Palomar (PLMR) Q3 2024 earnings summary

Executive summary

• Adjusted net income grew 39% to $32.4M ($1.23/share) in Q3 2024, with a 77.1% adjusted combined ratio and 21% adjusted ROE, despite elevated catastrophe activity.

• Gross written premiums rose 32.2% to $415M, driven by strong performance in Earthquake, Casualty, and Crop segments, with same-store sales growth of 38%.

• Net income increased 65.5% to $30.5M ($1.15/share), and underwriting income rose 27.5% to $26.4M.

• Raised $160M in primary equity and $116M in August 2024 to support diversification, acquisition of First Indemnity of America Insurance Company (FIA), and organic growth.

• Continued to scale the organization with key hires and an AM Best rating upgrade to A.

Financial highlights

• Net earned premiums grew 58.1% to $135.6M; net written premiums up 44.3% to $159.7M.

• Net investment income increased 56% to $9.4M, with a yield of 4.6%.

• Combined ratio was 80.5% (77.1% adjusted); loss ratio increased to 29.7% due to higher catastrophe losses.

• Stockholders’ equity reached $703.3M at quarter-end.

• Cash and invested assets totaled $1.02B at quarter-end.

Outlook and guidance

• Full-year 2024 adjusted net income guidance tightened to $124M–$128M, including $8M of Q4 catastrophe losses.

• Midpoint of guidance implies 35% adjusted net income growth and >20% adjusted ROE for 2024.

• Expect high teens to 20% earthquake premium growth for full year 2024 and sustained growth in 2025.

• Crop premium expected near $120M for 2024, with ambitions to build to $500M+ in coming years.

• Management expects continued premium growth from new products, partnerships, and expanded distribution.