PLMR — Palomar Holdings, Inc.

Summary of PLMR Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted Net Income: $63.8 million, up 31% year-over-year; Adjusted EPS: $2.36, a 34% increase.
• Gross Written Premium: Increased 27% to $630.5 million.
• Adjusted Combined Ratio: 76.7%, up from 73.1% in Q2 2025.
• Adjusted Return on Equity: 26.3%, compared to 23.7% in the prior year.
• Net Earned Premium: Rose 59.5% year-over-year to $287 million.
• Loss Ratio: 34.5%, up from 25.7% in Q2 2025, driven by higher attritional losses.

2. Strategic Updates and Business Highlights

• Diversification Strategy: Continued focus on a balanced portfolio with no single product group exceeding one-third of gross written premiums. Approximately 50% of the portfolio is property business.
• Earthquake Franchise: Residential Earthquake remains stable, while Commercial Earthquake faces competitive pricing pressures.
• Inland Marine and Property Group: Strong performance in residential and admitted property products, with gross written premium up 11% year-over-year.
• Casualty Lines: Gross written premium increased 37% year-over-year, driven by investments in new products and partnerships.
• Crop Insurance: Gross written premium surged 96% year-over-year, with the launch of the PLMR.Farm platform enhancing operational efficiency.
• Surety and Credit: Gross written premium increased 236% year-over-year, with integration of the acquired Gray Surety nearly complete.

3. Forward Guidance and Outlook

• Full-Year Adjusted Net Income Guidance: Increased to $270 million to $280 million, implying approximately 27% growth year-over-year.
• Expectations for Loss Ratios: Anticipated to be in the mid-to-upper 30s for 2026, with the third quarter expected to be the low point for net earned premium ratios.
• Dividend Announcement: Initiation of a quarterly dividend of $0.45 per share, reflecting confidence in long-term growth.

4. Bad News, Challenges, or Points of Concern

• Competitive Pressures: Notable rate decreases in the Commercial Earthquake segment, with average rates down over 20%. The large commercial property market remains competitive.
• Loss Ratio Increases: The overall loss ratio has risen, primarily due to higher attritional losses from growing lines like crop and casualty, which could impact profitability.
• Market Conditions: The insurance market is described as choppy and competitive, with potential headwinds affecting growth.

5. Notable Q&A Insights

• Casualty Reserve Releases: Favorable reserve development was primarily from older fronted programs, particularly in workers' compensation. The company maintains a conservative reserving philosophy.
• Reinsurance Strategy: Management is balancing retention and ceding based on line-by-line analysis, with a focus on maintaining profitability and managing risk.
• Pipeline for Growth: There are ongoing rollovers of existing books of business, with a pipeline of potential new opportunities, though scrutiny is heightened due to current market conditions.

Overall, Palomar Holdings demonstrated strong financial performance in Q2 2026, driven by a diversified portfolio and strategic initiatives, while navigating competitive pressures and rising loss ratios. The company remains optimistic about its growth trajectory and shareholder returns.