Business Context and Reporting Period
Palomar Holdings, Inc. filed a Form 8-K on November 2, 2021, under Item 2.02 to report revised estimated pretax catastrophe losses for the third quarter of 2021.
Key Financial Metrics
- Revised pretax catastrophe losses: $17.5 million, net of reinsurance and prior-period development.
- Loss components: Estimated losses from Hurricanes Ida and Nicholas, plus a $5.0 million loss under an excess liability indemnity policy issued by Palomar Excess and Surplus Insurance Company.
- Per-share impact: The excess liability policy loss, net of accelerated earned premium, is expected to reduce quarterly results by approximately $0.09 per share, or $2.3 million.
- The filing does not provide revenue, net income, cash flow, margins, debt, liquidity, or other full-quarter financial metrics.
Material Changes Versus Prior Comparable Period
The filing reports revised third-quarter 2021 catastrophe loss estimates but does not provide a comparison with the prior-year or prior-quarter period. The reported estimates include the newly identified or revised loss associated with the PG&E-related policy.
Outlook, Risks, and Unusual Items
- The PG&E-related loss arose under a high-attaching excess-of-loss liability policy covering wildfire-related liability, with a maximum coverage amount of $5.0 million.
- The loss remains subject to further review and adjudication, including the possibility of recoveries.
- Loss estimates are preliminary and may change because of claim complexity and limited available information.
- Palomar had not completed its financial closing and review procedures for the quarter; updated catastrophe loss estimates were expected to be reflected in the third-quarter 2021 results.
Investor Verification Items
- Verify the final third-quarter 2021 catastrophe losses and any changes from the $17.5 million estimate.
- Assess the final impact of the PG&E-related claim, including any recoveries or adjudication outcomes.
- Confirm the final per-share effect and the treatment of accelerated earned premium.
- Review the completed third-quarter financial statements for revenue, earnings, capital, liquidity, and reinsurance impacts.