Palomar reports strong 23% growth in premiums for Q4’24

Palomar Holdings, Inc., a specialty insurer, posted strong underwriting performance in 2024, with significant increases in premiums and underwriting income, driving robust financial performance for the fourth quarter and full year.

In the fourth quarter 2024, Palomar saw impressive growth in its underwriting operations. Gross written premiums surged 23.3%, reaching $373.7 million compared to $303.2 million in the same period of 2023.

Net earned premiums also saw a significant increase, up 54.6% year-over-year to $145 million, reflecting the company’s growing presence in the insurance market.

This growth was fuelled by Palomar’s focus on maintaining underwriting discipline while expanding its product offerings.

Palomar’s combined ratio for the fourth quarter stood at 75.9%, slightly higher than 74.2% in Q4 2023.

However, it is still a very healthy combined ratio, indicating solid underwriting performance. When adjusted for non-recurring items, the combined ratio improved to 71.7%, compared to 68.8% in the prior year.

Underwriting income for Q4 2024 reached $34.9 million, up from $24.2 million in the same period last year. The increase in the combined ratio was mainly due to higher losses and loss adjustment expenses, particularly from catastrophe events, including Hurricane Milton.

The company recorded $8.1 million in catastrophe losses for the fourth quarter of 2024, contributing to a total loss ratio of 25.7%, compared to 19.1% in the same quarter of 2023.

The catastrophe loss ratio accounted for 5.6 percentage points of the total, while the remaining 20.1% was driven by attritional losses. Although the catastrophe losses impacted the overall loss ratio, Palomar’s underlying underwriting performance remained strong, with underwriting income growing compared to the prior year.

Palomar’s premium growth for 2024 was strong, with gross written premiums increasing by 35.1% year-over-year, reaching $1.5 billion in 2024, up from $1.1 billion in 2023.

On the investment front, Palomar saw a 61.3% increase in net investment income, which rose to $11.3 million for the fourth quarter of 2024, compared to $7 million in Q4 2023.

Net income for the fourth quarter of 2024 totalled $35 million, or $1.29 per diluted share, a 35% increase compared to $25.9 million, or $1.02 per diluted share, for the same quarter in 2023. Adjusted net income for Q4 2024 grew by 47.5%, reaching $41.3 million, or $1.52 per diluted share.

For the full year 2024, Palomar’s net income increased by 48.4% to $117.6 million, up from $79.2 million in 2023. Adjusted net income for the year also saw impressive growth, increasing by 42.8% to $133.5 million from $93.5 million in 2023.

Mac Armstrong, Chairman and Chief Executive Officer, commented: “Palomar’s stellar 2024 was capped off by an exceptional fourth quarter. During the quarter, we generated gross written premiums growth of 23%, 39% when excluding run-off business from our results, adjusted net income growth of 48%, inclusive of $8.1 million of catastrophe losses, and, importantly, an adjusted return on equity of 23%.

“When looking at the full year we not only generated record gross written premiums and adjusted net income, but we grew our top and bottom-line 35% and 43%, respectively. Additionally, throughout 2024 we made significant investments across the organisation that we believe will sustain our earnings base and profitable growth trajectory.”

Armstrong continued: “Beyond the strong financial results of the fourth quarter and 2024, Palomar’s accomplishments were several and notable, highlighted by our AM Best upgrade and the acquisition of First Indemnity of America, our surety operation.  Furthermore, we accomplished a Palomar 2X fundamental strategic objective by doubling our adjusted underwriting income for the 2021 period in a three-year timeframe. We are energised by our prospects to continue this profitable growth in 2025 and thereafter.”

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