Exhibit 99.1

	NEWS RELEASE

RLI Corp.	9025 N. Lindbergh Drive \| Peoria, IL 61615-1431
	P: 309-692-1000 \| F: 309-692-1068 \| www.rlicorp.com

FOR IMMEDIATE RELEASE		CONTACT: John Robison
		(309) 693-5846
		John_Robison@rlicorp.com
		www.rlicorp.com

RLI reports record third quarter

PEORIA, ILLINOIS, October 16, 2007 — RLI Corp. (NYSE: RLI) – RLI Corp. reported third quarter 2007 net earnings of $61.5 million ($2.56 per share), compared to $30.4 million ($1.21 per share) from the same period last year. For the nine months ended September 30, 2007, net earnings were $143.9 million ($5.91 per share) compared to $79.0 million ($3.06 per share) for the same period last year.

	Third Quarter
Earnings Per Diluted Share	2007		2006
Net earnings	$	2.56	$	1.21
Operating earnings	$	2.46	$	1.14

Highlights for the quarter included:

• $59.1 million ($2.46 per share) operating earnings

• $48.5 million pretax ($1.31 per share) favorable development in prior years’ loss reserves, net of bonus and profit sharing-related expenses

• $22.2 million net operating cash flow

• 50.6 combined ratio

• 11.6% investment income growth

• Book value per share of $35.17, up 12.8% year to date

RLI Corp. President & CEO Jonathan E. Michael said, “The quarter was obviously impacted in a positive way by the reserve release. Even without this, the result was excellent, reflective of our unrelenting focus on underwriting. Like the rest of our industry, we’ve seen downward pressure on premiums. But our talented underwriters’ selectivity continues to produce underwriting profits and this quarter’s earnings are a solid result in today’s environment. We are very familiar with all marketplace conditions, and we know how to succeed in all of them.”

Operating earnings for the first nine months of 2007 were $128.7 million ($5.28 per share) versus $70.1 million ($2.72 per share) for the comparable period last year. Please refer to the table on Page 2 of this release for the quarterly and year-to-date impact of specific items.

Third quarter underwriting results

RLI achieved $66.4 million of underwriting income in the third quarter of 2007 on a 50.6 combined ratio, compared to $21.3 million of underwriting income on an 84.5 combined ratio in the third quarter of 2006.

Underwriting Income	Third Quarter
(in millions)	2007		2006
Casualty	$	47.5	$	18.7
Property	8.2		0.2
Surety	10.7		2.4
Total	$	66.4	$	21.3

	Third Quarter
Combined Ratio	2007	2006
Casualty	43.5	78.4
Property	76.0	99.5
Surety	32.8	83.8
Total	50.6	84.5

— more —

RLI reported year-to-date underwriting income of $131.1 million representing a 68.0 combined ratio versus $44.2 million underwriting income representing an 88.7 combined ratio for the same period last year.

Other income

Third quarter investment income grew 11.6% to $20.4 million. For the nine-month period ended September 30, 2007, investment income was $58.5 million, up 11.3% over the same period last year.

The investment portfolio’s total return for the quarter was 2.3%. The bond portfolio’s return was 2.5% and the equity portfolio, which includes common and preferred stock, had a return of 1.8%. For the nine-month period ending September 30, 2007, the portfolio’s total return was 4.8% based on a bond portfolio return of 4.1% and an equity portfolio return of 7.7%.

Comprehensive earnings, which include after-tax unrealized gains/losses from the investment portfolio, were $71.4 million for the quarter ($2.97 per share) versus $55.6 million ($2.21 per share) over the same period in 2006. Year-to-date comprehensive earnings were $139.4 million, or $5.72 per share, compared to $92.4 million ($3.58 per share) for the same period last year.

During the quarter, equity in earnings of unconsolidated investees was $2.0 million, all related to Maui Jim, Inc. (Maui Jim). The third quarter of 2006 reflected $4.7 million in income, which included $2.8 million related to Maui Jim and $1.9 million from Taylor Bean & Whitaker Mortgage Corp. (TBW). In the fourth quarter of 2006, RLI sold its equity interest in TBW. Year to date, equity in earnings of unconsolidated investees was $7.8 million, all related to Maui Jim. For the same period in 2006, the company reported $12.3 million of earnings from these entities, of which $8.3 million was related to Maui Jim and $4.0 million from TBW.

	Operating Earnings Per Share
	2007						2006
	3rd Qtr			9 mos.			3rd Qtr			9 mos.
Operating Earnings Per Share	$	2.46		$	5.28		$	1.14		$	2.72

Specific items included in operating earnings per share: (1) (2)
• Gain from favorable casualty prior years’ reserve development	$	1.14		$	1.96		$	0.27		$	0.32
• (Loss) on unfavorable property prior years’ reserve development	$	(0.04	)	$	(0.01	)	—			—
• Gain from favorable surety prior years’ reserve development	$	0.21		$	0.23		—			—
• Gain from favorable development from 2005 hurricanes	—			$	0.01		$	0.02		$	0.08
• (Loss) on property construction coverage	—			—			$	(0.02	)	$	(0.20	)

(1) Includes bonus and profit sharing-related impacts which affected other insurance and general corporate expenses.

(2) Developments reflect revisions for previously estimated losses.

Other RLI news

In May 2007, RLI announced a new stock repurchase program for up to $100 million of RLI common stock. During the third quarter of 2007, we repurchased 547,100 shares at an average price of $58.52 ($32.0 million). Since this $100 million share buyback authorization, we have repurchased 787,100 shares for a total of $45.8 million.

The company paid a quarterly cash dividend of $0.22 per share on October 15, 2007, the same as the prior quarter, representing the company’s 125^th consecutive quarterly dividend. The company’s dividend growth has averaged 19.6% annually over the last five years, and has averaged 13.9% annually over the last 10 years. The company has increased dividends for 32 straight years.

During the quarter, RLI was named to the Ward’s 50, a list of the insurance industry’s top performing companies, for the 17^th consecutive year. RLI is one of only five property and casualty insurers to have been recognized for excellence among 2,700 property and casualty insurers every year since the list’s inception.

At 10 a.m. CDT, October 17, 2007, RLI management will hold a conference call to discuss quarterly results with insurance industry analysts. Interested parties may listen to the discussion through the Internet at RLI’s website, www.rlicorp.com.

Operating earnings and earnings per share (EPS) from operations and other per share items are non-GAAP financial measures, and management believes that investors’ understanding of core operating performance is enhanced by RLI’s disclosure of these financial measures. Operating earnings and EPS from operations consist of net earnings reduced by net realized investment gains and taxes related to net realized gains. Definitions of these items may not be comparable to the definitions used by other companies. Net earnings and net earnings per share are the GAAP financial measures that are most directly comparable to operating earnings and EPS from operations. All earnings per share data are calculated using fully diluted shares. Combined ratio refers to a GAAP combined ratio.

Except for historical information, this news release may include 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) including, without limitation, statements reflecting current expectations about the future performance of the company or its business segments or about future market conditions. These statements are subject to certain risk factors that could cause actual results to differ materially. Various risk factors that could affect future results are listed in the company’s filings with the Securities and Exchange Commission, including the Form 10-K Annual Report for the year ended December 31, 2006.

RLI, a specialty insurance company, offers a diversified portfolio of property and casualty coverages and surety bonds serving “niche” or underserved markets. RLI operates in all 50 states from 25 office locations. The company’s talented associates have delivered underwriting profits in 26 of the last 30 years, including the last 11. RLI’s insurance subsidiaries – RLI Insurance Company, Mt. Hawley Insurance Company and RLI Indemnity Company – are rated A+ “Superior” by A.M. Best Company and A+ “Strong” by Standard & Poor’s.

For additional information, contact Treasurer John Robison at (309) 693-5846 or at john_robison@rlicorp.com or visit our website at www.rlicorp.com.

RLI CORP.

2007 FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007		2006		% Change		2007			2006			% Change
SUMMARIZED INCOME STATEMENT DATA:
Net premiums earned	$	134,111	$	138,245	-3.0	%	$	409,576		$	391,499		4.6	%
Net investment income	20,433		18,316		11.6	%	58,500			52,580			11.3	%
Net realized investment gains	3,822		2,822		35.4	%	23,414			8,753			167.5	%
Consolidated revenue	158,366		159,383		-0.6	%	491,490			452,832			8.5	%

Loss and settlement expenses	16,977		70,018		-75.8	%	131,609			211,661			-37.8	%
Policy acquisition costs	38,685		36,320		6.5	%	115,276			106,126			8.6	%
Other insurance expenses	12,082		10,573		14.3	%	31,626			29,510			7.2	%
Interest expense on debt	1,913		1,662		15.1	%	4,968			5,054			-1.7	%
General corporate expenses	3,401		1,898		79.2	%	7,441			5,407			37.6	%
Total expenses	73,058		120,471		-39.4	%	290,920			357,758			-18.7	%

Equity in earnings of unconsolidated investees	2,047		4,650		-56.0	%	7,770			12,257			-36.6	%

Earnings before income taxes	87,355		43,562		100.5	%	208,340			107,331			94.1	%
Income tax expense	25,816		13,184		95.8	%	64,431			28,375			127.1	%
Net Earnings	$	61,539	$	30,378	102.6	%	$	143,909		$	78,956		82.3	%
Other comprehensive earnings (loss), net of tax	9,861		25,231		-60.9	%	(4,491		)	13,437			-133.4	%
Comprehensive earnings	$	71,400	$	55,609	28.4	%	$	139,418		$	92,393		50.9	%
Operating Earnings:(1)

Net Earnings	$	61,539	$	30,378	102.6	%	$	143,909		$	78,956		82.3	%
Less: Realized investment gains, net of tax	2,484		1,834		35.4	%	15,219			5,689			167.5	%
Tax benefit on IRS examination (2)	—		—		—		—			3,172			—
Operating earnings	$	59,055	$	28,544	106.9	%	$	128,690		$	70,095		83.6	%

Return on Equity:
Net earnings (trailing four quarters)							26.0		%	14.0		%
Comprehensive earnings (trailing four quarters)							26.6		%	14.6		%

Per Share Data

Diluted:
Weighted average shares outstanding (in 000’s)	24,029		25,131				24,367			25,783

EPS from operations (1)	$	2.46	$	1.14	115.8	%	$	5.28		$	2.72		94.1	%
Realized gains, net of tax	0.10		0.07		42.9	%	0.63			0.34			85.3	%
Net earnings per share	$	2.56	$	1.21	111.6	%	$	5.91		$	3.06		93.1	%
Comprehensive earnings per share	$	2.97	$	2.21	34.4	%	$	5.72		$	3.58		59.8	%

Cash dividends per share	$	0.22	$	0.19	15.8	%	$	0.64		$	0.55		16.4	%

Net Cash Flow from Operations	$	22,181	$	74,268	-70.1	%	$	111,228		$	142,765		-22.1	%

(1) See discussion of use of non-GAAP financial measures on page 3.

(2) During the second quarter of 2006, the Internal Revenue Service (IRS) concluded an examination of the company’s tax years 2000 through 2004. As a result of the conclusion of this exam, our second quarter income tax expense includes a positive impact of $3.2 million, resulting from the change in estimate for a tax exposure item relating to the sale of assets. This impact is excluded from operating earnings and EPS from operations.

	September 30,		December 31,
	2007		2006		% Change
SUMMARIZED BALANCE SHEET DATA:
Fixed income and short-term investments	$	1,511,593	$	1,460,046	3.5	%
(amortized cost - $1,517,003 at 9/30/07)
(amortized cost - $1,465,660 at 12/31/06)
Equity securities	370,379		368,195		0.6	%
(cost - $209,388 at 9/30/07)
(cost - $201,443 at 12/31/06)
Preferred stock	39,260		—		—
(cost - $41,744 at 9/30/07)
Total investments	1,921,232		1,828,241		5.1	%

Premiums and reinsurance balances receivable	103,248		126,021		-18.1	%
Ceded unearned premiums	75,556		97,596		-22.6	%
Reinsurance recoverable on unpaid losses	520,716		525,671		-0.9	%
Deferred acquisition costs	82,010		73,817		11.1	%
Property and equipment	18,838		20,590		-8.5	%
Investment in unconsolidated investees	38,538		36,667		5.1	%
Goodwill	26,214		26,214		—
Other assets	25,896		36,479		-29.0	%
Total assets	$	2,812,248	$	2,771,296	1.5	%

Unpaid losses and settlement expenses	1,291,133		1,318,777		-2.1	%
Unearned premiums	373,400		387,811		-3.7	%
Reinsurance balances payable	68,364		85,046		-19.6	%
Short-term debt	52,644		—		—
Long-term debt - bonds payable	100,000		100,000		—
Income taxes - deferred	28,806		27,069		6.4	%
Other liabilities	77,725		96,073		-19.1	%
Total liabilities	1,992,072		2,014,776		-1.1	%
Shareholders’ equity	820,176		756,520		8.4	%
Total liabilities & shareholders’ equity	$	2,812,248	$	2,771,296	1.5	%

OTHER DATA
Common shares outstanding (in 000’s)	23,320		24,273
Book Value per share	$	35.17	$	31.17	12.8	%
Closing stock price per share	$	56.72	$	56.42	0.5	%
Statutory Surplus	$	766,407	$	746,905	2.6	%

RLI CORP.

2007 FINANCIAL HIGHLIGHTS

UNDERWRITING SEGMENT DATA

(Unaudited)

(Dollars in thousands, except per share amounts)

			GAAP			GAAP				GAAP				GAAP
Three Months Ended September 30,	Casualty		Ratios	Property		Ratios	Surety			Ratios		Total		Ratios
2007

Gross premiums written	$	114,279		$	55,551		$	18,488				$	188,318
Net premiums written	84,406			39,173			17,323					140,902
Net premiums earned	84,252			34,013			15,846					134,111
Net loss & settlement expenses	8,618		10.2%	13,373		39.3%	(5,014		)	-31.6	%	16,977		12.7	%
Net operating expenses	28,079		33.3%	12,482		36.7%	10,206			64.4	%	50,767		37.9	%
Underwriting income	$	47,555	43.5%	$	8,158	76.0%	$	10,654		32.8	%	$	66,367	50.6	%

2006
Gross premiums written	$	128,610		$	65,102		$	18,302				$	212,014
Net premiums written	87,349			43,468			17,302					148,119
Net premiums earned	86,657			36,591			14,997					138,245
Net loss & settlement expenses	43,188		49.8%	23,665		64.7%	3,165			21.1	%	70,018		50.6	%
Net operating expenses	24,758		28.6%	12,732		34.8%	9,403			62.7	%	46,893		33.9	%
Underwriting income	$	18,711	78.4%	$	194	99.5%	$	2,429		83.8	%	$	21,334	84.5	%

			GAAP			GAAP					GAAP				GAAP
Nine Months Ended September 30,	Casualty		Ratios	Property		Ratios		Surety			Ratios		Total		Ratios
2007

Gross premiums written	$	352,886		$	163,959			$	54,880				$	571,725
Net premiums written	255,212			110,665				51,330					417,207
Net premiums earned	260,051			103,108				46,417					409,576
Net loss & settlement expenses	88,101		33.9%	45,322		44.0	%	(1,814		)	-3.9	%	131,609		32.1	%
Net operating expenses	80,510		31.0%	36,888		35.8	%	29,504			63.6	%	146,902		35.9	%
Underwriting income	$	91,440	64.9%	$	20,898	79.8	%	$	18,727		59.7	%	$	131,065	68.0	%

2006
Gross premiums written	$	378,704		$	185,197			$	51,956				$	615,857
Net premiums written	262,993			117,859				49,108					429,960
Net premiums earned	259,738			87,583				44,178					391,499
Net loss & settlement expenses	151,579		58.4%	50,132		57.2	%	9,950			22.5	%	211,661		54.1	%
Net operating expenses	73,927		28.5%	33,953		38.8	%	27,756			62.8	%	135,636		34.6	%
Underwriting income	$	34,232	86.9%	$	3,498	96.0	%	$	6,472		85.3	%	$	44,202	88.7	%

FOR IMMEDIATE RELEASE

CONTACT: John Robison

RLI reports record third quarter