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Palomar (PLMR) Q4 Earnings Top Estimates on Solid Underwriting
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Palomar Holdings, Inc. (PLMR - Free Report) reported fourth-quarter 2022 operating income of 82 cents per share, beating the Zacks Consensus Estimate by 5.13%. The bottom line increased 20.6% year over year.
Palomar witnessed improved premiums and net investment income, partly offset by higher losses and loss adjustment expenses and other underwriting expenses.
Palomar Holdings, Inc. Price, Consensus and EPS Surprise
Total revenues improved 23.4% year over year to $87.8 million, mainly attributable to higher premiums and net investment income. The top line missed the Zacks Consensus Estimate by 3%.
Gross written premiums increased 60% year over year to $239.1 million. Net earned premiums increased 21.2% year over year to $82.2 million.
Net investment income increased 81.6% year over year to $4.4 million, driven by higher returns on invested assets and a higher average balance of investments.
Palomar witnessed an underwriting income of $20.1 million, 18.5% higher than the year-ago income of $17 million. Adjusted underwriting income was $23.5 million, 18.1% higher than the year-ago amount of $19.9 million.
Total expenses of $63.6 million increased 24.4% year over year due to higher losses and loss adjustment expenses, underwriting expenses and interest expenses. The loss ratio was 22.4, up 740 basis points (bps) year over year.
Adjusted combined ratio, excluding catastrophe losses, improved 400 bps year over year to 69.2.
Full-Year Highlights
Total operating revenues for 2022 were $334.6 million, compared with $246.5 million at 2021-end.
Adjusted earnings for 2022 were $2.77 per share compared with $2.01 per share at 2021-end.
Net premiums earned of $316.5 million rose 35.3% from 2021-end figures.
The adjusted combined ratio excluding catastrophe losses improved 310 bps to 70.8, down 50 bps from 2021-end.
Financial Update
Cash and cash equivalents increased 35.4% from the 2021-end to $68.1 million at 2022-end.
Shareholder equity decreased 2.4% from 2021-end to $384.7 million.
Annualized adjusted return on equity in 2022 was 18.3%, expanding 450 bps year over year.
PLMR bought back shares worth $11.1 million in the fourth quarter of 2022. As of Dec 31, 2022, $65.6 million remains under authorization.
2023 Outlook
Palomar aims to achieve adjusted net income in the range of $86 million to $90 million.
Zacks Rank
Palomar currently carries a Zacks Rank #5 (Strong Sell).
Of the P&C industry players that have reported fourth-quarter results so far, RLI Corporation (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Travelers Companies (TRV - Free Report) earnings were in line with Zacks Consensus Estimate.
RLI Corporation reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter of RLI were $329.5 million, up 19.4% year over year, driven by 16.7% higher net premiums earned and 59% higher net investment income. The top line beat the Zacks Consensus Estimate by 0.4%.
Progressive Corporation’s fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49. The bottom line improved 42.9% year over year. Net premiums written of PGR were $12.5 billion in the quarter, up 16% from $10.7 billion a year ago. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
Travelers Companies reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
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Palomar (PLMR) Q4 Earnings Top Estimates on Solid Underwriting
Palomar Holdings, Inc. (PLMR - Free Report) reported fourth-quarter 2022 operating income of 82 cents per share, beating the Zacks Consensus Estimate by 5.13%. The bottom line increased 20.6% year over year.
Palomar witnessed improved premiums and net investment income, partly offset by higher losses and loss adjustment expenses and other underwriting expenses.
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 23.4% year over year to $87.8 million, mainly attributable to higher premiums and net investment income. The top line missed the Zacks Consensus Estimate by 3%.
Gross written premiums increased 60% year over year to $239.1 million. Net earned premiums increased 21.2% year over year to $82.2 million.
Net investment income increased 81.6% year over year to $4.4 million, driven by higher returns on invested assets and a higher average balance of investments.
Palomar witnessed an underwriting income of $20.1 million, 18.5% higher than the year-ago income of $17 million. Adjusted underwriting income was $23.5 million, 18.1% higher than the year-ago amount of $19.9 million.
Total expenses of $63.6 million increased 24.4% year over year due to higher losses and loss adjustment expenses, underwriting expenses and interest expenses. The loss ratio was 22.4, up 740 basis points (bps) year over year.
Adjusted combined ratio, excluding catastrophe losses, improved 400 bps year over year to 69.2.
Full-Year Highlights
Total operating revenues for 2022 were $334.6 million, compared with $246.5 million at 2021-end.
Adjusted earnings for 2022 were $2.77 per share compared with $2.01 per share at 2021-end.
Net premiums earned of $316.5 million rose 35.3% from 2021-end figures.
The adjusted combined ratio excluding catastrophe losses improved 310 bps to 70.8, down 50 bps from 2021-end.
Financial Update
Cash and cash equivalents increased 35.4% from the 2021-end to $68.1 million at 2022-end.
Shareholder equity decreased 2.4% from 2021-end to $384.7 million.
Annualized adjusted return on equity in 2022 was 18.3%, expanding 450 bps year over year.
PLMR bought back shares worth $11.1 million in the fourth quarter of 2022. As of Dec 31, 2022, $65.6 million remains under authorization.
2023 Outlook
Palomar aims to achieve adjusted net income in the range of $86 million to $90 million.
Zacks Rank
Palomar currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Property & Casualty Insurers
Of the P&C industry players that have reported fourth-quarter results so far, RLI Corporation (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Travelers Companies (TRV - Free Report) earnings were in line with Zacks Consensus Estimate.
RLI Corporation reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter of RLI were $329.5 million, up 19.4% year over year, driven by 16.7% higher net premiums earned and 59% higher net investment income. The top line beat the Zacks Consensus Estimate by 0.4%.
Progressive Corporation’s fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49. The bottom line improved 42.9% year over year. Net premiums written of PGR were $12.5 billion in the quarter, up 16% from $10.7 billion a year ago. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
Travelers Companies reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.