Palomar (PLMR) Q2 2024 earnings summary

Executive summary

• Achieved record gross written premiums of $385.2 million in Q2 2024, up 40.4% year-over-year, driven by new business, strong retention, and expanded distribution.

• Adjusted net income rose 47% to $32 million ($1.25 per share), with net income at $25.7 million ($1.00 per share).

• Upgraded to an A financial strength rating by AM Best, reflecting improved financial stability and strategic execution.

• Announced acquisition of First Indemnity of America Insurance Company (FIA) to enter the surety market, expected to close by year-end or early 2025.

• Palomar 2X strategy is ahead of schedule, targeting doubled underwriting income and over 20% adjusted ROE.

Financial highlights

• Net earned premiums increased 47.1% to $122.3 million in Q2 2024.

• Adjusted underwriting income reached $32.9 million, up from $23.1 million year-over-year.

• Net investment income rose 43.7% to $8 million, driven by higher yields and balances.

• Combined ratio was 79.1% (adjusted: 73.1%), nearly flat year-over-year.

• Stockholders’ equity reached $532.6 million as of June 30, 2024.

Outlook and guidance

• Raised full-year 2024 adjusted net income guidance to $124 million–$130 million, implying 36% growth at the midpoint.

• Guidance includes $6.8 million in catastrophe losses for H1 and $5–$7 million for Q3, but excludes FIA acquisition impact.

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

• Confident in achieving the Palomar 2X goal and maintaining ROE above 20%.

• Liquidity and capital resources are considered sufficient to support ongoing operations and growth initiatives.