Palomar reports rise in net income to $25.7m in Q2’24

Specialty insurer Palomar Holdings has reported a net income of $25.7 million for the second quarter of 2024, an improvement compared to net income of $17.6 million from Q2 2023.

The company’s gross written premiums (GWP) experienced substantial growth, increasing by 40.4% to $385.2 million compared to $274.3 million from the same period in 2023.

Furthermore, Palomar Holdings’ total loss ratio increased from 21.5% in Q2’23 to 24.9% in this quarter. This consisted of a catastrophe loss ratio of 2.8% and an attritional loss ratio of 22.1%, compared with a cat loss ratio of 2.6% and an attritional loss ratio of 18.9% a year earlier.

For the second quarter, Palomar has reported loss and loss adjustment expenses of $30.4 million, which includes attritional losses of $27 million and catastrophe losses, driven by severe convective storms, of $3.4 million.

Underwriting income for Q1’24 improved to $25.6 million compared to $17.4 million the previous year, resulting in a combined ratio of 79.1% compared to 79% for the same period last year.

Turning to investments, Palomar generated net investment income of $8 million for the quarter, up by a significant 43.7% year-on-year, driven by higher yields on invested assets and a higher average balance of investments held.

Looking ahead to the full year of 2024, Palomar Holdings anticipates achieving adjusted net income between $124 million and $130 million. This projection includes $6.8 million of catastrophe losses incurred during the six months ended June 30, 2024 and additional catastrophe losses incurred during the third quarter of 2024 of approximately $5 million to $7 million related to Hurricanes Beryl and Debby.

Mac Armstrong, Chairman and CEO of Palomar Holdings, commented, “I am very pleased with our second quarter results as we achieved record gross written premium and adjusted net income during the quarter. Additionally, our profitable growth remained robust with gross written premium and adjusted net income increasing 40% and 47%, respectively, year-over-year.

“Beyond the strong financial results achieved during the quarter, we had several other accomplishments including but not limited to: successfully placing our core excess of loss reinsurance program at June 1st on terms that were better than anticipated, bringing on several new leaders who will help scale the Company and execute our Palomar 2X strategy, and AM Best upgrading our Financial Strength Rating to an A.

“We introduced our Palomar 2X strategy at our investor day in 2022 with designs of doubling our underwriting income over a three-to-five-year time frame while generating an adjusted ROE in excess of 20%. Our second quarter results and our further raising of adjusted net income guidance for the year clearly demonstrates that we are tracking ahead of these ambitious goals.”

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