Palomar Holdings, Inc.

Second-quarter 2026 adjusted net income was $63.8 million, or $2.36 per diluted share, versus $48.5 million, or $1.76 per share, in Q2 2025. Gross written premiums increased 27% year over year to $630.5 million, and net earned premium increased 59.5% to $287 million. Adjusted underwriting income was $67 million, up 38% year over year; the adjusted combined ratio was 76.7% versus 73.1% a year ago; and annualized adjusted ROE was 26.3% versus 23.7%. The company raised full-year 2026 adjusted net income guidance to $270 million to $280 million, up from prior expectations, and said the range includes expected catastrophe losses of $8 million to $12 million. Management also said it expects 2026 loss ratio to be in the mid-to-upper 30s, adjusted combined ratio in the mid-70s, net earned premium ratio to move into the upper 40s, and slight improvements in acquisition and other underwriting expense ratios. Crop premium outlook was increased to more than $400 million for 2026 from approximately $320 million previously.

Mac Armstrong emphasized that Palomar is winning through diversification, disciplined underwriting, and capital allocation rather than chasing volume. He said the company is seeing strong contributions from residential earthquake, admitted property, casualty, crop, and surety, while selectively walking away from business where pricing no longer meets return hurdles. His tone was confident and execution-focused, repeatedly stressing that Palomar will sacrifice premium for profitability and that the franchise is positioned for continued profitable growth.

Chris Uchida focused on the improving earnings base, reinsurance structure, and capital return. He noted higher yields, with net investment income of $20 million and a 4.9% portfolio yield, while cash and invested assets totaled about $1.7 billion at quarter end and stockholders’ equity reached $980.9 million. He highlighted 368,719 shares repurchased for $41 million at an average price of $111, and the initiation of a $0.45 quarterly dividend. He also explained that the higher loss ratio reflects growth and mix shift, especially crop, while reserve conservatism remains high with 79% of total reserves and 84% of casualty reserves in IBNR.

Analysts pressed management on casualty reserve releases, the rising accident-year loss ratio, crop profitability, surety competition, the pace of rollover programs, and whether guidance was conservative given the latest beat. Management said the favorable casualty development mainly came from an older fronted workers’ comp program, and reiterated that reserves are intentionally conservative and have been releasing favorably over the last six quarters. On crop, they said 2026 is currently being booked closer to 100% on a net basis early in the year, that prior-year crop results look in line with historical/industry norms, and that the higher crop mix will raise losses but support long-term growth. On surety, they said competition is present but rate pressure is limited, while the rollover pipeline remains active into the third and fourth quarters.