Palomar Raises Outlook as Adjusted Profit Hits Record
The specialty insurer raised the low end of its annual profit forecast to $270 million.
The specialty insurer Palomar Holdings (PLMR) reported record second-quarter adjusted net income as earnings growth accelerated and underwriting income climbed despite a higher loss ratio.
Adjusted net income rose 31.4% from a year earlier to $63.8 million, accelerating from 23.1% growth in the first quarter. Diluted adjusted earnings increased 34.1% to $2.36 a share. Net income rose 13.0% to $52.6 million after remaining essentially flat from a year earlier in the first quarter.
Gross written premiums increased 27.0% to $630.5 million, slowing from first-quarter growth of 42.4% and remaining nearly flat sequentially. Net earned premiums grew 59.5%, roughly matching the prior quarter’s 59.3% pace.
The business mix continued to shift toward casualty, crop and surety and credit. Casualty premiums rose 36.8% and represented 31.3% of gross written premiums, while crop premiums grew 96.0% and surety and credit premiums more than tripled. Earthquake premiums slipped 0.7% and fell to 23.3% of the mix from 29.8% a year earlier.
Palomar also became less concentrated in California, where premiums increased about 1% to $165.3 million and declined to 26.2% of the total from 33.0%. Texas premiums rose to $61.5 million from $35.7 million and expanded to 9.7% of the mix.
Underwriting income increased 25.5% to $48.0 million, and adjusted underwriting income rose 38.4% to $67.0 million. The combined ratio improved sequentially to 83.3% from 84.5%, though it remained above 78.8% a year earlier as the loss ratio climbed to 34.5%. Net investment income rose 49.2% to $20.0 million.
Palomar now expects full-year adjusted net income of $270 million to $280 million, its third increase to the 2026 forecast and a $4 million rise in the low end. The company also declared its first quarterly cash dividend of $0.45 a share and repurchased $41.0 million of stock during the quarter, while launching PLMR.Farm to administer crop policies.