Palomar Holdings, Inc. · NASDAQ:PLMR
Palomar — Investor Presentation (December 2022)
22 slides from Palomar's investor presentation, Dec 16, 2022
Slide 1: Investor Presentation December 2022
Investor Presentation December 2022
Slide 2: Disclaimer
Disclaimer This presentation contains forward - looking statements about Palomar Holdings, Inc .. (the “Company”) .. These statements involve known and unknown risks that relate to the Company’s future events or future financial performance and the actual results could differ materially from those d
Slide 3: Company Profile and Q4 2022 Business Update
Company Profile PLMR Q4 2022 Business Update Strong fourth quarter gross written premium growth via Earthquake and Fronting Attritional loss results for the fourth quarter will be closer to the high end of the previously guided annual loss ratio range resulting in a full year 2022 loss ratio clo
Slide 4: Q3 Update: 2022 Strategic Initiatives
Q3 Update: 2022 Strategic Initiatives SCALE THE ORGANIZATION 4 SUSTAIN STRONG GROWTH MONETIZE RECENT INVESTMENTS • Generated exceptional GWP growth of 66% year - over - year • 30% same - store growth excluding Fronting • Residential Earthquake and Commercial Earthquake each grew by 19% • Record new
Slide 5: PLMR 2X Fundamental Principles and Key Components
PLMR 2X FUNDAMENTAL PRINCIPLES KEY COMPONENTS • Organic growth • A nchored by non - attritional loss business ( Earthquake and Hawaii Hurricane ) • Entry into new markets driven by replicable, analytics - driven process • Continued reduction in non - earthquake catastrophic exposure • Conservative a
Slide 6: The Palomar Approach
LEARNING IDENTIFY MARKETS LEVERAGE TALENT SYSTEMS & ANALYTICS RISK TRANSFER DISTRIBUTION DIVERSIFY GROWTH The Palomar Approach 6 PREDICTABLE EARNINGS CASUALTY EXCESS PROPERTY FRONTING TX SPECIALTY HOMEOWNERS RESIDENTIAL FLOOD E&S COMMERCIAL ALL RISK RESIDENTIAL EARTHQUAKE ADMITTED COMMERCIAL ALL RIS
Slide 7: Markets
7 MARKETS • Markets with attractive long term returns but fragmented competition • Straightforward risks, legal environments and claims processes • Willingness to enter dislocated markets • Scalable underwriting approach combining data analysis with human expertise • Lines of business that can lever
Slide 8: Comprehensive Risk Transfer Program
Comprehensive Risk Transfer Program 8 $900M HAWAII HURRICANE *INURES TO BENEFIT OF CORE XOL TOWER $25M LIMIT $30M RETENTION EARTHQUAKE ONLY $12.5M RETENTION ALL PERILS $250M RETENTION EARTHQUAKE - ONLY LAYERS* ($875Mx250M, No Reinstatement) CAT AGG CORE CAT XOL TOWER 80% RETENTION 20% CESSION CA COM
Slide 9: Reinsurance Program Designed to Minimize Earnings Volatility
• In - depth portfolio analytics conducted on a monthly basis utilizing multiple catastrophe models, deterministic loss scenarios an d exposure profiles to assess risk to catastrophe losses and evaluate reinsurance coverage needs • The current program, effective June 1, 2022, provides ground up cove
Slide 10: Entrepreneurial and Experienced Management Team
Entrepreneurial and Experienced Management Team 10 NAME EXPERIENCE (YRS) PRIOR PROFESSIONAL EXPERIENCE Mac Armstrong | Chairman & Chief Executive Officer 25+ Arrowhead General Insurance Agency | Spectrum Equity | Alex. Brown & Sons Jon Christianson | President 20+ Holborn Corporation | John B. Colli
Slide 11: Commitment To ESG
Commitment To ESG 11 • Commitment to Environmental, Social and Governance (“ESG”) matters are fundamental to the business strategy and mission • Values - driven workplace that integrates ESG considerations into strategy, operations, capital allocation and investment decisions • Continue to take step
Slide 12: Proven Business Model
23% 24% 3% 14% 12% 15% 2018 2019 2020 2021 YTD'21 YTD'22 +3% Proven Business Model 12 GROWTH PROFITABILITY SHAREHOLDER RETURNS $20 $38 $9 $53 $34 $44 2018 2019 2020 2021 YTD'21 YTD'22 Gross Written Premium ($M) Adjusted Return on Equity Adjusted Net Income $155 $252 $354 $535 $385 $643 2018 2019 202
Slide 13: 2022 Guidance
2022 Guidance 13 FULL YEAR 2022 CURRENT OUTLOOK Adjusted net income $82 to $85 million • Updated full year 2022 adjusted net income guidance of $82 to $85 million • Includes additional reinsurance expense resulting from Hurricane Ian • Excludes catastrophe losses and realized and unrealized gains an
Slide 14: Appendix
Appendix @ Palomar
Slide 15: Third Quarter & YTD 2022 Financial Highlights
15 Third Quarter & YTD 2022 Financial Highlights In Thousands Three Months Ended September 30 Nine Months Ended September 30 2022 2021 2022 2021 Gross written premiums $ 253,128 $ 152,332 $ 642,751 $ 385,267 Ceded written premium (161,930) (58,073) (374,109) (153,005) Net written premiums 91,198 94,
Slide 16: Reconciliation Of Non-GAAP Metrics Used In This Presentation
Reconciliation Of Non - GAAP Metrics Used In This Presentation 16 In Thousands Three Months Ended September 30 Nine Months Ended September 30 2022 2021 2022 2021 Gross earned premiums $ 186,938 $ 117,276 $ 484,005 $ 311,088 Ceded earned premiums (108,996) (52,556) (249,766) (145,100) Net earned prem
Slide 17: Reconciliation Of Non-GAAP Metrics Used In This Presentation
Reconciliation Of Non - GAAP Metrics Used In This Presentation 17 In Thousands Three Months Ended September 30 Nine Months Ended September 30 2022 2021 2022 2021 Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other
Slide 18: Reconciliation Of Non-GAAP Metrics Used In This Presentation
Reconciliation Of Non - GAAP Metrics Used In This Presentation 18 In Thousands Three Months Ended September 30 Nine Months Ended September 30 2022 2021 2022 2021 Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other
Slide 19: Historical Growth and Current Business Mix
23.5% 12.9% 3.7% 32.5% 12.2% 5.1% 3.6% 1.5% 5.0% Historical Growth and Current Business Mix 19 Q3 2022 GWP: $253M 2014 2015 2016 2017 2018 2019 2020 2021 YTD'21 YTD'22 Annual Gross Written Premium By Year $17M $55M $82M $120M $155M $ 252 M $ 354 M $535M $ 643 M $ 385 M Residential Earthquake Commerc
Slide 20: Innovative Technology Platform
Innovative Technology Platform 20 • Technology systems built for automation and efficiency • Integration between pricing models, policy administration and analytics • Ability to rapidly quote and bind policies for producers • API development for partners with Palomar Automated Submission System (PAS
Slide 21: Flexible Distribution Network
Flexible Distribution Network 21 • Predominant channel for commercial property and casualty insurance • Much higher average premium than retail business • Rapid scale via utilization of existing distribution infrastructures • Products ultimately sold by retailers and wholesalers • Companion offers •
Slide 22: Strategic Partnerships
*Does not include all partnerships 2014 2022 2021 2020 2019 2018 2017 2016 2015 2014 STRATEGIC MATTERS Strategic Partnerships 22 Eight years of partnerships continue with one of the most robust pipelines in the company’s history across multiple product c ate gories
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