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, emphasizing profitable growth and market leadership in earthquake, inland marine, fronting, casualty, and crop insurance.

• Palomar 2X strategy aimed to double adjusted underwriting income and achieve ROE above 20% within 3–5 years, a goal achieved within three years.

• Expanded into new markets, including crop and surety, through acquisitions such as FIA and Advanced AgProtection, enhancing product diversification and growth potential.

• Reduced wind exposure, scaled the casualty franchise, and entered the E&S casualty market, while maintaining a conservative risk transfer strategy to limit volatility.

• Ongoing investments in technology, talent, and operational excellence support scalable growth and 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 by 2024, excluding $56M in buybacks.

• Consistently beat and raised earnings guidance, achieving $134M net adjusted income in 2024 and targeting $180M–$192M adjusted net income in 2025 (39% growth at midpoint), with ROE above 20%.

• Combined ratios have outperformed the industry by an average of 26 points over the past 4–5 years, with a 2024 adjusted combined ratio of 71%.

• Investment portfolio is high quality and liquid, with a 4.6% average book yield and focus on capital preservation.

• Seasonality from the crop business will impact quarterly results, with the third quarter expected to show higher gross and net earned premiums.

Product and market development

• Earthquake insurance remains the anchor, with Palomar now the largest non-governmental writer and third largest overall in the U.S., targeting mid-teens GWP growth in 2025, especially in California.

• Inland marine and other property lines have grown at 20% annually since 2021, expanding through geographic diversification, operational scalability, and increased net retention.

• Specialty casualty business, including E&S, has grown at a 72% annual rate since 2021, focusing on niche, low-severity markets and leveraging cross-selling with property lines.

• Crop insurance is a significant new growth driver, with GWP expected to exceed $200M in 2025 and a long-term target of $500M, leveraging federal AIP status and strategic partnerships.

• Surety market entry via FIA acquisition, aiming for $100M annual premium and national leadership.