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PLMR Q3 Earnings Beat Estimates on Strong Premium Growth
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Key Takeaways
PLMR earned $3.01 per share, beating estimates by 15.8%, as revenues surged 58% to $386.6 million.
Gross written premiums rose 28.4%, with Crop and Surety & Credit leading growth across insurance products.
Palomar raised 2026 adjusted net income guidance to $280-$285M despite higher claims and underwriting costs.
Palomar Holdings, Inc. (PLMR - Free Report) reported third-quarter 2026 adjusted earnings of $3.01 per share, which increased 49.8% year over year. The bottom line beat the Zacks Consensus Estimate of $2.60 by 15.8%.
Total revenues surged 58% year over year to $386.6 million, driven by higher net earned premiums and investment income. The top line surpassed the Zacks Consensus Estimate by 2.7%. Gross written premiums increased 28.4% to $767 million. However, elevated claims and underwriting expenses weighed on underwriting margins.
Palomar Holdings, Inc. Price, Consensus and EPS Surprise
Net earned premiums surged 62.3% year over year to $365.4 million, reflecting strong growth in the insurance business. The Zacks Consensus Estimate was pegged at $351 million. The figure was higher than our estimate of $339.9 million. Net written premiums increased 41.2% to $388.6 million, while gross earned premiums climbed 41.9% to $736.1 million.
Net investment income rose 53.8% year over year to $22.4 million, driven by higher yields on invested assets and a larger average investment balance, supported by cash generated from operations. The Zacks Consensus Estimate was pegged at $20.52 million. The figure was higher than our estimate of $18.7 million.
The company recorded net realized and unrealized investment losses of $2.7 million compared with gains of $3.5 million in the year-ago quarter. Commission and other income increased 2.6% to $1.5 million.
Palomar Sees Growth Across Insurance Products
Crop gross written premiums surged 89.3% year over year to $226.7 million, accounting for 29.6% of total gross written premiums. Casualty premiums increased 3.4% to $176.8 million, representing 23% of the total.
Inland Marine and Property premiums climbed 13.4% to $160.7 million, while Earthquake premiums rose 3% to $154.5 million. Surety & Credit premiums jumped 228.4% to $48.4 million.
Management highlighted growth across all five product categories, reflecting the diversity of its specialty insurance portfolio. Crop and Surety & Credit contributed significantly to premium expansion.
PLMR Claims Rise as Underwriting Ratios Deteriorate
Losses and loss adjustment expenses increased 108.3% year over year to $151.6 million. The figure was higher than our estimate of $149.4 million. Catastrophe losses totaled $4.5 million compared with $1.9 million a year earlier, reflecting hurricane and flood events in Hawaii and flooding in the Midwest.
The loss ratio deteriorated 920 basis points to 41.5%. The attritional loss ratio increased to 40.3% from 31.5%, while the catastrophe loss ratio rose 40 basis points to 1.2%.
Acquisition expenses, net of ceding commissions and fronting fees, increased 28.6% to $72.4 million. Other underwriting expenses climbed 50.5% to $72.7 million.
The expense ratio improved 650 basis points to 39.3%. However, the combined ratio deteriorated 270 basis points to 80.8%, while the adjusted combined ratio worsened 150 basis points to 76.3%.
Reported underwriting income increased 42.6% year over year to $70.2 million. Adjusted underwriting income surged 52.6% to $86.5 million, supported by substantial growth in earned premiums.
Net income increased 27% to $65.3 million. Income before taxes rose 26.2% to $84.7 million despite higher losses, underwriting expenses and interest costs.
Adjusted net income advanced 47.4% to $81.3 million. Annualized adjusted return on equity improved 750 basis points to 33.1%, while reported return on equity increased 270 basis points to 26.6%.
PLMR Maintains a Strong Investment Portfolio
Cash and invested assets totaled approximately $1.8 billion as of Sept. 30, 2026. Total investments increased to $1.76 billion from $1.35 billion at 2025-end.
The weighted average duration of the fixed-maturity investment portfolio, including cash equivalents, was 4.61 years. Fixed-maturity securities available for sale totaled $1.57 billion at fair value.
Cash and cash equivalents declined to $55.6 million from $106.9 million at the end of 2025. Total assets increased to $4.17 billion from $3.05 billion over the same period.
Palomar Strengthens Equity and Returns Capital
Stockholders' equity increased 12.2% year over year to $985 million. However, tangible stockholders' equity stood at $756.5 million compared with $881.6 million at 2025-end.
During the third quarter, the company repurchased 70,000 shares for $8.9 million, continuing its capital return activities.
On Oct. 29, 2026, Palomar's board declared a quarterly cash dividend of 45 cents per share, payable on Dec. 2, 2026, to shareholders of record as of Nov. 17, 2026.
PLMR Raises 2026 Earnings Guidance
Palomar raised its full-year 2026 adjusted net income guidance to $280-$285 million from the previous range of $270-$280 million.
The updated outlook incorporates estimated catastrophe losses of $8-$12 million for the year. Management highlighted record gross written premiums, record adjusted net income and continued execution of its Palomar 2X strategy.
Performance of Other Property and Casualty Insurers
NMI Holdings, Inc. (NMIH - Free Report) reported third-quarter 2026 adjusted earnings of $1.23 per share, which rose 1.7% year over year. The bottom line missed the Zacks Consensus Estimate of $1.32 by 6.8%. Revenues rose 5% year over year to $187.6 million. The supplied Zacks data indicates a revenue miss of 5.3%, based on rounded reported revenues of $0.18 billion against the consensus mark of $0.19 billion. Net premiums earned increased 2.7% year over year to $155.5 million, supported by continued expansion in the company's insured portfolio. The Zacks Consensus Estimate was pegged at $160 million. The figure was lower than our estimate of $159.5 million.
Net investment income climbed 20.3% to $32.2 million, providing a meaningful lift to revenues. The Zacks Consensus Estimate was pegged at $29.24 million. The figure was higher than our estimate of $28.8 million. The company recorded net realized investment losses of $0.3 million compared with gains of $0.3 million a year earlier.
Arch Capital Group Ltd. (ACGL - Free Report) reported third-quarter 2026 operating income of $2.67 per share, beating the Zacks Consensus Estimate by 24.2%. The bottom line declined 3.6% year over year. Operating revenues fell 5.2% year over year to $4.47 billion, mainly due to lower net premiums earned and net realized investment losses. Revenues beat the Zacks Consensus Estimate by 0.3%. Gross premiums written decreased 0.4% year over year to $5.39 billion.
Pre-tax net investment income increased 10.5% year over year to $451 million, reflecting growth in average investable assets. The figure was higher than our estimate of $432.2 million. Pre-tax current accident year catastrophic losses for the company’s Insurance and Reinsurance segments, net of reinsurance and reinstatement premiums, totaled $234 million.
Chubb Limited (CB - Free Report) reported third-quarter 2026 core operating earnings of $7.66 per share, which beat the Zacks Consensus Estimate of $6.53 by 17.3%. The bottom line increased 0.8% year over year. Revenues of $16.81 billion surpassed the consensus mark of $16.72 billion by 0.55%.
Consolidated net premiums earned rose 3.9% year over year to $14.92 billion. P&C underwriting income declined 8.8% year over year to $2.06 billion. The combined ratio deteriorated 230 basis points to 84.1%. The Zacks Consensus Estimate is pegged at 87.
View the Zacks #1 Rank List
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PLMR Q3 Earnings Beat Estimates on Strong Premium Growth
Key Takeaways
Palomar Holdings, Inc. (PLMR - Free Report) reported third-quarter 2026 adjusted earnings of $3.01 per share, which increased 49.8% year over year. The bottom line beat the Zacks Consensus Estimate of $2.60 by 15.8%.
Total revenues surged 58% year over year to $386.6 million, driven by higher net earned premiums and investment income. The top line surpassed the Zacks Consensus Estimate by 2.7%. Gross written premiums increased 28.4% to $767 million. However, elevated claims and underwriting expenses weighed on underwriting margins.
Palomar Holdings, Inc. Price, Consensus and EPS Surprise
Palomar Holdings, Inc. price-consensus-eps-surprise-chart | Palomar Holdings, Inc. Quote
PLMR Premiums and Investment Income Rise
Net earned premiums surged 62.3% year over year to $365.4 million, reflecting strong growth in the insurance business. The Zacks Consensus Estimate was pegged at $351 million. The figure was higher than our estimate of $339.9 million. Net written premiums increased 41.2% to $388.6 million, while gross earned premiums climbed 41.9% to $736.1 million.
Net investment income rose 53.8% year over year to $22.4 million, driven by higher yields on invested assets and a larger average investment balance, supported by cash generated from operations. The Zacks Consensus Estimate was pegged at $20.52 million. The figure was higher than our estimate of $18.7 million.
The company recorded net realized and unrealized investment losses of $2.7 million compared with gains of $3.5 million in the year-ago quarter. Commission and other income increased 2.6% to $1.5 million.
Palomar Sees Growth Across Insurance Products
Crop gross written premiums surged 89.3% year over year to $226.7 million, accounting for 29.6% of total gross written premiums. Casualty premiums increased 3.4% to $176.8 million, representing 23% of the total.
Inland Marine and Property premiums climbed 13.4% to $160.7 million, while Earthquake premiums rose 3% to $154.5 million. Surety & Credit premiums jumped 228.4% to $48.4 million.
Management highlighted growth across all five product categories, reflecting the diversity of its specialty insurance portfolio. Crop and Surety & Credit contributed significantly to premium expansion.
PLMR Claims Rise as Underwriting Ratios Deteriorate
Losses and loss adjustment expenses increased 108.3% year over year to $151.6 million. The figure was higher than our estimate of $149.4 million. Catastrophe losses totaled $4.5 million compared with $1.9 million a year earlier, reflecting hurricane and flood events in Hawaii and flooding in the Midwest.
The loss ratio deteriorated 920 basis points to 41.5%. The attritional loss ratio increased to 40.3% from 31.5%, while the catastrophe loss ratio rose 40 basis points to 1.2%.
Acquisition expenses, net of ceding commissions and fronting fees, increased 28.6% to $72.4 million. Other underwriting expenses climbed 50.5% to $72.7 million.
The expense ratio improved 650 basis points to 39.3%. However, the combined ratio deteriorated 270 basis points to 80.8%, while the adjusted combined ratio worsened 150 basis points to 76.3%.
Palomar Delivers Higher Underwriting Profitability
Reported underwriting income increased 42.6% year over year to $70.2 million. Adjusted underwriting income surged 52.6% to $86.5 million, supported by substantial growth in earned premiums.
Net income increased 27% to $65.3 million. Income before taxes rose 26.2% to $84.7 million despite higher losses, underwriting expenses and interest costs.
Adjusted net income advanced 47.4% to $81.3 million. Annualized adjusted return on equity improved 750 basis points to 33.1%, while reported return on equity increased 270 basis points to 26.6%.
PLMR Maintains a Strong Investment Portfolio
Cash and invested assets totaled approximately $1.8 billion as of Sept. 30, 2026. Total investments increased to $1.76 billion from $1.35 billion at 2025-end.
The weighted average duration of the fixed-maturity investment portfolio, including cash equivalents, was 4.61 years. Fixed-maturity securities available for sale totaled $1.57 billion at fair value.
Cash and cash equivalents declined to $55.6 million from $106.9 million at the end of 2025. Total assets increased to $4.17 billion from $3.05 billion over the same period.
Palomar Strengthens Equity and Returns Capital
Stockholders' equity increased 12.2% year over year to $985 million. However, tangible stockholders' equity stood at $756.5 million compared with $881.6 million at 2025-end.
During the third quarter, the company repurchased 70,000 shares for $8.9 million, continuing its capital return activities.
On Oct. 29, 2026, Palomar's board declared a quarterly cash dividend of 45 cents per share, payable on Dec. 2, 2026, to shareholders of record as of Nov. 17, 2026.
PLMR Raises 2026 Earnings Guidance
Palomar raised its full-year 2026 adjusted net income guidance to $280-$285 million from the previous range of $270-$280 million.
The updated outlook incorporates estimated catastrophe losses of $8-$12 million for the year. Management highlighted record gross written premiums, record adjusted net income and continued execution of its Palomar 2X strategy.
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 and Casualty Insurers
NMI Holdings, Inc. (NMIH - Free Report) reported third-quarter 2026 adjusted earnings of $1.23 per share, which rose 1.7% year over year. The bottom line missed the Zacks Consensus Estimate of $1.32 by 6.8%. Revenues rose 5% year over year to $187.6 million. The supplied Zacks data indicates a revenue miss of 5.3%, based on rounded reported revenues of $0.18 billion against the consensus mark of $0.19 billion. Net premiums earned increased 2.7% year over year to $155.5 million, supported by continued expansion in the company's insured portfolio. The Zacks Consensus Estimate was pegged at $160 million. The figure was lower than our estimate of $159.5 million.
Net investment income climbed 20.3% to $32.2 million, providing a meaningful lift to revenues. The Zacks Consensus Estimate was pegged at $29.24 million. The figure was higher than our estimate of $28.8 million. The company recorded net realized investment losses of $0.3 million compared with gains of $0.3 million a year earlier.
Arch Capital Group Ltd. (ACGL - Free Report) reported third-quarter 2026 operating income of $2.67 per share, beating the Zacks Consensus Estimate by 24.2%. The bottom line declined 3.6% year over year. Operating revenues fell 5.2% year over year to $4.47 billion, mainly due to lower net premiums earned and net realized investment losses. Revenues beat the Zacks Consensus Estimate by 0.3%. Gross premiums written decreased 0.4% year over year to $5.39 billion.
Pre-tax net investment income increased 10.5% year over year to $451 million, reflecting growth in average investable assets. The figure was higher than our estimate of $432.2 million. Pre-tax current accident year catastrophic losses for the company’s Insurance and Reinsurance segments, net of reinsurance and reinstatement premiums, totaled $234 million.
Chubb Limited (CB - Free Report) reported third-quarter 2026 core operating earnings of $7.66 per share, which beat the Zacks Consensus Estimate of $6.53 by 17.3%. The bottom line increased 0.8% year over year. Revenues of $16.81 billion surpassed the consensus mark of $16.72 billion by 0.55%.
Consolidated net premiums earned rose 3.9% year over year to $14.92 billion. P&C underwriting income declined 8.8% year over year to $2.06 billion. The combined ratio deteriorated 230 basis points to 84.1%. The Zacks Consensus Estimate is pegged at 87.