Palomar Holdings Inc., the second-largest earthquake insurer in California, reported net income of $56.2 million, or $2.06 per diluted share, for the fourth quarter of 2025 compared to $35.0 million, or $1.29 per diluted share, in the year-earlier period – a 60.6% increase.
The Nasdaq-listed specialty insurer posted adjusted net income of $61.1 million, or $2.24 per diluted share, for the fourth quarter compared to $41.3 million, or $1.52 per diluted share, a year earlier. The adjusted figure increased 48%.
Gross written premiums surged 31.8% to $492.6 million in the fourth quarter from $373.7 million in the same period of 2024. The company's total loss ratio reached 30.4% compared to 25.7% in the fourth quarter of 2024, whilst the catastrophe loss ratio stood at negative 0.9% compared to 5.6% in the prior year.
Founded in 2014, Palomar serves residential and commercial clients across five product categories: earthquake, inland marine and other property, casualty, fronting, and crop.
The combined ratio reached 76.8% compared to 75.9% in the fourth quarter of 2024. The adjusted combined ratio stood at 73.4% compared to 71.7% in the year-earlier period.
Read more: Palomar Holdings reports record Q3 results
Annualized return on equity reached 24.7% compared to 19.5% in the fourth quarter of 2024. Annualized adjusted return on equity stood at 26.9% compared to 23.1% in the prior-year period.
For the full year 2025, gross written premiums increased 31.5% to $2 billion compared to $1.5 billion in 2024. Net income rose 67.6% to $197.1 million compared to $117.6 million in 2024, whilst adjusted net income increased 61.9% to $216.1 million compared to $133.5 million.
The results demonstrated progress on the company's Palomar 2X strategy, an organic business initiative introduced in 2022 designed to double underwriting income over a three-to-five-year timeframe whilst maintaining adjusted return on equity above 20%.
The strategy encompasses sustaining profitable growth, managing dislocation and diversification, delivering predictable earnings, and scaling the organization. From 2019 to 2023, the company achieved compound annual premium growth of 46% whilst adjusted net income grew 25%.
Mac Armstrong (pictured above), chairman and chief executive officer, said the fourth quarter was highlighted by record adjusted net income. "Gross written premium grew 32% and adjusted net income increased 48% across our unique and diverse portfolio," Armstrong said.
The company completed acquisitions of Advanced Ag Protection and The Gray Casualty and Surety Company in 2025, expanding into surety and bolstering crop insurance capabilities.
"These investments should sustain our long-term profitable growth trajectory and our Palomar 2X strategic imperative," Armstrong said.
The company holds a market capitalization of $3.35 billion with 253 employees. Its insurance subsidiaries maintain an "A" (Excellent) financial strength rating from AM Best.
