Palomar Q4 Earnings & Revenues Beat Estimates, Premiums Rise Y/Y

Palomar Holdings, Inc. price-consensus-eps-surprise-chart | Palomar Holdings, Inc. Quote

Behind the Headlines

Gross written premiums increased 31.8% year over year to $492.6 million but missed our estimate of $590.6 million.

Net earned premiums rose 61.1% year over year to $233.5 million, exceeding our estimate of $197.9 million and the Zacks Consensus Estimate of $205.6 million.

Net investment income climbed 41.3% year over year to $16 million, driven by higher yields on invested assets and a larger average investment balance supported by strong operating cash flow. The figure surpassed both the Zacks Consensus Estimate of $15.3 million and our estimate of $15.9 million.

Palomar reported adjusted underwriting income of $62.3 million, marking a 51.8% increase from the prior-year level. Reported underwriting income rose 55.7% year over year to $54.4 million, exceeding our estimate of $46.5 million.

Total expenses rose 63.1% year over year to $180.7 million, driven by higher losses and loss adjustment expenses, increased acquisition costs, and elevated underwriting expenses. The figure exceeded our estimate of $152.1 million.

The loss ratio was 30.4%, down 470 basis points year over year. However, it was better than our estimate of 37.9% and slightly below the Zacks Consensus Estimate of 31%.

The adjusted combined ratio worsened 170 basis points year over year to 73.4%, marginally above the Zacks Consensus Estimate of 73.1%.

Full-Year 2025 Highlights

Palomar reported operating revenues of $876 billion in 2025, representing a 58.2% increase from 2024. This metric surpassed the Zacks Consensus Estimate by 4.9%.

Adjusted earnings increased 54.4% year over year to $7.86 per share, driven by higher underwriting income and stronger net investment income. The figure beat the Zacks Consensus Estimate by 2.1%.

Total expenses increased 54.6% to $622.6 million. The adjusted combined ratio improved 100 basis points to 72.7.

Financial Update

Cash and cash equivalents rose 32.9% year over year to $106.9 million. Shareholders’ equity increased 29.3% to $942.7 million over the same period.

Annualized adjusted return on equity for 2025 was 25.9%, representing an expansion of 100 basis points year over year.

The company did not repurchase any common shares during the quarter. As of Dec. 31, 2025, about $112.7 million remained under its $150 million buyback authorization.

2026 Outlook

Palomar raised its 2026 adjusted net income guidance to $260-$275 million from $210-$215 million. The outlook includes $8-$12 million in expected catastrophe losses.

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 Insurers

Chubb Limited CB reported fourth-quarter 2025 core operating income of $7.52 per share, which beat the Zacks Consensus Estimate by 13.9%. The bottom line improved 24.9% year over year.

CB’s operating revenues improved 7.4% year over year to $15.3 billion. The top line beat the Zacks Consensus Estimate by 1.7%. Chubb’s strong performance was driven by solid underwriting profit, robust premium growth and record investment income.

Arch Capital Group Ltd. ACGL reported fourth-quarter 2025 operating income of $2.98 per share, which beat the Zacks Consensus Estimate by 19.7%. The bottom line increased 31.9% year over year.

ACGL’s operating revenues of $4.7 billion increased 4.4% year over year, driven by higher net premiums earned and net investment income. Revenues surpassed the Zacks Consensus Estimate by 2% on higher premiums in its insurance segment and improved net investment income. These positives were partially offset by higher taxes.

The Progressive Corporation’s PGR fourth-quarter 2025 earnings per share of $4.67 beat the Zacks Consensus Estimate by 5.2%. The bottom line increased 14.4% year over year.

PGR’s operating revenues increased 10.6% year over year to $22.49 billion and beat the consensus estimate by 2.5%. Net premiums earned grew 10% to $21 billion. The reported figure surpassed the Zacks Consensus Estimate of $20.9 billion.