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Palomar (PMR) Debuts in Crop Insurance With Advanced AgProtection
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Palomar Holdings (PLMR - Free Report) inked a long-term fronting arrangement with Advanced AgProtection. The agreement makes Palomar the 14th approved insurance provider in the United States by the Federal Crop Insurance Corporation as well as PLMR entry into the crop insurance sector. This agreement also gives the insurer access to the $20 billion insured crop marketplace.
Advanced AgProtection, a managing general agent, boasts leadership in the crop insurance sector, leveraging its expertise and technology. The transaction diversifies PLMR’s product mix and accelerates fee income growth.
Per Jon Christianson, president of Palomar, “Given the increased demand for American-based crop insurance solutions, Advanced AgProtection’s growth potential presents an attractive opportunity to diversify our business and further expand our PLMR-FRONT franchise generating consistent fee income as we strive to deliver predictable bottom-line results.”
Palomar launched the fee-generating PLMR-FRONT in September 2021 to drive growth in the medium term. The addition of the fee-based revenue stream to its business is expected to strengthen its earnings base. On the third-quarter earnings call, PLMR estimated the fronting business to generate $130 to $160 million in 2022, up from the prior guidance of $80 million to $100 million of premiums. The new guidance includes the Texas homeowners business, which will add about $45 million of fee-generating premium over the next 12 months.
Shares of Palomar have lost 7.8% in a year, against the industry’s increase of 1.2%. Focus on new business, strong premium retention rates for existing business and renewals of existing policies should continue to drive PLMR.
Palomar currently carries Zacks Rank #5 (Strong Sell).
Image: Bigstock
Palomar (PMR) Debuts in Crop Insurance With Advanced AgProtection
Palomar Holdings (PLMR - Free Report) inked a long-term fronting arrangement with Advanced AgProtection. The agreement makes Palomar the 14th approved insurance provider in the United States by the Federal Crop Insurance Corporation as well as PLMR entry into the crop insurance sector. This agreement also gives the insurer access to the $20 billion insured crop marketplace.
Advanced AgProtection, a managing general agent, boasts leadership in the crop insurance sector, leveraging its expertise and technology. The transaction diversifies PLMR’s product mix and accelerates fee income growth.
Per Jon Christianson, president of Palomar, “Given the increased demand for American-based crop insurance solutions, Advanced AgProtection’s growth potential presents an attractive opportunity to diversify our business and further expand our PLMR-FRONT franchise generating consistent fee income as we strive to deliver predictable bottom-line results.”
Palomar launched the fee-generating PLMR-FRONT in September 2021 to drive growth in the medium term. The addition of the fee-based revenue stream to its business is expected to strengthen its earnings base. On the third-quarter earnings call, PLMR estimated the fronting business to generate $130 to $160 million in 2022, up from the prior guidance of $80 million to $100 million of premiums. The new guidance includes the Texas homeowners business, which will add about $45 million of fee-generating premium over the next 12 months.
Shares of Palomar have lost 7.8% in a year, against the industry’s increase of 1.2%. Focus on new business, strong premium retention rates for existing business and renewals of existing policies should continue to drive PLMR.
Palomar currently carries Zacks Rank #5 (Strong Sell).
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Root, Inc. (ROOT - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and First American Financial Corporation (FAF - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 91.4%.
The Zacks Consensus Estimate for ROOT’s 2023 earnings indicates a year-over-year increase of 23.9%.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average being 15.16%. In the past year, KNSL has gained 22%.
The Zacks Consensus Estimate for KNSL’s 2023 earnings implies a year-over-year rise of 22.6%.
First American has a solid track record of beating earnings estimates in each of the last six quarters. In the past year, FAF has lost 28.6%.
The Zacks Consensus Estimate for FAF’s 2023 earnings has moved 3.9% north in the past 60 days.