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Palomar (PLMR) Q4 Earnings Top, Revenues Miss Estimates

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·3 min read
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Palomar Holdings, Inc. PLMR reported fourth-quarter 2021 operating income of 74 cents per share, beating the Zacks Consensus Estimate by 12.1%. The bottom line rebounded from the year-ago loss of 5 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 69% year over year to $71 million, mainly attributable to higher premiums, net investment income, and commission and other income. The top line however missed the Zacks Consensus Estimate by 4.2%.

Gross written premiums increased 56% year over year to $149.9 million. Net earned premiums surged 74.3% year over year to $67.8 million.

Net investment income increased 4.6% year over year to $2.4 million, driven by a higher average balance of investments, partially offset by lower yields on invested assets.

Palomar witnessed an underwriting income of about $17 million, which marked a rebound from the year-ago loss of about $5 million.

Total expenses of $51.8 million increased 15.8% year over year due to higher acquisition and underwriting expenses as well as interest expenses. Loss ratio improved 2920 basis points (bps) to 15.

Adjusted combined ratio, excluding catastrophe losses, improved 4030 bps year over year to 70.7.

Full-Year Update

Operating income of $2.05 per share beat the Zacks Consensus Estimate of $1.97. The bottom line increased nearly six-fold from 2020

Total revenues improved 47.6% year over year to $246.5 million but missed the Zacks Consensus Estimate of $250 million.

Gross written premiums increased 51% year over year to $535.2 million.

Adjusted combined ratio of 76.1 improved 2430 bps year over year.

Financial Update

Cash and cash equivalents increased 49% from the 2020-end level to $50.4 million at the end of 2021.

Shareholder equity increased 8.4% from 2020 end to $394.2 million.

Annualized adjusted return on equity was 14.1%, expanding 1110 bps from 2020.

2022 Guidance

Palomar estimates adjusted net income between $80 million and $85 million in 2022.

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 fourth-quarter results so far, The Travelers Companies TRV, RenaissanceRe Holdings Ltd. RNR and The Progressive Corporation PGR beat the Zacks Consensus Estimate for earnings.

Travelers’ core income of $5.20 per share surpassed the Zacks Consensus Estimate of $3.86 and increased 6% year over year. Total revenues rose 7% to about $9 billion and beat the Zacks Consensus Estimate of $8.7 billion.

Travelers’ net written premiums increased 10% year over year to a record $8 billion. The combined ratio deteriorated 130 bps year over year to 88.

RenaissanceRe’s operating earnings per share of $4.71 surpassed the Zacks Consensus Estimate by 27% and rebounded from the year-ago loss of $1.59 per share. Total revenues of $1.39 billion dipped 0.1% year over year.

RenaissanceRe’s gross premiums written surged 40.4% year over year to $1.3 billion. The combined ratio improved 3530 bps year over year to 79.4.

Progressive’s earnings per share of $1.05 beat the Zacks Consensus Estimate of 99 cents but declined 43.2% from the year-ago quarter.

Progressive’s net premiums written were $10.7 billion in the quarter, up 13% from $9.5 billion a year ago. The combined ratio deteriorated 630 bps from the prior-year quarter to 94.7.


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