Palomar (PLMR) Investor Day 2025 summary

Strategic direction and business evolution

• Transitioned from a single-line earthquake insurer to a diversified specialty insurance platform with five product categories, including earthquake, inland marine/property, fronting, casualty, and crop, each with tailored risk and distribution strategies.

• Achieved market leadership in earthquake insurance, expanded into high-growth lines like crop and surety, and executed acquisitions (FIA and Advanced AgProtection) to accelerate entry and scale in new markets.

• The Palomar 2X strategy, introduced in 2022, aimed to double adjusted underwriting income and achieve an adjusted ROE above 20% over an intermediate timeframe, a goal achieved within three years.

• Maintains a philosophy of conservative underwriting, robust risk transfer, and deliberate expansion, focusing on consistent, profitable growth and minimizing earnings volatility.

• Strategic investments in talent, technology, and operational infrastructure are designed to support scalable growth and maintain a competitive edge.

Financial performance and guidance

• Adjusted net income grew at a 37% CAGR since 2021, with book value rising from under $400M to $730M (excluding $56M in buybacks) by end of 2024.

• Achieved and exceeded Palomar 2X goals, doubling adjusted underwriting income in three years while maintaining ROE above 20%.

• 2024 net adjusted income reached $134M, surpassing initial guidance, and 2025 guidance targets $180M–$192M in adjusted net income, implying 39% growth at the midpoint and continued ROE above 20%.

• Industry-leading profitability is demonstrated by a 2024 adjusted combined ratio of 71% and an adjusted ROE of 22%, outperforming peer groups.

• The company’s investment portfolio is high quality and liquid, with a 4.6% average book yield and a focus on capital preservation and liquidity.

Product and market development

• Earthquake remains the anchor line, with Palomar now the third largest U.S. provider, but two-thirds of the portfolio now comes from non-earthquake lines, reflecting disciplined diversification.

• Inland marine/property and casualty lines have grown rapidly, supported by experienced underwriting teams and tailored reinsurance structures.

• Crop insurance is positioned for stable, profitable growth, leveraging federal reinsurance and a focus on technology and service differentiation, with GWP expected to exceed $200M in 2025 and a long-term target of $500M.

• Surety market entry via FIA acquisition aims for $100M in annual premium, with plans for geographic expansion and T-listing to access broader markets.

• Fronting is used selectively for fee income and R&D, with less than 10 relationships and minimal risk retention, focusing on selectivity, creditworthiness, and fully reinsured models.