FPA Queens Road Small Cap Value Fund on RLI Corp.

RLI is a specialty property-and-casualty insurer with a highly selective underwriting culture and exposure to numerous niche insurance markets. Its incentive structure and willingness to walk away from unprofitable business have historically produced exceptional underwriting results, including an average combined ratio of 89.3% from 2015 through 2024. Return on equity averaged 16.6% during that period despite excess capital. The fund has owned RLI since 2011 and views the company as deserving of a premium valuation. It added shares when the valuation fell to roughly twenty times current-year earnings.