Specialty insurance company Palomar Holdings, Inc. reported a 60.6% increase in net income to $56.2 million in the fourth quarter of 2025, compared with net income of $35 million in the fourth quarter of 2024.
The insurer reported strong underwriting results for the quarter, with gross written premiums (GWP) increasing 31.8% to $492.6 million, compared with $373.7 million in the fourth quarter of 2024. Net premiums written (NPW) in 4Q25 increased 46.3% to $247.6 million, compared to $169.2 million in 4Q24. Meanwhile, net premiums earned (NPE) increased 61.1% to $233.5 million, compared with $144.9 million in Q4 2024.
Underwriting revenue in 4Q25 was $54.4 million and combined ratio was 76.8%, compared to $34.9 million and 75.9% in the same period in 2024.
Meanwhile, losses and loss adjustment expenses for the fourth quarter of 2025 were $70.9 million, including $72.9 million in natural loss losses and $2.1 million in favorable catastrophe losses.
The loss rate in the quarter was 30.4%, of which the natural loss rate was 31.3%, and the catastrophe loss rate was -0.9%, while the loss rate in the fourth quarter of 2024 was 25.7%, of which the natural loss rate was 20.1%, and the catastrophe loss rate was 5.6%.
The insurer explained that the current quarter’s results included $2.8 million in favorable developments from the prior year, primarily from short-tail inland marine and other real estate operations.
On the asset side, Palomar reported net investment income increased 41.3% to $16.0 million from $11.3 million in the fourth quarter of 2024, driven by higher yields on invested assets and an increase in the average investment balance held as a result of cash generated from operations during the three-month period ended December 31, 2025.
Looking ahead to full-year 2025 results, Palomar reported GWP growth of 31.5% to $2.0 billion, compared with $1.5 billion in 2024. NPW increased 49.5% to $964 million compared to $644.8 million in 2024; NPE increased 57.2% to $802.6 million compared to $510.7 million in 2024. Underwriting revenue increased 66.1% to $185.9 million compared to $111.9 million in 2024.
In 2025, the total loss rate increased slightly to 28.5%, compared with 26.4% in 2024, and the catastrophe loss rate fell to -0.1%, compared with 5.5% in 2024. The comprehensive loss rate for fiscal year 2025 also fell to 76.9% from 78.1% in 2024.
Net profit in 2025 will be US$197.1 million, an increase of 67.6% from US$117.6 million in 2024.
Mac Armstrong, Chairman and Chief Executive Officer of Palomar Holdings, commented: “Our strong fourth quarter results set the stage for an extraordinary 2025. The quarter was highlighted by record adjusted net income, strong top and bottom line growth, and a 32% increase in total premiums written across our unique and diverse portfolio and a 48% increase in adjusted net income.
“Our suite of specialty products is purpose-built to ride any market cycle and generate strong, consistent returns. The fourth quarter further demonstrated this capability, with our adjusted combined ratio of 73% and adjusted return on equity of 27%.
“There are numerous accomplishments in 2025 that go beyond strong financial results. Notable achievements include the successful acquisitions of Advanced Ag Protection and The Gray Casualty and Surety Company, as well as the addition of numerous outstanding leaders across the organization. These investments should sustain our long-term profitable growth trajectory and Palomar 2X strategic imperative.”
