Fourth Quarter 2025 Highlights
Gross written premiums increased by 31.8% to $492.6 million compared to $373.7 million in the fourth quarter of 2024
Net income increased 60.6% to $56.2 million compared to $35.0 million in the fourth quarter of 2024
Adjusted net income(1) increased 48.0% to $61.1 million compared to $41.3 million in the fourth quarter of 2024
Total loss ratio of 30.4% compared to 25.7% in the fourth quarter of 2024
Catastrophe loss ratio(1) of -0.9% compared to 5.6% in the fourth quarter of 2024
Combined ratio of 76.8% compared to 75.9% in the fourth quarter of 2024
Adjusted combined ratio(1) of 73.4% compared to 71.7%, in the fourth quarter of 2024
Annualized return on equity of 24.7% compared to 19.5% in the fourth quarter of 2024
Annualized adjusted return on equity(1) of 26.9% compared to 23.1% in the fourth quarter of 2024
Full Year 2025 Highlights
Gross written premiums increased by 31.5% to $2.0 billion compared to $1.5 billion in 2024
Net income increased 67.6% to $197.1 million compared to $117.6 million in 2024
Adjusted net income(1) increased 61.9% to $216.1 million compared to $133.5 million in 2024
Total loss ratio of 28.5% compared to 26.4% in 2024
Catastrophe loss ratio(1) of -0.1% compared to 5.5% in 2024
Combined ratio of 76.9% compared to 78.1% in 2024
Adjusted combined ratio(1) of 72.7% compared to 73.7% in 2024
Return on equity of 23.6% compared to 19.6% in 2024
Adjusted return on equity(1) of 25.9% compared to 22.2% in 2024
(1) See discussion of "Non-GAAP and Key Performance Indicators" below.
Mac Armstrong, Chairman and Chief Executive Officer, commented, "Our strong fourth quarter results provided a superb culmination to what was an exceptional 2025. The quarter was highlighted by record adjusted net income, strong top and bottom-line growth as gross written premium grew 32% and adjusted net income increased 48% across our unique and diverse portfolio. Our specialty product suite is purpose-built to navigate any market cycle and generate strong, consistent returns. The fourth quarter further demonstrated this capability as we generated an adjusted combined ratio of 73% and a 27% adjusted return on equity."
Mr. Armstrong continued, "The accomplishments of the 2025 were myriad and not limited to strong financial performance. Noteworthy accomplishments include the successful acquisitions of Advanced Ag Protection and The Gray Casualty and Surety Company and the addition of numerous exceptional leaders across the organization. These investments should sustain our long-term profitable growth trajectory and our Palomar 2X strategic imperative."
Underwriting ResultsGross written premiums increased 31.8% to $492.6 million compared to $373.7 million in the fourth quarter of 2024, while net earned premiums increased 61.1% compared to the prior year's fourth quarter.
Losses and loss adjustment expenses for the fourth quarter were $70.9 million, comprised of $72.9 million of attritional losses and $2.1 million of favorable development on catastrophe losses. The loss ratio for the quarter was 30.4%, comprised of an attritional loss ratio of 31.3% and a catastrophe loss ratio(1) of -0.9% compared to a loss ratio of 25.7% during the same period last year comprised of an attritional loss ratio of 20.1% and a catastrophe loss ratio(1) of 5.6%. Additionally, our fourth quarter results include $2.8 million of favorable prior year development primarily from our short tail Inland Marine and Other Property business.
Underwriting income(1) for the fourth quarter was $54.4 million resulting in a combined ratio of 76.8% compared to underwriting income of $34.9 million resulting in a combined ratio of 75.9% during the same period last year. The Company's adjusted underwriting income(1) was $62.3 million, an increase of 51.8%, resulting in an adjusted combined ratio(1) of 73.4% in the fourth quarter compared to adjusted underwriting income(1) of $41.0 million and an adjusted combined ratio(1) of 71.7% during the same period last year. The Company's adjusted combined ratio excluding catastrophe losses(1) was 74.2% compared to 66.1% during the same period last year.
Investment ResultsNet investment income increased by 41.3% to $16.0 million compared to $11.3 million in the prior year's fourth quarter. The increase was primarily due to higher yields on invested assets and a higher average balance of investments held during the three months ended December 31, 2025 due to cash generated from operations. The weighted average duration of the fixed-maturity investment portfolio, including cash equivalents, was 3.81 years at December 31, 2025. Cash and invested assets totaled $1.5 billion at December 31, 2025. During the fourth quarter, the Company recorded $2.4 million net realized and unrealized gains related to its investment portfolio as compared to net realized and unrealized losses of $1.2 million during the same period last year.
Tax RateThe effective tax rate for the three months ended December 31, 2025 was 22.7% compared to 22.2% for the three months ended December 31, 2024. For the current quarter, the Company's income tax rate differed from the statutory rate due primarily to non-deductible executive compensation expense offset by the tax impact of the permanent component of employee stock options.
Stockholders' Equity and ReturnsStockholders' equity was $942.7 million at December 31, 2025, compared to $729.0 million at December 31, 2024. For the three months ended December 31, 2025, the Company's annualized return on equity was 24.7% compared to 19.5% for the same period in the prior year while adjusted return on equity(1) was 26.9% compared to 23.1% for the same period in the prior year. During the current quarter, the Company did not repurchase any shares of its common stock. As of December 31, 2025, approximately $112.7 million remains available for future repurchases under the previously announced $150 million share repurchase authorization.
Full Year 2026 OutlookFor the full year 2026, the Company expects to achieve adjusted net income of $260 million to $275 million. This includes an estimate of $8 million to $12 million of catastrophe losses for the year.
Conference CallAs previously announced, Palomar will host a conference call Thursday, February 12, 2026, to discuss its fourth quarter 2025 results at 12:00 p.m. (Eastern Time). The conference call can be accessed live by dialing 1-877-423-9813 or for international callers, 1-201-689-8573, and requesting to be joined to the Palomar Fourth Quarter 2025 Earnings Conference Call. A replay will be available starting at 4:00 p.m. (Eastern Time) on February 12, 2026, and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The passcode for the replay is 13758018. The replay will be available until 11:59 p.m. (Eastern Time) on February 19, 2026.
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company's website at http://ir.palomarspecialty.com/. The online replay will remain available for a limited time beginning immediately following the call.
About Palomar Holdings, Inc.Palomar Holdings, Inc. is the holding company of subsidiaries Palomar Specialty Insurance Company ("PSIC"), Palomar Specialty Reinsurance Company Bermuda Ltd. ("PSRE"), Palomar Insurance Agency, Inc., Palomar Excess and Surplus Insurance Company ("PESIC"), Palomar Underwriters Exchange Organization, Inc. ("PUEO"), First Indemnity of America Insurance Co. ("FIA"), Palomar Crop Insurance Services, Inc. ("PCIS"), and Palomar Casualty and Surety Company ("PCSC"), formerly known as The Gray Casualty & Surety Company. Palomar's consolidated results also include Laulima Exchange ("Laulima"), a variable interest entity for which the Company is the primary beneficiary. Palomar is an innovative specialty insurer serving residential and commercial clients in five product categories: Earthquake, Inland Marine and Other Property, Casualty, Fronting, and Crop. Palomar's insurance subsidiaries, PSIC, PSRE, PESIC, and FIA have a financial strength rating of "A" (Excellent) from A.M. Best and PCSC has a financial strength rating of "A-" (Excellent) from A.M. Best.
To learn more, visit PLMR.com.
Non-GAAP and Key Performance Indicators
Palomar discusses certain key performance indicators, described below, which provide useful information about the Company's business and the operational factors underlying the Company's financial performance.
Underwriting revenue is a non-GAAP financial measure defined as total revenue, excluding net investment income and net realized and unrealized gains and losses on investments. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of total revenue calculated in accordance with GAAP to underwriting revenue.
Underwriting income is a non-GAAP financial measure defined as income before income taxes excluding net investment income, net realized and unrealized gains and losses on investments, and interest expense. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of income before income taxes calculated in accordance with GAAP to underwriting income.
Adjusted net income is a non-GAAP financial measure defined as net income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. Palomar calculates the tax impact only on adjustments which would be included in calculating the Company's income tax expense using the estimated tax rate at which the company received a deduction for these adjustments. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of net income calculated in accordance with GAAP to adjusted net income.
Annualized Return on equity is net income expressed on an annualized basis as a percentage of average beginning and ending stockholders' equity during the period.
Annualized adjusted return on equity is a non-GAAP financial measure defined as adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders' equity during the period. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of return on equity calculated using unadjusted GAAP numbers to adjusted return on equity.
Loss ratio, expressed as a percentage, is the ratio of losses and loss adjustment expenses, to net earned premiums.
Expense ratio, expressed as a percentage, is the ratio of acquisition and other underwriting expenses, net of commission and other income to net earned premiums.
Combined ratio is defined as the sum of the loss ratio and the expense ratio. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss.
Adjusted combined ratio is a non-GAAP financial measure defined as the sum of the loss ratio and the expense ratio calculated excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio.
Diluted adjusted earnings per share is a non-GAAP financial measure defined as adjusted net income divided by the weighted-average common shares outstanding for the period, reflecting the dilution which could occur if equity-based awards are converted into common share equivalents as calculated using the treasury stock method. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of diluted earnings per share calculated in accordance with GAAP to diluted adjusted earnings per share.
Catastrophe loss ratio is a non-GAAP financial measure defined as the ratio of catastrophe losses to net earned premiums. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of loss ratio calculated using unadjusted GAAP numbers to catastrophe loss ratio.
Adjusted combined ratio excluding catastrophe losses is a non-GAAP financial measure defined as adjusted combined ratio excluding the impact of catastrophe losses. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio excluding catastrophe losses.
Adjusted underwriting income is a non-GAAP financial measure defined as underwriting income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of income before income taxes calculated in accordance with GAAP to adjusted underwriting income.
Tangible stockholders' equity is a non-GAAP financial measure defined as stockholders' equity less goodwill and intangible assets. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of stockholders' equity calculated in accordance with GAAP to tangible stockholders' equity.
Safe Harbor StatementPalomar cautions you that statements contained in this press release may regard matters that are not historical facts but are forward-looking statements. These statements are based on the company's current beliefs and expectations. The inclusion of forward-looking statements should not be regarded as a representation by Palomar that any of its plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in the Company's business. The forward-looking statements are typically, but not always, identified through use of the words "believe," "expect," "enable," "may," "will," "could," "intends," "estimate," "anticipate," "plan," "predict," "probable," "potential," "possible," "should," "continue," and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including unexpected expenditures and costs, unexpected results or delays in development and regulatory review, regulatory approval requirements, the frequency and severity of adverse events and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
ContactMedia Inquiries Lindsay Conner 1-551-206-6217 [email protected]
Investor RelationsJamie Lillis1-203-428-3223[email protected]Source: Palomar Holdings, Inc.
Summary of Operating Results:
The following tables summarize the Company's results for the three months and year ended December 31, 2025 and 2024:
Three Months Ended
December 31,
2025
2024
Change
% Change
(in thousands, except per share data)
Gross written premiums
$
492,629
$
373,723
$
118,906
31.8
%
Ceded written premiums
(245,059
)
(204,492
)
(40,567
)
19.8
%
Net written premiums
247,570
169,231
78,339
46.3
%
Net earned premiums
233,460
144,890
88,570
61.1
%
Commission and other income
1,541
750
791
105.5
%
Total underwriting revenue(1)
235,001
145,640
89,361
61.4
%
Losses and loss adjustment expenses
70,856
37,176
33,680
90.6
%
Acquisition expenses, net of ceding commissions and fronting fees
62,867
40,585
22,282
54.9
%
Other underwriting expenses
46,894
32,947
13,947
42.3
%
Underwriting income(1)
54,384
34,932
19,452
55.7
%
Interest expense
(87
)
(87
)
—
NM
Net investment income
15,991
11,318
4,673
41.3
%
Net realized and unrealized gains (losses) on investments
2,370
(1,201
)
3,571
(297.3
)%
Income before income taxes
72,658
44,962
27,696
61.6
%
Income tax expense
16,493
9,997
6,496
65.0
%
Net income
$
56,165
$
34,965
$
21,200
60.6
%
Adjustments:
Net realized and unrealized (gains) losses on investments
(2,370
)
1,201
(3,571
)
(297.3
)%
Expenses associated with transactions
1,075
922
153
16.6
%
Stock-based compensation expense
5,543
4,779
764
16.0
%
Amortization of intangibles
1,284
389
895
230.1
%
Tax impact
(581
)
(964
)
383
(39.7
)%
Adjusted net income(1)
$
61,116
$
41,292
$
19,824
48.0
%
Key Financial and Operating Metrics
Annualized return on equity
24.7
%
19.5
%
Annualized adjusted return on equity(1)
26.9
%
23.1
%
Loss ratio
30.4
%
25.7
%
Expense ratio
46.4
%
50.2
%
Combined ratio
76.8
%
75.9
%
Adjusted combined ratio(1)
73.4
%
71.7
%
Diluted earnings per share
$
2.06
$
1.29
Diluted adjusted earnings per share(1)
$
2.24
$
1.52
Catastrophe losses
$
(2,063
)
$
8,122
Catastrophe loss ratio(1)
-0.9
%
5.6
%
Adjusted combined ratio excluding catastrophe losses(1)
74.2
%
66.1
%
Adjusted underwriting income(1)
$
62,286
$
41,022
$
21,264
51.8
%
NM - not meaningful
(1) - Indicates Non-GAAP financial measure - see above for definition of Non-GAAP financial measures and see below for reconciliation of Non-GAAP financial measures to their most directly comparable measures prepared in accordance with GAAP.
Year Ended
December 31,
2025
2024
Change
% Change
(in thousands, except per share data)
Gross written premiums
$
2,028,252
$
1,541,962
$
486,290
31.5
%
Ceded written premiums
(1,064,230
)
(897,111
)
(167,119
)
18.6
%
Net written premiums
964,022
644,851
319,171
49.5
%
Net earned premiums
802,635
510,687
291,948
57.2
%
Commission and other income
5,496
2,784
2,712
97.4
%
Total underwriting revenue(1)
808,131
513,471
294,660
57.4
%
Losses and loss adjustment expenses
228,594
134,759
93,835
69.6
%
Acquisition expenses, net of ceding commissions and fronting fees
217,133
149,657
67,476
45.1
%
Other underwriting expenses
176,458
117,113
59,345
50.7
%
Underwriting income(1)
185,946
111,942
74,004
66.1
%
Interest expense
(392
)
(1,138
)
746
(65.6
)%
Net investment income
56,005
35,824
20,181
56.3
%
Net realized and unrealized gains on investments
11,831
4,568
7,263
159.0
%
Income before income taxes
253,390
151,196
102,194
67.6
%
Income tax expense
56,320
33,623
22,697
67.5
%
Net income
$
197,070
$
117,573
$
79,497
67.6
%
Adjustments:
Net realized and unrealized gains on investments
(11,831
)
(4,568
)
(7,263
)
159.0
%
Expenses associated with transactions
4,644
1,479
3,165
214.0
%
Stock-based compensation expense
21,014
16,685
4,329
25.9
%
Amortization of intangibles
4,683
1,558
3,125
200.6
%
Expenses associated with catastrophe bond
2,660
2,483
177
7.1
%
Tax impact
(2,124
)
(1,699
)
(425
)
25.0
%
Adjusted net income(1)
$
216,116
$
133,511
$
82,605
61.9
%
Key Financial and Operating Metrics
Annualized return on equity
23.6
%
19.6
%
Annualized adjusted return on equity(1)
25.9
%
22.2
%
Loss ratio
28.5
%
26.4
%
Expense ratio
48.4
%
51.7
%
Combined ratio
76.9
%
78.1
%
Adjusted combined ratio(1)
72.7
%
73.7
%
Diluted earnings per share
$
7.17
$
4.48
Diluted adjusted earnings per share(1)
$
7.86
$
5.09
Catastrophe losses
$
(728
)
$
27,846
Catastrophe loss ratio(1)
-0.1
%
5.5
%
Adjusted combined ratio excluding catastrophe losses(1)
72.8
%
68.3
%
Adjusted underwriting income(1)
$
218,947
$
134,147
$
84,800
63.2
%
NM - not meaningful
(1) - Indicates Non-GAAP financial measure - see above for definition of Non-GAAP financial measures and see below for reconciliation of Non-GAAP financial measures to their most directly comparable measures prepared in accordance with GAAP.
Condensed Consolidated Balance sheets
Palomar Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
(in thousands, except shares and par value data)
December 31,
December 31,
2025
2024
Assets
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $1,227,605 in 2025; $973,330 in 2024)
$
1,224,187
$
939,046
Equity securities, at fair value (cost: $81,772 in 2025; $32,987 in 2024)
99,333
40,529
Equity method investment
