• Palomar Holdings, Inc. Reports Fourth Quarter & Full Year 2024 Results

    Source: Nasdaq GlobeNewswire / 12 Feb 2025 16:10:00   America/New_York

    LA JOLLA, Calif., Feb. 12, 2025 (GLOBE NEWSWIRE) -- Palomar Holdings, Inc. (NASDAQ:PLMR) (“Palomar” or “Company”) reported net income of $35.0 million, or $1.29 per diluted share, for the fourth quarter of 2024 compared to net income of $25.9 million, or $1.02 per diluted share, for the fourth quarter of 2023. Adjusted net income(1) was $41.3 million, or $1.52 per diluted share, for the fourth quarter of 2024 as compared to $28.0 million, or $1.11 per diluted share, for the fourth quarter of 2023. 

    Fourth Quarter 2024 Highlights

    • Gross written premiums increased by 23.3% to $373.7 million compared to $303.2 million in the fourth quarter of 2023
    • Net income increased 35.0% to $35.0 million compared to $25.9 million in the fourth quarter of 2023
    • Adjusted net income(1) increased 47.5% to $41.3 million compared to $28.0 million in the fourth quarter of 2023
    • Total loss ratio of 25.7% compared to 19.1% in the fourth quarter of 2023
    • Combined ratio of 75.9% compared to 74.2% in the fourth quarter of 2023
    • Adjusted combined ratio(1) of 71.7% compared to 68.8%, in the fourth quarter of 2023
    • Annualized return on equity of 19.5% compared to 23.2% in the fourth quarter of 2023
    • Annualized adjusted return on equity(1) of 23.1% compared to 25.1% in the fourth quarter of 2023

    Full Year 2024 Highlights

    • Gross written premiums increased by 35.1% to $1.5 billion compared to $1.1 billion in 2023
    • Net income increased 48.4% to $117.6 million compared to $79.2 million in 2023
    • Adjusted net income(1) increased 42.8% to $133.5 million compared to $93.5 million in 2023
    • Total loss ratio of 26.4% compared to 21.0% in 2023
    • Combined ratio of 78.1% compared to 76.6% in 2023
    • Adjusted combined ratio(1) of 73.7% compared to 71.2% in 2023
    • Return on equity of 19.6% compared to 18.5% in 2023
    • Adjusted return on equity(1) of 22.2% compared to 21.9% in 2023

    (1)  See discussion of “Non-GAAP and Key Performance Indicators” below.

    Mac Armstrong, Chairman and Chief Executive Officer, commented, "Palomar’s stellar 2024 was capped off by an exceptional fourth quarter. During the quarter, we generated gross written premiums growth of 23%, 39% when excluding run-off business from our results, adjusted net income growth of 48%, inclusive of $8.1 million of catastrophe losses, and, importantly, an adjusted return on equity of 23%. When looking at the full year we not only generated record gross written premiums and adjusted net income, but we grew our top and bottom-line 35% and 43%, respectively. Additionally, throughout 2024 we made significant investments across the organization that we believe will sustain our earnings base and profitable growth trajectory.”  

    Mr. Armstrong continued, “Beyond the strong financial results of the fourth quarter and 2024, Palomar’s accomplishments were several and notable, highlighted by our AM Best upgrade and the acquisition of First Indemnity of America, our surety operation.  Furthermore, we accomplished a Palomar 2X fundamental strategic objective by doubling our adjusted underwriting income for the 2021 period in a three-year timeframe. We are energized by our prospects to continue this profitable growth in 2025 and thereafter.”  

    Underwriting Results

    Gross written premiums increased 23.3% to $373.7 million compared to $303.2 million in the fourth quarter of 2023, additionally net earned premiums increased 54.6% compared to the prior year’s fourth quarter. 

    Losses and loss adjustment expenses for the fourth quarter were $37.2 million, comprised of $29.1 million of attritional losses and $8.1 million of catastrophe losses primarily related to Hurricane Milton. The loss ratio for the quarter was 25.7%, comprised of an attritional loss ratio of 20.1% and a catastrophe loss ratio of 5.6%, compared to a loss ratio of 19.1% during the same period last year, all comprised of attritional losses.

    Underwriting income(1) for the fourth quarter was $34.9 million resulting in a combined ratio of 75.9% compared to underwriting income of $24.2 million resulting in a combined ratio of 74.2% during the same period last year. The Company’s adjusted underwriting income(1) was $41.0 million resulting in an adjusted combined ratio(1) of 71.7% in the fourth quarter compared to adjusted underwriting income(1) of $29.3 million and an adjusted combined ratio(1) of 68.8% during the same period last year.

    Investment Results
    Net investment income increased by 61.3% to $11.3 million compared to $7.0 million in the prior year’s fourth quarter. The increase was primarily due to higher yields on invested assets and a higher average balance of investments held during the three months ended December 31, 2024 due to cash generated from operations and proceeds from our August 2024 stock offering. The weighted average duration of the fixed-maturity investment portfolio, including cash equivalents, was 4.04 years at December 31, 2024. Cash and invested assets totaled $1.1 billion at December 31, 2024. During the fourth quarter, the Company recorded net realized and unrealized losses of $1.2 million related to its investment portfolio as compared to net realized and unrealized gains of $3.0 million in last year’s fourth quarter.

    Tax Rate
    The effective tax rate for the three months ended December 31, 2024 was 22.2% compared to 22.6% for the three months ended December 31, 2023. For the current quarter, the Company’s income tax rate differed from the statutory rate due primarily to the non-deductible executive compensation expense, offset by the permanent component of employee stock option exercises.

    Stockholders’ Equity and Returns
    Stockholders' equity was $729.0 million at December 31, 2024, compared to $471.3 million at December 31, 2023. For the three months ended December 31, 2024, the Company’s annualized return on equity was 19.5% compared to 23.2% for the same period in the prior year while adjusted return on equity(1) was 23.1% compared to 25.1% for the same period in the prior year. 

    Full Year 2025 Outlook
    For the full year 2025, the Company expects to achieve adjusted net income of $180 million to $192 million. This includes an estimate of $8 million to $12 million of catastrophe losses for the year.

    Conference Call
    As previously announced, Palomar will host a conference call Thursday, February 13, 2025, to discuss its fourth quarter 2024 results at 12:00 p.m. (Eastern Time). The conference call can be accessed live by dialing 1-877-423-9813 or for international callers, 1-201-689-8573, and requesting to be joined to the Palomar Fourth Quarter 2024 Earnings Conference Call. A replay will be available starting at 4:00 p.m. (Eastern Time) on February 13, 2025, and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The passcode for the replay is 13743970. The replay will be available until 11:59 p.m. (Eastern Time) on February 20, 2025.

    Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company’s website at http://ir.palomarspecialty.com/. The online replay will remain available for a limited time beginning immediately following the call.

    About Palomar Holdings, Inc.
    Palomar Holdings, Inc. is the holding company of subsidiaries Palomar Specialty Insurance Company (“PSIC”), Palomar Specialty Reinsurance Company Bermuda Ltd. ("PSRE"), Palomar Insurance Agency, Inc. ("PIA"), Palomar Excess and Surplus Insurance Company (“PESIC”), Palomar Underwriters Exchange Organization, Inc ("PUEO"), Palomar Crop Insurance Services, Inc, and First Indemnity of America Insurance Company (acquired 1/1/2025). Palomar's consolidated results also include Laulima Reciprocal Exchange, a variable interest entity for which the Company is the primary beneficiary. Palomar is an innovative specialty insurer serving residential and commercial clients in five product categories: Earthquake, Inland Marine and Other Property, Casualty, Fronting, and Crop. Palomar’s insurance subsidiaries, Palomar Specialty Insurance Company, Palomar Specialty Reinsurance Company Bermuda Ltd., and Palomar Excess and Surplus Insurance Company, have a financial strength rating of “A” (Excellent) from A.M. Best. 

    Non-GAAP and Key Performance Indicators

    Palomar discusses certain key performance indicators, described below, which provide useful information about the Company’s business and the operational factors underlying the Company’s financial performance.

    Underwriting revenue is a non-GAAP financial measure defined as total revenue, excluding net investment income and net realized and unrealized gains and losses on investments. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of total revenue calculated in accordance with GAAP to underwriting revenue.

    Underwriting income is a non-GAAP financial measure defined as income before income taxes excluding net investment income, net realized and unrealized gains and losses on investments, and interest expense. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of income before income taxes calculated in accordance with GAAP to underwriting income.

    Adjusted net income is a non-GAAP financial measure defined as net income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. The Company calculates the tax impact only on adjustments which would be included in calculating its income tax expense using the estimated tax rate at which the company received a deduction for these adjustments. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of net income calculated in accordance with GAAP to adjusted net income.

    Annualized Return on equity is net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period.

    Annualized adjusted return on equity is a non-GAAP financial measure defined as adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of return on equity calculated using unadjusted GAAP numbers to adjusted return on equity.

    Loss ratio, expressed as a percentage, is the ratio of losses and loss adjustment expenses, to net earned premiums.

    Expense ratio, expressed as a percentage, is the ratio of acquisition and other underwriting expenses, net of commission and other income to net earned premiums.

    Combined ratio is defined as the sum of the loss ratio and the expense ratio. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss.

    Adjusted combined ratio is a non-GAAP financial measure defined as the sum of the loss ratio and the expense ratio calculated excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio.

    Diluted adjusted earnings per share is a non-GAAP financial measure defined as adjusted net income divided by the weighted-average common shares outstanding for the period, reflecting the dilution which could occur if equity-based awards are converted into common share equivalents as calculated using the treasury stock method. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of diluted earnings per share calculated in accordance with GAAP to diluted adjusted earnings per share.

    Catastrophe loss ratio is a non-GAAP financial measure defined as the ratio of catastrophe losses to net earned premiums. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of loss ratio calculated using unadjusted GAAP numbers to catastrophe loss ratio.

    Adjusted combined ratio excluding catastrophe losses is a non-GAAP financial measure defined as adjusted combined ratio excluding the impact of catastrophe losses.  See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio excluding catastrophe losses.

    Adjusted underwriting income is a non-GAAP financial measure defined as underwriting income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of income before income taxes calculated in accordance with GAAP to adjusted underwriting income.

    Tangible stockholders’ equity is a non-GAAP financial measure defined as stockholders’ equity less goodwill and intangible assets. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of stockholders’ equity calculated in accordance with GAAP to tangible stockholders’ equity.

    Safe Harbor Statement
    Palomar cautions you that statements contained in this press release may regard matters that are not historical facts but are forward-looking statements. These statements are based on the company’s current beliefs and expectations. The inclusion of forward-looking statements should not be regarded as a representation by Palomar that any of its plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in the Company’s business. The forward-looking statements are typically, but not always, identified through use of the words "believe," "expect," "enable," "may," "will," "could," "intends," "estimate," "anticipate," "plan," "predict," "probable," "potential," "possible," "should," "continue," and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including unexpected expenditures and costs, unexpected results or delays in development and regulatory review, regulatory approval requirements, the frequency and severity of adverse events and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

    Contact
    Media Inquiries 
    Lindsay Conner 
    1-551-206-6217 
    lconner@plmr.com 

    Investor Relations
    Jamie Lillis
    1-203-428-3223
    investors@plmr.com
    Source: Palomar Holdings, Inc.


    Summary of Operating Results:

    The following tables summarize the Company’s results for the three months and year ended December 31, 2024 and 2023:

     Three Months Ended        
     December 31,        
     2024 2023 Change % Change
     ($ in thousands, except per share data)
    Gross written premiums$373,723  $303,152  $70,571   23.3%
    Ceded written premiums (204,492)  (188,742)  (15,750)  8.3%
    Net written premiums 169,231   114,410   54,821   47.9%
    Net earned premiums 144,890   93,748   51,142   54.6%
    Commission and other income 750   1,586   (836)  (52.7)%
    Total underwriting revenue (1) 145,640   95,334   50,306   52.8%
    Losses and loss adjustment expenses 37,176   17,896   19,280   107.7%
    Acquisition expenses, net of ceding commissions and fronting fees 40,585   29,005   11,580   39.9%
    Other underwriting expenses 32,947   24,210   8,737   36.1%
    Underwriting income (1) 34,932   24,223   10,709   44.2%
    Interest expense (87)  (824)  737   (89.4)%
    Net investment income 11,318   7,015   4,303   61.3%
    Net realized and unrealized (losses) gains on investments (1,201)  3,044   (4,245)  (139.5)%
    Income before income taxes 44,962   33,458   11,504   34.4%
    Income tax expense 9,997   7,564   2,433   32.2%
    Net income$34,965  $25,894  $9,071   35.0%
    Adjustments:               
    Net realized and unrealized losses (gains) on investments 1,201   (3,044)  4,245   (139.5)%
    Expenses associated with transactions 922   478   444   92.9%
    Stock-based compensation expense 4,779   4,176   603   14.4%
    Amortization of intangibles 389   389   —   —%
    Tax impact (964)  103   (1,067)  NM 
    Adjusted net income (1)$41,292  $27,996  $13,296   47.5%
    Key Financial and Operating Metrics               
    Annualized return on equity 19.5%  23.2%        
    Annualized adjusted return on equity (1) 23.1%  25.1%        
    Loss ratio 25.7%  19.1%        
    Expense ratio 50.2%  55.1%        
    Combined ratio 75.9%  74.2%        
    Adjusted combined ratio (1) 71.7%  68.8%        
    Diluted earnings per share$1.29  $1.02         
    Diluted adjusted earnings per share (1)$1.52  $1.11         
    Catastrophe losses$8,122  $10         
    Catastrophe loss ratio (1) 5.6%  —%        
    Adjusted combined ratio excluding catastrophe losses (1) 66.1%  68.8%        
    Adjusted underwriting income (1)$41,022  $29,266  $11,756   40.2%
    NM - not meaningful               

    (1)- Indicates Non-GAAP financial measure- see above for definition of Non-GAAP financial measures and see below for reconciliation of Non-GAAP financial measures to their most directly comparable measures prepared in accordance with GAAP.

               
     Year Ended        
     December 31,        
     2024 2023 Change % Change
     ($ in thousands, except per share data)
    Gross written premiums$1,541,962  $1,141,558  $400,404   35.1%
    Ceded written premiums (897,111)  (731,531)  (165,580)  22.6%
    Net written premiums 644,851   410,027   234,824   57.3%
    Net earned premiums 510,687   345,913   164,774   47.6%
    Commission and other income 2,784   3,367   (583)  (17.3)%
    Total underwriting revenue (1) 513,471   349,280   164,191   47.0%
    Losses and loss adjustment expenses 134,759   72,592   62,167   85.6%
    Acquisition expenses, net of ceding commissions and fronting fees 149,657   107,745   41,912   38.9%
    Other underwriting expenses 117,113   88,172   28,941   32.8%
    Underwriting income (1) 111,942   80,771   31,171   38.6%
    Interest expense (1,138)  (3,775)  2,637   (69.9)%
    Net investment income 35,824   23,705   12,119   51.1%
    Net realized and unrealized gains on investments 4,568   2,941   1,627   55.3%
    Income before income taxes 151,196   103,642   47,554   45.9%
    Income tax expense 33,623   24,441   9,182   37.6%
    Net income$117,573  $79,201  $38,372   48.4%
    Adjustments:               
    Net realized and unrealized gains on investments (4,568)  (2,941)  (1,627)  55.3%
    Expenses associated with transactions 1,479   706   773   109.5%
    Stock-based compensation expense 16,685   14,913   1,772   11.9%
    Amortization of intangibles 1,558   1,481   77   5.2%
    Expenses associated with catastrophe bond 2,483   1,640   843   51.4%
    Tax impact (1,699)  (1,480)  (219)  14.8%
    Adjusted net income (1)$133,511  $93,520  $39,991   42.8%
    Key Financial and Operating Metrics               
    Annualized return on equity 19.6%  18.5%        
    Annualized adjusted return on equity (1) 22.2%  21.9%        
    Loss ratio 26.4%  21.0%        
    Expense ratio 51.7%  55.7%        
    Combined ratio 78.1%  76.6%        
    Adjusted combined ratio (1) 73.7%  71.2%        
    Diluted earnings per share$4.48  $3.13         
    Diluted adjusted earnings per share (1)$5.09  $3.69         
    Catastrophe losses$27,846  $3,442         
    Catastrophe loss ratio (1) 5.5%  1.0%        
    Adjusted combined ratio excluding catastrophe losses (1) 68.3%  70.2%        
    Adjusted underwriting income (1)$134,147  $99,511  $34,636   34.8%
                    

    Condensed Consolidated Balance sheets

    Palomar Holdings, Inc. and Subsidiaries

    Condensed Consolidated Balance Sheets (unaudited)

    (in thousands, except shares and par value data)
          
    ​December 31,
    2024    		 December 31,
    2023
    Assets​  ​ 
    Investments:​  ​ 
    Fixed maturity securities available for sale, at fair value (amortized cost: $973,330 in 2024; $675,130 in 2023)$939,046  $643,799 
    Equity securities, at fair value (cost: $32,987 in 2024; $43,003 in 2023) 40,529   43,160 
    Equity method investment 2,277   2,617 
    Other investments 5,863   — 
    Total investments 987,715   689,576 
    Cash and cash equivalents 80,438   51,546 
    Restricted cash 101   306 
    Accrued investment income 8,440   5,282 
    Premium receivable 305,724   261,972 
    Deferred policy acquisition costs, net of ceding commissions and fronting fees 94,881   60,990 
    Reinsurance recoverable on paid losses and loss adjustment expenses 47,076   32,172 
    Reinsurance recoverable on unpaid losses and loss adjustment expenses 348,083   244,622 
    Ceded unearned premiums 276,237   265,808 
    Prepaid expenses and other assets 91,086   72,941 
    Deferred tax assets, net 8,768   10,119 
    Property and equipment, net 429   373 
    Goodwill and intangible assets, net 13,242   12,315 
    Total assets$2,262,220  $1,708,022 
    Liabilities and stockholders' equity       
    Liabilities:       
    Accounts payable and other accrued liabilities$70,079  $42,376 
    Reserve for losses and loss adjustment expenses 503,382   342,275 
    Unearned premiums 741,692   597,103 
    Ceded premium payable 190,168   181,742 
    Funds held under reinsurance treaty 27,869   13,419 
    Income taxes payable —   7,255 
    Borrowings from credit agreements —   52,600 
    Total liabilities 1,533,190   1,236,770 
    Stockholders' equity:       
    Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of December 31, 2024 and December 31, 2023, 0 shares issued and outstanding as of December 31, 2024 and December 31, 2023 —   — 
    Common stock, $0.0001 par value, 500,000,000 shares authorized, 26,529,402 and 24,772,987 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively 3   3 
    Additional paid-in capital 493,656   350,597 
    Accumulated other comprehensive loss (26,845)  (23,991)
    Retained earnings 262,216   144,643 
    Total stockholders' equity 729,030   471,252 
    Total liabilities and stockholders' equity$2,262,220  $1,708,022 
            

    Condensed Consolidated Income Statement

    Palomar Holdings, Inc. and Subsidiaries

    Condensed Consolidated Statements of Income and Comprehensive Income (loss) (Unaudited)

    (in thousands, except shares and per share data)
          
     Three Months Ended Year Ended
     December 31, December 31,
     2024 2023 2024 2023
    Revenues:               
    Gross written premiums$373,723  $303,152  $1,541,962  $1,141,558 
    Ceded written premiums (204,492)  (188,742)  (897,111)  (731,531)
    Net written premiums 169,231   114,410   644,851   410,027 
    Change in unearned premiums (24,341)  (20,662)  (134,164)  (64,114)
    Net earned premiums 144,890   93,748   510,687   345,913 
    Net investment income 11,318   7,015   35,824   23,705 
    Net realized and unrealized (losses) gains on investments (1,201)  3,044   4,568   2,941 
    Commission and other income 750   1,586   2,784   3,367 
    Total revenues 155,757   105,393   553,863   375,926 
    Expenses:               
    Losses and loss adjustment expenses 37,176   17,896   134,759   72,592 
    Acquisition expenses, net of ceding commissions and fronting fees 40,585   29,005   149,657   107,745 
    Other underwriting expenses 32,947   24,210   117,113   88,172 
    Interest expense 87   824   1,138   3,775 
    Total expenses 110,795   71,935   402,667   272,284 
    Income before income taxes 44,962   33,458   151,196   103,642 
    Income tax expense 9,997   7,564   33,623   24,441 
    Net income$34,965  $25,894  $117,573  $79,201 
    Other comprehensive income, net:               
    Net unrealized (losses) gains on securities available for sale (16,707)  19,229   (2,854)  12,524 
    Net comprehensive income$18,258  $45,123  $114,719  $91,725 
    Per Share Data:               
    Basic earnings per share$1.32  $1.05  $4.61  $3.19 
    Diluted earnings per share$1.29  $1.02  $4.48  $3.13 
                    
    Weighted-average common shares outstanding:               
    Basic 26,491,939   24,747,347   25,520,343   24,822,004 
    Diluted 27,206,225   25,272,149   26,223,842   25,327,091 
                    

    Underwriting Segment Data

    The Company has a single reportable segment and offers specialty insurance products. Gross written premiums (GWP) by product, location and company are presented below:

     Three Months Ended December 31,        
     2024 2023        
     ($ in thousands)    
         % of     % of     %
     Amount GWP Amount GWP Change Change
    Product (1)                       
    Earthquake$146,757   39.3% $122,087   40.3% $24,670   20.2%
    Inland Marine and other Property 85,396   22.9%  63,039   20.8%  22,357   35.5%
    Casualty 68,484   18.3%  32,323   10.7%  36,161   111.9%
    Fronting 57,418   15.4%  85,708   28.3%  (28,290)  (33.0)%
    Crop 15,668   4.2%  (5)  (0.0)%  15,673   NM 
    Total Gross Written Premiums$373,723   100.0% $303,152   100.0% $70,571   23.3%

    NM- Not meaningful

     Year Ended December 31,        
     2024 2023        
     ($ in thousands)    
         % of     % of     %
     Amount GWP Amount GWP Change Change
    Product (1)                       
    Earthquake$522,864   33.9% $436,896   38.3% $85,968   19.7%
    Inland Marine and Other Property 334,079   21.7%  250,023   21.9%  84,056   33.6%
    Fronting 333,188   21.6%  352,141   30.8%  (18,953)  (5.4)%
    Casualty 235,592   15.3%  90,388   7.9%  145,204   160.6%
    Crop 116,239   7.5%  12,110   1.1%  104,129   859.9%
    Total Gross Written Premiums$1,541,962   100.0% $1,141,558   100.0% $400,404   35.1%

    (1) - Beginning in 2024, the Company has updated the categorization of its products to align with management's current strategy and view of the business. Prior year amounts have been reclassified for comparability purposes. The recategorization is for presentation purposes only and does not impact overall gross written premiums.

     Three Months Ended December 31, Year Ended December 31,
     2024 2023 2024 2023
     ($ in thousands) ($ in thousands)
         % of     % of     % of     % of
     Amount GWP Amount GWP Amount GWP Amount GWP
    State                               
    California$157,786   42.2% $165,342   54.5% $668,635   43.4% $600,791   52.6%
    Texas 28,002   7.5%  22,740   7.5%  124,416   8.1%  95,517   8.4%
    Hawaii 18,636   5.0%  11,562   3.8%  72,558   4.7%  47,388   4.2%
    Washington 16,007   4.3%  14,124   4.7%  57,900   3.8%  49,494   4.3%
    New York 14,756   3.9%  6,775   2.2%  38,919   2.5%  18,424   1.6%
    Florida 8,855   2.4%  11,286   3.7%  67,008   4.3%  47,595   4.2%
    Oregon 8,298   2.2%  6,307   2.1%  29,550   1.9%  23,220   2.0%
    Illinois 7,176   1.9%  6,697   2.2%  20,901   1.4%  22,340   2.0%
    Other 114,207   30.6%  58,319   19.2%  462,075   30.0%  236,789   20.7%
    Total Gross Written Premiums$373,723   100.0% $303,152   100.0% $1,541,962   100.0% $1,141,558   100.0%
                                    


     Three Months Ended December 31, Year Ended December 31,
     2024 2023 2024 2023
     ($ in thousands) ($ in thousands)
         % of     % of     % of     % of
     Amount GWP Amount GWP Amount GWP Amount GWP
    Subsidiary                               
    PSIC$170,275   45.6% $156,590   51.7% $823,263   53.4% $653,809   57.3%
    PESIC 188,496   50.4%  146,562   48.3%  661,404   42.9%  487,749   42.7%
    Laulima 14,952   4.0%  —   —%  57,295   3.7%  —   —%
    Total Gross Written Premiums$373,723   100.0% $303,152   100.0% $1,541,962   100.0% $1,141,558   100.0%
                                    

    Gross and net earned premiums

    The table below shows the amount of premiums the Company earned on a gross and net basis and the Company’s net earned premiums as a percentage of gross earned premiums for each period presented:

     Three Months Ended         Year Ended        
     December 31,         December 31,        
     2024 2023 Change % Change 2024 2023 Change % Change
     ($ in thousands) ($ in thousands)
    Gross earned premiums$371,654  $276,502  $95,152   34.4% $1,397,369  $1,015,722  $381,647   37.6%
    Ceded earned premiums (226,764)  (182,754)  (44,010)  24.1%  (886,682)  (669,809)  (216,873)  32.4%
    Net earned premiums$144,890  $93,748  $51,142   54.6% $510,687  $345,913  $164,774   47.6%
                                    
    Net earned premium ratio 39.0%  33.9%          36.5%  34.1%        
                                    

    Loss detail

     Three Months Ended         Year Ended        
     December 31,         December 31,        
     2024 2023 Change % Change 2024 2023 Change % Change
     ($ in thousands) ($ in thousands)
    Catastrophe losses$8,122  $10  $8,112   NM  $27,846  $3,442  $24,404   NM 
    Non-catastrophe losses 29,054   17,886   11,168   62.4%  106,913   69,150   37,763   54.6%
    Total losses and loss adjustment expenses$37,176  $17,896  $19,280   107.7% $134,759  $72,592  $62,167   85.6%
                                    
    Catastrophe loss ratio 5.6%  0.0%          5.5%  1.0%        
    Non-catastrophe loss ratio 20.1%  19.1%          20.9%  20.0%        
    Total loss ratio 25.7%  19.1%          26.4%  21.0%        
    NM-Not meaningful                               
                                    

    The following table represents a reconciliation of changes in the ending reserve balances for losses and loss adjustment expenses:

     Three Months Ended
    December 31,    		 Year Ended December 31,
     2024 2023 2024 2023
     (in thousands) (in thousands)
    Reserve for losses and LAE net of reinsurance recoverables at beginning of period$137,274  $92,178  $97,653  $77,520 
    Add: Incurred losses and LAE, net of reinsurance, related to:               
    Current year 37,575   19,409   137,798   70,363 
    Prior years (399)  (1,513)  (3,039)  2,229 
    Total incurred 37,176   17,896   134,759   72,592 
    Deduct: Loss and LAE payments, net of reinsurance, related to:               
    Current year 15,675   5,417   43,582   19,631 
    Prior years 3,476   7,004   33,531   32,828 
    Total payments 19,151   12,421   77,113   52,459 
    Reserve for losses and LAE net of reinsurance recoverables at end of period 155,299   97,653   155,299   97,653 
    Add: Reinsurance recoverables on unpaid losses and LAE at end of period 348,083   244,622   348,083   244,622 
    Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period$503,382  $342,275  $503,382  $342,275 
                    

    Reconciliation of Non-GAAP Financial Measures

    For the three months and year ended December 31, 2024 and 2023, the Non-GAAP financial measures discussed above reconcile to their most comparable GAAP measures as follows:

    Underwriting revenue

     Three Months Ended Year Ended
     December 31, December 31,
     2024 2023 2024 2023
     (in thousands) (in thousands)
    Total revenue$155,757  $105,393  $553,863  $375,926 
    Net investment income (11,318)  (7,015)  (35,824)  (23,705)
    Net realized and unrealized (gains) losses on investments 1,201   (3,044)  (4,568)  (2,941)
    Underwriting revenue$145,640  $95,334  $513,471  $349,280 
                    

    Underwriting income and adjusted underwriting income

     Three Months Ended Year Ended
     December 31, December 31,
     2024 2023 2024 2023
     (in thousands) (in thousands)
    Income before income taxes$44,962  $33,458  $151,196  $103,642 
    Net investment income (11,318)  (7,015)  (35,824)  (23,705)
    Net realized and unrealized losses (gains) on investments 1,201   (3,044)  (4,568)  (2,941)
    Interest expense 87   824   1,138   3,775 
    Underwriting income$34,932  $24,223  $111,942  $80,771 
    Expenses associated with transactions 922   478   1,479   706 
    Stock-based compensation expense 4,779   4,176   16,685   14,913 
    Amortization of intangibles 389   389   1,558   1,481 
    Expenses associated with catastrophe bond —   —   2,483   1,640 
    Adjusted underwriting income$41,022  $29,266  $134,147  $99,511 
                    

    Adjusted net income

     Three Months Ended Year Ended
     December 31, December 31,
     2024 2023 2024 2023
     (in thousands) (in thousands)
    Net income$34,965  $25,894  $117,573  $79,201 
    Adjustments:               
    Net realized and unrealized losses (gains) on investments 1,201   (3,044)  (4,568)  (2,941)
    Expenses associated with transactions 922   478   1,479   706 
    Stock-based compensation expense 4,779   4,176   16,685   14,913 
    Amortization of intangibles 389   389   1,558   1,481 
    Expenses associated with catastrophe bond —   —   2,483   1,640 
    Tax impact (964)  103   (1,699)  (1,480)
    Adjusted net income$41,292  $27,996  $133,511  $93,520 
                    

    Annualized adjusted return on equity

     Three Months Ended Year Ended
     December 31, December 31,
     2024 2023 2024 2023
     (in thousands) (in thousands)
                    
    Annualized adjusted net income$165,168  $111,984  $133,511  $93,520 
    Average stockholders' equity$716,171  $446,293  $600,140  $428,002 
    Annualized adjusted return on equity 23.1%  25.1%  22.2%  21.9%
                    

    Adjusted combined ratio

     Three Months Ended Year Ended
     December 31, December 31,
     2024 2023 2024 2023
     (in thousands) (in thousands)
    Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income$109,958  $69,525  $398,745  $265,142 
    Denominator: Net earned premiums$144,890  $93,748  $510,687  $345,913 
    Combined ratio 75.9%  74.2%  78.1%  76.6%
    Adjustments to numerator:               
    Expenses associated with transactions$(922) $(478) $(1,479) $(706)
    Stock-based compensation expense (4,779)  (4,176)  (16,685)  (14,913)
    Amortization of intangibles (389)  (389)  (1,558)  (1,481)
    Expenses associated with catastrophe bond —   —   (2,483)  (1,640)
    Adjusted combined ratio 71.7%  68.8%  73.7%  71.2%
                    

    Diluted adjusted earnings per share

     Three Months Ended Year Ended
     December 31, December 31,
     2024 2023 2024 2023
     (in thousands, except per share data) (in thousands, except per share data)
                    
    Adjusted net income$41,292  $27,996  $133,511  $93,520 
    Weighted-average common shares outstanding, diluted 27,206,225   25,272,149   26,223,842   25,327,091 
    Diluted adjusted earnings per share$1.52  $1.11  $5.09  $3.69 
                    

    Catastrophe loss ratio

     Three Months Ended Year Ended
     December 31, December 31,
     2024 2023 2024 2023
     (in thousands) (in thousands)
    Numerator: Losses and loss adjustment expenses$37,176  $17,896  $134,759  $72,592 
    Denominator: Net earned premiums$144,890  $93,748  $510,687  $345,913 
    Loss ratio 25.7%  19.1%  26.4%  21.0%
                    
    Numerator: Catastrophe losses$8,122  $10  $27,846  $3,442 
    Denominator: Net earned premiums$144,890  $93,748  $510,687  $345,913 
    Catastrophe loss ratio 5.6%  0.0%  5.5%  1.0%
                    

    Adjusted combined ratio excluding catastrophe losses

     Three Months Ended Year Ended
     December 31, December 31,
     2024 2023 2024 2023
     (in thousands) (in thousands)
    Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income$109,958  $69,525  $398,745  $265,142 
    Denominator: Net earned premiums$144,890  $93,748  $510,687  $345,913 
    Combined ratio 75.9%  74.2%  78.1%  76.6%
    Adjustments to numerator:               
    Expenses associated with transactions$(922) $(478) $(1,479) $(706)
    Stock-based compensation expense (4,779)  (4,176)  (16,685)  (14,913)
    Amortization of intangibles (389)  (389)  (1,558)  (1,481)
    Expenses associated with catastrophe bond —   —   (2,483)  (1,640)
    Catastrophe losses (8,122)  (10)  (27,846)  (3,442)
    Adjusted combined ratio excluding catastrophe losses 66.1%  68.8%  68.3%  70.2%
                    

    Tangible Stockholders’ equity

     December 31, December 31,
     2024 2023
     (in thousands)
    Stockholders' equity$729,030  $471,252 
    Goodwill and intangible assets (13,242)  (12,315)
    Tangible stockholders' equity$715,788  $458,937 
            

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