Is RLI Corp. overvalued or undervalued?

As of 5 August 2025, the valuation grade for RLI Corp. has moved from very expensive to expensive, indicating a slight improvement in its valuation outlook. The company appears to be overvalued based on its current metrics, with a P/E ratio of 31, significantly higher than its peer CNA Financial Corp. at 14.82 and Unum Group at 13.25. Additionally, RLI Corp. has a Price to Book Value of 5.43 and an EV to Capital Employed ratio of 6.55, both of which suggest that the stock is trading at a premium compared to its peers.
In terms of recent performance, RLI Corp. has underperformed against the S&P 500, with a year-to-date return of -20.31% compared to the index's 12.22%. This trend is further emphasized by its one-year return of -14.04% against the S&P 500's 17.14%, reinforcing the notion that the stock may not justify its current valuation levels.