Palomar (PLMR) The 44th Annual William Blair Growth Stock Conference summary

Strategic focus and business model

• Emphasizes specialty insurance using data analytics and traditional underwriting to target niche markets with opportunities for innovation.

• Operates an open architecture distribution model, writing both admitted and E&S business in all 50 states, recently achieving Financial Size Category X.

• Maintains an A- AM Best rating and leverages reinsurance to balance the book and minimize earnings volatility.

• Achieved over $1.3 billion in premium and $100 million in net income, with ROE exceeding 20%.

• Growth is primarily organic, with minimal contribution from acquisitions.

Palomar 2X strategic framework

• Aims to double underwriting income in 3-5 years while maintaining ROE above 20%.

• Focuses on organic growth, anchored by earthquake insurance and supported by diversification into non-catastrophe lines.

• Limits catastrophe exposure outside earthquake, notably reducing hurricane risk and transitioning Hawaii business to a fee-based reciprocal insurer.

• Invests in experienced underwriters and data analytics to enhance risk selection and conservative exposure management.

• On track to achieve Palomar 2X goals within three years based on 2021 results.

Business segment performance and diversification

• Earthquake remains the core franchise, now the second-largest writer in California and third in the US.

• Residential and commercial earthquake lines allow flexibility through market cycles and rate adjustments.

• Inland marine and other property segments are growing selectively, with significant contraction in hurricane-exposed business.

• Builders risk and excess national property lines are being expanded due to lower catastrophe exposure.

• Hawaii hurricane risk is now managed through a reciprocal insurer, shifting loss exposure away from the balance sheet.