Specialty property insurer Palomar Holdings has reported a net income of $12.3 million for the second quarter of 2021 as compared to $12.0 million for the same prior year period.
The insurer’s gross written premiums have also increased by 54.4% to $129.4 million in the second quarter, compared to $83.8 million in 2020.
Palomar reported its combined ratio had dropped to 76.0% compared to 68.4% for Q2 2020, this was due to the company being impacted by $3.9 million of additional reinsurance charges from Winter Storm Uri.
Mac Armstrong, Chairman and Chief Executive Officer commented: “Our second quarter results, highlighted by year-over-year gross written premium growth of 54%, demonstrate the sustained momentum we are seeing across our business.
“We believe that our E&S business, which delivered $34.1 million in gross written premium and grew 43% sequentially from the first quarter, is in the very early innings of its development and has the potential to reach the size of our admitted carrier over time.
“In addition to our topline growth, importantly we delivered strong earnings, and grew net income despite $3.9 million of non-recurring, incremental reinsurance charges incurred as a result of Winter Storm Uri.
“During the quarter we continued our focus on using risk transfer to provide a stable earnings base and profitable growth as we successfully completed our June 1 reinsurance renewal in which we procured approximately $180 million of incremental reinsurance limit for earthquakes and $100 million of incremental limit for windstorms.
“Our reinsurance coverage now exhausts at $1.65 billion for earthquake events and $700 million for hurricane events, which we believe provides ample capacity for our growth.”
“While I am very pleased with our growth, I am most proud of our people and the culture they create at Palomar. We analytically and proactively manage our portfolio, product by product and state by state, at a granular level, as we seek to optimise risk adjusted returns, exposures, and most of all profitability.
“We continue to invest in the development of new product offerings that add value to the market and achieve target returns and as such launched several during the quarter. We remain confident in our ability to expand our product suite, distribution footprint, and earnings base over time.
“Moreover, we believe we have the capital to execute our strategy for the foreseeable future and opportunistically deploy it towards other initiatives that we believe generate an attractive return. Consistent with that philosophy, during the quarter we repurchased 239,000 shares of our stock under the share repurchase program we announced in late March.”
