Palomar Holdings, Inc.

What they do

Palomar writes specialty P&C insurance for individuals and businesses across Earthquake, Casualty, Inland Marine and Other Property, Crop, and Fronting, in both admitted and excess and surplus lines. It distributes through retail agents, program administrators, wholesale brokers and strategic partnerships with other insurers. Insurance subsidiaries PSIC, PESIC and FIA carry an 'A' financial strength rating from A.M. Best.

Revenue drivers

• Gross written premiums across five product categories — Gross written premiums reached $2.0 billion for the year ended December 31, 2025, a roughly 55% compound annual growth rate from $16.6 million in the company's first year. Crop premiums are heavily seasonal, with most recognized in the third quarter because insureds report at that time.
• Crop — Crop is one of the newer products introduced in recent years alongside E&S Casualty, Surety and Environmental Liability. Because the majority of Crop premium is recognized in the third quarter, interim results may not indicate full-year performance.
• Surety and Credit (new reporting line for 2026) — Following the January 2026 Gray Surety acquisition, renamed Palomar Casualty & Surety Company, the company will report Surety and Credit premium as a separate line beginning in 2026. Gray Surety is Treasury-listed, writes contract bonds for mid-sized and emerging contractors, is licensed in all 50 states and operates through 13 regional offices.
• Fronting (no longer a separate line) — Fronting was previously reported as a separate line of business. Beginning in 2026 the company will cease reporting Fronting separately and consolidate the underlying premium into existing lines. Fronting premiums are ceded under fronting agreements.

Recent performance

Second quarter 2026 gross written premiums rose 27.0% to $630.5 million from $496.3 million a year earlier, while net earned premiums increased 59.5%. Net income was $52.6 million, or $1.94 per diluted share, compared with $46.5 million, or $1.68, in the second quarter of 2025. Adjusted net income rose 31.4% to $63.8 million, or $2.36 per diluted share. The loss ratio rose to 34.5% from 25.7% on higher attritional losses, and the combined ratio rose to 83.3% from 78.8%; the adjusted combined ratio was 76.7% versus 73.1%. Net investment income increased 49.2% to $20.0 million.

Strategy

Management frames the direction as the 'Palomar 2X' strategy, funded by earnings and the balance sheet. The company acquired The Gray Casualty & Surety Company in January 2026 and renamed it Palomar Casualty & Surety Company, and entered an unsecured credit agreement totaling $450 million maturing January 27, 2031 to support it. For 2026 it will reorganize product reporting, adding Surety and Credit as a separate line and folding Fronting into existing lines. The board authorized a new quarterly dividend of $0.45 per share, which management says does not change the growth strategy. The company launched a crop policy administration system, PLMR.Farm.

Risks

• Catastrophe exposure — Claims from unpredictable and severe catastrophe events, including those linked to climate change, could reduce or eliminate earnings and stockholders' equity, especially if such events occur more often or severely than historical experience.
• Reinsurer credit risk — The company cedes premiums through excess of loss, quota share and fronting agreements, and reinsurers may not pay claims on a timely basis or at all.
• Loss reserve adequacy — Loss reserves are based on estimates and assumptions and may prove inadequate to cover actual incurred losses, including from changes in claims severity or litigation trends.
• Reinsurance market access — The company may be unable to purchase third-party reinsurance or expand catastrophe coverage in desired amounts or on commercially acceptable terms, given reinsurance market volatility.

Outlook

Management raised full-year adjusted net income guidance for the third time and described the second quarter of 2026 as the fifteenth consecutive earnings beat. It cited capacity to invest in the businesses driving the Palomar 2X strategy while returning capital to shareholders through the newly authorized $0.45 quarterly dividend. The company is adding new team members and launched PLMR.Farm, its crop policy administration system, and will change segment reporting in 2026 to show Surety and Credit separately.