Palomar (PLMR) 47th Annual Raymond James Institutional Investor Conference summary

Company overview and strategy

• Founded in 2014, the company has evolved into a specialty insurer with five product categories: earthquake, marine/other property, casualty, crop, and surety/credit.

• Focuses on markets needing innovation, leveraging data and technology to drive product development and risk management.

• Growth strategy centers on balancing admitted and E&S business, targeting dislocated markets, and minimizing earnings volatility.

• Recent expansion includes acquisitions in surety and significant growth in crop and casualty lines.

• The Palomar 2X initiative aims to double adjusted net income in 2–5 years while maintaining a 20%+ ROE.

Market dynamics and product performance

• Earthquake remains the largest line, with embedded growth from inflation guard and stability in residential rates, offsetting commercial rate declines.

• Builder’s risk focus is shifting toward admitted and single-structure risks to avoid E&S pricing pressures.

• Casualty growth is driven by niche segments, conservative risk appetite, and strong reinsurance protection.

• Crop business leverages management expertise and aims for $500M near-term and $1B long-term premium, with 30% growth targeted this year.

• Surety expansion achieved through acquisitions, aiming to become a top 15 writer by leveraging a larger balance sheet.

Financial levers and capital management

• Net income growth outpaces top-line growth through reinsurance, operating leverage, and expanding participation in profitable lines.

• Heavy use of reinsurance in new lines, gradually increasing retention as capital grows, converting fee income to higher-margin underwriting income.

• Operating leverage is enhanced by building internal teams and infrastructure, reducing acquisition expenses.

• Investment income is expected to grow as longer-tail lines like casualty expand.

• Capital management includes a $150M buyback program, ongoing investment in organic growth, and potential for dividends.