Palomar Holdings, Inc. Reports Third Quarter 2025 Results

Core Insights - Palomar Holdings, Inc. reported a significant increase in net income for Q3 2025, reaching $51.5 million or $1.87 per diluted share, compared to $30.5 million or $1.15 per diluted share in Q3 2024, marking a 68.7% increase [1][8] - Adjusted net income also saw a substantial rise of 70% to $55.2 million or $2.01 per diluted share, up from $32.4 million or $1.23 per diluted share in the same quarter last year [1][8] - The company achieved record gross written premiums of $597.2 million, a 43.9% increase from $415.0 million in Q3 2024, indicating strong growth in its insurance portfolio [4][8] Financial Performance - Gross written premiums increased by 43.9% to $597.2 million compared to $415.0 million in Q3 2024 [4][8] - Net earned premiums rose by 66.0% to $225.1 million from $135.6 million in the prior year [4][8] - The total loss ratio for the quarter was 32.3%, up from 29.7% in Q3 2024, while the catastrophe loss ratio significantly decreased to 0.8% from 9.5% [5][8] - The combined ratio improved to 78.1% from 80.5% year-over-year, indicating better underwriting performance [6][8] Underwriting and Investment Results - Underwriting income for Q3 was $49.2 million, with an adjusted underwriting income of $56.7 million, reflecting an adjusted combined ratio of 74.8% compared to 77.1% in the previous year [6][8] - Net investment income increased by 54.9% to $14.6 million, driven by higher yields on invested assets [7][8] - The company recorded $3.5 million in net realized and unrealized gains on investments, compared to $2.7 million in the same period last year [9][8] Strategic Initiatives - The company is focused on its "Palomar 2X" strategic imperatives, with notable growth in its crop insurance segment and the recent acquisition of The Gray Casualty and Surety Company [3][8] - Investments in Crop and Surety are expected to drive long-term profitable growth and enhance portfolio differentiation [3][8] Stockholder Equity and Returns - Stockholders' equity increased to $878.1 million as of September 30, 2025, compared to $703.3 million a year earlier [11][8] - The annualized return on equity was reported at 23.9%, up from 19.7% in Q3 2024, while the annualized adjusted return on equity reached 25.6%, compared to 21.0% in the prior year [11][8] Full Year Outlook - For the full year 2025, the company expects adjusted net income to be in the range of $210 million to $215 million, an increase from the previously announced range of $198 million to $208 million [12][8]