Palomar Q3 Earnings, Revenues Top Estimates on Higher Premiums

Core Insights - Palomar Holdings, Inc. (PLMR) reported a third-quarter 2024 operating income of $1.23 per share, exceeding the Zacks Consensus Estimate by 13.9% and reflecting a year-over-year increase of 33.7% [1][2] Financial Performance - Total revenues rose 60.3% year over year to $145.8 million, driven by higher premiums, commissions, and net investment income, surpassing the Zacks Consensus Estimate by 8.2% [3] - Gross written premiums increased 32.2% year over year to $415 million, supported by strong performance in earthquake and casualty products, as well as growth in the crop business [4] - Net earned premiums grew 58.1% year over year to $135.6 million, exceeding estimates [4] - Net investment income increased 56% year over year to $9.4 million, attributed to higher yields on invested assets and a larger average balance of investments [5] - Adjusted underwriting income was $31 million, up 24% from the previous year, while underwriting income rose 27.5% year over year to $26.4 million [6] Expense and Loss Metrics - Total expenses increased 65.6% year over year to $110 million, primarily due to higher losses and underwriting expenses [6] - The loss ratio deteriorated by 1090 basis points year over year to 29.7, while the adjusted combined ratio, excluding catastrophe losses, worsened by 620 basis points to 77.1 [7] Financial Position - Cash and cash equivalents increased 67% from the end of 2023 to $86.5 million, and shareholder equity rose 49% to $703.3 million [8] - The annualized adjusted return on equity for the third quarter of 2024 was 21%, a decrease of 130 basis points year over year [8] Future Outlook - Palomar anticipates adjusted net income in the range of $124-$128 million for 2024, which includes expected catastrophe losses of nearly $8 million related to Hurricane Milton [9]