​ Forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 appear throughout this report. These forward-looking statements generally include words such as “expect,” “predict,” “estimate,” “will,” “should,” “anticipate,” “believe” and similar expressions. Such assumptions are, in turn, based on information available and internal estimates and analyses of general economic conditions, competitive factors, conditions specific to the property and casualty insurance, reinsurance and surety industries, claims development and the impact thereof on our loss reserves, the adequacy and financial security of our reinsurance programs, developments in the securities market and the impact on our investment portfolio, regulatory changes and conditions and other factors. These assumptions are subject to various risks, uncertainties and other factors, including, without limitation those set forth in “Item 1A. Risk Factors” within the Annual Report on Form 10-K for the year ended December 31, 2025 and Part II within this report. Actual results could differ materially from those expressed in, or implied by, these forward-looking statements. Forward-looking statements reflect the Company’s expectations, plans or forecasts of future events and views as of the date of this report. While the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. You should review the various risks, uncertainties and other factors listed from time to time in our Securities and Exchange Commission filings. ​ OVERVIEW ​ RLI Corp. is a U.S.-based, specialty insurance company that underwrites select property, casualty and surety products through three major subsidiaries. Our focus is on niche markets and developing unique products that are tailored to customers’ needs. We hire underwriters and claim examiners with deep expertise and provide exceptional customer service and support. We maintain a highly diverse product portfolio and underwrite for profit in all market conditions. In 2025, we achieved our 30th consecutive year of underwriting profitability. Over the 30-year period, we averaged an 87.9 combined ratio. This drives our ability to provide shareholder returns in three different ways: the underwriting income itself, net investment income from our investment portfolio and long-term appreciation in our equity portfolio. ​ We measure the results of our insurance operations by monitoring growth and profitability across three distinct business segments: casualty, property and surety. Growth is measured in terms of gross premiums written, and profitability is analyzed through underwriting income and combined ratios. ​ The property and casualty insurance business is cyclical and influenced by many factors, including price competition, economic conditions, natural or man-made disasters (for example, earthquakes, hurricanes, pandemics and terrorism), interest rates, state regulations, court decisions, changes in the law and evolving technologies. One of the unique and challenging features of the property and casualty insurance business is that coverages must be priced before costs have fully developed, because premiums are charged before claims are incurred. This requires that liabilities be estimated and recorded in recognition of future loss and settlement obligations. Due to the inherent uncertainty in estimating these liabilities, there can be no assurance that actual liabilities will equal recorded amounts. If actual liabilities differ from recorded amounts, there will either be an adverse or favorable effect on net earnings. ​ The casualty portion of our business consists largely of commercial excess, personal umbrella, general liability, transportation and management liability coverages, as well as package business and other specialty coverages, such as professional liability and workers’ compensation for office-based professionals. We also assume a limited amount of risks 24 ​ Table of Contents through quota share and excess of loss reinsurance agreements. The casualty business is subject to the risk of estimating losses and related loss reserves because the ultimate settlement of a casualty claim may take several years to fully develop. ​ Our property segment is comprised primarily of commercial fire, hurricane, earthquake, difference in conditions and marine coverages. We also offer homeowners’ coverages in Hawaii. Property insurance results are subject to the variability introduced by perils such as earthquakes, fires, hurricanes and other storms. Our major catastrophe exposure is to losses caused by windstorms, affecting commercial properties in coastal regions of the United States, and earthquakes, primarily on the West Coast. We limit our net aggregate exposure to a catastrophic event by managing the total policy limits written in a particular region, purchasing reinsurance and maintaining policy terms and conditions throughout all insurance cycles. We also use computer-assisted modeling techniques to provide estimates that help the Company carefully manage the concentration of risks exposed to catastrophic events. ​ The surety segment specializes in writing small to medium-sized contract surety coverages, including payment and performance bonds. We offer a variety of commercial surety bonds for medium to large-sized businesses across a broad spectrum of industries, including the home builders, financial, healthcare, energy and renewable energy industries. We also offer a variety of transactional bonds, including but not limited to license and permit, notary and court bonds. Often, our surety coverages involve a statutory requirement for bonds. While these bonds typically maintain a relatively low loss ratio, losses may fluctuate due to adverse economic conditions affecting the financial viability of our insureds. The contract surety product guarantees commercial contractors’ contractual obligations for a specific construction project. Generally, losses occur due to the deterioration of a contractor’s financial condition. ​ The insurance marketplace is competitive across all of our segments. However, we believe that our business model is built to create underwriting income by focusing on sound risk selection and discipline. Our primary focus will continue to be on underwriting profitability, with a secondary focus on premium growth where we believe underwriting profit exists, as opposed to general premium growth or market share measurements. ​ Key Performance Measures ​ The following is a list of key performance measures found throughout this report with their definitions, relationships to GAAP measures and explanations of their importance to our operations. ​ Underwriting Income ​ Underwriting income or profit represents one measure of the pretax profitability of our insurance operations, and is derived by subtracting losses and settlement expenses, policy acquisition costs and insurance operating expenses from net premiums earned, which are all GAAP financial measures. Each of these components are presented in the statements of earnings but are not subtotaled. However, this information is available in total and by segment in note 7 to the unaudited condensed consolidated financial statements in this quarterly report on Form 10-Q, and in note 11 to the consolidated financial statements in our 2025 Annual Report on Form 10-K, regarding operating segment information. The nearest comparable GAAP measure is earnings before income taxes which, in addition to underwriting income, includes net investment income, net realized gains or losses, net unrealized gains or losses on equity securities, general corporate expenses, debt costs and our portion of earnings from unconsolidated investees. A reconciliation of net earnings to underwriting income follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ For the Six Months ​ ​ Ended June 30, ​ Ended June 30, (in thousands) 2026 2025 2026 2025 Net earnings ​ $ 168,028 ​ $ 124,336 ​ $ 222,913 ​ $ 187,550 Income tax expense ​ ​ 42,660 ​ ​ 32,179 ​ ​ 55,116 ​ ​ 47,596 Earnings before income taxes ​ $ 210,688 ​ $ 156,515 ​ $ 278,029 ​ $ 235,146 Equity in earnings of unconsolidated investees ​ ​ (2,970) ​ ​ (2,467) ​ ​ (5,117) ​ ​ (5,515) General corporate expenses ​ ​ 6,223 ​ ​ 4,754 ​ ​ 8,947 ​ ​ 7,702 Interest expense on debt ​ ​ 4,441 ​ ​ 1,350 ​ ​ 6,794 ​ ​ 2,685 Net unrealized (gains) losses on equity securities ​ ​ (103,024) ​ ​ (43,500) ​ ​ (63,628) ​ ​ (1,182) Net realized gains ​ ​ (9,407) ​ ​ (15,004) ​ ​ (18,966) ​ ​ (29,916) Net investment income ​ ​ (46,042) ​ ​ (39,418) ​ ​ (88,363) ​ ​ (76,144) Net underwriting income ​ $ 59,909 ​ $ 62,230 ​ $ 117,696 ​ $ 132,776 ​ 25 ​ Table of Contents Combined Ratio ​ The combined ratio, which is derived from components of underwriting income, is a common industry performance measure of profitability for underwriting operations and is calculated in two components. First, the loss ratio is losses and settlement expenses divided by net premiums earned. The second component, the expense ratio, reflects the sum of policy acquisition costs and insurance operating expenses divided by net premiums earned. All items included in these components of the combined ratio are presented in our GAAP consolidated financial statements. The sum of the loss and expense ratios is the combined ratio. The difference between the combined ratio and 100 reflects the per-dollar rate of underwriting income or loss. ​ Critical Accounting Policies ​ In preparing the unaudited condensed consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. Actual results could differ significantly from those estimates. ​ The most critical accounting policies involve significant estimates and include those used in determining the liability for unpaid losses and settlement expenses, investment valuation, recoverability of reinsurance balances, deferred policy acquisition costs and deferred taxes. For a detailed discussion of each of these policies, refer to our 2025 Annual Report on Form 10-K. ​ There have been no significant changes to critical accounting policies during the year. ​ RESULTS OF OPERATIONS ​ Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 ​ Net premiums earned increased 4 percent, driven primarily by products in our casualty segment. Investment income was up 16 percent, reflecting higher reinvestment rates and an increased average asset base. Market increases resulted in $64 million of unrealized gains on equity securities during the first six months of 2026, compared to $1 million in the same period of 2025. Realized gains in 2026 included $20 million of realized gains on equity securities, primarily due to rebalancing within our equity strategies, and $1 million of realized losses on fixed income securities. This compares to $29 million of realized gains on equity securities, $1 million of realized losses on fixed income securities and $2 million of other realized gains during the first six months of 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months ​ ​ Ended June 30, Consolidated Revenues (in thousands) 2026 2025 Net premiums earned ​ $ 828,482 ​ $ 800,249 Net investment income ​ ​ 88,363 ​ ​ 76,144 Net realized gains ​ ​ 18,966 ​ ​ 29,916 Net unrealized gains on equity securities ​ ​ 63,628 ​ ​ 1,182 Total consolidated revenue ​ $ 999,439 ​ $ 907,491 ​ Underwriting income was $118 million on an 85.8 combined ratio for the first six months of 2026, compared to $133 million on an 83.4 combined ratio in the same period of 2025. Underwriting results were impacted by $26 million of pretax catastrophe losses in both 2026 and 2025. Results for each period benefited from favorable development on prior years’ loss reserves, which provided additional pretax earnings of $75 million in the first six months of 2026, compared to $59 million in 2025. ​ The loss ratio was 46.2 for the first six months of 2026, compared to 45.2 in 2025. The benefit of greater favorable development on prior years’ loss reserves was offset by a shift in the mix of business towards casualty lines, which tend to have higher non-catastrophe loss ratios than our property and surety products. The expense ratio increased to 39.6 from 38.2. The increase primarily reflected continued investments in our workforce. ​ Bonus and profit-sharing amounts earned by executives, managers and associates are predominantly influenced by corporate performance, including operating earnings, combined ratio and return on capital. Favorable development and other drivers of growth in book value will increase bonus and profit-sharing expenses, while catastrophe losses, adverse development 26 ​ Table of Contents and decreased investment portfolio returns would lead to expense reductions. These performance-related expenses affect policy acquisition, insurance operating and general corporate expenses. ​ Equity in earnings of unconsolidated investees relates to our investment in Prime Holdings Insurance Services, Inc. (Prime), a specialty insurance company. We recognized $5 million of investee earnings from Prime in the first six months of 2026, the same as in the first six months of 2025. ​ Net earnings for the first six months of 2026 totaled $223 million, compared to $188 million for the same period in 2025. The increase primarily reflected larger unrealized gains on equity securities and higher investment income. ​ Comprehensive earnings totaled $195 million for the first six months of 2026, compared to $236 million for the first six months of 2025. Other comprehensive earnings (loss) primarily included net after-tax unrealized gains (losses) from the fixed income portfolio. Other comprehensive loss of $28 million in the first six months of 2026 was primarily attributable to rising interest rates, which decreased the fair value of securities held in the fixed income portfolio. Comparatively, $49 million of other comprehensive earnings was recognized in 2025. ​ Premiums ​ Gross premiums written increased $30 million for the first six months of 2026, driven by favorable rate movement and growth within our casualty segment. Net premiums earned increased $28 million, primarily due to continued growth within our casualty segment. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Premiums Written ​ ​ Net Premiums Earned ​ ​ ​ For the Six Months ​ ​ ​ ​ For the Six Months ​ ​ ​ ​ ​ Ended June 30, ​ ​ ​ ​ Ended June 30, ​ ​ ​ (in thousands) 2026 2025 % Change ​ 2026 2025 % Change ​ Casualty ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial excess and personal umbrella ​ $ 326,947 ​ $ 276,718 ​ 18 % ​ $ 248,125 ​ $ 206,530 ​ 20 % Commercial transportation ​ ​ 80,634 ​ ​ 65,698 ​ 23 % ​ ​ 64,326 ​ ​ 60,274 ​ 7 % Professional services ​ ​ 62,081 ​ ​ 59,732 ​ 4 % ​ ​ 56,083 ​ ​ 53,210 ​ 5 % General liability ​ ​ 50,389 ​ ​ 53,648 ​ (6) % ​ ​ 45,658 ​ ​ 46,799 ​ (2) % Small commercial ​ ​ 43,641 ​ ​ 43,242 ​ 1 % ​ ​ 39,208 ​ ​ 39,915 ​ (2) % Executive products ​ ​ 39,192 ​ ​ 38,363 ​ 2 % ​ ​ 11,354 ​ ​ 11,464 ​ (1) % Other casualty ​ ​ 43,129 ​ ​ 47,663 ​ (10) % ​ ​ 40,734 ​ ​ 45,494 ​ (10) % Total ​ $ 646,013 ​ $ 585,064 ​ 10 % ​ $ 505,488 ​ $ 463,686 ​ 9 % Property ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial property ​ $ 223,898 ​ $ 259,416 ​ (14) % ​ $ 141,860 ​ $ 159,688 ​ (11) % Marine ​ ​ 96,256 ​ ​ 90,938 ​ 6 % ​ ​ 79,556 ​ ​ 78,726 ​ 1 % Other property ​ ​ 33,885 ​ ​ 31,515 ​ 8 % ​ ​ 28,748 ​ ​ 24,794 ​ 16 % Total ​ $ 354,039 ​ $ 381,869 ​ (7) % ​ $ 250,164 ​ $ 263,208 ​ (5) % Surety ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transactional ​ $ 29,048 ​ $ 28,851 ​ 1 % ​ $ 26,642 ​ $ 25,756 ​ 3 % Commercial ​ ​ 28,834 ​ ​ 32,357 ​ (11) % ​ ​ 25,037 ​ ​ 25,198 ​ (1) % Contract ​ ​ 25,602 ​ ​ 25,246 ​ 1 % ​ ​ 21,151 ​ ​ 22,401 ​ (6) % Total ​ $ 83,484 ​ $ 86,454 ​ (3) % ​ $ 72,830 ​ $ 73,355 ​ (1) % Grand Total ​ $ 1,083,536 ​ $ 1,053,387 ​ 3 % ​ $ 828,482 ​ $ 800,249 ​ 4 % ​ Casualty ​ Gross premiums written for the casualty segment increased $61 million in the first six months of 2026. We continued to benefit from positive rate movement across a large portion of our casualty segment. Personal umbrella expanded its distribution base while achieving favorable rate increases. Our commercial transportation business benefited from favorable market conditions as some competitors reduced their appetite, creating opportunities to write additional high-quality business at adequate rates. The decline in general liability premiums resulted from slower construction activity within our targeted markets, which created a more challenging environment for writing new project business. Other casualty premiums declined due to increased competition in our binding authority business and our decision to no longer participate in the reinsurance agreement with Prime. ​ 27 ​ Table of Contents Property ​ Gross premiums written for the property segment decreased $28 million in the first six months of 2026. Commercial property declined $36 million as increased market capacity and competition continued to pressure pricing. Marine premiums increased $5 million, driven by strong new business production and continued growth in our inland marine products. Additionally, growth in other property premiums was driven by rate increases for our Hawaii homeowners business and new business opportunities. ​ Surety ​ Gross premiums written for the surety segment decreased by $3 million in the first six months of 2026. Contract surety remained relatively stable despite economic conditions that tempered construction activity, reflecting continued marketing efforts and disciplined underwriting. Commercial surety premiums declined due to lower levels of non-recurring premium from our renewable energy portfolio and a competitive marketplace that resulted in fewer new business opportunities. ​ Underwriting Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Six Months ​ ​ Ended June 30, ​ 2026 2025 Underwriting Income (in thousands) ​ ​ ​ ​ ​ ​ Casualty ​ $ 9,035 ​ $ 10,360 Property ​ ​ 101,684 ​ ​ 106,426 Surety ​ ​ 6,977 ​ ​ 15,990 Total ​ $ 117,696 ​ $ 132,776 ​ ​ ​ ​ ​ ​ ​ Combined Ratio ​ ​ ​ ​ ​ ​ Casualty ​ ​ 98.2 ​ ​ 97.8 Property ​ ​ 59.4 ​ ​ 59.6 Surety ​ ​ 90.4 ​ ​ 78.2 Total ​ ​ 85.8 ​ ​ 83.4 ​ Casualty ​ The casualty segment recorded underwriting income of $9 million in the first six months of 2026, compared to $10 million for the same period last year. Prior accident years’ reserve releases reduced loss and settlement expenses for the casualty segment by $28 million in 2026, primarily related to accident years 2019 through 2022, as well as 2024 and 2025. Larger drivers of the favorable development were commercial transportation, executive products, professional services and commercial excess, while personal umbrella experienced some adverse development. In comparison, $20 million of prior accident years’ reserves were released in the first six months of 2025. Commercial excess, general liability and subsegments within professional liability drove the favorable development, while commercial transportation and personal umbrella had adverse development related to auto exposures in 2025. Storm losses on casualty-oriented package policies that include property coverage resulted in $2 million of losses in both 2026 and 2025. ​ The combined ratio for the casualty segment was 98.2 in 2026, compared to 97.8 in 2025. The segment’s loss ratio was 61.8 in 2026, down from 61.9 in 2025. The expense ratio for the casualty segment was 36.4, up from 35.9 for the same period last year. ​ Property ​ The property segment recorded underwriting income of $102 million for the first six months of 2026, compared to $106 million for the same period last year. Underwriting results for 2026 included $44 million of favorable development on prior years’ loss and catastrophe reserves, offset by $24 million of storm losses. Comparatively, results for 2025 included $28 million of favorable development on prior years’ loss and catastrophe reserves and $24 million of storm and other catastrophe losses. ​ Underwriting results for the first six months of 2026 resulted in a combined ratio of 59.4, compared to 59.6 for the same period last year. The segment’s loss ratio was 24.2 in 2026, down from 27.0 in 2025, due to increased favorable development 28 ​ Table of Contents on prior accident years. The segment’s expense ratio increased to 35.2 in 2026 from 32.6 in the prior year, as a result of continued investments in people on a lower earned premium base. ​ Surety ​ The surety segment recorded underwriting income of $7 million for the first six months of 2026, compared to $16 million for the same period last year. Results for 2026 included favorable development on prior accident years’ reserves, which decreased loss and settlement expenses for the segment by $4 million, compared to $11 million in 2025. ​ The combined ratio for the surety segment totaled 90.4 for the first six months of 2026, compared to 78.2 for the same period last year. The segment’s loss ratio was 13.8 in 2026, up from 4.8 in 2025, due to lower levels of favorable prior accident years’ reserve development. The expense ratio was 76.6, up from 73.4 in the prior year, due to continued investments in people, as well as higher acquisition expenses, which can fluctuate between periods. ​ Investment Income ​ Our investment portfolio generated net investment income of $88 million during the first six months of 2026, an increase of 16 percent from the same period in 2025. The increase in investment income was due to higher reinvestment rates, as well as an increased average asset base relative to the prior year. ​ Yields on our fixed income investments for the first six months of 2026 and 2025 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 2025 ​ Pretax Yield ​ ​ ​ ​ ​ ​ Taxable ​ 4.35 % ​ 4.04 % Tax-Exempt ​ 3.01 % ​ 2.91 % After-Tax Yield ​ ​ ​ ​ ​ ​ Taxable ​ 3.44 % ​ 3.19 % Tax-Exempt ​ 2.85 % ​ 2.76 % ​ The following table depicts the composition of our investment portfolio at June 30, 2026 as compared to December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) June 30, 2026 December 31, 2025 ​ Fixed income ​ $ 3,617,942 74.2 % $ 3,533,336 75.7 % Equity securities ​ ​ 959,377 ​ 19.7 % ​ 898,876 ​ 19.3 % Short-term investments ​ ​ 206,119 ​ 4.2 % ​ 120,562 ​ 2.6 % Other invested assets ​ ​ 58,661 ​ 1.2 % ​ 59,281 ​ 1.3 % Cash ​ ​ 32,101 ​ 0.7 % ​ 51,565 ​ 1.1 % Total investments and cash ​ $ 4,874,200 ​ 100.0 % $ 4,663,620 ​ 100.0 % ​ We believe our overall asset allocation supports our strategy to preserve capital for policyholders, provide sufficient income to support our insurance operations and effectively grow book value over a long-term investment horizon. ​ The fixed income portfolio increased by $85 million in the first six months of 2026, as the majority of investment cash flows were directed to the fixed income portfolio. Average fixed income duration was 4.7 years at June 30, 2026, reflecting our liability structure and sound capital position. The equity portfolio increased by $61 million during the first six months of 2026, due to positive performance in the equity markets, primarily in the second quarter. Proceeds from debt issuance were invested into short-term securities, increasing the short-term investment portfolio by $86 million. ​ Income Taxes ​ Our effective tax rate for the first six months of 2026 was 19.8 percent, compared to 20.2 percent for the same period in 2025. Effective rates are dependent upon components of pretax earnings or losses and the related tax effects. The decrease in the effective tax rate for the six-month period in 2026 was primarily due to higher levels of tax credit utilization and deductions related to the $2.00 special dividend paid to our Employee Stock Ownership Plan. ​ 29 ​ Table of Contents Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 ​ Net premiums earned increased 4 percent, driven primarily by products in our casualty segment. Investment income was up 17 percent, reflecting higher reinvestment rates and an increased average asset base. Market increases resulted in $103 million of unrealized gains on equity securities in the second quarter of 2026, compared to $44 million of unrealized gains for the same period in 2025. Realized gains in 2026 included $10 million of realized gains on equity securities, primarily due to rebalancing within our equity strategies, and less than $1 million of realized losses on fixed income securities. This compares to $14 million of realized gains on equity securities, $1 million of realized losses on fixed income securities and $2 million of other realized gains during the second quarter of 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ ​ Ended June 30, Consolidated Revenues (in thousands) 2026 2025 Net premiums earned ​ $ 417,096 ​ $ 401,904 Net investment income ​ ​ 46,042 ​ ​ 39,418 Net realized gains ​ ​ 9,407 ​ ​ 15,004 Net unrealized gains on equity securities ​ ​ 103,024 ​ ​ 43,500 Total consolidated revenue ​ $ 575,569 ​ $ 499,826 ​ Underwriting income was $60 million on an 85.6 combined ratio for the second quarter of 2026, compared to $62 million on an 84.5 combined ratio in the same period of 2025. Underwriting results for 2026 were impacted by $10 million of pretax catastrophe losses, compared to $14 million in 2025. Results for each period benefited from favorable development on prior years’ loss reserves, which provided additional pretax earnings of $40 million in the second quarter of 2026, compared to $28 million in 2025. ​ The loss ratio was 45.5 for the second quarter of 2026, down from 45.9 in 2025 due to higher levels of favorable development on prior years’ loss reserves and lower catastrophe losses. The expense ratio increased to 40.1 from 38.6. Increased expenses were primarily related to continued investments in our workforce, as well as higher acquisition-related costs, which can fluctuate between periods. ​ Bonus and profit-sharing amounts earned by executives, managers and associates are predominantly influenced by corporate performance, including operating earnings, combined ratio and return on capital. Favorable development and other drivers of growth in book value will increase bonus and profit-sharing expenses, while catastrophe losses, adverse development and decreased investment portfolio returns would lead to expense reductions. These performance-related expenses affect policy acquisition, insurance operating and general corporate expenses. ​ Equity in earnings of unconsolidated investees relates to our investment in Prime Holdings Insurance Services, Inc. (Prime), a specialty insurance company. We recognized $3 million of investee earnings from Prime in the second quarter of 2026, the same as in the second quarter of 2025. ​ Net earnings for the second quarter of 2026 totaled $168 million, compared to $124 million for the same period in 2025. The increase primarily reflected larger unrealized gains on equity securities and higher investment income. ​ Comprehensive earnings totaled $166 million for the second quarter of 2026, compared to $143 million for the same period in 2025. Other comprehensive earnings (loss) primarily included net after-tax unrealized gains (losses) from the fixed income portfolio. Other comprehensive loss of $2 million in the second quarter of 2026 was primarily attributable to rising interest rates, which decreased the fair value of securities held in the fixed income portfolio. Comparatively, $19 million of other comprehensive earnings was recognized in 2025. ​ Premiums ​ Gross premiums written increased $17 million for the second quarter of 2026, driven by favorable rate movement and growth within our casualty segment. Net premiums earned increased $15 million, primarily due to continued growth within our casualty segment. ​ 30 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Premiums Written ​ ​ Net Premiums Earned ​ ​ ​ For the Three Months ​ ​ ​ ​ For the Three Months ​ ​ ​ ​ ​ Ended June 30, ​ ​ ​ ​ Ended June 30, ​ ​ ​ (in thousands) 2026 2025 % Change ​ 2026 2025 % Change ​ Casualty ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial excess and personal umbrella ​ $ 172,414 ​ $ 145,286 ​ 19 % ​ $ 126,854 ​ $ 106,055 ​ 20 % Commercial transportation ​ ​ 41,520 ​ ​ 34,782 ​ 19 % ​ ​ 33,632 ​ ​ 30,015 ​ 12 % Professional services ​ ​ 32,975 ​ ​ 31,320 ​ 5 % ​ ​ 28,134 ​ ​ 26,623 ​ 6 % General liability ​ ​ 25,350 ​ ​ 27,218 ​ (7) % ​ ​ 22,850 ​ ​ 23,869 ​ (4) % Small commercial ​ ​ 21,354 ​ ​ 22,097 ​ (3) % ​ ​ 19,886 ​ ​ 20,000 ​ (1) % Executive products ​ ​ 22,630 ​ ​ 21,536 ​ 5 % ​ ​ 5,481 ​ ​ 5,521 ​ (1) % Other casualty ​ ​ 22,756 ​ ​ 24,371 ​ (7) % ​ ​ 20,085 ​ ​ 22,555 ​ (11) % Total ​ $ 338,999 ​ $ 306,610 ​ 11 % ​ $ 256,922 ​ $ 234,638 ​ 9 % Property ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial property ​ $ 131,123 ​ $ 148,544 ​ (12) % ​ $ 68,900 ​ $ 76,876 ​ (10) % Marine ​ ​ 49,546 ​ ​ 46,212 ​ 7 % ​ ​ 40,337 ​ ​ 41,017 ​ (2) % Other property ​ ​ 18,607 ​ ​ 17,061 ​ 9 % ​ ​ 14,549 ​ ​ 12,771 ​ 14 % Total ​ $ 199,276 ​ $ 211,817 ​ (6) % ​ $ 123,786 ​ $ 130,664 ​ (5) % Surety ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transactional ​ $ 13,990 ​ $ 14,143 ​ (1) % ​ $ 13,347 ​ $ 13,096 ​ 2 % Commercial ​ ​ 13,961 ​ ​ 16,363 ​ (15) % ​ ​ 12,402 ​ ​ 12,422 ​ (0) % Contract ​ ​ 13,424 ​ ​ 13,348 ​ 1 % ​ ​ 10,639 ​ ​ 11,084 ​ (4) % Total ​ $ 41,375 ​ $ 43,854 ​ (6) % ​ $ 36,388 ​ $ 36,602 ​ (1) % Grand Total ​ $ 579,650 ​ $ 562,281 ​ 3 % ​ $ 417,096 ​ $ 401,904 ​ 4 % ​ Casualty ​ Gross premiums written for the casualty segment increased $32 million in the second quarter of 2026. We continued to benefit from favorable rate movement across a large portion of our casualty segment. Personal umbrella expanded its distribution base while benefiting from favorable rate movement. Our commercial transportation business benefited from favorable market conditions as some competitors reduced their appetite, creating opportunities to write additional high-quality business at adequate rates. The decline in general liability premiums resulted from slower construction activity within our targeted markets, which created a more challenging environment for writing new project business. Other casualty premiums declined due to increased competition in our binding authority business. ​ Property ​ Gross premiums written for the property segment decreased $13 million in the second quarter of 2026. Commercial property premiums declined $17 million as increased market capacity and competition continued to pressure pricing. Marine premiums increased $3 million, driven primarily by continued growth in our inland marine products. Additionally, growth in other property premiums was driven by rate increases for our Hawaii homeowners business. ​ Surety ​ Gross premiums written for the surety segment decreased by $2 million in the second quarter of 2026. Transactional and contract surety remained relatively stable despite economic conditions that tempered construction activity. Commercial surety premiums declined due to lower levels of non-recurring premium from our renewable energy portfolio and fewer new business opportunities. 31 ​ Table of Contents Underwriting Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months ​ ​ Ended June 30, ​ 2026 2025 Underwriting Income (in thousands) ​ ​ ​ ​ ​ ​ Casualty ​ $ 1,742 ​ $ 8,289 Property ​ ​ 53,499 ​ ​ 49,511 Surety ​ ​ 4,668 ​ ​ 4,430 Total ​ $ 59,909 ​ $ 62,230 ​ ​ ​ ​ ​ ​ ​ Combined Ratio ​ ​ ​ ​ ​ ​ Casualty ​ ​ 99.3 ​ ​ 96.5 Property ​ ​ 56.8 ​ ​ 62.1 Surety ​ ​ 87.2 ​ ​ 87.9 Total ​ ​ 85.6 ​ ​ 84.5 ​ Casualty ​ The casualty segment recorded underwriting income of $2 million in the second quarter of 2026, compared to $8 million for the same period last year. Prior accident years’ reserve releases reduced loss and settlement expenses for the casualty segment by $13 million in 2026, primarily related to accident years 2020, 2021, 2024 and 2025. Larger drivers of the favorable development were commercial excess, commercial transportation, professional services and executive products, while personal umbrella experienced some adverse development. In comparison, $15 million of prior accident years’ reserves were released in the second quarter of 2025. Commercial excess, personal umbrella, general liability and subsegments within professional liability drove the favorable development. Storm losses on casualty-oriented package policies that include property coverage resulted in $1 million of losses in both 2026 and 2025. ​ The combined ratio for the casualty segment was 99.3 in 2026, compared to 96.5 in 2025. The segment’s loss ratio was 62.2 in 2026, up from 60.2 in 2025, primarily due to lower levels of favorable prior accident years’ reserve development. The expense ratio for the casualty segment was 37.1, up from 36.3 for the same period last year. ​ Property ​ The property segment recorded underwriting income of $53 million for the second quarter of 2026, compared to $50 million for the same period last year. Underwriting results for 2026 included $23 million of favorable development on prior years’ loss and catastrophe reserves, offset by $9 million of storm losses. Comparatively, results for 2025 included $10 million of favorable development on prior years’ loss and catastrophe reserves and $13 million of storm and other catastrophe losses. ​ Underwriting results for the second quarter of 2026 resulted in a combined ratio of 56.8, compared to 62.1 for the same period last year. The segment’s loss ratio was 21.6 in 2026, down from 29.4 in 2025, due to larger reserve releases and lower catastrophe losses. The segment’s expense ratio increased to 35.2 in 2026 from 32.7 in the prior year, as a result of continued investments in people on a lower earned premium base. ​ Surety ​ The surety segment recorded underwriting income of $5 million for the second quarter of 2026, compared to $4 million for the same period last year. Results for 2026 included favorable development on prior accident years’ reserves, which decreased loss and settlement expenses for the segment by $3 million, compared to $2 million in 2025. ​ The combined ratio for the surety segment totaled 87.2 for the second quarter of 2026, compared to 87.9 for the same period last year. The segment’s loss ratio was 9.6 in 2026, down from 13.3 in 2025, due to larger levels of favorable prior accident years’ reserve development. The expense ratio was 77.6, up from 74.6 in the prior year, due to continued investments in people, as well as higher acquisition expenses, which can fluctuate between periods. ​ 32 ​ Table of Contents Investment Income ​ Our investment portfolio generated net investment income of $46 million during the second quarter of 2026, an increase of 17 percent from the same period in 2025. The increase in investment income was due to higher reinvestment rates, as well as an increased average asset base relative to the prior year. ​ Yields on our fixed income investments for the second quarter of 2026 and 2025 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ 2025 ​ Pretax Yield ​ ​ ​ ​ ​ ​ Taxable ​ 4.40 % ​ 4.06 % Tax-Exempt ​ 3.04 % ​ 2.95 % After-Tax Yield ​ ​ ​ ​ ​ ​ Taxable ​ 3.48 % ​ 3.21 % Tax-Exempt ​ 2.88 % ​ 2.80 % ​ Income Taxes ​ Our effective tax rate for the second quarter of 2026 was 20.2 percent, compared to 20.6 percent for the same period in 2025. Effective rates are dependent upon components of pretax earnings or losses and the related tax effects. The decrease in the effective tax rate for the second quarter of 2026 was primarily due to deductions related to the $2.00 special dividend paid to our Employee Stock Ownership Plan. ​ LIQUIDITY AND CAPITAL RESOURCES ​ We have three primary types of cash flows: (1) cash flows from operating activities, which consist mainly of cash generated by our underwriting operations and income earned on our investment portfolio, (2) cash flows from investing activities related to the purchase, sale and maturity of investments and (3) cash flows from financing activities that impact our capital structure, such as shareholder dividend payments and changes in debt and shares outstanding. ​ The following table summarizes cash flows provided by (used in) our activities for the six-month periods ended June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) 2026 2025 Operating cash flows ​ $ 188,049 ​ $ 278,233 Investing cash flows ​ ​ (179,614) ​ ​ (269,082) Financing cash flows ​ ​ (27,899) ​ ​ (27,527) Total ​ $ (19,464) ​ $ (18,376) ​ Premiums received from customers are our largest source of cash, while claim payments on insured losses represent our largest use of cash. Cash flows from operating activities may vary between periods due to the timing of these receipts and payments. Operating cash flow decreased in the first six months of 2026 compared to the same period in 2025, primarily due to higher loss and settlement expense payments, the purchase of federal income tax credits, and higher employee compensation payments. These decreases were partially offset by higher investment income receipts and lower reinsurance costs. During 2026, our financing activities included returning $184 million to shareholders through a $2.00 special dividend and repurchasing $12 million of common stock under the $250 million share repurchase plan the Company’s Board of Directors authorized on May 14, 2026. ​ Outstanding debt totaled $297 million as of June 30, 2026. On March 3, 2026, we completed a public debt offering, issuing $300 million of senior notes maturing June 1, 2036, with interest payable semi-annually at a rate of 5.375 percent. The notes were issued at a discount, resulting in net proceeds of $297 million after discounts and issuance costs. ​ We repaid $50 million that was outstanding under our revolving credit facility with PNC Bank, N.A. (PNC) on February 20, 2026. The credit facility with PNC, which was entered into during the first quarter of 2023, provided borrowing capacity of $100 million and was scheduled to expire on May 29, 2026. On February 26, 2026, we entered into an amended and restated credit agreement with PNC to extend the maturity date to February 26, 2031. The amended agreement provides borrowing capacity of $150 million and may be increased to $200 million under certain conditions. 33 ​ Table of Contents ​ On May 12, 2026, we repaid the $50 million borrowed from the Federal Home Loan Bank of Chicago (FHLBC) on November 12, 2025. While the borrowing was outstanding, interest was paid monthly at an annualized rate of 4.21 percent. ​ Two of our insurance companies, RLI Insurance Company (RLI Ins.) and Mt. Hawley Insurance Company, are members of the FHLBC. Membership in the Federal Home Loan Bank system provides both companies access to an additional source of liquidity via a secured lending facility. Our membership allows each insurance subsidiary to determine tenor and structure at the time of borrowing. As of June 30, 2026, there were no outstanding borrowings with the FHLBC. ​ As of June 30, 2026, we had cash and other investments maturing within one year of approximately $424 million and an additional $811 million maturing between one to five years. Whereas our strategy is to be fully invested at all times, short-term investments in excess of demand deposit balances are considered a component of investment activities, and thus are classified as investments in our consolidated balance sheets. ​ We believe that cash generated by operations and investments will provide sufficient sources of liquidity to meet our anticipated needs over the next 12 to 24 months. In the event they are not sufficient, we believe cash available from financing activities and other sources will provide sufficient additional liquidity. ​ We maintain a diversified investment portfolio representing policyholder funds that have not yet been paid out as claims, as well as the capital we hold for our shareholders. Invested assets at June 30, 2026 have increased $211 million from December 31, 2025. As of June 30, 2026, our investment portfolio had the following asset allocation breakdown: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost or ​ Fair ​ Unrealized ​ % of Total ​ ​ ​ (in thousands) Amortized Cost Value Gain/(Loss) Fair Value Quality* U.S. government ​ $ 282,536 ​ $ 281,707 ​ $ (829) ​ 5.8 % ​ AA+ U.S. agency ​ ​ 26,313 ​ ​ 26,194 ​ ​ (119) ​ 0.5 % ​ AA+ Non-U.S. government & agency ​ ​ 16,884 ​ ​ 16,471 ​ ​ (413) ​ 0.3 % ​ A Agency MBS ​ ​ 625,626 ​ ​ 594,335 ​ ​ (31,291) ​ 12.2 % ​ AA+ ABS/CMBS/MBS** ​ ​ 775,674 ​ ​ 758,032 ​ ​ (17,642) ​ 15.5 % ​ AA+ Corporate ​ ​ 1,609,863 ​ ​ 1,582,543 ​ ​ (27,320) ​ 32.5 % ​ A- Municipal ​ ​ 423,980 ​ ​ 358,660 ​ ​ (65,320) ​ 7.4 % ​ AA+ Total fixed income ​ $ 3,760,876 ​ $ 3,617,942 ​ $ (142,934) ​ 74.2 % ​ AA- Equity ​ ​ 530,730 ​ ​ 959,377 ​ ​ 428,647 ​ 19.7 % ​ ​ Short-term investments ​ ​ 206,119 ​ ​ 206,119 ​ ​ — ​ 4.2 % ​ ​ Other invested assets ​ ​ 59,609 ​ ​ 58,661 ​ ​ (948) ​ 1.2 % ​ ​ Cash ​ ​ 32,101 ​ ​ 32,101 ​ ​ — ​ 0.7 % ​ ​ Total portfolio ​ $ 4,589,435 ​ $ 4,874,200 ​ $ 284,765 ​ 100.0 % ​ ​ * Quality ratings provided by Moody’s, S&P and Fitch ** Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities ​ Quality is an average of each bond’s credit rating, adjusted for its relative weighting in the portfolio. As of June 30, 2026, our fixed income portfolio had the following rating distribution: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Below ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment ​ ​ ​ ​ ​ ​ ​ ​ AAA ​ AA ​ A ​ BBB ​ Grade ​ No Rating ​ Fair Value U.S. government ​ $ - ​ $ 281,707 ​ $ - ​ $ - ​ $ - ​ $ - ​ $ 281,707 U.S. agency ​ ​ - ​ ​ 26,194 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 26,194 Non-U.S. government & agency ​ ​ - ​ ​ 1,387 ​ ​ 7,369 ​ ​ 5,593 ​ ​ - ​ ​ 2,122 ​ ​ 16,471 Agency MBS ​ ​ - ​ ​ 594,335 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ 594,335 ABS/CMBS/MBS* ​ ​ 502,433 ​ ​ 70,035 ​ ​ 121,112 ​ ​ 14,654 ​ ​ 3,303 ​ ​ 46,495 ​ ​ 758,032 Corporate ​ ​ 17,548 ​ ​ 150,475 ​ ​ 625,564 ​ ​ 490,054 ​ ​ 162,695 ​ ​ 136,207 ​ ​ 1,582,543 Municipal ​ ​ 93,838 ​ ​ 231,546 ​ ​ 32,040 ​ ​ - ​ ​ - ​ ​ 1,236 ​ ​ 358,660 Total ​ $ 613,819 ​ $ 1,355,679 ​ $ 786,085 ​ $ 510,301 ​ $ 165,998 ​ $ 186,060 ​ $ 3,617,942 * Non-agency asset-backed, commercial mortgage-backed and mortgage-backed securities 34 ​ Table of Contents ​ As of June 30, 2026, our fixed income portfolio remained well diversified, with 1,977 individual issues. ​ Our investment portfolio has limited exposure to structured asset-backed securities. As of June 30, 2026, we had $420 million in ABS, which are pools of assets collateralized by cash flows from several types of loans, including home equity, credit cards, autos and structured bank loans in the form of collateralized loan obligations (CLOs). ​ As of June 30, 2026, we had $338 million in commercial and non-agency MBS and $594 million in MBS backed by government sponsored enterprises (GSEs - Freddie Mac, Fannie Mae and Ginnie Mae). Excluding the GSE-backed MBS, our exposure to ABS and CMBS was 15.5 percent of our investment portfolio at quarter end. ​ We had $1.6 billion in corporate fixed income securities as of June 30, 2026, which includes $143 million invested in a high-yield credit strategy. This high-yield portfolio consists of floating rate bank loans and bonds that are below investment grade in credit quality and offer incremental yield over our core fixed income portfolio. ​ The municipal portfolio includes approximately 72 percent taxable securities and 28 percent tax-exempt securities. Approximately 91 percent of our municipal bond portfolio maintains an ‘AA’ or better rating, while 100 percent of the municipal bond portfolio is rated ‘A’ or better. ​ Securities within the equity portfolio are well diversified and are primarily invested in broad index exchange traded funds (ETFs). Our actively managed equity strategy has a preference for dividend income and value oriented security selection with low turnover, which minimizes transaction costs and taxes throughout our long investment horizon. ​ As of June 30, 2026, our equity portfolio had a dividend yield of 1.3 percent, compared to 1.1 percent for the S&P 500 index. Because of the corporate dividend-received-deduction applicable to our dividend income, we pay an effective tax rate of 13.1 percent on dividends, compared to 21.0 percent on taxable interest and 5.3 percent on municipal bond interest income. The equity portfolio is managed in a diversified and granular manner, with 75 individual securities and five ETF positions. No single company exposure in the equity portfolio represents more than 1 percent of invested assets. ​ Other invested assets include investments in low-income housing tax credit and historic tax credit partnerships, membership in the FHLBC and investments in private funds. ​ We had $58 million of investments in unconsolidated investees at June 30, 2026, compared to $54 million at December 31, 2025. ​ Our investment portfolio does not have any exposure to derivatives. ​ As of June 30, 2026, our capital structure consisted of $297 million in debt and $1.8 billion of shareholders’ equity. Debt outstanding comprised 14 percent of total capital as of June 30, 2026. Interest and fees on debt obligations totaled $7 million for the first six months of 2026 and $3 million during the same period in 2025. We incurred interest expense on debt at an average annual interest rate of 5.20 percent during the first six months of 2026, compared to 5.18 percent during the same period last year. ​ On June 12, 2026, we paid a special dividend of $2.00 per share and a regular quarterly cash dividend of $0.18 per share, a 12.5 percent increase over the prior quarter. We have increased dividends in each of the last 51 years. ​ Our three insurance companies are subsidiaries of RLI Corp, with RLI Ins. as the first-level, or principal, insurance company. At the holding company (RLI Corp.) level, we rely largely on dividends from our insurance subsidiaries to meet our obligations for paying principal and interest on outstanding debt, corporate expenses and dividends to RLI Corp. shareholders. As discussed further below, dividend payments to RLI Corp. from our principal insurance subsidiary are restricted by state insurance laws as to the amount that may be paid without prior approval of the insurance regulatory authorities of Illinois. As a result, we may not be able to receive dividends from such subsidiary at times and in amounts necessary to pay desired dividends to RLI Corp. shareholders. On a GAAP basis, as of June 30, 2026, our holding company had $1.8 billion in equity. This includes amounts related to the equity of our insurance subsidiaries, which is subject to regulatory restrictions under state insurance laws. The unrestricted portion of holding company net assets is comprised primarily of investments and cash, including $191 million in liquid assets. Unrestricted funds at the holding company are available to fund debt interest, general corporate obligations and dividend payments to our shareholders. If necessary, the holding company also has other potential 35 ​ Table of Contents sources of liquidity that could provide for additional funding to meet corporate obligations or pay shareholder dividends, which include a revolving line of credit, as well as access to capital markets. ​ Ordinary dividends, which may be paid by our principal insurance subsidiary without prior regulatory approval, are subject to certain limitations based upon statutory income, surplus and earned surplus. The maximum ordinary dividend distribution from our principal insurance subsidiary in a rolling 12-month period is limited by Illinois law to the greater of 10 percent of RLI Ins. policyholder surplus, as of December 31 of the preceding year, or the net income of RLI Ins. for the 12-month period ending December 31 of the preceding year. Ordinary dividends are further restricted by the requirement that they be paid from earned surplus. ​ In the first six months of 2026, RLI Ins. paid $119 million in ordinary dividends to RLI Corp. In 2025, RLI Ins. paid ordinary dividends totaling $139 million. Any dividend distribution in excess of the ordinary dividend limits is deemed extraordinary and requires prior approval from the Illinois Department of Insurance (IDOI). In 2025, our principal insurance subsidiary sought and received regulatory approval prior to the payment of extraordinary dividends totaling $151 million. As of June 30, 2026, $10 million of the net assets of our principal insurance subsidiary were not restricted and could be distributed to RLI Corp. as ordinary dividends. A total of $190 million in ordinary dividend capacity will be available over the remainder of 2026. In addition to restrictions from our principal subsidiary’s insurance regulator, we also consider internal models and how capital adequacy is defined by our rating agencies in determining amounts available for distribution. ​