Palomar Holdings, Inc.
For the period ended Dec 31, 2025. Filed Feb 24, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 24, 2026
PLMR$155.71+0.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-25.
0001437749-25-005069
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-24.
0001193125-26-067364
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 206 previous paragraphs and 225 current paragraphs.
141 unchanged; 48 reworded; 34 added; 13 removed; 4 previous and 2 current paragraphs rearranged.
Tables are not compared: 48 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (34)
Current report
Beginning in 2026, we will reorganize the presentation of our product offerings and report Surety and Credit premium as a separate line. Our Fronting premium will cease to be reported as a separate line of business and the underlying premium will be consolidated into existing lines.
Current report
Our Business
Current report
Volume of new business submissions in existing products or partnerships;
Current report
Binding of new business submissions in existing products or partnerships into policies;
Current report
Entrance into new partnerships or the offering of new types of insurance products;
Current report
Exits from existing partnerships or reducing or ceasing to offer existing insurance products;
Current report
Renewal rates of existing policies; and
Current report
Average size and premium rate of bound policies.
Current report
The occurrence, frequency, and severity of catastrophe events in the areas where we underwrite policies relating to these perils;
Current report
The occurrence, frequency, and severity of non‑catastrophe attritional losses;
Current report
The reinsurance agreements we have in place at the time of a loss;
Current report
The geographic location and characteristics of the policies we underwrite;
Current report
Changes in the legal or regulatory environment related to the business we write;
Current report
Trends in legal defense costs;
Current report
Inflation in housing and construction costs; and
Current report
Increases in amounts awarded by courts and juries.
Current report
Indicates non-GAAP financial measure; see “Reconciliation of Non‑GAAP Financial Measures” for a reconciliation of the non‑GAAP financial measures to their most directly comparable financial measures prepared in accordance with GAAP.
Current report
Ceded written premiums increased $167.1 million, or 18.6%, to $1.1 billion for the year ended December 31, 2025 from $897.1 million for the year ended December 31, 2024. The increase in ceded written premium was primarily driven by growth in written premiums subject to quota share arrangements, such as those in Casualty and Crop lines, as well as elevated exposure leading to higher XOL reinsurance expense.
Current report
Commission and other income increased $2.7 million to $5.5 million for the year ended December 31, 2025 from $2.8 million for the year ended December 31, 2024. The balance increased due to an increase in commissions and policy related fees driven by increased premiums written.
Current report
Catastrophe loss activity for the year ended December 31, 2025 was related to favorable development on prior period catastrophe events, offset by flood losses in the third quarter.
Current report
Non-catastrophe losses increased for the year ended December 31, 2025 compared to the year ended December 31, 2024 due mainly to higher attritional losses driven by premium growth on lines of business subject to attritional losses such as Casualty, Crop, and Inland Marine and Other Property.
Current report
Income tax expense increased $22.7 million to $56.3 million for the year ended December 31, 2025 from $33.6 million for the year ended December 31, 2024 due to higher pre-tax income for the year ended December 31, 2025. For the year ended December 31, 2025 and 2024, the Company’s income tax rate of 22.2% for both periods was higher than the statutory rate of 21% due primarily to non-deductible executive compensation expense.
Current report
Loss ratio and catastrophe loss ratio are calculated as follows:
Current report
The Company is subject to New Jersey law, such that all dividend payments require 30-day prior approval of the New Jersey Commissioner of Banking and Insurance (the “Commissioner”). The maximum dividend, which may be paid in any twelve-month period, is limited to the greater of 10% of statutory surplus as of December 31 of the preceding year or the net gain from operations of the preceding calendar year. Cash dividends may only be paid out of surplus derived from realized net profits. Based on these limitations, FIA has capacity to pay a dividend of $1.8 million in 2026, conditional upon the Commissioner’s approval. No dividends were declared or paid during the year ended December 31, 2025.
Current report
On July 31, 2025, the Company’s Board of Directors approved a share repurchase program authorizing the repurchase of up to $150 million of the Company’s outstanding common stock through July 31, 2027. We also have implemented a share repurchase plan and have used and may use our cash in the future to purchase outstanding shares of our common stock. Under our current share repurchase program, shares may be repurchased from time to time in the open market or negotiated transactions at prevailing market rates, or by other means in accordance with federal securities laws. We repurchased 308,417 shares for $37.3 million under this program during the year ended December 31, 2025 and $112.7 million remains available for future repurchases.
Current report
In January 2026, we entered into a new credit agreement that replaced our existing revolving credit facility. The new credit agreement provides for unsecured credit facilities totaling $450 million, comprised of a $150 million revolving facility and a $300 million term loan, each maturing on January 27, 2031.
Current report
Borrowings under the new credit agreement bear interest at variable rates based on Term SOFR or an alternate base rate, plus an applicable margin determined by our debt-to-capital ratio. The term loan amortizes quarterly, and borrowings may be prepaid without premium. Obligations under the new credit agreement are guaranteed by certain of our domestic subsidiaries and are unsecured, subject to a negative pledge.
Current report
Proceeds from the new credit agreement may be used for general corporate purposes, including permitted acquisitions and the refinancing of existing indebtedness. The new credit agreement contains customary affirmative and negative covenants, including financial covenants, that may limit our operating and financial flexibility.
Current report
Reported and/or Paid Loss Development Methods—Ultimate losses are estimated based on historical reported and/or paid loss patterns. Reported losses are the sum of paid and case losses. Industry development patterns are substituted for historical development patterns when sufficient historical data is not available.
Current report
IBNR-to-Case Reserve Ratio Method—This method calculates ratios of IBNR to case reserves based on incurred and paid development factors from the development methods. Estimated IBNR equals the product of case reserves and the IBNR-to-case reserve ratio. These IBNR amounts are added to the reported-to-date amount to derive ultimate losses.
Current report
Reported Bornhuetter-Ferguson Severity Method—Under this method, ultimate losses are estimated as the sum of cumulative reported losses and estimated IBNR losses. IBNR losses are estimated based on expected average severity, estimated ultimate claim counts and the historical development patterns of reported losses.
Current report
Reported Bornhuetter Ferguson Pure Premium Method—Under this method, ultimate losses are estimated as the sum of cumulative reported losses and estimated IBNR losses. IBNR losses are estimated based on expected pure premium and on the historical development patterns of reported losses.
Current report
Effective tax rate estimated to be 21%
Current report
This column includes the acquired FIA balances. As the FIA acquisition occurred on January 1, 2025, these balances are excluded from the 2023-2024 development calculations.
Removed paragraphs (13)
Previous report
Item 7.** Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous report
Commission and Other Income
Previous report
Results of Operations
Previous report
(1) - Beginning in 2024, the Company has updated the categorization of its products to align with management's current strategy and view of the business. Prior year amounts have been reclassified for comparability purposes. The recategorization is for presentation purposes only and does not impact overall gross written premiums.
Previous report
The year ended December 31, 2024 was our first full year of offering Crop products, which led to the growth shown above. Crop premiums are primarily written and earned during the third quarter of each year.
Previous report
NM- Not meaningful
Previous report
Ceded written premiums increased $165.6 million, or 22.6%, to $897.1 million for the year ended December 31, 2024 from $731.5 million for the year ended December 31, 2023. The increase was primarily due to increased premiums ceded related to our Crop products as these products saw significant growth and we currently cede the majority of Crop premiums and risk to reinsurers. In addition, our XOL reinsurance expense increased due to growth in exposure and higher rates on XOL reinsurance.
Previous report
Commission and Other Income
Previous report
Non-catastrophe attritional losses increased due to a higher volume of premiums being subject to attritional losses, primarily driven by the growth in Casualty and Inland Marine and other Property premiums.
Previous report
Acquisition expenses increased $41.9 million, or 38.9%, to $149.7 million for the year ended December 31, 2024 from $107.7 million for the year ended December 31, 2023. The increase was primarily due to higher commission expenses driven by higher gross earned premiums. This was partially offset by higher ceding commissions due to a higher volume of premiums subject to quota share arrangements.
Previous report
Income tax expense increased $9.2 million, or 37.6%, to $33.6 million for the year ended December 31, 2024 compared to $24.4 million during the year ended December 31, 2023. For the year ended December 31, 2024 our effective tax rate was 22.2% and the difference between our tax effective tax rate and the statutory rate of 21% relates primarily to non-deductible executive compensation expense and state taxes, offset by the permanent component of employee stock options. For the year ended December 31, 2023, our effective tax rate was 23.6% and the difference between our tax rate and the statutory rate of 21% relates primarily to non-deductible executive compensation expense and state taxes, offset by the permanent component of employee stock options.
Previous report
Our share repurchase program expired on March 31, 2024 and we did not make any share repurchases during the year ended December 31, 2024.
Previous report
During the year ended December 31, 2022, our total gross incurred losses for accident years 2021 and prior developed unfavorably by $0.3 million. The gross unfavorable development was due primarily to losses on certain 2020 Hurricanes emerging at a higher severity than expected, primarily in our special property lines of business. This was offset by favorable development on 2021 attritional and catastrophe losses. On a net basis, the development was unfavorable by $2.4 million due to the effect of ceding under our reinsurance program. The favorable 2021 development was subject to a higher amount of ceding versus the unfavorable 2020 development resulting in the net unfavorable development being higher than the gross amount.
Reworded paragraphs (48)
Previous wording
We are a specialty insurance company that provides property and casualty insurance products to individuals and businesses. We use our underwriting and analytical expertise to provide innovative insurance products serving five categories: Earthquake, Inland Marine and Other Property, Casualty, Fronting, and Crop. We use proprietary data analytics and a modern technology platform to offer our customers flexible products with customized and granular pricing for both the admitted and excess and surplus lines (“E&S”) markets. Our insurance company subsidiaries, Palomar Specialty Insurance Company (“PSIC”) and Palomar Excess and Surplus Insurance Company (“PESIC”) carry an “A” rating from A.M. Best Company (“A.M. Best”), a leading rating agency for the insurance industry.
Current wording
We offer coverage in both the admitted and excess and surplus lines (“E&S”) markets, utilizing proprietary data analytics and a technology-enabled platform to support customized underwriting and pricing. Our insurance company subsidiaries, Palomar Specialty Insurance Company (“PSIC”), Palomar Excess and Surplus Insurance Company (“PESIC”), and First Indemnity of America Insurance Co. (“FIA”) carry an “A” financial strength rating from A.M. Best Company (“A.M. Best”), a leading rating agency for the insurance industry.
Previous wording
We distribute our products through multiple channels, including retail agents, program administrators, wholesale brokers, and partnerships with other insurance companies. Our business strategy is supported by a comprehensive risk transfer program with reinsurance coverage that we believe reduces earnings volatility and provides appropriate levels of protection from catastrophic events. Our management team combines decades of insurance industry experience across specialty underwriting, reinsurance, program administration, distribution, and analytics.
Current wording
We distribute our products through multiple channels, including retail agents, program administrators, wholesale brokers, and strategic partnerships with other insurance companies. Our business strategy is supported by a comprehensive risk transfer program with reinsurance coverage which we believe reduces earnings volatility and provides appropriate levels of protection from catastrophic events. Our management team combines decades of insurance industry experience across specialty underwriting, reinsurance, program administration, distribution, claims, and analytics.
Previous wording
Founded in 2014, we have significantly grown our business and have generated attractive returns. We have organically increased gross written premiums from $16.6 million in our first year of operations to $1.5 billion for the year ended December 31, 2024, which reflects a compound annual growth rate of approximately 57%. We have also been profitable since 2016 and our net income growth since 2016 reflects a compound annual growth rate of 43%.
Current wording
Founded in 2014, we have significantly grown our business and have generated attractive returns. We have organically increased gross written premiums from $16.6 million in our first year of operations to $2.0 billion for the year ended December 31, 2025, which reflects a compound annual growth rate of approximately 55%. We have also been profitable since 2016, and our net income has increased over that period at a compound annual growth rate of 46%.
Previous wording
We seek to continuously grow our income by developing products in lines of business that harness our core competencies and where we believe we can generate attractive risk adjusted returns. In recent years, we have introduced several new products including Crop, Environmental Liability, and E&S Casualty. In January 2025, we completed the acquisition of First Indemnity of America ("FIA"), a New Jersey domiciled insurance carrier specializing in surety bonds for small to medium sized contractors primarily in the Northeast United States. These new products diversify our book of business and broaden our product portfolio. We believe that our market opportunity, distinctive products, and differentiated business model position us to grow our business profitably.
Current wording
We seek to continuously grow our income by developing product offerings for lines of business that harness our core competencies and where we believe we can generate attractive risk adjusted returns. In recent years, we have introduced several new products including Crop, E&S Casualty, Surety and Environmental Liability. These new products diversify our book of business and broaden our product portfolio. We believe that our market opportunity, distinctive products, and differentiated business model position us to grow our business profitably.
Previous wording
Our gross written premiums are also impacted when we assume unearned in-force premiums due to new partnerships or other business reasons. In periods where we assume a large volume of unearned premiums, our gross written premiums may increase significantly compared to prior periods and the increase may not be indicative of future trends. The majority of our Crop written premiums are recognized in the third quarter, as we receive the requisite reporting from insureds at that time.
Current wording
Our gross written premiums are also impacted when we assume unearned in-force premiums due to new partnerships or other business reasons. In periods where we assume a large volume of unearned premiums, our gross written premiums may increase significantly compared to prior periods and the increase may not be indicative of future trends. The majority of our Crop written premiums are recognized in the third quarter, as we receive the requisite reporting from insureds at that time. This pattern reflects the seasonal nature of the Crop business, which typically results in a disproportionate amount of Crop premiums being recognized in the third quarter. As such, our interim results may not be indicative of full-year performance.
Previous wording
Our ceded written premiums can be impacted significantly in certain periods due to changes in quota share agreements. In periods where we modify a quota share agreement, ceded written premiums may increase or decrease significantly compared to prior periods and these fluctuations may not be indicative of future trends. Our XOL costs as a percentage of gross earned premiums also may vary each period due to changes of premium in-force during the XOL contract period or due to acceleration of XOL charges or the need to purchase additional reinsurance due to losses. In addition, the volume of premiums ceded in fronting agreements each period may vary due to the timing of entering new fronting partnerships and terminations of fronting partnerships.
Current wording
Our ceded written premiums can be impacted significantly in certain periods due to changes in quota share agreements. In periods where we modify a quota share agreement, ceded written premiums may increase or decrease significantly compared to prior periods and these fluctuations may not be indicative of future trends. Our XOL costs as a percentage of gross earned premiums also may vary each period due to changes in cost of XOL between contract periods, changes of premium in-force during the XOL contract period, or due to acceleration of XOL charges or the need to purchase additional XOL reinsurance due to losses. In addition, the volume of premiums ceded in fronting agreements each period may vary due to the timing of entering new fronting partnerships and terminations of fronting partnerships.
Previous wording
Commission and other income consists primarily of fees and commissions earned in conjunction with underwriting policies. Commission and other income are earned on the effective date of the underlying policy.
Current wording
Commission and other income consist of commissions earned on policies written on behalf of third-party insurance companies where we have no exposure to the insured risk and certain fees earned in conjunction with underwriting policies. Commission and other income are earned on the effective date of the underlying policy.
Previous wording
Losses and loss adjustment expenses represent the costs incurred for losses, net of any losses ceded to reinsurers. These expenses are a function of the size and term of the insurance policies we write and the loss experience associated with the underlying coverage. Certain policies we write subject us to attritional losses such as building fires or casualty claims. In addition, many of the policies we write subject us to catastrophe losses. Catastrophe losses are certain losses resulting from events involving multiple claims and policyholders, including earthquakes, hurricanes, floods, convective storms, terrorist acts or other aggregating events. Our losses and loss adjustment expenses are generally affected by:
Current wording
Losses and loss adjustment expenses represent the costs incurred for losses, net of any losses ceded to reinsurers. These expenses are a function of the size and term of the insurance policies we write and the loss experience associated with the underlying coverage. Certain policies we write subject us to attritional losses such as building fires or casualty claims. In addition, many of the policies we write subject us to catastrophe losses. Catastrophe losses are certain losses resulting from events involving multiple claims and policyholders, including earthquakes, hurricanes, floods, droughts, convective storms, terrorist acts or other aggregating events. Our losses and loss adjustment expenses are generally affected by:
Previous wording
Commission and other income decreased $0.6 million, or 17.3%, to $2.8 million for the year ended December 31, 2024 from $3.4 million for the year ended December 31, 2023. The decrease was driven by a decrease in policy related fees driven by changes in the mix of business produced.
Current wording
The mix of business written by us;
Previous wording
Acquisition expenses are principally comprised of the commissions we pay retail agents, program administrators and wholesale brokers, net of ceding commissions and fronting fees we receive on business ceded under quota share and fronting reinsurance agreements. In addition, acquisition expenses include premium-related taxes and other fees. Acquisition expenses related to each policy we write are deferred and expensed pro rata over the term of the policy. We earn fronting fees in a manner consistent with the recognition of the earned premiums on the underlying insurance policies, on a pro rata basis over the terms of the policies.
Current wording
Acquisition expenses are principally comprised of the commissions we pay retail agents, program administrators and wholesale brokers, net of ceding commissions and fronting fees we receive on business ceded under quota share and fronting reinsurance agreements. In addition, acquisition expenses include premium‑related taxes and other fees. Acquisition expenses related to each policy we write are deferred and expensed pro rata over the term of the policy. We earn fronting fees consistent with how we earn premiums on the underlying insurance policies, on a pro-rata basis over the terms of the policies.
Previous wording
Interest expense consists of the unused line fee, amortization of the commitment fee and interest incurred on borrowings from our credit agreement with U.S. Bank National Association and interest incurred on borrowings from our FHLB line of credit.
Current wording
Interest expense consists of interest incurred on borrowings from our U.S. Bank credit agreement and FHLB line of credit and the unused line fee and amortization of the commitment fee on our U.S. Bank credit agreement.
Previous wording
We earn investment income on our portfolio of invested assets. We invest primarily in investment grade fixed maturity securities, including U.S. government issues, state government issues, mortgage and asset-backed obligations, and corporate bonds with a small portion of our portfolio in equity securities, equity method investments, limited partnerships, and cash and cash equivalents. The principal factors that influence net investment income are the size of our investment portfolio, the yield on that portfolio, and investment management expenses. As measured by amortized cost, which excludes fair value fluctuations from changes in interest rates or other factors, the size of our investment portfolio is mainly a function of our invested capital along with premiums we receive from our insureds, less payments on policyholder claims and other operating expenses. Our balance of invested capital may be impacted in the future by repurchases of shares of our common stock or borrowings under our credit agreements.
Current wording
We earn investment income on our portfolio of invested assets. We invest primarily in investment grade fixed maturity securities, including U.S. government issues, state government issues, mortgage and asset-backed obligations, and corporate bonds with a small portion of our portfolio in equity securities, limited partnerships, and cash and cash equivalents. The principal factors that influence net investment income are the size of our investment portfolio, the yield on that portfolio, and investment management expenses. As measured by amortized cost, which excludes fair value fluctuations from changes in interest rates or other factors, the size of our investment portfolio is mainly a function of our invested capital along with premium we receive from our insureds, less payments on policyholder claims and other operating expenses.
Previous wording
Net realized and unrealized gains and losses on investments are a function of the difference between the amount received by us on the sale of a security and the security’s cost-basis, mark-to-market adjustments, credit losses recognized in earnings, unrealized gains and losses on equity securities, and unrealized gains and losses on equity method and other investments. Unrealized gains and losses on fixed maturity securities are recognized as a component of other comprehensive income and do not impact our net income.
Current wording
Net realized and unrealized gains and losses on investments are a function of the difference between the amount received by us on the sale of a security and the security’s cost-basis, mark-to-market adjustments, credit losses recognized in earnings, unrealized gains and losses on equity securities, and other changes in the fair value of investments. Unrealized gains and losses on fixed maturity securities are recognized as a component of other comprehensive income and do not impact our net income.
Previous wording
Adjusted net income is a non-GAAP financial measure defined as net income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. We calculate the tax impact only on adjustments which would be included in calculating our income tax expense using the estimated tax rate at which the company received a deduction for these adjustments. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of net income calculated in accordance with GAAP to adjusted net income.
Current wording
Adjusted net incomeis a non‑GAAP financial measure defined as net income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. We calculate the tax impact only on adjustments which would be included in calculating our income tax expense using the estimated tax rate at which the company received a deduction for these adjustments. See “Reconciliation of Non‑GAAP Financial Measures” for a reconciliation of net income calculated in accordance with GAAP to adjusted net income.
Previous wording
Adjusted underwriting incomeis a non-GAAP financial measure defined as underwriting income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of income before income taxes calculated in accordance with GAAP to adjusted underwriting income.
Current wording
Adjusted underwriting income is a non-GAAP financial measure defined as underwriting income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of income before income taxes calculated in accordance with GAAP to adjusted underwriting income.
Previous wording
Gross written premiums were $1.5 billion for the year ended December 31, 2024 compared to $1.1 billion for the year ended December 31, 2023, an increase of $400.4 million, or 35.1%. Premium growth was primarily due to an increased volume of policies written across our lines of business which was driven by new business generated with existing partners, strong premium retention rates for existing business, expansion of our distribution footprint, and new partnerships.
Current wording
Gross written premiums increased $486.3 million, or 31.5%, to $2.0 billion for the year ended December 31, 2025 compared to $1.5 billion for the year ended December 31, 2024. Premium growth was primarily due to an increased volume of policies in the majority of our lines of business, particularly in our Casualty and Crop lines, which was driven by new business generated with existing partners, strong premium retention rates for existing business, expansion of our distribution footprint, and new partnerships, partially offset by a decrease in our Fronting line. The following table summarizes our gross written premiums by line of business and shows each line’s percentage of total gross written premiums for each period:
Previous wording
Fronting premiums represent premium where we subsequently cede the majority of the premium and risk in exchange for a fronting fee, which is our primary source of profit in the arrangement. The volume of fronting premiums written each period may vary due to the timing of entering new fronting partnerships and terminations of existing fronting partnerships. A large fronting partnership terminated in the third quarter of 2024, causing the decline in fronting premiums shown above.
Current wording
A large fronting partnership terminated in the third quarter of 2024, which primarily caused the decline in fronting premiums shown above.
Previous wording
Although our volume of ceded written premiums increased, ceded written premiums as a percentage of gross written premiums decreased to 58.2% for the year ended December 31, 2024 from 64.1% for the year ended December 31, 2023. This percentage decrease was driven by changes in our composition of business whereby premiums written in the current year were subject to lower quota share or XOL cession percentages compared to premiums written in the prior year.
Current wording
Although our volume of ceded written premiums increased, ceded written premiums as a percentage of gross written premiums decreased to 52.5% for the year ended December 31, 2025 from 58.2% for the year ended December 31, 2024. This percentage decrease was driven by changes in our composition of business whereby premiums written in the current period were subject to lower quota share or XOL cession percentages compared to premiums written in the prior period.
Previous wording
Net written premiums increased $234.8 million, or 57.3%, to $644.9 million for the year ended December 31, 2024 from $410.0 million for the year ended December 31, 2023. The increase was primarily due to an increase in gross written premiums, primarily in our Casualty and Earthquake products, partially offset by increased ceded written premiums.
Current wording
Net written premiums increased $319.2 million, or 49.5%, to $964.0 million for the year ended December 31, 2025 from $644.9 million for the year ended December 31, 2024. The increase was primarily due to an increase in gross written premiums, primarily in our Casualty and Crop lines, partially offset by increased ceded written premiums.
Previous wording
Net earned premiums increased $164.8 million, or 47.6%, to $510.7 million for the year ended December 31, 2024 from $345.9 million for the year ended December 31, 2023 due primarily to the earning of increased gross written premiums offset by the earning of ceded written premiums under reinsurance agreements. The table below shows the amount of premiums we earned on a gross and net basis for each period presented:
Current wording
Net earned premiums increased $291.9 million, or 57.2%, to $802.6 million for the year ended December 31, 2025 from $510.7 million for the year ended December 31, 2024 due primarily to the earning of increased gross written premiums offset by the earning of ceded written premiums under reinsurance agreements. The table below shows the amount of premiums we earned on a gross and net basis and net earned premiums as a percentage of gross earned premiums in each period presented:
Previous wording
Our net earned premium ratio increased due to changes in our composition of business whereby premiums earned in the current period were subject to lower quota share or XOL cession percentages compared to premiums earned in the prior period.
Current wording
Our net earned premium ratio increased due to changes in our composition of business whereby premiums earned in the current period were subject to lower quota share or XOL cession percentages compared to premiums earned in the prior period, which was partially driven by the aforementioned decrease in fronting premiums.
Previous wording
Losses and loss adjustment expenses increased $62.2 million, or 85.6%, to $134.8 million for the year ended December 31, 2024 from $72.6 million for the year ended December 31, 2023.
Current wording
Losses and loss adjustment expenses increased $93.8 million, or 69.6%, to $228.6 million for the year ended December 31, 2025 from $134.8 million for the year ended December 31, 2024. Losses and loss adjustment expenses consisted of the following elements during the respective periods:
Previous wording
Catastrophe losses increased during the year ended December 31, 2024 due to higher frequency and severity of catastrophe events compared to the prior year. Catastrophe losses during the year ended December 31, 2024 were related to floods occurring during the first quarter, severe convective storms occurring during the second quarter, and Hurricanes Beryl, Debby, Helene and Milton which occurred during the third and fourth quarters. Catastrophe losses during the year ended December 31, 2023 were primarily related to floods occurring during the first quarter and severe convective storms occurring during the second quarter.
Current wording
Catastrophe loss activity for the year ended December 31, 2024 was primarily related to flood losses in the first quarter, severe convective storms in the second quarter, and Hurricanes Beryl, Debby, and Helene during the third and fourth quarters.
Previous wording
Acquisition expenses as a percentage of gross earned premiums were 10.7% for the year ended December 31, 2024 compared to 10.6% for the year ended December 31, 2023. Acquisition expenses as a percentage of gross earned premiums slightly increased due to the higher commission expenses as a percentage of gross earned premiums due to changes in mix of business produced.
Current wording
Acquisition expenses increased $67.5 million, or 45.1%, to $217.1 million for the year ended December 31, 2025 from $149.7 million for the year ended December 31, 2024. The increase was primarily due to higher commissions due to higher gross earned premiums and lower fronting fees due to changes in the composition of our business. Acquisition expenses as a percentage of gross earned premiums were 12.1% for the year ended December 31, 2025 compared to 10.7% for the year ended December 31, 2024. Acquisition expenses as a percentage of gross earned premiums increased due to higher commissions as a percentage of gross earned premiums and lower fronting fees as a percentage of gross earned premiums due to changes in the composition of our business.
Previous wording
Other underwriting expenses increased $28.9 million, or 32.8%, to $117.1 million for the year ended December 31, 2024 from $88.2 million for the year ended December 31, 2023. The increase was primarily due to the Company incurring higher payroll, technology, and stock-based compensation expenses associated with growth of the Company.
Current wording
Other underwriting expenses increased $59.3 million, or 50.7%, to $176.5 million for the year ended December 31, 2025 from $117.1 million for the year ended December 31, 2024. The increase was primarily due to the Company incurring higher payroll, technology, and stock-based compensation expenses associated with general growth.
Previous wording
Other underwriting expenses as a percentage of gross earned premiums were 8.4% for the year ended December 31, 2024 compared to 8.7% for the year ended December 31, 2023. Excluding the impact of expenses relating to transactions, stock-based compensation, amortization of intangibles, and catastrophe bonds, other underwriting expenses as a percentage of gross earned premiums were 6.8% for the year ended December 31, 2024 compared to 6.8% for the year ended December 31, 2023. This percentage was relatively consistent as adjusted operating expenses grew at approximately the same rate as gross earned premiums. Other underwriting expenses as a percentage of gross earned premiums may fluctuate period over period based on timing of certain expenses relative to premium growth.
Current wording
Other underwriting expenses as a percentage of gross earned premiums were 9.9% for the year ended December 31, 2025 compared to 8.4% for the year ended December 31, 2024. Excluding the impact of expenses relating to transactions, stock-based compensation, amortization of intangibles, and catastrophe bonds, other underwriting expenses as a percentage of gross earned premiums were 8.0% for the year ended December 31, 2025 compared to 6.8% for the year ended December 31, 2024. Other underwriting expenses as a percentage of gross earned premiums fluctuates period over period based on timing of certain expenses relative to premium growth.
Previous wording
Net investment income increased $12.1 million, or 51.1%, to $35.8 million for the year ended December 31, 2024 from $23.7 million for the year ended December 31, 2023. The increase was primarily due to a higher average balance of investments during the year ended December 31, 2024 and higher yields on invested assets.
Current wording
Net investment income increased $20.2 million, or 56.3%, to $56.0 million for the year ended December 31, 2025 from $35.8 million for the year ended December 31, 2024. The increase was primarily due to a higher average balance of investments during the year ended December 31, 2025 due primarily to cash generated from operations and the investing of proceeds from our August 2024 secondary offering. In addition, higher yields on invested assets versus the prior year contributed to the increase.
Previous wording
The Company incurred $4.6 million of net realized and unrealized gains on investments for the year ended December 31, 2024 compared to $2.9 million of net realized and unrealized gains for the year ended December 31, 2023. In both periods, the balance was primarily driven by unrealized gains on our equity securities due to the general performance of equity security markets. Unrealized gains and losses on fixed maturity securities are recognized as a component of other comprehensive income and do not impact our net income.
Current wording
The Company incurred $11.8 million of net realized and unrealized gains on investments for the year ended December 31, 2025 compared to $4.6 million of net realized and unrealized gains for the year ended December 31, 2024. In both periods, the balance was primarily driven by unrealized gains on our equity securities. Unrealized gains and losses on fixed maturity securities are recognized as a component of other comprehensive income and do not impact our net income. The following table summarizes the components of our investment income for each period presented:
Previous wording
We define underwriting revenue as total revenue excluding net investment income and net realized and unrealized gains and losses on investments. Underwriting revenue represents revenue generated by our underwriting operations and allows us to evaluate our underwriting performance without regard to investment income. We use this metric as we believe it gives our management and other users of our financial information useful insight into our underlying business performance. Underwriting revenue should not be viewed as a substitute for total revenue calculated in accordance with GAAP, and other companies may define underwriting revenue differently.
Current wording
We define underwriting revenue as total revenue excluding net investment income and net realized and unrealized gains and losses on investments. Underwriting revenue represents revenue generated by our underwriting operations and allows us to evaluate our underwriting performance without regard to investment results. We use this metric as we believe it gives our management and other users of our financial information useful insight into our underlying business performance. Underwriting revenue should not be viewed as a substitute for total revenue calculated in accordance with GAAP, and other companies may define underwriting revenue differently.
Previous wording
We define underwriting income as income before income taxes excluding net investment income, net realized and unrealized gains and losses on investments, and interest expense. Underwriting income represents the pre-tax profitability of our underwriting operations and allows us to evaluate our underwriting performance without regard to investment income. We use this metric as we believe it gives our management and other users of our financial information useful insight into our underlying business performance. Underwriting income should not be viewed as a substitute for pre-tax income calculated in accordance with GAAP, and other companies may define underwriting income differently.
Current wording
We define underwriting income as income before income taxes excluding net investment income, net realized and unrealized gains and losses on investments, and interest expense. Underwriting income represents the pre‑tax profitability of our underwriting operations and allows us to evaluate our underwriting performance without regard to investment results. We use this metric as we believe it gives our management and other users of our financial information useful insight into our underlying business performance. Underwriting income should not be viewed as a substitute for pre‑tax income calculated in accordance with GAAP, and other companies may define underwriting income differently.
Previous wording
We define adjusted return on equity as adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. We use adjusted return on equity as an internal performance measure in the management of our operations because we believe it gives our management and financial statement users useful insight into our results of operations and our underlying business performance. Adjusted return on equity should not be viewed as a substitute for return on equity calculated using unadjusted GAAP numbers, and other companies may define adjusted return on equity differently.
Current wording
We define annualized adjusted return on equity as adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. We use annualized adjusted return on equity as an internal performance measure in the management of our operations because we believe it gives our management and financial statement users useful insight into our results of operations and our underlying business performance. Annualized adjusted return on equity should not be viewed as a substitute for return on equity calculated using unadjusted GAAP numbers, and other companies may define adjusted return on equity differently.
Previous wording
Adjusted return on equity is calculated as follows:
Current wording
Annualized adjusted return on equity is calculated as follows:
Previous wording
The Company’s U.S. insurance company subsidiaries, PSIC and PESIC are restricted by the statutes as to the amount of dividends that they may pay without prior approval by state insurance commissioners.
Current wording
The Company’s U.S. insurance company subsidiaries, PSIC, PESIC, and FIA, are restricted by the statutes as to the amount of dividends that they may pay without prior approval by state insurance commissioners.
Previous wording
Under California and Oregon statute which govern PSIC, dividends paid in a consecutive twelve month period cannot exceed the greater of (i) 10% of an insurance company’s statutory policyholders’ surplus as of December 31 of the preceding year or (ii) 100% of its statutory net income for the preceding calendar year. Any dividends or distributions in excess of these amounts would require regulatory approval. In addition, under Oregon statute PSIC may only declare a dividend from earned surplus, which does not include contributed capital. Surplus arising from unrealized capital gains or revaluation of assets is not considered part of earned surplus. Based on the above restrictions, PSIC may pay a dividend or distribution of no greater than $99.6 million in 2025 without approval by the California and Oregon Insurance Commissioners. During October 2024, PSIC elected to pay a dividend of $95.0 million to its parent company.
Current wording
Under California and Oregon statute which govern PSIC, dividends paid in a consecutive twelve month period cannot exceed the greater of (i) 10% of an insurance company’s statutory policyholders’ surplus as of December 31 of the preceding year or (ii) 100% of its statutory net income for the preceding calendar year. Any dividends or distributions in excess of these amounts would require regulatory approval. In addition, under Oregon statute PSIC may only declare a dividend from earned surplus, which does not include contributed capital. Surplus arising from unrealized capital gains or revaluation of assets is not considered part of earned surplus. Based on the above restrictions, PSIC may pay a dividend or distribution of no greater than $176.0 million in 2026 without approval by the California and Oregon Insurance Commissioners. During October 2025, PSIC elected to pay a dividend of $99.0 million to its parent company.
Previous wording
Under Arizona statute which governs PESIC, dividends paid in a consecutive twelve month period cannot exceed the lesser of (i) 10% of an insurance company’s statutory policyholders’ surplus as of December 31 of the preceding year or (ii) 100% of its statutory net income for the preceding calendar year. Based on the above restrictions, PESIC may pay a dividend or distribution of no greater than $4.2 million in 2025 without approval of the Arizona Insurance Commissioner.
Current wording
Under Arizona statute which governs PESIC, dividends paid in a consecutive twelve month period cannot exceed the lesser of (i) 10% of an insurance company’s statutory policyholders’ surplus as of December 31 of the preceding year or (ii) 100% of its statutory net income for the preceding calendar year. Based on the above restrictions, PESIC may pay a dividend or distribution of no greater than $7.4 million in 2026 without approval of the Arizona Insurance Commissioner. No dividends were declared or paid during the year ended December 31, 2025.
Previous wording
Insurance companies in the United States are also required by state law to maintain a minimum level of policyholder’s surplus. State insurance regulators have a risk-based capital standard designed to identify property and casualty insurers that may be inadequately capitalized based on inherent risks of the insurer’s assets and liabilities and its mix of net written premium. Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action. As of December 31, 2024 and December 31, 2023, the total adjusted capital of PSIC and PESIC were in excess of their respective prescribed risk-based capital requirements.
Current wording
Insurance companies in the United States are also required by state law to maintain a minimum level of policyholder’s surplus. State insurance regulators have a risk-based capital standard designed to identify property and casualty insurers that may be inadequately capitalized based on inherent risks of the insurer’s assets and liabilities and its mix of net written premium. Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action. As of December 31, 2025 and 2024, the total adjusted capital of PSIC, PESIC, and FIA were in excess of their respective prescribed risk-based capital requirements.
Previous wording
Pursuant to Bermuda regulations, the maximum amount of dividends and return of capital available to be paid by a reinsurer is determined pursuant to a formula. Under this formula, the maximum amount of dividends and return of capital available from PSRE during 2025 is calculated to be approximately $4.2 million. However, this dividend amount is subject to annual enhanced solvency requirement calculations. There were no dividends declared or paid during the years ended December 31, 2024 and December 31, 2023
Current wording
Pursuant to Bermuda regulations, the maximum amount of dividends and return of capital available to be paid by a reinsurer is determined pursuant to a formula. Under this formula, the maximum amount of dividends and return of capital available from PSRE during 2026 is calculated to be approximately $4.5 million. However, this dividend amount is subject to annual enhanced solvency requirement calculations. There were no dividends declared or paid during the years ended December 31, 2025 and 2024.
Previous wording
Cash provided by financing activities for the year ended December 31, 2024 related to the receipt of $115.7 million in proceeds from a stock offering, $7.0 million in proceeds from stock option exercises, $2.8 million in proceeds from policy holder contributions of surplus and $0.9 million in proceeds from our employee stock purchase plan, offset by $52.6 million in payments on our FHLB line of credit. Cash used in financing activities for the year ended December 31, 2023 related to the repurchase of $22.3 million of our common stock, offset by $16.2 million in proceeds from our FHLB line of credit, $1.2 million in proceeds from stock option exercises and $0.8 million in proceeds from our employee stock purchase plan.
Current wording
Cash used in financing activities for the year ended December 31, 2025 related to $3.8 million in proceeds from stock option exercises, $3.7 million in proceeds from policy holder contributions of surplus and $1.2 million in proceeds from our employee stock purchase plan, offset by share repurchases of $37.3 million. Cash provided by financing activities for the year ended December 31, 2024 related to the receipt of $115.7 million in proceeds from a stock offering, $7.0 million in proceeds from stock option exercises, $2.8 million in proceeds from policy holder contributions of surplus and $0.9 million in proceeds from our employee stock purchase plan, offset by $52.6 million in payments on our FHLB line of credit.
Previous wording
We do not have any current plans for material capital expenditures other than current operating requirements. We believe that we will generate sufficient cash flows from operations to satisfy our liquidity requirements for at least the next 12 months and beyond. The key factor that will affect our future operating cash flows is the frequency and severity of catastrophic loss events. To the extent our future operating cash flows are insufficient to cover our net losses from catastrophic events, we had $1,068.3 million in cash and investment securities available at December 31, 2024. We also have the ability to access additional capital through pursuing third-party borrowings including our credit agreements, sales of our equity or debt securities, or entrance into a reinsurance arrangement.
Current wording
We do not have any current plans for material capital expenditures other than current operating requirements. We believe that we will generate sufficient cash flows from operations to satisfy our liquidity requirements for at least the next 12 months and beyond. The key factor that will affect our future operating cash flows is the frequency and severity of catastrophic loss events. To the extent our future operating cash flows are insufficient to cover our net losses from catastrophic events, we had $1.5 billion in cash and investment securities available at December 31, 2025. We also have the ability to access additional capital through pursuing third-party borrowings including our credit agreements, sales of our equity or debt securities, or entrance into a reinsurance arrangement.
Previous wording
As of December 31, 2024 we do not have any outstanding borrowings under the Credit Agreement, but we may seek to borrow under the Credit Agreement in the future.
Current wording
As of December 31, 2025 we do not have any outstanding borrowings under the Credit Agreement.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
We are a specialty insurance company that provides property and casualty insurance products to individuals and businesses. We leverage underwriting expertise and data-driven analytics to offer innovative solutions in five product categories: Earthquake, Casualty, Inland Marine and Other Property, Crop, and Fronting.
Current report — wording carried from elsewhere
During the year ended December 31, 2025, our total gross incurred losses for accident years 2024 and prior developed favorably by $56.8 million. The gross favorable development was due primarily to lower than anticipated severity of attritional losses in our Inland Marine and Other Property line of business. On a net basis, the development was favorable by $19.8 million due to the same reason.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
The following table summarizes our gross written premiums by product and shows each product's percentage of total gross written premiums for each period:
Previous report — wording carried elsewhere
Losses and loss adjustment expenses consisted of the following elements during the respective periods:
Previous report — wording carried elsewhere
The following table summarizes the components of our investment income for each period presented:
Previous report — wording carried elsewhere
Catastrophe loss ratio is calculated as follows: