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

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Palomar Holdings, Inc. PLMR 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

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 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 and RLI Corporation RLI beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation PGR 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.


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