Catastrophe Insurer Palomar Announces IPO Pricing, Shares Rise 1st Day of Trading

By | April 17, 2019

La Jolla, Calif.-based Palomar Holdings Inc. this week announced the pricing of its initial public offering of its common stock at a price of $15 per share and in its first day of trading on Wednesday it had at one point reached nearly $20 per share.

Palomar is offering 5,625,000 shares of its common stock, plus up to an additional 843,750 shares that the underwriters have the option to purchase.

Shares of the firm closed at $18.99, up $3.99, on a trading volume of more than 3.3 million shares. Shares reached a high of $19.96 on the day.

The shares began on the Nasdaq Global Select Market on under the ticker symbol “PLMR.” The offering is expected to close on April 22, 2019, subject to customary closing conditions.

The company offers insurance for earthquake, wind and flood risk. Palomar uses data analytics and a technology platform to offer customers flexible products “with customized and granular pricing on admitted basis.” Palomar sells its coverage through retail agents, program administrators, wholesale brokers, and in partnership with other insurance companies.

Palomar, first launched in 2014, increased its gross written premiums from $16.6 million in 2014 to $154.9 million in 2015, according to its filing. For 2018, the company reported a nearly 21 percent return on equity and a 71.6 combined ratio, it said.

The company currently does business in 14 states: California, Oregon, Washington, Missouri, Texas, Oklahoma, Arizona, Nevada, Utah, Kentucky, Kansas, Indiana, Tennessee and Alaska.

Barclays Capital Inc., J.P. Morgan and Keefe, Bruyette & Woods Inc. are acting as joint lead book-running managers for the offering. Evercore Group L.L.C., William Blair & Company, L.L.C., Sandler O’Neill & Partners, L.P. and SunTrust Robinson Humphrey Inc. are acting as joint book-running managers for the offering.

The company has been busy lately on several fronts.

In February, it launched Flood Guard, a private flood program in California that it has since expanded to other states. In 2017, Palomar Specialty partnered with AAA Club Alliance to offer residential earthquake insurance, beginning in Oklahoma.It launched a wholly owned subsidiary, Prospect General Insurance Agency in 2016, and Prospect later that year launched a real estate investor insurance program.

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