Palomar Q4 earnings jump 35%
California-based re/insurer Palomar Holdings’ fourth quarter net income jumped 35% to $35 million, driving a full year profit of $117.6 million.
The re/insurer, which primarily underwrites earthquake risk and has a Bermuda-based reinsurer, said full year income rose 48.4%.
The company also said it expects to pay out between $8 million and $12 million in catastrophe losses in 2025 but did not specify if it had been affected by last month’s Southern California wildfires.
“Palomar’s stellar 2024 was capped off by an exceptional fourth quarter,” said Mac Armstrong (pictured), chairman and chief executive officer. “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 organisation that we believe will sustain our earnings base and profitable growth trajectory.”
Armstrong also trumpeted the company’s success in getting a ratings upgrade from AM Best, acquiring surety insurer First Indemnity of America and doubling the company’s adjusted underwriting income compared to 2021 – strategic objective of the company.
Gross written premiums rose by 23.3% to $373.7 million in the quarter while the company’s combined ratio rose to 75.9% from 74.2% in the same period in 2023.
For the year, GWP rose by 35.1% to $1.5 billion compared to $1.1 billion in 2023 and the combined ratio rose to 78.1% from 76.6%.
For the quarter, underwriting income rose 44% to $34.9 million compared to $24.2 million in 2023, despite catastrophe losses of $8.1 million primarily related to Hurricane Milton.
Investment income increased by 61.3% to $11.3 million compared to $7 million in the prior year’s fourth quarter due to higher yields on invested assets and a higher level of investments due to cash generated from operations and proceeds from our August 2024 stock offering.
Palomar said it expects to achieve adjusted net income in 2025 of $180 million to $192 million, including an estimate of $8 million to $12 million of catastrophe losses for the year. Adjusted net income in 2024 was $133.5 million compared to $93.5 million in 2023.
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