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Palomar (PLMR) Q1 Earnings Beat, Revenues Miss Estimates

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Palomar Holdings, Inc. (PLMR - Free Report) reported first-quarter 2021 operating income of 73 cents per share, beating the Zacks Consensus Estimate by 43.1%. The bottom line also improved 46% year over year.

Palomar witnessed improved premiums and net investment income, partially offset by higher expenses.

Palomar Holdings, Inc. Price, Consensus and EPS Surprise

Palomar Holdings, Inc. Price, Consensus and EPS Surprise

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

Behind the Headlines

Total revenues improved 31.6% year over year to $50 million, mainly attributable to higher premiums, net investment income, and commission and other income. However, the top line missed the Zacks Consensus Estimate by 2.2%.

Gross written premiums increased 44.9% year over year to $103.6 million. Net written premiums also increased 35.2% year over year to $42.3 million.

Net investment income increased 9% year over year to $2.2 million, driven by higher average balance of investments, partially offset by lower yields on invested assets.

Palomar witnessed underwriting income of $18.6 million, up 47.2% year over year.

Total expenses of $29.1 million increased 27.5% year over year due to higher acquisition and underwriting expenses.

Adjusted combined ratio, excluding catastrophe losses, improved 830 basis points (bps) year over year to 53.3.

Financial Update

Cash and cash equivalents increased 29.7% from the 2020-end level to about $23.6 million at first quarter 2021-end.

Shareholder equity increased 3.5% from 2020-end to $376.4 million.

Annualized adjusted return on equity was 20.8% for the reported quarter, expanding 20 bps year over year.

2021 View

Palomar estimates adjusted net income between $64 million and $69 million, which includes the impact of winter storm Uri in Texas.

For first-half 2021, the company expects Uri to result in a net underwriting loss of $1 million, comprising $4 million of additional reinsurance expense in first-quarter 2021 and similar additional reinsurance expense in second-quarter 2021, partially offset by negative net losses in the reported quarter.

Zacks Rank

Palomar 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

First-quarter earnings of The Travelers Companies (TRV - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and RLI Corporation’s (RLI - Free Report) beat the respective Zacks Consensus Estimate.

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