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Palomar (PLMR) Q3 Earnings Miss, Revenues Beat Estimates

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Palomar Holdings, Inc. PLMR reported third-quarter 2021 operating income of 7 cents per share, missing the Zacks Consensus Estimate of 17 cents. The bottom line rebounded from the year-ago loss of 62 cents.

Palomar witnessed improved premiums and net investment income, partially 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 59% year over year to $68 million, mainly attributable to higher premiums, net investment income, and commission and other income. The top line beat the Zacks Consensus Estimate by 5%.

Gross written premiums increased 47.9% year over year to $152.3 million. Net written premiums jumped 53.5% year over year to $94.3 million.

Net investment income increased 4.6% year over year to $2.2 million, driven by a higher average balance of investments, partially offset by lower yields on invested assets.

Palomar witnessed an underwriting loss of $1.8 million, narrower than the year-ago loss of $24 million. Results were impacted by catastrophe losses from Hurricanes Ida and Nicholas as well as a single excess liability policy shock loss.

Total expenses of $67.5 million increased 1% year over year due to higher acquisition and underwriting expenses. Loss ratio improved 5370 basis points (bps) to 44.

Adjusted combined ratio, excluding catastrophe losses, deteriorated 430 bps year over year to 73.2.

Financial Update

Cash and cash equivalents increased 23.5% from the 2020-end level to $41.4 million at the end of third-quarter 2021.

Shareholder equity increased 3.9% from 2020 end to $377.8 million.

Annualized adjusted return on equity was 0.3% for the reported quarter against negative 17% in the year-ago quarter.

Guidance

Palomar estimates adjusted net income between $17 million and $18.5 million for the fourth quarter of 2021.

Zacks Rank

Palomar currently carries a Zacks Rank #4 (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 insurance industry players that have reported third-quarter results so far, The Travelers Companies TRV and RLI Corporation RLI beat the Zacks Consensus Estimate for earnings, while The Progressive Corporation PGR missed the same.


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