RLI (RLI) risk factors, FY2024 10-K

RLI's FY2024 10-K, filed Feb 21, 2025, lists 25 risk factors. There is no earlier 10-K to compare against, so the most company-specific risks are listed below.

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Risk factors listed
250 groups
Section length
6k wordsItem 1A

RLI's biggest risks in the FY2024 10-K

  • Geographic concentration in Florida, California, Texas, and New York drives significant catastrophe and regulatory exposure.
  • Reliance on a few brokers for 46 percent of gross premiums introduces distribution risk.
  • Inadequate loss reserves and unpredictable weather events threaten profitability.

The risks most specific to RLI

  • A significant percentage of our premium revenues are sold through a few brokers and carrier partners and a loss of business provided by any of them could adversely affect us

    In 2024, 46 percent of our gross premiums written came through eight producer entities, creating revenue concentration risk.

  • Our business is concentrated in several key states and a change in our business in one of those states could disproportionately affect our financial condition or results of operations

    In 2024, 57 percent of our direct premiums earned were generated in Florida, California, Texas, and New York.

  • Our loss reserves are based on estimates and may be inadequate to cover our actual insured losses, which would negatively impact our profitability

    Our loss reserves for unpaid losses and adjustment expenses are estimates and may prove inadequate to cover actual claims.

  • Catastrophic losses are unpredictable and could cause the Company to suffer material financial losses

    We face exposure to unpredictable catastrophic events like coastal hurricanes, tropical storms, and West Coast earthquakes.

  • If we cannot obtain adequate reinsurance protection for the risks we have underwritten or at prices we deem acceptable, we may be exposed to greater losses from these risks or we may reduce the amount of business we underwrite, which would reduce our revenues

    We depend on reinsurers to assume risk, and lack of adequate or affordable reinsurance could increase our losses.

  • We are an insurance holding company and therefore may not be able to receive adequate or timely dividends from our insurance subsidiaries

    As a holding company, we rely heavily on dividends from our three insurance operating companies to meet debt and corporate obligations.

  • We rely on third-party vendors for a number of key components of our business

    We rely on third-party vendors for critical software used to model natural catastrophes, process claims, and manage policies.

  • Technology breaches or failures, including but not limited to cyber security incidents, could disrupt our operations, result in the loss of critical and confidential information and expose us to additional liabilities, which could adversely impact our reputation and results of operations

    Cyber security incidents or technology failures could disrupt operations and compromise confidential data.

All 25 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01Our results of operations and revenues may fluctuate as a result of many factors, including cyclical changes in the insurance industry, which may cause the price of our securities to be volatile
  2. 02A significant percentage of our premium revenues are sold through a few brokers and carrier partners and a loss of business provided by any of them could adversely affect us
  3. 03Our business is concentrated in several key states and a change in our business in one of those states could disproportionately affect our financial condition or results of operations
  4. 04We are vulnerable to the actions of other companies who may seek to write business without the appropriate regard for risk and profitability, especially during periods of intense competition for premium. During these times, it is very difficult to grow or maintain premium volume without sacrificing underwriting income
  5. 05A downgrade in our ratings from AM Best, Standard & Poor’s or Moody’s could negatively affect our business
  6. 06These regulatory requirements may adversely affect or inhibit our ability to achieve some or all of our business objectives
  7. 07Our loss reserves are based on estimates and may be inadequate to cover our actual insured losses, which would negatively impact our profitability
  8. 08Catastrophic losses are unpredictable and could cause the Company to suffer material financial losses
  9. 09Changing climate and weather conditions may adversely affect our financial condition or profitability
  10. 10If we cannot obtain adequate reinsurance protection for the risks we have underwritten or at prices we deem acceptable, we may be exposed to greater losses from these risks or we may reduce the amount of business we underwrite, which would reduce our revenues
  11. 11Our reinsurers may not pay on losses in a timely fashion, or at all, which may increase our costs and have an adverse effect on our business
  12. 12Adverse changes in the economy could lower the demand for our insurance products and could have an adverse effect on the revenue and profitability of our operations
  13. 13Access to capital and market liquidity may adversely affect our ability to take advantage of business opportunities as they arise
  14. 14We are an insurance holding company and therefore may not be able to receive adequate or timely dividends from our insurance subsidiaries
  15. 15We may not be able to, or might not choose to, continue paying dividends on our common stock
  16. 16Our success will depend on our ability to maintain and enhance effective operating procedures and manage risks on an enterprise-wide basis
  17. 17We may not be able to effectively start up or integrate new product opportunities
  18. 18We may be unable to attract and retain qualified key employees
  19. 19We rely on third-party vendors for a number of key components of our business
  20. 20Any significant interruption in the operation of our facilities, systems and business functions could adversely affect our financial condition and results of operations
  21. 21Technology breaches or failures, including but not limited to cyber security incidents, could disrupt our operations, result in the loss of critical and confidential information and expose us to additional liabilities, which could adversely impact our reputation and results of operations
  22. 22If we are unable to keep pace with the technological advancements in the insurance industry, our ability to compete effectively could be impaired
  23. 23Epidemics, pandemics and public health outbreaks could adversely affect our business, including revenues, profitability, results of operations and/or cash flows, in a manner and to a degree that could be material
  24. 24We may suffer losses from litigation, which could materially and adversely affect our financial condition and business operations
  25. 25Anti-takeover provisions affecting the Company could prevent or delay a change of control that is beneficial to you

Other RLI 10-Ks

  • FY2025 10-K risk factors
    25 risks2 reworded

    State concentration eased slightly: four states generated 56% of 2025 direct premiums, versus 57% in 2024.

    Filed Feb 20, 2026

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.