Palomar raises 2023 net income guidance
Palomar Holdings Inc, the parent company of island-based Palomar Specialty Reinsurance Company Bermuda Ltd, has announced the successful completion of certain reinsurance programmes incepting June 1, and increased the company’s full year 2023 adjusted net income guidance.
Palomar’s reinsurance coverage now exhausts at $2.68 billion for earthquake events including $17.5 million of additional limit incepting September 1, $900 million for Hawaii hurricane events, and $100 million for all continental United States hurricane events.
The company said the reinsurance programme provides ample capacity for the company’s growth in the subject business lines as well as coverage to a level exceeding Palomar’s 1:250-year peak zone probable maximum loss.
Palomar has now purchased approximately $550 million of reinsurance limit to support the growth of its earthquake franchise in 2023. Some $200 million of the new limit was sourced through a new catastrophe bond, the Torrey Pines Re Series 2023-1 notes. The new catastrophe bonds were the fourth insurance linked securities issuance Palomar has sponsored.
Palomar’s per occurrence catastrophe event retention is now $17.5 million, a level that remains well within management’s previously stated guideposts, on an after-tax basis, of less than one quarter’s earnings and less than five per cent of the company’s surplus.
“In what most have deemed the hardest reinsurance market in 30 years, we successfully completed our 6/1 renewal. Importantly, we maintained our retention within our previously stated expectations, bought incremental limit to support our growth, preserved important terms and conditions such as prepaid reinstatements, and successfully completed our fourth catastrophe bond,” said Mac Armstrong, Palomar’s chairman and chief executive officer.
“While risk-adjusted pricing increased, the total expense was within our previously stated expectations. The success of this placement, along with our strong start to the year allow us to raise our full year 2023 adjusted net income guidance to a range of $88 million to $92 million.”