Palomar Holdings, Inc. PLMR reported fourth-quarter 2023 operating income of 94 cents per share, which beat the Zacks Consensus Estimate by 10.6%. The bottom line increased 14.6% year over year. Palomar witnessed improved premiums and net investment income as well as improved losses and loss adjustment expenses.
Behind the Positive Figures
Total revenues improved 16% year over year to $102 million, mainly attributable to higher premiums and net investment income. The top line beat the Zacks Consensus Estimate by 7.7%.
Gross written premiums increased 26.8% year over year to $303.2 million. Net earned premiums increased 14% year over year to $93.7 million.
Net investment income increased 58.9% year over year to $7 million, driven by higher yields on invested assets and a higher average balance of investments.
Palomar Holdings, Inc. Operational Performance
Palomar witnessed an underwriting income of $24.2 million, up 20.4% year over year. Adjusted underwriting income was nearly $29.3 million, rising 24.5% year over year.
Total expenses of $71.9 million increased 13% year over year due to loss and loss adjustment expenses.
The loss ratio was 19.1, which improved 330 basis points (bps) year over year. Adjusted combined ratio, excluding catastrophe losses, improved 260 bps year over year to 68.8.
Full-Year Accomplishments
Adjusted income of $3.69 per share increased 33.2% year over year.
Gross written premiums increased 29.4% year over year to $1.1 billion.
Underwriting income of $80.8 million improved 30.1% year over year. Total loss ratio was 21%, which improved 390 bps year over year. Adjusted combined ratio was 71.2, which improved 440 bps year over year.
Financial Update
Cash and cash equivalents declined 25.1% from 2022-end to $52.4 million at 2023-end. Shareholder equity increased 22.5% from 2022-end to $471.3 million at the end of 2023.
Annualized adjusted return on equity in 2023 was 21.9%, up 360 bps year over year. As of Dec 31, 2023, $43.5 million remained under authorization.
2024 Outlook
Palomar aims to achieve adjusted net income in the range of $110 million-$115 million.
Zacks Rank
PLMR currently carries a Zacks Rank #3 (Hold).
Performance of Other Insurers
The Travelers Companies TRV reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. Net written premiums increased 13% year over year to about $10 billion.
The Progressive Corporation’s PGR fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38.
W.R. Berkley Corporation’s WRB fourth-quarter 2023 operating income of $1.45 per share beat the Zacks Consensus Estimate of $1.35 by 7.4%.
