Core Insights - AM Best has commented that the Credit Ratings of Palomar Holdings, Inc. and its member companies remain unchanged following the announcement of Palomar's acquisition of The Gray Casualty & Surety Company, expected to close in the first half of 2026 [1][12] Credit Ratings - Palomar has a Long-Term Issuer Credit Rating of "bbb†(Good), while its subsidiaries, PSIC, PESIC, and Palomar Re, have a Financial Strength Rating of A (Excellent) and Long-Term ICRs of "aâ€(Excellent) with a stable outlook [2] - FIA has an FSR of A- (Excellent) and a Long-Term ICR of "a-†(Excellent) with a positive outlook [2] - Gray has an FSR of A- (Excellent) and a Long-Term ICR of "a-†(Excellent), which have been placed under review with positive implications following the acquisition announcement [3] Acquisition Details - Post-acquisition, Gray will operate independently under new management and is expected to benefit from synergies with Palomar [4] - The acquisition will be funded through cash on hand and a bank loan, with expected financial leverage having a neutral impact on the ratings [4] Business Operations - Palomar writes various risks, with earthquake coverage being a significant part of its portfolio, alongside inland marine/other property, casualty, fronting, and crop businesses [5] - The group consistently reports profitable results due to diligent underwriting strategies and is expanding into the surety space, particularly through the acquisition of Gray, which has a larger footprint in the contract surety segment across the U.S. [5]