Palomar Holdings Posts Strong Performance in 2024 Earnings
Palomar Holdings, Inc. Reports Fourth Quarter and Full Year Results
Palomar Holdings, Inc. (NASDAQ: PLMR) has recently announced its financial results for the fourth quarter of the preceding year. This report highlights an impressive net income of $35.0 million for the fourth quarter, equating to $1.29 per diluted share. This shows a notable increase compared to a net income of $25.9 million, or $1.02 per diluted share, from the prior year's fourth quarter.
Key Highlights from Q4 2024
Financial Performance
In the fourth quarter, Palomar experienced a robust increase in gross written premiums, which surged by 23.3%, reaching $373.7 million compared to $303.2 million in Q4 2023. Additionally, the adjusted net income for the same quarter rose to $41.3 million, an impressive 47.5% increase from $28.0 million in the fourth quarter of 2023.
Operational Metrics
The company reported a total loss ratio of 25.7%, an increase from last year’s 19.1% in Q4. The combined ratio stood at 75.9%, a slight rise from 74.2% in the previous year. The annualized return on equity was recorded at 19.5%, down from 23.2% year-over-year, but the annualized adjusted return on equity remained strong at 23.1% compared to 25.1% last year.
Full Year 2024 Overview
Premium Growth
For the full year, gross written premiums increased by a significant 35.1% to $1.5 billion from $1.1 billion in 2023. The net income for the entire year was $117.6 million, marking a notable growth of 48.4% from $79.2 million in the previous year.
Adjusted Metrics
Palomar's adjusted net income also experienced a remarkable increase of 42.8%, reaching $133.5 million compared to $93.5 million in 2023. The overall loss ratio for 2024 stood at 26.4%, compared to 21.0% last year, and the adjusted combined ratio was reported at 73.7%, which reflects its operational efficiency.
Company Insights from Leadership
Mac Armstrong, the CEO of Palomar, remarked on the company’s successful fiscal year, noting, "We achieved record gross written premiums and adjusted net income while implementing strategic investments to sustain our business growth." He also highlighted the acquisition of First Indemnity of America, which strengthens their surety operations.
Underwriting Performance
Palomar's underwriting results indicate a robust growth trajectory, with gross written premiums rising significantly. The losses and loss adjustment expenses for Q4 totaled $37.2 million, comprising $29.1 million of attritional losses and $8.1 million related to catastrophe losses due to Hurricane Milton. The attritional loss ratio was 20.1%, reflective of the company’s commitment to managing risks effectively.
Investment Outcomes for Palomar
Investment Strategies
The company also saw a 61.3% increase in net investment income, totaling $11.3 million for Q4, primarily attributed to higher yields on invested assets and an increased average balance of investments held. The total cash and invested assets reached approximately $1.1 billion, a sign of robust liquidity management.
Tax Considerations
The effective tax rate for Q4 was reported at 22.2%, a slight decrease from 22.6% in Q4 of the previous year. This variation reflects adjustments related to executive compensation and stock option exercises.
Prospects for 2025
Looking ahead, Palomar anticipates achieving adjusted net income between $180 million to $192 million for 2025, while factoring in an estimation of $8 million to $12 million for catastrophe losses throughout the year.
Conclusion on Palomar Holdings, Inc.
Overall, Palomar Holdings demonstrated significant financial growth and operational strength throughout 2024. Their strategic initiatives, coupled with strong leadership and financial performance, position the company well as they move into 2025 and beyond.
Frequently Asked Questions
What were Palomar Holdings' net income results for the fourth quarter of 2024?
Palomar Holdings reported a net income of $35.0 million, which is $1.29 per diluted share.
How much did gross written premiums increase in 2024?
Gross written premiums increased by 35.1%, reaching $1.5 billion compared to $1.1 billion in 2023.
What was the adjusted net income for Palomar Holdings in 2024?
The adjusted net income for 2024 was $133.5 million, a 42.8% increase from the previous year.
What significant acquisition did Palomar Holdings make in 2024?
Palomar acquired First Indemnity of America, enhancing its operations in the surety field.
What is the expected adjusted net income for Palomar in 2025?
Palomar expects to achieve an adjusted net income between $180 million and $192 million for the year 2025.
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