JUNE 16, 2022 09:31 AM (EDT)
AM Best Affirms Credit Ratings of Palomar Holdings, Inc. and Its Member Companies
|Chris Draghi |
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Manager, Public Relations
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Managing Director, Strategy & Communications
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FOR IMMEDIATE RELEASE
OLDWICK - JUNE 16, 2022 09:31 AM (EDT)
AM Best has affirmed the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb-” (Good) of Palomar Holdings, Inc. (Palomar) (Delaware) [NASDAQ: PLMR], the ultimate parent and insurance holding company of Palomar Specialty Insurance Company (PSIC) (headquartered in La Jolla, CA), Palomar Excess and Surplus Insurance Company (PESIC) (Phoenix, AZ) and Palomar Specialty Reinsurance Company Bermuda Ltd. (Palomar Re) (Bermuda). Concurrently, AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) of PSIC, PESIC and Palomar Re. The outlook of these Credit Ratings (ratings) is stable. PSIC, PESIC and Palomar Re are members of Palomar.
The ratings reflect Palomar’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
Palomar’s overall balance sheet strength is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), solid liquidity, positive operating cash flows and generally favorable loss reserve development. Partially offsetting these positions is material reinsurance dependency, reflective of the group’s strategic use of excess of loss and quota share arrangements to mitigate volatility and catastrophe exposure. Palomar writes a variety of risks through its admitted and nonadmitted entities, primarily focused on earthquake coverage in California, Hawaii hurricane, inland marine and commercial all-risk products. The consolidated group consistently has reported net income, reflective of prudent underwriting strategies that Palomar continues to refine in an effort to curb volatility, particularly in the admitted markets.
Palomar completed an initial public offering in 2019 with the associated capital raises driving GAAP equity growth over the previous five-year period. This growth has supported substantial premium and geographic expansion as management has built out its core product lines. Distribution strategies leverage several channels including retail agents, wholesale brokers, program administrators and carrier partnerships. While growth has been formidable, an appropriate ERM program has been implemented to partially mitigate volatility.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.