Palomar Q3 Premiums Jump 28% to $767M, 2026 Outlook Raised Again

Palomar Holdings, a specialty insurer best known for earthquake coverage, reported third-quarter 2026 gross written premiums of $767.0 million, up 28.4% from $597.2 million a year earlier. Net income rose 27.0% to $65.3 million, or $2.42 a diluted share, and adjusted net income rose 47.4% to $81.3 million, or $3.01 a share. The company raised its full-year guidance again. This article walks through the numbers in its press release, what drove the growth, and the caveats that come with a changing product mix. It summarises company-reported results and is not investment advice.

The headline figures

Gross written premiums are the total premiums the insurer writes before ceding any to reinsurers. At $767.0 million they were up more than a quarter on the year. Net income was $65.3 million against $51.5 million, and diluted earnings per share were $2.42 against $1.87. Adjusted net income, a non-GAAP measure that strips out certain items, was $81.3 million against $55.2 million, and adjusted diluted earnings per share were $3.01 against $2.01.

On returns, annualised return on equity was 26.6% against 23.9%, and adjusted return on equity was 33.1% against 25.6%. Stockholders' equity was $985.0 million against $878.1 million a year earlier. The press release does not report adjusted EBITDA. Palomar repurchased 70,000 shares for $8.9 million in the quarter and declared a quarterly dividend of $0.45 per share, announced October 29 and payable December 2, 2026.

Underwriting ratios

The combined ratio was 80.8% against 78.1%, an increase of 2.7 points, and the adjusted combined ratio was 76.3% against 74.8%. Excluding catastrophe losses, the adjusted combined ratio was 75.1% against 74.0%. The catastrophe loss ratio was 1.2% against 0.8%. All of these are well below 100%, which means underwriting profit before investment income.

Underneath the combined ratio, the two components moved in opposite directions. The loss ratio rose to 41.5% from 32.3%, while the expense ratio fell to 39.3% from 45.8%. A company's ratios can shift with the mix of products. Crop and some other lines carry different loss and expense profiles than earthquake or inland marine, and a very large increase in one line can move the totals. The press release excerpt we reviewed does not offer a full explanation of the loss ratio increase, so readers should not assume a single cause.

Growth by product

Palomar recategorised its products in 2026 and reclassified the prior-year figures, so the comparisons below use the new categories. Crop gross written premiums were $226.7 million against $106.9 million, an increase of 89.3%. Casualty was $176.8 million against $171.0 million, up 3.4%. Inland marine and property were $160.7 million against $141.7 million, up 13.4%. Earthquake was $154.5 million against $149.9 million, up 3.0%. Surety and credit was $48.4 million against $14.7 million, up 228.4%.

These figures show that the company's growth came from newer lines. Earthquake, the product most associated with Palomar, grew by only 3%. Crop provided the largest dollar increase, about $120 million, followed by surety and credit, about $34 million. For readers, this means that comparing the company with its earlier profile requires attention to what it now writes. Crop insurance is seasonal and is affected by weather and commodity prices, so its contribution can vary from quarter to quarter.

Catastrophe events and guidance

The catastrophe loss discussion in the release cited hurricane and flood events in Hawaii and flood events in the Midwest. Total catastrophe losses were small relative to premium, at a 1.2% loss ratio. For the full year, Palomar's guidance is for adjusted net income of $280 million to $285 million, including $8 million to $12 million of catastrophe losses. The chief executive described the quarter as exceptional, pointing to record premiums and adjusted net income, a 16th consecutive earnings beat and the fourth raise to the 2026 adjusted net income guidance this year. He said growth came from all five product categories and credited the specialty portfolio with providing stability across market cycles. Those are management's characterisations.

Why guidance on catastrophe losses matters

Guidance that includes only $8 million to $12 million of catastrophe losses for a year implies a mild catastrophe season. An insurer that writes earthquake and weather-exposed lines can see results move sharply if a large event occurs, since one event can exceed the budget. The guidance should therefore be read as conditional on how the rest of the year unfolds.

How to read the quarter

The strong earnings and high returns are consistent with a company that is growing profitably in niches. Points of caution include the sharp jump in the loss ratio, the reliance on crop premium for much of the growth, and the fact that adjusted figures exclude items that the company chooses to adjust. Readers who want to judge the quality of earnings can compare net income with adjusted net income and read the reconciliation in the press release.

What it means for the market

Specialty insurers tend to do well when standard markets restrict capacity and poorly when price competition returns. Palomar's growth suggests that demand for specialty coverage remains strong. For consumers and businesses, that can mean more options for hard-to-place risks such as earthquake, though prices and terms are set by individual policies and regions.

What to watch next

Watch for the fourth-quarter results and 2027 outlook, how the loss ratio develops as the product mix changes, and whether earthquake growth picks up. The company's filings are on the SEC website. This article summarises public statements and is not financial advice.