Palomar(PLMR)2025-05-06 21:23Financial Performance - Gross written premiums increased from $16.6 million in 2014 to $1.5 billion for the year ended December 31, 2024, reflecting a compound annual growth rate of approximately 57%[90] - Net income growth since 2016 reflects a compound annual growth rate of 43%[90] - Gross written premiums increased by $74.1 million, or 20.1%, to $442.2 million for the three months ended March 31, 2025, compared to $368.1 million for the same period in 2024[124] - Net written premiums rose by $71.5 million, or 51.1%, to $211.4 million for the three months ended March 31, 2025, from $139.9 million in the prior year[128] - Net earned premiums increased by $56.2 million, or 52.1%, to $164.1 million for the three months ended March 31, 2025, compared to $107.9 million for the same period in 2024[129] - Underwriting income surged by $19.1 million, or 76.6%, to $44.1 million for the three months ended March 31, 2025, from $25.0 million in the previous year[131] - Net income rose by $16.5 million, or 62.7%, to $42.9 million for the three months ended March 31, 2025, compared to $26.4 million for the same period in 2024[124] - Adjusted net income increased by $23.5 million, or 84.6%, to $51.3 million for the three months ended March 31, 2025, from $27.8 million in the prior year[124] - Total revenue for the three months ended March 31, 2025, was $174.6 million, up from $118.5 million in 2024, resulting in an underwriting revenue of $164.9 million compared to $108.4 million[141] Underwriting and Ratios - The combined ratio is defined as the sum of the loss ratio and the expense ratio, with a ratio under 100% indicating an underwriting profit[116] - Adjusted combined ratio excluding catastrophe losses is a non-GAAP financial measure that provides insight into underlying business trends[120] - The combined ratio improved to 73.1% for the three months ended March 31, 2025, down from 76.9% in the prior year[124] - Other underwriting expenses as a percentage of gross earned premiums increased to 9.5% for the three months ended March 31, 2025, compared to 8.2% for the same period in 2024[135] - The adjusted combined ratio improved to 68.5% for the three months ended March 31, 2025, from 73.0% in 2024[151] - Adjusted combined ratio excluding catastrophe losses improved to 68.9% in Q1 2025 from 69.8% in Q1 2024[157] Investment and Cash Flow - Net investment income rose by $4.9 million, or 69.1%, to $12.1 million for the three months ended March 31, 2025, from $7.1 million in the prior year[136] - The company incurred $2.3 million of net realized and unrealized losses on investments for the three months ended March 31, 2025, compared to $3.0 million of net realized and unrealized gains for the same period in 2024[137] - Cash provided by operating activities was $87.2 million for Q1 2025, significantly higher than $33.1 million in Q1 2024[173] - Cash used in investing activities was $51.9 million in Q1 2025, compared to $16.3 million in Q1 2024[173] - The company had $1,168.7 million in cash and investment securities available as of March 31, 2025[177] Equity and Dividends - Total stockholders' equity increased to $790.4 million as of March 31, 2025, up from $729.0 million at the end of 2024[184] - Tangible stockholders' equity rose to $765.5 million as of March 31, 2025, compared to $715.8 million at December 31, 2024[159] - PSIC subsidiary has the capacity to pay dividends of up to $99.6 million in 2025 without regulatory approval[162] - The maximum dividend available from PSRE during 2025 is approximately $4.2 million, subject to solvency requirements[168] Acquisitions and New Products - The company completed the acquisition of Advanced AgProtection in April 2025, enhancing its capabilities in the Crop insurance sector[92] - The company has introduced several new products, including Crop, Environmental Liability, and E&S Casualty, to diversify its portfolio[91] Reinsurance and Catastrophe Events - The company holds $895 million in multi-year indemnity-based reinsurance coverage for earthquake events, issued through Torrey Pines Re Ltd[191] - The catastrophe event retention is set at $20 million for earthquake events and $15.5 million for hurricane events[193] - The company’s reinsurance coverage exhausts at $3.2 billion for earthquake events, providing significant protection against catastrophic losses[193] - The company utilizes a mix of traditional reinsurers and insurance-linked securities, purchasing reinsurance from over 100 reinsurers[190] Investment Portfolio - The investment portfolio comprised $991.8 million in fixed maturity securities as of March 31, 2025, with a book yield of 4.65%[186] - The corporate and other fixed maturities represented 51.3% of the total fair value of available-for-sale investments as of March 31, 2025[187] - The fair value of AAA-rated securities increased to $139,730 thousand, accounting for 14.1% of the total fair value as of March 31, 2025, compared to 13.9% on December 31, 2024[188] - The fixed maturity portfolio has an average rating of at least "AA−," with approximately 73.7% rated "A−" or better as of March 31, 2025[198] - As of March 31, 2025, 1.4% of the fixed maturity portfolio was unrated or rated below investment grade, indicating a focus on high credit quality[198] - The estimated fair value of fixed maturities due within one year is $70,386 thousand, representing 7.1% of the total fair value[188]