Palomar Holdings, Inc. Announces Successful Completion of June 1 Reinsurance Placement

Core Viewpoint - Palomar Holdings, Inc. has successfully completed reinsurance programs and increased its full-year 2025 adjusted net income guidance to a range of $195 million to $205 million, up from a previous range of $186 million to $200 million [1][6]. Reinsurance Program Highlights - The company has secured approximately $455 million of incremental limit to support the growth of its Earthquake franchise, bringing total reinsurance coverage to $3.53 billion for earthquake events and $100 million for hurricane events in the continental United States [2]. - Palomar's per occurrence event retention has been reduced to $11 million for hurricane events from $15.5 million and remains at $20 million for earthquake events, which is within management's guideposts [3]. - The reinsurance program provides ample capacity for growth and exceeds the company's 1:250-year peak zone Probable Maximum Loss, with $525 million of the earthquake limit sourced through the largest Torrey Pines Re catastrophe bond issuance [4]. New Treaty and Coverage Changes - Effective June 1, Palomar executed its first standalone excess of loss treaty covering Hawaii hurricane policies, which were previously included in the core reinsurance tower now consisting of over 95% earthquake-only coverage [5]. - The Laulima's XOL reinsurance program offers per occurrence coverage up to $735 million with a retention of $1.5 million [5]. Management Commentary - The CEO expressed satisfaction with the reinsurance placement outcomes, highlighting a risk-adjusted rate decrease of approximately 10% and the successful procurement of additional earthquake limits, which should enhance earnings prospects for the remainder of 2025 and the first half of 2026 [6]. - The Chief Risk Officer noted the strong support from the reinsurance market, emphasizing the stability and predictability of results, which positions the company for long-term value delivery to shareholders [7]. Financial Strength and Capacity - Palomar has $1.15 billion of multi-year ILS capacity providing diversifying collateralized reinsurance capital, supported by a panel of over 100 reinsurers and ILS investors, all rated "A-" or better [9]. - The company maintains prepaid reinstatements for most layers, limiting pre-tax net loss to $11 million for hurricane events and $20 million for earthquake events [9].