Specialty property insurer Palomar Holdings has reported a net income of $14.5 million for Q122, a 12.6% decline when compared to the same period last year which saw the company report a net income of $16.6 million.
Adjusted net income also decreased by 8.9%, as the company reported an adjusted net income of $17.6 million, compared to the $19.3 million it secured in the same period last year.
However, Palomar Holdings did report some major positives from its Q122 results as their gross written premiums (GWP) increased by 65% to $170.9 million, compared to $103.6 million from Q121, while net premiums increased by 61.6% compared to the prior year’s quarter.
The report also showed that losses and loss adjustment expenses for the quarter were $15 million, which included $14.5 million of non-catastrophe attritional losses, and $0.5 million of unfavourable development on catastrophe losses from prior periods.
However, the company reported a loss ratio of 19.7% for the quarter, which comprised of a catastrophe loss of 0.6% and a non-catastrophe loss ratio of 19.1%, compared to a loss ratio of -9.4% during the same period last year, which comprised of a catastrophe loss ratio of -20.5% and a non-catastrophe attritional loss ratio of 11.1%.
In addition, Palomar Holdings’ reported underwriting income of $17.9 million, resulted in a combined ratio of 76.5%, compared to last year’s period underwriting income of $18.6 million and a combined ratio of 60.4%.
The report also states that excluding expenses related to transactions, stock-based compensation, amortization of intangibles, and catastrophe bonds, the company’s adjusted combined ratio for the quarter was 72.1%, compared to 53.3% during the same period last year.
In the report, the company says that non-catastrophe losses and loss ratio increased mainly due to the growth of lines of business subject to attritional losses, such as Specialty Homeowners, Flood, and Inland Marine.
They also stated that when comparing their results from this quarter compared to the same period last year, it is important to remember the impact that winter storm Uri had on their results during those periods
Furthermore, Palomar Holdings’ net investment income increased by 16.2% to $2.6 million, compared to $2.2 million the prior year’s first quarter.
The YoY increase was primarily due to a higher average balance of investments held during the three months ended March 31, 2022, due to cash generated from operations.
Palomar Holdings, Chairman and Chief Executive Officer, Mac Armstrong, commented: “We are pleased to report another strong quarter for Palomar. When we began the year, we identified four strategic priorities for calendar 2022: produce strong premium growth, continue to deliver consistent and predictable earnings, monetize investments made over the course of 2021, and scale our organization.
“I am very happy to report that we made strong progress across all four initiatives during the first quarter. Selected highlights of Q1 2022 include: delivering a 65% gross written premium increase compared to the prior year period and record residential earthquake new business, the successful renewal of our aggregate reinsurance program that effectively places a floor on our adjusted return on equity of 14% for 2022, writing $30 million of managed written premium for PLMR-FRONT in its second quarter of operation, and achieving an expense ratio of 56.8%, which constituted a meaningful sequential and year-over-year improvement.”
He continues: “The momentum of our first quarter results well positions Palomar to deliver sustained growth and profitability in the year ahead.”
