % Tax exempt interest income ​ ​ ( 144 ) ​ ( 0.1 ) % ​ ( 216 ) ​ ( 0.2 ) % ​ ( 476 ) ​ ( 0.1 ) % ​ ( 725 ) ​ ( 0.2 ) % Dividends received deduction ​ ​ ( 253 ) ​ ( 0.2 ) % ​ ( 588 ) ​ ( 0.5 ) % ​ ( 752 ) ​ ( 0.2 ) % ​ ( 1,056 ) ​ ( 0.3 ) % Tax credit ​ ​ ( 645 ) ​ ( 0.4 ) % ​ ( 1,093 ) ​ ( 0.9 ) % ​ ( 1,935 ) ​ ( 0.5 ) % ​ ( 2,629 ) ​ ( 0.7 ) % ESOP dividends paid deduction ​ ​ ( 158 ) ​ ( 0.1 ) % ​ ( 149 ) ​ ( 0.1 ) % ​ ( 466 ) ​ ( 0.1 ) % ​ ( 439 ) ​ ( 0.1 ) % Nondeductible expenses ​ ​ 1,367 ​ 0.9 % ​ 1,160 ​ 1.0 % ​ 2,933 ​ 0.7 % ​ 2,819 ​ 0.7 % Other items, net ​ ​ ( 503 ) ​ ( 0.3 ) % ​ 118 ​ 0.1 % ​ 1,733 ​ 0.4 % ​ 1,669 ​ 0.5 % Total tax expense ​ $ 32,635 ​ 20.8 % $ 21,798 ​ 18.7 % $ 80,231 ​ 20.4 % $ 75,200 ​ 19.8 % ​ 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 capitalized costs can be deducted for tax purposes. Adopting the tax provisions in the OBBBA did not 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 1,130,763 awards under the 2023 LTIP, including 317,581 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 $ 6 million in the three and nine-month periods ended September 30, 2025 and 2024. The total income tax benefit was less than $ 1 million for the three and nine-month periods ended September 30, 2025 and 2024. Total unrecognized compensation expense relating to outstanding and unvested awards was $ 7 million, which will be recognized over the weighted average vesting period of 2.53 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 18 ​ Table of Contents 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 nine-month period ended September 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ Aggregate ​ ​ ​ ​ Weighted ​ Average ​ Intrinsic ​ ​ ​ ​ Average ​ Remaining ​ Value ​ Options Exercise Price Contractual Life (in 000’s) Outstanding options at January 1, 2025 ​ 2,837,938 ​ $ 52.80 ​ ​ ​ ​ ​ Options granted ​ 280,680 ​ ​ 72.98 ​ ​ ​ ​ ​ Options exercised ​ ( 81,518 ) ​ ​ 29.47 ​ ​ ​ ​ ​ Options canceled/forfeited ​ ( 36,150 ) ​ ​ 64.51 ​ ​ ​ ​ ​ Outstanding options at September 30, 2025 ​ 3,000,950 ​ $ 55.18 ​ 4.13 ​ $ 35,782 Exercisable options at September 30, 2025 ​ 1,909,058 ​ $ 48.94 ​ 3.05 ​ $ 32,086 ​ The intrinsic value of options exercised, which is the difference between the fair value and the exercise price, was $ 4 million and $ 19 million during the first nine 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 September 30: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 2024 ​ Weighted-average fair value of grants ​ $ 15.02 ​ $ 15.65 ​ Risk-free interest rates ​ ​ 4.10 % ​ 4.92 % Dividend yield ​ ​ 2.53 % ​ 2.30 % Expected volatility ​ ​ 23.18 % ​ 23.08 % Expected option life ​ ​ 5.03 years ​ 5.00 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 nine months of 2025 and 2024, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ RSUs Fair Value Nonvested at January 1, 2025 ​ 99,095 ​ $ 67.54 Granted ​ 36,901 ​ ​ 74.40 Reinvested ​ 657 ​ ​ 70.61 Vested ​ ( 36,821 ) ​ ​ 64.77 Forfeited ​ ( 3,406 ) ​ ​ 67.14 Nonvested at September 30, 2025 ​ 96,426 ​ $ 71.10 ​ ​ 19 ​ Table of Contents 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ For the Nine Months Net Premiums Earned ​ Ended September 30, ​ Ended September 30, (in thousands) 2025 2024 2025 2024 Casualty ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial excess and personal umbrella ​ $ 115,132 ​ $ 91,434 ​ $ 327,252 ​ $ 257,455 Commercial transportation ​ ​ 31,190 ​ ​ 32,067 ​ ​ 91,464 ​ ​ 88,691 General liability ​ ​ 28,690 ​ ​ 26,316 ​ ​ 82,997 ​ ​ 77,832 Professional services ​ ​ 27,431 ​ ​ 26,281 ​ ​ 80,641 ​ ​ 77,366 Small commercial ​ ​ 19,627 ​ ​ 20,074 ​ ​ 59,542 ​ ​ 57,870 Executive products ​ ​ 6,043 ​ ​ 6,261 ​ ​ 17,507 ​ ​ 17,624 Other casualty ​ ​ 15,395 ​ ​ 17,205 ​ ​ 47,791 ​ ​ 50,176 Total ​ $ 243,508 ​ $ 219,638 ​ $ 707,194 ​ $ 627,014 Property ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial property ​ $ 72,853 ​ $ 85,814 ​ $ 232,541 ​ $ 260,819 Marine ​ ​ 40,058 ​ ​ 37,618 ​ ​ 118,784 ​ ​ 107,255 Other property ​ ​ 13,778 ​ ​ 9,834 ​ ​ 38,572 ​ ​ 28,700 Total ​ $ 126,689 ​ $ 133,266 ​ $ 389,897 ​ $ 396,774 Surety ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transactional ​ $ 13,268 ​ $ 12,488 ​ $ 39,024 ​ $ 36,904 Commercial ​ ​ 12,700 ​ ​ 12,477 ​ ​ 37,898 ​ ​ 35,802 Contract ​ ​ 11,530 ​ ​ 11,620 ​ ​ 33,931 ​ ​ 32,736 Total ​ $ 37,498 ​ $ 36,585 ​ $ 110,853 ​ $ 105,442 Grand Total ​ $ 407,695 ​ $ 389,489 ​ $ 1,207,944 ​ $ 1,129,230 ​ 20 ​ Table of Contents The following tables present our operating results by segment, as evaluated by the CODM. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended September 30, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ Casualty ​ ​ Property ​ ​ Surety ​ ​ Total Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net premiums earned ​ $ 243,508 ​ $ 126,689 ​ $ 37,498 ​ $ 407,695 Net investment income ​ ​ - ​ ​ - ​ ​ - ​ ​ 41,270 Net realized gains ​ ​ - ​ ​ - ​ ​ - ​ ​ 18,318 Net unrealized gains on equity securities ​ ​ - ​ ​ - ​ ​ - ​ ​ 41,981 Consolidated revenue ​ $ 243,508 ​ $ 126,689 ​ $ 37,498 ​ $ 509,264 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Losses and settlement expenses ​ $ 150,912 ​ $ 32,815 ​ $ 4,271 ​ ​ ​ Amortization of deferred acquisition costs ​ ​ 47,335 ​ ​ 26,311 ​ ​ 13,103 ​ ​ ​ Other policy acquisition costs ​ ​ 23,199 ​ ​ 8,219 ​ ​ 10,770 ​ ​ ​ Insurance operating expenses ​ ​ 17,576 ​ ​ 8,920 ​ ​ 3,719 ​ ​ ​ Segment earnings before income taxes ​ $ 4,486 ​ $ 50,424 ​ $ 5,635 ​ $ 60,545 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization expense ​ $ 1,517 ​ $ 534 ​ $ 370 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended September 30, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ Casualty ​ ​ Property ​ ​ Surety ​ ​ Total Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net premiums earned ​ $ 219,638 ​ $ 133,266 ​ $ 36,585 ​ $ 389,489 Net investment income ​ ​ - ​ ​ - ​ ​ - ​ ​ 36,694 Net realized gains ​ ​ - ​ ​ - ​ ​ - ​ ​ 5,420 Net unrealized gains on equity securities ​ ​ - ​ ​ - ​ ​ - ​ ​ 38,392 Consolidated revenue ​ $ 219,638 ​ $ 133,266 ​ $ 36,585 ​ $ 469,995 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Losses and settlement expenses ​ $ 137,951 ​ $ 60,991 ​ $ 3,176 ​ ​ ​ Amortization of deferred acquisition costs ​ ​ 41,240 ​ ​ 27,054 ​ ​ 12,471 ​ ​ ​ Other policy acquisition costs ​ ​ 21,266 ​ ​ 6,054 ​ ​ 9,726 ​ ​ ​ Insurance operating expenses ​ ​ 16,632 ​ ​ 8,765 ​ ​ 3,471 ​ ​ ​ Segment earnings before income taxes ​ $ 2,549 ​ $ 30,402 ​ $ 7,741 ​ $ 40,692 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization expense ​ $ 1,428 ​ $ 485 ​ $ 243 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended September 30, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ Casualty ​ ​ Property ​ ​ Surety ​ ​ Total Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net premiums earned ​ $ 707,194 ​ $ 389,897 ​ $ 110,853 ​ $ 1,207,944 Net investment income ​ ​ - ​ ​ - ​ ​ - ​ ​ 117,414 Net realized gains ​ ​ - ​ ​ - ​ ​ - ​ ​ 48,234 Net unrealized gains on equity securities ​ ​ - ​ ​ - ​ ​ - ​ ​ 43,163 Consolidated revenue ​ $ 707,194 ​ $ 389,897 ​ $ 110,853 ​ $ 1,416,755 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Losses and settlement expenses ​ $ 438,007 ​ $ 103,999 ​ $ 7,808 ​ ​ ​ Amortization of deferred acquisition costs ​ ​ 135,999 ​ ​ 79,985 ​ ​ 38,361 ​ ​ ​ Other policy acquisition costs ​ ​ 67,935 ​ ​ 23,496 ​ ​ 32,350 ​ ​ ​ Insurance operating expenses ​ ​ 50,407 ​ ​ 25,567 ​ ​ 10,709 ​ ​ ​ Segment earnings before income taxes ​ $ 14,846 ​ $ 156,850 ​ $ 21,625 ​ $ 193,321 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization expense ​ $ 4,556 ​ $ 1,553 ​ $ 1,039 ​ ​ ​ ​ 21 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended September 30, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ Casualty ​ ​ Property ​ ​ Surety ​ ​ Total Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net premiums earned ​ $ 627,014 ​ $ 396,774 ​ $ 105,442 ​ $ 1,129,230 Net investment income ​ ​ - ​ ​ - ​ ​ - ​ ​ 103,502 Net realized gains ​ ​ - ​ ​ - ​ ​ - ​ ​ 11,222 Net unrealized gains on equity securities ​ ​ - ​ ​ - ​ ​ - ​ ​ 87,314 Consolidated revenue ​ $ 627,014 ​ $ 396,774 ​ $ 105,442 ​ $ 1,331,268 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Losses and settlement expenses ​ $ 369,273 ​ $ 134,950 ​ $ 9,518 ​ ​ ​ Amortization of deferred acquisition costs ​ ​ 117,979 ​ ​ 80,319 ​ ​ 35,574 ​ ​ ​ Other policy acquisition costs ​ ​ 64,121 ​ ​ 14,696 ​ ​ 29,497 ​ ​ ​ Insurance operating expenses ​ ​ 49,103 ​ ​ 25,511 ​ ​ 10,278 ​ ​ ​ Segment earnings before income taxes ​ $ 26,538 ​ $ 141,298 ​ $ 20,575 ​ $ 188,411 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization expense ​ $ 4,228 ​ $ 1,406 ​ $ 755 ​ ​ ​ ​ The following table reconciles segment earnings before income taxes to earnings before income taxes. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ For the Nine Months ​ ​ Ended September 30, ​ Ended September 30, (in thousands) 2025 2024 2025 2024 Reconciliation of earnings before income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment earnings before income taxes ​ $ 60,545 ​ $ 40,692 ​ $ 193,321 ​ $ 188,411 Net investment income ​ ​ 41,270 ​ ​ 36,694 ​ ​ 117,414 ​ ​ 103,502 Net realized gains ​ ​ 18,318 ​ ​ 5,420 ​ ​ 48,234 ​ ​ 11,222 Net unrealized gains on equity securities ​ ​ 41,981 ​ ​ 38,392 ​ ​ 43,163 ​ ​ 87,314 Interest expense on debt ​ ​ ( 1,364 ) ​ ​ ( 1,617 ) ​ ​ ( 4,049 ) ​ ​ ( 4,839 ) General corporate expenses ​ ​ ( 5,045 ) ​ ​ ( 3,994 ) ​ ​ ( 12,747 ) ​ ​ ( 13,144 ) Equity in earnings of unconsolidated investees ​ ​ 1,540 ​ ​ 1,238 ​ ​ 7,055 ​ ​ 7,653 Earnings before income taxes ​ $ 157,245 ​ $ 116,825 ​ $ 392,391 ​ $ 380,119 ​ ​ ​ ​ 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. ​ 22 ​ Table of Contents 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 nine-month periods ended September 30, 2025 and 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ For the Nine Months ​ ​ Ended September 30, ​ Ended September 30, (in thousands) 2025 2024 2025 2024 Operating lease cost ​ $ 1,040 ​ $ 1,149 ​ $ 3,270 ​ $ 3,483 Variable lease cost ​ ​ 323 ​ ​ 351 ​ ​ 1,112 ​ ​ 966 Sublease income ​ ​ ( 42 ) ​ ​ ( 42 ) ​ ​ ( 127 ) ​ ​ ( 127 ) Total lease cost ​ $ 1,321 ​ $ 1,458 ​ $ 4,255 ​ $ 4,322 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for amounts included in measurement of lease liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating cash outflows from operating leases ​ $ 1,027 ​ $ 845 ​ $ 3,273 ​ $ 3,013 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ROU assets obtained in exchange for new operating lease liabilities ​ $ — ​ $ 351 ​ $ 480 ​ $ 4,140 ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) September 30, 2025 December 31, 2024 ​ Operating lease ROU assets ​ $ 11,629 ​ $ 14,016 ​ Operating lease liabilities ​ $ 13,320 ​ $ 15,711 ​ Weighted-average remaining lease term - operating leases ​ ​ 5.91 years ​ 6.01 years Weighted-average discount rate - operating leases ​ ​ 3.76 % ​ 3.63 % ​ Future minimum lease payments under non-cancellable leases as of September 30, 2025 were as follows: ​ ​ ​ ​ ​ (in thousands) September 30, 2025 2025 ​ $ 1,116 2026 ​ ​ 3,947 2027 ​ ​ 2,529 2028 ​ ​ 1,617 2029 ​ ​ 1,470 2030 ​ ​ 887 Thereafter ​ ​ 3,602 Total future minimum lease payments ​ $ 15,168 Less imputed interest ​ ​ ( 1,848 ) Total operating lease liability ​ $ 13,320 ​ ​