Good day, welcome, ladies and gentlemen, to the RLI Corp.'s first quarter earnings teleconference. As a reminder, we will open up the conference for questions and answers after the presentation. Before we get started, let me remind everyone that through the course of the teleconference, RLI management may make comments that reflect their intentions, beliefs, and expectations for the future. As always, these forward-looking statements are subject to certain factors and uncertainties, which could cause actual results to differ materially. Please refer to the risk factors described in the company's various SEC filings, including the annual report on Form 10-K, as supplemented in the Form 10-Q for quarterly period ending March 31, 2021, which should be reflected carefully. The company has filed a Form 8-K with the Securities and Exchange Commission that contains the press release announcing first quarter results. RLI management may make reference during the call to operating earnings and earnings per share from operations, which are non-GAAP measured for financial results. RLI operating earnings and earnings per share from operations consist of net earnings after the elimination of after-tax realized gains or losses and after-tax unrealized gains or losses on equity securities. RLI management believes these measures are useful in gauging core operating performance across reporting periods and may not be comparable to other companies' definition of operating earnings. The Form 8-K contains a reconciliation between operating earnings and net earnings. The Form 8-K and press release are available at the company's website at www.rlicorp.com. I will now turn the conference over to RLI's Vice President, Chief Investment Officer, and Treasurer, Mr. Aaron Diefenthaler. Please go ahead, sir. Thanks, Casey. Good morning and welcome to RLI's first quarter earnings call for 2021. Joining us today are Jon Michael, Chairman and CEO, Craig Kliethermes, President and Chief Operating Officer, and Todd Bryant, Chief Financial Officer. As usual, Todd will start off with financial details on the quarter. Craig will follow with some color on the product portfolio and market conditions. We can then open the call to questions, and Jon will close with some final thoughts. Todd? Thanks, Aaron. Good morning, everyone. Yesterday, we reported first quarter operating earnings of $0.87 per share. The quarter's result reflects elevated winter storm losses, which were more than offset by favorable benefits on prior year's loss reserves, as well as improved current year casualty results. We achieved 20% top-line growth or 10% growth when adjusting the comparable quarter last year for premium return to transportation insurers. As a reminder, at the onset of the pandemic, we helped our public auto insurers by adjusting or returning premium, which resulted in a $23 million decrease in our transportation business. We believe adding the premium back when comparing to last year provides a more accurate view on premium growth in the quarter. In total, we posted an 86.9 combined ratio. Investment income was down 7.6%, reflective of the decline in reinvestment rates during 2020. Unrealized gains on the equity portfolio were in stark contrast to unrealized losses experienced during the same period last year and served to bolster net earnings this quarter. Additionally, investee earnings advanced nicely to start the year, which accrued to net earnings. Craig will talk more about market conditions in a minute. From a high level, all three segments experienced growth. Property led the way, up 31%, as rates and market disruption continued to support growth. Reported casualty growth was +19% compared to last year. As previously mentioned, we want to call out the comparative benefit from the $23 million public auto premium adjustment in the first quarter of last year. Adjusting last year's result for this amount, casualty growth was fairly modest, as was sureties. From an underwriting perspective, this quarter's combined ratio of 86.9 compared to 92.0 a year ago. Our loss ratio declined 5.6 points to 45.9, despite a seven-point impact from Winter Storm Uri, one of our largest winter or spring storm events experienced. Of the $16 million in net storm loss, $15 million was in the property segment and $1 million was in the casualty segment related to property exposure and certain package coverages. Favorable reserve development was up notably compared to last year and was widespread across most products. As a reminder, in the first quarter of last year, uncertainty around COVID influenced our approach to indications we were seeing in prior years' reserves, as well as specific COVID reserves we established on the current accident year. In the first quarter of 2020, we recorded $5 million in COVID-specific reserves, $2 million in property, and $3 million in casualty. On an underlying basis, if you exclude prior year reserve benefits, catastrophes, and the aforementioned reserves established for COVID, our loss ratio is down in 2021. The casualty segment is influenced in this result, and its underlying loss ratio is down about three points from the same period last year. An improving mix and modest reductions in loss booking ratios, similar to what we discussed on our fourth quarter call, have driven the improvement. From an overall COVID perspective, total reserves are largely unchanged from year-end. Moving to expenses, our quarterly expense ratio increased half a point to 41. General corporate expense was up $1.6 million. These increases are driven by amounts accrued for performance-related incentive plans. The combination of significantly higher operating and net earnings, given the relative equity portfolio performance, plus an improved combined ratio, drove these metrics higher. Excluding incentive amounts, other operating expenses were flat. Turning to investments, risk assets continue to lead with positive returns in the quarter from both public equities and high yield credit. Traditional investment-grade bonds couldn't overcome higher yields, and price declines offset the positive return from other assets. All in, our portfolio posted a 0.2% return for the first quarter, and we are more than happy to trade a modest price decline in bonds for the opportunity to put operating cash flow to work at higher rates. Outside of the core portfolio, investee earnings were also a contributor in the quarter, with Maui Jim and Prime each adding $3.7 million to the quarter's results. Prime continues to benefit from profitable growth, and Maui Jim has rebounded nicely from a more difficult period in mid-2020. All in, a very good quarter and solid start to the year. With that, I'll turn the call over to Craig. Thanks, Aaron and Todd, and good morning, everyone. As Todd mentioned, we're off to a running start to the year, reporting an 87 combined ratio and 10% underlying growth in gross written premium. Very solid underwriting results despite the impact of Winter Storm Uri. The sub-90 combined ratio we achieved is a testament to our well-diversified portfolio of specialty products and the consistency of our disciplined underwriting approach. Top-line growth was realized across all segments and in most of our products. Our rate achievement this quarter carried a lower beta. The highs were not quite as high, but the lows were not as low. I would say it is a little too early to say whether the rates are plateauing in the most fervent markets. We continue to achieve rate increases at or above long-term loss costs across the majority of our portfolio. Our underwriting diet is well-balanced, and our palette remains refined as the competition is broadly moving toward acceptable rate levels in our chosen market. The most disrupted spaces for us remain catastrophe-exposed property, excess casualty, executive products, commercial auto liability, and marine. Now on to some segment-specific comments. In Casualty, we report an outstanding 83 combined ratio and grew gross premiums 19%, 4% adjusted for transportation. As you may recall, the comparable quarter last year required a significant premium adjustment for inactive vehicles in our transportation product line. Also of note, our Casualty segment has a significant exposure to the construction industry, and although this industry never completely shut down, we have observed some slowdown due to uncertainty related to both the pandemic and resulting supply chain issues. We were still able to achieve 8% rate increase in this segment overall, while account retentions are holding well. The casualty segment was led on the top line by our personal excess liability, executive products, and transportation businesses, which rebounded nicely. Underwriting profitability was led by our primary liability, personal excess liability, transportation, professional services liability, and small package businesses. As mentioned earlier, we did see some moderating of rate increases for our public directors' and officers' product, but the rate increases were more widespread across the dozen or so products within our executive products portfolio. This business, along with transportation and commercial excess liability, were still able to achieve double-digit rate increases for the quarter. Property segment's top line grew 31% on a small underwriting loss as a result of the widespread Winter Storm Uri. We achieved 10% rate for the segment overall. We continue to observe opportunities across all products in this segment. Our catastrophe businesses grew premium and rate at a double-digit pace. The size of the rate increases was a little off its peak in the last couple of quarters, but still above acceptable levels to assume the risk. Earthquake still seems a little more competitive than wind, mainly the result of demand versus excess supply. Since significant earthquakes occur infrequently and coverage is seldom required for financing, prices above a certain threshold are declined, and property owners elect to self-insure. We have room to grow our catastrophe exposures if the market continues to cooperate. Our marine business also continues to see profitable opportunities to grow because of the disruption at Lloyd's and elsewhere. Submissions continue to increase significantly, and we experienced top-line growth of more than 25% on a very good underwriting result. I don't want to move on without giving a big mahalo to our Hawaii homeowners business, which continues to grow at a double-digit pace and produces great results for our company. In Surety, we grew top line 5% and achieved a 79 combined ratio. Another great underwriting result and hopefully some signs that the market is finally starting to come back to us. Larger losses have hit the industry, causing competitors retrenchment and reinsurance capacity seems to be tightening for the first time in many years. We will continue to capitalize on the disruption we are starting to observe. Most of our growth this quarter came from our commercial account-driven business, which saw both new business opportunities as well as expansion with existing accounts. All products in this segment were profitable. We will continue to focus on building relationships, consistent underwriting, servicing our distribution partners and customers, and investing in technology to make it easier for our customers to work with us. Overall, a solid start to 2021. We remain well-positioned for the future, and we'll focus on what we do well, adapt to our environment, stay true to what makes us different, and execute. We create our own opportunities with our investment in people, service, and technology, and we will take advantage of new opportunities when our competitors retrench and market disruption occurs. We are constantly looking for ways to provide profitable solutions to meet the needs of our customers and distribution partners. This is what we do. It is what owners do. Our success can be attributed directly to the quality of the associate owners we hire and the service they provide and the relationships they build with our customers. Our differentiated approach delivered again this quarter. Thank you, and I'll turn it back to the moderator to open up the questions. Thank you, sir. The question and answer session will begin at this time. If you are using a speakerphone, please pick up the headset before pressing any numbers. Should you have a question, please press star one on your telephone keypad. If you wish to withdraw your question, please press star two. Your question will be taken in the order in which they were received. Please stand by for the first question. We'll take our first question from Randy Binner. Please go ahead, sir. Hi, good morning. Thanks. I have a couple quantification questions. I guess the first is on the commentary around adding back in transportation book premiums. I apologize if I missed it, but was there a quantification of that so we can get a more normalized growth rate in casualty? Randy, this is Todd. It's $23 million. Adding that back to where the negative premium we produced in the first quarter of last year for transportation was $23 million. Okay. compared to 1Q 2020? Correct. Yeah. Add that amount back to where we ended, either in transportation or really in casualty in total. Yeah. If you add that back to last year, then that'll get to that 10% overall growth versus 2020. Got it. Correct. On Craig's comment that your rate increase was lower beta, I guess, did you provide actually a number that, kind of an absolute number of what the blended or overall rate increase was? Well, I'm sure we disclosed last quarter what the rate increase was by segment, and I disclosed this quarter. I'm happy to say that, I guess last quarter for casualty overall, I think we had 11% in the quarter. I think I said we had 8% this quarter. I wouldn't get too caught up because there's obviously, we're a relatively small or medium-sized player, so, and we're not necessarily a bellwether for the whole industry. That's why I want to caution against them. We have a little bit of volatility as numbers bounce around, so I'm not sure that's a trend or not. On the property side, we reported 10% rate increase this quarter, and I believe we reported 11% last quarter. You could say it's down, but it's one point. I don't know if that could be within. No, I think, I think that some of the data earlier this earning season was maybe past peak, but kind of too early to tell, but it's still very good rate versus loss cost trend. I guess if you could just expand a little bit on what made it lower beta, I think that would be helpful. Sure. I did talk a little bit in the casualty segment. For example, the public D&O business, it's on its third straight year of double-digit rate increases. That, I won't say soften, that's too strong a word. We still got double-digit rate increases. When they weigh in the average, it takes down the overall average for that business. We did get more widespread rate increases in the executive products group, like within cyber, some of the private D&O, EPLI that's in there, those rates actually increased. It didn't quite offset the public D&O on the decrease, but less of an increase. There's an area. Transportation was relatively flat. That was probably the biggest driver in the casualty part of that. On the property, I think some of the cat business, again, was off. This was, I think, the third straight year roughly that we were getting double-digit increases. The increases aren't quite as large, but they're still double-digit increases in both wind and quake. That brought that one down. Got it. Okay. I'll leave it there. Thank you. Yes. Thanks, Randy. Thank you. We will take our next question from [Derek Hagan]. Good morning. Thanks for taking my question. A couple of quick ones. How are you thinking about the short-term loss trends during the unprecedented economic recovery? On a related note, aside from monitoring actual claims, what are some of the data points or metrics that you look to to kind of determine whether the impressive top-line growth that you've had is sustainable? Derek, this is Todd. I'll start out. As far as your first part of the question there on the short-term trends, I guess I would just, and how we consider that, I would just say we don't. On the actuarial side, and Craig can certainly comment further, but on the actuarial view, the reserving view, and we talk about this often, we are taking a longer-term loss cost trend approach, because I think we talked about it last year, too, whether it was frequency down or whatever it may be, we discount that. We think it's prudent to take a long-term loss cost trend approach and to the extent that the rate that we're getting is above long-term loss cost trend, you would expect to see some modest benefit in the loss ratio. We really discount those shorter-term trends. On top of that, and as Todd said, those longer term trends, just the way we book things is certainly the way we've always approached things, and we continue to approach those. I think I made a comment that we believe our rate was in excess of the long-term trends that we see both in the property and casualty business. As far as long-term growth or intermediate term growth, we insure the economy. If the economy reboots and there's a lot of good signs that it's coming back, I think that's a positive sign. As the pie gets bigger, there's more opportunities to insure, so you don't end up fighting with each other over stuff. I think there's some opportunity just with existing clients as the exposure bases start to increase. We've had several of our clients become more cautious and reserved in regards to their estimates. I kind of inferred that from one of my comments about the construction industry. We're definitely seeing much more caution around their estimates of revenue because of the pandemic. Those are auditable policies for the most part. If the economy comes in better, we'll end up getting some audit premium. It may not come till next year, but we will realize that audit premium. That's very positive. Obviously, if there's an infrastructure bill, I think it will help given a third of our business is in the construction industry. We don't do a lot of roads and bridges across the whole portfolio, but we do a lot of other public construction, so that could be helpful. Any disruption in the market, we constantly continue to monitor disruption, any tightening of capacity, tightening of the reinsurance capacity, especially amongst our competitors, or I'll say the less disciplined underwriters. That gives us an opportunity as the rates come to our acceptable levels to see more opportunities. We look at submission flow, which continues to be good, but it's not up everywhere. We do see good submission flow, very good retention of our accounts is something we're watching. If we retain accounts who have lowered their exposure base, and then obviously the economy comes back, there's going to be opportunity for growth with existing clients, which we like the best because those are clients we already know typically produce positive results for us and value us. That's very helpful. My second question is, you have some large reserve releases in the casualty segment. What accident years drove that? Derek, it's Todd. It's fairly widespread. I think you'll look 17-20. You're going to have some a little bit earlier than that in spots. 18-20 on several, some 17. It's fairly widespread. GL was a product that was fairly large in the quarter. It was probably more 17, 18. Transportation was larger, small commercial was larger, PUP was larger on a relative basis. It was pretty widespread. Okay. Thank you for all the answers. Thank you, Derek Thank you. As a reminder, if you would like to ask a question, please press star one now. We'll take our next question from Mark Dwelle. Please go ahead, sir. Yeah, good morning. I'm glad to see RLI continues to set a high standard. You're the first insurance company to ever use the word mahalo on an earnings call. Kudos for that. On to my questions. First one is just a numbers question. Maybe I've even asked this before, in your press release, at the top of the press release, you say reserve releases were $31 million. On the table down below, if you sum all the by lines, it totals up to $37 million. What's the difference between those? Mark, it's Todd. That table was a new addition, although those would have been in our Q, you would have the similar type thing. We're showing the net in the bullet, right? It's the net increase, total increase to underwriting income. There will be expense impact, those types of things that will offset the total release. We're trying to give you both pictures. One is a pure EPS, if you will, net underwriting impact, and then the table breaks out the pure loss impact Got it. That makes sense. Okay. You reconciled that in the past, but there's been expense aspects to it. Yes. This kind of isolates the loss ratio impact from the total EPS impact effectively. Yeah. Okay. Yeah. Something we have done, and we've broken those out in the Q, but there's been some requests to have this broken out in the release, and so we added that table. Got it. Okay. Thank you. The second question that I had, I guess it relates to maybe some of the operating comments. I think it's correct whether it's unclear whether pricing has peaked or is near peak or whatever. I guess the question I would like to ask is, are you seeing any change in competitive behavior? Are there people that seem to be moving from, I'm going to say, a more price first and growth second approach to maybe a more broader interest in growth, maybe more competitive quotes, fewer changes in terms and conditions, what have you? I'm just trying to kind of drill down on to maybe some of the competitive dynamics. Yeah, Mark, this is Craig. It's very difficult for us to see through. Obviously we have much deeper knowledge of our own business than our competitors. It is a little harder for us because in every one of our businesses, we speak to our diversification, but almost every one of our businesses, if I list their top five competitors, they're different. All I can say is there is still some capacity for MGAs. We don't do really that business, but we still see from time to time, people giving the pen to MGAs, which it confounds us a bit in this marketplace. Obviously, we'd rather bet on our own people, own experienced talent. From a terms and conditions standpoint, we are seeing some, I think I'll say, some hardening in the property side. We're not really seeing it in the casualty side. We've always felt like we've had the tightest terms in the casualty side in the market anyway. People are coming a little bit closer to our standards in regards to that. Certainly on property, we're seeing some stuff, deductibles going up, minimum premium going up, people insisting on ACV versus replacement costs, co-insurance requirements. A general acceptance from the brokers that we're going to get better valuations on the properties that we write, which that bleeds into maybe something you were talking about, is where you actually get acceptance from brokers to get more information. That's a good sign, right? Normally they take the path of least resistance, asking for that almost puts you on the list over there as last resort. I'm only going to you unless if I can't find placements elsewhere. I don't know if I've answered your question effectively, but I certainly see movement from folks, people that, I'll say get burned or whatever, don't have good results. They always tighten, it's a little different by every product line. I'm not going to say we have people that are super aggressive anymore in most of our spaces. That's good. We always like competing with responsible competition. We invite responsible competition. We lose an account to someone that likes a certain class of business better than us and will price it better, they probably understand it better than us, know how to handle claims better, so be it. We'd rather focus on the things we understand, we know, we think we can deliver a mutual beneficiary relationship. Again, hopefully I answered your question. All right. That covers it quite thoroughly. That's all my questions. Mahalo. Mahalo. Thank you. We will take our next question from Matt Carletti. Hey, Matt. Hoping you could just peel back the onion a little bit on the Winter Storm Uri losses. It was a modest number for obviously a very big industry event. Just curious if there's lessons learned from even just kind of, I assume a lot of that's Texas, but even kind of geography within Texas, or if anything COVID related might have exacerbated that loss. What I'm thinking there is kind of empty properties that takes a little longer to find out the pipes froze, things like that. The most interesting thing I found out is, in Texas, they don't have shutoff valves, as many of them in buildings as we do where we live. I don't think there was anything COVID related that we had challenges with. We've dealt with hurricanes since COVID. We've done an exceptional job. Our claim people have been willing to get out and service our customers and get them back and going. We did the same thing here. I think the biggest challenge is it was widespread, right? In a hurricane- Yep even in a hurricane, which is more broad than something, than a tornado. The area is somewhat contained, but this covered multiple states, six or seven states, I believe. It was a little more challenging, and it varied a lot by class of business. We did find that shutoff valves were not as prevalent in Texas as they are in other places. So. Interesting. Things we take for granted. Yeah. Matt, just one other, to Craig's point, right? That was very widespread. What to me is interesting is really outside of Uri, we didn't have any other winter storm losses. Property really had a great quarter kind of ex Uri from that standpoint. Yeah. No, good point. Great. Well, thank you for the color and nice quarter. Best of luck going forward. Thanks, Matt. Thanks, Matt. We currently have no further questions, so I'll be turning the conference back over to Jonathan Michael. Thank you. A very satisfying start for the year. Premiums were up. We're getting rates, sub 87 combined ratio. We produced $0.87 per share operating earnings. That's a significant beat over consensus estimates. I'll just use the words thank you, and we'll talk to you next quarter. Thanks. Mahalo. This concludes today's teleconference. Thank you for participating. Have a wonderful day. All parties may now disconnect.