Palomar

2024
A N N U A L  R E P O R T

PALOMAR  2024 ANNUAL REPORT
With strong financial results 
and a focus on sustainable, 
profitable growth, we are 
proud to have delivered 
significant shareholder 
value this year.
Founded in 2014 by a team with deep experience across 
underwriting, analytics, reinsurance, and capital markets, 
Palomar is an innovative specialty insurer serving residential 
and commercial clients in five product categories: Earthquake, 
Inland Marine & Other Property, Fronting, Casualty, and 
Crop. Our underwriting and analytical expertise allow us to 
concentrate on certain markets that we believe are underserved 
and can generate attractive risk-adjusted returns.
2024 was an exceptional year for Palomar...
35%
Gross written 
premium growth
43%
Adjusted net 
income growth
A
Upgraded to “A” (Excellent) FSC X group 
rating by AM Best
Entered Surety 
market by 
acquiring First 
Indemnity of 
America (FIA)
Added exceptional 
leaders to an already 
strong team
$1.5B
Gross Written Premiums
$117.6M
Net Income
$133.5M
Adjusted Net Income
78%
Combined Ratio
74%
Adjusted Combined Ratio
20%
Return on Equity
22%
Adjusted Return on Equity

1
2024 ANNUAL REPORT  PALOMAR
1 Beginning in 2022, we modified our definition of adjusted net income to adjust for net realized and unrealized gains and losses. We believe adding this 
adjustment provides a more meaningful comparison of our performance. We have modified the prior period figures accordingly.
Delivering Profitable 
Growth for Shareholders
■ Gross Written Premiums
■ Adjusted Net Income1
1
2024
2020
2021
2022
2023
2024 ANNUAL REPORT  PALOMAR
$1.5B
$535M
$882M
$1.1B
$8M
$52M
$71M
$94M
$134M
$354M

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PALOMAR  2024 ANNUAL REPORT
Palomar’s diverse portfolio of innovative 
specialty insurance products is designed 
to expertly manage risk, reduce earnings 
volatility, and sustain profitable growth.
2
PALOMAR  2024 ANNUAL REPORT
22%
Inland Marine 
& Other Property
34%
Earthquake
15%
Casualty
7%
Crop
22%
Fronting
Percentage of Total Gross Written 
Premiums by Product Category
Total GWP
$1.5B

3
2024 ANNUAL REPORT  PALOMAR
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2024 ANNUAL REPORT  PALOMAR
Palomar 2X Strategy
Introduced in 2022, Palomar 2X is a strategic imperative that aims 
to double adjusted net income and achieve an adjusted return on 
equity above 20% over an intermediate time frame.
Anchored by 
Earthquake 
franchise
Organic 
growth
Low volatility – 
specialty lines focus
Entry into 
new markets
Conservative and 
comprehensive 
risk transfer 
strategy
Scale the 
business
Achieved initial Palomar 2X goal within three years.

4
As we closed out our eleventh 
year, I can’t help but look back 
on the tremendous progress 
we have made. 2024 was a 
banner year for Palomar. We 
achieved several meaningful and 
noteworthy accomplishments, 
driven by the dedication, hard 
work, and innovative spirit of 
our exceptional team.
Palomar’s 2024 
financial results were 
stellar as we continued 
our strong record of 
profitable growth.
Mac Armstrong
Chairman and Chief Executive Officer
4
PALOMAR  2024 ANNUAL REPORT

5
2024 ANNUAL REPORT  PALOMAR
Our financial results were stellar as we continued our strong 
record of profitable growth. Our gross written premiums 
and adjusted net income growth of 35% and 43%, 
respectively, led to record top- and bottom-line results. 
Additionally, the year featured significant milestones 
including an upgrade by AM Best to an “A” (Excellent) 
rating, as well as the acquisition of FIA. We expanded our 
team by recruiting seasoned industry professionals, whose 
addition helped us reach our Palomar 2X target of doubling 
2021 adjusted underwriting income in three years, the 
shorter end of our intermediate time frame.
Core to our success in 2024 was the execution of four 
strategic imperatives we laid out at the beginning of the 
year: Grow Where We Want, Manage Dislocation and 
Diversification, Deliver Predictable Earnings, and Scale 
the Organization.
Imperative 1: Grow Where We Want
Our first imperative, Grow Where We Want was centered 
on achieving targeted premium growth across our five 
key product categories (Earthquake, Inland Marine & Other 
Property, Fronting, Casualty, and Crop) while limiting portfolio 
volatility and generating strong risk-adjusted returns. 
Driven by this mantra, we achieved record premiums of over 
$1.5 billion in 2024 and continued to establish ourselves 
as a leader in the Earthquake market. During the year, our 
Residential and Commercial Earthquake products anchored 
our growth as we maintained strong new business sales 
and high policy retention. Our balanced approach of writing 
both Residential and Commercial Earthquake products 
helped us navigate market cycles and maintain margins, 
even when commercial rates soften. 
Our Casualty franchise saw significant growth with gross 
written premiums increasing 161%. Our strategy in the 
Casualty market is firmly rooted in expertly underwriting 
specialized niche segments. A few standout performers this 
year included Real Estate E&O, Commercial Contractors 
Liability, Primary Casualty, and Environmental Liability. We 
are judiciously growing these lines of business through 
disciplined underwriting, prudent risk management, and 
conservative reserving practices.
Lastly, our Crop franchise continues to grow and scale. In 
the fourth quarter, Benson Latham, Executive Vice President, 
Head of Crop, joined our team to spearhead Palomar’s Crop 
franchise, bolstering the efforts made over the past two 
years to build the foundation for a much larger business. 
We delivered $116 million in gross written premiums in our 
first full year in operation, up from $12 million in 2023. I am 
enthusiastic about the significant growth opportunities for 
Palomar in the Crop market.
“Core to our success in 2024 was the execution of the four strategic 
objectives we laid out at the beginning of the year: Grow Where We 
Want, Manage Dislocation and Diversification, Deliver Predictable 
Earnings, and Scale the Organization.”

6
PALOMAR  2024 ANNUAL REPORT
Imperative 2: Manage Dislocation 
and Diversification 
Our second imperative, Manage Dislocation and 
Diversification, required us to navigate market disruption 
and displacement while further diversifying our business. 
Over the past few years, we adeptly navigated a 
generationally hard property catastrophe reinsurance 
market. This year we successfully renewed our catastrophe 
excess of loss reinsurance program at not only compelling 
terms and conditions but at prices exceeding expectations 
provided to shareholders. Palomar’s reinsurance coverage 
now extends to $3.2 billion for Earthquake events, $420 
million of which was secured through the issuance of 
a new catastrophe bond in May 2024. Additionally, our 
Earthquake event retention remains at a modest $20 
million, less than 3% of year-end stockholders’ equity. 
The successful completion of our June 1 reinsurance 
renewal is a testament to our business mix and risk profile, 
which has been curated with the goal of delivering stable, 
predictable results. 
In August 2024, we raised $116 million through a primary 
equity issuance to help finance our acquisition of FIA and 
to support organic growth in our rapidly growing Crop and 
Casualty franchises. We are also using a portion of the 
capital to increase our risk participation in selected lines 
such as Crop and to increase our maximum limits in mature 
markets like Earthquake and Builders Risk. 
The FIA acquisition provides diversification as Surety is an 
attractive and profitable market segment that, like Crop 
insurance, has a limited correlation to P&C market cycles. 
I believe FIA and the Surety franchise will be an important 
contributor for Palomar over the longer term.
Imperative 3: Deliver Predictable Earnings
Our third imperative, Deliver Predictable Earnings, was 
evident in our full-year 2024 results in which we achieved 
an adjusted return on equity of 22%, above our Palomar 2X 
goal of 20%, and grew our surplus over 55%. Additionally, 
we beat earnings consensus every quarter this year, 
raising our streak of surpassing earnings forecasts to nine 
quarters in a row.
Our commitment to minimizing potential losses from 
continental hurricane and severe convective storm activity, 
evidenced by a more than 80% reduction in our continental 
hurricane 250-year probable maximum loss, paid dividends 
this year. Despite elevated natural catastrophe and an active 
wind season, we exceeded our 2024 guidance and achieved 
$133.5 million in adjusted net income. This consistent 
financial performance underscores the strength of our 
Palomar 2X strategy, our diverse product portfolio, and the 
excellence of our team.
Imperative 4: Scale the Organization 
Our fourth imperative in 2024, Scale the Organization, 
involved making the requisite investments to execute our 
Palomar 2X strategy. This effort starts with an investment in 
people, and I’m proud to say that we’ve recruited industry-
leading talent to join the Palomar team this year. (See next 
page for 2024 Leadership Hires)
We elevated our operational prowess and strategic 
leadership through multiple investments made in 2024. We 
are laying the groundwork for long-term success, ongoing 
growth, and expanded profit margins.

7
2024 ANNUAL REPORT  PALOMAR
2024 Leadership Hires
Tim Carter
Chief People Officer
Althea Garvey
Chief Claims Officer
Rudy Hervé
Chief Operating Officer
Benson Latham
Executive Vice President 
Head of Crop
James Long
Chief Technology Officer
Tricia Panaguiton
Executive Vice President 
Reinsurance
David Sapia
Executive Vice President 
Head of E&S Casualty
Looking Ahead
Looking ahead to 2025, we are introducing four new strategic 
imperatives that are a logical progression from those of 
2024. First: Integrate and Operate. We will monetize the 
investments that we made throughout 2024, most notably 
the integration of FIA. Second: We will Build New Market 
Leaders Deliberately. Our Crop and Casualty franchises 
have strong leadership and the capital support necessary 
to become market leaders; but we will not overextend our 
underwriting or compromise our risk management approach 
in the short term. Third: We must Remember What We Like 
and more importantly, what we don’t like. This is a natural 
migration from the Grow Where We Want mantra of 2024. 
We will stick to our conservative and well-defined appetite in 
the market and focus on profitable growth. Fourth: Continue 
to Generate Consistent Earnings, and with the addition 
of new talent, find new sources of earnings growth while 
preserving a healthy reserve base. 
Last year’s performance was exceptional, and I believe the 
future is bright. Our heritage products, alongside newer 
offerings like Crop, Casualty, and Surety, provide strong 
visibility to continued growth and above-market returns. 
I take immense pride in the progress and achievements 
we made this past year, thanks to the dedication and hard 
work of our team. We have consistently adhered to our 
core values which help drive our success. We strive to be a 
leader in our industry. By staying true to the principles that 
define us, I am confident that we are well-positioned to 
build on the legacy of excellence we have established and 
remain a specialty insurance leader.
Mac Armstrong
Chairman and Chief Executive Officer

8
PALOMAR  2024 ANNUAL REPORT
Financial Highlights
(Year ended December 31) ($ in thousands, except per share data)
2024
2023
Change
% Change
Gross written premiums
$
1,541,962 
$
1,141,558 
$
400,404 
 
35.1%
Ceded written premiums
 
(897,111)
 
(731,531)
 
(165,580)
 
22.6%
Net written premiums
 
644,851 
 
410,027 
 
234,824 
 
57.3%
Net earned premiums
 
510,687 
 
345,913 
 
164,774 
 
47.6%
Commission and other income
 
2,784 
 
3,367 
 
(583)
 
(17.3)%
Total underwriting revenue(1)
 
513,471 
 
349,280 
 
164,191 
 
47%
Losses and loss adjustment expenses
 
134,759 
 
72,592 
 
62,167
 
85.6%
Acquisition expenses, net of ceding commissions 
and fronting fees
 
149,657 
 
107,745 
 
41,912
 
38.9%
Other underwriting expenses
 
117,113 
 
88,172 
 
28,941 
 
32.8%
Underwriting income(1)
 
111,942 
 
80,771 
 
31,171 
 
38.6%
Interest expense
 
(1,138)
 
(3,775)
 
2,637
 
(69.9)%
Net investment income
 
35,824 
 
23,705 
 
12,119 
 
51.1%
Net realized and unrealized gains (losses) on investments
 
4,568 
 
2,941 
 
1,627 
 
55.3%
Income before income taxes
 
151,196 
 
103,642 
 
47,554 
 
45.9%
Income tax expense
 
33,623 
 
24,441 
 
9,182 
 
37.6%
Net income
$
117,573 
$
79,201 
$
38,372 
 
48.4%
Adjustments:
 
   
 
   
 
   
 
   
Net realized and unrealized (gains) losses on investments
 
(4,568)
 
(2,941)
 
(1,627)
 
55.3%
Expenses associated with transactions
 
1,479 
 
706 
 
773 
 
109.5%
Stock-based compensation expense
 
16,685 
 
14,913 
 
1,772 
 
11.9%
Amortization of intangibles
 
1,558 
 
1,481 
 
77 
 
5.2%
Expenses associated with catastrophe bond
 
2,483 
 
1,640 
 
843
 
51.4%
Tax impact
 
(1,699)
 
(1,480)
 
(219)
 
14.8%
Adjusted net income(1)
$
133,511 
$
93,520 
$
39,991 
 
42.8%
Key Financial and Operating Metrics
 
   
 
   
 
   
 
   
Annualized return on equity
 
19.6%
 
18.5%
 
   
 
   
Annualized adjusted return on equity(1)
 
22.2%
 
21.9%
 
   
 
   
Loss ratio
 
26.4%
 
21.0%
 
   
 
   
Expense ratio
 
51.7%
 
55.7%
 
   
 
   
Combined ratio
 
78.1%
 
76.6%
 
   
 
   
Adjusted combined ratio(1)
 
73.7%
 
71.2%
 
   
 
   
Diluted earnings per share
$
4.48 
$
3.13 
 
   
 
   
Diluted adjusted earnings per share(1)
$
5.09 
$
3.69 
 
   
 
   
Catastrophe losses
$
27,846 
$
3,442 
 
   
 
   
Catastrophe loss ratio(1)
 
5.5%
 
1.0%
 
   
 
   
Adjusted combined ratio excluding catastrophe losses(1)
 
68.3%
 
70.2%
 
   
 
   
Adjusted underwriting income(1)
$
134,147 
$
99,511 
$
34,636 
 
34.8%
(1) Indicates non-GAAP financial measure; see “Reconciliation of Non-GAAP Financial Measures” within “Managements Discussion and Analysis of Financial 
Condition and Results of Operations” for a reconciliation of the non-GAAP financial measures to the most directly comparable financial measures prepared in 
accordance with GAAP.

 
 
 
UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
FORM 10-K 
(Mark One) 
☒   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
    For the fiscal year ended December 31, 2024 
or 
☐   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
    For the transition period from ___________ to ___________ 
Commission File Number: 001-38873 
Palomar Holdings, Inc. 
(Exact name of registrant as specified in its charter) 
  
Delaware 
 
83-3972551 
(State or other jurisdiction of incorporation or organization) 
 
(I.R.S. Employer Identification No.) 
 
 
 
7979 Ivanhoe Avenue, Suite 500 
La Jolla, California 
 
92037 
(Address of principal executive offices) 
 
(Zip Code) 
(619) 567-5290 
Registrant’s telephone number, including area code) 
Securities registered pursuant to Section 12(b) of the Act: 
Title of each class 
Trading Symbol(s) 
Name of each exchange on which registered 
Common Stock, par value $0.0001 per share 
PLMR 
The Nasdaq Stock Market LLC 
Securities registered pursuant to section 12(g) of the Act: None 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒   No ☐ 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Act. Yes ☐  No ☒ 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and 
(2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐ 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the 
registrant was required to submit such files).  Yes ☒  No ☐ 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting 
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” 
and “emerging growth company” in Rule 12b-2 of the Exchange Act. 
  
  Large accelerated filer ☒  
Accelerated filer ☐ 
  Non-accelerated filer ☐ 
Smaller reporting company ☐ 
  Emerging growth company ☐ 
 
  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for 
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐  
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness 
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public 
accounting firm that prepared or issued its audit report. ☒  
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the 
registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ 
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based 
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes ☐   No ☒  
Aggregate market value of shares of the registrant’s common stock held by non-affiliates as of June 30, 2024 was approximately 
$1,977,345,127 
Number of shares of the registrant’s common shares outstanding at February 22, 2025: 26,677,622 
DOCUMENTS INCORPORATED BY REFERENCE: 
Portions of the registrant’s definitive proxy statement relating to its 2025 annual meeting of stockholders (the "2025 Proxy Statement") are 
incorporated by reference into Part III of this Annual Report on Form 10-K. The 2025 Proxy Statement will be filed with the Securities and 
Exchange Commission within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. 
 
 

2 
TABLE OF CONTENTS 
  
 
 
Page 
PART I 
 
 
 
 
 
Item 1. 
Business ......................................................................................................................................................... 
3
 
 
 
Item 1A. 
Risk Factors ................................................................................................................................................... 
26
 
 
 
Item 1B. 
Unresolved Staff Comments .......................................................................................................................... 
51
  
  
  
Item 1C. 
Cybersecurity ................................................................................................................................................. 
51
 
 
 
Item 2. 
Properties ....................................................................................................................................................... 
52
 
 
 
Item 3. 
Legal Proceedings.......................................................................................................................................... 
52
 
 
 
Item 4. 
Mine Safety Disclosures ................................................................................................................................ 
52
 
 
 
PART II 
 
 
 
 
 
Item 5. 
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of 
Equity Securities ........................................................................................................................................ 
52
 
 
 
Item 6. 
[Reserved] ...................................................................................................................................................... 
54
 
 
 
Item 7. 
Management’s Discussion and Analysis of Financial Condition and Results of Operations ........................ 
54
 
 
 
Item 7A. 
Quantitative and Qualitative Disclosures About Market Risk ....................................................................... 
81
 
 
 
Item 8. 
Financial Statements and Supplementary Data .............................................................................................. 
83
 
 
 
Item 9. 
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ........................ 130
 
 
 
Item 9A. 
Controls and Procedures ................................................................................................................................ 130
 
 
 
Item 9B. 
Other Information .......................................................................................................................................... 131
 
 
 
Item 9C. 
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ........................................................... 131
 
 
 
PART III 
 
 
 
 
 
Item 10. 
Directors, Executive Officers and Corporate Governance ............................................................................. 131
 
 
 
Item 11. 
Executive Compensation ............................................................................................................................... 131
 
 
 
Item 12. 
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...... 131
 
 
 
Item 13. 
Certain Relationships and Related Transactions, and Director Independence ............................................... 131
 
 
 
Item 14. 
Principal Accountant Fees and Services ........................................................................................................ 131
 
 
 
PART IV 
 
 
 
 
 
Item 15. 
Exhibits and Financial Statement Schedules ................................................................................................. 132
 
 
 
Item 16. 
Form 10 K Summary ..................................................................................................................................... 133
 
 
 

3 
PART I 
  
Item 1. Business 
  
Who We Are 
  
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. 
  
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. 
  
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%. 
  
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. 
  
Our Business 
  
Our management team founded our company to address unmet needs that we perceived to exist in certain specialty 
insurance markets. These markets have primarily been served by either large generalist insurance companies and state-
managed entities applying “one-size-fits-all” pricing and policy forms across broad geographies. Our admitted products 
feature rates and policy forms approved by state insurance departments and are backed by state guaranty funds, providing a 
further level of security to policyholders. We believe that for our personal lines products, both our customers and 
distribution partners prefer the ease of use and security of admitted products with flexible coverages. We write surplus lines 
policies primarily for our commercial business. As the E&S market does not involve the same level of regulation and 
required approvals as the admitted market, our surplus lines products enable us to react quickly to changing market 
conditions. 
  
We believe that we can generate superior risk-adjusted returns through the use of underwriting methods 
that apply a more granular approach to pricing than what is typically offered by standard carriers and that better reflect our 
customers' underlying risk. We believe this market acceptance and return potential is evidenced by the fact that we have 
quickly and profitably grown to become the 2nd largest earthquake insurer in the state of California and the 3rd largest 
earthquake insurer in the United States. We also continue to experience growth and profitability across our other lines of 
business. 
   
 
 

4 
Our five product lines include: Earthquake, Inland Marine and Other Property, Casualty, Fronting, and Crop. We 
seek to write a diverse mix of business by loss exposure, customer type and geography to capitalize on market 
opportunities, mitigate the potential impact of any single catastrophe event or shock loss, and reduce our cost of 
reinsurance. 
  
We continue to develop new product offerings for lines of business that harness our core competencies and where 
we believe we can generate attractive risk-adjusted returns. Recent examples of our commitment to developing new 
products include the expansion of our Casualty and Crop insurance offerings. In January 2025, we completed the 
acquisition of FIA, a New Jersey domiciled insurance carrier specializing in surety bonds for small to medium sized 
contractors primarily in the Northeast United States. We believe these markets complement our existing product offerings 
and offer significant growth opportunities across both the admitted and E&S markets.  
  
We seek to have a diversified business mix, anchored by our core earthquake offerings and we have made 
substantial progress diversifying our business by product, market, and geography. In 2014, our first year of operations, all 
our premiums were related to earthquake insurance. For the year ended December 31, 2024, 34% of our gross written 
premiums were related to earthquake insurance and non-earthquake related premiums grew 45% while earthquake related 
premiums grew 20% versus the prior year. 
  
  
 
 

5 
Our admitted insurance subsidiary, PSIC, is licensed in 44 states and we have the flexibility to write nationally 
through our surplus lines subsidiary, PESIC. California represents our largest current exposure with 43% of our gross 
written premiums for the year ended December 31, 2024. Our business strategy involves continuing to grow our core 
earthquake insurance business, extending the reach of Inland Marine and Other Property Products, and diversifying our 
book of business into uncorrelated products such as Casualty, Fronting and Crop. The following charts illustrate our 
business mix by product, state, and entity for the year ended December 31, 2024: 
  
 
 
 
 
 
  
We employ a highly granular and analytical underwriting process to assess each insurance policy that we write, 
and we ensure that the risk characteristics of business assumed through our channel partnerships or written by program 
administrator partners are consistent with our underwriting of direct business. Our systems enable us to underwrite our 
personal lines business automatically within minutes by leveraging our proprietary modeling techniques to analyze data at 
the geocode or ZIP code level. With our commercial products, we balance automation with human expertise and controls to 
underwrite more complex risks. Because the data we collect through our underwriting process is highly granular, we can 
utilize detailed portfolio analytics to actively manage aggregation of policies and to ensure an appropriate dispersion of 
risks across our full portfolio. Similarly, our Casualty products are subject to extensive risk analysis, including review by 
experienced underwriters, thorough actuarial review, fostering broker relationships to obtain complete underwriting 
information, and accurately assessing and quantifying loss exposures to inform pricing, terms and conditions, limits, and 
attachment points. 

6 
Our Competitive Strengths 
  
We believe that our competitive strengths include: 
  
Focus on capturing market share and expanding underserved markets. We focus on specialty insurance markets 
that we believe are underserved, and where we believe we can capture market share and expand the market to new 
customers. In our target markets, there are few direct competitors who focus exclusively on specialty risks. With our 
specialized knowledge of these risks and our customized products, pricing and risk management, we believe we can serve 
these markets better than our competitors. Furthermore, we can expand our markets by creating products that attract 
insureds who previously had not obtained coverage. Our focus and expertise have enabled us to rapidly increase our market 
share; for example, we have grown to become the 2nd largest earthquake insurer in California and the 3rd largest 
earthquake insurer in the United States. In markets with similar characteristics, we are experiencing growth and profitability 
across our other lines of business. We believe that our focus on addressing the needs of underserved specialty markets 
provides us with a competitive advantage. 
  
Differentiated products built with the customer in mind. We have invested significant time and resources into 
developing what we believe are innovative and unique product offerings to address customer needs within our target 
markets. Our products generally offer our customers flexible features that are not typical of standard products in our 
markets. By offering our customers the ability to manage pricing, coverage options, and deductibles, we believe we have 
created products that are attractive both to those who have existing coverages with our competitors, and to those who have 
not historically bought insurance in our target markets. Furthermore, since our admitted products have been approved by 
individual state regulators and are supported by proprietary pricing models, we believe that these products are not easily 
replicable, particularly by existing carriers who would face the burden of gathering data, building new models, and revising 
existing rates and policy forms with regulators. 
  
Product offerings in both the admitted and E&S markets. We believe that our core capabilities can be applied to 
both the admitted as well as the E&S insurance markets. Admitted products are backed by state guarantee funds and, as a 
result, are subject to more regulation, as admitted insurance companies must receive approval for rates and policy forms 
from individual state regulators. Our admitted insurance company subsidiary, PSIC, is licensed to write business in 
44 states. We primarily serve the personal lines insurance market through the sale of admitted insurance products as those 
risks tend to be more homogenous in nature and retail agents prefer the sale of admitted products. We offer E&S insurance 
products through our surplus lines insurance company subsidiary, PESIC, which is licensed to do business on a national 
basis. We primarily serve the commercial lines insurance market through the sale of E&S insurance products as those 
markets are better suited to the flexibility of rate and form available to E&S carriers. Having E&S offerings allows us to 
react quickly to changing market conditions and to accelerate the expansion of our business nationally as we do not have to 
go through the process of receiving required approvals from individual state regulators. 
  
Analytically driven, disciplined and scalable underwriting. Our underwriting approach combines decades of 
specialized underwriting experience of our management team with sophisticated, customized modeling tools we have 
developed that utilize extensive geospatial and actuarial data across all our lines of business. Our proprietary models enable 
automated pricing of risks at the geocode or ZIP code level, in contrast to our competitors who we believe use less granular 
analytics and more manual underwriting processes. For example, our Residential Flood products underwrite risks at the 
distinct address level compared to broader pricing zones employed by alternative product offerings in the market. Our 
analytical pricing framework is embedded in all facets of our business and is incorporated into our filings, pricing, 
underwriting and risk management. We believe that our analytically-driven underwriting approach has been the foundation 
of our ability to generate attractive risk-adjusted underwriting margins. 
  
Multi-channel distribution model. Our open architecture distribution framework allows us to attract and 
underwrite business from multiple channels. We work with a wide variety of retail agents, program administrators, and 
wholesale brokers. We serve over 25 insurance companies as a specialty partner either by issuing companion policies or 
providing reinsurance for in-force risks that fit our strict underwriting parameters. The breadth and flexibility of our 
distribution model allows us to generate premium from many different parts of the insurance ecosystem and to rapidly take 
advantage of changing market conditions. 
   
 
 

7 
Sophisticated and conservative risk transfer program. Our risk transfer program utilizes excess of loss, quota 
share and property per risk coverages for both our property and casualty products. We manage our exposure to catastrophe 
events through several risk mitigation strategies, including the purchase of reinsurance. We believe that our reinsurance 
program provides appropriate levels of protection and improves visibility into our earnings. Our current reinsurance 
program is designed to limit our net loss before tax from a single event to $20 million, equivalent to approximately 2.7% of 
our total stockholders’ equity as of December 31, 2024. At each reinsurance treaty renewal, we consider any plans to 
change the underlying insurance coverage we offer, our current capital, our risk appetite, and the cost and availability of 
reinsurance coverage, which may vary from time to time.  Further, we buy program specific quota share reinsurance 
coverage for certain lines of business to mitigate the impact of attritional losses on underwriting results. In our quota share 
agreements, we cede a portion of our premiums to reinsurers and, in return, we also cede a proportionate amount of losses 
and receive ceding commissions from the reinsurers. 
  
Emphasis on the use of technology and analytics across our business. We have built a proprietary operating 
platform that employs best practices derived from our management team’s extensive prior experience. Our technology 
platform is not burdened by outdated technology and processes which may be utilized by older insurance companies. In 
building our platform, we have emphasized automated processes that use granular data and analytics consistently across all 
aspects of our business. Our internally developed Palomar Automated Submission System (“PASS”) acts as our interface 
with retail agents and wholesale brokers. PASS serves as the conduit to our policy administration system that integrates 
policy issuance, underwriting, billing and portfolio analytics. Our platform enables us to rapidly quote and bind policies via 
automated processing, and to run detailed risk-management analytics for internal and external constituents including 
distribution partners, carrier partners and reinsurers. We believe that this real-time access to data and analytics provides us 
with an advantage in distributing our products, managing our risk, and purchasing reinsurance. 
  
Highly experienced management team and board. Our management team is highly qualified, with an average of 
more than twenty years of relevant experience in insurance, reinsurance and capital markets. We are led by our Chairman 
and Chief Executive Officer, Mac Armstrong, who prior to founding Palomar was President of Arrowhead General 
Insurance Agency (“Arrowhead”). Many of our key management team members such as Mr. Armstrong, Jon Christianson, 
our President, Jon Knutzen, our Chief Risk Officer, and Chris Uchida, our Chief Financial Officer, have served in their 
roles for over five years and worked together prior to Palomar. We have also recently made key management hires in 
operations, technology, claims, people and talent, E&S Casualty, and Crop. These new management hires are insurance 
industry veterans with proven track records and deep industry knowledge. We believe their skills and experience will assist 
Palomar during our next phase of growth and expansion. In addition, our Board of Directors is comprised of accomplished 
industry veterans who bring decades of experience from prior roles with insurance and other companies. 
  
Our Strategy 
  
We believe that our approach will allow us to achieve our goals of both growing our business and generating 
attractive returns. Our strategy involves: 
  
Expand our presence in existing markets. We compete in the United States property and casualty market that 
represented over $965 billion in total written premiums during 2023. By comparison, we generated $1.5 billion of gross 
written premiums for the year ended December 31, 2024. We believe that our differentiated product offerings will enable us 
to continue growing in our existing markets by (i) gaining market share from competitors who have less flexible product 
offerings; (ii) continuing to expand our strong distribution network; and (iii) increasing the total addressable market by 
providing attractive products to customers who previously elected not to purchase coverage. We continue to evaluate 
additional geographic markets and lines of business where we believe we can generate attractive risk-adjusted returns by 
harnessing our core competencies. 
  
  
 
 

8 
Maintain our distinctive combination of profitability and growth. Our analytically informed risk selection and 
disciplined underwriting guidelines enable us to identify segments of the market that are both underserved and mispriced. 
As a result, we are able to generate an attractive underwriting profit by expanding the addressable market and winning 
market share with our distinctive products. For the years ended December 31, 2024 and 2023, our return on equity (“ROE”) 
was 19.6% and 18.5%, and our adjusted ROE was 22.2% and 21.9%, respectively. As we seek premium growth, we intend 
to remain disciplined in our pricing, underwriting, and risk management processes, including closely managing our net 
probable maximum loss (“PML”), average annual loss (“AAL”), and spread of risk. We will remain focused on lines of 
business with attractive pricing dynamics and a favorable risk / return profile, and we will not participate in markets where 
we believe our business model cannot add incremental value. 
  
Maintain a diversified book of business. We currently write a book of specialty insurance that is diversified by 
underlying loss exposure, customer type and geography. Our major product lines and exposures are uncorrelated, such that 
events contributing to a loss in one product line are unlikely to generate material losses in our other product lines. 
Furthermore, our Crop products are uncorrelated with the traditional P&C cycle, enhancing the diversification of our 
specialty product portfolio. The diversification of our book of business improves our risk-adjusted returns, insulates us from 
swings in any single insurance or reinsurance market, and allows us to capitalize on market shifts opportunistically. As we 
grow, we intend to maintain a diversified book of business and continually capitalize on these advantages. 
  
Leverage our underwriting, analytics, and risk transfer acumen to generate fee income. We generate fee 
income through the use of quota share reinsurance treaties whereby third-party reinsurers pay us a ceding commission in 
order to access attractive pools of risk. Our Fronting and Crop products offer additional sources of fee income that we earn 
from program administrators and reinsurers seeking to access our licensed insurance companies. Our multi-channel 
distribution model produces attractive business that we aim to translate into a balanced mix of underwriting and fee income. 
As a result, we have an increasing number of partnerships where we write policies on behalf of other insurance and 
reinsurance companies who pay us a ceding commission to access the business. We believe these partnerships are an 
important validation of the intellectual property and expertise we have developed, and that this strategy enables us to scale 
our business more quickly and profitably and provides a growing and valuable fee stream to complement our profitable 
underwriting operations. 
  
Continue to purchase conservative reinsurance coverage, while optimizing for risk-adjusted returns. We believe 
that protecting our earnings and balance sheet through the use of reinsurance is critical to our business and supports our 
ability to meet obligations to our policyholders and other constituents, and generate strong returns for our stockholders. We 
plan to maintain a conservative, robust reinsurance program to provide protection against severe or frequent losses. Our 
goal is to protect our earnings by constructing a reinsurance program that mitigates losses and ensures profitability in spite 
of potential shock losses or catastrophic activity. As we grow, we expect that we will benefit from increased scale and 
diversification of risk in our business, and we plan to optimize our reinsurance program continuously by adjusting terms, 
structure, pricing, and participants to maximize our risk-adjusted returns. 
  
Continue to invest in proprietary technology assets that deepen our competitive advantage. We believe that the 
success of our business is centered upon our relentless commitment to using technology to improve our business. For 
example, we have dedicated software developers focused on building application programming interfaces (“APIs”), which 
enable seamless integration into the point-of-sale systems of our partner carriers and distribution partners. This integration 
increases the ease of use for our partners, embeds us within their systems, and facilitates real-time sharing of information 
between our distribution, underwriting, and risk management functions. We will continue to evaluate and invest in 
proprietary and third-party technology assets, which deepen our competitive advantage, strengthen our operations, and 
improve our returns. 
  
History 
  
We are an insurance holding company that was originally incorporated under the laws of the Cayman Islands in 
October 2013. In March 2019, we implemented a domestication pursuant to Section 388 of the Delaware General 
Corporation Law and became a Delaware corporation. 
  
  
 
 

9 
Our primary operating subsidiary, PSIC, is an insurance company domiciled in the state of Oregon and is an 
admitted insurer licensed to write business in 44 states as of December 31, 2024. PSIC was formed in February 2014. In 
August 2014, we incorporated Palomar Specialty Reinsurance Company Bermuda Ltd.(“PSRE”), a Bermuda-based 
reinsurance subsidiary that provides reinsurance support exclusively to PSIC and PESIC. In August 2015, we incorporated 
Prospect General Insurance Agency, Inc., now known as Palomar Insurance Agency, Inc., (“PIA”), to underwrite specialty 
insurance products on behalf of third-party insurance companies. During 2020, we received regulatory approval for and 
capitalized PESIC. PESIC is domiciled in the State of Arizona and licensed in Arizona to write surplus lines business on a 
nationwide basis across all our existing lines of business.  During 2023, we formed Palomar Underwriters Exchange 
Organization, Inc. ("PUEO"), a Delaware incorporated management company that provides services by serving as the 
attorney-in-fact to Laulima Exchange (“Laulima”), a Hawaii domiciled reciprocal exchange. 
  
Our Products 
  
We provide personal and commercial specialty insurance products in our target markets. With the goal of giving 
customers better options, we designed an analytical framework to create flexible products with innovative coverages and 
pricing that we believe better reflects the underlying risk. Using this framework, we initially introduced Residential and 
Commercial Earthquake products in 2014 and have subsequently expanded our product portfolio to cover multiple specialty 
risks in the United States. We have grown our business by entering markets that demonstrated one or more of the following 
attributes: (i) have loss characteristics, including limited attritional losses, similar to our initial earthquake product, (ii) can 
benefit from our technology platform, data analytics and customer centric products, and/or (iii) allow us to leverage our 
existing underwriting talent, reinsurance expertise and/or distribution relationships. 
  
Our lines of business include: Earthquake, Inland Marine and Other Property, Casualty, Fronting, and Crop. We 
aim to develop a diversified portfolio with exposure spread across geographic regions with limited correlation. Although 
our largest exposure is in the state of California, we write business across the United States. We tailor our risk participation 
to optimize our returns depending on the conditions of specific markets. In total, we are licensed as an admitted insurer in 
44 total states. The following tables show gross written premiums (“GWP”) by state and product for the years ended 
December 31, 2024, 2023 and 2022. 
  
  
  
Year Ended December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
  
  
($ in thousands) 
  
  
    
  
    
% of 
      
  
    
% of 
      
  
    
% of 
  
  
  Amount     
GWP 
    Amount     
GWP 
    Amount     
GWP 
  
State 
      
        
        
        
        
        
  
California ....................................   $ 
668,635      
43.4%  $ 
600,791      
52.6%  $
418,809      
47.5 %
Texas ...........................................     
124,416      
8.1%    
95,517      
8.4%    
90,459      
10.3 %
Hawaii .........................................     
72,558      
4.7%    
47,388      
4.2%    
40,157      
4.5 %
Florida .........................................     
67,008      
4.3%    
47,595      
4.2%    
38,715      
4.4 %
Washington .................................     
57,900      
3.8%    
49,494      
4.3%    
41,827      
4.7 %
New York ...................................     
38,919      
2.5%    
18,424      
1.6%    
12,510      
1.5 %
Oregon ........................................     
29,550      
1.9%    
23,220      
2.0%    
24,108      
2.7 %
Illinois .........................................     
20,901      
1.4%    
22,340      
2.0%    
17,368      
2.0 %
Other ...........................................     
462,075      
30.0%    
236,789      
20.7%    
197,915      
22.4 %
Total Gross Written Premiums ...   $ 1,541,962      
100.0%  $ 1,141,558      
100.0%  $
881,868      
100.0 %
  
  
  
  
 
 

10 
  
  
Year Ended December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
  
  
($ in thousands) 
  
  
    
  
    
% of 
      
  
    
% of 
      
  
    
% of 
  
  
  Amount     
GWP 
    Amount     
GWP 
    Amount     
GWP 
  
Product (1) 
      
        
        
        
        
        
  
Earthquake ........................................   $
522,864      
33.9%  $
436,897      
38.3%  $ 
345,480      
39.2%
Inland Marine and Other Property ....     
334,079      
21.7%    
250,022      
21.9%    
232,918      
26.4%
Fronting ............................................     
333,188      
21.6%    
352,141      
30.8%    
223,249      
25.3%
Casualty ............................................     
235,592      
15.3%    
90,388      
7.9%    
80,221      
9.1%
Crop ..................................................     
116,239      
7.5%    
12,110      
1.1%    
—      
—%
Total Gross Written Premiums .....   $ 1,541,962      
100.0%  $ 1,141,558      
100.0%  $ 
881,868      
100.0%
  
(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. 
  
Our five product lines are summarized as follows: 
  
 Earthquake 
  
We offer Residential and Commercial Earthquake products on both admitted and E&S basis. Our Residential 
Earthquake products insure against home damage, contents, appurtenant structures, and temporary housing costs following 
an earthquake. Our products are designed with flexibility, offering a variety of deductible options and customizable 
coverage limits. We aim to attract customers who haven't previously purchased earthquake insurance. Our pricing model, 
based on data from top catastrophe models, allows us to accurately assess and price risks at the ZIP code or geocode level. 
Unlike competitors who use broad pricing zones, we factor in regional differences like soil types, liquefaction risk, and 
proximity to fault lines. This approach helps us offer more precise rates and often provides rate relief, especially in low-risk 
areas with historically low earthquake insurance uptake. Our Commercial Earthquake products focus on providing coverage 
for benign commercial risks where the business interruption exposure is typically less than 15% of the total insured value 
(“TIV”). We attempt to avoid risks where the contents are hard to value or represent a disproportionate percentage of the 
value.  
  
 
 

11 
Inland Marine and Other Property 
  
Our Inland Marine and Other Property products include Inland Marine, Hawaii Hurricane, Commercial All Risk, 
Excess National Property, Residential Flood, and other miscellaneous property products. These products are written on an 
admitted and on an E&S basis directly and through program administrators. Policy limits vary by product; however, our 
E&S offerings are designed to target larger limit business and do not directly compete with our admitted offerings. We 
believe the flexibility of these products enables us to compete in select market segments and price risk appropriately.  
  
Casualty  
  
We provide Casualty products on an admitted and E&S basis. We primarily focus on niche segments of the 
Casualty market including Real Estate Agent Errors and Omissions, Excess Liability, and Environmental 
Liability coverages written directly and through program administrators. We utilize experienced underwriters and thorough 
actuarial review to optimize our pricing, terms and conditions, limits, and attachment points.  
  
In addition to our existing Casualty product offerings, we announced the launch of our E&S Casualty product at 
the end of 2024. The new product will focus on Primary & Excess Construction and Excess Liability lines of business. This 
new line of business further demonstrates our commitment to providing comprehensive insurance solutions that address 
evolving market needs. On January 1, 2025 we completed the acquisition of FIA, a New Jersey domiciled insurance carrier 
specializing in surety bonds for small to medium sized contractors primarily in the Northeast United States. 
  
Fronting 
  
Our Fronting products offer reinsurers, insurance carriers and managing general agents the ability to utilize our 
licensed admitted and E&S insurance companies to design and operate customized insurance programs. We issue insurance 
policies for other insurance companies that may not have the licensure, product suite or rating to serve their desired 
markets, or for programs supported by reinsurance or alternative capital providers. In addition, we enter fronting 
arrangements with program administrators that require a broadly licensed, highly rated carrier to conduct business in certain 
states. 
  
 
 

12 
Crop 
  
Our Crop insurance products are comprised primarily of multi-peril crop insurance offered in connection with the 
U.S. Department of Agriculture's Risk Management Agency and designed to cover revenue shortfalls or production losses 
due to natural causes such as drought, hail, and wind. We currently write Crop insurance with the goal of minimizing 
exposure to any single region. We also offer Livestock and Private Product Crop solutions.  
  
  
 
 

13 
Marketing and Distribution 
  
We market and distribute our products through a multi-channel, open architecture distribution model which 
includes retail agents, wholesale brokers, program administrators and carrier partnerships. We have well-defined 
underwriting criteria and have designed our distribution model to access our targeted risks through what we believe to be 
the most efficient channels. 
  
Retail Agents: We primarily distribute our personal lines products through retail agents. We believe that retail 
agents are an important pillar of our distribution model due to the high retention rates and rate stability that we are able to 
achieve with policies sold through this channel. We provide agents with flexible products that are preferred by end 
consumers and are easier for agents to sell. In many cases, we provide agents with direct access to our policy management 
system that enables them to quote, bind and issue policies in a matter of minutes. We believe this ease of use and quick 
speed-to-quote serves as a competitive advantage. 
  
Wholesale Brokers: We distribute our commercial lines products primarily through wholesale brokers. Wholesale 
brokers are an important channel for commercial insurance products as they control much of the premium in these 
segments.  We target brokers with experience serving our target markets and with business plans consistent with our 
strategy and underwriting objectives. Brokers must demonstrate an ability to produce both the quality and quantity of 
business that we seek. To assist with this goal, our underwriters regularly visit with brokers to market and discuss the 
products we offer. 
  
Program Administrators: Within select lines of business, we partner with program administrators to harness the 
efficiency and scale of their existing marketing and distribution infrastructures. In some cases, policies bound by our 
program administrators are pre-underwritten using pricing models that we have developed and are programmed into the 
policy administration system of those partners. For business that is not automatically underwritten, we set strict 
underwriting guidelines to which our partners must adhere. We audit the underwriting, systems, financial strength and 
reporting capabilities of all of our program administrators on a regular basis. 
  
Carrier Partnerships: Given our unique specialty focus and underwriting expertise, we are a carrier of choice for 
other insurance companies seeking a specialty insurance partner to act as a fronting carrier, transfer certain classes of risk, 
satisfy insurance department mandatory offer requirements or provide a more comprehensive risk solution to their 
customers. As of December 31, 2024, we had partnerships with over 25 insurance companies. Several carriers invite us to 
provide a companion offer for residential earthquake insurance alongside their homeowners’ insurance policy offerings. 
Other carriers will direct their captive agents to our online system so that they may quote, bind and issue policies directly. 
Finally, we offer assumed reinsurance arrangements to carriers whereby we assume up to 100% of the underlying risk for 
specific classes of business in exchange for a ceding commission. Our assumed reinsurance treaties represent risks that we 
would ordinarily underwrite on a primary basis and/or that fit well within our risk tolerance, however, the cedant either 
(i) has already written these policies or (ii) the cedant wants to issue the policies on its paper but not retain any of the risk 
and as such prefers an assumed reinsurance partnership. We believe that our carrier partnerships with sophisticated industry 
participants speak to the value and quality of our products, service offering and systems. Furthermore, carrier partnerships 
are a highly scalable distribution model as they enable us to tap into a sizable customer base and to quickly build scale in 
new markets. With all partnerships, we review pricing at the policy level to ensure that the risk characteristics of both new 
and assumed business are consistent with our underwriting of direct business.  
  
 
 

14 
Underwriting 
  
Our underwriting team combines comprehensive data analysis with experienced underwriting techniques to build a 
profitable, stable and diversified book of business. Our underwriting process involves securing an adequate level of 
underwriting information, classifying and evaluating each individual risk exposure, assessing the impact of the risk upon 
our existing portfolio, and pricing the risk accordingly. Our overarching underwriting philosophy is ‘to write what we 
know’ a straightforward approach that allows our underwriters to focus on business they understand and can process 
quickly without sacrificing diligence and attention to detail. 
  
We develop our underwriting guidelines and pricing models for our property and casualty products through 
traditional underwriting metrics, management experience, and advanced data analytics. Our underwriters actively 
collaborate with our actuarial team to determine pricing and risk exposure. This analytical and underwriting expertise 
framework enables us to offer rate relief in low risk areas and to accurately price risks that are at higher risk. 
  
Personal lines policies are issued via automated underwriting. Using our predefined underwriting guidelines, 
distribution partners can rapidly quote and bind accounts lower in limit via automated processing. We believe that 
automated underwriting of personal lines policies improves efficiency, reduces errors, and enhances the customer 
experience. 
  
Since commercial lines risks involve additional complexity and do not lend themselves to highly automated 
underwriting, we combine robust risk analysis and data collection with underwriter expertise to evaluate individual risks 
and to quote business efficiently. We regularly audit data gathered during our underwriting process to determine the 
accuracy of rating information and risk pricing. For example, we often inspect properties as part of our underwriting 
process to discover any unrepaired damage and identify any other conditions that affect the insurability of the property. 
Similarly, our casualty products are subject to extensive risk analysis, including review by experienced underwriters, 
thorough actuarial review, fostering broker relationships to obtain complete underwriting information, and accurately 
assessing and quantifying loss exposures to inform pricing, terms and conditions, limits, and attachment points. Our 
underwriters bring specific line of business experience including underwriting expertise, distribution relationships and 
support from the reinsurance community while collaborating closely with our actuarial team on pricing. In addition, we 
continue to pursue the use of technology to streamline inspections and other components of the underwriting process. 
  
We apply disciplined underwriting principles when selecting program administrator partners. We proactively 
engage with our program managers to create specific underwriting guidelines and techniques. We regularly conduct 
underwriting, claims and financial audits to ensure consistent execution upon underwriting guidelines, claims processing 
and compliance with regulatory requirements. 
  
Ongoing risk management of our portfolio in aggregate is a critical component of our underwriting process. We 
use third-party catastrophe modeling software to evaluate our ongoing risk exposure. We regularly review the output of 
these models to evaluate the geographic spread of our risk, including the evaluation of AAL and PML by line of business 
and for the portfolio as a whole. This review enables us to monitor our exposure to correlated risks and optimize the design 
and pricing of our reinsurance program including the purchase of appropriate reinsurance coverage. 
  
Claims Management 
  
Claims are overseen by our in-house claims team, led by our Chief Claims Officer. To supplement our in-house 
team, we outsource part of our claims handling infrastructure to third-party administrators (“TPAs”). We currently contract 
with multiple TPAs to reduce our reliance on any single TPA, as well as to benefit from expertise of individual vendors in 
specific lines of business. Our Chief Claims Officer is responsible for overseeing our TPAs, including the management of 
catastrophe event preparation, loss reserves, claim evaluation, arbitration, mediation, and settlement. Claims are reported 
directly to us and the applicable TPA, which adheres to agreed upon service level standards. 
  
  
 
 

15 
In the case of a catastrophe event, our technology infrastructure and data analytics enable us to identify potentially 
affected policies immediately and begin assisting our customers by notifying our TPAs, our reinsurance partners and other 
potentially impacted parties. Contracting with a network of TPAs improves our ability to mobilize claims adjusters 
immediately to the areas where our customers are most affected and helps insulate us from the “demand surge” following a 
catastrophe event. To prepare for a potential catastrophe event, we run simulations and work closely with our TPAs to 
ensure there are dedicated desk and field adjusters to handle the volume of claims that would be expected in each loss 
scenario. Using each earthquake and hurricane scenario, we project losses and identify an individualized and optimal 
catastrophe response plan for each event. 
  
We review claims files and claims reports from our TPAs for accuracy and reasonableness on an ongoing basis. 
We review all claims received from our TPAs to validate coverage, limits, and deductibles prior to making payment. In 
addition, we have certain managerial requirements of our TPAs around notification, reserve approval, payment 
management, correspondence with insureds, timeliness, regulatory compliance, and reports for all claims in excess of the 
claims analyst’s authority. We also monitor possible litigation and litigation trends associated with our claims. 
  
Reinsurance 
  
We purchase a significant amount of reinsurance from third parties that we believe enhances our business by 
reducing our exposure to potential catastrophe and attritional losses, limiting volatility in our underwriting performance, 
and providing us with greater visibility into our future earnings. Reinsurance involves transferring, or ceding, a portion of 
our risk exposure on policies that we write to another insurer, the reinsurer, in exchange for a premium. 
  
We purchase several types of reinsurance, including catastrophe excess of loss (“XOL”), in which the 
reinsurer(s) agree to assume all or a portion of losses relating to a group of policies occurring in relation to specified events, 
subject to customary exclusions, in excess of a specified amount. In addition, we buy reinsurance coverage for specific lines 
of business on a quota share, property per risk, or a facultative basis. In quota share reinsurance, the reinsurer agrees to 
assume a specified percentage of the ceding company’s losses arising out of a defined class of business in exchange for a 
corresponding percentage of premiums, net of a ceding commission. Property per risk coverage is similar to catastrophe 
excess of loss except that the treaty applies in individual property losses rather than in the aggregate for all claims 
associated with a single catastrophic loss occurrence. Facultative coverage refers to a reinsurance contract on individual 
risks as opposed to a group or class of business. We use facultative reinsurance selectively to supplement limits or to cover 
risks or perils excluded from other reinsurance contracts. 
  
We have a robust program utilizing a mix of traditional reinsurers and insurance linked securities. We currently 
purchase reinsurance from over 100 reinsurers, who either have an “A−” (Excellent) (Outlook Stable) or better financial 
strength rating by A.M. Best or post collateral. Our reinsurance contracts include special termination provisions that allow 
us to cancel and replace any participating reinsurer that is downgraded below a rating of “A−” (Excellent) (Outlook Stable) 
from A.M. Best, or whose surplus drops by more than 20%. 
  
In addition to reinsurance from traditional reinsurers, we utilize collateralized protection via catastrophe bonds. 
We currently have $895 million of multi-year indemnity-based reinsurance coverage for earthquake events, all issued 
through Torrey Pines Re Ltd, a Bermuda-domiciled special purpose insurer. Our latest bond, a $420 million 144A issuance, 
became effective on June 1, 2024. 
  
  
 
 

16 
Our largest single XOL reinsurer, excluding Torrey Pines Re, comprises 9.14% of the total catastrophe XOL 
reinsurance limit we have in effect. The table below reflects the ratings of our largest individual reinsurers. 
  
Reinsurer Ratings 
  
A.M Best 
  
S&P 
Torrey Pines Re, LTD ...........................................................................................    
Collateralized 
  
Collateralized 
Ariel Re BDA, Ltd obo Lloyds Syndicate 1910 ...................................................    
A+ 
  
AA- 
Houston Casualty Company ..................................................................................    
A++ 
  
A+ 
Fidelis Insurance Bermuda ....................................................................................    
A 
  
A- 
Arch Reinsurance, Ltd. .........................................................................................    
A+ 
  
A+ 
Hannover Ruck .....................................................................................................    
A+ 
  
AA- 
Swiss Reinsurance America ..................................................................................    
A+ 
  
AA- 
MS Amlin AG Bermuda .......................................................................................    
A+ 
  
A+ 
Lloyds Syndicate 1301 - Inigo ..............................................................................   
A+ 
  
AA- 
Lloyds Syndicate 1084 - Chaucer..........................................................................   
A+ 
  
AA- 
  
 Catastrophe XOL Reinsurance Coverage 
  
Our catastrophe event retention before any tax effect is currently $20 million for earthquake events and $15.5 
million for hurricane events and all other perils. Our reinsurance coverage exhausts at $3.08 billion for earthquake events, 
$735 million for Hawaii hurricane events, and $117.5 million for continental U.S. hurricane events, providing coverage in 
excess of our 1:250 year peak zone PML and in excess of our A.M. Best threshold. In addition, we maintain reinsurance 
coverage equivalent to or better than the 1 in 250 year PML for our other lines. As of December 31, 2024, our first event 
retention represented approximately 2.7% of our stockholders’ equity. 
  
In the event that multiple catastrophe events occur during a treaty period, many of our contracts include the right 
to reinstate reinsurance limits for potential future recoveries during the same contract year and preserve our limit for 
subsequent events. This feature for subsequent event coverage is known as a “reinstatement.” 
  
To assess the sufficiency of our catastrophe XOL reinsurance coverage, we continuously quantify our exposure to 
catastrophes including earthquakes, hurricanes, tornadoes, and hailstorms. We evaluate and monitor the total policy limit 
insured for each peril and in each geographic region, and we use third-party catastrophe models to evaluate the AAL as well 
as the estimated PML at various intervals. Our PML modeling is consistent with standards established by A.M. Best and 
includes “demand surge,” and loss amplification. To protect against model bias, we perform probabilistic modeling as well 
as deterministic modeling using a variety of industry models including AIR Touchstone and RMS RiskLink for all perils 
and regions. 
  
  
 
 

17 
We believe our current reinsurance program provides coverage well in excess of our theoretical losses from any 
recorded historical event. The below table shows the PML from selected historical catastrophe events, all of which are less 
than the amount covered by our current catastrophe reinsurance program. Should an event equivalent to one of these 
historical events recur, our hypothetical net loss before any tax effect would be capped at our current net retention of 
$20.0 million for earthquake events or $15.5 million for hurricane events and all other perils. 
  
 
  
12/31/2024 
  
Historical Event 
  modeled PML   
 
  
($ millions)   
CA 1906 San Francisco M7.8 .......................................................................................................................   
$2,177 
  
CA 1994 Northridge M6.7 ............................................................................................................................   
1,624 
  
CA 1971 San Fernando M6.7 ........................................................................................................................   
817 
  
CA 1868 Hayward M7.0 ...............................................................................................................................   
773 
  
NM 1811-12 sequence M7.8 .........................................................................................................................   
680 
  
HI 1992 Hurricane Iniki ................................................................................................................................   
673 
  
NW 1949 Puget Sound M7.1 ........................................................................................................................   
518 
  
CA 1857 Fort Tejon M7.9 .............................................................................................................................   
465 
  
CA 1933 Long Beach M6.4 ..........................................................................................................................   
437 
  
NW 1965 Puget Sound M6.5 ........................................................................................................................   
225 
  
  
While we only select reinsurers whom we believe to have acceptable credit or a minimum A.M. Best rating of 
“A−”, if our reinsurers are unable to pay the claims for which they are responsible, we ultimately retain primary liability to 
our policyholders. In addition, at each reinsurance treaty renewal, we consider any plans to change the underlying insurance 
coverage we offer, our current capital, our risk appetite, and the cost and availability of reinsurance coverage, which may 
vary from time to time. 
  
Program Specific Reinsurance Coverage 
  
In addition to our catastrophe XOL coverage, we purchase reinsurance for specific programs in order to control 
our net exposure for any single risk, manage our exposure to attritional losses and improve our economics through ceding a 
portion of the risk to reinsurers in exchange for a ceding commission which generates fee income. We purchase program 
specific reinsurance, consisting primarily of quota share coverage, for certain lines of business with an attritional loss 
component such as Inland Marine and Casualty. We also utilize a combination of XOL and quota share reinsurance to 
provide coverage for our Flood, Inland Marine, and Crop products. Specific to our Crop portfolio, we purchase private 
reinsurance coverage which is applied to premiums and liabilities net of the inuring protection afforded by the Standard 
Reinsurance Agreement provided via the Federal Crop Insurance Corporation.  
  
Technology 
  
Our integrated technology systems form the backbone of our business as they enable us to offer quality and timely 
service to our policyholders and producers, communicate seamlessly with reinsurers and partner carriers, and run our 
business more efficiently and cost effectively.  Our systems offer greater ease of use to distribution partners and provide 
seamless integration between our pricing models, quoting tools, policy administration systems and portfolio analytics 
databases. Our proprietary operating platform is based on applications licensed from multiple third-party software vendors. 
We have invested significantly in customizing, building on top of and extending these applications to increase automation 
and enhance efficiency. We have dedicated in-house software developers as well as external resources. Our internally 
developed PASS provides producers direct access to our retail and wholesale distributed products including Residential 
Earthquake, Hawaii Hurricane, and Residential Flood. PASS also serves as the administration system for select policy data 
and the access point for business written through direct personal lines partnerships. PASS enables the effective use of 
predefined underwriting, providing efficiency and optimization to our production partners and real-time transparency in 
underwriting and aggregate management. Our software development team develops programing interfaces where applicable 
so that partner carriers and distribution partners can seamlessly access our system. 
  
  
 
 

18 
Our pricing models are based on the most recent versions of catastrophe models from industry leading vendors and 
our internal expertise. For certain products where limited models are available, we have worked directly with the vendors to 
develop proprietary models. We update our pricing models as new versions are released, which mitigates our exposure to 
changes in our business following industry-wide model changes. For personal lines products issued through automated 
underwriting, our pricing models integrate directly into our policy administration system as well as the systems of program 
administrator partners. Since our commercial lines products do not lend themselves to highly automated underwriting, we 
have built a customized operating platform that our underwriters use to evaluate risk and to efficiently quote business. Our 
custom application platform seamlessly integrates policy administration, billing, and maintenance. 
  
We emphasize the use of technology in our analytics and enterprise risk management (“ERM”) operations. Our 
data and analytics team, which reports to our Chief Technology Officer, uses multiple catastrophe modeling software 
applications to evaluate our ongoing risk exposure. Our data analytics enable us to provide timely reporting of our in-force 
portfolio to our reinsurers, TPAs and distribution partners on a regular basis and during severe weather events. This 
reporting combines content from the catastrophe models that we license with internally developed content. Event reporting 
is an element of our overall ERM framework which monitors our risks and ensures that we have appropriate controls and 
preparations are in place. Our technology infrastructure is designed to function through any major disruption, with all data 
stored offsite and employees provided with the resources to work remotely. 
  
Reserves 
  
When a claim is reported to us or when an event occurs, we establish loss reserves to cover our estimated ultimate 
losses under all insurance policies that we underwrite, and loss adjustment expenses relating to the investigation and 
settlement of policy claims. These reserves include estimates of the cost of the claims reported to us (case reserves) and 
estimates of the cost of claims that have been incurred but not yet reported (“IBNR”) and are net of estimated related 
salvage, subrogation recoverables and reinsurance recoverables. Reserves are estimates involving actuarial projections of 
the expected ultimate cost to settle and administer claims at a given time, but are not expected to represent precisely the 
ultimate liability. Estimates are based upon past loss experience modified for current trends as well as prevailing economic, 
legal and social conditions. Such estimates will also be based on facts and circumstances then known, but are subject to 
significant uncertainty based on the outcome of various factors, such as future events, future trends in claim severity, 
inflation and changes in the judicial interpretation of policy provisions relating to the determination of coverage. 
  
When a claim is reported and investigated by a claims adjuster, we establish a case reserve for the estimated 
amount of the ultimate payment after an appropriate assessment of coverage, damages and other information as applicable. 
The estimate is based on general insurance reserving practices and on the claim adjuster’s experience and knowledge of the 
nature and value of the specific type of claim. Case reserves are revised periodically based on subsequent developments 
associated with each claim. 
  
We establish IBNR reserves in accordance with industry practice to provide for (i) the estimated amount of future 
loss payments on incurred claims not yet reported, and (ii) potential development on reported claims. IBNR reserves are 
estimated based on generally accepted actuarial reserving techniques that consider quantitative loss experience data and, 
where appropriate, qualitative factors. 
  
We regularly review our loss reserves using a variety of actuarial techniques. We also update the reserve estimates 
as historical loss experience develops, additional claims are reported and/or settled and new information becomes available. 
A reserve can be increased or decreased over time as claims move towards settlement, which can impact earnings in the 
form of either adverse development or reserve releases. 
  
  
 
 

19 
The following tables present the development of our loss reserves by accident year on a gross basis and net of 
reinsurance recoveries during each of the below calendar years: 
  
  
  
Gross Ultimate Loss and LAE 
  
  
    
  
      
  
      
  
      
  
    
Development- (Favorable) 
Unfavorable 
  
  
  
Calendar Year 
    2021 to     2022 to     2023 to   
Accident Year 
  
2021     
2022     
2023     
2024     
2022     
2023     
2024   
  
  
(in thousands) 
  
Prior ..................................................   $ 450,570    $ 450,904    $ 417,234    $ 416,443    $
334    $ (33,670)   $
(791) 
2022 ..................................................     
       200,765      198,635      182,660      
—      
(2,130)     (15,975) 
2023 ..................................................     
       
       334,520      308,049      
—      
—      (26,471) 
2024 ..................................................     
       
       
       537,646      
—      
—      
—  
  
    
       
       
       
     $
334    $ (35,800)   $ (43,237) 
  
  
  
Net Ultimate Loss and LAE 
  
  
    
  
      
  
      
  
      
  
    
Development- (Favorable) 
Unfavorable 
  
 
  
Calendar Year 
    2021 to     2022 to     2023 to   
Accident Year 
  
2021     
2022     
2023     
2024     
2022     
2023     
2024   
  
  
(in thousands) 
  
Prior ..................................................   $ 139,530    $ 141,913    $ 137,405    $ 139,173    $
2,383    $ (4,508)    $
1,768  
2022 ..................................................     
       76,289      83,026      80,551      
—      
6,737      
(2,475) 
2023 ..................................................     
       
       70,346      68,015      
—      
—      
(2,331) 
2024 ..................................................     
       
       
       137,788      
—      
—      
—  
  
    
       
       
       
     $
2,383    $
2,229    $
(3,038) 
   
Investments 
  
Investment income is an important component of our earnings. We collect premiums and are required to hold a 
portion of these funds in reserves until claims are paid. We invest these reserves, primarily in fixed maturity investments. 
Our fixed maturity investment portfolio is primarily managed by an external investment advisory firm that is an 
experienced manager of insurance company assets, and operates under guidelines approved by our Board of Directors. We 
believe our investment strategy allows us to eliminate the expense of a treasury department while allowing our management 
to maintain oversight over the investment portfolio. 
  
Our cash and invested assets consist of fixed maturity securities, short-term investments, cash and cash 
equivalents, mutual funds, exchange traded funds and equity securities. We also have one equity method investment and a 
small portion of our portfolio invested in limited partnerships, which are classified as other investments on our consolidated 
balance sheet. Our fixed maturity securities are classified as “available-for-sale” and are carried at fair value with 
unrealized gains and losses on these securities reported, net of tax, as a separate component of accumulated other 
comprehensive income (loss). Our equity investments are measured at fair value with changes in fair value recognized in 
net income. Fair value generally represents quoted market value prices for securities traded in the public market or prices 
analytically determined using bid or closing prices for securities not traded in the public marketplace. Our equity method 
investment is measured following the consolidation model, by increasing or decreasing the carrying amount of the 
investment to reflect our share of contributions, distributions, earnings, or losses. Our other investments are measured at 
estimated fair value utilizing a net asset value per share (or its equivalent) as a practical expedient. Short-term investments 
are reported at cost and include investments that are both readily convertible to known amounts of cash and have maturities 
of 12 months or less upon acquisition by us. 
  
  
 
 

20 
Our investment securities available totaled $987.7 million and $689.6 million at December 31, 2024 and 2023 
respectively, and are summarized as follows: 
  
 
  
Fair 
    
% of Total   
December 31, 2024 
  
Value 
    
Fair Value   
Fixed maturities: 
   
     
  
U.S. Governments ........................................................................................................   $ 
32,806      
3.3%
U.S. States, Territories, and Political Subdivisions .....................................................     
9,778      
1.0%
Special revenue excluding mortgage/asset-backed securities ......................................     
26,634      
2.7%
Corporate and other .....................................................................................................     
475,491      
48.2%
Mortgage/asset-backed securities ................................................................................     
394,337      
39.9%
Total fixed maturities ......................................................................................................   $ 
939,046      
95.1%
Equity securities ..............................................................................................................     
40,529      
4.1%
Equity method investment ...............................................................................................     
2,277      
0.2%
Other investments ............................................................................................................     
5,863      
0.6%
Total investments ............................................................................................................   $ 
987,715      
100.0%
  
 
  
Fair 
    
% of Total   
December 31, 2023 
  
Value 
    
Fair Value   
Fixed maturities: 
   
     
  
U.S. Governments ........................................................................................................   $ 
39,420      
5.7%
U.S. States, Territories, and Political Subdivisions .....................................................     
9,902      
1.4%
Special revenue excluding mortgage/asset-backed securities ......................................     
29,511      
4.3%
Corporate and other .....................................................................................................     
300,239      
43.5%
Mortgage/asset-backed securities ................................................................................     
264,727      
38.4%
Total fixed maturities ......................................................................................................   $ 
643,799      
93.3%
Equity securities ..............................................................................................................     
43,160      
6.3%
Equity method investment ...............................................................................................     
2,617      
0.4%
Total investments ............................................................................................................   $ 
689,576      
100.0%
  
Our primary investment focus is to preserve capital to support our insurance operations through investing 
primarily in high quality fixed maturity securities with a secondary focus on maximizing our risk-adjusted investment 
returns. Our investment policy is set by our Board of Directors, subject to the limits of applicable regulations. 
  
Our investment policy imposes strict requirements for credit quality, with a minimum average credit quality of the 
portfolio being rated “A” or higher by Standard & Poor’s or the equivalent rating from another nationally recognized rating 
agency. Our investment policy also imposes restrictions on concentrations of securities by class and issuer and any new 
asset class must be approved by management and our Board of Directors. Given our existing exposure to property values, 
notably in the state of California, we have imposed restrictions on municipal obligations in the state of California and 
CMBS single issuers concentrated in the state of California. In addition, we allocate at least 2% of our investment portfolio 
to investments in green bonds- or fixed income investments tailored towards environmental solutions such as renewable 
energy, clean transportation, green building, and wastewater treatment – a commitment that is consistent with both our 
investment objectives and our company values. 
  
Enterprise Risk Management (“ERM”) 
  
We maintain a dedicated ERM function that is responsible for analyzing and reporting our risks, monitoring that 
risks remain within established tolerances, and monitoring, on an ongoing basis, that our ERM objectives are met. These 
objectives include ensuring proper risk controls are in place, risks are effectively identified, assessed, and managed, and key 
risks to which we are exposed are appropriately disclosed. Our ERM framework plays an important role in fostering our 
risk management culture and practices. We continue to enhance our ERM framework, which is guided by the Own Risk and 
Solvency Assessment (“ORSA”) model developed by the National Association of Insurance Commissioners (“NAIC”) and 
the National Institute of Standards and Technology (“NIST”) cybersecurity framework. These ongoing enhancements 
include the creation of an ERM Committee of the Board of Directors which is comprised of select board members and 
select members of executive management, creation and maintenance of a risk register, and regular reporting on risk 
management. 
   
 
 

21 
An additional important part of our ERM is business continuity, including in the circumstances of a catastrophe 
event. We have established a business continuity team made up of executive management with predefined roles and 
responsibilities in the event of an emergency response situation and a business continuity communication site where 
employees are directed to receive instructions that are tailored to various scenarios. We store all data offsite and ensure it is 
accessible remotely. Our communications, virtual file servers, underwriting and distribution systems, and claims portal are 
hosted in geographically diverse data centers domestically and globally. We maintain an additional office in Edina, 
Minnesota and purchase business continuity services to support our offices in the event of a disruptive event.  The majority 
of our workforce is also equipped to work remotely should they be unable to access our offices. 
  
  
 
 

22 
Sustainability Matters 
  
Our Board of Directors has established a Sustainability Committee which is comprised of various members of our 
Board. The Sustainability Committee oversees and provides guidance on the company’s strategies related to several factors, 
including community resiliency, health and safety, corporate social responsibility, governance, partner diversity, and public 
policy matters relevant to our business. 
  
Specific duties of the Sustainability Committee include: 
  
● Assisting the management team in setting general strategy relating to sustainability matters; 
● Developing, implementing and monitoring initiatives and policies based on that strategy; and 
● Overseeing communications with employees, investors and shareholders with respect to sustainability matters. 
  
The Sustainability Committee meets on a quarterly basis to assess progress on sustainability matters and will 
continue to look for opportunities to integrate sustainability concerns in our strategy. 
  
Environmental and Climate Change 
  
Our economic model is closely tied to our coverages for natural disasters and catastrophes. We believe the existing 
scientific consensus that man-made changes to climate conditions are leading to increases in sea levels and global 
temperatures, and that the severity and frequency of weather-related natural disasters may increase relative to historical 
experience. We believe that this increase in severe weather, coupled with currently projected demographic trends in 
catastrophe-exposed regions, contributes to factors that will increase the average economic value of expected losses, 
increase the number of people exposed per year to natural disasters and in general exacerbate disaster risk, including risks 
to infrastructure, global supply chains and agricultural production. In addition to the impacts that environmental incidents 
have on our business, changes to law and regulation related to climate change could also directly affect our business, 
including state insurance regulations that could impact the Company’s ability to manage property exposures in areas 
vulnerable to significant climate driven losses, and possible new requirements that insurers integrate the financial risk of 
climate change into business operations and governance. 
  
From an underwriting standpoint, we carefully consider the development and deployment of insurance products in 
coastal areas that may be impacted by rising sea levels, and we incorporate scenarios into our catastrophe modeling that 
involve elevated sea surface temperatures and other relevant data. Evidence of the Company’s commitment to the 
environment and combating climate change can be found in the Sustainability and Citizenship report available on our 
corporate website. 
  
The company considers sustainability factors as part of its investment strategy and reviews individual investments 
to ensure congruence with company goals in this area. We have also made commitments to automate manual or paper-
intensive processes and promote the paperless delivery of documents to our policyholders and producers. We will remain 
proactive in our efforts to evolve our business in response to our changing natural environment. 
  
Competition 
  
The specialty insurance industry is highly competitive. While we currently target specialty markets, some of our 
competitors have greater resources than we do. Our primary competitors include national specialty insurance companies, 
including Kinsale Capital Group, Inc., RLI Corp., Skyward Specialty Insurance Group, Inc. and W.R. Berkley. We also 
compete with Lloyd’s of London in some of our lines. In addition, we compete against state or other publicly managed 
enterprises including the California Earthquake Authority and the National Flood Insurance Program. We may also 
compete with new market entrants in the future. Competition is based on many factors, including the reputation and 
experience of the insurer, coverages offered, pricing and other terms and conditions, customer service, relationships with 
brokers and agents (including ease of doing business, service provided and commission rates paid), size and financial 
strength ratings, among other considerations. 
  
 
 

23 
Ratings 
  
Our insurance company subsidiaries, PSIC and PESIC each has a rating of “A” (Excellent) (Outlook Stable) 
from A.M. Best, which rates insurance companies based on factors of concern to policyholders.  A.M. Best currently 
assigns 16 ratings to insurance companies, which currently range from “A++” (Superior) to “F” for insurance companies 
that have been publicly placed in liquidation. “A” (Excellent) (Outlook Stable) is the third highest rating. In evaluating a 
company’s financial and operating performance, A.M. Best reviews the company’s profitability, leverage and liquidity, as 
well as its book of business, the adequacy and soundness of its reinsurance, the quality and estimated market value of its 
assets, the adequacy of its loss and loss expense reserves, the adequacy of its surplus, its capital structure, the experience 
and competence of its management and its market presence. A.M. Best’s ratings reflect its opinion of an insurance 
company’s financial strength, operating performance and ability to meet its obligations to policyholders. These evaluations 
are not directed to purchasers of an insurance company’s securities. 
  
Laulima has a rating of "A" (Exceptional) from Demotech, which rates insurance companies on their financial 
stability. 
  
Intellectual Property 
  
We have registered our logo as a trademark in the United States. We will pursue additional trademark registrations 
and other intellectual property protection to the extent we believe it would be beneficial and cost effective. 
  
Regulation 
  
Insurance Regulation 
  
We are regulated by insurance regulatory authorities in the states in which we operate. State insurance laws and 
regulations generally are designed to protect the interests of policyholders, consumers and claimants rather than 
stockholders or other investors. The nature and extent of state regulation varies by jurisdiction, and state insurance 
regulators generally have broad administrative power relating to, among other matters, setting capital and surplus 
requirements, licensing of insurers and insurance producers, review and approval of product forms and rates, establishing 
standards for reserve adequacy, prescribing statutory accounting methods and the form and content of statutory financial 
reports, regulating certain transactions with affiliates and prescribing types and amounts of investments. 
  
Regulation of insurance companies constantly changes as governmental agencies and legislatures react to real or 
perceived issues. In recent years, the state insurance regulatory framework has come under increased federal scrutiny, and 
some state legislatures have considered or enacted laws that alter and, in many cases, increase, state authority to regulate 
insurance companies and insurance holding company systems. Further, the NAIC and some state insurance regulators are 
re-examining existing laws and regulations specifically focusing on issues relating to the solvency of insurance companies, 
interpretations of existing laws and the development of new laws. Although the federal government does not directly 
regulate the business of insurance, federal initiatives often affect the insurance industry in a variety of ways. In addition, the 
Federal Insurance Office (the "FIO") was established within the U.S. Department of the Treasury by the Dodd-Frank Wall 
Street Reform and Consumer Protection Act (the "Dodd-Frank Act") in July 2010 to monitor all aspects of the insurance 
industry, although FIO has no express regulatory authority over insurance companies or other insurance industry 
participants. 
  
Insurance Holding Company Regulation 
  
We operate as an insurance holding company system and are subject to the insurance holding company laws of the 
State of Oregon, the state in which Palomar Specialty Insurance Company is domiciled. Palomar Specialty Insurance 
Company is also commercially domiciled in California and, as a result, we are subject to the insurance holding company 
laws of California, as well. These statutes require that each insurance company in the system register with the insurance 
department of its state of domicile and furnish information concerning the operations of companies within the holding 
company system that may materially affect the operations, management or financial condition of the insurers within the 
system and domiciled in that state. These statutes also provide that all transactions among members of a holding company 
system must be fair and reasonable. Transactions between insurance subsidiaries and their parents and affiliates generally 
must be disclosed to the state regulators, and notice to or prior approval of the applicable state insurance regulator generally 
is required for any material or extraordinary transaction. 
  
 
 

24 
Human Capital 
  
We believe our greatest asset is our talent. As of December 31, 2024, we employed 253 team members. During 
2024, our workforce increased by approximately 19% compared to the prior year, and our turnover rate was approximately 
8.5%. 
  
Our business relies on our ability to attract and retain talented team members. To attract and retain talent, we strive 
to create a diverse, inclusive, and supportive workplace, with opportunities for our team members to develop in their 
careers. This is supported by competitive compensation, benefits and health and wellness programs, and by programs that 
build connections between our team members and their communities. 
  
We are committed to following best-in-class sustainability practices, and we believe that our focus on 
sustainability fosters greater creativity and productivity, helps us serve our customers and partners more effectively, and 
ultimately benefits our shareholders and the communities in which we do business.  As part of our sustainability efforts, we 
set diversity goals in our annual Sustainability & Citizenship report. In 2024, 40% of our team members identify as a 
member of a minority group, and 43% of our senior executive team identifies as a member of a minority group. Our 
commitment to sustainability further includes our focus on "D.I.C.E", defined as follows: 
   
DIVERSITY – We are not all the same. Palomar celebrates our differences, and we identify opportunities for increased 
innovation and collaboration amongst diverse teams with diverse perspectives. 
  
INCLUSION – Palomar appreciates and takes pride in the active involvement of every team member’s unique contribution 
within a culture that harmonizes our differences. Our team members understand their important contribution to the greater 
good and understand that what they do makes a difference, both for the company, and in the larger communities we serve. 
  
COMMUNITY & ENGAGEMENT – Palomar’s commitment to diversity, equality and inclusion extends into the 
communities where we conduct business. We believe that every organization, regardless of size or scope, can make a 
meaningful difference on issues of community welfare, justice, and equality. Through our social, personal, and professional 
networks, we champion our values and actions. We partner with like-minded organizations to drive action and positive 
change. 
  
EQUALITY – Palomar promotes a work environment where individuals are treated fairly, respectfully and have equal 
access to resources and opportunities for growth. We encourage our teammates to share ideas and collaborate to remove 
organizational boundaries, solve problems, and drive company growth. 
  
Compensation, Health and Well Being  
  
We offer fair, competitive compensation and benefits to support our team members overall well-being.  Our 
compensation programs include base pay, annual incentive compensation and long-term equity-based compensation. In 
2024, 100% of our workforce received equity awards and participated in our annual cash bonus plan, including all hourly 
personnel. We offer team members a comprehensive and leading benefits program that includes a holistic approach to 
health and wellness. We regularly benchmark programs to ensure our team has access to industry-leading benefits to 
address all aspects of well-being — physical and mental health, family care, financial support, and community 
engagement.    
  
We believe in pay transparency and we include base pay ranges in all our job listings. Additionally, we voluntarily 
disclose our base pay ranges to all our internal employees for the roles they hold. 
  
  
 
 

25 
Talent Development 
  
We provide numerous training opportunities for our team members, with a focus on personal and professional 
development. We utilize “Coaching for Performance” methodologies to manage performance, provide feedback and 
develop talent. Our talent development programs provide team members resources to achieve career goals and build 
leadership skills. We encourage all team members to take advantage of company supported learning opportunities that help 
broaden industry and functional knowledge to help them excel in their current roles as well as advance their overall career 
objectives. We believe in the dynamic allocation of talent, and therefore we encourage interested team members to explore 
functions outside their current role. To support this belief, we provide a $3,000 per annum tuition and/or certification 
reimbursement for ongoing development. Lastly, we have a methodical approach to talent development, offering 
organizational advancement and mentoring services to all team members regardless of position or title. In 2024, 28% of our 
workforce was promoted or moved into new positions. 
  
During the third quarter of 2024, our team members completed an engagement survey, and we received an 85% 
response rate, and a 87% overall engagement score. Consistent with historical practice, we use the responses and learnings 
from this survey to inform our future talent management strategies. Additionally, the Company was voted one of the top 
places to work by the San Diego Union-Tribune for the third consecutive year. 
  
Available Information 
  
We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other 
information with the SEC. The SEC maintains an Internet web site that contains reports, proxy and information statements 
and other information regarding issuers, including us, that file electronically with the SEC. The address of that site is 
http://www.sec.gov. Our financial and other material information is routinely posted to and accessible on the Investors 
section of our website, available at www.plmr.com. Information that is contained in and can be accessed through our 
website or our social media is not incorporated into, and does not form a part of, this Annual Report on Form 10-K. 
  
  
  
 
 

26 
Item 1A. Risk Factors 
  
A description of the risks and uncertainties associated with our business is set forth below. You should carefully 
consider the risks and uncertainties described below, together with all of the other information in this Annual Report on 
Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of 
Operations” and our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 
10-K. The risks and uncertainties described below may not be the only ones we face. If any of the risks actually occur, our 
business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, 
the market price of our common stock could decline. Additional risks and uncertainties of which we are unaware, or that we 
currently deem immaterial also may become important factors that affect us. 
  
Summary Risk Factors 
  
Our business is subject to numerous risks and uncertainties, these risks include, but are not limited to, the 
following: 
  
Risks Related to Our Business and Industry: 
  
  
● 
Claims arising from unpredictable and severe catastrophe events, including those caused by global climate 
change, could reduce or eliminate our earnings and stockholders' equity, and limit our ability to underwrite 
new insurance policies; 
  
  
● 
Our reinsurers may not pay claims on a timely basis, or at all, which may materially adversely affect our 
business, financial condition, and results of operations; 
  
  
● 
Our loss reserves are established based on estimates and may be inadequate to cover actual incurred losses 
which could have a material adverse impact on our results of operations and financial condition; 
  
  
● 
We may be unable to purchase third-party reinsurance or otherwise expand our catastrophe coverage in 
amounts we desire on commercially acceptable terms or on terms that adequately protect us, and this inability 
may materially adversely affect our business, financial condition and results of operations. 
  
  
● 
Our risk management and loss limitation methods, including estimates and models, may fail to adequately 
manage our exposure to losses from catastrophe events and our losses could be materially higher than our 
expectations; 
  
  
● 
Our business is concentrated in California and we are exposed more significantly to California loss activity 
and regulatory environments; 
  
  
● 
We rely on a select group of brokers and program administrators, and such relationships may not continue; 
  
  
● 
There is intense competition for business in our industry; 
  
  
● 
Volatility in crop prices, as a result of weather conditions or other events, could adversely impact our results 
of operations; 
  
Risks Related to the Economic Environment: 
  
  
● 
Adverse economic factors, including recession, inflation, periods of high unemployment or lower economic 
activity could affect our growth and profitability; 
  
  
 
 

27 
Risks Related to Technology: 
  
  
● 
The failure of our information technology and telecommunications systems could adversely affect our 
business; 
  
  
● 
Security breaches or cyber-attacks could expose us to liability and damage our reputation and business; 
  
Risks Related to Laws and Regulations: 
  
  
● 
We are subject to extensive regulation, which may adversely affect our ability to achieve our business 
objectives; 
  
  
● 
Unexpected changes in the interpretation of our coverage or provisions, including loss limitations and 
exclusions, in our policies could have a material adverse effect on our financial condition or results of 
operations; 
  
  
● 
We incur significant costs as a result of operating as a public company, and our management is required to 
devote substantial time to complying with public company regulations; and 
  
Risks Related to Ownership of our Common Stock: 
  
  
● 
Our operating results and stock price may be volatile, or may decline regardless of our operating performance,
and holders of our common stock could lose all or part of their investment. 
  
Risks Related to Our Business and Industry 
  
Claims arising from unpredictable and severe catastrophe events, including those caused by global climate change, 
could reduce or eliminate our earnings and stockholders’ equity and limit our ability to underwrite new insurance 
policies. 
  
Our insurance operations expose us to claims arising from unpredictable catastrophe events, such as earthquakes, 
hurricanes, windstorms, floods, wildfires, and other severe events. We have incurred significant losses from catastrophe 
events multiple times in our history and we may incur significant losses from future catastrophe events. The actual 
occurrence, frequency and magnitude of such events are uncertain. While there can be no certainty surrounding the timing 
and magnitude of earthquakes, some observers believe that significant shifts in the tectonic plates, including the San 
Andreas Fault, may occur in the future. Over the past several years, changing weather patterns and climatic conditions, such 
as global warming, have added to the unpredictability and frequency of natural disasters in certain parts of the world, 
including the markets in which we operate. Climate change may increase the frequency and severity of extreme weather 
events. This effect has led to conditions in the ocean and atmosphere, including warmer-than-average sea-surface 
temperatures and low wind shear that increase hurricane activity. Hurricane activity typically increases between June and 
November of each year, though the actual occurrence and magnitude of such events is uncertain. The occurrence of a 
natural disaster or other catastrophe loss could materially adversely affect our business, financial condition, and results of 
operations. These events could impact our business even where we do not have insured exposure, such as the 2025 
California wildfires, as homes and businesses lost due to such events may cancel or not renew their policies with us which 
could adversely affect our business, financial condition, and results of operations. Additionally, any increased frequency 
and severity of such weather events, including hurricanes, could have a material adverse effect on our ability to predict, 
quantify, reinsure and manage catastrophe risk and may materially increase our losses resulting from such catastrophe 
events. 
  
The extent of losses from catastrophes is a function of both the frequency and severity of the insured events and 
the total amount of insured exposure in the areas affected. The frequency and severity of catastrophes are inherently 
unpredictable and the occurrence of one catastrophe does not make the occurrence of another catastrophe more or less 
likely. Increases in the replacement cost of insured property due to higher material and labor costs, increases in 
concentrations of insured property, the effects of inflation, and changes in cyclical weather patterns may increase the 
severity of claims from catastrophe events in the future. Claims from catastrophe events could reduce our earnings and 
cause substantial volatility in our results of operations for any fiscal quarter or year, which could materially adversely affect 
our financial condition, possibly to the extent of eliminating our total stockholders’ equity. Our ability to underwrite new 
insurance policies could also be materially adversely impacted as a result of corresponding reductions in our capital. In 
addition, a natural disaster could materially impact the financial condition of our policyholders, resulting in loss of 
premiums. 

28 
Our reinsurance coverage currently exhausts at $3.08 billion for earthquake events, $735 million for Hawaii 
hurricane events, and $117.5 million for continental U.S. hurricane events, with coverage in excess of our estimated peak 
zone 1 in 250 year PML event and in excess of our A.M. Best threshold. Our catastrophe event retention is currently $20 
million for earthquake events and $15.5 million for hurricane events and all other perils. In addition to our event retention, 
we may also incur additional reinsurance expenses upon a catastrophe event. While we only select reinsurers whom we 
believe to have acceptable credit, if our reinsurers are unable to pay the claims for which they are responsible, we retain 
primary liability. Our earthquake policies do not provide coverage for fire damage arising from an earthquake. Catastrophe 
events which cause our reinsurers to incur losses may increase the cost of reinsurance in future periods or make it more 
difficult to obtain reinsurance on commercially acceptable terms. While we believe our risk transfer program reduces 
exposure to catastrophe losses and earnings volatility, one or more severe catastrophe events could result in claims 
that exceed the limits of our reinsurance coverage. 
  
Our reinsurers may not pay claims on a timely basis, or at all, which may materially adversely affect our business, 
financial condition, and results of operations. 
  
Our ability to grow our business is dependent in part in our ability to secure reinsurance for a substantial portion of 
the risk associated with our policies. Although reinsurance makes the reinsurer liable to us to the extent the risk is 
transferred or ceded to the reinsurer, it does not relieve us (the ceding insurer) of our primary liability to our policyholders. 
While our current reinsurance program is designed to limit our risk retention, in the event of a major catastrophe, our 
reinsurers may not pay claims made by us on a timely basis, or they may not pay some or all these claims. 
  
In addition, reinsurers may default in their financial obligations to us as the result of insolvency, lack of liquidity, 
operational failure, fraud, asserted defenses based on agreement wordings or the principle of utmost good faith, asserted 
deficiencies in the documentation of agreements, or other reasons. Any disputes with reinsurers regarding coverage under 
reinsurance contracts could be time consuming, costly, and uncertain of success. If a catastrophe event were to occur and 
our reinsurers were unable to satisfy their commitments to us, we may be unable to satisfy our policyholder liabilities which 
would adversely impact our results of operations and financial condition. We evaluate each reinsurance claim based on the 
facts of the case, historical experience with the reinsurer on similar claims and existing case law and consider including any 
amounts deemed uncollectible from the reinsurer in a reserve for uncollectible reinsurance. As of December 31, 2024, we 
had $395.2 million of aggregate reinsurance recoverables. 
  
Our loss reserves are established based on estimates which may be inadequate to cover actual incurred losses and could 
have a material adverse impact on our results of operations and financial condition. 
  
The reserve for losses and loss adjustment expenses represents our estimated ultimate cost of all reported and 
unreported losses and loss adjustment expenses incurred and unpaid at the balance sheet date. We seek to establish adequate 
reserves; however, our ultimate liability may be greater than our estimate. 
  
The process of estimating the reserves for losses and loss adjustment expenses requires a high degree of judgment 
and is subject to several variables. Multiple actuarial methods are used to estimate the reserve for losses and loss adjustment 
expenses. These methods utilize, to varying degrees, the initial expected loss ratio, detailed statistical analysis of past 
claims reporting and payment patterns, claims frequency and severity, paid loss experience, industry loss experience, and 
changes in market conditions, policy forms, exclusions, and exposures. 
  
We are subject to uncertainties which impact the adequacy of our reserves. For example, when we write 
“occurrence” policies, we are obligated to pay covered claims, up to the contractually agreed amount, for any covered loss 
that occurs while the policy is in force. Accordingly, claims may arise in years after a policy has lapsed.  In addition, there 
may be significant reporting lags between the occurrence of an insured event and the time it is actually reported to us and 
additional lags between the time of reporting and final settlement of any claims. Consequently, estimates of loss associated 
with specified claims can increase as new information emerges, which could cause the reserves for the claim to become 
inadequate. 
   
 
 

29 
Our reserves are driven by several important factors, including litigation and regulatory trends, legislative activity, 
climate change, social and economic patterns, and claims inflation assumptions. Our reserve estimates reflect current 
inflation in legal claims’ settlements and assume we will not be subject to losses from significant new legal liability 
theories. Our reserve estimates assume that there will not be significant changes in the regulatory and legislative 
environment. The impact of potential changes in the regulatory or legislative environment is difficult to quantify in the 
absence of specific, significant new regulation or legislation. In the event of significant new regulation or legislation, we 
will attempt to quantify its impact on our business, but no assurance can be given that our attempt to quantify such inputs 
will be accurate or successful. 
  
If our loss reserves should prove to be inadequate, we will be required to increase our reserves resulting in a 
reduction in our net income and stockholders’ equity in the period where the inadequacy is identified. Material increases to 
our reserves may impact our liquidity, our financial rating, and our ability to comply with debt covenants. 
  
For further information on our loss reserving methodology, see “Management’s Discussion and Analysis-Critical 
Accounting Policies and Estimates- Reserve for Losses and Loss Adjustment Expenses”. 
  
We may be unable to purchase third-party reinsurance or otherwise expand our catastrophe coverage in amounts we 
desire on commercially acceptable terms or on terms that adequately protect us, and this inability may materially 
adversely affect our business, financial condition and results of operations. 
  
We purchase a significant amount of reinsurance from third parties that we believe enhances our business by 
reducing our exposure to potential catastrophe losses and reducing volatility in our underwriting performance, providing us 
with greater visibility into our future earnings. Reinsurance involves transferring, or ceding, a portion of our risk exposure 
on policies that we write to another insurer, the reinsurer, in exchange for a premium. 
  
We buy multiple types of reinsurance including treaty excess of loss (“XOL”) coverage and program specific 
reinsurance coverage on a quota share, property per risk or a facultative basis. Treaty coverage refers to a reinsurance 
contract that is applied to a group or class of business where all the risks written meet the criteria for that class. Facultative 
coverage refers to a reinsurance contract on individual risks as opposed to a group or class of business. Our catastrophe 
XOL treaties are divided into multiple layers. 
  
The reinsurance market historically has been a cyclical market characterized by periods of sufficient or excess 
capital (soft market cycle) as well as shortages of capital (hard market cycle). Market conditions have limited, and in some 
cases prevented, insurers from obtaining the types and amounts of reinsurance they consider adequate for their business 
needs. As a result, we may not be able to purchase reinsurance in the areas and for the amounts we desire or on terms we 
deem acceptable or at all. Hard market cycles may increase our cost of reinsurance, force us to increase our loss retention, 
or limit the amount of reinsurance we are able to purchase, all of which would have an adverse impact on our business and 
results of operations. 
  
In addition to reinsurance purchased from traditional reinsurers, we have historically incorporated collateralized 
protection from the insurance linked securities market via catastrophe bonds. During the first quarter of 2021, we closed a 
$400 million 144A catastrophe bond which became effective June 1, 2021. The catastrophe bond was completed through 
Torrey Pines Re Pte. Ltd. (“Torrey Pines Re Pte.”). Torrey Pines Re Pte. is a special purpose reinsurance vehicle 
incorporated in Singapore that provides Palomar with indemnity-based reinsurance covering earthquake events through 
June 1, 2024. During the second quarter of 2022, we closed a $275 million 144A catastrophe bond which became effective 
June 1, 2022. This catastrophe bond was completed through Torrey Pines Re Ltd., a Bermuda-domiciled special purpose 
insurer that provides indemnity-based reinsurance covering earthquake events through June 1, 2025. During the second 
quarter of 2023, we also closed a $200 million 144A catastrophe bond which became effective June 1, 2023. This 
catastrophe bond was also completed through Torrey Pines Re Ltd and provides indemnity-based reinsurance covering 
earthquake events through June 1, 2026. During the second quarter of 2024, we also closed a $420 million 144A 
catastrophe bond which became effective June 1, 2024. This catastrophe bond was also completed through Torrey Pines Re 
Ltd and provides indemnity-based reinsurance covering earthquake events through June 1, 2027. 
  
We may seek similar catastrophe bond offerings in the future. However, there can be no assurance that we will be 
able to complete such offerings on acceptable terms, if at all. 
  
If we are unable to renew our expiring reinsurance contracts on acceptable terms or expand our reinsurance 
coverage through traditional reinsurers, catastrophe bonds, or otherwise, our loss exposure may increase, which would 
increase our potential losses related to catastrophe or non-catastrophe events. If we are unwilling to bear an increase in loss 
exposure, we may have to reduce our written premiums. These outcomes could adversely affect our business, financial 
condition, and results of operations. 

30 
In addition, as we grow our written premiums and enter new lines of business we will seek new types of 
reinsurance and will need to purchase reinsurance on commercially acceptable terms in order to reduce the risk associated 
with entering new lines of business. The inability to purchase appropriate reinsurance for new lines of business could 
negatively impact our ability to grow our written premiums and maintain our desired level of profitability. 
  
Many reinsurance companies have begun to exclude certain coverages from, or alter terms in, our reinsurance 
contracts with them. As a result, we, like other insurance companies, write insurance policies which to some extent do not 
have the benefit of reinsurance protection. These gaps in reinsurance protection expose us to greater risk and greater 
potential losses. 
  
We utilize several risk management and loss limitation methods, including relying on estimates and models. If these 
methods fail to adequately manage our exposure to losses from catastrophe events, our losses could be materially higher 
than our expectations, and our business, financial condition, and results of operations could be materially adversely 
affected. 
  
Our approach to risk management relies on subjective variables that entail significant uncertainties. We manage 
our exposure to catastrophe losses by analyzing the probability of the occurrence of catastrophe events and their severity 
and impact on our underwriting and investment portfolio. We monitor and mitigate our exposure through a number of 
methods designed to minimize risk, including underwriting specialization, modeling and data systems, data quality control, 
strategic use of policy deductibles, regular review of aggregate exposure and probable maximum loss reports, which report 
the maximum amount of expected losses based on computer or actuarial modeling techniques. These estimates, models, 
data, and scenarios may not produce accurate predictions; consequently, we could incur losses both in the risks we 
underwrite and to the value of our investment portfolio due to the overall impact on financial markets from the occurrence 
of catastrophe events. 
  
In addition, output from our risk modeling software is based on third-party data that we believe to be accurate and 
reliable. The estimates and assumptions we use are dependent on many variables, such as loss adjustment expenses, 
insurance to value, storm or earthquake intensity, building code compliance and demand surge, which is the temporary 
inflation of costs for building materials such as lumber and labor resulting from increased demand for rebuilding services in 
the aftermath of a catastrophe. Accordingly, if the estimates and assumptions used in our risk models are incorrect or if our 
risk models prove to be an inaccurate forecasting tool, the losses we incur from an actual catastrophe could be materially 
higher than our expectation of losses generated from modeled catastrophe scenarios, and our business, financial condition, 
and results of operations could be materially adversely affected. In addition, our third-party data providers may change the 
estimates or assumptions that we use in our risk models and/or their data may be inaccurate. Changes in these estimates or 
assumptions or the use of inaccurate third-party data could cause our actual losses to be materially higher than our current 
expectation of losses generated by modeled catastrophe scenarios, which in turn could materially adversely affect our 
business, financial condition, and results of operations. 
  
We run many model simulations to understand the impact of these assumptions on a catastrophe’s loss potential. 
Furthermore, there are risks associated with catastrophe events, which are either poorly represented or not represented at all 
by catastrophe models. Each modeling assumption or un-modeled risk introduces uncertainty into probable maximum loss 
estimates that management must consider. These uncertainties can include, but are not limited to, the following: 
  
  
● 
The models do not address all the possible hazard characteristics of a catastrophe peril (e.g., the precise path 
and wind speed of a hurricane); 
  
  
● 
The models may not accurately reflect the true frequency or severity of events; 
  
  
● 
The models may not accurately reflect a risk’s vulnerability or susceptibility to damage for a given event 
characteristic; 
  
  
 
 

31 
  
● 
The models may not account for unusual or unprecedented catastrophe events; 
  
  
● 
The models may not adequately consider the impact of inflation on the magnitude of modeled losses; 
  
  
● 
The models may not accurately represent loss potential to insurance or reinsurance contract coverage limits, 
terms and conditions; and 
  
  
● 
The models may not accurately reflect the impact on the economy of the area affected or the financial, 
judicial, political, or regulatory impacts on insurance claim payments during or following a catastrophe event. 
  
As a result of these factors and contingencies, our reliance on assumptions and data used to evaluate our entire risk 
portfolio and specifically to estimate a probable maximum loss is subject to a high degree of uncertainty that could result in 
actual losses that are materially different from our probable maximum loss estimates and could adversely impact our 
financial results. 
  
A decline in our financial strength rating may adversely affect the amount of business we write and impact compliance 
with our debt covenants. 
  
Participants in the insurance industry use ratings from independent ratings agencies, such as A.M. Best, as an 
important means of assessing the financial strength and quality of insurers. In setting its ratings, A.M. Best performs 
quantitative and qualitative analysis of a company’s balance sheet strength, operating performance and business profile. 
A.M. Best financial strength ratings range from “A++” (Superior) to “F” for insurance companies that have been publicly 
placed in liquidation. As of December 31, 2024, A.M. Best has assigned a financial strength rating of “A” (Excellent) 
(Outlook Stable) to our insurance company subsidiaries, Palomar Specialty Insurance Company (“PSIC”) and Palomar 
Excess and Surplus Insurance Company (“PESIC”). A.M. Best assigns ratings that are intended to provide an independent 
opinion of an insurance company’s ability to meet its obligations to policyholders and such ratings are not evaluations 
directed to investors and are not a recommendation to buy, sell or hold our common stock or any other securities we may 
issue. A.M. Best’s analysis includes comparisons to peers and industry standards as well as assessments of operating plans, 
philosophy and management. A.M. Best periodically reviews our financial strength rating and may revise it downward or 
revoke it at A.M. Best’s discretion based primarily on its analyses of our balance sheet strength (including capital adequacy 
and loss adjustment expense reserve adequacy), operating performance and business profile. Factors that could affect such 
analyses include, but are not limited to: 
  
  
● 
If we change our business practices from our organizational business plan in a manner that no longer supports 
A.M. Best’s rating; 
  
  
● 
If unfavorable financial, regulatory or market trends affect us, including excess market capacity; 
  
  
● 
If our losses exceed our loss reserves; 
  
  
● 
If we have unresolved issues with government regulators; 
  
  
● 
If we are unable to retain our senior management or other key personnel; 
  
  
● 
If our investment portfolio incurs significant losses; or 
  
  
● 
If A.M. Best alters its capital adequacy assessment methodology in a manner that would adversely affect our 
rating. 
  
  
 
 

32 
These and other factors could result in a downgrade of our financial strength rating. A downgrade or withdrawal of 
our rating could result in any of the following consequences, among others: 
  
  
● 
Causing our current and future distribution partners and insureds to choose other, more highly-rated 
competitors; 
  
  
● 
Increasing the cost or reducing the availability of reinsurance to us; 
  
  
● 
Severely limiting or preventing us from writing new and renewal insurance contracts; or 
  
  
● 
Causing us to be out of compliance with the financial covenants in our credit agreement. 
  
In addition, in view of the earnings and capital pressures experienced by many financial institutions, including 
insurance companies, it is possible that rating organizations will heighten the level of scrutiny that they apply to such 
institutions, will increase the frequency and scope of their credit reviews, will request additional information from the 
companies that they rate or will increase the capital and other requirements employed in the rating organizations’ models 
for maintenance of certain ratings levels. If our credit rating were to be downgraded, or general market conditions were to 
ascribe higher risk to our rating levels, our access to capital markets and the cost of any equity or debt financing will be 
negatively impacted. We can offer no assurance that our rating will remain at its current level. It is possible that such 
reviews of us may result in adverse ratings consequences, which could have a material adverse effect on our financial 
condition and results of operations. 
  
We and our customers could be negatively and adversely impacted by pandemics, disease outbreaks and other public 
health crises.  
  
The extent of the impact of a pandemic, disease outbreak or other public health crisis on our operational and 
financial performance depends on several factors, including the ultimate duration and severity of the event, the emergence 
and severity of variant strains, actions taken and restrictions imposed by the government and health officials in response, 
the effectiveness and adoption of vaccines and therapeutics, the ability for our customers to continue to pay premiums, 
contraction of the insurance and reinsurance markets, and the ability for reinsurers to satisfy claims, all of which are 
uncertain and cannot be predicted. While policy terms and conditions in the lines of business written by us would be 
expected to preclude coverage for virus-related claims, court decisions and governmental actions may challenge the validity 
of any exclusions or our interpretation of how such terms and conditions operate. 
  
Global health crises have historically contributed to financial market volatility, supply chain disruptions, price 
inflation, and material and labor shortages, all of which may have a negative impact on our business. Furthermore, since our 
results of operations are partially dependent on the performance of our investment portfolio, a global health crisis' impact on 
the economy and financial markets could reduce our net investment income and result in realized investment losses in 
future periods. The macroeconomic effects of a global health crisis may persist for an indefinite period, even after it has 
subsided. We cannot anticipate all the ways in which global health crises could adversely impact our business in the future. 
  
Our business is concentrated in California and, as a result, we are exposed more significantly to California  loss activity 
and regulatory environments. 
  
Our policyholders and insurance risks are currently concentrated in California, which generated 53% of our gross 
written premiums for the year ended December 31, 2023 and 43% for the year ended December 31, 2024. We are exposed 
to business, economic, political, judicial and regulatory risks due to this concentration that are greater than the risks faced 
by insurance companies with a lower concentration of their premiums in California. Any single, major catastrophe event, 
series of events or other condition causing significant losses in California could materially adversely affect our business, 
financial condition and results of operations. This may include catastrophes even where we do not insure against the loss, 
such as the 2025 California wildfires, as homes and businesses lost or damaged due to catastrophe may otherwise cancel 
our policies following such event. Additionally, unfavorable business, economic or regulatory conditions in California may 
result in a significant reduction of our premiums or increase our loss exposure. Changes to insurance-related laws or 
regulations in California could also have a negative impact on our business. 
   
 
 

33 
We could be adversely affected by the loss of one or more key executives or by an inability to attract and retain qualified 
personnel. 
  
We depend on our ability to attract and retain experienced personnel and seasoned key executives who are 
knowledgeable about our business. The pool of talent from which we recruit is limited and may fluctuate based on market 
dynamics specific to our industry and independent of overall economic conditions. As such, higher demand for employees 
having the desired skills and expertise could lead to increased compensation expectations for existing and prospective 
personnel, making it difficult for us to retain and recruit key personnel and maintain labor costs at desired levels.  
  
In particular, our future success is substantially dependent on the continued service of our Founder, Chief 
Executive Officer and Chairman, Mac Armstrong, and our Chief Financial Officer, Christopher Uchida. Should any of our 
key executives terminate their employment with us, or if we are unable to retain and attract talented personnel, we may be 
unable to maintain our current competitive position in the specialized markets in which we operate, which could adversely 
affect our results of operations. 
  
We rely on a select group of brokers and program administrators, and such relationships may not continue. 
  
The distribution networks of our products are multi-faceted and distinct to each line of business. Our relationship 
with our brokers or program administrators may be discontinued at any time. Even if the relationships do continue, they 
may not be on terms that are profitable for us. We distribute a significant portion of our Residential Earthquake, 
Commercial Earthquake, Hawaii Hurricane, and Fronting products through relationships with certain program 
administrators. Each of the products managed by the program administrators operates as a separate program that is 
governed by an independent, separately negotiated agreement with unique terms and conditions, including geographic 
scope, key person provisions, economics and exclusivity. These programs also feature separate managerial oversight and 
leadership, policy administration systems and retail agents originating policies. 
  
For the year ended December 31, 2023, our largest program administrator distributed $394.1 million or 34.5% of 
our gross written premiums and our second largest program administrator distributed $152.4 million, or 13.3% of our gross 
written premiums. There were no other program administrators which distributed greater than 10% of our gross written 
premiums for the year ended December 31, 2023. 
  
For the year ended December 31, 2024, our largest program administrator distributed $403.4 million or 26.2% of 
our gross written premiums. There were no other program administrators which distributed greater than 10% of our gross 
written premiums for the year ended December 31, 2024. 
 
Our largest program administrator, Arrowhead General Insurance Agency, distributes our Value Select Residential 
Earthquake program, which represents the majority of our Residential Earthquake premium and is administered through a 
mutually exclusive agreement for the states of California, Oregon and Washington. The agreement remains in effect until 
terminated by either party upon 180 days’ prior written notice to the other party for cause. The termination of a relationship 
with one or more significant brokers or program administrators could result in lower gross written premiums and could have 
a material adverse effect on our results of operations or business prospects. 
  
Because we provide our program administrators with specific quoting and binding authority, if any of them fail to 
comply with pre-established guidelines, our results of operations could be adversely affected. 
  
We market and distribute certain of our insurance products through program administrators that have limited 
quoting and binding authority and that in turn sell our insurance products to insureds through retail agents and wholesale 
brokers. These program administrators can bind certain risks without our expressed approval. If any of these program 
administrators fail to comply with our underwriting guidelines and the terms of their appointments, we could be bound on a 
particular risk or number of risks that were not anticipated when we developed the insurance products or estimated losses 
and loss adjustment expenses. Such actions could adversely affect our results of operations. 
  
  
 
 

34 
Because our business depends on insurance brokers and program administrators, we are exposed to certain risks arising 
out of our reliance on these distribution channels that could adversely affect our results. 
  
Certain premiums from policyholders, where the business is produced by brokers, are collected directly by the 
brokers and forwarded to our insurance subsidiaries. In certain jurisdictions, when the insured pays its policy premium to its 
broker for payment to us, the premium might be considered to have been paid under applicable insurance laws and 
regulations. Accordingly, the insured would no longer be liable to us for those amounts, whether or not we have actually 
received the premium from the broker. Consequently, we assume a degree of credit risk associated with the brokers with 
which we work. We review the financial condition of potential new brokers before we agree to transact business with them. 
Although the failure by any of our brokers to remit premiums to us has not been material to date, there may be instances 
where our brokers collect premiums but do not remit them to us and we may be required under applicable law to provide 
the coverage set forth in the policy despite the related premiums not being paid to us. Additionally, the loss or disruption of 
business from our agents and brokers or the failure or inability of these agents and brokers to successfully market our 
insurance products could have a material adverse effect on our business, financial condition, and results of operations. 
  
Because the possibility of these events occurring depends in large part upon the financial condition and internal 
operations of our brokers, we regularly meet and communicate with our brokers, monitor broker behavior, and review 
broker financial information on an as-needed basis. If we are unable to collect premiums from our brokers in the future, our 
underwriting profits may decline, and our financial condition and results of operations could be materially and adversely 
affected. 
  
Competition for business in our industry is intense. 
  
We face competition from other specialty insurance companies, standard insurance companies and underwriting 
agencies that are larger than we are and that have greater financial, marketing, and other resources than we do. Some of 
these competitors also have longer operating history and more market recognition than we do in certain lines of business. In 
addition, we compete against state or other publicly managed enterprises including the California Earthquake Authority 
(“CEA”), the National Flood Insurance Program, and the Texas Wind Insurance Association. If the CEA decided to provide 
coverage to non-CEA member carriers or lessened the capital requirements for membership, we would face additional 
competition in our markets, and our operating results could be adversely affected. Furthermore, it may be difficult or 
prohibitively expensive for us to implement technology systems and processes that are competitive with the systems and 
processes of these larger companies. 
  
Competition in the insurance industry is based on many factors, including price of coverage, the general reputation 
and perceived financial strength of the company, relationships with brokers, terms and conditions of products offered, 
ratings assigned by independent rating agencies, speed of claims payment, and the experience and reputation of the 
members of our underwriting team in the particular lines of insurance and reinsurance we seek to underwrite. In recent 
years, the insurance industry has undergone increasing consolidation, which may further increase competition. 
  
Certain new, proposed or potential industry or legislative developments could further increase competition in our 
industry. For example, an increase in capital-raising by companies with whom we compete could result in new entrants to 
our markets and an excess of capital in the industry. Additionally, the possibility of federal regulatory reform of the 
insurance industry could increase competition from standard carriers. 
  
We may not be able to continue to compete successfully in the insurance markets. Increased competition in these 
markets could result in a change in the supply and demand for insurance, affect our ability to price our products at risk-
adequate rates and retain existing business, or underwrite new business on favorable terms. If this increased competition so 
limits our ability to transact business, our operating results could be adversely affected. 
  
If actual renewals of our existing policies do not meet expectations, our written premium in future years and our future 
results of operations could be materially adversely affected. 
  
Most of our insurance policies are written for a one-year term. In our financial forecasting process, we make 
assumptions about the rates of renewal of our prior year’s policies. The insurance and reinsurance industries have 
historically been cyclical businesses with intense competition, often based on price. If actual renewals do not meet 
expectations or if we choose not to write a renewal because of pricing conditions, our written premium in future years and 
our future operations would be materially adversely affected. In addition, the volume of fronting premiums written may 
vary significantly in future periods due to the timing of entering large fronting partnerships and terminations of large 
fronting partnerships. 
   

35 
Our failure to accurately and timely evaluate and pay claims could materially and adversely affect our business, 
financial condition, results of operations, and prospects. 
  
We must accurately and timely evaluate and pay claims that are made under our policies. Many factors affect our 
ability to pay claims accurately and timely, including the training and experience of our claims representatives, including 
our third-party claims administrators (“TPAs”), the effectiveness of our management, our ability to develop or select and 
implement appropriate procedures and systems to support our claims functions and other factors. Our failure to evaluate and 
pay claims accurately and timely could lead to regulatory and administrative actions or material litigation, undermine our 
reputation in the marketplace and materially and adversely affect our business, financial condition, results of operations, 
and prospects. 
  
In addition, if we do not manage our TPAs effectively, or if our TPAs are unable to effectively manage our volume 
of claims, our ability to manage our claims workload could be adversely affected. In addition to potentially requiring that 
growth be slowed in the affected markets, our business could suffer from decreased quality of claims work which, in turn, 
could adversely affect our results of operations. 
  
We may act based on inaccurate or incomplete information regarding the accounts we underwrite. 
  
We rely on information provided by insureds or their representatives when underwriting insurance policies. While 
we may make inquiries and take other steps to validate or supplement the information provided, we may make underwriting 
decisions based on incorrect or incomplete information. It is possible that we will misunderstand the nature or extent of the 
activities or facilities and the corresponding extent of the risks that we insure because of our reliance on inadequate or 
inaccurate information. 
  
We may change our underwriting guidelines or our strategy without stockholder approval. 
  
Our management has the authority to change our underwriting guidelines or our strategy without notice to our 
stockholders and without stockholder approval. As a result, we may make fundamental changes to our operations without 
stockholder approval, which could result in our pursuing a strategy or implementing underwriting guidelines that may be 
materially different from the strategy or underwriting guidelines described in our public filings. 
  
Our employees could take excessive risks, which could negatively affect our financial condition and business. 
  
As an insurance enterprise, we are in the business of binding certain risks. The employees who conduct our 
business, including executive officers and other members of management, underwriters, product managers and other 
employees, do so in part by making decisions and choices that involve exposing us to risk. These include decisions such as 
setting underwriting guidelines and standards, product design and pricing, determining which business opportunities to 
pursue, and other decisions. We endeavor, in the design and implementation of our compensation programs and practices, 
to avoid giving our employees incentives to take excessive risks. Employees may, however, take such risks regardless of 
the structure of our compensation programs and practices. Similarly, although we employ controls and procedures designed 
to monitor employees’ business decisions and prevent them from taking excessive risks, these controls and procedures may 
not be effective. If our employees take excessive risks, the impact of those risks could have a material adverse effect on our 
financial condition and business operations. 
  
We may require additional capital in the future, which may not be available or may only be available on unfavorable 
terms. 
  
Our future capital requirements depend on many factors, including our ability to write new business successfully 
and to establish premium rates and reserves at levels sufficient to cover losses. Many factors will affect the amount and 
timing of our capital needs, including our growth rate and profitability, our claims experience, the availability of 
reinsurance, market disruptions, and other unforeseeable developments. If we need to raise additional capital, equity or debt 
financing may not be available at all or only available on unfavorable terms. Equity financings would result in dilution to 
our stockholders.  Debt financings could subject us to covenants that restrict our ability to freely operate our business. If we 
cannot obtain adequate capital on favorable terms or at all, we may not have sufficient funds to implement our operating 
plans and our business, financial condition or results of operations could be materially adversely affected. 
   
 
 

36 
We may not be able to manage our growth effectively. 
  
We intend to grow our business in the future, which could require additional capital, technology development, and 
skilled personnel. To grow effectively, we must be able to meet our capital needs and expand our systems, technology, and 
internal controls effectively. We also must allocate our human resources optimally, including identifying, hiring, and 
retaining qualified employees, and effectively incorporating the components of any businesses we may acquire in our effort 
to achieve growth. The failure to manage our growth effectively could have a material adverse effect on our business, 
financial condition and results of operations. 
  
We face risks associated with the evaluation of potential acquisitions, the integration of acquired businesses, and the 
introduction of new products, lines of business, and markets. 
  
As part of our business strategy, we may make acquisitions, including acquisitions in lines of business that are 
natural adjacencies. For example, we recently completed the acquisition of FIA in January 2025. The success of our 
acquisition strategy is dependent upon our ability to identify appropriate acquisition targets, negotiate transactions on 
favorable terms, complete transactions, have adequate access to financing and the ability to finance acquisitions on 
acceptable terms, and successfully integrate them into our existing businesses. We may not realize the anticipated benefits 
of acquisitions we have completed or may complete in the future, and we may not be able to incorporate any acquired lines 
of business with our existing operations, or integrate personnel from the acquired businesses, in which case our business, 
financial condition and results of operations could be harmed. 
  
If acquisitions are made, we may not realize the anticipated benefits of such acquisitions, including, but not limited 
to, revenue growth, operational efficiencies, or expected synergies. Many of the businesses and assets that we have acquired 
or may acquire have unaudited historical financial statements or records that have been, or will be, prepared by the 
management of such companies and have not been, or will not be, independently reviewed or audited. We cannot be certain 
that the financial statements or records of companies or assets we have acquired or may acquire would not, or will not, be 
materially different if such statements were independently reviewed or audited. If such statements were to be materially 
different, the tangible and intangible assets we acquire may be more susceptible to impairment charges, which could have a 
material adverse effect on us. 
  
In addition, many of the businesses that we acquire and develop will likely have smaller scales of operations prior 
to the implementation of our growth strategy. If our growth continues, it may place a significant strain on our management 
team and on our operational and financial systems, procedures, and controls. If we are not able to manage the growing 
complexity of these businesses, including improving, refining, or revising our systems and operational practices, enlarging 
the scale and scope of the businesses, and integrating the new business into our culture and operations, our business may be 
adversely affected. 
  
From time to time, either through acquisitions or internal development, we enter new distribution channels or lines 
of business or offer new products and services within existing lines of business. These new distribution channels, lines of 
business, or new products and services present additional risks, particularly in instances where the markets are not fully 
developed. Such risks include the investment of significant time and resources to recruit, hire, and retain personnel and 
develop the products, the risks involved with the management of the integration process and development of new processes 
and systems to accommodate complex programs, and the risk of financial guarantees and additional liabilities associated 
with these efforts. 
  
Failure to manage these risks arising from acquisitions or development of new businesses could materially and 
adversely affect our business, results of operations, and financial condition. 
  
Our operating results have in the past varied from quarter to quarter and may not be indicative of our long-term 
prospects. 
  
Our operating results are subject to fluctuation and have historically varied from quarter to quarter. We expect our 
quarterly results to continue to fluctuate in the future due to a number of factors, including the general economic conditions 
in the markets where we operate, the frequency of occurrence and severity of catastrophe or other insured events, 
fluctuating interest rates, claims exceeding our loss reserves, competition in our industry, deviations from expected 
premium retention rates of our existing policies, volatility in investment performance, including gains and losses on our 
equity securities, and the cost of reinsurance coverage. 
  
In addition, the insurance and reinsurance business historically has been a cyclical industry characterized by 
periods of intense price competition due to excess underwriting capacity (soft market cycle) as well as periods when 
shortages of capacity increase premium levels (hard market cycle). We expect our business and results of operations to be 
continuously impacted by these market cycles. 

37 
We seek to underwrite products and make investments to achieve favorable returns on tangible stockholders’ 
equity over the long term. Our opportunistic nature and focus on long-term growth in tangible equity may result in 
fluctuations in gross written premiums, reinsurance expenses, loss expenses, and other underwriting expenses from period 
to period as we concentrate on underwriting contracts that we believe will generate better long-term, rather than short-term, 
results. Accordingly, our short-term results of operations may not be indicative of our long-term prospects. 
  
Our Credit Agreement contains restrictions and covenants that limit our flexibility in operating our business and any 
debt borrowed under our Credit Agreement exposes us to additional risk and may adversely affect our financial 
condition and future financial results. 
  
In December 2021, we entered into a Credit Agreement (the “Credit Agreement”) with certain lenders which 
provides a revolving credit facility of up to $100.0 million. Borrowings under the Credit Agreement may impact our 
business and financial condition by: 
  
  
● 
Requiring the dedication of a portion of our expected cash flows from operations to service our debt, thereby 
reducing the amount of expected cash flows available for other purposes, including investing, and paying 
claims and operating expenses and; 
  
  
● 
Exposing us to interest rate risk since the interest rate in the credit agreement is a variable rate 
  
In addition, the Credit Agreement contains financial covenants, restrictions on indebtedness, liens, investments, 
mergers, dispositions, prepayment of other indebtedness and dividends and other distributions. The financial covenants in 
the Credit agreement require the Company not to exceed a maximum leverage ratio and maintain a minimum net worth at 
the end of each quarter. The Company’s insurance subsidiaries are also required to maintain a minimum Risk Based Capital 
Ratio at the end of each year and must always maintain a minimum AM Best Financial Strength rating. All of these 
covenants and restrictions impact how we operate our business and may limit our flexibility in planning for, or reacting to, 
changes in our business and industry. Our ability to comply with these covenants may be affected by events beyond our 
control. If we breach any of the covenants and do not obtain a waiver from the noteholders or lenders, then, subject to 
applicable cure periods, any outstanding debt may be declared immediately due and payable. 
  
Volatility in crop prices, as a result of weather conditions or other events, could adversely impact our results of 
operations. 
  
Weather conditions, including too much moisture (flooding or excessive rain), not enough moisture (droughts), 
and the level of crop prices in the commodities market heavily impact our crop insurance products. These factors are 
inherently unpredictable and could result in significant volatility in our operating results from one year to the next. Our 
results could also be negatively impacted by pests and plant disease. A large decline in the commodity prices of one or more 
of the major crops that we insure could have a material adverse effect on our results of operations or financial condition. 
   
Risks Related to the Economic Environment 
  
Adverse economic factors, including recession, inflation, periods of high unemployment or lower economic activity 
could result in the sale of fewer policies than expected or an increase in the frequency of claims and premium defaults, 
and even the falsification of claims, or a combination of these effects, which, in turn, could affect our growth and 
profitability. 
  
Factors, such as general economic conditions, the volatility and strength of the capital markets, and inflation can 
affect the business and economic environment. These same factors affect our ability to generate revenue and profits. In an 
economic downturn that is characterized by higher unemployment, declining spending, and reduced corporate revenue, the 
demand for insurance products could be adversely affected, which directly affects our premium levels and profitability. 
Negative economic factors may also affect our ability to receive the appropriate rate for the risk we insure with our 
policyholders and may adversely affect the number of policies we can write, and our opportunities to underwrite profitable 
business. In an economic downturn, our customers may have less need for insurance coverage, cancel or cease payment on 
existing insurance policies, modify their coverage, or not renew the policies they hold with us. Existing policyholders may 
exaggerate or even falsify claims to obtain higher claims payments. These outcomes would reduce our underwriting profit 
to the extent these factors are not reflected in the rates we charge. 
  
We underwrite a significant portion of our insurance in California. An economic downturn which particularly 
impacts California could have an adverse effect on our financial condition and results of operations. 
  
Performance of our investment portfolio is subject to a variety of investment risks that may adversely affect our financial 
results. 
  
Our results of operations depend, in part, on the performance of our investment portfolio. We seek to hold a 
diversified portfolio of investments that is managed by a professional investment advisory management firm in accordance 

38 
with our investment policy and routinely reviewed by our Board of Directors. Our investments are subject to general 
economic conditions and market risks as well as risks inherent to particular securities. 
  
Our primary market risk exposures relate to changes in interest rates and credit quality considerations. Future 
increases in interest rates could cause the values of our fixed maturity securities portfolios to decline, with the magnitude of 
the decline depending on the duration of securities included in our portfolio and the amount by which interest rates increase. 
Interest rate fluctuations can also impact the business and results of operations of the companies that issue fixed maturity 
securities and may cause a decline in fair value of their securities. Some fixed maturity securities have call or prepayment 
options, which create reinvestment risk in declining rate environments. Other fixed maturity securities, such as 
mortgage-backed and asset-backed securities, carry prepayment risk or, in a rising interest rate environment, may not 
prepay as quickly as expected. 
  
The value of our investment portfolio is subject to the risk that certain investments may default or become 
impaired due to deterioration in the financial condition of one or more issuers of the securities we hold, or due to 
deterioration in the financial condition of an insurer that guarantees an issuer’s payments on such investments. Such 
deteriorations may be caused or magnified by interest rate fluctuations. Downgrades in the credit ratings of fixed maturities 
also have a significant negative effect on the market valuation of such securities. 
   
Such factors could reduce our net investment income and result in realized investment losses. Our investment 
portfolio is subject to increased valuation uncertainties when investment markets are illiquid. The valuation of investments 
is more subjective when markets are illiquid, thereby increasing the risk that the estimated fair value (i.e., the carrying 
amount) of the securities we hold in our portfolio does not reflect prices at which actual transactions would occur. 
  
We also invest in marketable equity securities. These securities are carried on the balance sheet at fair market 
value and are subject to potential losses and declines in market value based on the performance of equity markets. Our 
equity invested assets totaled $40.5 million as of December 31, 2024. 
  
Risks for all types of securities are managed through the application of our investment policy, which establishes 
investment parameters that include but are not limited to, maximum percentages of investment in certain types of securities 
and minimum levels of credit quality, which we believe are within applicable guidelines established by the National 
Association of Insurance Commissioners (“NAIC”), the Oregon Division of Financial Regulation and the California and 
Arizona Departments of Insurance. 
  
Although we seek to preserve our capital, we cannot be certain that our investment objectives will be achieved, 
and results may vary substantially over time. In addition, although we seek to employ investment strategies that are not 
correlated with our insurance and reinsurance exposures, losses in our investment portfolio may occur at the same time as 
underwriting losses and, therefore, exacerbate the adverse effect of the losses on us. 
  
Our investment portfolio could also be adversely impacted by ratings downgrades, increased bankruptcies and 
credit spread widenings caused by economic downturns or other events. Severe economic downturns could cause 
impairments in our fixed income portfolio. In addition, declines in fixed income yields would result in decreases in net 
investment income from future investment activity, including re-investments. 
  
We may, in certain circumstances, invest a small percentage of our investment portfolio in private companies or 
limited partnerships which we believe provide strategic opportunities. These types of investments are typically illiquid, and 
we have limited ability to take actions that protect or increase the value of this type of investment. Net losses from 
these investments or impairment of these investments may negatively impact our operating results. 
  
We could be forced to sell investments to meet our liquidity requirements. 
  
We invest the premiums we receive from our insureds until they are needed to pay policyholder claims. 
Consequently, we seek to manage the duration of our investment portfolio based on the duration of our losses and loss 
adjustment expense reserves to provide sufficient liquidity and avoid having to liquidate investments to fund claims. Risks 
such as inadequate losses and loss adjustment reserves, a significant catastrophe event, or unfavorable trends in litigation 
could potentially result in the need to sell investments to fund these liabilities. We may not be able to sell our investments at 
favorable prices or at all. Sales could result in significant realized losses depending on the conditions of the general market, 
interest rates, and credit issues with individual securities. 
  
Risks Related to Technology 
  
The failure of our information technology and telecommunications systems could adversely affect our business. 
  
Our business is highly dependent upon our information technology and telecommunications systems, including our 
underwriting system. We rely on these systems to interact with brokers and insureds, to underwrite business, to prepare 
policies and process premiums, to perform actuarial and other modeling functions, to process claims and make claims 

39 
payments, and to prepare internal and external financial statements and information. Some of these systems may include or 
rely on third-party systems not located on our premises or under our control. Events such as natural catastrophes, 
pandemics, cyber-attacks, terrorist attacks, industrial accidents or computer viruses may cause our systems to fail or be 
inaccessible for extended periods of time. While we have implemented business contingency plans and other reasonable 
plans to protect our systems, sustained or repeated system failures or service denials could severely limit our ability to write 
and process new and renewal business, provide customer service, pay claims in a timely manner or otherwise operate in the 
ordinary course of business. 
  
A portion of our employees work remotely and outside of our primary offices on a regular basis. We believe 
remote work increases the need for our information technology and telecommunications systems to work properly and 
creates additional operational risk and difficulty should these systems fail. 
   
Security breaches or cyber-attacks could expose us to liability and damage our reputation and business. 
  
Our operations depend on the reliable and secure processing, storage, and transmission of confidential and other 
data and information in our computer systems and networks. Computer viruses, hackers, employee misconduct, and other 
external hazards could expose our systems to security breaches, cyber-attacks or other disruptions. 
  
Cyberthreats are constantly evolving and becoming increasingly sophisticated and complex, making it increasingly 
difficult to detect and successfully defend against them.  In addition, cyber-attackers (which may include individuals or 
groups, as well as sophisticated groups such as nation-state and state-sponsored attackers, which can deploy significant 
resources to plan and carry out exploits) also develop and deploy viruses, worms, credential stuffing attack tools and other 
malicious software programs, some of which may be specifically designed to attack our products, information systems or 
networks. Outside parties have in the past and may in the future attempt to fraudulently induce our employees or users of 
our products or services to disclose sensitive, personal or confidential information via illegal electronic spamming, phishing 
or other tactics. 
  
While we have implemented security measures and employee training designed to protect against breaches of 
security and other interference with our systems and networks, our systems and networks may be, and at times are, subject 
to breaches or interference. Any such event may result in operational disruptions as well as unauthorized access to or the 
disclosure or loss of our proprietary information or our customers’ data and information, which in turn may result in legal 
claims, regulatory scrutiny and liability, reputational damage, the incurrence of costs to eliminate or mitigate further 
exposure, the loss of customers or affiliated advisors, reputational harm or other damage to our business. While we 
maintain insurance coverage that may, subject to policy terms and conditions, cover certain aspects of cyber risks, such 
insurance coverage may be insufficient to cover all losses. 
  
In addition, the trend toward general public notification of such incidents could exacerbate the harm to our 
business, financial condition and results of operations. Even if we successfully protect our technology infrastructure and the 
confidentiality of sensitive data, we could suffer harm to our business and reputation if attempted security breaches are 
publicized. We cannot be certain that advances in criminal capabilities, discovery of new vulnerabilities, attempts to exploit 
vulnerabilities in our systems, data thefts, physical system or network break-ins or inappropriate access, or other 
developments will not compromise or breach the technology or other security measures protecting the networks and 
systems used in connection with our business. 
  
We employ third-party licensed software for use in our business, and the inability to maintain these licenses, problems 
with the software we license, or increases to the cost of software licenses could adversely affect our business. 
  
Multiple areas of our business rely on certain third-party software obtained under licenses from other companies. 
We anticipate that we will continue to rely on such third-party software in the future. Unforeseen issues may arise in third-
party software platforms which may have an adverse impact on our operations. Integration of new third-party software or 
modifications to our existing third-party software may require substantial investment of our time and resources. The 
inability to integrate or operate third-party software successfully or the inadequacy of third-party software may have a 
material adverse impact on our operations. In addition, the cost of third-party software is significant and we expect it to 
increase in the future. If we have issues with the functionality or expense of third-party software, we may not be able to find 
acceptable alternatives in a timely manner or at all. Many of the risks associated with the use of third-party software cannot 
be eliminated, and these risks could negatively affect our business. 
  
Additionally, the software powering our technology systems incorporates software covered by open-source 
licenses. The terms of many open-source licenses have not been interpreted by U.S. courts, and there is a risk that the 
licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to operate our 

40 
systems. In the event that portions of our proprietary software are determined to be subject to an open-source license, we 
could be required to publicly release the affected portions of our source code or re-engineer all or a portion of our 
technology systems, each of which could reduce or eliminate the value of our technology systems. Such risk could be 
difficult or impossible to eliminate and could adversely affect our business, financial condition, and results of operations. 
   
Any control weakness or failure in cloud-based software could adversely affect our business. 
  
We use cloud-based third-party software to host applications and for key financial and operational systems and we 
expect to expand their use in the future.  We will increasingly rely on third-party software providers to maintain appropriate 
controls and safeguards to protect the integrity of our data and any information we transmit, including personal, personally 
identifiable, sensitive, confidential or proprietary information. While we conduct due diligence on these cloud providers 
with respect to their security and business controls, we may not have the visibility to effectively monitor the 
implementation and efficacy of these controls. If these controls do not operate effectively, we may not be able to rely on 
their software and cyber attackers may be able to exploit vulnerabilities, resulting in operational disruption, data loss, 
defects or a cybersecurity event. Migrating our software to the cloud increases the risk of operational disruption should 
internet service be interrupted. While we have implemented business contingency and other plans to facilitate continuous 
internet access, sustained or concurrent service denials or similar failures could limit our ability to write and process new 
and renewal business, provide customer service, pay claims in a timely manner, maintain our accounting function, or 
otherwise operate our business. Any such event or failure could have a material adverse effect on our business, financial 
condition and results of operations. 
  
The growth and evolution of artificial intelligence may impact our business and operations 
  
In the future, we may seek to deploy and/or further rely on technologies such as artificial intelligence or machine 
learning in operating our business. If we are unable to deploy this technology effectively or if our competitors are better 
able to deploy this technology our business may be adversely impacted. Our third-party software vendors and service 
providers are increasingly incorporating artificial intelligence into their processes and this may expose us to additional risks 
should they not be able to incorporate the technology effectively. The evolution and increased reliance on artificial 
intelligence may exacerbate our information technology and cybersecurity risks. Furthermore, regulations around artificial 
intelligence continue to evolve and we may be subject to increased regulation around artificial intelligence in the future.  
  
Risks Related to Laws and Regulations 
  
We are subject to extensive regulation, which may adversely affect our ability to achieve our business objectives. In 
addition, if we fail to comply with these regulations, we may be subject to penalties, including fines and suspensions, 
which may adversely affect our financial condition and results of operations. 
  
PSIC is subject to extensive regulation in Oregon, its state of domicile, California, where it is commercially 
domiciled, and to a lesser degree, the other states in which it operates. PESIC is subject to extensive regulation in Arizona, 
its state of domicile, and to a lesser degree, the other states in which it writes business. Our Bermuda based reinsurance 
subsidiary, Palomar Specialty Reinsurance Company Bermuda Ltd. (“PSRE”), is subject to regulation in Bermuda. 
  
Most insurance regulations are designed to protect the interests of insurance policyholders, as opposed to the 
interests of investors or stockholders. These regulations generally are administered by a department of insurance in each 
state and relate to, among other things, capital and surplus requirements, investment and underwriting limitations, affiliate 
transactions, dividend limitations, changes in control, solvency and a variety of other financial and non-financial aspects of 
our business. Significant changes in these laws and regulations could further limit our discretion or make it more expensive 
to conduct our business. State insurance regulators and the Bermuda Monetary Authority (the “BMA”), also conduct 
periodic examinations of the affairs of insurance and reinsurance companies and require the filing of annual and other 
reports relating to financial condition, holding company issues and other matters. These regulatory requirements may 
impose timing and expense constraints that could adversely affect our ability to achieve some or all our business objectives. 
  
Our U.S. insurance subsidiaries are part of an “insurance holding company system” within the meaning of 
applicable California, Oregon and Arizona statutes and regulations. As a result of such status, certain transactions between 
our U.S. insurance subsidiaries and one or more of their affiliates, such as a tax sharing agreement or cost sharing 
arrangement, may not be effected unless the insurer has provided notice of that transaction to the California Department of 
Insurance, the Oregon Division of Financial Regulation, or the Arizona Department of Insurance, as applicable, at least 
30 days prior to engaging in the transaction and the California Department of Insurance, the Oregon Division of Financial 
Regulation, or the Arizona Department of Insurance, as applicable, has not disapproved such transaction within the 30-day 
time period. These prior notification requirements may result in business delays and additional business expenses. If any of 

41 
our U.S. insurance subsidiaries fail to file a required notification or fail to comply with other applicable insurance 
regulations in California, Oregon or Arizona, as applicable, we may be subject to significant fines and penalties and our 
working relationship with the California Department of Insurance, the Oregon Division of Financial Regulation, or the 
Arizona Department of Insurance, as applicable, may be impaired. 
   
In addition, state insurance regulators have broad discretion to deny, suspend, or revoke licenses for various 
reasons, including the violation of regulations. In some instances, where there is uncertainty as to applicability, we follow 
practices based on our interpretations of regulations or practices that we believe generally to be followed by the industry. 
These practices may turn out to be different from the interpretations of regulatory authorities. If we do not have the 
requisite licenses and approvals or do not comply with applicable regulatory requirements, state insurance regulators could 
preclude or temporarily suspend us from carrying on some or all of our activities or could otherwise penalize us. This could 
adversely affect our ability to operate our business. Further, changes in the level of regulation of the insurance industry or 
changes in laws or regulations themselves or interpretations by regulatory authorities could interfere with our operations 
and require us to bear additional costs of compliance, which could adversely affect our ability to operate our business. 
  
Our U.S. insurance subsidiaries are subject to risk-based capital requirements, based upon the “risk based capital 
model” adopted by the NAIC, and other minimum capital and surplus restrictions imposed under Arizona, Oregon and 
California law. These requirements establish the minimum amount of risk-based capital necessary for a company to support 
its overall business operations. It identifies property and casualty insurers that may be inadequately capitalized by looking 
at certain inherent risks of each 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, including supervision, rehabilitation or 
liquidation. Failure by any of our U.S. subsidiaries to maintain risk-based capital at the required levels could adversely 
affect their ability to maintain regulatory authority to conduct business. 
  
PSRE is subject to regulation from the European Union. The European Union adopted the Economic Substance 
Act 2018 and the Economic Substance Regulations 2018 (together, the “ES Requirements”). As an insurance company, our 
Bermuda subsidiary conducts a relevant activity and is subject to the ES Requirements. As a result, our Bermuda subsidiary 
may be required to change or increase our business operations in Bermuda to meet these requirements.  
  
Laulima is subject to regulation from the Hawaii Department of Commerce and Consumer Affairs, Hawaii 
Insurance Division which requires that Laulima comply with Hawaii Statutes and Insurance Code. If Laulima is unable to 
comply with the applicable insurance regulations in Hawaii, it may be subject to significant fines and penalties and its 
working relationship with the Hawaii Department of Commerce and Consumer Affairs, Hawaii Insurance Division may be 
impaired. 
  
Unexpected changes in the interpretation of our coverage or provisions, including loss limitations and exclusions, in our 
policies could have a material adverse effect on our financial condition and results of operations. 
  
There can be no assurances that specifically negotiated loss limitations or exclusions in our policies will be 
enforceable in the manner we intend. As industry practices and legal, judicial, social, and other conditions change, 
unexpected and unintended issues related to claims and coverage may emerge. For example, many of our policies limit the 
period during which a policyholder may bring a claim, which may be shorter than the statutory period under which such 
claims can be brought against our policyholders. While these limitations and exclusions help us assess and mitigate our loss 
exposure, it is possible that a court or regulatory authority or an executive action could nullify or void a limitation or 
exclusion, such as limitations on business interruption claims caused by pandemics or other crises, or legislation could be 
enacted modifying or barring the use of such limitations or exclusions. These types of governmental actions could result in 
higher than anticipated losses and loss adjustment expenses, which could have a material adverse effect on our financial 
condition or results of operations. In addition, court decisions, such as the 1995 Montrose decision in California could read 
policy exclusions narrowly so as to expand coverage, thereby requiring insurers to create and write new exclusions. 
  
These issues may adversely affect our business by either broadening coverage beyond our underwriting intent or 
by increasing the frequency or severity of claims. In some instances, these changes may not become apparent until 
sometime after we have issued insurance contracts that are affected by the changes. As a result, the full extent of liability 
under our insurance contracts may not be known for many years after a contract is issued. 
  
We may become subject to additional government or market regulation, including additional regulation around 
cybersecurity, which may have a material adverse impact on our business. 
  
Our business could be adversely affected by changes in state laws, including those relating to asset and reserve 
valuation requirements, surplus requirements, limitations on investments and dividends, enterprise risk and risk-based 

42 
capital requirements, and, at the federal level, by laws and regulations that may affect certain aspects of the insurance 
industry, including proposals for preemptive federal regulation. The U.S. federal government generally has not directly 
regulated the insurance industry except for certain areas of the market, such as insurance for flood, nuclear and terrorism 
risks. However, the federal government has undertaken initiatives or considered legislation in several areas that may affect 
the insurance industry, including tort reform, corporate governance and the taxation of reinsurance companies. In addition, 
the Bermuda reinsurance regulatory framework has become subject to increased scrutiny in many jurisdictions. As a result, 
the BMA has implemented and imposed additional requirements on the companies it regulates, which requirements could 
adversely impact the operations of PSRE. 
   
Any government mandates and/or legislative changes related to mandated premium refunds or credits and 
extended premium grace periods, could have a material adverse effect on our results of operations and financial condition. 
Premium grace periods could significantly increase our expenses while decreasing our short-term revenues which would 
adversely impact our liquidity. 
  
Additionally, in response to the growing threat of cyber-attacks in the insurance industry, cybersecurity regulations 
have been adopted, which, among other things, require insurance companies to establish and maintain a cybersecurity 
program and implement and maintain cybersecurity policies and procedures. On October 24, 2017, the NAIC adopted its 
Insurance Data Security Model Law, intended to serve as model legislation for states to enact in order to govern 
cybersecurity and data protection practices of insurers, insurance agents, and other licensed entities registered under state 
insurance laws. We are required to abide by the provisions of and file compliance certifications pertaining to this 
legislation. 
  
We routinely transmit and receive personal, confidential and proprietary data and information by electronic means 
and are subject to numerous data privacy laws and regulations enacted in the jurisdictions in which we do business, 
including recent laws in California whose impact on our business are difficult to predict. 
  
While we have implemented cybersecurity policies and procedures, there is no guarantee our policies and 
procedures will protect our systems against all attacks or comply with all provisions of these evolving regulations. 
  
Changes in tax laws as a result of the enactment of tax legislation could impact our operations and profitability. 
  
Any future tax legislation or changes to tax laws such as changing the corporate or personal tax rate or changes to 
allowed tax deductions could have a negative impact on our results of operations and profitability by causing us to incur 
additional tax expense or by having a financial impact on our policyholders. 
  
If states increase the assessments that we are required to pay, our business, financial condition and results of operations 
would suffer. 
  
Certain jurisdictions in which PSIC is admitted to transact business require property and casualty insurers doing 
business within that jurisdiction to participate in insurance guaranty associations. These organizations pay contractual 
benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers. They levy assessments, up to 
prescribed limits, on all member insurers in a particular state based on the proportionate share of the premiums written by 
member insurers in the lines of business in which the impaired, insolvent or failed insurer is engaged. States may also 
assess admitted companies to fund their respective department of insurance operations. Some states permit member insurers 
to recover assessments paid through full or partial premium tax offset or in limited circumstances by surcharging 
policyholders. 
  
PSIC is licensed to conduct insurance operations on an admitted basis in 44 states. As PSIC grows, its share of any 
assessments in each state in which it underwrites business on an admitted basis may increase. We cannot predict with 
certainty the amount of future assessments, because they depend on factors outside our control, such as insolvencies of 
other insurance companies as well as the occurrence of significant catastrophes. Assessments may be covered by our 
catastrophe XOL treaties and, to the extent we have experienced a net loss from an event in excess of our net retention, 
assessments would be recovered from our reinsurers with no additional expense to us. Although reinsurance makes the 
reinsurer liable to us to the extent the risk is transferred or ceded to the reinsurer, it does not relieve us (the ceding insurer) 
of our primary liability to our policyholders. Significant assessments could result in higher operating expenses and have a 
material adverse effect on our business, financial condition, or results of operations. In addition, while some states permit 
member insurers to recover assessments paid through full or partial premium tax offset or, in limited circumstances, by 
surcharging policyholders, there is no certainty that offsets or surcharges will be permitted in connection with any future 
assessments. 
   

43 
Because we are a holding company and substantially all our operations are conducted by our insurance subsidiaries, 
our ability to pay dividends depends on our ability to obtain cash dividends or other permitted payments from our 
insurance subsidiaries. 
  
The continued operation and growth of our business will require substantial capital. We do not intend to declare 
and pay cash dividends on shares of our common stock in the foreseeable future. Because we are a holding company with 
no business operations of our own, our ability to pay dividends to stockholders largely depends on dividends and other 
distributions from our insurance subsidiaries, PSIC, PESIC and PSRE. State insurance laws, including the laws of Oregon, 
California, Arizona, and the laws of Bermuda restrict the ability of our subsidiaries to declare stockholder dividends. State 
insurance regulators require insurance companies to maintain specified levels of statutory capital and surplus. The 
maximum dividend distribution absent the approval or non-disapproval of the insurance regulatory authority in Oregon, 
California and Arizona is limited by Oregon law at ORS 732.576, California law at Cal. Ins. Code 1215.5(g) and Arizona 
Revised Statute 20-481. Under Oregon statute, dividend payments from PSIC are further limited to that part of available 
policyholder surplus that is derived from net profits on our business. State insurance regulators have broad powers to 
prevent the reduction of statutory surplus to inadequate levels, and there is no assurance that dividends up to the maximum 
amounts calculated under any applicable formula would be permitted. Moreover, state insurance regulators that have 
jurisdiction over the payment of dividends by PSIC and PESIC may in the future adopt statutory provisions more restrictive 
than those currently in effect. 
  
PSRE is highly regulated and is required to comply with various conditions before it is able to pay dividends or 
make distributions to us. Bermuda law, including the Insurance Act 1978, as amended (“Insurance Act”) and the 
Companies Act 1981, as amended (“Companies Act”) impose restrictions on PSRE’s ability to pay dividends to us based 
on solvency margins and surplus and capital requirements. These restrictions, and any other future restrictions adopted by 
the BMA, could have the effect, under certain circumstances, of significantly reducing dividends or other amounts payable 
to us by PSRE without affirmative approval of the BMA. 
  
Any determination to pay dividends in the future will be at the discretion of our Board of Directors and will 
depend upon results of operations, financial condition, restrictions imposed by applicable law and other factors our Board 
of Directors deems relevant. Consequently, investors may need to sell all or part of their holdings of our common stock 
after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors 
seeking immediate cash dividends should not purchase our common stock. 
  
The effects of litigation on our business are uncertain and could have an adverse effect on our business. 
  
As is typical in our industry, we continually face risks associated with litigation of various types, including 
disputes relating to insurance claims under our policies as well as other general commercial and corporate litigation. 
Although we are not currently involved in any material litigation with our customers, other members of the insurance 
industry are the target of class action lawsuits and other types of litigation, some of which involve claims for substantial or 
indeterminate amounts, and the outcomes of which are unpredictable. This litigation is based on a variety of issues, 
including insurance and claim settlement practices. We cannot predict with any certainty whether we will be involved in 
such litigation in the future or what impact such litigation would have on our business. 
  
We rely on the use of credit scoring in pricing and underwriting certain of our insurance policies and any legal or 
regulatory requirements that restrict our ability to access credit score information could decrease the accuracy of our 
pricing and underwriting process and thus decrease our ability to be profitable. 
  
We use credit scoring as a factor in pricing and underwriting decisions where allowed by state law. Consumer 
groups and regulators have questioned whether the use of credit scoring unfairly discriminates against some groups of 
people and are calling for laws and regulations to prohibit or restrict the use of credit scoring in underwriting and pricing. 
Laws or regulations that significantly curtail or regulate the use of credit scoring, if enacted in states in which we operate, 
could impact the integrity of our pricing and underwriting processes, which could, in turn, materially and adversely affect 
our business, financial condition, results of operations and prospects, and make it harder for us to be profitable over time. 
  
  
 
 

44 
Any failure to protect our intellectual property rights could impair our ability to protect our intellectual property, 
proprietary technology platform and brand, or we may be sued by third parties for alleged infringement of their 
proprietary rights. 
  
Our success and ability to compete depend in part on our intellectual property, which includes our rights in our 
proprietary technology platform and our brand. We primarily rely on copyright, trade secret and trademark laws, and 
confidentiality agreements with our employees, customers, service providers, partners and others to protect our intellectual 
property rights. However, the steps we take to protect our intellectual property may be inadequate. Litigation brought to 
protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management and 
could result in the impairment or loss of portions of our intellectual property. Additionally, our efforts to enforce our 
intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and 
enforceability and scope of our intellectual property rights. Our failure to secure, protect and enforce our intellectual 
property rights could adversely affect our brand and adversely impact our business. 
  
Our success also depends in part on us not infringing on the intellectual property rights of others. Our competitors, 
as well as a number of other entities and individuals, may own or claim to own intellectual property relating to our industry. 
In the future, third parties may claim that we are infringing on their intellectual property rights, and we may be found to be 
infringing on such rights. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted 
against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our 
services, or require that we comply with other unfavorable terms. Even if we were to prevail in such a dispute, any litigation 
could be costly and time-consuming and divert the attention of our management and key personnel from our business 
operations. 
  
Changes in accounting practices and future pronouncements may materially affect our reported financial results. 
  
Developments in accounting practices may require us to incur considerable additional expenses to comply, 
particularly if we are required to prepare information relating to prior periods for comparative purposes or to apply the new 
requirements retroactively. Our consolidated financial statements are prepared in accordance with Generally Accepted 
Accounting Principles (“GAAP”). The impact of changes in GAAP cannot be predicted but may affect the calculation of 
net income, stockholders’ equity, and other relevant financial statement line items. 
  
In addition to compliance with GAAP on a consolidated basis, PSIC, PESIC, PSRE and Laulima are required to 
comply with statutory accounting principles (“SAP”). SAP and various components of SAP are subject to constant review 
by the NAIC and its task forces and committees, as well as state insurance departments to address emerging issues and 
otherwise improve financial reporting. Various proposals are pending before committees and task forces of the NAIC, some 
of which, if enacted, could have negative effects on insurance industry participants. The NAIC continuously examines 
existing laws and regulations. We cannot predict whether or in what form such reforms will be enacted and, if so, whether 
the enacted reforms will positively or negatively affect us. 
  
We incur significant costs as a public company, and our management is required to devote substantial time to complying 
with public company regulations. 
  
As a public company, we incur certain legal, accounting, and other expenses that we would not incur as a private 
company. We are subject to the reporting requirements of the Exchange Act, which require, among other things, that we file 
with the SEC annual, quarterly, and current reports with respect to our business and financial condition and therefore we 
need to have the ability to prepare financial statements that comply with all SEC reporting requirements on a timely basis. 
In addition, we are subject to other reporting and corporate governance requirements, including certain requirements of and 
certain provisions of the Sarbanes-Oxley Act and the regulations promulgated thereunder, which impose significant 
compliance obligations upon us. In particular, we must perform system and process evaluation and testing of our internal 
control over financial reporting to allow management and our independent registered public accounting firm to report on the 
effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. Our 
compliance with Section 404 requires that we incur substantial accounting expense and expend significant management 
efforts. We must maintain accounting and finance staff and consultants with appropriate public company reporting, 
technical accounting, and internal control knowledge to satisfy the ongoing requirements of Section 404 and provide 
internal audit services. 
   
 
 

45 
The Sarbanes-Oxley Act and the Dodd-Frank Act, as well as new rules subsequently implemented by the SEC and 
Nasdaq, have increased regulation of, and imposed enhanced disclosure and corporate governance requirements on, public 
companies. We expect disclosure requirements to increase in the future and expand to areas such as climate change and 
greenhouse gas emissions. Our efforts to comply with these evolving laws, regulations and standards increases our 
operating costs and divert management’s time and attention from revenue-generating activities. 
  
These requirements also place significant additional demands on our finance and accounting staff and on our 
financial accounting and information systems. We must retain accounting and financial staff with appropriate public 
company reporting experience and technical accounting knowledge. Other expenses associated with being a public 
company include increased auditing, accounting and legal fees and expenses, investor relations expenses, increased 
directors’ fees and director and officer liability insurance costs, registrar and transfer agent fees and listing fees, as well as 
other expenses. As a public company, we are required, among other things, to: 
  
  
● 
prepare and file periodic reports and distribute other stockholder communications, in compliance with the 
federal securities laws and requirements of Nasdaq; 
  
  
● 
define and expand the roles and the duties of our Board of Directors and its committees; 
  
  
● 
institute comprehensive compliance and investor relations functions; and 
  
  
● 
evaluate and maintain our system of internal control over financial reporting, and report on management’s 
assessment thereof, in compliance with rules and regulations of the SEC and the Public Company Accounting 
Oversight Board. 
  
We may not be successful in complying with these requirements, and compliance with them could materially 
adversely affect our business. These requirements increase our costs and may cause us to reduce costs in other areas of our 
business or increase the prices of our products or services. For example, these rules and regulations to make it more 
difficult and more expensive for us to obtain director and officer liability insurance. We cannot predict or estimate the 
amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements 
could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our Board 
committees or as executive officers. 
  
In addition, if we fail to implement and maintain the required controls with respect to our internal accounting and 
audit functions, our ability to report our results of operations on a timely and accurate basis could be impaired. If we do not 
implement the required controls in a timely manner or with adequate compliance, we may be subject to sanctions or 
investigation by regulatory authorities, such as the SEC or Nasdaq. Any such action could harm our reputation and the 
confidence of our investors and customers and could negatively affect our business and cause the price of our shares of 
common stock to decline. 
  
We are required by Section 404 of the Sarbanes-Oxley Act to evaluate the effectiveness of our internal control over 
financial reporting. If we are unable to achieve and maintain effective internal controls, our operating results and 
financial condition could be harmed and the market price of our common stock may be negatively affected. 
  
As a public company with SEC reporting obligations, we are required to document and test our internal control 
procedures to satisfy the requirements of Section 404(b) of the Sarbanes-Oxley Act, which requires annual assessments by 
management of the effectiveness of our internal control over financial reporting. We must implement and maintain 
substantial internal control systems and procedures to satisfy the reporting requirements under the Exchange Act. 
   
During our assessments, we may identify deficiencies that we are unable to remediate in a timely manner. Testing 
and maintaining our internal control over financial reporting may also divert management’s attention from other matters 
that are important to the operation of our business. We may not be able to conclude on an ongoing basis that we have 
effective internal control over financial reporting in accordance with Section 404(b) of Sarbanes-Oxley. If we conclude that 
our internal control over financial reporting is not effective, the cost and scope of remediation actions and their effect on our 
operations may be significant. Moreover, any material weaknesses or other deficiencies in our internal control over 
financial reporting may impede our ability to file timely and accurate reports with the SEC. Any of the above could cause 
investors to lose confidence in our reported financial information or our common stock listing on Nasdaq to be suspended 
or terminated, which could have a negative effect on the trading price of our common stock. 
  
 
 

46 
Applicable insurance laws may make it difficult to effect a change of control. 
  
Under applicable Oregon, California and Arizona insurance laws and regulations, no person may acquire control of 
a domestic insurer until written approval is obtained from the state insurance commissioner following a public hearing on 
the proposed acquisition. Such approval would be contingent upon the state insurance commissioner’s consideration of a 
number of factors including, among others, the financial strength of the proposed acquiror, the acquiror’s plans for the 
future operations of the domestic insurer and any anti-competitive results that may arise from the consummation of the 
acquisition of control. Oregon, California and Arizona insurance laws and regulations pertaining to changes of control apply 
to both the direct and indirect acquisition of ten percent or more of the voting stock of an insurer domiciled in that state. 
Accordingly, the acquisition of ten percent or more of our common stock would be considered an indirect change of control 
of Palomar Holdings, Inc. and would trigger the applicable change of control filing requirements under Oregon, California 
and Arizona insurance laws and regulations, absent a disclaimer of control filing and its acceptance by the Oregon, 
California and Arizona Insurance Departments. These requirements may discourage potential acquisition proposals and may 
delay, deter or prevent a change of control of Palomar Holdings, Inc., including through transactions that some or all of the 
stockholders of Palomar Holdings, Inc. might consider to be desirable. 
  
Risks Related to Ownership of Our Common Stock 
  
Future transactions where we raise capital may negatively affect our stock price. 
  
We are currently a “Well-Known Seasoned Issuer” and may file automatic shelf registration statements at any time 
with the SEC. Sales of substantial amounts of shares of our common stock or other securities under our current or future 
shelf registration statements could lower the market price of our common stock and impair our ability to raise capital 
through the sale of equity securities. 
  
Our operating results and stock price may be volatile, or may decline regardless of our operating performance, and 
holders of our common stock could lose all or part of their investment. 
  
Our quarterly operating results are likely to fluctuate in the future as a publicly traded company. In addition, 
securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume 
fluctuations. This market volatility, as well as general economic, market or political conditions, could subject the market 
price of our shares to wide price fluctuations regardless of our operating performance. Although we believe we have 
adequate sources of liquidity over the short- and long-term, the success of our operations, the global economic outlook, and 
the pace of sustainable growth in our markets, among other factors, could impact our business and liquidity. You should 
consider an investment in our common stock to be risky, and you should invest in our common stock only if you can 
withstand a significant loss and wide fluctuation in the market value of your investment. The market price of our common 
stock is likely to continue to be subject to significant fluctuations in response to the factors described in this “Risk Factors” 
section and other factors, many of which are beyond our control. Among the factors that could affect our stock price are: 
  
  
● 
market conditions in the broader stock market; 
  
  
● 
actual or anticipated fluctuations in our quarterly financial and operating results; 
  
  
● 
introduction of new products or services by us or our competitors; 
  
  
● 
issuance of new or changed securities analysts’ reports or recommendations; 
  
  
● 
results of operations that vary from expectations of securities analysis and investors; 
 
  
● 
short sales, hedging and other derivative transactions in our common stock; 
  
  
● 
guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this 
guidance; 
  
  
● 
strategic actions by us or our competitors; 
  
 
 

47 
  
● 
announcement by us, our competitors or our acquisition targets; 
  
  
● 
sales, or anticipated sales, of large blocks of our stock, including by our directors, executive officers and 
principal stockholders; 
  
  
● 
additions or departures in our Board or Directors, senior management or other key personnel; 
  
  
● 
regulatory, legal or political developments; 
  
  
● 
public response to press releases or other public announcements by us or third parties, including our filings 
with the SEC; 
  
  
● 
litigation and governmental investigations; 
  
  
● 
changing economic conditions; 
  
  
● 
changes in accounting principles; 
  
  
● 
any indebtedness we may incur or securities we may issue in the future; 
  
  
● 
default under agreements governing our indebtedness; 
  
  
● 
exposure to capital and credit market risks that adversely affect our investment portfolio or our capital 
resources; 
  
  
● 
changes in our credit ratings; 
  
  
● 
changes in corporate tax rates; 
  
  
● 
interest or exchange rate fluctuations; and 
  
  
● 
other events or factors, including those from natural disasters, war, pandemics, acts of terrorism, cyber-attacks 
or responses to these events. 
  
The securities markets have from time to time experienced extreme price and volume fluctuations that often have 
been unrelated or disproportionate to the operating performance of particular companies. As a result of these factors, 
investors in our common stock may not be able to resell their shares at or above the price at which they purchased their 
shares. These broad market fluctuations, as well as general market, economic and political conditions, such as recessions, 
loss of investor confidence or interest rate changes, may negatively affect the market price of our common stock. 
  
In addition, the stock markets, including Nasdaq, have experienced extreme price and volume fluctuations that 
have affected and continue to affect the market prices of equity securities of many companies. If any of the foregoing 
occurs, it could cause our stock price to fall and may expose us to securities class action litigation that, even if unsuccessful, 
could be costly to defend, divert management’s attention and resources or harm our business. 
   
Anti-takeover provisions in our organizational documents could delay a change in management and limit our share 
price. 
  
Provisions of our certificate of incorporation and bylaws could make it more difficult for a third party to acquire 
control of us even if such a change in control would increase the value of our common stock and prevent attempts by our 
stockholders to replace or remove our current Board of Directors or management. 
  
 
 

48 
Our charter documents contain anti-takeover provisions that will hinder takeover attempts and could reduce the 
market value of our common stock or prevent sale at a premium. Our anti-takeover provisions: 
  
  
● 
permit the Board of Directors to establish the number of directors and fill any vacancies and newly created 
directorships; 
  
  
● 
provide, through 2027, that our Board of Directors are classified into three classes with staggered, three year 
terms and that directors may only be removed for cause; 
  
  
● 
require super-majority voting to amend provisions in our certificate of incorporation and bylaws; 
  
  
● 
include blank-check preferred stock, the preference, rights and other terms of which may be set by the Board 
of Directors and could delay or prevent a transaction or a change in control that might involve a premium 
price for our common stock or otherwise benefit our stockholders; 
  
  
● 
eliminate the ability of our stockholders to call special meetings of stockholders; 
  
  
● 
specify that special meetings of our stockholders can be called only by our Board of Directors, the chairman 
of our Board of Directors, or our chief executive officer; 
  
  
● 
prohibit stockholder action by other than unanimous written consent; 
  
  
● 
provide that vacancies on our Board of Directors may be filled only by a majority of directors then in office, 
even though less than a quorum; 
  
  
● 
prohibit cumulative voting in the election of directors; and 
  
  
● 
establish advance notice requirements for nominations for election to our Board of Directors or for proposing 
matters that can be acted upon by stockholders at annual stockholder meetings. 
  
In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law. 
These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, 
from merging or combining with us for a period of time. 
  
Our certificate of incorporation and bylaws provide that the Court of Chancery of the State of Delaware is the exclusive 
forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to 
obtain a favorable judicial forum for disputes with us or our directors, officers or employees. 
  
Our certificate of incorporation and bylaws provide that the Court of Chancery of the State of Delaware is the 
exclusive forum for the following civil actions: 
  
  
● 
any derivative action or proceeding brought on our behalf; 
  
  
● 
any action asserting a claim of breach of a fiduciary duty by any of our directors, officers, employees or 
agents or our stockholders; 
  
  
● 
any action asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation 
or bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; 
  
  
● 
any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or our 
bylaws; or 
  
  
● 
any action asserting a claim governed by the internal affairs doctrine. 
  
  
 
 

49 
However, this provision would not apply to suits brought to enforce a duty or liability created by the Exchange 
Act. Furthermore, this provision applies to Securities Act claims and Section 22 of the Securities Act creates concurrent 
jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or 
the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such provision, 
and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and 
regulations thereunder. This choice of forum provision, if enforced, may limit a stockholder’s ability to bring a claim in a 
judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may 
discourage such lawsuits against us and our directors, officers and other employees, although our stockholders will not be 
deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. Alternatively, 
if a court were to find the choice of forum provision contained in our certificate of incorporation and bylaws to be 
inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other 
jurisdictions, which could have a material adverse effect on our business, financial condition or results of operations. 
  
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our 
business, our stock price and trading volume could decline. 
  
The trading market for our common stock depends, in part, on the research and reports that securities or industry 
analysts publish about us or our business and our industry. If one or more of the analysts who cover us downgrades our 
common stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If 
one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common 
stock could decrease, which could cause our stock price and trading volume to decline. 
  
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 
  
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal 
securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to 
future events or our future financial or operating performance. In some cases, you can identify forward-looking statements 
because they contain words such as “may”, “will”, “should”, “expects”, “plans”, “anticipates”, “could”, “intends”, “target”, 
“projects”, “contemplates”, “believes”, “estimates”, “predicts”, “would”, “potential” or “continue” or the negative of these 
words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These forward-
looking statements include, among others, statements relating to our future financial performance, our business prospects 
and strategy, anticipated financial position, liquidity and capital needs and other similar matters. These forward-looking 
statements are based on management’s current expectations and assumptions about future events, which are inherently 
subject to uncertainties, risks and changes in circumstances that are difficult to predict. 
  
Our actual results may differ materially from those expressed in, or implied by, the forward-looking statements 
included in this Annual Report on Form 10-K as a result of various factors, including, among others: 
  
  
● 
claims arising from unpredictable and severe catastrophe events could reduce our earnings and 
stockholders’ equity and limit our ability to underwrite new insurance policies; 
  
  
● 
the inability to purchase third-party reinsurance or otherwise expand our catastrophe coverage in amounts that 
are commercially acceptable to us or on terms that adequately protect us; 
  
  
● 
the inherent uncertainty of models resulting in actual losses that are materially different than our estimates; 
  
  
● 
we and our customers could be negatively and adversely impacted by pandemics, disease outbreaks, and other 
public health crises; 
  
  
● 
a decline in our financial strength rating adversely affecting the amount of business we write; 
  
  
● 
reinsurance counterparty credit risk; 
  
  
● 
the concentration of our business in California and Texas; 
  
  
● 
the potential loss of one or more key executives or an inability to attract and retain qualified personnel 
adversely affecting our results of operations; 
  
  
● 
our reliance on a select group of brokers; 
  

50 
  
● 
the failure of any of the loss limitations or exclusions we employ, or changes in other claims or coverage 
issues, having a material adverse effect on our financial condition or results of operations; 
  
  
● 
unexpected changes in the interpretation of our coverage or provisions; 
  
  
● 
adverse economic factors, including recession, inflation, periods of high unemployment or lower economic 
activity resulting in the sale of fewer policies than expected or an increase in frequency or severity of claims 
and premium defaults or both, affecting our growth and profitability; 
  
  
● 
the performance of our investment portfolio adversely affecting our financial results; 
  
  
● 
being forced to sell investments to meet our liquidity requirements; 
  
  
● 
extensive regulation adversely affecting our ability to achieve our business objectives or the failure to comply 
with these regulations adversely affecting our financial condition and results of operations; 
  
  
● 
we may become subject to additional government or market regulation; 
  
  
● 
the possibility that states could increase the assessments that Palomar Specialty Insurance Company is 
required to pay; 
  
  
● 
the ability to pay dividends being dependent on our ability to obtain cash dividends or other permitted 
payments from our insurance subsidiary; 
  
  
● 
fluctuation and variance in our operating results; 
  
  
● 
the possibility that we act based on inaccurate or incomplete information regarding the accounts we 
underwrite; 
  
  
● 
our employees, underwriters and other associates taking excessive risks; 
  
  
● 
our inability to obtain future additional capital or obtaining additional capital on unfavorable terms; 
  
  
● 
the failure of our information technology and telecommunications systems; 
  
  
● 
our inability to protect our trademarks or other intellectual property rights; 
  
  
● 
our inability to maintain, or errors in, our third-party and open source licensed software; 
  
  
● 
the inability to manage our growth effectively; 
  
  
● 
the intense competition for business in our industry; 
   
  
● 
the failure of renewals of our existing contracts to meet expectations could affect our written premiums in the 
future; 
  
  
● 
our inability to underwrite risks accurately and charge competitive yet profitable rates to our policyholders; 
  
  
● 
the effects of litigation having an adverse effect on our business; 
  
  
● 
changes in accounting practices; 
  
  
● 
our failure to accurately and timely pay claims; 
  
  
● 
legal or regulatory requirements that restrict our ability to access credit score information for purposes of 
pricing and underwriting our insurance policies; 
  
  
● 
increased costs as a result of being a public company; and 
  
  
● 
the failure to maintain effective internal controls in accordance with Sarbanes-Oxley. 
  

51 
We have based the forward-looking statements contained in this Annual Report on Form 10-K primarily on our 
current expectations and projections about future events and trends that we believe may affect our business, financial 
condition, results of operations, prospects, business strategy and financial needs. The outcome of the events described in 
these forward-looking statements is subject to risks, uncertainties, assumptions and other factors described in the section 
captioned “Risk Factors” and elsewhere in this Annual Report on Form 10-K. These risks are not exhaustive. Other sections 
of this Annual Report on Form 10-K include additional factors that could adversely impact our business and financial 
performance. Furthermore, new risks and uncertainties emerge from time to time and it is not possible for us to predict all 
risks and uncertainties that could have an impact on the forward-looking statements contained in this Annual Report on 
Form 10-K. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements 
will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the 
forward-looking statements. 
  
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant 
subject. These statements are based upon information available to us as of the date of this Annual Report on Form 10-K, 
and while we believe such information forms a reasonable basis for such statements, such information may be limited or 
incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review 
of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not 
to unduly rely upon these statements. 
  
You should read this Annual Report on Form 10-K and the documents that we reference in this Annual Report on 
Form 10-K and have filed as exhibits to this Annual Report on Form 10-K with the understanding that our actual future 
results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all 
of our forward-looking statements by these cautionary statements. 
  
The forward-looking statements made in this Annual Report on Form 10-K relate only to events as of the date on 
which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this 
Annual Report on Form 10-K or to conform such statements to actual results or revised expectations, except as required by 
law. 
  
Item 1B: Unresolved Staff Comments 
  
None. 
 
Item 1C: Cybersecurity 
  
We recognize that our business operations depend on the reliable and secure processing, storage, and transmission 
of confidential and other data and information in our computer systems and networks. We also recognize the importance of 
protecting customer's data and digital assets in our care. Therefore, identifying and assessing cybersecurity risk is integrated 
into our overall risk management systems and processes. We have created a layered security posture leveraging people, 
process, and technology to protect our information systems and our customer’s data and digital assets. We maintain a suite 
of information security, privacy, and data protection related policies, standards, and procedures leveraging the National 
Institute of Standards and Technology (“NIST”) along with the COBIT 2019 framework to align with applicable laws, 
regulatory guidance, and industry best practices. 
  
We employ an experienced security operations team that is responsible for the day-to-day assessment and 
management for material risks from cybersecurity threats. We require mandatory cybersecurity, privacy, and information 
handling training for all team members upon onboarding and on an annual basis thereafter. Additional role-based training is 
provided to the security, IT operations, and development teams. We also regularly communicate important cybersecurity 
updates to employees. To test the effectiveness of our training, a simulated phishing campaign is run monthly against all 
team members. 
  
We leverage a variety of tools to protect information. These tools include but are not limited to multifactor 
authentication, firewalls, intrusion detection, vulnerability and penetration testing, central log management, endpoint 
protection and patch management systems. Our identity and access management systems include industry leading products 
leveraged through our internally developed best practices. We also leverage threat hunting services that actively monitor for 
anomalies on our network and escalate these anomalies to our security operations team. We continue to mature our threat 
hunting, proactively searching for and identifying malicious attacks, and testing our cybersecurity posture to further 
enhance our cybersecurity programs. Our threat hunting includes comprehensive risk analysis of our assets along with 
routine external penetration testing from third party providers. The Company also utilizes a third-party consultant to 
perform a cybersecurity risk assessment annually in which we measure the current state of our cybersecurity program using 

52 
the NIST Cybersecurity Framework. The results of this assessment are used to identify possible gaps, risks, and areas 
requiring remediation. 
  
With the assistance of outside consultants, we have developed cybersecurity incident monitoring and reporting 
procedures. These procedures begin with continuously monitoring network hardware and applications for cybersecurity 
breaches and continuously identifying and recording any cyber security events.  If appropriate, cyber security events are 
escalated as incidents and our incident management plan and incident response team are activated. Our incident 
management plan focuses on containing, eradicating, recovering and following up as necessary from a cybersecurity 
incident. In addition, incidents are evaluated to determine materiality as well as business impact and reviewed for privacy 
impact. This evaluation may involve members of our Board of Directors, executive team as well as consultants such as our 
outside legal counsel and independent auditors. Our cybersecurity incident monitoring and reporting procedures are tested 
annually through a tabletop event involving the business and IT operations staff. A tabletop event is a role-playing exercise 
simulating a real cybersecurity event which aims to ensure the plans are still covering all relevant and critical services and 
stakeholders are prepared. We continuously make cybersecurity improvements based on lessons learned from the tabletop 
exercises, enterprise risk assessments, and penetration testing.   
  
The ERM Committee of our Board of Directors is updated regularly on cybersecurity matters. The ERM 
Committee is comprised of select board members and select members of executive management and meets at least 
quarterly. During ERM meetings, our Chief Technology Officer and Head of Technology Engineering discuss key areas of 
cyber risk, and reviews key cybersecurity metrics and results of cybersecurity risk assessments and testing.  In the event of 
a cybersecurity incident, our ERM Committee would also receive reports from our incident response team. The Board of 
Directors are briefed quarterly by the ERM Committee on cybersecurity matters that would include threats, policies, 
practices, and the roadmap being implemented to improve the security posture. 
  
Our business strategy, results of operations and financial condition have not been materially affected by risks from 
cybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide assurance 
that they will not be materially affected in the future by such risks or any future material incidents. For more information on 
our cybersecurity related risks, see Item 1A Risk Factors of this Annual Report on Form 10-K. 
   
Item 2. Properties 
  
Our primary executive offices and insurance operations are located in La Jolla, California, which occupy 
approximately 22,000 square feet of office space for annual rent and rent-related operating payments of approximately $1.0 
million with the lease expiring in 2034. We also have an office in Edina, Minnesota, which occupies 7,457 square feet of 
office space for annual rent and rent-related operating payments of approximately $0.2 million. The lease for this space 
expires in 2027. 
  
We do not own any real property. We believe that our facilities are adequate for our current needs. 
  
Item 3. Legal Proceedings 
  
We are subject to routine legal proceedings in the normal course of operating our insurance business. We are not 
involved in any legal proceedings which reasonably could be expected to have a material adverse effect on our business, 
results of operations or financial condition. 
  
Item 4. Mine Safety Disclosures 
  
Not applicable. 
  
PART II 
  
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 
Securities 
  
Market information for Common Stock 
  
Our common shares began trading on the NASDAQ Global Select Market under the symbol “PLMR” on April 17, 
2019. Prior to that time, there was no public market for our common shares. As of February 22, 2025, there were 
approximately six holders of record of our common stock. Because most of our shares of common stock are held by brokers 
and other institutions on behalf of our stockholders, this number is not representative of our total stockholders. 
  

53 
Payment of Dividends 
  
The continued operation and growth of our business will require substantial capital. We do not intend to declare 
and pay cash dividends on shares of our common stock in the foreseeable future. Because we are a holding company with 
no business operations of our own, our ability to pay dividends to stockholders largely depends on dividends and other 
distributions from our U.S. subsidiaries, PESIC and PSIC, and our Bermuda subsidiary, PSRE. State insurance laws, 
including the laws of Arizona, Oregon and California, and the laws of Bermuda restrict the ability these subsidiaries to 
declare stockholder dividends. State insurance regulators require insurance companies to maintain specified levels of 
statutory capital and surplus and restrict dividend payments. Dividend payments are further limited to that part of available 
policyholder surplus that is derived from net profits on our business. State insurance regulators have broad powers to 
prevent the reduction of statutory surplus to inadequate levels, and there is no assurance that dividends up to the maximum 
amounts calculated under any applicable formula would be permitted. Moreover, state insurance regulators may in the 
future adopt statutory provisions more restrictive than those currently in effect. 
  
Our Bermuda reinsurance subsidiary is highly regulated and is required to comply with various conditions before 
it is able to pay dividends or make distributions to us. Bermuda law, including the Insurance Act 1978, as amended 
(“Insurance Act”) and the Companies Act 1981, as amended (“Companies Act”) impose restrictions on our Bermuda 
reinsurance subsidiary’s ability to pay dividends to us based on solvency margins and surplus and capital requirements. 
These restrictions, and any other future restrictions adopted by the BMA, could have the effect, under certain 
circumstances, of significantly reducing dividends or other amounts payable to us by our Bermuda reinsurance subsidiary 
without affirmative approval of the BMA. 
   
Any determination to pay dividends in the future will be at the discretion of our Board of Directors and will 
depend upon results of operations, financial condition, restrictions imposed by applicable law and other factors our Board 
of Directors deems relevant. Consequently, investors may need to sell all or part of their holdings of our common stock 
after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors 
seeking immediate cash dividends should not purchase our common stock. 
  
Issuer Purchases of Equity Securities 
  
In January 2022, Company's the Board of Directors approved a share repurchase program which replaced the 
existing program and authorized the repurchase of up to $100 million of outstanding shares of common stock.  This 
program ended on March 31, 2024 and there were no share repurchases during the year ended December 31, 2024. 
  
Performance Graph 
  
The following performance graph compares the cumulative total shareholder return of an investment in (1) our 
common stock, (2) the cumulative total returns to the Nasdaq Composite Index and (3) the cumulative total returns to the 
Nasdaq Insurance Index, for the period from December 31, 2019 through December 31, 2024. 
  
  
 
 

54 
The graph assumes an initial investment of $100. Such returns are based on historical results and are not indicative 
of future performance. 
   
 
 
 
  
December 31, 
2019 
    
December 31, 
2020 
    
December 31, 
2021 
    
December 31, 
2022 
    
December 31, 
2023 
    
December 31, 
2024 
  
Palomar Holdings, Inc ........  $ 
100.00    $ 
175.96    $ 
128.28    $ 
89.44    $ 
109.92    $ 
209.13  
Nasdaq Composite Index ....  $ 
100.00    $ 
143.64    $ 
174.36    $ 
129.75    $ 
167.30    $ 
215.22  
Nasdaq Insurance Index .....  $ 
100.00    $ 
100.95    $ 
114.26    $ 
104.75    $ 
126.13    $ 
156.55  
  
Item 6. [Reserved]  
  
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 
  
The following discussion of our historical results of operations and our liquidity and capital resources should be 
read together with the consolidated financial statements and related notes that appear elsewhere in this Annual Report on 
Form 10-K. In addition to historical financial information, this Annual Report on Form 10-K contains “forward-looking 
statements.” You should review the “Special Note Regarding Forward-Looking Statements” and “Risk Factors” sections of 
this Annual Report on Form 10-K for factors and uncertainties that may cause our actual future results to be materially 
different from those in our forward-looking statements. Forward-looking statements in this Annual Report on Form 10-K 
are based on information available to us as of the date hereof, and we assume no obligation to update any such forward-
looking statements.  
  
Overview 
  
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. 
  
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. 
  
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 

55 
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%. 
  
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. 
  
Components of Our Results of Operations 
  
Gross Written Premiums 
  
Gross written premiums are the amounts received or to be received for insurance policies written or assumed by us 
during a specific period of time without reduction for policy acquisition costs, reinsurance costs or other deductions. The 
volume of our gross written premiums in any given period is generally influenced by: 
  
  
● 
Volume of new business submissions in existing products or partnerships; 
  
  
● 
Binding of new business submissions in existing products or partnerships into policies; 
  
  
● 
Entrance into new partnerships or the offering of new types of insurance products; 
  
  
● 
Exits from existing partnerships or reducing or ceasing to offer existing insurance products; 
  
  
● 
Renewal rates of existing policies; and 
  
  
● 
Average size and premium rate of bound policies. 
  
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. 
  
Ceded Written Premiums 
  
Ceded written premiums are the amount of gross written premiums ceded to reinsurers. We enter into reinsurance 
contracts to limit our exposure to potential losses and to provide additional capacity for growth. We cede premiums through 
excess of loss (“XOL”) agreements, quota share agreements, and fronting agreements. Ceded written premiums are earned 
pro-rata over the period of risk covered. The volume of our ceded written premiums is impacted by the amount of our gross 
written premiums and our decisions to increase or decrease limits or retention levels in our XOL agreements and co-
participation levels in our quota share agreements. The volume of ceded written premiums is also impacted by the amount 
of premium we write under fronting agreements. 
  
  
 
 

56 
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. 
  
Net Earned Premiums 
  
Net earned premiums represent the earned portion of our gross written premiums, less the earned portion that is 
ceded to third-party reinsurers under our reinsurance agreements. The majority of our insurance policies have a term of one 
year and premiums are earned pro rata over the terms of the policies. Crop premiums are earned ratably over the risk 
period. The requisite reporting of Crop premiums is primarily received in the third quarter, after the start of the risk period, 
and earned premium is caught up to cover the period between the start of the risk period and receipt of reporting. Generally, 
this process results in most of the Crop earned premiums being recognized in the third quarter of each year. 
  
Commission and Other Income 
  
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. 
  
Losses and Loss Adjustment Expenses 
  
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: 
  
  
● 
The occurrence, frequency and severity of catastrophe events in the areas where we underwrite policies 
relating to these perils; 
  
  
● 
The occurrence, frequency and severity of non-catastrophe attritional losses; 
  
  
● 
The mix of business written by us; 
  
  
● 
The reinsurance agreements we have in place at the time of a loss; 
  
  
● 
The geographic location and characteristics of the policies we underwrite; 
  
  
● 
Changes in the legal or regulatory environment related to the business we write; 
  
  
● 
Trends in legal defense costs; 
  
  
● 
Inflation in housing and construction costs; and 
  
  
● 
Increases in amounts awarded by courts and juries. 
  
Losses and loss adjustment expenses are based on an actuarial analysis of the estimated losses, including losses 
incurred during the period and changes in estimates from prior periods. Losses and loss adjustment expenses may be paid 
out over multiple years. 
  
Acquisition Expenses 
  
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 

57 
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. 
   
Other Underwriting Expenses 
  
Other underwriting expenses represent the general and administrative expenses of our insurance operations 
including employee salaries and benefits, software and technology costs, office rent, stock-based compensation, licenses 
and fees, and professional services fees such as legal, accounting, and actuarial services. 
  
Interest Expense 
  
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. 
  
Net Investment Income 
  
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. 
  
Net Realized and Unrealized Gains and Losses on Investments 
  
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. 
  
Income Tax Expense 
  
Currently our income tax expense consists mainly of federal income taxes imposed on our operations. Our 
effective tax rates are dependent upon the components of pretax earnings and the related tax effects. 
  
  
 
 

58 
Key Financial and Operating Metrics 
  
We discuss certain key financial and operating metrics, described below, which provide useful information about 
our business and the operational factors underlying our financial performance. 
  
Underwriting revenue is a non-GAAP financial measure defined as total revenue, excluding net investment 
income and net realized and unrealized gains and losses on investments. See “Reconciliation of Non-GAAP Financial 
Measures” for a reconciliation of total revenue calculated in accordance with GAAP to underwriting revenue. 
  
Underwriting income is a non-GAAP financial measure defined as income before income taxes excluding net 
investment income, net realized and unrealized gains and losses on investments and interest expense. See “Reconciliation 
of Non-GAAP Financial Measures” for a reconciliation of income before income taxes calculated in accordance with 
GAAP to underwriting income. 
  
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. 
  
Annualized return on equity is net income expressed on an annualized basis as a percentage of average beginning 
and ending stockholders’ equity during the period. 
  
Annualized adjusted return on equity is a non-GAAP financial measure defined as adjusted net income expressed 
on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. See 
“Reconciliation of Non-GAAP Financial Measures” for a reconciliation of return on equity calculated using unadjusted 
GAAP numbers to adjusted return on equity. 
  
Loss ratio, expressed as a percentage, is the ratio of losses and loss adjustment expenses, to net earned premiums. 
  
Expense ratio, expressed as a percentage, is the ratio of acquisition and other underwriting expenses, net of 
commission and other income to net earned premiums. 
  
Combined ratio is defined as the sum of the loss ratio and the expense ratio. A combined ratio under 100% 
generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss. 
  
Adjusted combined ratio is a non-GAAP financial measure defined as the sum of the loss ratio and the expense 
ratio calculated 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 combined ratio 
calculated using unadjusted GAAP numbers to adjusted combined ratio. 
  
Diluted adjusted earnings per share is a non-GAAP financial measure defined as adjusted net income divided by 
the weighted-average common shares outstanding for the period, reflecting the dilution which could occur if equity-based 
awards are converted into common share equivalents as calculated using the treasury stock method. See “Reconciliation of 
Non-GAAP Financial Measures” for a reconciliation of diluted earnings per share calculated in accordance with GAAP to 
diluted adjusted earnings per share. 
  
Catastrophe loss ratio is a non-GAAP financial measure defined as the ratio of catastrophe losses to net earned 
premiums. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of loss ratio calculated using 
unadjusted GAAP numbers to catastrophe loss ratio. 
  
  
 
 

59 
Adjusted combined ratio excluding catastrophe losses is a non-GAAP financial measure defined as adjusted 
combined ratio excluding the impact of catastrophe losses. See “Reconciliation of Non-GAAP Financial Measures” for a 
reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio excluding 
catastrophe losses. 
  
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. 
  
Tangible stockholders’ equity is a non-GAAP financial measure defined as stockholders’ equity less intangible 
assets. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of stockholders’ equity calculated in 
accordance with GAAP to tangible stockholders’ equity. 
  
 
 

60 
Results of Operations 
  
The following table summarizes our results for the years ended December 31, 2024 and 2023: 
  
  
  Year Ended December 31,      
  
    Percent   
  
  
2024 
    
2023 
    Change     Change   
  
  
($ in thousands, except 
per share data) 
      
  
      
  
  
Gross written premiums ...........................................................  $ 1,541,962    $ 1,141,558    $ 
400,404      
35.1 % 
Ceded written premiums ..........................................................    
(897,111)     
(731,531)     
(165,580)    
22.6 % 
Net written premiums ........................................................    
644,851      
410,027      
234,824      
57.3 % 
Net earned premiums ...............................................................    
510,687      
345,913      
164,774      
47.6 % 
Commission and other income .................................................    
2,784      
3,367      
(583)    
(17.3 )% 
Total underwriting revenue (1) ...........................................    
513,471      
349,280      
164,191      
47.0 % 
Losses and loss adjustment expenses .......................................    
134,759      
72,592      
62,167      
85.6 % 
Acquisition expenses ................................................................    
149,657      
107,745      
41,912      
38.9 % 
Other underwriting expenses ....................................................    
117,113      
88,172      
28,941      
32.8 % 
Underwriting income (1) .....................................................    
111,942      
80,771      
31,171      
38.6 % 
Interest expense ........................................................................    
(1,138)     
(3,775)     
2,637      
(69.9 )% 
Net investment income .............................................................    
35,824      
23,705      
12,119      
51.1 % 
Net realized and unrealized gains on investments ....................    
4,568      
2,941      
1,627      
55.3 % 
Income before income taxes .....................................................    
151,196      
103,642      
47,554      
45.9 % 
Income tax expense ..................................................................    
33,623      
24,441      
9,182      
37.6 % 
Net income ...........................................................................    
117,573      
79,201      
38,372      
48.4 % 
Adjustments: 
      
        
        
        
  
Net realized and unrealized gains on investments ....................    
(4,568)     
(2,941)     
(1,627)    
55.3 % 
Expenses associated with transactions .....................................    
1,479      
706      
773      
109.5 % 
Stock-based compensation expense .........................................    
16,685      
14,913      
1,772      
11.9 % 
Amortization of intangibles ......................................................    
1,558      
1,481      
77      
5.2 % 
Expenses associated with catastrophe bond .............................    
2,483      
1,640      
843      
51.4 % 
Tax impact ................................................................................    
(1,699)     
(1,480)     
(219)    
14.8 % 
Adjusted net income (1) ........................................................  $ 
133,511    $ 
93,520    $ 
39,991      
42.8 % 
Key Financial and Operating Metrics 
      
        
        
        
  
Annualized return on equity .....................................................    
19.6%    
18.5%    
       
   
Annualized adjusted return on equity (1) ...................................    
22.2%    
21.9%    
       
   
Loss ratio ..................................................................................    
26.4%    
21.0%    
       
   
Expense ratio ............................................................................    
51.7%    
55.7%    
       
   
Combined ratio .........................................................................    
78.1%    
76.6%    
       
   
Adjusted combined ratio (1) ......................................................    
73.7%    
71.2%    
       
   
Diluted earnings per share ........................................................  $ 
4.48    $ 
3.13      
       
   
Diluted adjusted earnings per share (1) ......................................  $ 
5.09    $ 
3.69      
       
   
Catastrophe losses ....................................................................  $ 
27,846    $ 
3,442      
       
   
Catastrophe loss ratio (1) ............................................................    
5.5%    
1.0%    
       
   
Adjusted combined ratio excluding catastrophe losses (1) .........    
68.3%    
70.2%    
       
   
Adjusted underwriting income (1)..............................................  $ 
134,147    $ 
99,511    $ 
34,636      
34.8 % 
  
  
(1) 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. 
  
  
 
 

61 
Gross Written Premiums 
  
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. 
  
The following table summarizes our gross written premiums by product and shows each product's percentage of 
total gross written premiums for each period: 
  
  
  
Year Ended December 31, 
      
  
      
  
  
  
  
2024 
    
2023 
      
  
      
  
  
  
  
($ in thousands) 
      
  
      
  
  
  
    
  
    
% of 
      
  
    
% of 
      
  
      
  
  
  
  Amount     
GWP 
    Amount     
GWP 
    Change     % Change  
Product (1) 
      
        
        
        
        
        
  
Earthquake ........................................   $
522,864      
33.9%  $
436,897      
38.3 %  $ 
85,967      
19.7% 
Inland Marine and Other Property ....     
334,079      
21.7%    
250,022      
21.9 %    
84,057      
33.6% 
Fronting ............................................     
333,188      
21.6%    
352,141      
30.8 %    
(18,953)    
(5.4)% 
Casualty ............................................     
235,592      
15.3%    
90,388      
7.9 %    
145,204      
160.6% 
Crop ..................................................     
116,239      
7.5%    
12,110      
1.1 %    
104,129      
859.9% 
Total Gross Written Premiums .....   $ 1,541,962      
100.0%  $ 1,141,558      
100.0 %  $ 
400,404      
35.1% 
  
(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. 
  
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. 
  
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. 
  
 
 

62 
The following table summarizes our gross written premiums by insurance subsidiary: 
  
  
  
Year Ended December 31, 
      
  
      
  
  
  
  
2024 
    
2023 
      
  
      
  
  
  
  
($ in thousands) 
      
  
      
  
  
  
    
  
    
% of 
      
  
    
% of 
      
  
      
  
  
  
  Amount     
GWP 
    Amount     
GWP 
    Change     % Change  
Subsidiary 
      
        
        
        
        
        
  
PSIC ..............................................   $
823,263      
53.4%  $
653,809      
57.3%  $
169,454      
25.9%
PESIC ...........................................     
661,404      
42.9%    
487,749      
42.7%    
173,655      
35.6%
Laulima .........................................     
57,295      
3.7%    
—      
—%    
57,295      
NM  
Total Gross Written Premiums .....   $ 1,541,962      
100.0%  $ 1,141,558      
100.0%  $
400,404      
35.1%
NM- Not meaningful 
  
Ceded Written Premiums 
  
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. 
  
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. 
  
Net Written Premiums 
  
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. 
  
  
 
 

63 
Net Earned Premiums 
  
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: 
  
  
  
Year Ended 
      
  
      
  
  
  
  
December 31, 
      
  
      
  
  
 
  
2024 
    
2023 
    Change     % Change   
  
  
($ in thousands) 
  
Gross earned premiums ................................................................  $ 1,397,369    $ 1,015,722    $
381,647      
37.6%
Ceded earned premiums ...............................................................    (886,682)     (669,809)     (216,873)    
32.4%
Net earned premiums ...................................................................  $
510,687    $
345,913    $
164,774      
47.6%
  
      
        
        
        
  
Net earned premium ratio .............................................................    
36.5%    
34.1%    
       
   
  
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. 
  
Commission and Other Income 
  
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. 
  
Losses and Loss Adjustment Expenses 
  
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. 
  
Losses and loss adjustment expenses consisted of the following elements during the respective periods: 
  
  
  
Year Ended 
      
  
      
  
  
  
  
December 31, 
      
  
      
  
  
  
  
2024 
    
2023 
    Change     % Change   
  
  
($ in thousands) 
  
Catastrophe losses ........................................................................  $
27,846    $ 
3,442    $ 
24,404      
709.0%
Non-catastrophe losses .................................................................    
106,913      
69,150      
37,763      
54.6%
Total losses and loss adjustment expenses ...................................  $
134,759    $ 
72,592    $ 
62,167      
85.6%
Catastrophe loss ratio ...................................................................    
5.5%    
1.0%    
       
   
Non-catastrophe loss ratio ............................................................    
20.9%    
20.0%    
       
   
Total loss ratio ..............................................................................    
26.4%    
21.0%    
       
   
  
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.  
  
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. 
  
 
 

64 
Acquisition Expenses 
  
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. 
  
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. 
  
Other Underwriting Expenses 
  
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. 
  
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. 
  
Net Investment Income and Net Realized and Unrealized Gains (Losses) on Investments 
  
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. 
  
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. 
  
The following table summarizes the components of our investment income for each period presented: 
  
  
  
Year Ended 
      
  
      
  
  
  
  
December 31, 
      
  
      
  
  
 
  
2024 
    
2023 
    Change     % Change   
 
  
($ in thousands) 
  
Interest income .............................................................................  $ 
35,433    $
23,349    $ 
12,084      
51.8%
Dividend income ..........................................................................    
1,075      
871      
204      
23.4%
Investment management fees and expenses .................................    
(684)     
(515)     
(169)     
32.8%
Net investment income .................................................................    
35,824      
23,705      
12,119      
51.1%
Net realized and unrealized gains on investments ........................    
4,568      
2,941      
1,627      
55.3%
Total .............................................................................................  $ 
40,392    $
26,646    $ 
13,746      
51.6%
    
Income Tax Expense  
  
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. 

65 
Reconciliation of Non-GAAP Financial Measures 
  
Underwriting Revenue 
  
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. 
  
Total revenue calculated in accordance with GAAP reconciles to underwriting revenue as follows: 
  
 
  
Year Ended 
  
 
  
December 31, 
  
 
  
2024 
    
2023 
  
 
  
(in thousands) 
  
Total revenue ...................................................................................................................   $ 
553,863    $
375,926  
Net investment income ....................................................................................................     
(35,824)     
(23,705 ) 
Net realized and unrealized (gains) losses on investments ..............................................     
(4,568)     
(2,941 ) 
Underwriting revenue ......................................................................................................   $ 
513,471    $
349,280  
    
Underwriting Income and adjusted underwriting income 
  
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. 
  
We define adjusted underwriting income as underwriting income excluding the impact of certain items that may 
not be indicative of underlying business trends, operating results, or future outlook. 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. 
Adjusted underwriting income should not be viewed as a substitute for pre-tax income calculated in accordance with 
GAAP. Other companies may define adjusted underwriting income differently. 
  
  
 
 

66 
Income before income taxes calculated in accordance with GAAP reconciles to underwriting income and adjusted 
underwriting income as follows: 
  
 
  
Year Ended 
  
 
  
December 31, 
  
 
  
2024 
    
2023 
  
 
  
(in thousands) 
  
Income before income taxes ............................................................................................   $ 
151,196    $
103,642  
Net investment income ....................................................................................................     
(35,824)     
(23,705 ) 
Net realized and unrealized (gains) losses on investments ..............................................     
(4,568)     
(2,941 ) 
Interest expense ...............................................................................................................     
1,138      
3,775  
Underwriting income .......................................................................................................   $ 
111,942    $
80,771  
Expenses associated with transactions ............................................................................     
1,479      
706  
Stock-based compensation expense ................................................................................     
16,685      
14,913  
Amortization of intangibles .............................................................................................     
1,558      
1,481  
Expenses associated with catastrophe bond ....................................................................     
2,483      
1,640  
Adjusted underwriting income ........................................................................................   $ 
134,147    $
99,511  
  
Adjusted Net Income 
  
We define adjusted net income 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. We use adjusted net income 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 net income does not reflect the overall 
profitably of our business and should not be viewed as a substitute for net income calculated in accordance with GAAP. 
Other companies may define adjusted net income differently. 
  
Net income calculated in accordance with GAAP reconciles to adjusted net income as follows: 
  
 
  
Year Ended December 31, 
  
 
  
2024 
    
2023 
  
 
  
(in thousands) 
  
Net income ......................................................................................................................   $ 
117,573    $
79,201  
Adjustments: 
      
        
  
Net realized and unrealized (gains) losses on investments ..............................................     
(4,568)     
(2,941 ) 
Expenses associated with transactions ............................................................................     
1,479      
706  
Stock-based compensation expense ................................................................................     
16,685      
14,913  
Amortization of intangibles .............................................................................................     
1,558      
1,481  
Expenses associated with catastrophe bond ....................................................................     
2,483      
1,640  
Tax impact .......................................................................................................................     
(1,699)     
(1,480 ) 
Adjusted net income ........................................................................................................   $ 
133,511    $
93,520  
  
Adjusted Return on Equity 
  
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. 
  
  
 
 

67 
Adjusted return on equity is calculated as follows: 
  
 
  
Year Ended December 31, 
  
 
  
2024 
    
2023 
  
 
  
($ in thousands) 
  
Numerator: Adjusted net income.....................................................................................  $
133,511    $
93,520  
Denominator: Average stockholders' equity....................................................................    
600,140      
428,002  
Adjusted return on equity ................................................................................................    
22.2%    
21.9%
   
Adjusted Combined Ratio 
  
We define adjusted combined ratio as the sum of the loss ratio and the expense ratio calculated excluding the 
impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. We 
use adjusted combined ratio 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 combined ratio should not be viewed as a substitute for combined ratio calculated using 
unadjusted GAAP numbers, and other companies may define adjusted combined ratio differently. 
  
Adjusted combined ratio is calculated as follows: 
  
 
  
Year Ended December 31, 
  
 
  
2024 
    
2023 
  
 
  
($ in thousands) 
  
Numerator: Sum of losses, loss adjustment expenses, underwriting, acquisition and 
other underwriting expenses, net of commission and other income ............................  $
398,745    $
265,142  
Denominator: Net earned premiums ...............................................................................  $
510,687    $
345,913  
Combined ratio ................................................................................................................    
78.1%    
76.6%
Adjustments to numerator: 
      
        
  
Expenses associated with transactions ............................................................................    
(1,479)     
(706) 
Stock-based compensation expense ................................................................................    
(16,685)     
(14,913) 
Amortization of intangibles .............................................................................................    
(1,558)     
(1,481) 
Expenses associated with catastrophe bond ....................................................................    
(2,483)     
(1,640) 
Adjusted combined ratio .................................................................................................    
73.7%    
71.2%
  
Diluted adjusted earnings per share 
  
We define diluted adjusted earnings per share as adjusted net income divided by the weighted-average common 
shares outstanding for the period, reflecting the dilution which could occur if equity-based awards are converted into common 
share equivalents as calculated using the treasury stock method. We use diluted adjusted earnings per share 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. Diluted adjusted 
earnings per share should not be viewed as a substitute for diluted earnings per share calculated in accordance with GAAP, 
and other companies may define diluted adjusted earnings per share differently. 
  
  
 
 

68 
Diluted adjusted earnings per share is calculated as follows: 
  
 
  
Year Ended December 31, 
  
 
  
2024 
    
2023 
  
 
  
(in thousands except shares and 
per share data) 
  
Adjusted net income ........................................................................................................   $ 
133,511    $
93,520  
Weighted-average common shares outstanding, diluted .................................................     
26,223,842      
25,327,091  
Diluted adjusted earnings per share .................................................................................   $ 
5.09    $
3.69  
   
Catastrophe Loss Ratio  
  
Catastrophe loss ratio is defined as the ratio of catastrophe losses to net earned premiums. Although we are 
inherently subject to catastrophe losses, the frequency and severity of catastrophe losses is unpredictable and their impact 
on our operating results may vary significantly between periods and obscure other trends in our business. Therefore, we are 
providing this metric because we believe it gives our management and other financial statement users useful insight into our 
results of operations and trends in our financial performance without the volatility caused by catastrophe losses. 
Catastrophe loss ratio should not be viewed as a substitute for loss ratio calculated using unadjusted GAAP numbers, and 
other companies may define catastrophe loss ratio differently. 
  
Catastrophe loss ratio is calculated as follows: 
  
  
  
Year Ended December 31, 
  
  
  
2024 
    
2023 
  
  
  
($ in thousands) 
  
Numerator: Losses and loss adjustment expenses ...........................................................  $
134,759    $
72,592  
Denominator: Net earned premiums ...............................................................................  $
510,687    $
345,913  
Loss ratio .........................................................................................................................    
26.4%    
21.0%
  
      
        
  
Numerator: Catastrophe losses ........................................................................................  $
27,846    $
3,442  
Denominator: Net earned premiums ...............................................................................  $
510,687    $
345,913  
Catastrophe loss ratio ......................................................................................................    
5.5%    
1.0%
  
Adjusted Combined Ratio Excluding Catastrophe Losses  
  
Adjusted combined ratio excluding catastrophe losses is defined as adjusted combined ratio excluding the impact 
of catastrophe losses. Although we are inherently subject to catastrophe losses, the frequency and severity of catastrophe 
losses is unpredictable and their impact on our operating results may vary significantly between periods and obscure other 
trends in our business. Therefore, we are providing this metric because we believe it gives our management and other 
financial statement users useful insight into our results of operations and trends in our financial performance without the 
volatility caused by catastrophe losses. Adjusted combined ratio excluding catastrophe losses should not be viewed as a 
substitute for combined ratio calculated using unadjusted GAAP numbers, and other companies may define adjusted 
combined ratio excluding catastrophe losses differently. 
  
  
 
 

69 
Adjusted combined ratio excluding catastrophe losses is calculated as follows: 
  
  
  
Year Ended December 31, 
  
  
  
2024 
    
2023 
  
  
  
($ in thousands) 
  
Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and 
other underwriting expenses, net of commission and other income ............................  $
398,745    $
265,142  
Denominator: Net earned premiums ...............................................................................  $
510,687    $
345,913  
Combined ratio ................................................................................................................    
78.1%    
76.6%
Adjustments to numerator: 
      
        
  
Expenses associated with transactions ............................................................................  $
(1,479)   $
(706) 
Stock-based compensation expense ................................................................................    
(16,685)     
(14,913) 
Amortization of intangibles .............................................................................................    
(1,558)     
(1,481) 
Expenses associated with catastrophe bond ....................................................................    
(2,483)     
(1,640) 
Catastrophe losses ...........................................................................................................    
(27,846)     
(3,442) 
Adjusted combined ratio excluding catastrophe losses ...................................................    
68.3%    
70.2%
  
Tangible Stockholders’ Equity 
  
We define tangible stockholders’ equity as stockholders’ equity less intangible assets. Our definition of tangible 
stockholders’ equity may not be comparable to that of other companies, and it should not be viewed as a substitute for 
stockholders’ equity calculated in accordance with GAAP. We use tangible stockholders’ equity internally to evaluate the 
strength of our balance sheet and to compare returns relative to this measure. 
  
Stockholders’ equity calculated in accordance with GAAP reconciles to tangible stockholders’ equity as follows: 
  
 
  
December 31, 
  
 
  
2024 
    
2023 
  
 
  
(in thousands) 
  
Stockholders’ equity ........................................................................................................   $ 
729,030    $
471,252  
Intangible assets ..............................................................................................................     
(13,242)     
(12,315 ) 
Tangible stockholders’ equity .........................................................................................   $ 
715,788    $
458,937  
   
Liquidity and Capital Resources 
  
Sources and Uses of Funds 
  
We operate as a holding company with no business operations of our own. Consequently, our ability to pay 
dividends to stockholders and pay taxes and administrative expenses is largely dependent on dividends or other 
distributions from our subsidiaries and affiliates, whose ability to pay us is highly regulated. 
  
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. 
  
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. 
  
  
 
 

70 
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. 
  
In addition to the above limitations, any dividend or distribution declared is also subject to state regulatory 
approval prior to payment. In the future, state insurance regulatory authorities may adopt statutory provisions and dividend 
limitations more restrictive than those currently in effect. 
  
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. 
  
Under the Insurance Act and related regulations, our Bermuda reinsurance subsidiary, PSRE, is required to 
maintain certain solvency and liquidity levels, which it maintained as of December 31, 2024 and December 31, 2023. 
  
PSRE maintains a Class 3A license and thus must maintain a minimum liquidity ratio in which the value of its 
relevant assets is not less than 75% of the amount of its relevant liabilities for general business. Relevant assets include 
cash and cash equivalents, fixed maturity securities, accrued interest income, premiums receivable, losses recoverable from 
reinsurers, and funds withheld. The relevant liabilities include total general business insurance reserves and total other 
liabilities, less sundry liabilities. As of December 31, 2024 and December 31, 2023, we met the minimum liquidity ratio 
requirement. 
  
Bermuda regulations limit the amount of dividends and return of capital paid by a regulated entity. A Class 3A 
insurer is prohibited from declaring or paying a dividend if it is in breach of its minimum solvency margin, its enhanced 
capital requirement, or its minimum liquidity ratio, or if the declaration or payment of such dividend would cause such a 
breach. If a Class 3A insurer has failed to meet its minimum solvency margin on the last day of any financial year, it will 
also be prohibited, without the approval of the Bermuda Monetary Authority (“BMA”), from declaring or paying any 
dividends during the next financial year. Furthermore, the Insurance Act limits the ability of PSRE to pay dividends or 
make capital distributions by stipulating certain margin and solvency requirements and by requiring approval from the 
BMA prior to a reduction of 15% or more of a Class 3A insurer’s total statutory capital as reported on its prior year 
statutory balance sheet. Moreover, an insurer must submit an affidavit to the BMA, sworn by at least two directors and the 
principal representative in Bermuda of the Class 3A insurer, at least seven days prior to payment of any dividend which 
would exceed 25% of that insurer’s total statutory capital and surplus as reported on its prior year statutory balance sheet. 
The affidavit must state that in the opinion of those swearing the declaration of such dividend has not caused the insurer to 
fail to meet its relevant margins. 
  
Further, under the Companies Act, PSRE may only declare or pay a dividend, or make a distribution out of 
contributed surplus, if it has no reasonable grounds for believing that: (1) it is, or would after the payment be, unable to pay 
its liabilities as they become due or (2) the realizable value of its assets would be less than its liabilities. 
  
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 
  
 
 

71 
One of our insurance company subsidiaries, PSIC, is a member of the Federal Home Loan Bank of San Francisco 
(FHLB). Membership allows PSIC access to collateralized advances, which may be used to support and enhance liquidity 
management. The amount of advances that may be taken is dependent on statutory admitted assets. 
  
Cash Flows 
  
Our primary sources of cash flow are written premiums, investment income, reinsurance recoveries, sales and 
redemptions of investments, and proceeds from offerings of debt and equity securities. We use our cash flows primarily to 
pay reinsurance premiums, operating expenses, losses and loss adjustment expenses, and income taxes. 
  
Our cash flows from operations may differ substantially from our net income due to non-cash charges or due to 
changes in balance sheet accounts. 
  
The timing of our cash flows from operating activities can also vary among periods due to the timing by which 
payments are made or received. Some of our payments and receipts, including loss settlements and subsequent reinsurance 
receipts, can be significant. Therefore, their timing can influence cash flows from operating activities in any given period. 
The potential for a large claim under an insurance or reinsurance contract means that our insurance subsidiaries may need to 
make substantial payments within relatively short periods of time, which would have a negative impact on our operating 
cash flows. 
  
We generated positive cash flows from operations for the years ended December 31, 2024 and 2023. Management 
believes that cash receipts from premium, proceeds from investment sales and redemptions, and investment income and 
reinsurance recoveries, if necessary, are sufficient to cover cash outflows in the foreseeable future. 
  
The following table summarizes our cash flows for the years ended December 31, 2024 and 2023: 
  
 
  
Year ended 
  
 
  
December 31, 
  
 
  
2024 
    
2023 
  
 
  
($ in thousands) 
  
Cash provided by (used in): 
   
     
  
Operating activities .........................................................................................................   $ 
261,157    $
116,106  
Investing activities ...........................................................................................................     
(306,244)     
(128,478 ) 
Financing activities .........................................................................................................     
73,774      
(3,940 ) 
Change in cash, cash equivalents, and restricted cash .....................................................   $ 
28,687    $
(16,312 ) 
    
Our cash flow from operating activities has been positive in each of the last two years. Variations in operating cash 
flow between periods are primarily driven by variations in our gross and ceded written premiums and the volume and 
timing of premium receipts, claim payments, reinsurance payments, and reinsurance recoveries on paid losses. In addition, 
fluctuations in losses and loss adjustment expenses and other insurance operating expenses impact operating cash flow. 
  
Cash used in investing activities for each of the last two years related primarily to purchases of fixed income and 
equity securities in excess of sales and maturities. 
  
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. 
  
 
 

72 
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. 
  
Contractual Obligations and Commitments 
  
The following table illustrates our contractual obligations and commercial commitments by due date as of 
December 31, 2024: 
  
 
  
Total 
    
Less Than 
One Year     
One Year 
to Less 
Than 
Three 
Years 
    
Three 
Years to 
Less Than 
Five Years     
More 
Than Five 
Years  
  
  
(in thousand) 
 
Reserves for losses and loss adjustment expenses ....   $ 
503,382    $
383,684    $ 
67,713    $ 
48,367    $
3,618 
Operating lease obligations ......................................     
9,906      
1,050      
2,790      
1,015      
5,051 
Total ......................................................................   $ 
233,602    $
178,843    $ 
30,321    $ 
24,155    $
283 
    
The reserve for losses and loss adjustment expenses represents management’s estimate of the ultimate cost of 
settling losses. As more fully discussed in “—Critical Accounting Policies—Reserve for Losses and Loss Adjustment 
Expenses” below, the estimation of the reserve for losses and loss adjustment expenses is based on various complex and 
subjective judgments. Actual losses paid may differ, perhaps significantly, from the reserve estimates reflected in our 
consolidated financial statements. Similarly, the timing of payment of our estimated losses is not fixed and there may be 
significant changes in actual payment activity. The assumptions used in estimating the likely payments due by period are 
based on our historical claims payment experience and industry payment patterns, but due to the inherent uncertainty in the 
process of estimating the timing of such payments, there is a risk that the amounts paid can be significantly different from 
the amounts disclosed above. 
  
The amounts in the above table represent our gross estimates of known liabilities as of December 31, 2024 and do 
not include any allowance for claims for future events within the time period specified. Accordingly, it is highly likely that 
the total amounts of obligations paid by us in the time periods shown will be greater than those indicated in the table. 
  
Share repurchases 
  
Our share repurchase program expired on March 31, 2024 and we did not make any share repurchases during the 
year ended December 31, 2024. 
  
Credit Agreement 
  
In December 2021, we entered into a Credit Agreement (the “Credit Agreement”) with U.S. Bank National 
Association which provides a revolving credit facility of up to $100 million through December 8, 2026. Interest on the 
credit facility accrues on each SOFR (as defined in the Credit Agreement) rate loan at the applicable SOFR (as defined in 
the Credit Agreement) plus 1.75% and on each base rate loan at the applicable Alternate Base Rate (as defined in the Credit 
Agreement) plus 0.75%. A loan may be either a SOFR rate loan or a base rate loan, at our discretion. Outstanding amounts 
under the Credit Agreement may be prepaid in full or in part at any time with no prepayment premium and may be reduced 
in full or in part at any time upon prior notice. Currently, $5.6 million of the borrowing capacity of the Credit Agreement is 
pledged as collateral and not able to be utilized. 
  
  
 
 

73 
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. 
  
Our PSIC subsidiary is a member of the Federal Home Loan Bank of San Francisco (“FHLB”). Membership in the 
FHLB provides PSIC access to collateralized advances, which can be drawn for general corporate purposes and used to 
enhance liquidity management. All borrowings are fully secured by a pledge of specific investment securities of PSIC and 
the borrowing capacity is equal to 10% of PSIC’s statutory admitted assets. All advances have predetermined term and the 
interest rate varies based on the term of the advance. 
  
As of December 31, 2024, the Company did not have any borrowings outstanding through the FHLB line of credit. 
  
Financial Condition 
  
Stockholders’ Equity 
  
At December 31, 2024 total stockholders’ equity was $729.0 million and tangible stockholders’ equity was $715.8 
million, compared to total stockholders’ equity of $471.3 million and tangible stockholders’ equity of $458.9 million as of 
December 31, 2023. Stockholders’ equity increased primarily due to net income we earned for the period, stock offering 
proceeds, and activity related to stock-based compensation.  Stock-based compensation expense is treated as an additional 
paid-in-capital and increases stockholders’ equity. 
  
Tangible stockholders’ equity is a non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial 
Measures” for a reconciliation of stockholders’ equity in accordance with GAAP to tangible stockholders’ equity. 
  
Investment Portfolio 
  
Our primary investment objectives are to maintain liquidity, preserve capital and generate a stable level of 
investment income. We purchase securities that we believe are attractive on a relative value basis and seek to generate 
returns in excess of predetermined benchmarks. Our Board of Directors approves our investment guidelines in compliance 
with applicable regulatory restrictions on asset type, quality and concentration. Our current investment guidelines allow us 
to invest in taxable and tax-exempt fixed maturities, as well as publicly traded mutual funds and common stock of 
individual companies. Our cash and invested assets consist of cash and cash equivalents, fixed maturity securities, and 
equity securities. As of December 31, 2024, the majority of our investment portfolio, or $939.0 million, was comprised of 
fixed maturity securities that are classified as available-for-sale and carried at fair value with unrealized gains and losses on 
these securities, net of applicable taxes, reported as a separate component of accumulated other comprehensive income. 
Also included in our investment portfolio were $40.5 million of equity securities. In addition, we maintained a non-
restricted cash and cash equivalent balance of $80.5 million at December 31, 2024. Our fixed maturity securities, including 
cash equivalents, had a weighted average effective duration of 4.04 and 3.48 years and an average rating of A1/A+ and 
“Aa3/A+” at December 31, 2024 and December 31, 2023, respectively. Our fixed income investment portfolio had a book 
yield of 4.59% as of December 31, 2024, compared to 4.07% as of December 31, 2023. 
  
  
 
 

74 
At December 31, 2024 and December 31, 2023 the amortized cost and fair value on available-for-sale securities 
were as follows: 
  
December 31, 2024 
  
Amortized 
Cost or Cost     
Fair Value     
% of Total 
Fair Value   
 
  
($ in thousands) 
  
Fixed maturities: 
      
        
     
  
U.S. Governments ...........................................................................  $ 
33,449    $
32,806      
3.5%
U.S. States, Territories, and Political Subdivisions ........................    
10,606      
9,778      
1.0%
Special revenue excluding mortgage/asset-backed securities .........    
30,283      
26,634      
2.8%
Corporate and other ........................................................................    
492,395      
475,491      
50.6%
Mortgage/asset-backed securities ...................................................    
406,597      
394,337      
42.0%
Total available-for-sale investments ...................................................  $ 
973,330    $
939,046      
100.0%
   
December 31, 2023 
  
Amortized 
Cost or Cost     
Fair Value     
% of Total 
Fair Value   
 
  
($ in thousands) 
  
Fixed maturities: 
   
     
     
  
U.S. Governments ...........................................................................  $ 
40,836    $
39,420      
6.1%
U.S. States, Territories, and Political Subdivisions ........................    
10,641      
9,902      
1.5%
Special revenue excluding mortgage/asset-backed securities .........    
32,513      
29,511      
4.6%
Corporate and other ........................................................................    
316,590      
300,239      
46.6%
Mortgage/asset-backed securities ...................................................    
274,550      
264,727      
41.1%
Total available-for-sale investments ...................................................  $ 
675,130    $
643,799      
100.0%
   
The following tables provide the credit quality of investment securities as of December 31, 2024 and December 
31, 2023: 
  
December 31, 2024 
  
Estimated 
Fair Value     
% of Total   
  
  
($ in thousands) 
  
Rating 
   
     
  
AAA ................................................................................................................................   $ 
130,161      
13.9%
AA ...................................................................................................................................     
305,267      
32.5%
A ......................................................................................................................................     
254,890      
27.1%
BBB .................................................................................................................................     
236,855      
25.2%
BB ...................................................................................................................................     
10,614      
1.1%
B ......................................................................................................................................     
1,258      
0.1%
CCC&Below ...................................................................................................................     
1      
0.0%
 
  $ 
939,046      
100.0%
    
  
 
 

75 
December 31, 2023 
  
Estimated 
Fair Value     
% of Total   
  
  
($ in thousands) 
  
Rating 
   
     
  
AAA ................................................................................................................................   $ 
98,823      
15.4%
AA ...................................................................................................................................     
211,354      
32.8%
A ......................................................................................................................................     
205,162      
31.9%
BBB .................................................................................................................................     
119,016      
18.5%
BB ...................................................................................................................................     
5,869      
0.9%
B ......................................................................................................................................     
735      
0.1%
CCC&Below ...................................................................................................................     
2,840      
0.4%
 
  $ 
643,799      
100.0%
  
The amortized cost and fair value of our available-for-sale investments in fixed maturity securities summarized by 
contractual maturity as of December 31, 2024 were as follows: 
  
December 31, 2024 
  
Amortized 
Cost 
    
Fair Value     
% of Total 
Fair Value   
 
  
($ in thousands) 
  
Due within one year ...........................................................................  $ 
76,696    $
76,089      
8.1%
Due after one year through five years ................................................    
195,931      
190,627      
20.3%
Due after five years through ten years ................................................    
192,924      
183,560      
19.5%
Due after ten years ..............................................................................    
101,182      
94,433      
10.1%
Mortgage and asset-backed securities ................................................    
406,597      
394,337      
42.0%
 
  $ 
973,330    $
939,046      
100.0%
    
Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay 
obligations. See “Critical Accounting Policies and Estimates- Investment Valuation and Fair Value” for discussion of 
investment valuation considerations. 
  
Critical Accounting Policies and Estimates 
  
We identified the accounting estimates below as critical to the understanding of our financial position and results 
of operations. Critical accounting estimates are defined as those estimates that are both important to the portrayal of our 
financial condition and results of operations and which require us to exercise significant judgment. We use significant 
judgment concerning future results and developments in applying these critical accounting estimates and in preparing our 
consolidated financial statements. These judgments and estimates affect the reported amounts of assets, liabilities, revenue 
and expenses and the disclosure of material contingent assets and liabilities. Actual results may differ materially from the 
estimates and assumptions used in preparing the consolidated financial statements. We evaluate our estimates regularly 
using information that we believe to be relevant. For a detailed discussion of our accounting policies, see the Notes to 
Consolidated Financial Statements included in this Annual Report on Form 10-K. 
  
Reserve for Losses and Loss Adjustment Expenses 
  
The reserve for losses and loss adjustment expenses represents our estimated ultimate cost of all reported and 
unreported losses and loss adjustment expenses incurred and unpaid at the balance sheet date. We do not discount this 
reserve. We seek to establish reserves that will ultimately prove to be adequate. 
  
We categorize our reserves for unpaid losses and loss adjustment expenses into two types: case reserves and 
reserves for incurred but not yet reported losses (“IBNR”). Through our third-party administrators (“TPAs”), we generally 
are notified of losses by our insureds or their agents or brokers. Based on the information provided by the TPAs, we 
establish initial case reserves by estimating the ultimate losses from the claim, including administrative costs associated 
with the ultimate settlement of the claim. Our personnel use their knowledge of the specific claim along with internal and 
external experts, including underwriters and legal counsel, to estimate the expected ultimate losses. 
   
 
 

76 
We establish IBNR reserves to provide for (i) the estimated amount of future loss payments on incurred claims not 
yet reported, and (ii) potential development on reported claims. IBNR reserves are estimated based on generally accepted 
actuarial reserving techniques that consider quantitative loss experience data and, where appropriate, qualitative factors. We 
use statistical analysis to estimate the cost of losses and loss adjustment expenses related to IBNR. Those estimates are 
based on our historical information, industry information and practices, and estimates of trends that may affect the ultimate 
frequency of incurred but not reported claims and changes in ultimate claims severity. 
  
We regularly review our reserve estimates and adjust them as necessary as experience develops or as new 
information becomes known to us. Such adjustments are included in current operations. During the loss settlement period, 
if we have indications that claims frequency or severity exceeds our initial expectations, we generally increase our reserves 
for losses and loss adjustment expenses. Conversely, when claims frequency and severity trends are more favorable than 
initially anticipated, we generally reduce our reserves for losses and loss adjustment expenses once we have sufficient data 
to confirm the validity of the favorable trends. Even after such adjustments, the ultimate liability may exceed or be less than 
the revised estimates. Accordingly, the ultimate settlement of losses and the related loss adjustment expenses may vary 
significantly from the estimate included in our consolidated financial statements. 
  
The following tables summarize our gross and net reserves for unpaid losses and loss adjustment expenses at 
December 31, 2024 and 2023. 
  
 
  
December 31, 2024 
  
 
  
Gross 
    % of Total     
Net 
    % of Total   
Loss and Loss Adjustment Reserves 
  
($ in thousands) 
  
Case reserves .........................................................................  $ 
164,665      
32.7%  $
40,731      
26.2%
IBNR .....................................................................................    
338,717      
67.3%    
114,568      
73.8%
Total reserves ............................................................................  $ 
503,382      
100.0%  $
155,299      
100.0%
   
 
  
December 31, 2023 
  
 
  
Gross 
    % of Total     
Net 
    % of Total   
Loss and Loss Adjustment Reserves 
   
        
     
     
  
Case reserves .........................................................................  $ 
124,170      
36.3%  $
38,428      
39.4%
IBNR .....................................................................................    
218,105      
63.7%    
59,225      
60.6%
Total reserves ............................................................................  $ 
342,275      
100.0%  $
97,653      
100.0%
   
The process of estimating the reserves for losses and loss adjustment expenses requires a high degree of judgment 
and is subject to several variables. On a quarterly basis, we perform an analysis of our loss development and select the 
expected ultimate loss ratio for each of our product lines by exposure period. In our actuarial analysis, we use input from 
our TPAs and our underwriting departments, including premium pricing assumptions and historical experience. Multiple 
actuarial methods are used to estimate the reserve for losses and loss adjustment expenses. These methods utilize, to 
varying degrees, the initial expected loss ratio, detailed statistical analysis of past claims reporting and payment patterns, 
claims frequency and severity, paid loss experience, industry loss experience, and changes in market conditions, policy 
forms, exclusions, and exposures. The actuarial methods used to estimate loss reserves are: 
  
  
● 
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. 
  
  
● 
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. 
  
  
 
 

77 
  
● 
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. 
  
  
● 
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. 
  
The method(s) used vary based on the line of business and the nature of the loss event. Development patterns for 
catastrophic events are based on the time since event versus an accident quarter and year pattern used for non-catastrophic 
events. Considering each of the alternative ultimate estimates, we select an estimate of ultimate loss for each line of 
business. 
  
Loss Adjustment Expense reserves are estimated based on the ratio of paid loss adjustment expense to paid loss, 
which is estimated separately by line of business as well as split by hurricane and excluding hurricane. We then apply this 
ratio to our estimated unpaid loss, by multiplying the ratio times 50% of loss case reserves and 100% of loss IBNR 
reserves. This is applied by line of business and accident year to arrive at estimated unpaid loss adjustment expense on a 
gross basis. We then add the estimated unpaid loss adjustment expense on a gross basis to the paid loss adjustment expense 
to calculate estimated ultimate loss adjustment expense. 
  
On a quarterly basis, the leaders of our executive management, accounting, actuarial, and claims teams meet to 
review the recommendations made by our actuarial team and use their best judgment to determine the best estimate to be 
recorded for the reserve for losses and loss adjustment expenses on our balance sheet. 
  
Our reserves are driven by several important factors, including litigation and regulatory trends, legislative activity, 
climate change, social and economic patterns and claims inflation assumptions. Our reserve estimates reflect current 
inflation in legal claims’ settlements and assume we will not be subject to losses from significant new legal liability 
theories. Our reserve estimates assume that there will not be significant changes in the regulatory and legislative 
environment. The impact of potential changes in the regulatory or legislative environment is difficult to quantify in the 
absence of specific, significant new regulation or legislation. In the event of significant new regulation or legislation, we 
will attempt to quantify its impact on our business, but no assurance can be given that our attempt to quantify such inputs 
will be accurate or successful.   
  
The table below quantifies the impact of potential reserve deviations from our carried reserve at December 31, 
2024. We applied sensitivity factors to incurred losses for the three most recent accident years and to the carried reserve for 
all prior accident years combined. We believe that potential changes such as these would not have a material impact on our 
liquidity. 
  
  
    
  Net Ultimate  
  
December 31, 2024 
    
Potential Impact on 2024 
  
Sensitivity 
  
Accident 
Year 
  
LLAE 
Sensitivity 
Factor 
  
  
Net Ultimate 
Incurred 
LLAE 
    
Net LLAE 
Reserve 
    
Pre-tax 
income 
    
Stockholders’ 
Equity* 
  
  
  
(in thousands) 
  
Sample increases ......    
2024 
    
5.0 %   $ 
137,788    $ 
94,215    $ 
6,889    $ 
5,443  
  
  
2023 
    
2.5 %   $ 
68,066    $ 
31,171    $ 
1,702    $ 
1,344  
  
  
Prior 
    
1.0 %   $ 
219,724    $ 
29,913    $ 
2,197    $ 
1,736  
Sample decreases ......    
2024 
    
(5.0 )%   $ 
137,788    $ 
94,215    $ 
(6,889)   $ 
(5,443) 
  
  
2023 
    
(2.5 )%   $ 
68,066    $ 
31,171    $ 
(1,702)   $ 
(1,344) 
  
  
Prior 
    
(1.0 )%   $ 
219,724    $ 
29,913    $ 
(2,197)   $ 
(1,736) 
  
 
* 
Effective tax rate estimated to be 21% 
  
  
 
 

78 
The amount by which estimated losses differ from those originally reported for a period is known as 
“development.” Development is unfavorable when the losses ultimately settle for more than the amount reserved or 
subsequent estimates indicate a basis for reserve increases on unresolved claims. Development is favorable when losses 
ultimately settle for less than the amount reserved, or subsequent estimates indicate a basis for reducing loss reserves on 
unresolved claims. We reflect favorable or unfavorable development of loss reserves in the results of operations in the 
period the estimates are changed. 
  
The following tables present the development of our loss reserves by accident year on a gross basis and net of 
reinsurance recoveries during each of the below calendar years: 
  
  
  
Gross Ultimate Loss and LAE 
  
  
    
  
      
  
      
  
      
  
    
Development- (Favorable) 
Unfavorable 
  
  
  
Calendar Year 
    2021 to     2022 to     2023 to   
Accident Year 
  
2021     
2022     
2023     
2024     
2022     
2023     
2024   
  
  
(in thousands) 
  
Prior ..................................................   $ 450,570    $ 450,904    $ 417,234    $ 416,443    $
334    $ (33,670)   $
(791) 
2022 ..................................................     
       200,765      198,635      182,660      
—      
(2,130)     (15,975) 
2023 ..................................................     
       
       334,520      308,049      
—      
—      (26,471) 
2024 ..................................................     
       
       
       537,646      
—      
—      
—  
  
    
       
       
       
     $
334    $ (35,800)   $ (43,237) 
  
  
  
Net Ultimate Loss and LAE 
  
  
    
  
      
  
      
  
      
  
    
Development- (Favorable) 
Unfavorable 
  
 
  
Calendar Year 
    2021 to     2022 to     2023 to   
Accident Year 
  
2021     
2022     
2023     
2024     
2022     
2023     
2024   
  
  
(in thousands) 
  
Prior ..................................................   $ 139,530    $ 141,913    $ 137,405    $ 139,173    $
2,383    $
(4,508)   $
1,768  
2022 ..................................................     
       76,289      83,026      80,551      
—      
6,737      
(2,475) 
2023 ..................................................     
       
       70,346      68,015      
—      
—      
(2,331) 
2024 ..................................................     
       
       
       137,788      
—      
—      
—  
  
    
       
       
       
     $
2,383    $
2,229    $
(3,038) 
     
During the year ended December 31, 2024, our total gross incurred losses for accident years 2023 and prior 
developed favorably by $43.2 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 $3.0 million due to the same reason. 
  
During the year ended December 31, 2023, our total gross incurred losses for accident years 2022 and prior 
developed favorably by $35.8 million. The gross favorable development was due primarily to lower than anticipated 
severity of catastrophe losses, offset by higher than anticipated severity of attritional losses. On a net basis, the 
development was unfavorable by $2.2 million due to the effect of ceding gross favorable development under our 
catastrophe XOL reinsurance program and due to unfavorable development on lines of business subject to lower amounts 
of ceding.  
  
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. 
   
 
 

79 
Although we believe that our reserve estimates are reasonable, it is possible that our actual loss experience may 
not conform to our assumptions. Specifically, our actual ultimate loss ratio could differ from our initial expected loss ratio 
or our actual reporting and payment patterns could differ from our expected reporting and payment patterns, which are 
based on our own data and industry data. Accordingly, the ultimate settlement of losses and the related loss adjustment 
expenses may vary significantly from the estimates included in our financial statements. We regularly review our estimates 
and adjust them as necessary as experience develops or as new information becomes known to us. Such adjustments are 
included in the results of current operations. 
  
Investment Valuation and Fair Value 
  
We invest in a variety of investment grade fixed maturity securities, including U.S. government issues, state 
government issues, mortgage and asset-backed obligations, and corporate bonds. All of our investments in fixed maturity 
securities and equity securities are carried at fair value, defined as the price that we would receive upon selling an 
investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the 
investment. Market participants are assumed to be independent, knowledgeable, able and willing to transact an exchange 
and not acting under duress. 
  
In our disclosure of the fair value of our investments, we utilize a hierarchy based on the quality of inputs used to 
measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets 
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Adjustments 
to transaction prices or quoted market prices may be required in illiquid or disorderly markets in order to estimate fair 
value. The three levels of the fair value hierarchy are described below: 
  
Level 1—Unadjusted quoted prices are available in active markets for identical investments as of the reporting 
date. 
  
Level 2—Pricing inputs are quoted prices for similar investments in active markets; quoted prices for identical or 
similar investments in inactive markets; or valuations based on models where the significant inputs are observable 
or can be corroborated by observable market data. 
  
Level 3—Pricing inputs into models are unobservable for the investment. The unobservable inputs require 
significant management judgment or estimation. 
  
We use independent pricing sources to obtain the estimated fair values of investments. The fair value is based on 
quoted market prices, where available. In cases where quoted market prices are not available, the fair value is based on a 
variety of valuation techniques depending on the type of investment. The fair values obtained from independent pricing 
sources are reviewed for reasonableness and any discrepancies are investigated for final valuation. 
  
The fair value of our investments in fixed maturity securities is estimated using relevant inputs, including available 
market information, benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. An Option 
Adjusted Spread model is also used to develop prepayment and interest rate scenarios. These fair value measurements are 
estimated based on observable, objectively verifiable market information rather than market quotes; therefore, these 
investments are classified and disclosed in Level 2 of the hierarchy. 
  
The fair value of our investments in equity securities is based on quoted prices available in active markets and 
classified and disclosed in Level 1 of the hierarchy. 
  
Investment securities are subject to fluctuations in fair value due to changes in issuer-specific circumstances, such 
as credit rating, and changes in industry-specific circumstances, such as movements in credit spreads based on the market’s 
perception of industry risks. In addition, fixed maturities are subject to fluctuations in fair value due to changes in interest 
rates. As a result of these potential fluctuations, it is possible to have significant unrealized gains or losses on a security. 
Unrealized gains and losses on our fixed maturity securities are included in accumulated other comprehensive income as a 
separate component of total stockholders’ equity. Equity securities are carried at fair value with unrealized gains and losses 
included as a component of net income on the Company’s consolidated statement of income. 
  
 
 

80 
All financial assets, including available-for-sale securities are required to be presented at the net amount expected 
to be collected by means of an allowance for credit losses that is included in net income. Credit losses relating to available-
for-sale debt securities are also required to be recorded through a reversible allowance for credit losses, but the allowance is 
limited to the amount by which fair value is less than amortized cost. 
  
The Company reviews all securities with unrealized losses on a regular basis to assess whether the decline in the 
securities fair value necessitates the recognition of an allowance for credit losses. Factors considered in the review include 
the extent to which the fair value has been less than amortized cost, and current market interest rates and whether the 
unrealized loss is credit-driven or a result of changes in market interest rates. The Company also considers factors specific 
to the issuer including the general financial condition of the issuer, the issuers industry and future business prospects, any 
past failure of issuer to make scheduled interest or principal payments, and the payment structure of the investment and the 
issuers ability to make contractual payments on the investment. 
  
The Company also considers whether it intends to sell the security or if it is more likely than not that it will be 
required to sell the security before recovery of its amortized cost. When assessing whether it intends to sell a fixed-maturity 
security or if it is likely to be required to sell a fixed-maturity security before recovery of its amortized cost, the Company 
evaluates facts and circumstances including, but not limited to, decisions to reposition the investment portfolio, potential 
sales of investments to meet cash flow needs, and potential sales of investments to capitalize on favorable pricing. 
  
For fixed-maturity securities where a decline in fair value is below the amortized cost basis and the Company 
intends to sell the security, or it is more likely than not that the Company will be required to sell the security before 
recovery of its amortized cost, a credit-loss charge is recognized in net income based on the fair value of the security at the 
time of assessment. For fixed-maturity securities that the Company has the intent and ability to hold, the Company 
compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. The 
extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the 
security represents the credit-related portion of the impairment, which is recognized in net income through an allowance for 
credit losses. Any remaining decline in fair value represents the noncredit portion of the impairment, which is recognized in 
other comprehensive income. 
  
The Company reports accrued interest receivable as a component of accrued investment income on its 
consolidated balance sheet which is presented separately from available-for-sale securities. The Company does not measure 
an allowance for credit losses on accrued interest receivable and instead would write off accrued interest receivable at the 
time an issuer defaults or is expected to default on payments. 
  
The Company has one investment in a limited liability company which is accounted for under the equity method 
of accounting whereby the investment carrying amount is adjusted in subsequent periods to reflect the Company's share of 
earnings or losses. The Company also invests a small portion of its portfolio in limited partnerships, which are classified as 
other investments on its consolidated balance sheet. These investments are measured at estimated fair value utilizing a net 
asset value per share (or its equivalent) as a practical expedient. 
  
Deferred Income Taxes 
  
We account for taxes under the asset and liability method, under which we record deferred income taxes as assets 
or liabilities on our balance sheet to reflect the net tax effect of the temporary differences between the carrying amount of 
assets and liabilities for financial reporting purposes and their respective tax bases. Deferred tax assets and liabilities are 
measured by applying enacted tax rates in effect for the years in which such differences are expected to reverse. 
  
Our deferred tax assets result from temporary differences primarily attributable to unearned premiums, net 
operating losses (“NOLs”), unrealized losses on investments and deferred compensation. Our deferred tax liabilities result 
primarily from deferred acquisition costs, internally developed software, and unrealized gains in the investment portfolio. 
  
We recognize deferred tax assets when we determine that such assets are more-likely-than-not to be realized in 
future periods. In making such a determination, we consider all available evidence, including future reversals of existing 
taxable temporary differences, tax-planning strategies, projected future taxable income, projected future tax rates, and 
results of recent operations. On a quarterly basis, we review our deferred tax assets and, if we determine that it is more 
likely than not that some portion or all of the deferred tax assets will not be realized, we reduce our deferred tax asset with a 
valuation allowance. The assessment requires significant judgement and review of all positive and negative evidence to 
reach a conclusion that it is more likely than not that all or some of portion of the deferred tax asset will not be realized. 
  

81 
In assessing the need for a deferred tax asset valuation allowance, we are required to make certain judgments and 
assumptions about our future operations based on historical experience and information regarding reversals of existing 
temporary differences, carryback capacity, future taxable income and tax planning strategies. Recent events, including 
changes in market interest rates and significant financial market volatility have caused us to incur unrealized losses on 
investments which contributes to us having a net capital deferred tax asset in the amount of $5.3 million at December 31, 
2024, as compared to a net capital deferred tax asset of $5.9 million at December 31, 2023. We are currently utilizing tax 
planning strategies in our assessment of the realizability of a portion of our net capital deferred tax asset at December 31, 
2024. These tax planning strategies include the holding of fixed maturity securities that are currently in a net unrealized loss 
position for tax purposes until recovery or maturity, if needed, to avoid future expiring capital loss carryforwards. 
  
As of December 31, 2024, we had a valuation allowance of $3.4 million relating to our state net operating loss 
carryforwards and the remainder of our deferred tax assets did not require a valuation allowance. 
  
Recent Accounting Pronouncements 
  
See “Note 2—Recent Accounting Pronouncements” in the Notes to Consolidated Financial Statements included in 
this Annual Report on Form 10-K for a discussion of accounting pronouncements recently adopted and recently issued 
accounting pronouncements not yet adopted and their potential impact to our financial statements. 
  
Off-Balance Sheet Arrangements 
  
We do not have any off-balance sheet arrangements (as defined by applicable regulations of the SEC) that are 
reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, 
capital expenditures or capital resources. 
  
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 
  
Market risk is the risk of economic losses due to adverse changes in the estimated fair value of a financial 
instrument as the result of changes in equity prices, interest rates, foreign currency exchange rates and commodity prices. 
Our consolidated balance sheets include assets and liabilities with estimated fair values that are subject to market risk. Our 
primary market risks have been equity price risk associated with investments in equity securities and interest rate risk 
associated with investments in fixed maturities. We do not have material exposure to foreign currency exchange rate risk or 
commodity risk. 
  
Credit risk is the potential loss resulting from adverse changes in an issuer’s ability to repay its debt obligations. 
General concern exists about the number of municipalities experiencing financial difficulties in light of the adverse 
economic conditions experienced over the past several years. We manage the exposure to credit risk in our municipal bond 
portfolio by investing in high quality securities and by diversifying our holdings, which are typically either general 
obligation or revenue bonds related to essential products and services. We manage the exposure to credit risk in our 
corporate bond portfolio by investing in high quality securities and by diversifying our holdings. 
  
We monitor our investment portfolio to ensure that credit risk does not exceed prudent levels. The majority of our 
investment portfolio is invested in high credit quality, investment grade fixed maturity securities. We also invest in higher 
yielding fixed maturities and equity securities. Our fixed maturity portfolio has an average rating by at least one nationally 
recognized rating organization of “AA−,” with approximately 73.5% rated “A−” or better. At December 31, 2024, 1.3% of 
our fixed maturity portfolio was unrated or rated below investment grade. Our fixed maturity portfolio includes some 
securities issued with financial guaranty insurance. We purchase fixed maturities based on our assessment of the credit 
quality of the underlying assets without regard to insurance. 
  
  
 
 

82 
Interest Rate Risk 
  
We manage our exposure to interest rate risk through a disciplined asset/liability matching and capital 
management process. In the management of this risk, the characteristics of duration, credit and variability of cash flows are 
critical elements. We regularly assess these risks and balance them within the context of our liability and capital position. 
  
As of December 31, 2024, the estimated fair value of our fixed maturities was $939.0 million. We estimate that a 
100-basis point increase in interest rates would cause a 3.7% decline in the estimated fair value of our fixed maturities 
portfolio, while a 100-basis point decrease in interest rates would cause a 4.0% increase in the estimated fair value of that 
portfolio. The selected scenarios are not predictions of future events, but rather illustrate the effect that such events may 
have on the fair value of our fixed maturities portfolio. 
  
Equity Price Risk 
  
Equity risk represents the potential economic losses due to adverse changes in equity security prices.  As of 
December 31, 2024, the estimated fair value of our equity securities was $40.5 million.  Our equity securities 
consist primarily of exchange traded funds which seek to track the performance of the broader U.S. stock market. 
Therefore, the fair value of our equity securities will fluctuate with the value of the overall U.S. stock market and a large 
decline in the value of the U.S. stock market would cause a corresponding decline in the value of our equity securities. 
  
Inflation 
  
We establish our insurance premiums prior to knowing the amount of losses and loss adjustment expenses or the 
extent to which inflation may affect such amounts. We attempt to anticipate the potential impact of inflation in our pricing 
and our establishing of reserves for losses and loss adjustment expenses. Inflation in excess of the levels we have assumed 
could cause losses and loss adjustment expenses to be higher than we anticipated. Inflation assumptions also impact our 
reinsurance costs and the amount of reinsurance we must purchase to meet certain thresholds and higher inflation 
assumptions cause our reinsurance costs to increase. 
  
Substantial future increases in inflation could also result in future increases in interest rates, which in turn are 
likely to result in a decline in the market value of the investment portfolio and cause unrealized losses or reductions in total 
stockholders’ equity. 
  
Seasonality 
  
Our Inland Marine and Other Property line of business exposes us to claims from seasonal weather events such as 
hurricanes and windstorms. The occurrence of such events typically increases between June and November of each year. As 
a result, we may experience increased losses in our Inland Marine and Other Property line of business during this 
period.  We also write and earn the majority of our Crop premiums during the third quarter of each year. 
  
  
  
 
 

83 
Item 8: Financial Statements  
  
Palomar Holdings, Inc. and Subsidiaries 
  
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 
  
  
Index to Audited Consolidated Financial Statements of Palomar Holdings, Inc. and Subsidiaries as 
of December 31, 2024 and 2023 and for each of the Three Years Ended December 31, 2024, 2023 and 2022 
 
  
  
Report of Independent Registered Public Accounting Firm (PCAOB ID 42) ................................................................... 
84
  
  
Consolidated Financial Statements 
 
  
  
Consolidated Balance Sheets as of December 31, 2024 and 2023 .................................................................................... 
87
  
  
Consolidated Statements of Income and Comprehensive Income for the three years ended December 31, 2024, 2023 
and 2022 ........................................................................................................................................................................ 
88
  
  
Consolidated Statements of Stockholders’ Equity for the three years ended December 31, 2024, 2023 and 2022 .......... 
89
  
  
Consolidated Statements of Cash Flows for the three years ended December 31, 2024, 2023 and 2022 ......................... 
90
  
  
Notes to Consolidated Financial Statements ..................................................................................................................... 
92
  
  
Schedule II—Condensed Financial Information of Registrant—Parent Company only ................................................... 125
  
  
Schedule V—Valuation and Qualifying Accounts ............................................................................................................ 129
  
Schedules other than those listed are omitted for the reason that they are not required, are not applicable or that 
equivalent information has been included in the financial statements or notes thereto or elsewhere herein. 
  
  
 
 

84 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  
  
To the Stockholders and the Board of Directors of Palomar Holdings, Inc. 
  
Opinion on Internal Control Over Financial Reporting 
  
We have audited Palomar Holdings, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 
2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring 
Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Palomar Holdings, Inc. 
and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of 
December 31, 2024, based on the COSO criteria. 
  
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) 
(PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated 
statements of income and comprehensive income, stockholders’ equity and cash flows for each of the three years in the 
period ended December 31, 2024, and the related notes and financial statement schedules listed in the Index at Item 15(a) 
and our report dated February 25, 2025 expressed an unqualified opinion thereon. 
  
Basis for Opinion 
  
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its 
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s 
Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal 
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are 
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the 
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 
  
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in 
all material respects. 
  
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material 
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, 
and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides 
a reasonable basis for our opinion. 
  
Definition and Limitations of Internal Control Over Financial Reporting  
  
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the 
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with 
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and 
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the 
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded 
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and 
that receipts and expenditures of the company are being made only in accordance with authorizations of management and 
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized 
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 
  
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate 
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 
  
/s/ Ernst & Young LLP 
San Francisco, California 
February 25, 2025 
   
 
 

85 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
  
To the Stockholders and the Board of Directors of Palomar Holdings, Inc. 
  
  
Opinion on the Financial Statements 
  
We have audited the accompanying consolidated balance sheets of Palomar Holdings, Inc. and subsidiaries (the Company) 
as of December 31, 2024 and 2023, the related consolidated statements of income and comprehensive income, stockholders' 
equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial 
statement schedules listed in the Index at Item 15(a)  (collectively referred to as the “consolidated financial statements”). In 
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the 
Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in 
the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. 
  
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) 
(PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in 
Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway 
Commission (2013 framework), and our report dated February 25, 2025 expressed an unqualified opinion thereon. 
  
Basis for Opinion 
  
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion 
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB 
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the 
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 
  
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether 
due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial 
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included 
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also 
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the 
overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 
  
Critical Audit Matter  
  
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements 
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or 
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex 
judgments. The communication of the critical audit matter does not alter in any way our opinion on the 
consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, 
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 
  
  
 
 

86 
 
Valuation of Reserve for Losses and Loss Adjustment Expenses 
  
Description of 
the Matter 
At December 31, 2024, the reserve for losses and loss adjustment expenses (LAE) is $503,382 
(in thousands). As explained in Notes 2 and 9 to the consolidated financial statements, the 
reserve for losses and LAE represents management's best estimate for unpaid claims and claim 
adjustment expenses on reported losses and estimates of losses incurred but not reported 
(IBNR), net of salvage and subrogation recoveries. The liability is based on individual claims, 
case reserves and other estimates reported by policyholders, as well as management estimates of 
ultimate losses and loss adjustment expenses. Inherent in the estimates of ultimate losses and 
loss adjustment expenses are expected trends in claims severity and frequency and other factors 
that could vary significantly as claims are settled. IBNR reserves include an estimate for future 
loss payments on incurred claims not yet reported and for expected development on reported 
claims. There is significant uncertainty inherent in determining management’s best estimate of 
IBNR, which is sensitive to significant assumptions including the selection of actuarial methods 
and reported and paid loss emergence patterns. 
  
Auditing management’s best estimate of IBNR reserves was complex due to the highly 
judgmental nature of the assumptions, including selection of actuarial methods and reported and 
paid loss emergence patterns, used in the valuation process. These assumptions have a 
significant effect on the valuation of reserves for IBNR claims. 
  
How We Addressed  
the Matter in Our  
Audit 
We obtained an understanding, evaluated the design and tested the operating effectiveness of 
the Company’s controls over the process for estimating IBNR reserves. This included, among 
other procedures, testing management review controls in place over the review and approval of 
methods and assumptions used in estimating IBNR reserves.  
  
To test IBNR reserves, our audit procedures included, among others, testing the completeness 
and accuracy of the data used in the calculation by testing reconciliations of the underlying 
claims and policyholder data recorded in the source systems to the actuarial reserving 
calculations and comparing a sample of incurred and paid claims to source documentation. With 
the assistance of our actuarial specialists, we evaluated the Company’s selection and weighting 
of actuarial methods compared to methods used in prior periods and in the industry for the 
specific types of insurance. To evaluate the significant assumptions used by management, we 
compared the assumptions to current and historical claims trends and to current industry 
benchmarks. We compared the Company’s recorded reserves to a range of reasonable reserve 
estimates developed by our actuarial specialists based on independently selected methods and 
assumptions. We also compared the results of the reserve study prepared by the Company’s 
actuarial specialists to management’s recorded reserve.  Additionally, we performed a hindsight 
analysis of the prior period estimates using subsequent claims development. 
  
   
/s/ Ernst & Young LLP 
We have served as the Company’s auditor since 2016 
San Francisco, California 
February 25, 2025 
  
  
  
 
 

87 
Palomar Holdings, Inc. and Subsidiaries 
Consolidated Balance Sheets 
(in thousands, except shares and par value data) 
  
 
  
December 31, 
2024 
    
December 31, 
2023 
  
Assets 
   
     
  
Investments: 
   
     
  
Fixed maturity securities available for sale, at fair value (amortized cost: $973,330 
in 2024; $675,130 in 2023) ......................................................................................   $ 
939,046    $
643,799  
Equity securities, at fair value (cost: $32,987 in 2024; $43,003 in 2023) ....................     
40,529      
43,160  
Equity method investment ...........................................................................................     
2,277      
2,617  
Other investments ........................................................................................................     
5,863      
—  
Total investments ............................................................................................................     
987,715      
689,576  
Cash and cash equivalents ...........................................................................................     
80,438      
51,546  
Restricted cash .............................................................................................................     
101      
306  
Accrued investment income .........................................................................................     
8,440      
5,282  
Premium receivable .....................................................................................................     
305,724      
261,972  
Deferred policy acquisition costs, net of ceding commissions and fronting fees ........     
94,881      
60,990  
Reinsurance recoverable on paid losses and loss adjustment expenses .......................     
47,076      
32,172  
Reinsurance recoverable on unpaid losses and loss adjustment expenses ...................     
348,083      
244,622  
Ceded unearned premiums ...........................................................................................     
276,237      
265,808  
Prepaid expenses and other assets................................................................................     
91,086      
72,941  
Deferred tax assets, net ................................................................................................     
8,768      
10,119  
Property and equipment, net ........................................................................................     
429      
373  
Goodwill and intangible assets, net .............................................................................     
13,242      
12,315  
Total assets ......................................................................................................................   $ 
2,262,220    $
1,708,022  
Liabilities and stockholders' equity 
      
        
  
Liabilities: 
      
        
  
Accounts payable and other accrued liabilities ............................................................   $ 
70,079    $
42,376  
Reserve for losses and loss adjustment expenses .........................................................     
503,382      
342,275  
Unearned premiums .....................................................................................................     
741,692      
597,103  
Ceded premium payable ..............................................................................................     
190,168      
181,742  
Funds held under reinsurance treaty ............................................................................     
27,869      
13,419  
Income taxes payable ...................................................................................................     
—      
7,255  
Borrowings from credit agreements .............................................................................     
—      
52,600  
Total liabilities.................................................................................................................     
1,533,190      
1,236,770  
Stockholders' equity: 
      
        
  
Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of December 31, 
2024 and December 31, 2023, 0 shares issued and outstanding as of December 31, 
2024 and December 31, 2023 ...................................................................................     
—      
—  
Common stock, $0.0001 par value, 500,000,000 shares authorized, 26,529,402 and 
24,772,987 shares issued and outstanding as of December 31, 2024 and December 
31, 2023, respectively ..............................................................................................     
3      
3  
Additional paid-in capital ............................................................................................     
493,656      
350,597  
Accumulated other comprehensive loss .......................................................................     
(26,845)     
(23,991 ) 
Retained earnings .........................................................................................................     
262,216      
144,643  
Total stockholders' equity ................................................................................................     
729,030      
471,252  
Total liabilities and stockholders' equity .........................................................................   $ 
2,262,220    $
1,708,022  
      
See accompanying notes. 
   
 
 

88 
Palomar Holdings, Inc. and Subsidiaries 
Consolidated Statements of Income and Comprehensive Income 
(in thousands, except shares and per share data) 
  
  
Year Ended December 31, 
  
  
2024 
  
2023 
  
2022 
  
Revenues: 
    
      
      
  
Gross written premiums ........................................................................ $ 
1,541,962  $ 
1,141,558  $ 
881,868  
Ceded written premiums .......................................................................   
(897,111)   
(731,531)   
(524,575) 
Net written premiums ........................................................................   
644,851    
410,027    
357,293  
Change in unearned premiums ..............................................................   
(134,164)   
(64,114)   
(40,827) 
Net earned premiums .........................................................................   
510,687    
345,913    
316,466  
Net investment income ..........................................................................   
35,824    
23,705    
13,877  
Net realized and unrealized gains (losses) on investments ....................   
4,568    
2,941    
(7,529) 
Commission and other income ..............................................................   
2,784    
3,367    
4,272  
Total revenues ....................................................................................   
553,863    
375,926    
327,086  
Expenses: 
    
      
      
  
Losses and loss adjustment expenses ....................................................   
134,759    
72,592    
78,672  
Acquisition expenses, net of ceding commissions and fronting fees.....   
149,657    
107,745    
110,771  
Other underwriting expenses .................................................................   
117,113    
88,172    
69,219  
Interest expense .....................................................................................   
1,138    
3,775    
873  
Total expenses ...................................................................................   
402,667    
272,284    
259,535  
Income before income taxes ..............................................................   
151,196    
103,642    
67,551  
Income tax expense ...............................................................................   
33,623    
24,441    
15,381  
Net income ........................................................................................ $ 
117,573  $ 
79,201  $ 
52,170  
Other comprehensive income, net: 
    
      
      
  
Net unrealized gains (losses) on securities available for sale ................   
(2,854)   
12,524    
(41,827) 
Total comprehensive income ........................................................... $ 
114,719  $ 
91,725  $ 
10,343  
Per Share Data: 
    
      
      
  
Basic earnings per share ........................................................................ $ 
4.61  $ 
3.19  $ 
2.07  
Diluted earnings per share ..................................................................... $ 
4.48  $ 
3.13  $ 
2.02  
  
    
      
      
  
Weighted-average common shares outstanding: 
    
      
      
  
Basic ......................................................................................................   
25,520,343    
24,822,004    
25,243,397  
Diluted ...................................................................................................   
26,223,842    
25,327,091    
25,796,008  
  
See accompanying notes. 
  
  
  
 
 

89 
Palomar Holdings, Inc. and Subsidiaries 
Consolidated Statements of Stockholders’ Equity 
(in thousands, except share data) 
  
  
   
  
    
  
    
  
   Accumulated     
  
    
  
  
  
  Number of     
  
    
  
   
Other 
    
  
    
  
  
  
  Common     
  
   Additional    Comprehensive    
  
   
Total 
  
  
  
Shares 
   Common    Paid-In    
Income 
   Retained    Stockholders'  
  
  Outstanding   
Stock 
   Capital    
(Loss) 
   Earnings    
Equity 
  
Balance at December 31, 2021 .....   25,428,929   $ 
3   $ 318,902   $ 
5,312   $ 
69,952   $ 
394,169  
  
     
      
      
      
      
      
  
Other comprehensive loss, net of 
tax .............................................   
—    
—    
—    
(41,827)   
—    
(41,827) 
Stock-based compensation ...........   
—    
—    
11,624    
—    
—    
11,624  
Issuance of common stock via 
employee stock purchase plan ..   
13,990    
—    
760    
—    
—    
760  
Issuance of common stock via 
equity incentive plan .................   
205,963    
—    
2,272    
—    
—    
2,272  
Repurchases of common stock .....   
(621,415)   
—    
—    
—    
(34,414)   
(34,414) 
Net income ...................................   
—    
—    
—    
—    
52,170    
52,170  
Balance at December 31, 2022 .....   25,027,467   $ 
3   $ 333,558   $ 
(36,515)  $ 
87,708   $ 
384,754  
  
     
      
      
      
      
      
  
Other comprehensive income,  
net of tax ...................................   
—    
—    
—    
12,524    
—    
12,524  
Stock-based compensation ...........   
—    
—    
14,913    
—    
—    
14,913  
Issuance of common stock  
via employee stock purchase 
plan ...........................................   
17,080    
—    
799    
—    
—    
799  
Issuance of common stock via 
equity incentive plan .................   
147,341    
—    
1,237    
—    
—    
1,237  
Policy holder contribution to 
surplus .......................................   
—    
—    
90    
—    
—    
90  
Repurchases of common stock .....   
(418,901)   
—    
—    
—    
(22,266)   
(22,266) 
Net income ...................................   
—    
—    
—    
—    
79,201    
79,201  
Balance at December 31, 2023 .....   24,772,987   $ 
3   $ 350,597   $ 
(23,991)  $ 144,643   $ 
471,252  
  
     
      
      
      
      
      
  
Other comprehensive loss, net of 
tax .............................................   
—    
—    
—    
(2,854)   
—    
(2,854) 
Stock-based compensation ...........   
—    
—    
16,685    
—    
—    
16,685  
Issuance of common stock in 
stock offering, net of offering 
costs ..........................................   
1,380,000    
—    
115,724    
—    
—    
115,724  
Issuance of common stock  
via employee stock purchase 
plan ...........................................   
17,100    
—    
902    
—    
—    
902  
Issuance of common stock via 
equity incentive plan .................   
359,315    
—    
6,990    
—    
—    
6,990  
Policy holder contribution to 
surplus .......................................   
—    
—    
2,758    
—    
—    
2,758  
Net income ...................................   
—    
—    
—    
—    
117,573    
117,573  
Balance at December 31, 2024 .....   26,529,402   $ 
3   $ 493,656   $ 
(26,845)  $ 262,216   $ 
729,030  
  
See accompanying notes. 
   
  
 
 

90 
Palomar Holdings, Inc. and Subsidiaries 
Consolidated Statements of Cash Flows 
(in thousands) 
  
  
  
Year Ended December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
Operating activities 
      
        
        
  
Net income .........................................................................................  $ 
117,573    $
79,201    $
52,170  
Adjustments to reconcile net income to net cash provided by 
operating activities: 
      
        
        
  
Stock-based compensation expense ................................................    
16,685      
14,913      
11,624  
Depreciation and amortization expense ..........................................    
5,106      
4,503      
4,115  
Allowance for credit loss on fixed maturity securities ....................    
—      
—      
236  
Net realized and unrealized losses (gains) on investments .............    
(4,568)     
(2,941 )     
7,529  
Amortization of premium on fixed maturity securities ...................    
(945)     
(9 )     
1,607  
Deferred income tax expense ..........................................................    
2,110      
(2,826 )     
(3,519) 
Changes in operating assets and liabilities: 
      
        
        
  
Accrued investment income ........................................................    
(3,158)     
(1,505 )     
(1,052) 
Premium receivable .....................................................................    
(43,752)     
(99,114 )     
(74,846) 
Deferred policy acquisition costs ................................................    
(33,891)     
(4,250 )     
(787) 
Reinsurance recoverables ............................................................    
(118,365)     
(83,181 )     
(36,298) 
Ceded unearned premiums ..........................................................    
(10,429)     
(61,724 )     
(145,768) 
Prepaid expenses and other assets ...............................................    
(15,704)     
(24,885 )     
(4,017) 
Accounts payable and other accrued liabilities ...........................    
29,178      
15,666      
5,426  
Reserve for losses and loss adjustment expenses ........................    
161,107      
110,860      
58,049  
Unearned premiums ....................................................................    
144,589      
125,789      
186,649  
Ceded premiums payable ............................................................    
8,426      
35,615      
108,667  
Funds held under reinsurance treaty ............................................    
14,450      
2,739      
(202) 
Income taxes payable ..................................................................    
(7,255)     
7,255      
—  
Net cash provided by operating activities ................................    
261,157      
116,106      
169,583  
Investing activities 
      
        
        
  
Purchases of property and equipment .................................................    
(243)     
(15 )     
(313) 
Capitalized software costs ..................................................................    
(5,803)     
(6,744 )     
(5,623) 
Purchases of fixed maturity securities ................................................    
(601,410)     
(233,770 )     
(382,114) 
Purchases of equity securities .............................................................    
(202)     
(945 )     
(10,518) 
Purchase of equity method investment ...............................................    
—      
(3,000 )     
—  
Sales and maturities of fixed maturity securities ................................    
301,847      
120,285      
242,726  
Sales of equity securities ....................................................................    
9,014      
295      
—  
Change in securities receivable or payable, net ..................................    
(1,475)     
950      
(950) 
Investments in limited partnerships ....................................................    
(5,485)     
—      
—  
Acquisitions, net of cash acquired ......................................................    
—      
(5,534 )     
(15) 
Purchase of policy renewal rights .......................................................    
(2,487)     
—      
—  
Net cash used in investing activities ........................................    
(306,244)     
(128,478 )     
(156,807) 
Financing activities 
      
        
        
  
Net (payments on) proceeds from line of credit .................................    
(52,600)     
16,200      
36,400  
Proceeds from common stock issued via employee stock purchase 
plan .................................................................................................    
902      
799      
760  
Proceeds from common stock issued via stock option exercises ........    
6,990      
1,237      
2,272  
Policy holder contribution to surplus .................................................    
2,758      
90      
—  
Repurchase of common stock .............................................................    
—      
(22,266 )     
(34,415) 
Proceeds from stock offering, net of offering costs ............................    
115,724      
—      
—  
Net cash provided by (used in) financing activities ............................    
73,774      
(3,940 )     
5,017  
Net increase in cash, cash equivalents and restricted cash .................    
28,687      
(16,312 )     
17,793  
Cash, cash equivalents and restricted cash at beginning of period .....    
51,852      
68,164      
50,371  
Cash, cash equivalents and restricted cash at end of period ...............  $ 
80,539    $
51,852    $
68,164  
  
      
        
        
  
Supplementary cash flow information: 
      
        
        
  
Cash paid for income taxes ................................................................  $ 
38,454    $
21,124    $
18,890  
Cash paid for interest ..........................................................................  $ 
1,048    $
3,682    $
704  

91 
The following table summarizes our cash and cash equivalents and restricted cash within the consolidated balance sheets (in 
thousands): 
  
  
  
December 31, 
2024 
    
December 31, 
2023 
  
Cash and cash equivalents 
  $ 
80,438    $ 
51,546  
Restricted cash 
    
101      
306  
Cash and cash equivalents and restricted cash 
  $ 
80,539    $ 
51,852  
  
See accompanying notes. 
  
  
 
 

92 
Palomar Holdings, Inc. and Subsidiaries 
Notes to Consolidated Financial Statements 
  
1. Summary of Operations and Basis of Presentation 
  
Summary of Operations 
  
Palomar Holdings, Inc. (the “Company”) is a Delaware incorporated insurance holding company that was founded 
in 2014. The Company has several wholly owned subsidiaries including an Oregon domiciled insurance company, Palomar 
Specialty Insurance Company (“PSIC”), a Bermuda based reinsurance company, Palomar Specialty Reinsurance Company 
Bermuda Ltd. (“PSRE”), an Arizona domiciled surplus lines insurance company, Palomar Excess and Surplus Insurance 
Company (“PESIC”), a California domiciled property and casualty insurance agency, Palomar Insurance Agency, DBA 
Palomar General Insurance Agency (“PGIA”), and a Delaware incorporated management company, Palomar Underwriters 
Exchange Organization, Inc. ("PUEO"). 
  
PSIC is a property and casualty insurance company domiciled in the state of Oregon.  PSIC is licensed to 
underwrite insurance on an admitted basis in 44 states in the United States, as of December 31, 2024, mainly through 
managing general insurance agencies, wholesale brokers, and independent agents. 
  
PSRE is a Bermuda captive reinsurance company that has historically been used to reinsure certain premiums on a 
quota share basis exclusively for PSIC. 
  
PESIC is an Arizona domiciled surplus lines insurance company. PESIC is licensed in Arizona to write surplus 
lines policies across all the Company’s lines of business and was formed and began writing policies in 2020. 
  
PGIA is a property and casualty general insurance agency for PSIC, PESIC, and unaffiliated insurance carriers. As 
a general insurance agency, PGIA assists in developing insurance products, underwriting insurance policies, and receiving 
and disbursing funds from premium and loss transactions under contracts on behalf of insurance companies. PGIA earns 
commissions from the product development, marketing, and servicing of the insurance companies’ programs. PGIA also 
earns fee income from policyholder transactions. 
  
PUEO is a Delaware corporation that was formed in 2023 and provides management services to Laulima 
Exchange ("Laulima"), a Hawaii domiciled reciprocal exchange, as its attorney-in-fact. Laulima was formed in 2023 and is 
comprised of an unincorporated association of Hawaii homeowners ("subscribers") that agree to insure one another.  
  
The Company operates as an insurance holding company system and is subject to the insurance holding company 
laws of the States of Oregon and Arizona, the states in which PSIC and PESIC are domiciled. The Company is also 
commercially domiciled in California, making it subject to California insurance holding company laws. These statutes 
require that each insurance company in the system register with the insurance department of its state of domicile and 
furnish information concerning the operations of companies within the holding company system that may materially affect 
the operations, management or financial condition of the insurers within the system and domiciled in that state. 
  
Segment Reporting 
  
The Company has a single operating segment, the property and casualty insurance business. The Company's chief 
operating decision maker ("CODM") is the Chief Executive Officer.  The significant segment expenses provided to the 
CODM are consistent with the categories shown in the Company's Consolidated Statements of Income and Comprehensive 
Income and there are no other segment items used by the CODM.  The CODM reviews the Company's revenue, expenses 
and net income as reported under GAAP, which is the primary measure of segment profit or loss. The CODM reviews these 
measures, comparing them to prior periods and expectations, and makes resource allocation decisions based on the 
analysis. While the Company’s CODM also reviews the revenue streams attributable to individual products, operations are 
managed, resources are allocated, and financial performance is evaluated on a consolidated basis. 
  
Basis of Presentation 
  
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally 
accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. 
The consolidated financial statements also include the accounts of Laulima, as Laulima is a variable interest entity ("VIE") 
for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in 
consolidation. 

93 
Use of Estimates 
  
The preparation of financial statements in conformity with GAAP requires management to make estimates and 
assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Such estimates 
and assumptions could change in the future as more information becomes known, which could impact the amounts reported 
and disclosed herein. All revisions to accounting estimates are recognized in the period in which the estimates are revised. 
Significant estimates reflected in the Company’s consolidated financial statements include, but are not limited to, reserves 
for losses and loss adjustment expenses, reinsurance recoverables on unpaid losses, and the fair values of investments. 
  
  
2. Significant Accounting Policies 
  
Cash and Cash Equivalents 
  
Cash and cash equivalents include time deposits and marketable securities with original maturities of three months 
or less at acquisition and are stated at cost, which approximates fair value. The Company maintains cash balances in 
federally insured financial institutions. 
  
Restricted Cash 
  
Restricted cash includes cash on deposit with reinsurance carriers. Restricted cash also includes cash held in a 
fiduciary capacity for the benefit of third-party insurance carriers. 
  
Investments 
  
All of the Company’s investments in fixed maturity securities are classified as available-for-sale and are carried at 
fair value. 
  
Investment income consists primarily of interest and dividends. Interest income is recognized on an accrual basis. 
Premiums and discounts on mortgage-backed securities and asset-backed securities are amortized or accrued using the 
prospective method which considers anticipated prepayments at the date of purchase. To the extent that the estimated lives 
of such securities change as a result of changes in estimated prepayment rates, the adjustments are included in net 
investment income using the prospective method. Dividend income is recognized on the ex-dividend date. Net investment 
income represents investment income, net of expenses. 
  
Unrealized gains and losses related to fixed maturity securities are included in accumulated other comprehensive 
income as a separate component of stockholders’ equity. Equity securities are carried at fair value with unrealized gains and 
losses included as a component of net income on the Company’s consolidated statement of income and comprehensive 
income. The Company uses the specific-identification method to determine the cost of fixed maturity securities sold and the 
first-in, first-out method for lots of equity securities sold. The Company has one investment in a limited liability company 
which is accounted for under the equity method of accounting whereby the investment carrying amount is adjusted in 
subsequent periods to reflect the Company's share of earnings or losses. Gains or losses from this equity method investment 
are recognized as a component of realized and unrealized gains or losses on investments in the Company's Statement of 
Income and Comprehensive Income. The Company also invests a small portion of its portfolio in limited partnerships, 
which are classified as other investments on the consolidated balance sheet. These investments are measured at estimated 
fair value utilizing a net asset value per share (or its equivalent) as a practical expedient. Gains or losses from other 
investments are recognized as a component of realized and unrealized gains or losses on investments in the Company's 
Statement of Income and Comprehensive Income. 
  
The Company reviews all securities with unrealized losses on a quarterly basis to assess whether the decline in the 
securities fair value necessitates the recognition of an allowance for credit losses. Factors considered in the review include 
the extent to which the fair value has been less than amortized cost, and current market interest rates and whether the 
unrealized loss is credit-driven or a result of changes in market interest rates. The Company also considers factors specific 
to the issuer including the general financial condition of the issuer, the issuers industry and future business prospects, any 
past failure of issuer to make scheduled interest or principal payments, and the payment structure of the investment and the 
issuers ability to make contractual payments on the investment. 
  
 
 

94 
The Company also considers whether it intends to sell the security or if it is more likely than not that it will be 
required to sell the security before recovery of its amortized cost. When assessing whether it intends to sell a fixed-maturity 
security or if it is likely to be required to sell a fixed-maturity security before recovery of its amortized cost, the Company 
evaluates facts and circumstances including, but not limited to, decisions to reposition the investment portfolio, potential 
sales of investments to meet cash flow needs, and potential sales of investments to capitalize on favorable pricing. 
   
For fixed-maturity securities where a decline in fair value is below the amortized cost basis and the Company 
intends to sell the security, or it is more likely than not that the Company will be required to sell the security before 
recovery of its amortized cost, a credit-loss charge is recognized in net income based on the fair value of the security at the 
time of assessment. For fixed-maturity securities that the Company has the intent and ability to hold, the Company 
compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. The 
extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the 
security represents the credit-related portion of the impairment, which is recognized in net income through an allowance for 
credit losses. Any remaining decline in fair value represents the noncredit portion of the impairment, which is recognized in 
other comprehensive income. 
  
The Company reports accrued interest receivable as a component of accrued investment income on its 
consolidated balance sheet which is presented separately from available-for-sale securities. The Company does not measure 
an allowance for credit losses on accrued interest receivable and instead would write off accrued interest receivable at the 
time an issuer defaults or is expected to default on payments. 
  
Fair Value 
  
Fair value is defined as the price that the Company would receive upon selling an investment in an orderly 
transaction to an independent buyer in the principal or most advantageous market of the investment. 
  
The three-tier hierarchy of inputs is summarized in the three broad levels listed below: 
  
Level 1—Unadjusted quoted prices are available in active markets for identical investments as of the reporting 
date. 
  
Level 2—Pricing inputs are quoted prices for similar investments in active markets; quoted prices for identical or 
similar investments in inactive markets; or valuation based on models where the significant inputs are observable or can be 
corroborated by observable market data. 
  
Level 3—Pricing inputs into models are unobservable for the investment. The unobservable inputs require 
significant management judgment or estimation. 
  
To measure fair value, the Company obtains quoted market prices for its investment securities from its outside 
investment managers. If a quoted market price is not available, the Company uses prices of similar securities. The fair 
values obtained from the outside investment managers are reviewed for reasonableness and any discrepancies are 
investigated for final valuation. 
  
The fair value of the Company’s investments in fixed maturity securities is estimated using relevant inputs, 
including available market information, benchmark curves, benchmarking of like securities, sector groupings, and matrix 
pricing. An Option Adjusted Spread model is also used to develop prepayment and interest rate scenarios. Industry standard 
models are used to analyze and value securities with embedded options or prepayment sensitivities. These fair value 
measurements are estimated based on observable, objectively verifiable market information rather than market quotes; 
therefore, these investments are classified and disclosed in Level 2 of the hierarchy. 
  
The fair value of the Company’s investments in equity securities is based on quoted prices available in active 
markets and classified and disclosed in Level 1 of the hierarchy. 
  
 
 
 

95 
Variable Interest Entities ("VIE") 
  
A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional 
financial support or is structured such that equity investors lack the ability to make significant decisions relating to the 
entity’s operations through voting rights or do not participate in the gains and losses of the entity. The Company 
consolidates VIEs in which the Company is deemed the primary beneficiary. The primary beneficiary is the entity that has 
both (1) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE and (2) 
the power to direct the activities of the VIE that most significantly affect that entity’s economic performance. 
  
Concentration of Credit Risk 
  
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of 
cash and cash equivalents, fixed maturity securities and reinsurance recoverables. The Company places its cash and cash 
equivalents with high credit quality financial institutions and its fixed maturity securities in securities of the U.S. 
government, U.S. government agencies, and high credit quality issuers of debt securities. The Company evaluates the 
financial condition of its reinsurers and reinsures its business with highly rated reinsurers and sometimes requires letters of 
credit or retains funds from reinsurers (see Note 10). 
  
Premiums Receivable 
  
Premiums receivable represent amounts due from policyholders, insurance agents, or program administrators for 
policies written. Generally, premiums are collected prior to providing risk coverage, minimizing the Company’s exposure 
to credit risk. Premiums receivable are short-term in nature and due within a year. The Company has established an 
allowance for uncollectible premiums related to its credit risk, which it reviews on a quarterly basis and adjusts as 
appropriate. The company considers the current economic environment, specific regulatory developments, and historic 
payment and cancelation trends by line of business and location when determining whether to record an allowance for 
uncollectible premiums. 
  
The Company recorded an immaterial allowance for uncollectible premiums as of December 31, 2024 
and December 31, 2023, and believes that all other amounts are collectable. 
  
Earned Premiums 
  
Gross premiums written are recorded at policy inception and are earned as revenue ratably over the term of the 
respective policies. Premiums written not yet recognized as revenue are reflected as unearned premiums on the balance 
sheet, or as advanced premiums if received prior to the policy effective date. Premiums written where cash is not yet 
received are recognized as premiums receivable. 
  
A premium deficiency is recognized if the sum of expected losses and loss adjustment expenses, unamortized 
acquisition costs, and policy maintenance costs exceeds the remaining unearned premiums. A premium deficiency would 
first be recognized by charging any unamortized acquisition costs to expense to the extent required to eliminate the 
deficiency. If the premium deficiency were greater than unamortized acquisition costs, a liability would be accrued for the 
excess deficiency. The Company does not consider anticipated investment income when determining if a premium 
deficiency exists. There was no premium deficiency at December 31, 2024 or 2023. 
  
Deferred Policy Acquisition Costs 
  
The costs of successfully acquiring new business, principally commission expense and premium taxes, are 
deferred and amortized over the terms of the policies in force, net of any ceding commissions or fronting fees and are 
shown as acquisition expenses in the accompanying consolidated statements of income and comprehensive income. 
  
Commission and Other Income 
  
Commission and other income is comprised of commissions and fees earned in conjunction with underwriting 
policies. Commission and fee income is earned at the time the policy is written. 
  
Property and Equipment 
  
Property and equipment are capitalized and carried at cost less accumulated depreciation. Depreciation for 
property and equipment is calculated on a straight-line basis using useful lives of 3 to 5 years. Leasehold improvements and 
other fixed assets are capitalized and depreciated over the useful lives of the properties and equipment. Expenditure for 

96 
maintenance and repairs are charged to operations as incurred. Upon disposition, the asset cost and related depreciation are 
removed from the accounts and the resulting gain or loss is included in the Company’s results of operations. 
   
Capitalized Software 
  
Costs associated with the implementation of certain internal systems are capitalized and carried at capitalized cost 
less accumulated amortization and are included as a component of prepaid expenses and other assets on the Company’s 
consolidated balance sheet. Costs capitalized include internal personnel costs, external developer costs, and interest. The 
implementation costs relate to systems built on software which the Company purchases under a cloud computing 
arrangement and accounts for as a service contract. As such, capitalized costs are amortized over the term of the service 
contract. 
  
Intangible Assets and Goodwill 
  
Intangible assets consist of both finite and indefinite lived assets. Finite lived intangible assets consist of customer 
relationships which are amortized over a period of 8 years. Indefinite lived intangible assets consist primarily of state 
licenses acquired upon formation of the Company. Goodwill was recognized as a result of a business acquisition during 
2023. Intangible assets and goodwill are initially recognized and measured at fair value and are subsequently evaluated for 
impairment annually or more frequently if circumstances warrant. No impairments of intangible assets or goodwill 
were recognized for the years ended December 31, 2024, 2023 or 2022. 
  
Impairment of Long-Lived Assets 
  
Long-lived assets with finite lives are tested for impairment whenever recognized events or changes in 
circumstances indicate the carrying value of these assets may not be recoverable. If indicators of impairment are present, 
the fair value is calculated using estimated future cash flows expected to be generated from the use of those assets. An 
impairment loss is recognized only if the carrying amount of a long-lived asset or asset group is not recoverable and 
exceeds its fair value. The carrying amount of a long-lived asset or asset group is not recoverable if it exceeds the sum of 
the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group. This 
assessment is based on the carrying amount of the asset or asset group at the date it is tested for recoverability. An 
impairment loss is measured as the amount by which the carrying amount of a long-lived asset or asset group exceeds its 
fair value. No impairments of long-lived assets were recognized for the years ended December 31, 2024, 2023 or 2022. 
  
Reserve for Losses and Loss Adjustment Expenses 
  
The reserve for unpaid losses and loss adjustment expenses includes estimates for unpaid claims and claim 
adjustment expenses on reported losses and estimates of losses incurred but not reported (“IBNR”), net of salvage and 
subrogation recoveries. The liability is based on individual claims, case reserves and other estimates reported by 
policyholders, as well as management estimates of ultimate losses and loss adjustment expenses. Inherent in the estimates 
of ultimate losses and loss adjustment expenses are expected trends in claims severity and frequency and other factors that 
could vary significantly as claims are settled. 
  
The Company’s estimates of ultimate losses and loss adjustment expenses are based in part upon the estimation of 
claims resulting from natural disasters such as hurricanes and earthquakes. Estimation by management of the ultimate 
losses and loss adjustment expenses resulting from catastrophic events is inherently difficult because of the potential 
severity of property catastrophe claims. Therefore, the Company uses both proprietary and commercially available models, 
as well as historic claims experience, for purposes of providing an estimate of ultimate losses and loss adjustment expenses. 
  
Reserves for IBNR are established in accordance with industry practice to provide for (i) the estimated amount of 
future loss payments on incurred claims not yet reported, and (ii) potential development on reported claims. IBNR reserves 
are estimated based on generally accepted actuarial reserving techniques that consider quantitative loss experience data and, 
where appropriate, qualitative factors. 
   
Ultimate losses and loss adjustment expenses may vary materially from the amounts provided in the consolidated 
financial statements. Estimates of unpaid losses and loss adjustment expenses are reviewed regularly and, as experience 
develops and new information becomes known, the liabilities are adjusted as necessary. Such adjustments, if any, are 
reflected in operations in the period in which they become known and are accounted for as changes in estimates. The 
Company does not discount its liability for unpaid losses and loss adjustment expenses. 
  
 
 

97 
Reinsurance 
  
The Company purchases excess of loss and quota share reinsurance to protect it against the impact of losses. The 
Company also writes premiums under fronting agreements where it cedes the majority of premium and risk to reinsurers in 
exchange for a fronting fee. Reinsurance premiums, commissions, and ceded unearned premiums are accounted for on 
bases consistent with the underlying terms of the reinsurance contracts and in proportion to the amount of insurance 
protection provided. The Company receives ceding commissions and fronting fees in connection with quota share and 
fronting reinsurance contracts. The ceding commissions and fronting fees are capitalized and amortized as a reduction of 
acquisition expenses. Amounts applicable to ceded unearned premiums are reported as assets in the accompanying 
consolidated balance sheets. Premiums earned and losses and loss adjustment expenses incurred are stated in the 
accompanying consolidated statements of income and comprehensive income net of amounts ceded to reinsurers. 
  
Reinsurance recoverables represent balances due to the Company from its reinsurers for paid and unpaid losses 
and loss adjustment expenses. The Company is exposed to credit losses from reinsurers being unable to meet their 
obligations. The Company evaluates the financial condition of potential reinsurers and reinsures its business with highly 
rated reinsurers with a rating of “A-“ (Excellent) (Outlook Stable) or better from A.M. Best. Reinsurers who do not meet 
the Company’s rating criteria are required to post collateral. The Company reviews credit quality of its reinsurers on a 
quarterly basis. The Company’s reinsurance contracts also include special termination provisions that allow the Company 
to cancel and replace any participating reinsurer that is downgraded below a rating of “A−” from A.M. Best, or whose 
surplus drops by more than 20%. Historically, the Company has experienced minimal credit losses from reinsurance 
recoverables and did not have an allowance for uncollectible reinsurance recoverables as of December 31, 2024 or 
December 31, 2023. 
  
Stock Based Compensation Expense 
  
Stock-based compensation expense is recognized on a straight-line basis over the vesting period of awards. The 
Company does not apply a forfeiture rate to unvested awards and accounts for forfeitures as they occur. For stock option 
grants, the fair value of awards is estimated using the Black Scholes Model. The fair value of restricted stock units is 
determined using the closing price of the Company's common stock on the grant date. The fair value of performance stock 
units containing employee service or company financial performance-based conditions is determined using the closing price 
of the Company's common stock on the grant date. The fair value of performance stock units containing conditions based 
on performance of the Company’s stock is determined using a Monte Carlo simulation. All stock-based compensation is 
included in other underwriting expenses in the Company’s consolidated statements of income and comprehensive income. 
  
Income Taxes 
  
The Company is taxed as a property/casualty insurer for federal income tax purposes. Deferred income tax assets 
and liabilities are determined based on the difference between the financial statement and the tax bases of assets and 
liabilities, using enacted tax rates expected to be in effect during the year in which the basis differences reverse. The effect 
on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation 
allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. 
  
The Company recognizes the tax benefit of uncertain tax positions where the position is more likely than not to be 
sustained assuming examination by taxing authorities. Based on its evaluation for the tax years ended December 31, 2024 
and 2023, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its 
financial statements. The Company recognizes interest and penalties related to uncertain tax positions, if any, as a 
component of income tax expense. The Company has not been assessed interest or penalties by any major tax jurisdictions 
for the respective tax years ended December 31, 2024, 2023, or 2022. 
  
Earnings Per Share 
  
Basic earnings per share is calculated by dividing net income by the weighted-average common shares outstanding 
for the period. Diluted earnings per share reflects the dilution which could occur if equity-based awards are converted into 
common share equivalents as calculated using the treasury stock method. When inclusion of additional common share 
equivalents increases the earnings per share or reduces the loss per share, the effect on earnings per share is anti-dilutive, 
and the diluted net earnings or net loss per share is computed excluding these common share equivalents. 
  
 
 

98 
Recently adopted accounting pronouncements 
  
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to 
Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily 
through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand 
the components of a segment's profit or loss to assess potential future cash flows for each reportable segment and the entity 
as a whole. The amendments expand a public entity's segment disclosures by requiring disclosure of significant segment 
expenses that are regularly provided to the chief operating decision maker ("CODM"), clarifying when an entity may report 
one or more additional measures to assess segment performance, requiring enhanced interim disclosures, providing new 
disclosure requirements for entities with a single reportable segment, and requiring other new disclosures. ASU 2023-07 is 
effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after 
December 15, 2024. The Company adopted this guidance beginning with this Annual Report on Form 10-K and the 
adoption did not have a significant impact to the Company's required disclosures. 
 
Recently issued accounting pronouncements not yet adopted 
  
Income Statement Expenses 
  
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which will 
require disclosure of additional information about specific expense categories in the notes to financial statements for all 
public business entities. ASU 2024-03 is effective for annual reporting beginning with the fiscal year ending December 31, 
2027, and for interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the impact the 
adoption of this standard will have on its consolidated financial statements. 
  
Income Taxes 
  
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax 
Disclosures. ASU 2023-09 requires public business entities to disclose additional information with respect to the 
reconciliation of the effective tax rate to the statutory rate. Additionally, public business entities will need to disaggregate 
federal, state and foreign taxes paid in their financial statements. ASU 2023-09 is effective for public business entities for 
fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024. The Company is currently 
evaluating the impact the adoption of this standard will have on its consolidated financial statements. 
  
  
3. Investments 
  
The Company’s available-for-sale investments are summarized as follows: 
  
December 31, 2024 
  
Amortized 
Cost or 
Cost 
    
Gross 
Unrealized 
Gains 
    
Gross 
Unrealized 
Losses 
    
Allowance 
for Credit 
Losses 
    Fair Value   
  
  
(in thousands) 
  
Fixed maturities: 
   
     
     
     
     
  
U.S. Governments .............................................   $ 
33,449    $ 
6    $ 
(649)   $ 
—    $
32,806  
U.S. States, Territories, and Political 
Subdivisions ..................................................     
10,606      
29      
(857)     
—      
9,778  
Special revenue excluding mortgage/asset-
backed securities ...........................................     
30,283      
85      
(3,734)     
—      
26,634  
Corporate and other ..........................................     
492,395      
1,689      
(18,349)     
(244)     
475,491  
Mortgage/asset-backed securities .....................     
406,597      
1,408      
(13,668)     
—      
394,337  
Total available-for-sale investments .....................   $ 
973,330    $ 
3,217    $ 
(37,257)   $ 
(244)   $
939,046  
     
   
 
 

99 
December 31, 2023 
  
Amortized 
Cost or 
Cost 
    
Gross 
Unrealized 
Gains 
    
Gross 
Unrealized 
Losses 
    
Allowance 
for Credit 
Losses 
    Fair Value   
  
  
(in thousands) 
  
Fixed maturities: 
   
     
     
     
     
  
U.S. Governments .............................................   $ 
40,836    $ 
—    $ 
(1,416)   $ 
—    $ 
39,420  
U.S. States, Territories, and Political 
Subdivisions ..................................................     
10,641      
100      
(839)     
—      
9,902  
Special revenue excluding mortgage/asset-
backed securities ...........................................     
32,513      
147      
(3,149)     
—      
29,511  
Corporate and other ..........................................     
316,590      
1,750      
(17,197)     
(904)     
300,239  
Mortgage/asset-backed securities .....................     
274,550      
1,879      
(11,702)     
—      
264,727  
Total available-for-sale investments .....................   $ 
675,130    $ 
3,876    $ 
(34,303)   $ 
(904)   $ 
643,799  
    
Security holdings in an unrealized loss position 
  
As of December 31, 2024, the Company held 595 fixed maturity securities in an unrealized loss position with a 
total estimated fair value of $664.0 million and total gross unrealized losses of $37.3 million. As of December 31, 2023, the 
Company held 483 fixed maturity securities in an unrealized loss position with a total estimated fair value of $451.0 million 
and total gross unrealized losses of $34.3 million. 
  
The aggregate fair value and gross unrealized losses of the Company’s investments aggregated by investment 
category and the length of time these individual securities have been in a continuous unrealized loss position as of 
December 31, 2024 and 2023, are as follows: 
  
 
  
Less Than 12 Months 
    
More Than 12 Months 
    
Total 
  
 
  
Fair 
    Unrealized     
Fair 
    Unrealized     
Fair 
    Unrealized   
December 31, 2024 
  
Value 
    
Losses 
    
Value 
    
Losses 
    
Value 
    
Losses 
  
  
  
(in thousands) 
  
Fixed maturity securities: 
      
        
        
        
        
        
  
U.S. Governments .........................  $ 
16,507    $ 
(65)   $ 
14,291    $ 
(584)   $ 
30,798    $ 
(649) 
U.S. States, Territories, and 
Political Subdivisions ................    
2,614      
(419)     
5,076      
(438)     
7,690      
(857) 
Special revenue excluding 
mortgage/asset-backed 
securities ...................................    
2,182      
(426)     
21,733      
(3,308)     
23,915      
(3,734) 
Corporate and other .......................    
181,179      
(4,996)     
176,531      
(13,353)     
357,710      
(18,349) 
Mortgage/asset-backed  
securities ...................................    
152,287      
(2,820)     
91,572      
(10,848)     
243,859      
(13,668) 
Total ..................................................  $ 
354,769    $ 
(8,726)  $ 
309,203    $ 
(28,531)  $ 
663,972    $ 
(37,257) 
   
 
  
Less Than 12 Months 
    
More Than 12 Months 
    
Total 
  
 
  
Fair 
    Unrealized     
Fair 
    Unrealized     
Fair 
    Unrealized   
December 31, 2023 
  
Value 
    
Losses 
    
Value 
    
Losses 
    
Value 
    
Losses 
  
 
  
(in thousands) 
  
Fixed maturity securities: 
   
     
     
     
     
     
  
U.S. Governments .......................  $ 
738    $ 
(1)   $ 
38,063    $ 
(1,415)   $ 
38,801    $ 
(1,416) 
U.S. States, Territories, and 
Political Subdivisions ..............    
—      
—      
6,196      
(839)     
6,196      
(839) 
Special revenue excluding 
mortgage/asset-backed 
securities .................................    
—      
—      
26,736      
(3,149)     
26,736      
(3,149) 
Corporate and other .....................    
28,872      
(480)     
204,034      
(16,717)     
232,906      
(17,197) 
Mortgage/asset-backed  
securities .................................    
29,334      
(245)     
117,016      
(11,457)     
146,350      
(11,702) 
Total ................................................  $ 
58,944    $ 
(726)   $ 
392,045    $ 
(33,577)   $ 
450,989    $ 
(34,303) 
  
 
 

100 
The Company reviewed the above securities at each balance sheet date to consider whether it was necessary to 
recognize a credit loss related to any of these securities. An allowance for credit losses of $0.2 million and $0.9 million was 
recorded pertaining to one investment security as of December 31, 2024 and 2023, respectively. For the remaining 
securities, the Company determined that the fixed maturity securities’ unrealized losses were primarily the result of the 
interest rate environment and not the credit quality of the issuers. The Company does not intend to sell the investments and 
it is not more likely than not that the Company will be required to sell the investments before the recovery of their 
amortized cost basis. 
  
Contractual maturities of available-for-sale fixed maturity securities 
  
The amortized cost and fair value of fixed maturity securities at December 31, 2024, by contractual maturity, are 
shown below. 
  
 
  
Amortized     
Fair 
  
 
  
Cost 
    
Value 
  
 
  
(in thousands) 
  
Due within one year ........................................................................................................   $ 
76,696    $
76,089  
Due after one year through five years .............................................................................     
195,931      
190,627  
Due after five years through ten years .............................................................................     
192,924      
183,560  
Due after ten years ...........................................................................................................     
101,182      
94,433  
Mortgage and asset-backed securities .............................................................................     
406,597      
394,337  
 
  $ 
973,330    $
939,046  
   
Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay 
obligations. 
  
Change in unrealized gains (losses) of investments 
  
The following table presents the change in available-for-sale gross unrealized gains or losses by investment type: 
  
 
  
Year Ended December 31, 
  
 
  
2024 
    
2023 
    
2022 
  
 
  
(in thousands) 
  
Change in net unrealized gains (losses) 
   
     
     
  
Fixed maturities ..................................................................................  $ 
(2,953)   $
15,185    $
(53,076) 
Net increase (decrease) .......................................................................  $ 
(2,953)   $
15,185    $
(53,076) 
    
Net investment income summary 
  
Net investment income is summarized as follows: 
  
 
  
Year Ended December 31, 
  
 
  
2024 
    
2023 
    
2022 
  
 
  
(in thousands) 
  
Interest income ...................................................................................  $ 
35,433    $
23,349    $
13,631  
Dividend income ................................................................................    
1,075      
871      
739  
Investment expense ............................................................................    
(684)     
(515 )     
(493) 
Net investment income .......................................................................  $ 
35,824    $
23,705    $
13,877  
     
  
 
 

101 
Net realized and unrealized investment gains and losses 
  
The following table presents net realized and unrealized investment gains and losses: 
  
 
  
Year Ended 
  
 
  
December 31, 
  
 
  
2024 
    
2023 
    
2022 
  
 
  
(in thousands) 
  
Realized gains: 
      
        
        
  
Gains on sales of fixed maturity securities .........................................  $ 
179    $
89    $
14  
Gains on sales of equity securities ......................................................    
20      
—      
—  
Total realized gains ............................................................................    
199      
89      
14  
Realized losses: 
      
        
        
  
Losses on sales of fixed maturity securities .......................................    
(2,489)     
(32 )     
(2,340) 
Losses on sales of equity securities ....................................................    
—      
—      
—  
Total realized losses ...........................................................................    
(2,489)     
(32 )     
(2,340) 
Net realized investment gains (losses) ...............................................    
(2,290)     
57      
(2,326) 
Change in allowance for credit losses ................................................    
659      
(667 )     
—  
Net unrealized gains (losses) on equity securities ..............................    
6,161      
3,933      
(5,203) 
Net unrealized losses on equity method investment ...........................    
(340)     
(382 )     
—  
Net unrealized gains on other investments .........................................    
378      
       
   
Net realized and unrealized gains (losses) on investments .................  $ 
4,568    $
2,941    $
(7,529) 
   
Proceeds from the sale of fixed maturity securities were $6.3 million, $10.1 million and $19.7 million for the years 
ended December 31, 2024, 2023 and 2022, respectively. 
  
The Company places securities on statutory deposit with certain state agencies to retain the right to do business in 
those states. These securities are included in available-for-sale investments on the consolidated balance sheets. At 
December 31, 2024 and 2023, the carrying value of securities on deposit with state regulatory authorities was $9.9 million 
and $8.6 million, respectively. 
  
The Company has investments in limited partnerships, recorded in the other investments line of the consolidated 
balance sheet. These investments are measured at estimated fair value utilizing a net asset value per share (or its equivalent) 
as a practical expedient. As of  December 31, 2024 the Company had unfunded commitments to invest an additional 
$79.5 million in these limited partnerships. 
  
  
4. Fair value measurements 
  
The following tables present the Company’s fair value hierarchy for financial assets and liabilities measured at fair 
value on a recurring basis as of December 31, 2024 and 2023: 
  
December 31, 2024 
  
Level 1     
Level 2     
Level 3     
Total 
  
 
  
(in thousands) 
  
Assets: 
   
     
     
     
  
Fixed maturity securities 
   
     
     
     
  
U.S. Governments .....................................................................   $
—    $ 
32,806    $ 
—    $
32,806  
U.S. States, Territories, and Political Subdivisions ..................     
—      
9,778      
—      
9,778  
Special revenue excluding mortgage/asset-backed securities ...     
—      
26,634      
—      
26,634  
Corporate and other ..................................................................     
—      
475,491      
—      
475,491  
Mortgage/asset-backed securities .............................................     
—      
394,337      
—      
394,337  
Equity securities ...........................................................................    
40,529      
—      
—      
40,529  
Cash, cash equivalents, and restricted cash ..................................     
80,539      
—      
—      
80,539  
Total assets ...................................................................................   $
121,068    $ 
939,046    $ 
—    $ 1,060,114  
     
 
 

102 
December 31, 2023 
  
Level 1     
Level 2     
Level 3     
Total 
  
 
  
(in thousands) 
  
Assets: 
   
     
     
     
  
Fixed maturity securities 
   
     
     
     
  
U.S. Governments .....................................................................   $
—    $
39,420    $ 
—    $
39,420  
U.S. States, Territories, and Political Subdivisions ..................     
—      
9,902      
—      
9,902  
Special revenue excluding mortgage/asset-backed securities ...     
—      
29,511      
—      
29,511  
Corporate and other ..................................................................     
—      
300,239      
—      
300,239  
Mortgage/asset-backed securities .............................................     
—      
264,727      
—      
264,727  
Equity securities ...........................................................................     
43,160      
—      
—      
43,160  
Cash, cash equivalents, and restricted cash ..................................     
51,852      
—      
—      
51,852  
Total assets ...................................................................................   $
95,012    $
643,799    $ 
—    $
738,811  
   
The carrying amounts of financial assets and liabilities reported in the accompanying consolidated balance sheet 
including cash and cash equivalents, restricted cash, receivables, reinsurance recoverable, and accounts payable and other 
accrued liabilities approximate fair value due to their short term-maturity. The carrying amount of the Company’s 
borrowings under the Federal Home Loan Bank (“FHLB”) line of credit approximates fair value as the Company borrows 
at a rate which is adjusted daily. 
  
  
5. Policy Acquisition Costs 
  
The following tables present the policy acquisition costs deferred and amortized over the terms of the policies in 
force: 
  
 
  
Year ended December 31, 
  
 
  
2024 
    
2023 
    
2022 
  
 
  
(in thousands) 
  
Deferred Policy Acquisition Costs: 
   
     
     
  
Balance, beginning of year .................................................................  $ 
60,990    $
56,740    $
55,953  
Additions to deferred balance: 
   
     
     
  
Direct commissions ........................................................................    
318,474      
220,822      
209,061  
Ceding commissions and fronting fees ...........................................    
(159,925)     
(123,911 )     
(109,302) 
Premium taxes ................................................................................    
15,491      
13,690      
10,166  
Total net additions ..............................................................................    
174,040      
110,601      
109,925  
Amortization of net policy acquisition costs ......................................    
(140,149)     
(106,351 )     
(109,138) 
Balance, end of year ...........................................................................  $ 
94,881    $
60,990    $
56,740  
Acquisition expenses: 
      
        
        
  
Amortization of net policy acquisition costs ......................................  $ 
140,149    $
106,351    $
109,138  
Period costs ........................................................................................    
9,508      
1,394      
1,633  
Total Acquisition expenses ................................................................  $ 
149,657    $
107,745    $
110,771  
     
  
  
 
 

103 
6. Intangible Assets and Goodwill 
  
Intangible assets consist of the following: 
  
 
  
December 31, 
  
 
  
2024 
    
2023 
  
 
  
(in thousands) 
  
Goodwill: 
      
        
  
Acquisitions ....................................................................................................................   $ 
3,755    $
3,755  
Indefinite-lived intangibles: 
      
        
  
State insurance licenses ...............................................................................................   $ 
744    $
744  
Finite-lived intangibles: 
      
        
  
Customer relationships ................................................................................................     
14,288      
11,803  
Accumulated amortization on finite-lived intangibles .................................................     
(5,545)     
(3,987 ) 
Total intangible assets ...................................................................................................   $ 
13,242    $
12,315  
  
State insurance licenses consist of licenses acquired at the inception of PSIC. 
  
Customer relationships represents the fair value of acquired policy renewal rights which are amortized on a 
straight line over a period of 8 years. Amortization expense was $1.6 million for the year ended December 31, 
2024 and $1.5 million for the year ended December 31, 2023. 
     
  
7. Capitalized Assets 
  
Capitalized software is included as a component of prepaid expenses and other assets in the Company’s 
consolidated balance sheet. The balances are as follows: 
  
  
    
  
    Accumulated     
Net 
  
December 31, 2024 
  
Cost 
    Amortization     Book Value   
 
  
(in thousands) 
  
Capitalized Software ..........................................................................  $ 
30,690    $ 
(12,207 )   $
18,483  
  
  
    
  
    Accumulated     
Net 
  
December 31, 2023 
  
Cost 
    Amortization     Book Value   
 
  
(in thousands) 
  
Capitalized Software ..........................................................................  $ 
25,356    $ 
(9,079 )   $
16,277  
   
Amortization expense relating to capitalized software for the years ended December 31, 2024, 2023 and 2022 was 
$3.4 million, $2.8 million, and $2.6 million, respectively. 
  
Property and Equipment consists of the following: 
  
  
    
  
    Accumulated     
Net 
  
December 31, 2024 
  
Cost 
    Depreciation     Book Value   
 
  
(in thousands) 
  
Leasehold improvements ....................................................................  $ 
879    $ 
(879)   $ 
—  
Computer hardware ............................................................................    
467      
(332)     
135  
Office equipment and furniture ..........................................................    
917      
(623)     
294  
Total ...................................................................................................  $ 
2,263    $ 
(1,834)   $ 
429  
  
  
    
  
    Accumulated     
Net 
  
December 31, 2023 
  
Cost 
    Depreciation     Book Value   
 
  
(in thousands) 
  
Leasehold improvements ....................................................................  $ 
879    $ 
(811)   $ 
68  
Computer hardware ............................................................................    
418      
(272)     
146  
Office equipment and furniture ..........................................................    
724      
(565)     
159  
Total ...................................................................................................  $ 
2,021    $ 
(1,648)   $ 
373  

104 
Depreciation expense for the years ended December 31, 2024, 2023 and 2022 was immaterial. 
    
  
8. Leases 
  
The Company has operating leases for office space used to conduct its insurance operations and administration 
activities. Operating lease right-of-use (“ROU”) assets are a component of prepaid expenses and other assets and operating 
lease liabilities are included in accounts payable and other accrued liabilities in the Company's consolidated balance sheets. 
  
The Company determines whether an arrangement is a lease at its inception. Operating lease ROU assets and 
liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the 
lease term. To determine the present value of lease payments, the Company uses its incremental borrowing rate, which it 
calculates based on information available at the lease commencement date. For certain leases that contain options to extend, 
the options are included in lease liabilities only if the company is reasonably certain the option will be exercised. Variable 
lease costs such as parking are expensed in the period the obligation is incurred and are not included in the Company’s 
operating lease liability. The Company's lease agreements do not contain any residual value guarantees. 
  
Operating lease costs for the years ended December 31, 2024, 2023 and 2022 were $0.8 million, $0.8 million and 
$0.8 million, respectively. Operating lease costs are comprised of rental expense for operating leases. Lease expense is 
recognized on a straight-line basis over the lease term and is included as a component of other underwriting expenses in the 
Company’s consolidated statements of income and comprehensive income. 
  
The following tables provide supplementary information about the Company’s leases: 
  
Year ended December 31, 2024 
  
($ in 
thousands)   
Operating cash outflows from operating leases .............................................................................................   $ 
882  
  
December 31, 2024 
  
($ in 
thousands)   
Operating lease ROU assets ..........................................................................................................................  $ 
7,639  
Operating lease liabilities ..............................................................................................................................  $ 
7,764  
Weighted-average remaining lease term on operating leases (years) ............................................................    
9.2  
Weighted-average discount rate on operating leases .....................................................................................    
5.1%
   
Future minimum lease payments as of December 31, 2024 are as follows: 
  
Years ending December 31, 
  
($ in 
thousands)   
2025 ...........................................................................................................................................................     
1,050  
2026 ...........................................................................................................................................................     
948  
2027 ...........................................................................................................................................................     
856  
2028 ...........................................................................................................................................................     
985  
2029 ...........................................................................................................................................................     
1,014  
Thereafter ......................................................................................................................................................     
5,053  
Total future minimum lease payments ..........................................................................................................   $ 
9,906  
Less: imputed interest ....................................................................................................................................     
(2,142) 
Total operating lease liability ........................................................................................................................   $ 
7,764  
     
  
  
 
 

105 
9. Reserve for Losses and Loss Adjustment Expenses 
  
Loss and loss adjustment expenses reserves represent management’s best estimate of the ultimate cost of all 
reported and unreported losses incurred for the years ended December 31, 2024, 2023, and 2022. The Company does not 
discount loss and loss adjustment expense reserves. The reserves for unpaid losses and loss adjustment expenses are 
estimated using individual case-basis valuations and statistical analyses. Those estimates are subject to the effects of trends 
in loss severity and frequency. 
  
In addition to case reserves, which are generally based on reported claims, the Company establishes reserves for 
incurred but not reported claims (“IBNR”). IBNR reserves are developed to provide for (i) the estimated amount of future 
loss payments on incurred claims not yet reported, and (ii) potential development on reported claims. IBNR reserves are 
estimated based on generally accepted actuarial reserving techniques that consider quantitative loss experience data and, 
where appropriate, qualitative factors. The Company uses statistical analysis to estimate the cost of losses and loss 
adjustment expenses related to IBNR. Those estimates are based on historical information, industry information and 
practices, and estimates of trends that may affect the ultimate frequency of incurred but not reported claims and changes in 
ultimate claims severity. 
  
The Company regularly reviews its reserve estimates and adjusts them as necessary as experience develops or as 
new information becomes known. Such adjustments are included in current operations. During the loss settlement period, if 
there are indications that claims frequency or severity exceeds initial expectations, the Company generally increases its 
reserves for losses and loss adjustment expenses. Conversely, when claims frequency and severity trends are more 
favorable than initially anticipated, the Company generally reduces its reserves for losses and loss adjustment expenses 
once it has sufficient data to confirm the validity of the favorable trends. Even after such adjustments, the ultimate liability 
may exceed or be less than the revised estimates. Accordingly, the ultimate settlement of losses and the related loss 
adjustment expenses may vary significantly from the estimate included in the Company’s consolidated financial statements. 
  
Although considerable variability is inherent in such estimates, management believes the reserves for losses and 
loss adjustment expenses are adequate. The estimates are continually reviewed and adjusted as necessary as experience 
develops or new information becomes known. Any adjustments to estimates are recorded in the current period. 
  
  
 
 

106 
The following table provides a reconciliation of the beginning and ending reserve balances for losses and LAE on 
a net of reinsurance basis to the gross amounts reported in the accompanying consolidated balance sheets: 
  
 
  
Year Ended December 31, 
  
 
  
2024 
    
2023 
    
2022 
  
 
  
(in thousands) 
  
Reserve for losses and loss adjustment expense, net of reinsurance 
recoverables at beginning of period ................................................  $ 
97,653    $
77,520    $
45,419  
Add: Incurred losses and loss adjustment expenses, net of 
reinsurance, related to: 
      
        
        
  
Current year .................................................................................    
137,797      
70,363      
76,289  
Prior years ...................................................................................    
(3,038)     
2,229      
2,383  
Total incurred .................................................................................    
134,759      
72,592      
78,672  
Deduct: Loss and loss adjustment expense payments, net of 
reinsurance, related to: 
      
        
        
  
Current year .................................................................................    
43,582      
19,631      
21,802  
Prior years ...................................................................................    
33,531      
32,828      
24,769  
Total payments................................................................................    
77,113      
52,459      
46,571  
Reserve for losses and loss adjustment expense net of reinsurance 
recoverables at end of period ..........................................................    
155,299      
97,653      
77,520  
Add: Reinsurance recoverables on unpaid losses and loss 
adjustment expenses at end of period .............................................    
348,083      
244,622      
153,895  
Reserve for losses and loss adjustment expenses gross of 
reinsurance recoverables on unpaid losses and loss adjustment 
expenses at end of period ................................................................  $ 
503,382    $
342,275    $
231,415  
    
The foregoing reconciliation shows favorable net development of $3.0 million in 2024 and unfavorable net 
development of $2.2 million and $2.4 million in 2023 and 2022, respectively. 
  
During 2024, the net favorable reserve development was primarily due to lower than anticipated severity of 
attritional losses in our Inland Marine and other property line of business. 
  
During 2023, the net unfavorable reserve development was primarily due to the effect of ceding gross favorable 
development under our catastrophe XOL reinsurance program and due to unfavorable development on lines of 
business subject to lower amounts of ceding. During 2022, the net unfavorable reserve development was primarily 
attributable to prior year catastrophe events including certain 2020 Hurricanes, offset by favorable development related to 
2021 attritional and catastrophe losses.  
  
The Company compiles and aggregates its claims data by grouping the claims according to the year in which the 
claim occurred (“Accident Year”) when analyzing claim payment and emergence patterns and trends over time. For the 
purpose of defining claims frequency, the number of reported claims is by loss occurrence and includes claims that do not 
result in a liability or payment associated with them. 
  
 The following tables show information about the Company’s incurred and paid loss development as of December 
31, 2024, net of reinsurance, as well as cumulative claim frequency, the total of IBNR liabilities included within the net 
incurred loss amounts and the average historical claims duration as of December 31, 2024. The loss information has been 
disaggregated so that losses that are expected to develop in a similar manner are grouped together. The information 
provided herein about incurred and paid accident year claims development for the years ended December 31, 2024 and 
prior is presented as unaudited supplementary information. 
   
 
 

107 
Incurred Losses and Allocated Loss Adjustment Expenses, 
Net of Reinsurance Property Insurance (in thousands) (1) 
  
  
    
        
        
  
      
  
      
  
      
  
      
  
      
  
      
  
      
  
    
As of  
December 31, 2024 
  
  
  
Year Ended December 31, 
    
Incurred 
but Not 
Reported     
Cumulative 
Number of   
Accident Year 
  2015     2016     2017     2018     2019     2020     2021     2022     2023     
2024     Liabilities    
Claims   
2015 ..............................   $2,678    $2,504    $ 2,329    $ 2,307    $ 2,320    $ 2,313    $ 2,316    $ 2,304    $ 2,324    $
2,301    $ 
-    $ 
582  
2016 ..............................     
     $7,450      7,127      6,972      7,090      7,075      7,062      7,125      5,730      
5,730      
-      
1,384  
2017 ..............................     
       
       12,425      10,893      10,644      10,652      10,561      10,668      12,339      11,978      
-      
3,623  
2018 ..............................     
       
       
       8,163      8,103      7,939      7,950      7,941      8,010      
7,978      
-      
1,197  
2019 ..............................     
       
       
       
       4,575      4,223      3,947      4,293      4,350      
4,365      
-      
1,689  
2020 ..............................     
       
       
       
       
       61,434      57,248      59,565      56,008      56,859      
33      
5,018  
2021 ..............................     
       
       
       
       
       
       29,836      25,158      25,733      27,902      
832      
5,254  
2022 ..............................     
       
       
       
       
       
       
       42,887      44,943      42,358      
3,249      
4,162  
2023 ..............................     
       
       
       
       
       
       
       
       40,921      36,587      
6,071      
4,703  
2024 ..............................     
       
       
       
       
       
       
       
       
       77,421      
32,641      
8,069  
Total ..............................     
       
       
       
       
       
       
       
       
     $273,479    $ 42,826    $ 
35,681  
  
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, 
Net of Reinsurance Property Insurance (in thousands) (1) 
  
 
  
Year Ended December 31,  
  
Accident Year 
  
2015     
2016     
2017     
2018     
2019     
2020     
2021     
2022     
2023     
2024   
2015 .........................................  $ 1,125    $ 1,817    $ 2,109    $ 2,241    $ 2,300    $ 2,309    $ 2,316    $ 2,304    $ 2,324    $ 
2,300  
2016 .........................................    
     $ 4,823      
6,420      
6,801      
7,051      
7,072      
7,062      
7,125      
5,729      
5,729  
2017 .........................................    
       
       
9,102      10,719      10,639      10,640      10,560      10,636      12,339      11,978  
2018 .........................................    
       
       
       
4,409      
7,889      
7,931      
7,943      
7,943      
7,999      
7,978  
2019 .........................................    
       
       
       
       
2,179      
3,510      
3,757      
4,170      
4,345      
4,365  
2020 .........................................    
       
       
       
       
       31,862      49,222      55,504      55,619      56,712  
2021 .........................................    
       
       
       
       
       
       11,355      22,500      24,408      26,466  
2022 .........................................    
       
       
       
       
       
       
       12,647      30,042      35,271  
2023 .........................................    
       
       
       
       
       
       
       
       14,226      26,378  
2024 .........................................    
       
       
       
       
       
       
       
       
       32,850  
Total .........................................    
       
       
       
       
       
       
       
       
     $ 210,027  
Reserve for losses and loss 
adjustment expense, net of 
reinsurance ..........................    
       
       
       
       
       
       
       
       
     $ 63,452  
  
(1) Data presented for these calendar years is required supplementary information, which is unaudited. 
  
Average Annual Percentage Payout of Incurred Claims by Age, 
Net of Reinsurance Property Insurance (unaudited) 
  
  
  Year 1    Year 2    Year 3    Year 4    Year 5    Year 6    Year 7    
Year  
8 (2)   
  Year 9    
Year 
10 (2)   
Payout percentage ........     52.22%    32.26%    6.89%    3.90%    1.36%    0.40%    3.84%    (9.30)%    0.44%    (1.05)% 
  
(2) Negative payout percentages are due to timing of reinsurance payments, allocations of reinsurance between different lines of 
business based on actual results, and allocation of reinsurance to different periods for reinsurance treaties in effect for multiple 
periods. These are primarily associated with larger recoveries from catastrophe events in earlier years of operation. 
 
Incurred Losses and Allocated Loss Adjustment Expenses, 
Net of Reinsurance Other Liability Occurrence (in thousands) (1) 
  
  
    
  
      
  
      
  
      
  
    
As of December 31, 2024   
  
    
  
      
  
      
  
      
  
    
Incurred 
but Not 
Reported      
Cumulative 
Number of   
Accident Year 
  
2021 
    
2022 
    
2023 
    
2024 
    Liabilities     
Claims 
  
Prior ....................................................  $ 
109    $ 
35    $ 
46    $ 
47    $ 
—      
7  
2021 ....................................................    
2,138      
1,641      
2,172      
2,428      
1,063      
27  
2022 ....................................................    
       
7,160      
8,755      
9,425      
3,867      
74  
2023 ....................................................    
       
       
5,005      
8,335      
3,235      
111  
2024 ....................................................    
       
       
       
21,811      
20,011      
267  
Total ....................................................    
       
       
     $ 
42,046    $ 
28,176      
486  

108 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, 
Net of Reinsurance Other Liability Occurrence (in thousands) (1) 
  
Accident Year 
  
2021 
    
2022 
    
2023 
    
2024 
  
Prior ........................................................................................................   $ 
109    $ 
35    $ 
46    $ 
47  
2021 ........................................................................................................     
141      
347      
653      
906  
2022 ........................................................................................................     
       
746      
1,603      
3,445  
2023 ........................................................................................................     
       
       
372      
1,146  
2024 ........................................................................................................     
       
       
       
869  
Total ........................................................................................................     
       
       
     $ 
6,413  
Reserve for losses and loss adjustment expense, net of reinsurance .......     
       
       
     $ 
35,633  
 
(1) Data presented for these calendar years is required supplementary information, which is unaudited. 
  
Average Annual Percentage Payout of Incurred Claims by Age, 
Net of Reinsurance Other Liability Occurrence (unaudited) 
   
  
  
Year 1 
    
Year 2 
    
Year 3 
    
Year 4 
  
Payout percentage .................................................................     
5.54%    
8.96%    
16.07 %    
10.40% 
  
Incurred Losses and Allocated Loss Adjustment Expenses, 
Net of Reinsurance Other Liability Claims Made (in thousands) (1) 
  
  
    
  
      
  
      
  
      
  
      
  
    
As of December 31, 2024   
  
    
  
      
  
      
  
      
  
      
  
    
Incurred 
but Not 
Reported      
Cumulative 
Number of   
Accident Year 
  
2020 
    
2021 
    
2022 
    
2023 
    
2024 
    Liabilities     
Claims 
  
Prior .....................................  $ 
48    $ 
26    $ 
7    $ 
—    $ 
286    $ 
285      
7  
2021 .....................................    
       
3,429      
3,299      
2,928      
2,252      
1,231      
109  
2022 .....................................    
       
       
8,871      
8,873      
7,674      
4,157      
430  
2023 .....................................    
       
       
       
12,580      
12,110      
7,144      
956  
2024 .....................................    
       
       
       
       
18,503      
10,785      
1,324  
Total .....................................    
       
       
       
     $ 
40,825    $ 
23,602      
2,826  
  
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, 
Net of Reinsurance Other Liability Claims Made (in thousands) (1) 
  
Accident Year 
  
2020 
    
2021 
    
2022 
    
2023 
    
2024 
  
Prior ..............................................................................   $ 
—    $ 
—    $ 
—    $ 
—    $ 
1  
2021 ..............................................................................     
       
62      
221      
449      
1,009  
2022 ..............................................................................     
       
       
481      
1,584      
2,776  
2023 ..............................................................................     
       
       
       
1,382      
3,310  
2024 ..............................................................................     
       
       
       
       
4,168  
Total ..............................................................................     
       
       
       
     $ 
11,264  
Reserve for losses and loss adjustment expense, net of 
reinsurance ................................................................     
       
       
       
     $ 
29,561  
 
(1) Data presented for these calendar years is required supplementary information, which is unaudited. 
  
Average Annual Percentage Payout of Incurred Claims by Age, 
Net of Reinsurance Other Liability Claims Made (unaudited) 
  
  
  
Year 1 
    
Year 2 
    
Year 3 
    
Year 4 
  
Payout percentage .................................................................     
10.74%    
12.45%    
12.83 %    
24.85% 
  
  
 
 

109 
The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim 
adjustment expenses in the consolidated balance sheets is as follows: 
  
  
  
2024 
  
  
  (in thousands)   
Reserve for losses and loss adjustment expense, net of reinsurance recoverables: 
      
  
Property .....................................................................................................................................................   $ 
63,452  
Other liability occurrence ..........................................................................................................................     
35,633  
Other liability claims made ........................................................................................................................     
29,561  
Reinsurance - Nonproportional assumed property (1) ...............................................................................     
12,018  
Other ..........................................................................................................................................................     
14,635  
Total reserve for losses and loss adjustment expense, net of reinsurance recoverables .............................     
155,299  
Reinsurance recoverable on unpaid claims: 
      
  
Property .....................................................................................................................................................   $ 
97,583  
Other liability occurrence ..........................................................................................................................     
20,074  
Other liability claims made ........................................................................................................................     
73,875  
Other ..........................................................................................................................................................     
156,551  
Total reinsurance recoverable on unpaid claims ........................................................................................     
348,083  
Total reserve for losses and loss adjustment expenses ..................................................................................   $ 
503,382  
  
  
(1) Reflects the Company’s share of Loss and Loss Adjustment Expense related to non-proportional assumed 
reinsurance business. This amount reflects gross and net reserves related to this treaty and the ultimate incurred 
amount reflects IBNR only. The Company does not have direct access to individual claim information underlying 
the assumed quota share arrangement. The Company does not use claim frequency information in the 
determination of loss reserves or for other internal purposes. Based on these considerations, the Company does 
not believe providing claims frequency information is practicable as it relates to this line of business. 
  
  
10. Reinsurance 
  
The Company utilizes reinsurance in order to limit its exposure to losses and enable it to underwrite policies with 
sufficient limits to meet policyholder needs. The Company primarily utilizes excess of loss (XOL) and quota share 
reinsurance to protect against catastrophe and attritional losses. The Company also writes premiums under fronting 
agreements, whereby the majority of premium and risk is ceded to reinsurers and the Company receives a fronting fee. 
  
In an XOL treaty, the Company retains losses for any occurrence up to a specified amount (its “retention”) and 
reinsurers assume any losses above that amount. As of December 31, 2024, the Company’s catastrophe event retention is 
$20 million for earthquake events and $15.5 million for hurricane events and all other perils. As of December 31, 2024, the 
Company’s reinsurance structure provides protection up to $3.08 billion for earthquake events, $735 million for Hawaii 
hurricane events, and $117.5 million for continental U.S. hurricane events. 
  
In a quota share agreement, the Company transfers, or cedes, a portion of its premiums to reinsurers and, in return, 
the reinsurer must share an agreed upon portion of losses and pay a ceding commission to the Company. In a fronting 
agreement, the Company writes premium and then cedes the majority of the premium and risk in exchange for a fronting 
fee, which is the primary source of profit in the arrangement. 
  
The following table shows ceded written premiums under fronting and quota share arrangements by line of 
business for the years ended December 31, 2024, 2023 and 2022: 
  
  
  
Year Ended December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
  
  
(in thousands) 
  
Fronting ..............................................................................................  $ 
312,173    $
339,376    $
237,285  
Crop ....................................................................................................    
109,975      
12,110      
—  
Inland Marine and Other Property ......................................................    
103,863      
108,409      
84,045  
Casualty ..............................................................................................    
86,120      
36,677      
23,398  
Earthquake ..........................................................................................    
42,466      
29,708      
23,398  
Total ...................................................................................................  $ 
654,597    $
526,280    $
368,126  
    

110 
The Company recognizes ceded unearned premiums related to quota share agreements as an asset on its 
consolidated balance sheets. As of December 31, 2024 and 2023, ceded unearned premiums totaled $276.2 million 
and $265.8 million, respectively. The increase was driven primarily by premium growth in lines subject to fronting 
agreements or quota shares. 
  
In addition to reinsurance purchased from traditional reinsurers, the Company has historically incorporated 
collateralized protection from the insurance linked securities market via catastrophe bonds. During the first quarter of 2021, 
the Company closed a $400 million 144A catastrophe bond that became effective June 1, 2021. The catastrophe bond was 
completed through Torrey Pines Re Pte. Ltd. (“Torrey Pines Re Pte.”). Torrey Pines Re Pte. is a special purpose reinsurance 
vehicle incorporated in Singapore that provides Palomar with indemnity-based reinsurance covering earthquake events 
through June 1, 2024. During the second quarter of 2022, the Company closed a $275 million 144A catastrophe bond that 
became effective June 1, 2022. This catastrophe bond was completed through Torrey Pines Re Ltd., a Bermuda-domiciled 
special purpose insurer that provides indemnity-based reinsurance covering earthquake events through June 1, 2025. During 
the second quarter of 2023, the Company also closed a $200 million 144A catastrophe bond that became effective June 1, 
2023. This catastrophe bond was also completed through Torrey Pines Re Ltd and provides indemnity-based reinsurance 
covering earthquake events through June 1, 2026. During the second quarter of 2024, the Company also closed a $420 
million 144A catastrophe bond which became effective June 1, 2024. This catastrophe bond was also completed through 
Torrey Pines Re Ltd and provides indemnity-based reinsurance covering earthquake events through June 1, 2027. 
  
Written premiums ceded under these catastrophe bond agreements were $55.3 million, $42.7 million 
and $28.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. 
  
The effect of reinsurance on premiums written and earned and on losses and LAE incurred for the years ended 
December 31, 2024, 2023 and 2022, is as follows: 
  
  
  
2024 
    
2023 
    
2022 
  
  
  Written     
Earned     Written     
Earned     Written     
Earned   
  
  
(in thousands) 
  
Premiums Written and Earned: 
      
        
        
        
        
        
  
Direct .........................................  $ 1,403,383    $ 1,301,901    $ 1,083,804    $
959,614    $
816,387    $ 
628,973  
Assumed ....................................    
138,578      
95,468      
57,754      
56,107      
65,481      
66,299  
Ceded .........................................    
(897,111)     
(886,682)     
(731,531)     
(669,808)     
(524,575)     
(378,806) 
Net .................................................  $
644,850    $
510,687    $ 
410,027    $
345,913    $
357,293    $ 
316,466  
  
  
  
2024 
  
  
  
Losses 
    
LAE 
    
Total 
  
  
  
(in thousands) 
  
Losses and LAE Incurred: 
      
        
        
  
Direct ..............................................................................................  $ 
367,276    $
75,301    $
442,577  
Assumed .........................................................................................    
46,866      
4,930      
51,796  
Ceded ..............................................................................................    
(305,336)     
(54,278 )     
(359,614) 
Net ......................................................................................................  $ 
108,806    $
25,953    $
134,759  
  
  
  
2023 
  
  
  
Losses 
    
LAE 
    
Total 
  
  
  
(in thousands) 
  
Losses and LAE Incurred: 
      
        
        
  
Direct ..............................................................................................  $ 
228,441    $
60,834    $
289,275  
Assumed .........................................................................................    
19,799      
1,789      
21,588  
Ceded ..............................................................................................    
(186,706)     
(51,565 )     
(238,271) 
Net ......................................................................................................  $ 
61,534    $
11,058    $
72,592  
  
   
 
 

111 
  
  
2022 
  
  
  
Losses 
    
LAE 
    
Total 
  
  
  
(in thousands) 
  
Losses and LAE Incurred: 
      
        
        
  
Direct ..............................................................................................  $
133,517    $
38,004    $ 
171,521  
Assumed .........................................................................................    
23,574      
5,998      
29,572  
Ceded ..............................................................................................    
(91,261 )     
(31,159)     
(122,421) 
Net ......................................................................................................  $
65,829    $
12,843    $ 
78,672  
   
The ceding of insurance does not legally discharge the Company from its primary liability for the full amount of 
the policy coverage, and therefore the Company will be required to pay the loss and bear collection risk if the reinsurer fails 
to meet its obligations under the reinsurance agreement. To minimize exposure to significant losses from reinsurance 
insolvencies, the Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk. 
  
To reduce credit exposure to reinsurance recoverable balances, the Company obtains acceptable forms of 
collateral from certain reinsurers that are not authorized as reinsurers under U.S. state insurance regulations. In addition, 
under the terms of its reinsurance contracts, the Company may retain funds due from reinsurers as security for those 
recoverable balances. As of December 31, 2024 and 2023, the Company had retained $27.9 million and $13.4 million in 
funds from reinsurers, respectively. The Company is able to use the funds in the ordinary course of its business. The funds 
are held in cash and cash equivalents and investments with an offsetting liability on the accompanying consolidated balance 
sheets. 
  
For the year ended December 31, 2024, reinsurance premiums ceded to the Company’s three largest reinsurers 
totaled $125.9 million, $67.9 million and $61.7 million, representing 28.5% of the total balance. For the year ended 
December 31, 2023, reinsurance premiums ceded to the Company’s three largest reinsurers totaled $152.4 million, $65.9 
million and $47.4 million, representing 36.3% of the total balance. For the year ended December 31, 2022, reinsurance 
premiums ceded to the Company’s three largest reinsurers totaled $24.7 million, $22.9 million and $18.4 million, 
representing 23.9% of the total balance. 
  
At December 31, 2024 reinsurance recoverable on unpaid losses by the Company’s three largest reinsurers were 
$137.0 million, $26.9 million and $24.4 million representing 47.7% of the total balance. At December 31, 2023 reinsurance 
recoverable on unpaid losses by the Company’s three largest reinsurers were $69.5 million, $29.8 million and $25.5 million 
representing 45.7% of the total balance. The Company seeks reinsurers that have an A.M. best rating of A− (excellent) or 
better or requires them to post collateral. 
  
  
11. Credit Agreements 
  
U.S. Bank Credit Agreement 
  
In December 2021, the Company entered into a Credit Agreement (the “Credit Agreement”) with certain lenders 
which provides a revolving credit facility of up to $100.0 million (the “Revolving Loan”). The maturity of the facility is 
December 8, 2026. The Revolving Loan may be either a SOFR rate loan or a base rate loan, at the Company’s discretion. 
The Revolving Loan may be prepaid in full or in part at any time with no prepayment premium and may be reduced in full 
or in part at any time upon prior notice. Interest on the Revolving Loan accrues on each SOFR rate loan at the applicable 
SOFR (as defined in the Credit Agreement) plus 1.75% and on each base rate loan at the applicable Alternate Base Rate (as 
defined in the Credit Agreement) plus (ii) 0.75%. In addition, the Company paid a commitment fee of $0.3 million upon 
closing of the Credit Agreement and must pay an unused line fee of 0.25% per annum on any unborrowed amount under the 
Credit Agreement. 
  
The Company’s obligations under the Credit Agreement are unsecured with a negative pledge against all assets of 
Palomar and its subsidiaries as described in the Credit Agreement. The Credit Agreement contains customary 
representations and warranties and customary affirmative and negative covenants, including, among other things, financial 
covenants, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and 
dividends and other distributions. 
   
 
 

112 
The financial covenants in the Credit agreement require the Company not to exceed a maximum leverage ratio and 
maintain a minimum net worth at the end of each quarter. The Company’s insurance subsidiaries are also required to 
maintain a minimum Risk Based Capital Ratio at the end of each year and must always maintain a minimum AM Best 
Financial Strength rating. As of December 31, 2024, the Company was in compliance with all covenants. 
  
The Credit Agreement provides for events of default customary for revolving loans of this type, including but not 
limited to non-payment, breaches, or defaults in the performance of covenants, insolvency, bankruptcy and the occurrence 
of a material adverse effect on Palomar. During the existence of an event of default, all outstanding amounts of the 
Revolving Loan shall bear interest at a rate per annum equal to the rate otherwise applicable thereto plus 2.00%. 
  
As of December 31, 2024 and 2023, there were no outstanding borrowings under this Credit Agreement. For the 
years ended December 31, 2024 and 2023, the Company incurred $0.3 million and $1.0 million, respectively, of interest 
related to borrowings and amortization of fees associated with the credit agreement. 
  
FHLB Line of Credit 
  
The Company’s PSIC subsidiary is a member of the Federal Home Loan Bank of San Francisco (“FHLB”). 
Membership in the FHLB provides PSIC access to collateralized advances, which can be drawn for general corporate 
purposes and used to enhance liquidity management. All borrowings are fully secured by a pledge of specific investment 
securities of PSIC and the borrowing capacity is currently equal to 10% of PSIC’s statutory admitted assets. All advances 
have a predetermined term and the interest rate varies based on the term of the advance. 
  
As of December 31, 2024, there were no borrowings outstanding through the FHLB. Interest expense on the 
FHLB Line of Credit was $0.8 million for the year ended December 31, 2024. As of December 31, 2023, the Company had 
$52.6 million of borrowings outstanding through the FHLB line of credit. Interest expense on the FHLB Line of Credit was 
$2.8 million for the year ended December 31, 2023. 
  
  
12. Stockholders’ Equity 
  
As of December 31, 2024 and December 31, 2023, the Company has 5,000,000 preferred shares authorized with a 
par value of $0.0001 and no preferred shares issued and outstanding. As of December 31, 2024 and December 31, 2023, the 
Company has 500,000,000 common shares authorized and 26,529,402 and 24,772,987 common shares issued and 
outstanding, respectively, with a par value of $0.0001. Additional paid in capital is $493.7 million as of December 31, 2024 
and $350.6 million as of December 31, 2023.  
  
  
 
 

113 
Common stock reserved for future issuance consists of the following as of December 31, 2024: 
  
Stock options outstanding under 2019 Equity Incentive Plan .......................................................................     
588,385  
Restricted stock units outstanding under 2019 Equity Incentive Plan ...........................................................     
320,411  
Performance stock units outstanding under 2019 Equity Incentive Plan ......................................................     
460,450  
Shares authorized for future issuance under 2019 Equity Incentive Plan .....................................................     
3,673,297  
Shares authorized for future issuance under 2019 Employee Stock Purchase Plan ......................................     
1,353,670  
Total ...........................................................................................................................................................     
6,396,213  
    
The Company does not maintain a treasury stock account and issues new shares to settle employee stock 
purchases, exercises of stock options, and vestings of other types of equity awards. 
  
The below table summarizes the Company’s stock-based compensation expense for each period presented: 
  
 
  
Year ended December 31, 
  
 
  
2024 
    
2023 
    
2022 
  
 
  
(in thousands) 
  
Stock-Based Compensation Expense .................................................  $ 
16,685    $
14,913    $
11,624  
    
Stock-based compensation expense is recognized on a straight-line basis over the vesting period of awards. The 
Company does not apply a forfeiture rate to unvested awards and accounts for forfeitures as they occur. All stock-based 
compensation is included in other underwriting expenses in the Company’s consolidated statements of income and 
comprehensive income. 
  
2019 Equity Incentive Plan 
  
On April 16, 2019, the Company’s 2019 Equity Incentive Plan (the “2019 Plan”) became effective. The 2019 Plan 
provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), 
performance shares and units, and other cash-based or share-based awards. In addition, the 2019 Plan contains a mechanism 
through which the Company may adopt a deferred compensation arrangement in the future.  
  
A total of 2,400,000 shares of common stock were initially authorized and reserved for issuance under the 2019 
Plan. This reserve increases on January 1 of each year through 2029, by an amount equal to the smaller of: 3% of the 
number of shares of common stock issued and outstanding on the immediately preceding December 31, or an amount 
determined by the board of directors.  
  
Stock Options 
  
Recipients of stock options can purchase shares of the Company’s common stock at a price equal to the stock’s 
fair market value on the grant date, determined by the closing price of the Company's common stock on the grant date. 
Stock options vest over a period between two and four years with between 25% and 50% vesting on the first anniversary of 
the grant date and the remainder vesting monthly over the remaining period, subject to continued service to the Company. 
Stock options expire ten years after the grant date.  
  
  
 
 

114 
The following table summarizes stock option transactions for the year ended December 31, 2024: 
  
  
  
Number of     
Weighted-
average 
exercise 
    
Weighted 
average 
remaining 
contractual 
term 
    
Aggregate 
intrinsic value  
  
  
shares 
    
price 
    
(in years)     (in thousands)  
Outstanding at January 1, 2024 ..............................    
807,685    $ 
34.31      
—    $ 
—  
Options granted ......................................................    
—      
—      
       
   
Options exercised ...................................................    
(208,341)     
33.54      
       
   
Options canceled ....................................................    
(10,959)     
78.12      
       
   
Outstanding at December 31, 2024 ........................    
588,385    $ 
33.76      
4.85    $ 
42,273  
Vested and Exercisable at December 31, 2024 ......    
583,792    $ 
33.55      
4.83    $ 
42,063  
  
The total intrinsic value of stock options exercised during the years ended December 31, 2024 and December 31, 
2023 was $18.7 million and $3.5 million, respectively.  
  
Restricted Stock Units 
  
Restricted stock units are valued on their grant date and generally vest either on the first anniversary of the grant 
date or over a three-year period with one third vesting on each anniversary date, subject to continued service with the 
Company. The fair value of RSUs is determined using the closing price of the Company's common stock on the grant date. 
  
  
 
 

115 
The following table summarizes RSU transactions for the year ended December 31, 2024: 
  
  
  
Number of 
shares 
    
Weighted-
average grant 
date fair value   
Non vested outstanding at January 1, 2024 .....................................................................     
332,077    $ 
61.07  
Granted ............................................................................................................................     
145,835      
69.82  
Vested ..............................................................................................................................     
(138,329 )     
61.99  
Forfeited ..........................................................................................................................     
(19,172 )     
54.66  
Non vested outstanding at December 31, 2024 ...............................................................     
320,411    $ 
65.03  
  
As of December 31, 2024, the Company had approximately $14.9 million of total unrecognized stock-based 
compensation expense related to RSUs expected to be recognized over a weighted-average period of 1.6 years. 
  
Performance Stock Units (“PSUs”) 
  
The Company issues PSUs to employees with a combination of service, performance, and market conditions. 
  
The majority of PSUs were issued via grants made to certain executives during 2021. These PSUs are earned based 
on the achievement of stock price milestones. If the Company’s stock price reaches and remains at certain milestones for 30 
days, the PSUs shall become earned units and will vest upon completion of a requisite service period of approximately five 
years from the date of grant.  
  
For other PSUs outstanding, vesting of PSUs requires a period of future service and the number of shares that vest 
depends on performance relative to predetermined targets of the Company’s Gross Written Premiums and Adjusted Return 
on Equity as set by the Compensation Committee. For PSU grants issued in years prior to 2023, the PSU’s performance 
period was the fiscal year of the grant. For PSU grants issued in 2023 and after, the PSU’s performance period is primarily a 
three-year period beginning with the grant date. At the end of the performance period, the actual results are measured 
against the predetermined targets to determine the number of PSUs to be earned as compensation. The earned PSUs are then 
subject to a required service period of approximately three years from the grant date before vesting and being issued as 
common stock. 
  
The following table summarizes PSU transactions for the year ended December 31, 2024: 
  
  
  
Number of 
shares 
    
Weighted-
average grant 
date fair value   
Non vested outstanding at January 1, 2024 .....................................................................     
423,621    $ 
38.90  
Granted ............................................................................................................................     
57,012      
65.78  
Vested ..............................................................................................................................     
(12,645 )     
96.74  
Forfeited ..........................................................................................................................     
(7,538 )     
51.92  
Non vested outstanding at December 31, 2024 ...............................................................     
460,450    $ 
40.42  
  
The PSU grants above represent the number of shares that would vest based on achievement of all stock price 
milestones in the executive stock grants and the 100% achievement of the predetermined company performance conditions 
for the other PSU grants. The actual number of PSUs which will vest is subject to adjustment based on the Company’s 
actual stock price performance and financial performance relative to the predetermined targets and subject to recipient 
service requirements. As of December 31, 2024, the Company had approximately $9.4 million of total unrecognized stock-
based compensation expense related to PSUs expected to be recognized over a weighted-average period of 1.7 years. 
  
2021 Executive Stock Grants 
  
During the year ended December 31, 2021, the Company granted 192,307 RSUs and 350,000 PSUs to various 
executives, including the Company’s CEO. The RSUs vest over a period of five years with one fifth vesting upon the first, 
second and third anniversary of the grants and the remainder vesting quarterly thereafter. 
  
 
 

116 
The PSUs are earned based on the achievement of stock price milestones. If the Company’s stock price reaches 
and remains at certain milestones for 30 days, the PSUs shall become earned units and will vest upon completion of a 
requisite service period. The Company’s CEO must remain as an employee through December 31, 2025, or as an employee 
and/or director through the fifth anniversary of the grant date the PSUs to vest. Other executives must remain as employees 
through December 31, 2026 for the PSUs to vest. As of December 31, 2024, 28,125 PSU shares have become earned units 
and will vest upon completion of the requisite service period. 
   
2019 Employee Stock Purchase Plan 
  
On April 16, 2019, the Company's 2019 Employee Stock Purchase Plan (“the 2019 ESPP”) became effective. A 
total of 240,000 shares of common stock are initially authorized and reserved for issuance under the 2019 ESPP. In 
addition, the 2019 ESPP provides for annual increases in the number of shares available for issuance on January 1 of each 
year through 2029, equal to the smaller of 240,000 shares of the Company’s common stock or such other amount as may be 
determined by the board of directors. 
  
Under the 2019 ESPP, employees can purchase Company stock at a discount via payroll withholdings. The 2019 
ESPP is administered through employee participation in discrete offering periods. During each discrete offering period 
employee funds are withheld, and the stock purchase occurs upon the conclusion of the offering period. The Company 
issued 17,100 and 17,080 shares pursuant to the ESPP during the years ended December 31, 2024 and December 31, 2023, 
respectively. 
  
Share repurchases  
  
The Company's share repurchase program expired on March 31, 2024.  There were no share repurchases made 
during the year ended December 31, 2024. 
  
 
13. Accumulated Other Comprehensive Income 
  
Changes in accumulated other comprehensive income (loss) (“AOCI”) are as follows: 
  
  
  
Year Ended December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
  
  
(in thousands) 
  
Balance as of January 1 .........................................................................................   $ 
(23,991)   $ 
(36,515 )   $ 
5,312  
Other comprehensive (loss) income before reclassification ..............................     
(5,924)     
15,913      
(55,270 ) 
Federal income tax benefit (expense) ................................................................     
1,244      
(3,342 )     
11,607  
Other comprehensive (loss) income before reclassification, net of tax .............     
(4,680)     
12,571      
(43,663 ) 
Amounts reclassified from AOCI ......................................................................     
2,311      
(60 )     
2,325  
Federal income tax (benefit) expense ................................................................     
(485)     
13      
(489 ) 
Amounts reclassified from AOCI, net of tax .....................................................     
1,826      
(47 )     
1,836  
Other comprehensive (loss) income ...................................................................     
(2,854)     
12,524      
(41,827 ) 
Balance at end of period ........................................................................................   $ 
(26,845)   $ 
(23,991 )   $ 
(36,515 ) 
   
  
  
 
 

117 
14. Underwriting Information 
  
The Company has a single reportable segment and offers specialty insurance products. Gross written premiums 
(“GWP”) by product are presented below: 
  
  
  
Year Ended December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
  
  
($ in thousands) 
  
  
    
  
    
% of 
      
  
    
% of 
      
  
    
% of 
  
  
  Amount     
GWP 
    Amount     
GWP 
    Amount     
GWP 
  
Product (1) 
      
        
        
        
        
        
  
Earthquake ........................................   $
522,864      
33.9%  $
436,897      
38.3%  $
345,480      
39.2%
Inland Marine and Other Property ....     
334,079      
21.7%    
250,022      
21.9%    
232,918      
26.4%
Fronting ............................................     
333,188      
21.6%    
352,141      
30.8%    
223,249      
25.3%
Casualty ............................................     
235,592      
15.3%    
90,388      
7.9%    
80,221      
9.1%
Crop ..................................................     
116,239      
7.5%    
12,110      
1.1%    
—      
—%
Total Gross Written Premiums .....   $ 1,541,962      
100.0%  $ 1,141,558      
100.0%  $
881,868      
100.0%
  
(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. 
  
Gross written premiums by state are as follows: 
  
  
  
Year Ended December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
  
  
($ in thousands) 
  
  
    
  
    
% of 
      
  
    
% of 
      
  
    
% of 
  
  
  Amount     
GWP 
    Amount     
GWP 
    Amount     
GWP 
  
State 
      
        
        
        
        
        
  
California ......................................   $
668,635      
43.4%  $
600,791      
52.6%  $
418,809      
47.5%
Texas .............................................     
124,416      
8.1%    
95,517      
8.4%    
90,459      
10.3%
Hawaii ...........................................     
72,558      
4.7%    
47,388      
4.2%    
40,157      
4.5%
Florida ...........................................     
67,008      
4.3%    
47,595      
4.2%    
38,715      
4.4%
Washington ...................................     
57,900      
3.8%    
49,494      
4.3%    
41,827      
4.7%
New York .....................................     
38,919      
2.5%    
18,424      
1.6%    
12,510      
1.5%
Oregon ..........................................     
29,550      
1.9%    
23,220      
2.0%    
24,108      
2.7%
Illinois ...........................................     
20,901      
1.4%    
22,340      
2.0%    
17,368      
2.0%
Other .............................................     
462,075      
30.0%    
236,789      
20.7%    
197,915      
22.4%
Total Gross Written Premiums .....   $ 1,541,962      
100.0%  $ 1,141,558      
100.0%  $
881,868      
100.0%
  
Gross written premiums by insurance subsidiary are as follows: 
  
  
  
Year Ended December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
  
  
($ in thousands) 
  
  
    
  
    
% of 
      
  
    
% of 
      
  
    
% of 
  
  
  Amount     
GWP 
    Amount     
GWP 
    Amount     
GWP 
  
Subsidiary 
      
        
        
        
        
        
  
PSIC ..............................................   $
823,263      
53.4%  $
653,809      
57.3%  $
489,720      
55.5%
PESIC ...........................................     
661,404      
42.9%    
487,749      
42.7%    
392,148      
44.5%
Laulima .........................................     
57,295      
3.7%    
—      
—%    
—      
—%
Total Gross Written Premiums .....   $ 1,541,962      
100.0%  $ 1,141,558      
100.0%  $
881,868      
100.0%
    
 
 

118 
The Company distributes a significant portion of its products through select program administrators. Each of the 
products managed by the program administrators operates as a separate program that is governed by an independent, 
separately negotiated agreement with unique terms and conditions, including geographic scope, key men provisions, 
economics and exclusivity. These programs also feature separate managerial oversight and leadership, policy administration 
systems and retail agents originating policies. 
  
For the year ended December 31, 2024, our largest program administrator distributed $403.4 million or 26.2% of 
our gross written premiums. There were no other program administrators which distributed greater than 10% of our gross 
written premiums for the year ended December 31, 2024. 
  
For the year ended December 31, 2023, our largest program administrator distributed $394.1 million or 34.5% of 
our gross written premiums and our second largest program administrator distributed $152.4 million, or 13.3% of our gross 
written premiums. There were no other program administrators which distributed greater than 10% of our gross written 
premiums for the year ended December 31, 2023. 
  
For the year ended December 31, 2022, our largest program administrator distributed $322.4 million or 36.6% of 
our gross written premiums and our second largest program administrator distributed $95.1 million, or 10.8% of our gross 
written premiums. There were no other program administrators which distributed greater than 10% of our gross written 
premiums for the year ended December 31, 2022. 
  
  
15. Retirement and Post-Employment Retirement Plans 
  
For employees meeting certain eligibility requirements, the Company provides a defined contribution retirement 
plan under IRC Section 401(k). Under a safe-harbor plan, the Company contributes 3% of each participant’s gross wages 
regardless of the employee’s contribution. For the years ended December 31, 2024, 2023 and 2022 the Company’s 
contributions to the plan were $1.3 million, $0.9 million and $0.7 million, respectively. 
  
  
16. Income Taxes 
  
The components of the Company’s income tax expense (benefit) are as follows: 
  
  
  
December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
  
  
(in thousands) 
  
Current ................................................................................................  $ 
31,560    $
27,267    $
18,842  
Deferred ..............................................................................................    
2,063      
(2,826 )     
(3,461) 
Income tax expense (benefit) .............................................................  $ 
33,623    $
24,441    $
15,381  
  
 
 

119 
As of December 31, 2024 and 2023, significant components of the Company’s deferred tax assets and liabilities 
were as follows: 
  
  
December 31, 
  
  
  
2024 
    
2023 
  
  
  
(in thousands) 
  
Deferred tax assets: 
      
        
  
Losses and LAE reserve discount ................................................................................   $ 
1,711    $
942  
State tax net operating losses .......................................................................................     
3,372      
3,486  
Deferred Intercompany ................................................................................................     
605      
656  
Unearned premiums .....................................................................................................     
19,550      
13,895  
Capitalized organizational costs ..................................................................................     
124      
154  
Unrealized losses on investments ................................................................................     
5,134      
5,829  
Deferred compensation ................................................................................................     
2,533      
2,425  
Lease Liability .............................................................................................................     
1,631      
478  
Other ............................................................................................................................     
2,230      
1,223  
Total deferred tax assets ..................................................................................................   $ 
36,890    $
29,088  
Deferred tax liabilities: 
      
        
  
Deferred acquisition costs ............................................................................................   $ 
(19,929)   $
(12,128 ) 
Internally developed software ......................................................................................     
(1,118)     
(1,276 ) 
State deferred tax liability ............................................................................................     
(1,216)     
(1,150 ) 
Right-of-use Asset .......................................................................................................     
(1,604)     
(478 ) 
Other ............................................................................................................................     
(837)     
(451 ) 
Total deferred tax liabilities ............................................................................................     
(24,704)     
(15,483 ) 
Net deferred tax asset (liability) before valuation allowance ..........................................     
12,186      
13,605  
Valuation allowance ........................................................................................................     
(3,372)     
(3,486 ) 
Total net deferred tax assets (liabilities) ..........................................................................   $ 
8,814    $
10,119  
  
The above valuation allowance relates to state net operating losses ("NOL") carryforwards. Due to the limited 
carryforward period these do not meet the “more likely than not” criteria and it is necessary to maintain a valuation 
allowance on these items. The amount of the deferred tax asset considered realizable, however, could be adjusted if 
estimates of future taxable income during the carryforward period change or if objective negative evidence in the form of 
cumulative losses is no longer present. 
  
As of December 31, 2024, there is no federal net operating loss or tax credit carryforwards for tax purposes. The 
Company has $3.4 million of state NOLs (tax-effected, net of federal benefit) set to expire beginning in 2025 over various 
periods. There is $2.9 million of tax capital loss carryforwards which will begin to expire in 2030. 
  
The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the 
tax years ended December 31, 2024, 2023 and 2022: 
  
  
  
Years Ended December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
  
  
($ in thousands) 
  
Expense computed at federal tax 
rate ............................................   $ 
31,750      
21.00%   $
21,765      
21.00%   $
14,186      
21.00% 
Stock-based compensation ...........     
429      
0.28%     
1,523      
1.47%     
153      
0.23% 
Dividend received deduction and 
tax-exempt interest ....................     
(90)    
(0.06)%    
(96)    
(0.09)%    
(101)    
(0.15)% 
Meals & entertainment, penalties 
& parking ..................................     
291      
0.19%     
261      
0.25%     
180      
0.27% 
State tax expense ..........................     
601      
0.40%     
303      
0.29%     
773      
1.14% 
Valuation allowance .....................     
(113)    
(0.08)%    
416      
0.40%     
191      
0.28% 
Other .............................................     
755      
0.50%     
269      
0.26%     
(1)    
—% 
Income tax expense (benefit) .......   $ 
33,623      
22.23%   $
24,441      
23.58%   $
15,381      
22.77% 
   
For the year ended December 31, 2024, the difference relates primarily to Section 162(m) limitations on executive 
compensation deductions and state taxes, offset by the permanent component of employee stock option exercises. For the 
year ended December 31, 2023, the difference relates primarily to Section 162(m) limitations on executive compensation 
deductions and state taxes. For the year ended December 31, 2022, the difference relates primarily to the permanent 
component of employee stock option exercises and state taxes.  

120 
As of December 31, 2024 and 2023, the Company had no uncertain tax positions that required either recognition 
or disclosure in the consolidated financial statements. This is not expected to change significantly during the next 
twelve months. The Company classifies interest and penalties, if any, related to the liability for unrecognized tax benefits as 
a component of the provision for income taxes. The Company’s federal income tax returns for 2021 through 2023 and state 
income tax returns for 2020 through 2023 remain subject to examination by the tax authorities. The 2024 income tax return 
is expected to be filed in 2025 and is subject to examination when filed. 
  
Under Pillar Two/GloBE rules, certain countries have agreed to enact a jurisdictional-level minimum tax system 
with a minimum effective tax rate (ETR) of 15%. The Bermuda Corporate Income Tax Act of 2023 also established a 15% 
income tax regime. Companies with annual revenue above 750 million Euros will be within the scope of Pillar Two and the 
Bermuda CIT. As of December 31, 2024, Palomar is not within this revenue threshold and hence not an in-scope entity. 
Subsequent financial years will be assessed for these rules. 
  
 
17. Earnings Per Share 
  
The following table sets forth the computation of earnings per share of common stock: 
  
  
  
Year ended December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
  
  (in thousands, except shares and per share data)   
Net income .........................................................................................  $ 
117,573    $
79,201    $
52,170  
Weighted average common shares outstanding: 
      
        
        
  
Basic ...................................................................................................    
25,520,343      
24,822,004      
25,243,397  
Common Share equivalents ................................................................    
703,499      
505,087      
552,611  
Diluted ................................................................................................    
26,223,842      
25,327,091      
25,796,008  
  
      
        
        
  
Earnings per share: 
      
        
        
  
Basic ...................................................................................................  $ 
4.61    $
3.19    $
2.07  
Diluted ................................................................................................  $ 
4.48    $
3.13    $
2.02  
  
Common share equivalents relate to outstanding stock options, RSUs, and PSUs under the 2019 Plan and 
unpurchased shares under the 2019 ESPP and are calculated using the treasury stock method. 
       
  
18. Statutory financial information 
  
U.S. 
  
U.S. state insurance laws and regulations prescribe accounting practices for determining statutory net income and 
capital and surplus for insurance companies. In addition, state regulators may permit statutory accounting practices that 
differ from prescribed practices. Statutory accounting practices (“SAP”) prescribed or permitted by regulatory authorities 
for the Company’s insurance subsidiaries differ from U.S. GAAP. The principal differences between SAP and GAAP as 
they relate to the financial statements of the Company’s insurance subsidiaries are (a) policy acquisition costs are expensed 
as incurred under SAP, whereas they are deferred and amortized under GAAP, (b) certain assets are not admitted for 
purposes of determining surplus under SAP, (c) investments in fixed income securities are carried at fair value under 
GAAP whereas such securities are carried at amortized cost under SAP, and (d) the criteria for recognizing net DTAs and 
the methodologies used to determine such amounts are different under SAP and GAAP. 
  
Combined statutory net income and statutory capital surplus for the U.S. insurance subsidiaries, PSIC and PESIC 
as of December 31, 2024, 2023 and 2022 and for the years then ended are summarized as follows: 
  
  
  
December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
  
  
(in thousands) 
  
Statutory net income (loss) .................................................................  $ 
102,510    $
97,391    $
76,222  
Statutory capital and surplus ..............................................................    
451,719      
439,264      
314,508  
  

121 
Risk-Based Capital (“RBC”) requirements promulgated by the NAIC require property/casualty insurers to 
maintain minimum capitalization levels determined based on formulas incorporating various business risks of the insurance 
subsidiaries. As of December 31, 2024 and 2023, the company’s capital and surplus exceeds its authorized control level. 
   
Bermuda 
  
Under the Bermuda Insurance Act, 1978 and related regulations, PSRE is required to maintain certain solvency 
and liquidity levels. The minimum statutory solvency margin required at December 31, 2024 and 2023 was approximately 
$1.2 million and $1.2 million, respectively. Actual statutory capital and surplus at December 31, 2024 and 2023 was $17.0 
million and $16.1 million, respectively. PSRE had statutory net income of $0.4 million, $0.3 million and $0.2 million for 
2024, 2023 and 2022, respectively. 
  
PSRE had stockholders’ equity of $16.9 million and $16.3 million on a GAAP basis at December 31, 2024 and 
2023, respectively. The principal difference between statutory capital and surplus and stockholders’ equity presented in 
accordance with GAAP is related to the valuation of investments. No dividends were paid in 2024 and 2023. 
  
PSRE maintains a Class 3A license and thus must maintain a minimum liquidity ratio in which the value of its 
relevant assets is not less than 75.0% of the amount of its relevant liabilities for general business. Relevant assets include 
cash and cash equivalents, fixed maturity securities, accrued interest income, premiums receivable, losses recoverable from 
reinsurers, and funds withheld. The relevant liabilities include total general business insurance reserves and total other 
liabilities, less sundry liabilities. As of December 31, 2024 and 2023, the Company met the minimum liquidity ratio 
requirement. 
  
  
19. Dividend Restrictions 
  
U.S. 
  
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. 
  
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. 
  
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. 
  
In addition to the above limitations, any dividend or distribution declared is also subject to state regulatory 
approval prior to payment. In the future, state insurance regulatory authorities may adopt statutory provisions and dividend 
limitations more restrictive than those currently in effect. 
  
  
 
 

122 
Bermuda 
  
Bermuda regulations limit the amount of dividends and return of capital paid by a regulated entity. A Class 3A 
insurer is prohibited from declaring or paying a dividend if it is in breach of its minimum solvency margin, its enhanced 
capital requirement, or its minimum liquidity ratio, or if the declaration or payment of such dividend would cause such a 
breach, or if there are reasonable grounds for believing there has been such a breach. 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 to the Company from PSRE during 
2024 is calculated to be approximately $4.2 million. However, this dividend amount is subject to annual enhanced solvency 
requirement calculations. 
  
  
20. Commitments and Contingencies 
  
Litigation 
  
The Company is subject to legal proceedings arising from the normal conduct of its business. In the opinion of 
management, any ultimate liability that may arise from these proceedings will not have a material effect on the Company’s 
financial position. 
  
Letters of Credit and Trusts 
  
As of December 31, 2024, the Company has three irrevocable standby letters of credit for the benefit of ceding 
insurance companies to secure the unearned premium assumed by PSIC. The bank letters of credit amount to a total of $5.6 
million and may renew if the Company continues to assume premium from these insurance companies. The letters of credit 
are collateralized by the Company’s Credit Agreement. 
  
As of December 31, 2024, the Company has a Letter of Credit for the benefit of the State of California to secured 
unearned premium and loss reserves incurred in the Worker’s Compensation program. The letter of credit amounts to $75 
million and are collateralized by the Company’s available-for-sale investments. 
  
 In addition, the Company has established six Regulation 114 Trust accounts for the benefit of ceding insurance 
companies to secure the unearned premium assumed by PSIC. As of December 31, 2024 the trust had a market value of 
$7.9 million. 
  
  
 
 

123 
21. Variable Interest Entities ("VIEs") 
  
 Laulima Insurance Exchange, a Hawaii domiciled reciprocal exchange (“Laulima”) is a consolidated VIE. 
Laulima was formed in 2023 as an insurance carrier organized as an unincorporated association. 
  
The Company's PUEO entity manages the business operations of Laulima and receives a management fee for the 
services provided to Laulima. Upon formation of Laulima, PSIC provided capital of $15.0 million in the form of a 
contribution to the surplus note issued by Laulima, which remains outstanding as of December 31, 2024. The Company 
holds an interest in the form of this surplus note which is included in other liabilities on the Statement of Assets and 
Liabilities of Laulima. In addition, the Company provides quota share reinsurance on the property business of Laulima. The 
Company has determined that is has the ability to direct the activities that most significantly impact the economic 
performance of the Laulima and, as it has provided capital to Laulima, would absorb any expected losses which could be 
significant to Laulima. As such, the Company is deemed the primary beneficiary and consolidates the results of Laulima.  
  
The Company does not own the equity of Laulima, which is owned by the policyholders. In the event of 
dissolution, policyholders would share any residual unassigned surplus but are not subject to assessment for any deficit in 
unassigned surplus of Laulima. The assets of Laulima can be used only to settle the obligations of Laulima and general 
creditors have no recourse to the Company. 
  
The results of operations of Laulima are included in the Company’s consolidated statement of income and 
comprehensive income and Laulima generated $0.1 million of net loss in 2024 and $0.6 million of net loss in 2023. As of 
December 31, 2024, Laulima's assets totaled $51.0 million, primarily comprised of $18.5 million of cash and investments 
and $30.5 million of prepaid reinsurance premiums and are included in the Company's consolidated balance sheets. For the 
same year, Laulima's liabilities totaled $48.9 million and primarily include $30.5 million of unearned premiums and $15.0 
million of surplus notes. As of December 31, 2023, Laulima's assets totaled $16.4 million, primarily comprised of $15.1 
million of cash and investments, and are included in the Company's consolidated balance sheets.  For the same year, 
Laulima's liabilities totaled $16.9 million and primarily include $15.0 million of surplus notes. The surplus notes are 
payable to PSIC and eliminate in consolidation for all years presented. 
 
  
  
 
 

124 
Note 22. Subsequent Events 
  
On January 1, 2025, the Company acquired 100% of the outstanding voting stock of First Indemnity of America 
Insurance Company (“FIA”) for a purchase price of $29.3 million. FIA is a New Jersey domiciled insurance carrier that 
specializes in the underwriting of surety bonds for small to medium sized contractors primarily in the Northeast United 
States. FIA is licensed in 16 states and is rated "A-" by A.M. Best. To date, the initial accounting for the acquisition is 
incomplete due to the limited time since the closing date. The Company is still gathering the necessary information to 
provide such disclosures in future filings. 
  
The Company has evaluated all other subsequent events from the balance sheet date through the date the financial 
statements were issued and has determined there are no additional events required to be disclosed. 
  
  
  
  
 
 

125 
Schedule II 
  
Palomar Holdings, Inc. and Subsidiaries 
Balance Sheets (Parent Company) 
(In Thousands, except shares and par value data) 
  
  
  
December 31, 
2024 
    
December 31, 
2023 
  
Assets 
      
        
  
Investments: 
      
        
  
Fixed maturity securities available for sale, at fair value (amortized cost: $153,425 
in 2024, $51,946 in 2023) ........................................................................................   $ 
147,467    $ 
48,626  
Equity securities, at fair value: (cost: $1,725 in 2024, $1,725 in 2023) .......................     
2,182      
1,835  
Equity method investment ...........................................................................................     
2,277      
2,617  
Total investments ............................................................................................................     
151,926      
53,078  
Cash and cash equivalents ...........................................................................................     
1,797      
314  
Accrued investment income .........................................................................................     
1,547      
345  
Prepaid expenses and other assets................................................................................     
—      
3,780  
Receivables from subsidiaries .....................................................................................     
78,961      
51,967  
Note receivable from subsidiary ..................................................................................     
15,000      
15,000  
Investment in subsidiaries ............................................................................................     
580,535      
530,690  
Total assets ......................................................................................................................   $ 
829,766    $ 
655,174  
Liabilities and Stockholders' equity 
      
        
  
Liabilities: 
      
        
  
Accounts payable and other liabilities .........................................................................   $ 
12,396    $ 
10,120  
Payables to subsidiaries ...............................................................................................     
88,340      
157,404  
Federal income tax payable .........................................................................................     
—      
16,398  
Total liabilities.................................................................................................................     
100,736      
183,922  
Stockholders' equity: 
      
        
  
Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of  
December 31, 2024 and December 31, 2023, 0 shares issued and outstanding  
as of December 31, 2024 and December 31, 2023 ...................................................     
—      
—  
Common stock, $0.0001 par value, 500,000,000 shares authorized, 26,529,402 and 
24,772,987 shares issued and outstanding as of December 31, 2024 and  
December 31, 2023, respectively .............................................................................     
3      
3  
Additional paid-in capital ............................................................................................     
493,656      
350,597  
Accumulated other comprehensive income (loss) .......................................................     
(26,845 )     
(23,991) 
Retained earnings .........................................................................................................     
262,216      
144,643  
Total stockholders' equity ................................................................................................     
729,030      
471,252  
Total liabilities and stockholders' equity .........................................................................   $ 
829,766    $ 
655,174  
  
See accompanying notes. 
  
  
 
 

126 
Schedule II 
  
Palomar Holdings, Inc. and Subsidiaries 
Statements of Income (Parent Company) 
(In Thousands) 
  
  
  
Year Ended December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
Revenues: 
      
        
        
  
Net investment income .......................................................................  $ 
4,877    $
1,699    $
1,048  
Net realized and unrealized gains (losses) on investments .................    
23      
(209 )     
(320) 
Total revenues .................................................................................    
4,900      
1,490      
728  
Expenses: 
      
        
        
  
Other operating expenses ...................................................................    
48,251      
39,347      
33,292  
Loss before income taxes ................................................................    
(43,351)     
(37,857 )     
(32,564) 
Income tax benefit ..............................................................................    
(10,199)     
(7,953 )     
(8,464) 
Loss before equity in net income of subsidiaries ............................    
(33,152)     
(29,904 )     
(24,100) 
Equity in net income of subsidiaries ..................................................    
150,725      
109,105      
76,270  
Net income 
    
117,573      
79,201      
52,170  
Other comprehensive income: 
      
        
        
  
Net unrealized losses on securities available for sale .........................    
(5,114)     
(2,505 )     
(3,997) 
Equity in other comprehensive income (loss) of subsidiaries, net  
of taxes ............................................................................................    
2,261      
15,029      
(37,830) 
Total comprehensive income ..........................................................  $ 
114,720    $
91,725    $
10,343  
  
See accompanying notes. 
  
 
 
 

127 
Schedule II 
  
Palomar Holdings, Inc. and Subsidiaries 
Statements of Cash Flows (Parent Company) 
(In Thousands) 
  
  
  
Year Ended December 31, 
  
  
  
2024 
    
2023 
    
2022 
  
Operating activities 
      
        
        
  
Net income .........................................................................................  $ 
117,573    $
79,201    $
52,170  
Adjustments to reconcile net income to net cash provided by 
operating activities: 
      
        
        
  
Equity in undistributed earnings of subsidiaries .............................    
(150,725)     
(109,105 )     
(76,270) 
Stock-based compensation expense ................................................    
10,513      
10,426      
8,820  
Net realized and unrealized losses on investments .........................    
(23)     
209      
320  
Amortization of premium on fixed maturity securities ...................    
172      
189      
347  
Deferred income tax expense ..........................................................    
(15,640)     
2,787      
7,210  
Dividend received from subsidiary .................................................    
95,000      
—      
—  
Changes in operating assets and liabilities: 
    
(80,154)     
37,777      
36,449  
Net cash provided by (used in) operating activities ....................    
(23,284)     
21,484      
29,046  
Investing activities 
      
        
        
  
Purchases of fixed maturity securities ................................................    
(114,611)     
(11,045 )     
(9,807) 
Sales and maturities of fixed maturity securities ................................    
13,004      
9,232      
8,488  
Net cash provided by (used in) investing activities .....................    
(101,607)     
(1,813 )     
(1,319) 
Financing activities 
      
        
        
  
Proceeds from stock offering, net of offering costs ............................    
115,724      
—      
—  
Proceeds from common stock issued via equity incentive plans ........    
7,892      
2,038      
3,032  
Policyholder contribution to surplus ..................................................    
2,758      
90      
—  
Repurchase of common stock .............................................................    
—      
(22,266 )     
(34,415) 
Net cash provided by (used in) financing activities ....................    
126,374      
(20,138 )     
(31,383) 
Net (decrease) increase in cash and cash equivalents ..................    
1,483      
(467 )     
(3,656) 
Cash and cash equivalents at beginning of period ..............................    
314      
781      
4,437  
Cash and cash equivalents at end of period ........................................  $ 
1,797    $
314    $
781  
Supplementary cash flow information: 
      
        
        
  
Cash paid for income taxes ................................................................  $ 
38,454    $
21,124    $
18,890  
Cash paid for interest ..........................................................................  $ 
1,048    $
3,682    $
704  
  
See accompanying notes. 
  
  
 
 

128 
Schedule II 
  
1.Accounting Policies 
  
Organization 
  
Palomar Holdings, Inc. (“the Company”), is an insurance holding company that domesticated in Delaware in 
March 2019. Prior to domestication in Delaware, the Company was known as GC Palomar Holdings (“GCPH”), which was 
a Cayman Islands incorporated insurance holding company formed on October 4, 2013 when GC Palomar Investor LP 
(“GCPI”) acquired control of GCPH. 
  
Basis of Presentation 
  
The accompanying condensed financial statements have been prepared using the equity method. Under the equity 
method, the investment in consolidated subsidiaries is stated at cost plus equity in undistributed earnings of consolidated 
subsidiaries since the date of acquisition. These condensed financial statements should be read in conjunction with the 
Company’s consolidated financial statements. 
  
Estimates and Assumptions 
  
Preparation of the financial statements in conformity with GAAP requires management to make estimates and 
assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Those estimates are 
inherently subject to change, and actual results may ultimately differ from those estimates. 
  
  
  
 
 

129 
Schedule V 
  
Palomar Holdings, Inc. and Subsidiaries 
Valuation and Qualifying Accounts 
  
  
    
  
    Additions     Deductions       
  
  
  
  Balance at     Amounts     Amounts     Balance at   
  
  Beginning     Charged to    Written     
End of 
  
(in thousands) 
  of Period     Expense     
Off 
    
Period 
  
Year Ended December 31, 2024 
      
        
        
        
  
Valuation Allowance for deferred tax assets ................................   $ 
3,486    $ 
—    $ 
114    $ 
3,372  
Valuation Allowance for premium receivable ..............................   $ 
49    $ 
30      
16    $ 
63  
Year Ended December 31, 2023 
      
        
        
        
  
Valuation Allowance for deferred tax assets ................................   $ 
3,070    $ 
416    $ 
—    $ 
3,486  
Valuation Allowance for premium receivable ..............................   $ 
96    $ 
42      
89    $ 
49  
  
   
  
  
 
 

130 
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
  
None. 
  
Item 9A. Controls and Procedures 
  
Evaluation of Disclosure Controls and Procedures 
  
Our management, with the participation of our principal executive officer and our principal financial officer, 
evaluated, as of the end of the period covered by this Annual Report on Form 10-K, the effectiveness of our disclosure 
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as 
amended, or the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer 
have concluded that as of December 31, 2024, our disclosure controls and procedures were effective at the reasonable 
assurance level. Management recognizes that any controls and procedures, no matter how well designed and operated, can 
provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in 
evaluating the cost-benefit relationship of possible controls and procedures. 
  
Management’s Report on Internal Control over Financial Reporting 
  
Our management is responsible for establishing and maintaining adequate internal control over financial reporting 
as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internal control 
over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the 
preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the 
United States of America. Our internal control over financial reporting includes those policies and procedures that: 
  
(i)    Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and 
dispositions of our assets; 
  
(ii)    Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial 
statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being 
made only in accordance with authorizations of our management and directors; and 
  
(iii)    Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or 
disposition of our assets that could have a material effect on the financial statements. 
  
Because of its inherent limitations, internal control over financial reporting may not prevent or detect 
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may 
become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may 
deteriorate. 
  
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. 
In making this assessment, management used the framework in Internal Control-Integrated Framework (2013) issued by the 
Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included an evaluation 
of the design of our internal control over financial reporting and testing of the operational effectiveness of its internal 
control over financial reporting. Management reviewed the results of its assessment with the audit committee of our board 
of directors. 
  
Based on that assessment under the framework in Internal Control-Integrated Framework (2013), management 
concluded that the company’s internal control over financial reporting was effective as of December 31, 2024. Pursuant to 
Section 404(c) of the Sarbanes-Oxley Act, our independent registered public accounting firm has issued an attestation 
report on the effectiveness of our internal control over financial reporting for the year ended December 31, 2024, which is 
included above. 
  
Changes in Internal Control over Financial Reporting 
  
There were no changes in our internal control over financial reporting identified in connection with the evaluation 
required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2024 
that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 
  
 
 

131 
Item 9B. Other Information 
  
Rule 10b5-1 Plans 
  
On December 4, 2024, Mac Armstrong, the Company’s Chairman and Chief Executive Officer, entered a trading 
plan intended to satisfy the affirmative defense conditions of Rule 10b5-1c under the Exchange Act, providing for the sale 
of up to 65,000 shares of the Company’s common stock. Pursuant to this plan, Mr. Armstrong may sell shares beginning 
March 5, 2025 and ending February 15, 2026. 
  
On December 10, 2024, Angela Grant, the Company’s Chief Legal Officer, entered a trading plan intended to 
satisfy the affirmative defense conditions of Rule 10b5-1c under the Exchange Act, providing for the exercise and sale of up 
to 297 shares of Company stock options and the sale of up to 2,071 shares of the Company’s common stock. Pursuant to 
this plan, Ms. Grant may sell shares beginning March 11, 2025 and ending August 31, 2025. 
  
On December 13, 2024, Chris Uchida, the Company’s Chief Financial Officer, entered a trading plan intended to 
satisfy the affirmative defense conditions of Rule 10b5-1c under the Exchange Act, providing for the exercise and sale of up 
to 2,524 shares of Company stock options and the sale of up to 8,981 shares of the Company’s common stock. Pursuant to 
this plan, Mr. Uchida may sell shares beginning March 14, 2025 and ending August 31, 2025. 
  
On December 13, 2024, Jon Christianson, the Company’s President, entered a trading plan intended to satisfy the 
affirmative defense conditions of Rule 10b5-1c under the Exchange Act, providing for the exercise and sale of up to 18,000 
shares of Company stock options. Pursuant to this plan, Mr. Christianson may sell shares beginning March 14, 2025 and 
ending August 31, 2025. 
  
There were no “non-Rule 10b5-1 trading arrangements” (as defined in Item 408 of Regulation S-K of the Exchange 
Act) adopted, modified or terminated during the fiscal year ended December 31, 2024 by our directors and Section 16 
officers. Each of the Rule 10b5-1 trading arrangements are in accordance with our Insider Trading Policy and actual sale 
transactions made pursuant to such trading arrangements will be disclosed publicly in Section 16 filings with the SEC in 
accordance with applicable securities laws, rules and regulations. 
  
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 
  
Not applicable. 
  
  
PART III 
  
Item 10. Directors, Executive Officers and Corporate Governance 
  
The information required by this item is incorporated herein by reference to our Proxy Statement with respect to 
our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by 
this Annual Report on Form 10-K. 
  
Item 11. Executive Compensation 
  
The information required by this item is incorporated herein by reference to our Proxy Statement with respect to 
our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by 
this Annual Report on Form 10-K. 
  
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 
  
The information required by this item is incorporated herein by reference to our Proxy Statement with respect to 
our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by 
this Annual Report on Form 10-K. 
  
Item 13. Certain Relationships and Related Transaction and Director Independence 
  
The information required by this item is incorporated herein by reference to our Proxy Statement with respect to 
our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by 
this Annual Report on Form 10-K. 
  
Item 14. Principal Accounting Fees and Services 
  
The information required by this item is incorporated herein by reference to our Proxy Statement with respect to 
our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the end of the fiscal year covered by 
this Annual Report on Form 10-K. 

132 
PART IV 
  
Item 15. Exhibits and Financial Statement Schedules 
  
(a) (1) and (2) Financial Statements and Financial Statement Schedules- All financial statement schedules are filed as part 
of this report under Item 8- Financial Statements. 
  
(3) Exhibits 
  
Exhibit 
Number   
Exhibit Description 
 
 
 
3.1
 
Certificate of Amendment to Certificate of Incorporation of the Registrant (incorporated by reference to 
Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 27, 2022). 
3.2
 
Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Company’s 
Current Report on Form 8-K filed with the Commission on May 27, 2022). 
4.1
 
Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Amendment 
No. 2 to Registration Statement on Form S-1, filed with the SEC on April 8, 2019). 
4.2
 
Description of the Registrant’s Securities (incorporated by reference to Exhibit 4.2 to the Company’s 2020 
Annual Report on Form 10-K, filed with the SEC on March 9, 2021). 
10.1+
 
2019 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Registration 
Statement on Form S-1, filed with the SEC on March 15, 2019). 
10.2+
 
2019 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 to the Company’s 
Registration Statement on Form S-1, filed with the SEC on March 15, 2019). 
10.3+
  
Executive Employment Agreement, dated January 1, 2025, by and between the Company and Mac 
Armstrong (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed 
with the SEC on December 30, 2024). 
10.4+
 
Form of Executive Employment Agreement (Named Executive Officers) (incorporated by reference to 
Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q filed with the SEC on August 3, 2023). 
10.5+
 
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.6 to the Company’s 
Registration Statement on Form S-1, filed with the SEC on March 15, 2019). 
10.6†
 
Program Administrator Agreement, dated as of February 19, 2014 (as amended by that certain First 
Amendment to Program Administrator Agreement, dated as of July 14, 2014, that certain Second 
Amendment to Program Administrator Agreement, dated as of March 21, 2016, that certain Third 
Amendment to Program Administrator Agreement, dated as of May 29, 2018 and that certain Second 
Amendment to Schedule H of the Program Administrator Agreement, dated as of August 29, 2018), by and 
between Palomar Specialty Insurance Company and Arrowhead General Insurance Agency, Inc. 
(incorporated by reference to Exhibit 10.7 to the Company’s Amendment No. 2 to Registration Statement on 
Form S-1, filed with the SEC on April 8, 2019). 
10.7+
 
Form of Notice of Grant of Performance Stock Units under 2019 Equity Incentive Plan (incorporated by 
reference to Exhibit 10.8 to the Company’s 2020 Annual Report on Form 10-K, filed with the SEC on March 
9, 2021). 
10.8+
 
Form of Performance Stock Units Agreement under 2019 Equity Incentive Plan (incorporated by reference 
to Exhibit 10.9 to the Company’s 2020 Annual Report on Form 10-K, filed with the SEC on March 9, 2021). 
  
  
 
 

133 
Exhibit 
Number   
Exhibit Description 
 
 
 
10.9+
 
Credit Agreement (Revolver), dated December 8, 2021, by and between the Registrant, the lenders listed 
therein and U.S. Bank National Association (incorporated by reference to Exhibit 10.1 to the Company’s 
Current Report on Form 8-K, filed with the SEC on December 9, 2021). 
10.10+
 
Guaranty, dated December 8, 2021, made in favor of U.S. Bank National Association by Registrant, Palomar 
Specialty Insurance Company, Palomar Excess and Surplus Insurance Company and Palomar Insurance 
Agency, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed 
with the SEC on December 9, 2021). 
19  Insider Trading Policy 
21.1 
List of subsidiaries of the Company. 
23.1 
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm. 
31.1 
Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 
31.2 
Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 
32.1*
 
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley 
Act of 2002. 
97
  
Policy for Recovery of Erroneously Awarded Incentive Compensation (incorporated by reference to Exhibit 
97 to the Company’s 2023 Annual Report on Form 10-K, filed with the SEC on February 23, 2024). 
101.INS 
Inline XBRL Instance Document. 
101.SCH 
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101.DEF 
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101.LAB 
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101.PRE 
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104
 
Cover Page Interactive Date File (embedded within the Inline XBRL document and contained in Exhibit 
101) 
  
 
+ 
Management contract or compensatory plan or arrangement. 
  
† 
Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10). 
  
* 
This certification is deemed not filed for purposes of section 18 of the Exchange Act, or otherwise subject to the 
liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the 
Exchange Act. 
  
  
Item 16. Form 10-K Summary 
  
None. 
  
  
 
 

134 
SIGNATURES 
  
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly 
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on February 25, 2025. 
  
 
Palomar Holdings, Inc. 
 
 
 
  
By: 
/s/ Mac Armstrong 
 
  
Mac Armstrong 
Chairman and Chief Executive Officer 
  
POWER OF ATTORNEY 
  
POWER OF ATTORNEY 
  
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and 
appoints Mac Armstrong and T. Christopher Uchida, jointly and severally, his attorneys-in-fact, each with the power of 
substitution, for him or her in any and all capacities, to sign any amendments to this Report on Form 10-K, and to file the 
same, with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, 
hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes may do or cause to be 
done by virtue hereof. 
  
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the 
following persons on behalf of the registrant and in the capacities and on the dates indicated. 
  
Signature 
Title 
Date 
 
 
 
 
 
 
/s/ Mac Armstrong 
 Chairman of the Board and Chief Executive Officer  
February 25, 2025 
Mac Armstrong 
(Principal Executive Officer) 
  
 
 
 
 
 
 
/s/ T. Christopher Uchida 
 Chief Financial Officer  
February 25, 2025 
T. Christopher Uchida 
(Principal Financial and Accounting Officer) 
 
  
  
  
 
 
 
/s/ Daryl Bradley 
Director 
February 25, 2025 
Daryl Bradley 
  
  
 
 
 
  
  
  
/s/ Thomas Bradley 
Director 
February 25, 2025 
Thomas Bradley 
  
  
  
  
  
 
 
 
/s/ Catriona M. Fallon 
Director 
February 25, 2025 
Catriona M. Fallon 
  
  
 
 
 
 
 
 
/s/ Daina Middleton 
Director 
February 25, 2025 
Daina Middleton 
  
  
  
 
/s/ Martha Notaras 
Director 
February 25, 2025 
Martha Notaras 
  
  
 
 
 
 
 
 
/s/ Richard H. Taketa 
Lead Independent Director 
February 25, 2025 
Richard H. Taketa 
  
  
  

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Corporate Information
Corporate Headquarters
7979 Ivanhoe Avenue 
Suite 500 
La Jolla, CA 92037
Transfer Agent
Computershare, Inc.
Independent Registered 
Public Accounting Firm
Ernst & Young LLP
Investor Information
Investor Relations 
investors@plmr.com 
619-771-1743
Palomar Holdings, Inc. common stock trades on the Nasdaq Stock Exchange under the symbol PLMR
Safe Harbor Statement
This Annual Report contains forward-looking statements within the meaning of the federal securities laws, which statements involve 
substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating 
performance. In some cases, you can identify forward-looking statements because they contain words such as “may”, “will”, “should”, 
“expects”, “plans”, “anticipates”, “could”, “intends”, “target”, “projects”, “contemplates”, “believes”, “estimates”, “predicts”, “would”, “potential” 
or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. 
These forward-looking statements include, among others, statements relating to our future financial performance, our business prospects and 
strategy, anticipated financial position, liquidity and capital needs and other similar matters. These forward-looking statements are based on 
management’s current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in 
circumstances that are difficult to predict.

Executive Management
Board of Directors
Mac Armstrong 
Founder, Chairman, and 
Chief Executive Officer
Jon Christianson 
President
Chris Uchida 
Chief Financial Officer
Mac Armstrong 
Founder, Chairman and 
Chief Executive Officer 
Palomar
ERM SC IC
Richard Taketa* 
President 
Taketa Capital 
Corporation
CC - Chair NCG IC
Jon Knutzen 
Chief Risk Officer
Angela Grant 
Chief Legal Officer and 
Corporate Secretary
Rudy Hervé 
Chief Operating Officer
Daryl Bradley 
Former Executive Vice 
President and Head of 
International Insurance 
Everest Reinsurance
AC ERM - Chair SC
Thomas Bradley 
Former Chief 
Executive Officer 
Argo
AC CC ERM IC - Chair
Tim Carter 
Chief People Officer
Robert Beyerle  
Chief Underwriting Officer
Althea Garvey 
Chief Claims Officer
Catriona Fallon 
Chief Financial Officer 
SambaNova Systems
AC - Chair NCG IC
Martha Notaras 
Managing Partner 
Brewer Lane Ventures
CC ERM NCG - Chair
James Long 
Chief Technology Officer
Kyle Morgan 
Chief Strategy Officer
Ethan Genteman 
Chief Actuarial Officer
Daina Middleton 
Co-founder 
PrismWork
AC CC SC - Chair
AC Audit Committee
CC Compensation Committee
ERM Enterprise Risk Management Committee
SC Sustainability Committee
NCG Nominating and Corporate Governance Committee
IC Investment Committee
*Lead Independent Director

7979 Ivanhoe Avenue, Suite 500
La Jolla, CA 92037
619-567-5290
plmr.com