Palomar Holdings Q3 Earnings Beat Estimates on Solid Underwriting

Palomar Holdings, Inc. PLMR reported third-quarter 2025 operating income of $2.01 per share, which beat the Zacks Consensus Estimate by 25.6%. The bottom line increased 63.4% year over year. 

Palomar Holdings witnessed higher premiums, higher yields on invested assets, and improved underwriting income, offset by higher expenses.

Behind the Headlines

Total revenues improved 65% year over year to $241 million, mainly attributable to higher premiums, commission and other income and net investment income. The top line beat the Zacks Consensus Estimate by 6.6%.

Gross written premiums increased 43.9% year over year to $597.2 million. Our estimate was $676.8 million.

Net earned premiums increased 66% year over year to $225.1 million. Our estimate was $194.2 million. The Zacks Consensus Estimate is pegged at $212 million.

Net investment income increased 54.9% year over year to $14.6 million. The increase was primarily due to higher yields on invested assets and a higher average balance of investments held during the three months ended Sept. 30, 2025, due to cash generated from operations and proceeds from the August 2024 public offering. The Zacks Consensus Estimate is pegged at $13.59 million. Our estimate was $11.2 million.

Palomar recorded an adjusted underwriting income of $56.6 million, which increased 82.5% from the year-ago quarter. Underwriting income was $49.2 million, up 86% year over year. Our estimate was $35.8 million.  

Total expenses of $177.5 million increased 61.4% year over year due to higher losses and loss adjustment expenses, acquisition expenses, net of ceding commissions and fronting fees, other underwriting expenses, and interest expense. Our estimate was $159.4 million. 

The loss ratio was 32.3, which deteriorated 260 basis points (bps) year over year. Our estimate was 40.3. The Zacks Consensus Estimate was pegged at 37.9.

Adjusted combined ratio, excluding catastrophe losses, improved 230 bps year over year to 74.8. The Zacks Consensus Estimate was pegged at 80.

Financial Update

Cash and cash equivalents increased 38.9% from 2024-end to $111.7 million at the end of the third quarter of 2025. Shareholder equity increased 20.4% from 2024-end to $878.1 million at the end of the reported quarter. 

Annualized adjusted return on equity in the third quarter of 2025 was 25.6%, expanding 460 bps year over year.

2025 View

Palomar Holdings expects adjusted net income of $210 million to $215 million, up from the earlier announced range of $198 million to $208 million.

Zacks Rank

PLMR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Property & Casualty Insurers

American Financial Group, Inc. AFG reported third-quarter 2025 net operating earnings per share of $2.69, which beat the Zacks Consensus Estimate by 14.5%. The bottom line increased 16.4% year over year. The increase was due to higher year-over-year underwriting profit and higher net investment income.  Total revenues of $2.2 billion decreased 1.4% year over year. The decline was due to lower P&C insurance net earned premiums. However, the top line beat the Zacks Consensus Estimate by 8.8%.

Net investment income climbed 2.5% year over year to $205 million in the quarter under review. The figure was higher than our estimate of $193.2 million and beat the Zacks Consensus Estimate of $191 million. Total cost and expenses decreased 3.6% year over year to $2.1 billion due to lower losses & loss adjustment expenses, and expenses of managed investment entities. The figure was higher than our estimate of $1.9 billion. 

NMI Holdings Inc. NMIH reported third-quarter 2025 operating net income per share of $1.21, which matched the Zacks Consensus Estimate. The bottom line increased 5.2% year over year. NMI Holdings’ total operating revenues of $179 million increased 7.8% year over year on higher net premiums earned (up 5.5%) and net investment income (up 19.1%). Revenues beat the Zacks Consensus Estimate by 2.3%.

Primary insurance in force increased 5.2% to $218.4 billion. Annual persistency was 83.9%, down 160 basis points (bps) year over year. New insurance written was $13 billion, up 6.4% year over year. Underwriting and operating expenses totaled $29.2 million, down 0.01% year over year. Insurance claims and claim expenses were $18.6 million, which surged 80.5% year over year. The loss ratio was 12.3, which deteriorated 510 bps.

CNA Financial Corporation CNA reported third-quarter 2025 core earnings of $1.50 per share, which beat the Zacks Consensus Estimate by 20%. The bottom line increased 39% year over year. Total operating revenues of CNA Financial were $3.4 billion, up 6.3% year over year. The top line missed the Zacks Consensus Estimate by 0.05%.

Net written premiums of Property & Casualty Operations increased 3.2% year over year to $2.4 billion, driven by P&C renewal premium change of more than 4% with a written rate of more than 3% and exposure change of more than 1%. Net investment income rose 2% year over year to $638 million. The Zacks Consensus Estimate and our estimate for net investment were both pegged at $690.5 million.

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