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Palomar (PLMR) Q1 Earnings Top Estimates, Revenues Up Y/Y

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Palomar Holdings, Inc. (PLMR - Free Report) reported first-quarter 2022 operating income of 68 cents per share, beating the Zacks Consensus Estimate by 9.7%. The bottom line decreased 6.8% year over year.

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

Palomar Holdings, Inc. Price, Consensus and EPS Surprise

 

Behind the Headlines

Total revenues improved 58.9% year over year to $79.4 million, mainly attributable to higher premiums, net investment income, and commission and other income. The top line missed the Zacks Consensus Estimate by 0.1%.

Gross written premiums increased 65 % year over year to $170.9 million. Net earned premiums surged 61.6% year over year to $76 million.

Net investment income increased 16.2% year over year to $2.6 million, driven by a higher average balance of investments.

Palomar witnessed an underwriting income of $17.9 million, down 3.8% year over year.

Total expenses of $59 million more than doubled year over year due to higher losses and loss adjustment expenses, acquisition and underwriting expenses as well as interest expenses. Loss ratio was 19.7 against (9.4%) in the year-ago quarter.

Adjusted combined ratio, excluding catastrophe losses, deteriorated 1880 basis points (bps) year over year to 72.1.

Financial Update

Cash and cash equivalents decreased 6.8% from the 2021-end level to $46.9 million at the end of 2021.

Shareholder equity decreased 3.5% from 2021 end to $380.4 million.

Annualized adjusted return on equity was 18.1%, contracting 270 bps year over year.

PLMR bought back 0.2 million shares for $13 million in the first quarter of 0222.

2022 Guidance Reiterated

Palomar estimates adjusted net income between $80 million and $85 million in 2022.

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 Property & Casualty Insurers

Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.

Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year. Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.

RLI’s first-quarter 2022 operating earnings of $1.43 per share beat the Zacks Consensus Estimate by 40.2% and improved 64.4% from the prior-year quarter. Operating revenues were $287 million, up 17.1% year over year and beat the Zacks Consensus Estimate by 0.8%. RLI’s gross premiums written increased 22% year over year to $359.2 million. The combined ratio improved 900 bps year over year to 77.9.

Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter. Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.