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Palomar (PLMR) Q2 Earnings, Revenues Top Estimates, Rise Y/Y
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Palomar Holdings, Inc. (PLMR - Free Report) reported second-quarter 2023 operating income of 86 cents per share, which beat the Zacks Consensus Estimate by 3.6%. The bottom line increased 17.8% 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 5.8% year over year to $89.3 million, mainly attributable to higher premiums and net investment income. The top line beat the Zacks Consensus Estimate by 5.3%.
Gross written premiums increased 25.4% year over year to $274.3 million. Our estimate was $223.4 million. Net earned premiums increased 3.5% year over year to $83.2 million. Our estimate was $89 million. The Zacks Consensus Estimate is pegged at $89 million.
Net investment income increased 76.5% year over year to $5.5 million, driven by higher yields on invested assets and a higher average balance of investments held during the three months ended Jun 30, 2023 due to cash generated from operations. The Zacks Consensus Estimate is pegged at $5.2 million. Our estimate was $3.9 million.
Palomar witnessed an underwriting income of $17.4 million, 13% lower than the year-ago income of $20 million. Adjusted underwriting income was $23.1 million, 6.9% lower than the year-ago figure.
Total expenses of $67.4 million increased 9.8% year over year due to higher losses and loss adjustment expenses, underwriting expenses and interest expenses. Our estimate was $68.8 million.
The loss ratio was 21.5, which deteriorated 360 basis points (bps) year over year. Our estimate was 18.2. The Zacks Consensus Estimate was pegged at 23.8.
Adjusted combined ratio, excluding catastrophe losses, deteriorated 310 bps year over year to 72.2. The Zacks Consensus Estimate was pegged at 73.
Financial Update
Cash and cash equivalents increased 14% from 2022-end to $58.6 million at second-quarter 2023-end. Shareholder equity increased 7.5% from 2022-end to $413.7 million.
Annualized adjusted return on equity in the second quarter of 2023 was 21.3%, contracting 240 bps year over year. PLMR bought back shares worth $8.7 million in the second quarter of 2023. As of Jun 30, 2023, $50 million remained under authorization.
2023 View
Palomar aims to achieve adjusted net income in the range of $89 million to $93 million.
The Travelers Companies (TRV - Free Report) reported second-quarter 2023 core income of 6 cents per share, which missed the Zacks Consensus Estimate of $2.27. The bottom line decreased 97.7% year over year, primarily attributable to higher-than-expected catastrophe loss.
Travelers’ total revenues increased 9.8% from the year-ago quarter to $10.1 billion, primarily driven by higher premiums. The top-line figure was almost in line with the Zacks Consensus Estimate.
Net written premiums increased 14% year over year to a record $10.3 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.1 billion.
Travelers witnessed an underwriting gain of $781 million, up 38% year over year, driven by record net earned premiums of $9.2 billion and a consolidated underlying combined ratio, which improved 170 basis points. The combined ratio deteriorated 820 basis points year over year to 106.5 due to higher catastrophe losses and lower net favorable prior-year reserve development, partially offset by a lower underlying combined ratio.
The Progressive Corporation’s (PGR - Free Report) second-quarter 2023 earnings per share of 50 cents missed the Zacks Consensus Estimate of 88 cents. The bottom line declined 47.4% year over year.
Net premiums earned grew 19% to $14.5 billion and beat our estimate of $12.9 billion as well as the Zacks Consensus Estimate of $14.3 billion. The combined ratio deteriorated 480 bps from the prior-year quarter’s level to 104.
Policies in force were solid in the Personal Auto segment, increasing 17% from the year-ago month’s figure to 19.7 million. Special Lines improved 7% to 5.8 million.
W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2023 operating income of $1.14 per share beat the Zacks Consensus Estimate by 6.5%. The bottom line increased 1.8% year over year.
Operating revenues came in at $2.9 billion, down 57.4% year over year, on the back of higher net premiums earned as well as higher net investment income. The top line missed the consensus estimate by 1.2%.
W.R. Berkley’s net premiums written were a record $2.8 billion, up 8.7% year over year, as market conditions remained favorable for most lines of business. Our estimate for the same was $2.7 billion.
Catastrophe losses totaled $53.5 million in the quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 100 basis points to 89.6, in line with the Zacks Consensus Estimate. Our estimate for the combined ratio was 91.3.
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Palomar (PLMR) Q2 Earnings, Revenues Top Estimates, Rise Y/Y
Palomar Holdings, Inc. (PLMR - Free Report) reported second-quarter 2023 operating income of 86 cents per share, which beat the Zacks Consensus Estimate by 3.6%. The bottom line increased 17.8% 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 5.8% year over year to $89.3 million, mainly attributable to higher premiums and net investment income. The top line beat the Zacks Consensus Estimate by 5.3%.
Gross written premiums increased 25.4% year over year to $274.3 million. Our estimate was $223.4 million. Net earned premiums increased 3.5% year over year to $83.2 million. Our estimate was $89 million. The Zacks Consensus Estimate is pegged at $89 million.
Net investment income increased 76.5% year over year to $5.5 million, driven by higher yields on invested assets and a higher average balance of investments held during the three months ended Jun 30, 2023 due to cash generated from operations. The Zacks Consensus Estimate is pegged at $5.2 million. Our estimate was $3.9 million.
Palomar witnessed an underwriting income of $17.4 million, 13% lower than the year-ago income of $20 million. Adjusted underwriting income was $23.1 million, 6.9% lower than the year-ago figure.
Total expenses of $67.4 million increased 9.8% year over year due to higher losses and loss adjustment expenses, underwriting expenses and interest expenses. Our estimate was $68.8 million.
The loss ratio was 21.5, which deteriorated 360 basis points (bps) year over year. Our estimate was 18.2. The Zacks Consensus Estimate was pegged at 23.8.
Adjusted combined ratio, excluding catastrophe losses, deteriorated 310 bps year over year to 72.2. The Zacks Consensus Estimate was pegged at 73.
Financial Update
Cash and cash equivalents increased 14% from 2022-end to $58.6 million at second-quarter 2023-end. Shareholder equity increased 7.5% from 2022-end to $413.7 million.
Annualized adjusted return on equity in the second quarter of 2023 was 21.3%, contracting 240 bps year over year. PLMR bought back shares worth $8.7 million in the second quarter of 2023. As of Jun 30, 2023, $50 million remained under authorization.
2023 View
Palomar aims to achieve adjusted net income in the range of $89 million to $93 million.
Zacks Rank
Palomar currently has 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
The Travelers Companies (TRV - Free Report) reported second-quarter 2023 core income of 6 cents per share, which missed the Zacks Consensus Estimate of $2.27. The bottom line decreased 97.7% year over year, primarily attributable to higher-than-expected catastrophe loss.
Travelers’ total revenues increased 9.8% from the year-ago quarter to $10.1 billion, primarily driven by higher premiums. The top-line figure was almost in line with the Zacks Consensus Estimate.
Net written premiums increased 14% year over year to a record $10.3 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.1 billion.
Travelers witnessed an underwriting gain of $781 million, up 38% year over year, driven by record net earned premiums of $9.2 billion and a consolidated underlying combined ratio, which improved 170 basis points. The combined ratio deteriorated 820 basis points year over year to 106.5 due to higher catastrophe losses and lower net favorable prior-year reserve development, partially offset by a lower underlying combined ratio.
The Progressive Corporation’s (PGR - Free Report) second-quarter 2023 earnings per share of 50 cents missed the Zacks Consensus Estimate of 88 cents. The bottom line declined 47.4% year over year.
Net premiums earned grew 19% to $14.5 billion and beat our estimate of $12.9 billion as well as the Zacks Consensus Estimate of $14.3 billion. The combined ratio deteriorated 480 bps from the prior-year quarter’s level to 104.
Policies in force were solid in the Personal Auto segment, increasing 17% from the year-ago month’s figure to 19.7 million. Special Lines improved 7% to 5.8 million.
W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2023 operating income of $1.14 per share beat the Zacks Consensus Estimate by 6.5%. The bottom line increased 1.8% year over year.
Operating revenues came in at $2.9 billion, down 57.4% year over year, on the back of higher net premiums earned as well as higher net investment income. The top line missed the consensus estimate by 1.2%.
W.R. Berkley’s net premiums written were a record $2.8 billion, up 8.7% year over year, as market conditions remained favorable for most lines of business. Our estimate for the same was $2.7 billion.
Catastrophe losses totaled $53.5 million in the quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 100 basis points to 89.6, in line with the Zacks Consensus Estimate. Our estimate for the combined ratio was 91.3.