Palomar Holdings’ CoR falls to 80.5% on $12.9m cat losses, GWP rises to $415m

Palomar Holdings has reported a 32.2% rise in gross written premiums (GWP) to $415 million for the third quarter of 2024, while catastrophe losses drove a 4.7 point deterioration in the combined ratio to 80.5%, compared to 75.8% in the third quarter of 2023.

At the same time, Palomar’s net income for Q3 2024 sat at $30.5 million, a solid increase compared to $18.4 million in the prior year quarter.

Palomar also reported $40.3 million in losses and loss adjustment expenses for the third quarter of 2024, which comprised of $27.4 million of attritional losses and $12.9 million of catastrophe losses from Hurricanes Beryl, Debby, and Helene.

Moreover, the company’s loss ratio for the quarter was 29.7%, comprised of an attritional loss ratio of 20.2% and a catastrophe loss ratio of 9.5% compared to a loss ratio of 18.8% during the same period last year comprised of an attritional loss ratio of 19.4% and a catastrophe loss ratio of -0.6%.

Palomar also posted a $26.4 million underwriting income for Q3’24, which resulted in a combined ratio of 80.5% compared to underwriting income of $20.7 million resulting in a combined ratio of 75.8% during the same period last year.

As well as this, Palomar’s adjusted underwriting income for the quarter sat at $31.0 million, which resulted in an adjusted combined ratio of 77.1%, in comparison to adjusted underwriting income of $25.0 million and an adjusted combined ratio of 70.9% during the same period last year.

Additionally, Palomar’s adjusted combined ratio excluding catastrophe losses was 67.6% compared to 71.5% during the same period last year.

In terms of investment, Palomar’s net investment income increased by 56.0% to $9.4 million in Q3 2o24, compared to $6.0 million in Q3 2023.

According to the firm, the increase was mostly driven by higher yields on invested assets and a higher average balance of investments held during the three months ended September 30, 2024 due to proceeds from the company’s August 2024 secondary offering and cash generated from operations.

Looking ahead towards the full-year 2024, Palomar expects to achieve an adjusted net income of $124 million to $128 million. However, its important to note that this range includes additional catastrophe losses incurred during the fourth quarter of 2024 of approximately $8 million related to Hurricane Milton.

Mac Armstrong, Chairman and Chief Executive Officer, commented: “I am very pleased with our third quarter results as they clearly demonstrate our successful efforts to deliver consistent earnings and returns. In a quarter that experienced a heightened level of cat activity, we delivered 39% adjusted net income growth, a 77% adjusted combined ratio, and a 21% adjusted ROE.

“Our results further validate the concerted efforts that we have undertaken to diversify the business, reduce the volatility in our earnings base and profitably grow. We continued to generate robust top line growth achieving 32% gross written premium growth, driven by strength in our Earthquake and Casualty products as well as strong growth from our burgeoning Crop business. Importantly, our same-store premium growth rate was 38%, demonstrating the strong underlying momentum that exists across our portfolio of specialty insurance products.”

He continued: “We have numerous energizing opportunities and initiatives associated with our Palomar 2X strategy. To capitalize on them, we successfully raised $116 million in August. A portion of the proceeds will fund our acquisition of First Indemnity of America Insurance Company and our entry into the surety market. We will use the remaining proceeds for organic growth and selected increases in risk participation in product categories including Crop and Earthquake. Our diversification into attractive lines with limited correlation to the P&C cycle such as Crop and Surety will further position Palomar to deliver consistent earnings growth over time.”

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.