0001558370-21-002643 | 10-K | XBRL Viewer

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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2020	Mar. 05, 2021	Jun. 30, 2020
Cover [Abstract]
Entity Central Index Key	0001761312
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Document Transition Report	false
Entity File Number	001-38873
Entity Registrant Name	Palomar Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	83-3972551
Entity Address, Address Line One	7979 Ivanhoe Avenue
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	La Jolla
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92037
City Area Code	619
Local Phone Number	567-5290
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Entity Listing, Par Value Per Share	$ 0.0001
Trading Symbol	PLMR
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
ICFR Auditor Attestation Flag	true
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 2,053,685,544
Entity Common Stock, Shares Outstanding		25,570,868
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Amendment Flag	false

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $381,279 in 2020; $211,278 in 2019)	$ 397,987	$ 217,151
Equity securities, at fair value (cost: $22,291 in 2020; $21,336 in 2019)	24,322	22,328
Total investments	422,309	239,479
Cash and cash equivalents	33,538	33,119
Restricted cash	248	230
Accrued investment income	2,545	1,386
Premium receivable	48,842	36,237
Deferred policy acquisition costs	35,481	25,201
Reinsurance recoverable on unpaid losses and loss adjustment expenses	94,566	12,952
Reinsurance recoverable on paid losses and loss adjustment expenses	10,162	4,303
Ceded unearned premiums	35,031	26,105
Prepaid expenses and other assets	34,119	14,861
Property and equipment, net	739	845
Intangible assets	11,512	744
Total assets	729,092	395,462
Liabilities:
Accounts payable and other accrued liabilities	20,730	13,555
Reserve for losses and loss adjustment expenses	129,036	16,821
Unearned premiums	183,489	130,373
Ceded premium payable	22,233	11,383
Funds held under reinsurance treaty	4,515	1,658
Income and excise taxes payable		1,117
Deferred tax liabilities, net	5,376	1,999
Total liabilities	365,379	176,906
Stockholders' equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of December 31, 2020 and December 31, 2019, 0 shares issued and outstanding as of December 31, 2020 and December 31, 2019
Common stock, $0.0001 par value, 500,000,000 shares authorized, 25,525,796 and 23,468,750 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively	3	2
Additional paid-in capital	310,507	180,012
Accumulated other comprehensive income	13,246	4,686
Retained earnings	39,957	33,856
Total stockholders' equity	363,713	218,556
Total liabilities and stockholders' equity	$ 729,092	$ 395,462

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Condensed Consolidated Balance Sheets
Fixed maturity securities available for sale, amortized cost	$ 381,279	$ 211,278
Equity securities, cost	$ 22,291	$ 21,336
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	25,525,796	23,468,750
Common stock, shares outstanding (in shares)	25,525,796	23,468,750

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues:
Gross written premiums	$ 354,360	$ 251,961	$ 154,891
Ceded written premiums	(155,102)	(108,332)	(82,949)
Net written premiums	199,258	143,629	71,942
Change in unearned premiums	(44,190)	(43,422)	(2,045)
Net earned premiums	155,068	100,207	69,897
Net investment income	8,612	5,975	3,238
Net realized and unrealized gains (losses) on investments	1,488	4,443	(2,569)
Commission and other income	3,295	2,671	2,405
Total revenues	168,463	113,296	72,971
Expenses:
Losses and loss adjustment expenses	64,115	5,593	6,274
Acquisition expenses	64,041	37,259	28,224
Other underwriting expenses (includes stock-based compensation of $2,167, $24,103 and $0 for the years ended December 31, 2020, 2019 and 2018, respectively)	34,084	51,299	17,957
Interest expense		1,068	2,303
Total expenses	162,240	95,219	54,758
Income before income taxes	6,223	18,077	18,213
Income tax expense (benefit)	(34)	7,456	(6)
Net income	6,257	10,621	18,219
Other comprehensive income, net:
Net unrealized gains (losses) on securities available for sale, net of taxes	8,560	5,249	(341)
Total comprehensive income	$ 14,817	$ 15,870	$ 17,878
Per Share Data:
Basic earnings per share (in dollars per share)	$ 0.25	$ 0.49	$ 1.07
Diluted (in dollars per share)	$ 0.24	$ 0.49	$ 1.07
Weighted-average common shares outstanding:
Basic (in shares)	24,872,251	21,501,541	17,000,000
Diluted (in shares)	25,598,647	21,834,934	17,000,000

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
Stock-Based Compensation Expense	$ 2,167	$ 24,103	$ 0

Consolidated Statements of Shareholder’s Equity - USD ($) $ in Thousands	Common Stock Stock Issued in January	Common Stock Stock Issued in June	Common Stock	Additional Paid-In Capital Stock Issued in January	Additional Paid-In Capital Stock Issued in June	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss) Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Income (Loss)	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	Retained Earnings	Stock Issued in January	Stock Issued in June	Cumulative Effect, Period of Adoption, Adjustment	Total
Beginning balance at Dec. 31, 2017			$ 2			$ 68,498	$ (3,215)	$ 2,993	$ 3,215	$ 6,921				$ 78,414
Beginning balance (in shares) at Dec. 31, 2017			17,000,000
Changes in Stockholders’ Equity
Other comprehensive income, net of tax														(341)
Other comprehensive income, net of tax								(341)						(341)
Net income										18,219				18,219
Ending balance at Dec. 31, 2018			$ 2			68,498		(563)		28,355				96,292
Ending balance (in shares) at Dec. 31, 2018			17,000,000
Changes in Stockholders’ Equity
Other comprehensive income, net of tax														5,249
Other comprehensive income, net of tax								5,249						5,249
Distribution to stockholder										(5,120)				(5,120)
Stock-based compensation						24,103								24,103
Issuance of common stock in stock offering, net of offering cost						87,411								87,411
Issuance of common stock (in shares)			6,468,750
Net income										10,621				10,621
Ending balance at Dec. 31, 2019			$ 2			180,012		4,686	$ (156)	33,856			$ (156)	$ 218,556
Ending balance (in shares) at Dec. 31, 2019			23,468,750											23,468,750
Changes in Stockholders’ Equity
Other comprehensive income, net of tax														$ 8,560
Other comprehensive income, net of tax								8,560						8,560
Stock-based compensation						2,167								2,167
Issuance of common stock in stock offering, net of offering cost		$ 1		$ 35,464	$ 90,082						$ 35,464	$ 90,083
Issuance of common stock (in shares)	750,000	1,150,000
Issuance of common stock via employee stock purchase plan						741								$ 741
Issuance of common stock via employee stock purchase plan (in shares)			28,367											28,367
Issuance of common stock via equity incentive plan						2,041								$ 2,041
Issuance of common stock via equity incentive plan (in shares)			128,679
Net income										6,257				6,257
Ending balance at Dec. 31, 2020			$ 3			$ 310,507		$ 13,246		$ 39,957				$ 363,713
Ending balance (in shares) at Dec. 31, 2020			25,525,796											25,525,796

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Operating activities
Net income	$ 6,257	$ 10,621	$ 18,219
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense	2,167	24,103
Depreciation and amortization expense	1,336	216	212
Amortization and write-off of debt issuance costs		921	443
Loss on asset disposal		1
Net realized and unrealized losses (gains) on investments	(1,488)	(4,443)	2,569
Amortization of premium on fixed maturity securities	1,214	431	481
Deferred income tax expense	1,094	646
Changes in operating assets and liabilities:
Accrued investment income	(1,159)	(652)	54
Premium receivable	(12,754)	(17,604)	(3,546)
Deferred policy acquisition costs	(10,280)	(11,149)	1,109
Reinsurance recoverables	(87,473)	(2,693)	70
Ceded unearned premiums	(8,926)	(7,821)	(15,109)
Prepaid expenses and other assets	(20,356)	(8,998)	(4,603)
Accounts payable and other accrued liabilities	5,998	3,287	2,748
Reserve for losses and loss adjustment expenses	112,215	760	(1,723)
Unearned premiums	53,116	51,243	17,154
Ceded premiums payable	10,850	776	5,538
Funds held under reinsurance treaty	2,857	938	(797)
Income taxes payable	(1,117)	1,117	(11)
Net cash provided by operating activities	53,551	41,700	22,808
Investing activities
Purchases of property and equipment	(132)	(115)	(332)
Purchases of fixed maturity securities	(295,002)	(211,587)	(102,745)
Purchases of equity securities	(46,944)	(58,858)	(33,712)
Sales and maturities of fixed maturity securities	124,243	124,151	81,215
Sales of equity securities	45,983	64,820	29,959
Securities receivable or payable, net	(2,523)	1,023	250
Purchase of policy renewal rights	(7,068)
Net cash used in investing activities	(181,443)	(80,566)	(25,365)
Financing activities
Proceeds from initial public offering, net of offering costs		87,411
Repayment of surplus notes		(20,000)	(17,500)
Distribution to stockholder		(5,120)
Proceeds from issuance of Floating Rate Notes, net of issuance costs			19,049
Proceeds from common stock issued via employee stock purchase plan	741
Proceeds from common stock issued via stock option exercises	2,041
Net cash provided by financing activities	128,329	62,291	1,549
Net increase (decrease) in cash, cash equivalents and restricted cash	437	23,425	(1,008)
Cash, cash equivalents and restricted cash at beginning of period	33,349	9,924	10,932
Cash, cash equivalents and restricted cash at end of period	33,786	33,349	9,924
Supplementary cash flow information:
Cash paid for income taxes	7,182	5,645	11
Cash paid for interest		$ 1,162	$ 1,727
Stock Issued in January
Financing activities
Proceeds from stock offering, net of offering costs	35,464
Stock Issued in June
Financing activities
Proceeds from stock offering, net of offering costs	$ 90,083

Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash and cash equivalents and restricted cash and cash equivalents
Cash and cash equivalents	$ 33,538	$ 33,119
Restricted cash	248	230
Cash and cash equivalents and restricted cash	$ 33,786	$ 33,349	$ 9,924	$ 10,932

Summary of Operations and Basis of Presentation	12 Months Ended
Summary of Operations and Basis of Presentation	Dec. 31, 2020
Summary of Operations and Basis of Presentation
Summary of Operations and Basis of Presentation	1. Summary of Operations and Basis of Presentation Summary of Operations Palomar Holdings, Inc. (“the Company”) is a Delaware incorporated insurance holding company that was founded in 2014. The Company has several wholly owned subsidiaries including an Oregon domiciled insurance company, Palomar Specialty Insurance Company (“PSIC”), a Bermuda based reinsurance company, Palomar Specialty Reinsurance Company Bermuda Ltd. (“PSRE”), an Arizona domiciled surplus lines insurance company, Palomar Excess and Surplus Insurance Company (“PESIC”), and a California domiciled property and casualty insurance agency, Palomar Insurance Agency, DBA Palomar General Insurance Agency (“PGIA”). PSIC is a property and casualty insurance company domiciled in the state of Oregon. The Company’s core focus is on the residential and commercial earthquake markets in earthquake‑exposed states such as California, Oregon, Washington, and states with exposure to the New Madrid Seismic Zone. The Company also offers products tailored to broader geographic regions and perils, including Hawaii residential hurricane, Specialty Homeowners, Inland Marine, and Flood products. PSIC is licensed to underwrite insurance on an admitted basis in 32 states in the United States, as of December 31, 2020, mainly through managing general insurance agencies, wholesale brokers, and independent agents. PSRE is a Bermuda captive reinsurance company that has historically been used to reinsure certain premiums on a quota share basis exclusively for PSIC. PESIC is an Arizona domiciled surplus lines insurance company. PESIC is licensed in Arizona to write surplus lines policies across all the Company’s lines of business and was formed and began writing policies in 2020. PGIA is a property and casualty general insurance agency for PSIC, PESIC, and unaffiliated insurance carriers. As a general insurance agency, PGIA assists in developing insurance products, underwriting insurance policies, and receiving and disbursing funds from premium and loss transactions under contracts on behalf of insurance companies. PGIA earns commissions from the product development, marketing, and servicing of the insurance companies’ programs. PGIA also earns fee income from policyholder transactions. The Company operates as an insurance holding company system and is subject to the insurance holding company laws of the States of Oregon and Arizona, the states in which PSIC and PESIC are domiciled. The Company is also commercially domiciled in California, making it subject to California insurance holding company laws. These statutes require that each insurance company in the system register with the insurance department of its state of domicile and furnish information concerning the operations of companies within the holding company system that may materially affect the operations, management or financial condition of the insurers within the system and domiciled in that state. The Company has a single operating segment, the property and casualty insurance business. While the Company’s chief operating decision‑maker reviews the revenue streams attributable to individual products, operations are managed, resources are allocated, and financial performance is evaluated on a consolidated basis. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly‑owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Stock Split On March 15, 2019, the Company effected a 17,000,000 for one forward stock split in conjunction with domestication in the United States. All share and per share information included in the accompanying consolidated financial statements and notes to the consolidated financial statements have been retroactively adjusted to reflect the stock split for the Company’s common stock for all periods presented. Initial Public Offering (“IPO”) On April 22, 2019, the Company completed its IPO with the sale of 6,468,750 shares of common stock at a price to the public of $15.00 per share, including 843,750 shares sold upon the exercise in full of the underwriter’s option to purchase additional shares. After underwriter discounts and commissions and offering expenses, net proceeds from the IPO were approximately $87.4 million. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein. All revisions to accounting estimates are recognized in the period in which the estimates are revised. Significant estimates reflected in the Company’s consolidated financial statements include, but are not limited to, reserves for losses and loss adjustment expenses, reinsurance recoverables on unpaid losses, and the fair values of investments.

Significant Accounting Policies	12 Months Ended
Significant Accounting Policies	Dec. 31, 2020
Significant Accounting Policies
Significant Accounting Policies	2. Significant Accounting Policies Cash and Cash Equivalents Cash and cash equivalents include time deposits and marketable securities with original maturities of three months or less at acquisition and are stated at cost, which approximates fair value. The Company maintains cash balances in federally insured financial institutions. Restricted Cash Restricted cash includes cash on deposit with reinsurance carriers. Restricted cash also includes cash held in a fiduciary capacity for the benefit of third-party insurance carriers. Investments All of the Company’s investments in fixed maturity securities are classified as available‑for‑sale and are carried at fair value. Investment income consists primarily of interest and dividends. Interest income is recognized on an accrual basis. Premiums and discounts on mortgage‑backed securities and asset‑backed securities are amortized or accrued using the prospective method which considers anticipated prepayments at the date of purchase. To the extent that the estimated lives of such securities change as a result of changes in estimated prepayment rates, the adjustments are included in net investment income using the prospective method. Dividend income is recognized on the ex‑dividend date. Net investment income represents investment income, net of expenses. Unrealized gains and losses related to fixed maturity securities are included in accumulated other comprehensive income as a separate component of stockholders’ equity. Equity securities are carried at fair value with unrealized gains and losses included as a component of net income on the Company’s consolidated statement of income and comprehensive income. The Company uses the specific‑identification method to determine the cost of fixed maturity securities sold and the first‑in, first‑out method for lots of equity securities sold. The Company reviews all securities with unrealized losses on a quarterly basis to assess whether the decline in the securities fair value necessitates the recognition of an allowance for credit losses. Factors considered in the review include the extent to which the fair value has been less than amortized cost, and current market interest rates and whether the unrealized loss is credit‑driven or a result of changes in market interest rates. The Company also considers factors specific to the issuer including the general financial condition of the issuer, the issuers industry and future business prospects, any past failure of issuer to make scheduled interest or principal payments, and the payment structure of the investment and the issuers ability to make contractual payments on the investment. The Company also considers whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery of its amortized cost. When assessing whether it intends to sell a fixed-maturity security or if it is likely to be required to sell a fixed-maturity security before recovery of its amortized cost, the Company evaluates facts and circumstances including, but not limited to, decisions to reposition the investment portfolio, potential sales of investments to meet cash flow needs, and potential sales of investments to capitalize on favorable pricing. For fixed-maturity securities where a decline in fair value is below the amortized cost basis and the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, a credit-loss charge is recognized in net income based on the fair value of the security at the time of assessment. For fixed-maturity securities that the Company has the intent and ability to hold, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit-related portion of the impairment, which is recognized in net income through an allowance for credit losses. Any remaining decline in fair value represents the noncredit portion of the impairment, which is recognized in other comprehensive income. The Company reports accrued interest receivable as a component of accrued investment income on its consolidated balance sheet which is presented separately from available-for-sale securities. The Company does not measure an allowance for credit losses on accrued interest receivable and instead would write off accrued interest receivable at the time an issuer defaults or is expected to default on payments. Prior to the adoption of ASU 2016-13, the Company evaluated fixed maturity securities for credit losses and any losses were bifurcated into the credit‑related loss and the loss related to all other factors. The credit‑related impairment loss would have been recognized as a realized loss in the statement of income and comprehensive income and the cost basis of the security would have been reduced. The impairment related to other factors would have remained in accumulated other comprehensive income. The Company did not recognize any credit losses during the years ended December 31, 2020 and 2019 related to its available-for-sale securities. Fair Value Fair value is defined as the price that the Company would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. The three‑tier hierarchy of inputs is summarized in the three broad levels listed below: Level 1—Unadjusted quoted prices are available in active markets for identical investments as of the reporting date. Level 2—Pricing inputs are quoted prices for similar investments in active markets; quoted prices for identical or similar investments in inactive markets; or valuation based on models where the significant inputs are observable or can be corroborated by observable market data. Level 3—Pricing inputs into models are unobservable for the investment. The unobservable inputs require significant management judgment or estimation. To measure fair value, the Company obtains quoted market prices for its investment securities from its outside investment managers. If a quoted market price is not available, the Company uses prices of similar securities. The fair values obtained from the outside investment managers are reviewed for reasonableness and any discrepancies are investigated for final valuation. The fair value of the Company’s investments in fixed maturity securities is estimated using relevant inputs, including available market information, benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. An Option Adjusted Spread model is also used to develop prepayment and interest rate scenarios. Industry standard models are used to analyze and value securities with embedded options or prepayment sensitivities. These fair value measurements are estimated based on observable, objectively verifiable market information rather than market quotes; therefore, these investments are classified and disclosed in Level 2 of the hierarchy. The fair value of the Company’s investments in equity securities is based on quoted prices available in active markets and classified and disclosed in Level 1 of the hierarchy. Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, fixed maturity securities and reinsurance recoverables. The Company places its cash and cash equivalents with high credit quality financial institutions and its fixed maturity securities in securities of the U.S. government, U.S. government agencies, and high credit quality issuers of debt securities. The Company evaluates the financial condition of its reinsurers and reinsures its business with highly rated reinsurers and sometimes requires letters of credit or retains funds from reinsurers (see Note 10). Premiums Receivable Premiums receivable represent amounts due from policyholders, insurance agents, or program administrators for policies written. Generally, premiums are collected prior to providing risk coverage, minimizing the Company’s exposure to credit risk. Premiums receivable are short-term in nature and due within a year. The Company has established an allowance for uncollectable premiums related to its credit risk, which it reviews on a quarterly basis and adjusts as appropriate. The company considers the current economic environment, specific regulatory developments, and historic payment and cancelation trends by line of business and location when determining whether to record an allowance for uncollectable premiums. Prior to December 31, 2019, the Company did not have an allowance for uncollectable premiums. An initial allowance for uncollectable premiums of $0.2 million was established upon adoption of ASC 2016-13 on January 1, 2020 and the company recognized an immaterial amount of credit losses relating to uncollectable premiums during the year ended December 31, 2020. Deferred Policy Acquisition Costs The costs of successfully acquiring new business, principally commission expense and premium taxes, are deferred and amortized over the terms of the policies in force, net of any ceding commissions. Premiums Earned Gross premiums written are recorded at policy inception and are earned as revenue ratably over the term of the respective policies. Premiums written not yet recognized as revenue are reflected as unearned premiums on the balance sheet, or as advanced premiums if received prior to the policy effective date. Premiums written where cash is not yet received are recognized as premiums receivable. A premium deficiency is recognized if the sum of expected losses and loss adjustment expenses, unamortized acquisition costs, and policy maintenance costs exceeds the remaining unearned premiums. A premium deficiency would first be recognized by charging any unamortized acquisition costs to expense to the extent required to eliminate the deficiency. If the premium deficiency were greater than unamortized acquisition costs, a liability would be accrued for the excess deficiency. The Company does not consider anticipated investment income when determining if a premium deficiency exists. There was no premium deficiency at December 31, 2020 or 2019. Commission and Other Income Commission and other income is comprised of commissions earned on policies where the Company has no exposure to underlying risk and fees earned in conjunction with underwriting policies. Commission and fee income is earned at the time the policy is written. Property and Equipment Property and equipment are capitalized and carried at cost less accumulated depreciation. Depreciation for property and equipment is calculated on a straight‑line basis using useful lives of 3 to 5 years. Leasehold improvements and other fixed assets are capitalized and depreciated over the useful lives of the properties and equipment. Expenditures for maintenance and repairs are charged to operations as incurred. Upon disposition, the asset cost and related depreciation are removed from the accounts and the resulting gain or loss is included in the Company’s results of operations. Capitalized Software Costs associated with the implementation of certain internal systems are capitalized and carried at capitalized cost less accumulated amortization and are included as a component of prepaid expenses and other assets on the Company’s consolidated balance sheet. Costs capitalized include internal personnel costs, external developer costs, and interest. The implementation costs relate to systems built on software which the Company purchases under a cloud computing arrangement and accounts for as a service contract. As such, capitalized costs are amortized over the term of the service contract, which currently ends in December 2024. Intangible Assets Intangible assets consist of both finite and indefinite lived assets. Finite lived intangible assets consist of customer relationships acquired from another insurer during 2020. Indefinite lived intangible assets consist of state licenses acquired upon formation of the Company. Intangible assets are initially recognized and measured at fair value and are subsequently evaluated for impairment annually or more frequently if circumstances warrant it. No impairments of intangible assets were recognized for the years ended December 31, 2020, 2019 or 2018. Impairment of Long‑Lived Assets Long‑lived assets with finite lives are tested for impairment whenever recognized events or changes in circumstances indicate the carrying value of these assets may not be recoverable. If indicators of impairment are present, the fair value is calculated using estimated future cash flows expected to be generated from the use of those assets. An impairment loss is recognized only if the carrying amount of a long‑lived asset or asset group is not recoverable and exceeds its fair value. The carrying amount of a long‑lived asset or asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group. This assessment is based on the carrying amount of the asset or asset group at the date it is tested for recoverability. An impairment loss is measured as the amount by which the carrying amount of a long‑lived asset or asset group exceeds its fair value. No impairments of long‑lived assets were recognized for the years ended December 31, 2020, 2019 and 2018. Reserve for Losses and Loss Adjustment Expenses The reserve for unpaid losses and loss adjustment expenses includes estimates for unpaid claims and claim adjustment expenses on reported losses and estimates of losses incurred but not reported (“IBNR”), net of salvage and subrogation recoveries. The liability is based on individual claims, case reserves and other estimates reported by policyholders, as well as management estimates of ultimate losses and loss adjustment expenses. Inherent in the estimates of ultimate losses and loss adjustment expenses are expected trends in claims severity and frequency and other factors that could vary significantly as claims are settled. The Company’s estimates of ultimate losses and loss adjustment expenses are based in part upon the estimation of claims resulting from natural disasters such as hurricanes and earthquakes. Estimation by management of the ultimate losses and loss adjustment expenses resulting from catastrophic events is inherently difficult because of the potential severity of property catastrophe claims. Therefore, the Company uses both proprietary and commercially available models, as well as historic claims experience, for purposes of providing an estimate of ultimate losses and loss adjustment expenses. Reserves for IBNR are established in accordance with industry practice to provide for (i) the estimated amount of future loss payments on incurred claims not yet reported, and (ii) potential development on reported claims. IBNR reserves are estimated based on generally accepted actuarial reserving techniques that consider quantitative loss experience data and, where appropriate, qualitative factors. Ultimate losses and loss adjustment expenses may vary materially from the amounts provided in the consolidated financial statements. Estimates of unpaid losses and loss adjustment expenses are reviewed regularly and, as experience develops and new information becomes known, the liabilities are adjusted as necessary. Such adjustments, if any, are reflected in operations in the period in which they become known and are accounted for as changes in estimates. The Company does not discount its liability for unpaid losses and loss adjustment expenses. The Company does not write insurance policies covering toxic clean‑up, asbestos‑related illness or other environmental remediation exposures. Reinsurance The Company purchases excess of loss and quota share reinsurance to protect it against the impact of losses. Reinsurance premiums, commissions, ceded unearned premiums are accounted for on bases consistent with the underlying terms of the reinsurance contracts and in proportion to the amount of insurance protection provided. The Company receives ceding commissions in connection with quota share reinsurance. The ceding commissions are capitalized and amortized as a reduction of acquisition expenses. Amounts applicable to ceded unearned premiums are reported as assets in the accompanying consolidated balance sheets. Premiums earned and losses and loss adjustment expenses incurred are stated in the accompanying consolidated statements of income and comprehensive income net of amounts ceded to reinsurers. Reinsurance recoverables represent balances due to the Company from its reinsurers for paid and unpaid losses and loss adjustment expenses. The Company is exposed to credit losses from reinsurers being unable to meet their obligations. The Company evaluates the financial condition of potential reinsurers and reinsures its business only with highly rated reinsurers with a rating of “A-“ (Excellent) (Outlook Stable) or better from A.M. Best. Reinsurers who do not meet the Company’s rating criteria are required to post collateral. The Company reviews credit quality of its reinsurers on a quarterly basis. The Company’s reinsurance contracts also include special termination provisions that allow the Company to cancel and replace any participating reinsurer that is downgraded below a rating of “A−” from A.M. Best, or whose surplus drops by more than 20%. Historically, the Company has not experienced any credit losses from reinsurance recoverables and did not have an allowance for uncollectable reinsurance recoverables as of December 31, 2020 or December 31, 2019. Stock Based Compensation Expense Stock-based compensation expense is recognized on a straight-line basis over the vesting period of awards. The Company does not apply a forfeiture rate to unvested awards and accounts for forfeitures as they occur. For stock option grants, the fair value of awards is estimated using the Black Scholes Model. The fair value of restricted stock units is determined using the closing price of the Company's common stock on the grant date. All stock-based compensation is included in other underwriting expenses in the Company’s consolidated statements of income and comprehensive income. Income Taxes The Company is taxed as a property/casualty insurer for federal income tax purposes. Deferred income tax assets and liabilities are determined based on the difference between the financial statement and the tax bases of assets and liabilities, using enacted tax rates expected to be in effect during the year in which the basis differences reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes the tax benefit of uncertain tax positions where the position is more likely than not to be sustained assuming examination by taxing authorities. Based on its evaluation for the tax years ended December 31, 2020 and 2019, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The Company recognizes interest and penalties related to uncertain tax positions, if any, as a component of income tax expense. The Company has not been assessed interest or penalties by any major tax jurisdictions for the respective tax years ended December 31, 2020, 2019, and 2018. Earnings Per Share Basic earnings per share is calculated by dividing net income by the weighted‑average common shares outstanding for the period. Diluted earnings per share reflects the dilution which could occur if equity-based awards are converted into common share equivalents as calculated using the treasury stock method. When inclusion of additional common share equivalents increases the earnings per share or reduces the loss per share, the effect on earnings per share is anti-dilutive, and the diluted net earnings or net loss per share is computed excluding these common share equivalents. Recently adopted accounting pronouncements Clarification on change in filing status and prior quarterly information Prior to December 31, 2020, the Company qualified as an emerging growth company (“EGC”) under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. The Company was previously electing to adopt new or revised accounting guidance within the same time periods as private companies as permitted by its status as an EGC. The Company became a large accelerated filed on December 31, 2020 and must now adopt new accounting guidance within the same time periods as public companies, beginning with this 2020 Annual Report on Form 10-K. Prior to this annual report, the Company’s 2020 quarterly filings did not reflect adoption of the below guidance as the Company was not required to have adopted it. Upon adoption of the below guidance, the Company updated its financials as if the below guidance was adopted on January 1, 2020, however, this adoption had a negligible impact on previously filed quarterly information. Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance for accounting for leases, ASU 2016‑02, Leases (Topic 842) and subsequently issued multiple clarifying updates to the guidance. This updated guidance requires the recognition of a right‑of‑use (“ROU”) asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. Under the previous guidance, leases were only included on the balance sheet if the criteria to classify the agreement as a capital lease were met. The Company adopted this new guidance as of January 1, 2020. The Company adopted this guidance using the modified retrospective transition method, applying the transition provisions on the date of adoption and not restating prior periods. The Company elected to use a number of practical expedients permitted under the transition guidance, but did not elect to use hindsight in determining the lease term. Upon adoption, the Company recognized a ROU asset of $2.9 million and lease liabilities of $3.8 million, with the difference representing the reclassification of deferred rent and lease incentive liabilities (the difference between the straight-line rent expenses and cash paid for rent under the leases) to operating lease ROU assets from other liabilities. The ROU asset and corresponding liability recognized pertained to various operating leases for office space. The Company did not have any cumulative-effect adjustment because of the adoption. Measurement of credit losses In June 2016, the FASB issued ASU 2016‑13, Financial Instruments-Credit Losses (Topic 326) and subsequently issued multiple clarifying updates to the guidance. This updated guidance requires financial assets measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that is included in net income. Credit losses relating to available-for-sale debt securities are also required to be recorded through a reversible allowance for credit losses, but the allowance is limited to the amount by which fair value is less than amortized cost. The previous accounting guidance delayed the recognition of credit losses until it was probable a loss had been incurred. The Company adopted this guidance on January 1, 2020 using the modified retrospective approach and recorded a $0.2 million cumulative effect adjustment to beginning retained earnings upon adoption relating to an allowance for credit losses on the Company’s premium receivables. The adoption of this accounting guidance did not have an impact on value of the Company’s fixed maturity securities or its reinsurance recoverables. Recently issued accounting pronouncements not yet adopted Income Taxes In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. Among other things, ASU 2019-12 eliminates certain exceptions for recognizing deferred taxes for investments, performing intra-period tax allocation and calculating income taxes in interim periods. ASU 2019-12 also clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company will adopt this guidance in the first fiscal quarter of 2021 and does not expect adoption to have a material impact on its consolidated financial statements.

Investments

12 Months Ended

Dec. 31, 2020

Investments

Investments

3. Investments

The Company’s available‑for‑sale investments are summarized as follows:


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2020	Cost or Cost		Gains		Losses		Value
	(in thousands)
Fixed maturities:
U.S. Governments	$	16,308	$	756	$	(5)	$	17,059
States, territories, and possessions		6,208		428		—		6,636
Political subdivisions		2,027		125		—		2,152
Special revenue excluding mortgage/asset-backed securities		39,704		1,525		(2)		41,227
Industrial and miscellaneous		234,049		11,602		(291)		245,360
Mortgage/asset-backed securities		82,983		2,785		(215)		85,553
Total available-for-sale investments	$	381,279	$	17,221	$	(513)	$	397,987


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2019	Cost or Cost		Gains		Losses		Value
	(in thousands)
Fixed maturities:
U.S. Governments	$	13,371	$	321	$	(13)	$	13,679
States, territories, and possessions		2,298		147		—		2,445
Political subdivisions		1,913		29		—		1,942
Special revenue excluding mortgage/asset-backed securities		18,139		343		(46)		18,436
Industrial and miscellaneous		124,726		4,326		(39)		129,013
Mortgage/asset-backed securities		50,831		824		(19)		51,636
Total available-for-sale investments	$	211,278	$	5,990	$	(117)	$	217,151

Security holdings in an unrealized loss position

As of December 31, 2020, the Company held 90 fixed maturity securities in an unrealized loss position with a total estimated fair value of $41.5 million and total gross unrealized losses of $0.5 million. None of the fixed maturity securities with unrealized losses has ever missed, or been delinquent on, a scheduled principal or interest payment. As of December 31, 2019, the Company held 51 fixed maturity securities in an unrealized loss position with a total estimated fair value of $20.9 million and total gross unrealized losses of $0.1 million. None of the fixed maturity securities with unrealized losses has ever missed, or been delinquent on, a scheduled principal or interest payment.

The aggregate fair value and gross unrealized losses of the Company’s investments aggregated by investment category and the length of time these individual securities have been in a continuous unrealized loss position as of December 31, 2020 and 2019, are as follows:


	Less Than 12 Months				More Than 12 Months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2020	Value		Losses		Value		Losses		Value		Losses
	(in thousands)
Fixed maturity securities:
U.S. Governments	$	1,496	$	(5)	$	—	$	—	$	1,496	$	(5)
States, territories, and possessions		—		—		—		—		—		—
Political subdivisions		—		—		—		—		—		—
Special revenue excluding mortgage/asset-backed securities		520		(2)		—		—		520		(2)
Industrial and miscellaneous		22,718		(234)		203		(57)		22,921		(291)
Mortgage/asset-backed securities		16,092		(211)		496		(4)		16,588		(215)
Total	$	40,826	$	(452)	$	699	$	(61)	$	41,525	$	(513)


	Less Than 12 Months				More Than 12 Months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2019	Value		Losses		Value		Losses		Value		Losses
	(in thousands)
Fixed maturity securities:
U.S. Governments	$	1,235	$	(11)	$	1,827	$	(2)	$	3,062	$	(13)
States, territories, and possessions		—		—		—		—		—		—
Political subdivisions		—		—		—		—		—		—
Special revenue excluding mortgage/asset-backed securities		3,548		(46)		—		—		3,548		(46)
Industrial and miscellaneous		6,929		(38)		188		(1)		7,117		(39)
Mortgage/asset-backed securities		7,035		(19)		182		—		7,217		(19)
Total	$	18,747	$	(114)	$	2,197	$	(3)	$	20,944	$	(117)

The Company reviewed the above securities at each balance sheet date to consider whether it was necessary to recognize a credit loss or other-than-temporary impairment (OTTI) related to any of these securities. Based on the reviews, the company determined that the fixed maturity securities’ unrealized losses were primarily the result of the interest rate environment and not the credit quality of the issuers for both periods. The Company does not intend to sell the investments and it is not more likely than not that that the Company will be required to sell the investments before the recovery of their amortized cost basis. Therefore, the Company did not recognize an allowance for credit losses related to any of these securities for the year ended December 31, 2020 and did not recognize any OTTI charges for the year ended December 31, 2019.

Contractual maturities of available‑for‑sale fixed maturity securities

The amortized cost and fair value of fixed maturity securities at December 31, 2020, by contractual maturity, are shown below.


	Amortized		Fair
	Cost		Value
	(in thousands)
Due within one year	$	11,222	$	11,351
Due after one year through five years		146,302		151,123
Due after five years through ten years		99,194		106,600
Due after ten years		41,578		43,360
Mortgage and asset-backed securities		82,983		85,553
	$	381,279	$	397,987

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations.

Change in unrealized gains (losses) of investments

The following table presents the change in available‑for‑sale gross unrealized gains or losses by investment type:


	Year Ended December 31,
	2020		2019		2018
	(in thousands)
Change in net unrealized gains (losses)
Fixed maturities	$	10,835	$	6,602	$	(341)
Net increase (decrease)	$	10,835	$	6,602	$	(341)

Net investment income summary

Net investment income is summarized as follows:


	December 31,
	2020		2019		2018
	(in thousands)
Interest income	$	8,554	$	5,894	$	3,036
Dividend income		489		424		514
Investment management fees and expenses		(431)		(343)		(312)
Net investment income	$	8,612	$	5,975	$	3,238

Net realized and unrealized investment gains and losses

The following table presents net realized and unrealized investment gains and losses:


	Year Ended
	December 31,
	2020		2019		2018
		(in thousands)
Realized gains:
Gains on sales of fixed maturity securities	$	501	$	1,405	$	19
Gains on sales of equity securities		62		177		4,287
Total realized gains		563		1,582		4,306
Realized losses:
Losses on sales of fixed maturity securities		(46)		(84)		(418)
Losses on sales of equity securities		(68)		(64)		(421)
Total realized losses		(114)		(148)		(839)
Net realized investment gains		449		1,434		3,467
Net unrealized gains (losses) on equity securities		1,039		3,009		(6,036)
Net realized and unrealized gains (losses) on investments	$	1,488	$	4,443	$	(2,569)

Proceeds from the sale of fixed maturity securities were $39.8 million, $46.3 million and $48.5 million for the years ended December 31, 2020, 2019 and 2018, respectively.

The Company places securities on statutory deposit with certain state agencies to retain the right to do business in those states. These securities are included in available‑for‑sale investments on the consolidated balance sheets. At December 31, 2020 and 2019, the carrying value of securities on deposit with state regulatory authorities was $7.5 million and $5.1 million, respectively.

Fair Value Measurements

12 Months Ended

Dec. 31, 2020

Fair Value Measurements

Fair value measurements

4. Fair value measurements

The following tables present the Company’s fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 and 2019:


December 31, 2020	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets:
Fixed maturity securities
U.S. Governments	$	—	$	17,059	$	—	$	17,059
States, territories, and possessions		—		6,636		—		6,636
Political subdivisions		—		2,152		—		2,152
Special revenue excluding mortgage/asset-backed securities		—		41,227		—		41,227
Industrial and miscellaneous		—		245,360		—		245,360
Mortgage/asset-backed securities		—		85,553		—		85,553
Equity securities		24,322		—		—		24,322
Cash, cash equivalents, and restricted cash		33,786		—		—		33,786
Total assets	$	58,108	$	397,987	$	—	$	456,095


December 31, 2019	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets:
Fixed maturity securities
U.S. Governments	$	—	$	13,679	$	—	$	13,679
States, territories, and possessions		—		2,445		—		2,445
Political subdivisions		—		1,942		—		1,942
Special revenue excluding mortgage/asset-backed securities		—		18,436		—		18,436
Industrial and miscellaneous		—		129,013		—		129,013
Mortgage/asset-backed securities		—		50,136		1,500		51,636
Equity securities		22,328		—		—		22,328
Cash, cash equivalents, and restricted cash		28,350		4,999		—		33,349
Total assets	$	50,678	$	220,650	$	1,500	$	272,828

The carrying amounts of financial assets and liabilities reported in the accompanying consolidated balance sheets including cash and cash equivalents, restricted cash, receivables, reinsurance recoverable, and accounts payable and other accrued liabilities approximate fair value due to their short term‑maturity.

Transfers between Level 3 and Level 2 securities result from changes in the availability of market observable inputs and are recorded at the beginning of the reporting period. As of December 31, 2019, the Company had $1.5 million of fixed income securities classified as Level 3 due to the availability of market observable inputs. These securities were transferred to Level 2 during the year ended December 31, 2020.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Policy Acquisition Costs

12 Months Ended

Dec. 31, 2020

Policy Acquisition Costs

Policy Acquisition Costs

5. Policy Acquisition Costs

The following tables present the policy acquisition costs deferred and amortized over the terms of the policies in force:


	December 31,
	2020		2019		2018
	(in thousands)
Deferred Policy Acquisition Costs:
Balance, beginning of year	$	25,201	$	14,052	$	15,161
Additions to deferred balance:
Direct commissions		82,786		59,676		36,934
Ceding commissions		(19,371)		(17,257)		(15,218)
Premium taxes		7,024		5,236		3,362
Total net additions		70,439		47,655		25,078
Amortization of net policy acquisition costs		(60,159)		(36,506)		(26,187)
Balance, end of year	$	35,481	$	25,201	$	14,052
Acquisition expenses:
Amortization of net policy acquisition costs	$	60,159	$	36,506	$	26,187
Period costs		3,882		753		2,037
Total Acquisition expenses	$	64,041	$	37,259	$	28,224

Intangible Assets

12 Months Ended

Dec. 31, 2020

Intangible Assets

Intangible Assets

6. Intangible Assets

Intangible assets consist of the following:


	December 31,
	2020		2019
	(in thousands)
Indefinite-lived intangibles:
State insurance licenses	$	744	$	744
Finite-lived intangibles:
Customer relationships		10,768		—
Accumulated amortization on finite-lived intangibles		—		—
Total intangible assets	$	11,512	$	744

State insurance licenses consist of licenses acquired at the inception of PSIC.

Customer relationships represents the fair value of policy renewal rights acquired by PSIC from another insurance company in November 2020. The policy renewals pertaining to this intangible asset will begin in early 2021 and the Company intends to amortize this customer relationship intangible over a period of 8 years.

Capitalized Assets

12 Months Ended

Dec. 31, 2020

Capitalized Assets

Capitalized Assets

7. Capitalized Assets

Capitalized software balances are as follows:


			Accumulated		Net
December 31, 2020	Cost		Amortization		Book Value
	(in thousands)
Capitalized Software	$	8,450	$	(1,767)	$	6,683


			Accumulated		Net
December 31, 2019	Cost		Amortization		Book Value
	(in thousands)
Capitalized Software	$	4,567	$	(669)	$	3,898

Amortization expense relating to capitalized software for the years ended December 31, 2020, 2019 and 2018 was $1.1 million, $0.6 million and $0.03 million, respectively.

Property and Equipment consists of the following:


			Accumulated		Net
December 31, 2020	Cost		Depreciation		Book Value
	(in thousands)
Leasehold improvements	$	879	$	(459)	$	420
Computer hardware		276		(100)		176
Office equipment and furniture		519		(376)		143
Total	$	1,674	$	(935)	$	739


			Accumulated		Net
December 31, 2019	Cost		Depreciation		Book Value
	(in thousands)
Leasehold improvements	$	879	$	(342)	$	537
Computer hardware		144		(64)		80
Office equipment and furniture		519		(291)		228
Total	$	1,542	$	(697)	$	845

Depreciation expense for the years ended December 31, 2020, 2019 and 2018 was $0.2 million, $0.2 million, and $0.2 million respectively.

Leases

12 Months Ended

Dec. 31, 2020

Leases

Leases

8. Leases

The Company has operating leases for office space used to conduct its insurance operations and administration activities. Operating lease ROU assets are a component of prepaid expenses and other assets and operating lease liabilities are included in accounts payable and other accrued liabilities in the Company's consolidated balance sheets.

The Company determines whether an arrangement is a lease at its inception. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. To determine the present value of lease payments, the Company uses its incremental borrowing rate, which it calculates based on information available at the lease commencement date. For certain leases that contain options to extend, the options are included in lease liabilities only if the company is reasonably certain the option will be exercised. Variable lease costs such as parking are expensed in the period the obligation is incurred and are not included in the Company’s operating lease liability. The Company's lease agreements do not contain any residual value guarantees.

Operating lease costs for the years ended December 31, 2020, 2019 and 2018 were $0.7 million, $0.6 million and $0.6 million, respectively. Operating lease costs are comprised of rental expense for operating leases. Lease expense is recognized on a straight-line basis over the lease term and is included as a component of other underwriting expenses in the Company’s consolidated statements of income and comprehensive income.

The following tables provide supplementary information about the Company’s leases:


Year ended December 31, 2020	(in thousands)
Operating cash outflows from operating leases	$	842
Right of use assets obtained in exchange for new operating lease liabilities		—


December 31, 2020	($ in thousands)
Operating lease ROU assets	$	2,274
Operating lease liabilities	$	3,012
Weighted-average remaining lease term-operating leases		3.5	years
Weighted-average discount rate-operating leases		2.1	%

Future minimum lease payments as of December 31, 2020 are as follows:


Years ending December 31,	(in thousands)
2021	$	879
2022		904
2023		862
2024		478
2025		—
Total future minimum lease payments	$	3,123
Less: imputed interest		(111)
Total operating lease liability	$	3,012

Reserve for Losses and Loss Adjustment Expenses

12 Months Ended

Dec. 31, 2020

Reserve for Losses and Loss Adjustment Expenses

Reserve for Losses and Loss Adjustment Expenses

9. Reserve for Losses and Loss Adjustment Expenses

Loss and loss adjustment expenses reserves represent management’s best estimate of the ultimate cost of all reported and unreported losses incurred for the years ended December 31, 2020, 2019, and 2018. The Company does not discount loss and loss adjustment expense reserves. The reserves for unpaid losses and loss adjustment expenses are estimated using individual case‑basis valuations and statistical analyses. Those estimates are subject to the effects of trends in loss severity and frequency.

In addition to case reserves, which are generally based on reported claims, the Company establishes reserves for incurred but not reported claims (“IBNR”). IBNR reserves are developed to provide for (i) the estimated amount of future loss payments on incurred claims not yet reported, and (ii) potential development on reported claims. IBNR reserves are estimated based on generally accepted actuarial reserving techniques that consider quantitative loss experience data and, where appropriate, qualitative factors. With the assistance of an independent, actuarial firm, the Company uses statistical analysis to estimate the cost of losses and loss adjustment expenses related to IBNR. Those estimates are based on historical information, industry information and practices, and estimates of trends that may affect the ultimate frequency of incurred but not reported claims and changes in ultimate claims severity.

The Company regularly reviews its reserve estimates and adjusts them as necessary as experience develops or as new information becomes known. Such adjustments are included in current operations. During the loss settlement period, if there are indications that claims frequency or severity exceeds initial expectations, the Company generally increases its reserves for losses and loss adjustment expenses. Conversely, when claims frequency and severity trends are more favorable than initially anticipated, the Company generally reduces its reserves for losses and loss adjustment expenses once it has sufficient data to confirm the validity of the favorable trends. Even after such adjustments, the ultimate liability may exceed or be less than the revised estimates. Accordingly, the ultimate settlement of losses and the related loss adjustment expenses may vary significantly from the estimate included in the Company’s consolidated financial statements.

Although considerable variability is inherent in such estimates, management believes the reserves for losses and loss adjustment expenses are adequate. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known. Any adjustments to estimates are recorded in the current period.

The following table provides a reconciliation of the beginning and ending reserve balances for losses and LAE on a net of reinsurance basis to the gross amounts reported in the accompanying consolidated balance sheets:


	Year Ended December 31,
	2020		2019		2018
	(in thousands)
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period	$	3,869	$	4,165	$	4,432
Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to:
Current year		64,179		5,774		8,165
Prior years		(64)		(181)		(1,891)
Total incurred		64,115		5,593		6,274
Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to:
Current year		31,879		2,179		4,409
Prior years		1,635		3,710		2,132
Total payments		33,514		5,889		6,541
Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period		34,470		3,869		4,165
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period		94,566		12,952		11,896
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period	$	129,036	$	16,821	$	16,061

The foregoing reconciliation shows loss and loss adjustment expense reserve redundancies of $0.1 million, $0.2 million, and $1.9 million developed in 2020, 2019 and 2018, respectively. During 2020, this favorable reserve development related to lower than anticipated frequency and severity of claims in our homeowners and special property lines of business offset by higher than anticipated frequency and severity of claims in our assumed reinsurance line. During 2019, this favorable reserve development was primarily related to lower than originally anticipated frequency and severity of claims in our homeowners lines of business, offset by higher than originally anticipated frequency and severity of claims in our special property lines of business. During 2018, this favorable reserve development was primarily due to favorable development in our homeowners lines of business due to lower than originally anticipated frequency and severity of claims.

The Company compiles and aggregates its claims data by grouping the claims according to the year in which the claim occurred (“Accident Year”) when analyzing claim payment and emergence patterns and trends over time. For the purpose of defining claims frequency, the number of reported claims is by loss occurrence and includes claims that do not result in a liability or payment associated with them.

The Company analyzed the usefulness of disaggregation of its results and determined the characteristics associated with the policies and the related unpaid loss reserves, incurred losses, and payment patterns are similar in nature. The Company separates its special property and other claim experience from its homeowner claim experience when analyzing losses and allocated loss adjustment expenses incurred and paid development and claim count triangles, as there are distinct differences in the development and claim count emergence patterns as well as methods of IBNR projection. The Special Property classification includes fire, allied lines, inland marine, and earthquake claims.

As such, the following tables show the Company’s historical homeowner and special property incurred and cumulative paid losses and LAE development, net of reinsurance, as well as IBNR loss reserves and the number of reported claims on an aggregate basis as of December 31, 2020 for each of the previous two accident years.

The information provided herein about incurred and paid accident year claims development for the years ended December 31, 2018 and prior is presented as unaudited supplementary information.

Incurred Losses and Allocated Loss Adjustment Expenses,

Net of Reinsurance Homeowners’ Insurance (in thousands)


													As of December 31, 2020
													Incurred but		Cumulative
	Year Ended December 31,												Not Reported		Number of
Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019		2020		Liabilities		Claims
2015	$	2,048	$	1,785	$	1,658	$	1,636	$	1,642	$	1,636	$	—	381
2016				6,069		5,878		5,721		5,636		5,622		—	1,083
2017						9,354		7,418		6,630		6,388		3	2,973
2018								2,193		2,008		1,930		3	789
2019										914		838		98	1,178
2020												19,100		2,995	3,223
Total											$	35,514	$	3,099	9,627

Cumulative Paid Losses and Allocated Loss Adjustment Expenses,

Net of Reinsurance Homeowners’ Insurance (in thousands)


	Year Ended December 31,
Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019		2020
2015	$	860	$	1,379	$	1,523	$	1,615	$	1,634	$	1,636
2016				4,120		5,356		5,585		5,607		5,619
2017						7,135		7,375		6,628		6,371
2018								1,550		1,853		1,922
2019										546		685
2020												13,588
Total											$	29,821
Reserve for losses and loss adjustment expense, net of reinsurance											$	5,693

(1)

Data presented for these calendar years is required supplementary information, which is unaudited.

Average Annual Percentage Payout of Incurred Claims by Age,

Net of Reinsurance Homeowners’ Insurance (unaudited)


	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6
Payout percentage	75.69	%	17.95	%	1.19	%	0.66	%	0.69	%	0.12	%

Incurred Losses and Allocated Loss Adjustment Expenses,

Net of Reinsurance Special Property Insurance (in thousands)


													As of December 31, 2020
													Incurred but		Cumulative
	Year Ended December 31,												Not Reported		Number of
Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019		2020		Liabilities		Claims
2015	$	630	$	719	$	671	$	671	$	678	$	677	$	—	381
2016				1,381		1,249		1,251		1,454		1,453		—	1,103
2017						3,071		3,475		4,014		4,264		—	3,068
2018								5,970		6,095		6,009		—	949
2019										3,661		3,385		332	1,339
2020												42,334		9,554	1,240
Total											$	58,122	$	9,886	8,080

Cumulative Paid Losses and Allocated Loss Adjustment Expenses,

Net of Reinsurance Special Property Insurance (in thousands)


	Year Ended December 31,
Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019		2020
2015	$	265	$	438	$	586	$	626	$	666	$	673
2016				703		1,064		1,216		1,444		1,453
2017						1,967		3,344		4,011		4,269
2018								2,859		6,036		6,009
2019										1,633		2,825
2020												18,274
Total												33,503
Reserve for losses and loss adjustment expense, net of reinsurance												24,619

(1)

Data presented for these calendar years is required supplementary information, which is unaudited.

Average Annual Percentage Payout of Incurred Claims by Age,

Net of Reinsurance Special Property Insurance (unaudited)


	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6
Payout percentage	45.44	%	34.16	%	11.88	%	9.22	%	3.26	%	1.03	%

The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the consolidated balance sheets is as follows:


	2020
	(in thousands)
Net outstanding liabilities:
Homeowners’ insurance	$	5,693
Special property		24,619
Reinsurance- Nonproportional assumed property(1)		4,110
Other		48
Reserve for losses and loss adjustment expense, net of reinsurance		34,470
Reinsurance recoverable on unpaid claims:
Homeowners’ insurance	$	14,640
Special property		79,825
Other		101
Total reinsurance recoverable on unpaid claims		94,566
Total reserve for losses and loss adjustment expenses	$	129,036

(1)

Reflects the Company’s share of Loss and Loss Adjustment Expense related to non-proportional assumed reinsurance business. This amount reflects gross and net reserves related to this treaty and the ultimate incurred amount reflects IBNR only. The Company does not have direct access to individual claim information underlying the assumed quota arrangement. The Company does not use claim frequency information in the determination of loss reserves or for other internal purposes. Based on these considerations, the Company does not believe providing claims frequency information is practicable as it relates to this line of business.

Reinsurance

12 Months Ended

Dec. 31, 2020

Reinsurance

Reinsurance

10. Reinsurance

The Company utilizes reinsurance in order to limit its exposure to losses and enable it to underwrite policies with sufficient limits to meet policyholder needs. The Company utilizes both excess of loss (XOL) and quota share reinsurance.

In an XOL treaty, the Company retains losses for any occurrence up to a specified amount (its “retention”) and reinsurers assume any losses above that amount. Historically, the Company has had a retention of between $5 million and $15 million for hurricane and earthquake events. As of December 31, 2020, the Company’s catastrophe event retention is $10 million for all perils and $1 million as a vertical co-participation in selected layers. As of December 31, 2020, the Company’s XOL reinsurance structure provides protection up to $1.4 billion for earthquake events and $600 million for hurricane events.

In a quota share agreement, the Company transfers, or cedes, part or all of its exposure to a reinsurer who receives a portion of the associated premium in exchange. The reinsurer also must share an agreed upon portion of losses and agreed upon portion of the associated commission expense. The Company has quota share reinsurance agreements on several of its lines with the Commercial All Risk and Specialty Homeowners lines currently accounting for the largest amount of ceded written premiums. For Texas Homeowners, a component of Specialty Homeowners, the Company ceded substantially all exposure between June 2018 and June 2019 and ceded a significant portion of exposure thereafter. Ceded written premium related to the Texas Homeowners line was $14.6 million, $20.4 million and $24.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. Ceded written premium related to the Commercial All Risk line was $19.2 million, $19.0 million and $7.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. The Company also began ceding a small portion of its Commercial Earthquake premiums in November 2020, which accounted for approximately $7.1 million in ceded written premiums for the year ended December 31, 2020. No other quota share program accounted for more than 10% of total ceded written premiums for those years.

The Company recognizes ceded unearned premiums related to quota share agreements as an asset on its consolidated balance sheets. As of December 31, 2020 and 2019, ceded unearned premiums totaled $35.0 million and $26.1 million, respectively. The increase was driven primarily by premium growth in lines subject to quota shares and the timing at which the Company entered quota share arrangements.

As part of its reinsurance program, in May 2017, the Company obtained catastrophe protection through a reinsurance agreement with Torrey Pines Re Ltd. (“TPRe”). In connection with the reinsurance agreement, TPRe issued notes to unrelated investors in an amount equal to the full $166 million of coverage provided under the reinsurance agreement covering a three-year period, ending May 31, 2020. At the time of the agreement, the Company performed an evaluation of TPRe to determine if it meets the definition of a variable interest entity (“VIE”). The Company concluded that TPRe is a VIE but it does not have a variable interest in the entity, as the variability in results is expected to be absorbed entirely by the investors in TPRe. Accordingly, TPRe is not consolidated in the Company’s financial statements. The premium ceded to TPRe for the year ended December 31, 2020 was approximately $5.0 million.

The effect of reinsurance on premiums written and earned and on losses and LAE incurred for the years ended December 31, 2020, 2019 and 2018, is as follows:


	2020				2019				2018
	Written		Earned		Written		Earned		Written		Earned
	(in thousands)
Premiums Written and Earned:
Direct	$	324,253	$	271,887	$	220,568	$	178,536	$	144,821	$	129,071
Assumed		30,107		29,569		31,393		21,985		10,070		8,688
Ceded		(155,102)		(146,388)		(108,332)		(100,314)		(82,949)		(67,862)
Net	$	199,258	$	155,068	$	143,629	$	100,207	$	71,942	$	69,897


	2020
	Losses		LAE		Total
	(in thousands)
Losses and LAE Incurred:
Direct	$	145,774	$	18,777	$	164,551
Assumed		3,485		159		3,644
Ceded		(91,969)		(12,111)		(104,080)
Net	$	57,290	$	6,825	$	64,115


	2019
	Losses		LAE		Total
	(in thousands)
Losses and LAE Incurred:
Direct	$	20,105	$	2,837	$	22,942
Assumed		1,201		34		1,235
Ceded		(16,564)		(2,020)		(18,584)
Net	$	4,742	$	851	$	5,593


	2018
	Losses		LAE		Total
	(in thousands)
Losses and LAE Incurred:
Direct	$	12,153	$	2,113	$	14,266
Assumed		46		6		52
Ceded		(6,580)		(1,464)		(8,044)
Net	$	5,619	$	655	$	6,274

The ceding of insurance does not legally discharge the Company from its primary liability for the full amount of the policy coverage, and therefore the Company will be required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance agreement. To minimize exposure to significant losses from reinsurance insolvencies, the Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk.

To reduce credit exposure to reinsurance recoverable balances, the Company obtains letters of credit from certain reinsurers that are not authorized as reinsurers under U.S. state insurance regulations. In addition, under the terms of its reinsurance contracts, the Company may retain funds due from reinsurers as security for those recoverable balances. As of December 31, 2020 and 2019, the Company had retained $4.5 million and $1.7 million in funds from reinsurers, respectively. The Company is able to use the funds in the ordinary course of its business. The funds are held in cash and cash equivalents and investments with an offsetting liability on the accompanying consolidated balance sheets.

For the year ended December 31, 2020, reinsurance premiums ceded to the Company’s three largest reinsurers totaled $9.7 million, $8.6 million, and $6.0 million, representing 22.4% of the total balance. For the year ended December 31, 2019, reinsurance premiums ceded to the Company’s three largest reinsurers totaled $21.7 million, $7.5 million, and $4.9 million, representing 31.5% of the total balance. For the year ended December 31, 2018, reinsurance premiums ceded to the Company’s three largest reinsurers totaled $7.5 million, $7.2 million, and $5.2 million, representing 24.0% of the total balance.

At December 31, 2020 reinsurance recoverable on unpaid losses by the Company’s three largest reinsurers were $36.0 million, $5.8 million, and $3.1 million representing 42.8% of the total balance. At December 31, 2019 reinsurance recoverables on paid and unpaid losses by the Company’s three largest reinsurers were $2.7 million, $1.9 million, and $1.9 million representing 38.2% of the total balance. All of the Company’s reinsurers post collateral or have an A.M. best rating of A− (excellent) or better.

Long-term Debt	12 Months Ended
Long-term Debt	Dec. 31, 2020
Long-term Debt
Long-term Debt	11. Long‑term Debt Prior to September 2018, the Company had $17.5 million in outstanding surplus notes which had been issued by PSIC on February 3, 2015 for a term of seven years. The surplus notes bore interest at the rate of LIBOR plus 8.00% and had restrictions as to payments of interest and principal and any such payment required the prior approval of the Oregon Insurance Commissioners before such payment could be made. Such payments could only be made from surplus. In September 2018, the Company completed a private placement financing of $20.0 million floating rate senior secured notes (the “Floating Rate Notes”), bearing interest at the three-month treasury rate plus 6.50% per annum. As part of the financing agreement, the Company immediately used surplus funds to pay down the existing $17.5 million in surplus notes. As part of this pre‑payment, the Company incurred a penalty of $0.1 million which, along with unamortized debt issuance costs of $0.4 million, was charged to income in 2018. The Floating Rate Notes were redeemed pursuant to their terms on May 23, 2019, at a redemption price equal to 102% of the principal amount of the Floating Rate Notes, or $20.4 million (plus $0.3 million of accrued and unpaid interest thereon). The Company recognized a charge of $1.3 million upon redemption with $0.4 million due to the redemption premium and $0.9 million due to the write‑off of unamortized debt issuance costs. The $0.4 million redemption premium was recognized as a component of interest expense and the $0.9 million issuance cost write‑off was recognized as a component of other underwriting expenses in the Company’s consolidated statements of income and comprehensive income. The Company incurred $1.1 million in interest expense related to the Floating Rate Notes for the year ended December 31, 2019 (inclusive of the $0.4 million redemption premium) and $0.6 million for the year ended December 31, 2018 and paid $1.2 million and $0.5 million for each period, respectively. The Company incurred and paid $1.2 million in interest expense related to the surplus notes for the year ended December 31, 2018.

Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Stockholders' Equity

Stockholders' Equity

12. Stockholders’ Equity

As of December 31, 2020 and December 31, 2019, the Company has 5,000,000 preferred shares authorized with a par value of $0.0001 and no preferred shares issued and outstanding. As of December 31, 2020 and December 31, 2019, the Company has 500,000,000 common shares authorized and 25,525,796 and 23,468,750 common shares issued and outstanding, respectively, with a par value of $0.0001. Additional paid in capital is $310.5 million as of December 31, 2020 and $180.0 million as of December 31, 2019.

In March 2019, the Company made a one-time cash distribution totaling approximately $5.1 million to its then-sole stockholder, GC Palomar Investor LP, enabling it to distribute funds to its partners in order to allow such partners to satisfy tax obligations incurred as a result of the Domestication transactions.

On April 22, 2019, the Company completed its IPO with the sale of 6,468,750 shares of common stock at a price to the public of $15.00 per share. The Company received net proceeds of approximately $87.4 million, after deducting underwriting discounts and commissions and offering costs.

On January 9, 2020, the Company sold 750,000 shares of common stock to the public at a price of $49.00 per share (along with 5,000,000 shares sold by existing stockholders) in an underwritten public offering. The Company received net proceeds of approximately $35.5 million, after deducting underwriting discounts and commissions and offering costs.

On June 26, 2020, the Company sold 1,150,000 shares of common stock to the public at a price of $82.00 per share in an underwritten public offering. The Company received net proceeds of approximately $90.1 million, after deducting underwriting discounts and commissions and offering costs.

Common stock reserved for future issuance consists of the following as of December 31, 2020:


Stock options outstanding under 2019 Equity Incentive Plan	1,008,648
Restricted stock units outstanding under 2019 Equity Incentive Plan	14,734
Shares authorized for future issuance under 2019 Equity Incentive Plan	1,952,001
Shares authorized for future issuance under 2019 Employee Stock Purchase Plan	451,633
Total	3,427,016

The below table summarizes the Company’s stock-based compensation expense for each period presented:


	Year ended December 31,
	2020		2019		2018
	(in thousands)
Stock-Based Compensation Expense	$	2,167	$	24,103	$	—

Stock-based compensation expense is recognized on a straight-line basis over the vesting period of awards. The Company does not apply a forfeiture rate to unvested awards and accounts for forfeitures as they occur. All stock-based compensation is included in other underwriting expenses in the Company’s consolidated statements of income and comprehensive income.

The Company recognized approximately $23.0 million of stock-based compensation expense in March 2019 relating to the modification of its 2014 Management Incentive Plan. The Company began recognizing stock-based compensation expense relating to its 2019 Equity Incentive Plan and the 2019 Employee Stock Purchase Plan upon their inception and initial equity grants in April 2019. Aside from the aforementioned $23.0 million charge, all stock-based compensation expense recognized during the years ended December 31, 2020 and December 31, 2019 relates to the 2019 Equity Incentive Plan and 2019 Employee Stock Purchase Plan.

Management Incentive Plan prior to IPO

The Company’s former parent, GC Palomar Investor LP, adopted a 2014 Management Incentive Plan (in the form of profits interests) on February 12, 2014 under which certain officers and employees of PSIC and its affiliates were entitled to Class P Units in GC Palomar Investor LP. Class P unit holders were expected to realize value only upon the occurrence of liquidity events meeting requisite financial thresholds after the Class A unit holders recovered their investment. The Class P unit holders had no voting rights. The Company did not record stock-based compensation expense related to this plan prior to 2019 because no liquidity events were probable of occurring.

On March 15, 2019, the Company modified its 2014 Management Incentive Plan by eliminating the requirement of a liquidity event to occur for the holders of its Class P units to realize value. The 12,552,825 Class P units outstanding were modified such that the vesting of each Class P unit holder’s awards was accelerated and their Class P distribution percentages were determined and distributed based on these percentages. This modification resulted in a stock compensation charge and corresponding increase to additional paid in capital of $23.0 million during the quarter ending March 31, 2019. The stock compensation charge is included in other underwriting expenses in the Company’s consolidated statements of income and comprehensive income.

2019 Equity Incentive Plan

On April 16, 2019, the Company’s 2019 Equity Incentive Plan (“the 2019 Plan”) became effective. The 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares and units, and other cash-based or share-based awards. In addition, the 2019 Plan contains a mechanism through which the Company may adopt a deferred compensation arrangement in the future.

A total of 2,400,000 shares of common stock are initially authorized and reserved for issuance under the 2019 Plan. This reserve increases on January 1 of each year through 2029, by an amount equal to the smaller of: 3% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or an amount determined by the board of directors.

Stock Options

Recipients of stock options can purchase shares of the Company’s common stock at a price equal to the stock’s fair market value on the grant date, determined by the closing price of the Company's common stock on the grant date. Stock options vest over a two or four year period with 25% or 50% vesting on the first anniversary of the grant date and the remainder vesting monthly over the remaining period, subject to continued service to the Company. Stock options expire ten years after the grant date.

The following table summarizes stock option transactions for the year ended December 31, 2020:


				Weighted average
				remaining	Aggregate
	Number of	Weighted-average		contractual term	intrinsic value
	shares	exercise price		(in years)	(in thousands)
Outstanding at January 1, 2020	1,046,373	$	17.05	9.33	$	35,039
Options granted	109,374		80.90
Options exercised	(122,613)		16.65
Options canceled	(24,486)		21.46
Outstanding at December 31, 2020	1,008,648	$	23.92	8.43	$	66,028
Vested and Exercisable at December 31, 2020	522,464	$	15.78	8.29	$	38,170

The total intrinsic value of stock options exercised during the year ended December 31, 2020 was $7.7 million. No options were exercised prior to 2020. As of December 31, 2020, the Company had approximately $3.7 million of total unrecognized stock-based compensation expense related to stock options expected to be recognized over a weighted-average period of 2.27 years.

The fair value of each option granted was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions in each year presented:


	Year ended December 31,
	2020		2019		2018
	(in thousands)
Risk free rate of return (1)		0.32% - 1.52%		1.59% - 2.45%		—
Expected share price volatility (2)		18.13% - 25.67%		18.12% - 18.45%		—
Expected life in years (3)		5.63-6.08		5.64-6.08		—
Dividend yield (4)		0%		0%		—

(1)

Determined based on the U.S. Treasury yield in effect at the time of the grant for zero-coupon U.S. Treasury notes with remaining terms similar to the expected term of the options.

(2)

Determined based on analysis of the historical volatility of a peer group of publicly traded companies.

(3)

Determined using the “simplified method” for estimating the expected option life, which is the average of the weighted-average vesting period and contractual term of the option as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its common stock has been publicly traded.

(4)

Determined to be zero as the Company does not currently plan to issue dividends.

Restricted Stock Units

Restricted stock units are valued on their grant date and generally vest either on the first anniversary of the grant date or over a three-year period with one third vesting on each anniversary date, subject to continued service with the Company. The fair value of RSUs is determined using the closing price of the Company's common stock on the grant date.

The following table summarizes RSU transactions for the year ended December 31, 2020:


		Weighted-average
	Number of	grant date
	shares	fair value
Non vested outstanding at January 1, 2020	6,066	$	16.49
Granted	14,734		95.86
Vested	(6,066)		16.49
Forfeited	—		—
Non vested outstanding at December 31, 2020	14,734	$	95.86

As of December 31, 2020, the Company had approximately $1.2 million of total unrecognized stock-based compensation expense related to RSUs expected to be recognized over a weighted-average period of 2.41 years.

2019 Employee Stock Purchase Plan

On April 16, 2019, the Company's 2019 Employee Stock Purchase Plan (“the 2019 ESPP”) became effective. A total of 240,000 shares of common stock are initially authorized and reserved for issuance under the 2019 ESPP. In addition, the 2019 ESPP provides for annual increases in the number of shares available for issuance on January 1 of each year through 2029, equal to the smaller of 240,000 shares of the Company’s common stock or such other amount as may be determined by the board of directors.

Under the 2019 ESPP, employees can purchase Company stock at a discount via payroll withholdings. The 2019 ESPP is administered through employee participation in discrete offering periods. During each discrete offering period employee funds are withheld, and the stock purchase occurs upon the conclusion of the offering period. The Company issued 28,367 shares pursuant to the ESPP during the year ended December 31, 2020.

Accumulated Other Comprehensive Income

12 Months Ended

Dec. 31, 2020

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

13. Accumulated Other Comprehensive Income

Changes in accumulated other comprehensive income (loss) (“AOCI”) are as follows:


	Year Ended December 31,
	2020		2019		2018
	(in thousands)
Balance as of January 1	$	4,686	$	(563)	$	2,993
Effect of equity accounting guidance adoption		—		—		(3,215)
Beginning Balance		4,686		(563)		(222)
Other comprehensive income (loss) before reclassification		11,292		6,555		(740)
Federal income tax (expense) benefit		(2,371)		(1,344)		76
Other comprehensive income (loss) before reclassification, net of tax		8,921		5,211		(664)
Amounts reclassified from AOCI		(456)		47		399
Federal income tax expense (benefit)		95		(9)		(76)
Amounts reclassified from AOCI, net of tax		(361)		38		323
Other comprehensive income (loss)		8,560		5,249		(341)
Balance at end of period	$	13,246	$	4,686	$	(563)

Underwriting Information

12 Months Ended

Dec. 31, 2020

Underwriting Information

Underwriting Information

14. Underwriting Information

The Company has a single reportable segment and offers primarily earthquake, wind, and flood insurance products. Gross written premiums (“GWP”) by product are presented below:


	Year Ended December 31,
	2020				2019				2018
	($ in thousands)
			% of				% of				% of
	Amount		GWP		Amount		GWP		Amount		GWP
Product
Residential Earthquake	$	140,934	39.8	%	$	130,473	51.8	%	$	81,679	52.7	%
Commercial Earthquake		58,890	16.6	%		38,741	15.4	%		20,946	13.5	%
Commercial All Risk		53,933	15.2	%		30,358	12.0	%		14,338	9.3	%
Specialty Homeowners		49,849	14.1	%		32,788	13.0	%		27,680	17.9	%
Inland Marine		15,423	4.3	%		2,465	1.0	%		—	—	%
Hawaii Hurricane		13,824	3.9	%		10,764	4.3	%		8,128	5.2	%
Residential Flood		8,176	2.3	%		5,216	2.1	%		2,120	1.4	%
Other		13,331	3.8	%		1,156	0.4	%		—	—	%
Total Gross Written Premiums	$	354,360	100.0	%	$	251,961	100.0	%	$	154,891	100.0	%

Gross written premiums by state are as follows:


	Year Ended December 31,
	2020				2019				2018
	($ in thousands)
			% of				% of				% of
	Amount		GWP		Amount		GWP		Amount		GWP
State
California	$	172,765	48.8	%	$	141,743	56.3	%	$	82,119	53.0	%
Texas		67,974	19.2	%		44,087	17.5	%		32,568	21.0	%
Hawaii		16,398	4.6	%		11,851	4.7	%		8,128	5.2	%
Washington		14,328	4.0	%		9,607	3.8	%		5,658	3.7	%
North Carolina		11,143	3.1	%		3,894	1.5	%		1,568	1.0	%
Oregon		10,038	2.8	%		7,396	2.9	%		5,286	3.4	%
South Carolina		9,196	2.6	%		6,185	2.5	%		3,208	2.1	%
Mississippi		7,461	2.1	%		4,769	1.9	%		2,585	1.7	%
Other		45,057	12.8	%		22,429	8.9	%		13,771	8.9	%
Total Gross Written Premiums	$	354,360	100.0	%	$	251,961	100.0	%	$	154,891	100.0	%

The Company distributes a significant portion of its Residential Earthquake, Commercial Earthquake, Specialty Homeowners and Hawaii Hurricane products through longstanding relationships with two program administrators. Each of the four products managed by the program administrators operates as a separate program that is governed by an independent, separately negotiated agreement with unique terms and conditions, including geographic scope, key men provisions, economics and exclusivity. These programs also feature separate managerial oversight and leadership, policy administration systems and retail agents originating policies. In total, these four products accounted for $191.3 million or 54.0% of the Company’s gross written premiums for the year ended December 31, 2020, $148.6 million or 59.0% of the Company’s gross written premiums for the year ended December 31, 2019 and $104.9 million or 67.7% of the Company’s gross written premiums for the year ended December 31, 2018.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Retirement and Post-Employment Retirement Plans	12 Months Ended
Retirement and Post-Employment Retirement Plans	Dec. 31, 2020
Retirement and Post-Employment Retirement Plans
Retirement and Post-Employment Retirement Plans	15. Retirement and Post‑Employment Retirement Plans For employees meeting certain eligibility requirements, the Company provides a defined contribution retirement plan under IRC Section 401(k). Under a safe‑harbor plan, the Company contributes 3% of each participant’s gross wages regardless of the employee’s contribution. For the years ended December 31, 2020, 2019, and 2018 the Company’s contributions to the plan were $0.3 million, $0.3 million and $0.2 million, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Taxes

Income Taxes

16. Income Taxes

Prior to March 2019, the Company was a Cayman Islands incorporated holding company with U.K. tax residency. On March 14, 2019, the Company implemented a domestication (“the Domestication”) pursuant to Section 388 of the Delaware General Corporation Law and Section 206 of the Companies Law (2018 Revision), as amended, of the Cayman Islands pursuant to which it became a Delaware corporation and no longer subject to the laws of the Cayman Islands.

Historically, the Company’s Bermuda based subsidiary, PSRE, was not required to pay any taxes on its income or capital gains but was subject to a 1% U.S. federal excise tax on reinsurance premiums assumed. The Company has elected for PSRE to be taxed as a U.S. domestic corporation under Section 953(d) of the Code effective January 1, 2019.

The components of the Company’s federal income tax expense (benefit) are as follows:



	December 31,
	2020		2019		2018
	(in thousands)
Current	$	(1,128)	$	6,810	$	(6)
Deferred		1,094		646		—
Income tax expense (benefit)	$	(34)	$	7,456	$	(6)

As of December 31, 2020 and 2019, significant components of the Company’s deferred tax assets and liabilities were as follows:


	December 31,
	2020		2019
	(in thousands)
Deferred tax assets:
Losses and LAE reserve discount	$	238	$	10
Net operating losses		680		74
Investment amortization		—		85
Unearned premiums		6,272		3,748
Capitalized organizational costs		244		274
Deferred compensation		511		—
Other		652		390
Total deferred tax assets	$	8,597	$	4,581
Deferred tax liabilities:
Deferred acquisition costs	$	(7,454)	$	(4,468)
Unrealized gains on investments		(3,884)		(1,396)
Internally developed software		(1,283)		(640)
Other		(672)		(2)
Total deferred tax liabilities		(13,293)		(6,506)
Net deferred tax liability before valuation allowance		(4,696)		(1,925)
Valuation allowance		(680)		(74)
Total net deferred tax liabilities	$	(5,376)	$	(1,999)

The valuation allowance shown above relates to deferred tax assets associated with state net operating loss carryforwards. These carryforwards do not meet the “more likely than not” criteria under ASC 740, Income Taxes due to the limited carryforward period. The amount of the deferred tax assets considered realizable could be adjusted if estimates of future taxable income during the carryforward period change or if objective negative evidence in the form of cumulative losses is no longer present.

The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the tax years ended December 31, 2020, 2019 and 2018:


	Years Ended December 31,
	2020				2019				2018
	($ in thousands)
Expense computed at federal tax rate	$	1,321	21.00	%	$	3,802	21.00	%	$	3,825	21.00	%
Non‑U.S. group member income		—	—	%		—	—	%		(4,409)	(24.21)	%
Stock-based compensation		(1,538)	(24.44)	%		4,822	26.63	%		—	—	%
Dividend received deduction and tax‑exempt interest		(67)	(1.06)	%		(36)	(0.20)	%		(144)	(0.79)	%
Valuation allowance		606	9.63	%		(1,677)	(9.27)	%		678	3.72	%
Other		(356)	(5.67)	%		545	3.01	%		44	0.24	%
Income tax expense (benefit)	$	(34)	(0.54)	%	$	7,456	41.17	%	$	(6)	(0.04)	%

The stock-based compensation difference shown above relates primarily to the permanent component of employee stock option exercises for the year ended December 31, 2020. For the year ended December 31, 2019, this difference relates primarily to a non-deductible stock compensation charge of $23.1 million incurred by the Company in March 2019. For the year ended December 31, 2020, the Company increased its valuation allowance relating to deferred tax assets associated with state net operating losses. The Company reversed the valuation allowance on its U.S. tax attributes during the year ended December 31, 2019 because of Domestication in the United States and projected future operating income in the U.S.

As of December 31, 2020 and 2019, the Company had no uncertain tax positions that required either recognition or disclosure in the consolidated financial statements. This is not expected to change significantly during the next twelve months. The Company classifies interest and penalties, if any, related to the liability for unrecognized tax benefits as a component of the provision for income taxes. The Company’s income tax returns for 2015 through 2019 remain subject to examination by the tax authorities.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Earnings Per Share

12 Months Ended

Dec. 31, 2020

Earnings Per Share

Earnings Per Share

17. Earnings Per Share

The following table sets forth the computation of earnings per share of common stock:


	Year ended December 31,
	2020		2019		2018
	(in thousands, except shares and per share data)
Net income	$	6,257	$	10,621	$	18,219
Weighted average common shares outstanding:
Basic		24,872,251		21,501,541		17,000,000
Common Share equivalents		726,396		333,393		—
Diluted		25,598,647		21,834,934		17,000,000

Earnings per share:
Basic	$	0.25	$	0.49	$	1.07
Diluted	$	0.24	$	0.49	$	1.07

Common share equivalents relate to outstanding stock options and RSUs under the 2019 Plan and unpurchased shares under the 2019 ESPP and are calculated using the treasury stock method.

Statutory financial information

12 Months Ended

Dec. 31, 2020

Statutory financial information

Statutory financial information

18. Statutory financial information

U.S.

U.S. state insurance laws and regulations prescribe accounting practices for determining statutory net income and capital and surplus for insurance companies. In addition, state regulators may permit statutory accounting practices that differ from prescribed practices. Statutory accounting practices (“SAP”) prescribed or permitted by regulatory authorities for the Company’s insurance subsidiaries differ from U.S. GAAP. The principal differences between SAP and GAAP as they relate to the financial statements of the Company’s insurance subsidiaries are (a) policy acquisition costs are expensed as incurred under SAP, whereas they are deferred and amortized under GAAP, (b) certain assets are not admitted for purposes of determining surplus under SAP, (c) investments in fixed income securities are carried at fair value under GAAP whereas such securities are carried at amortized cost under SAP, and (d) the criteria for recognizing net DTAs and the methodologies used to determine such amounts are different under SAP and GAAP.

Combined statutory net income and statutory capital surplus for the U.S. insurance subsidiaries, PSIC and PESIC as of December 31, 2020, 2019 and 2018 and for the years then ended are summarized as follows:


	December 31,
	2020		2019		2018
	(in thousands)
Statutory net income (loss)	$	1,753	$	(17,911)	$	9,609
Statutory capital and surplus		213,721		116,296		63,731

Risk‑Based Capital (“RBC”) requirements promulgated by the NAIC require property/casualty insurers to maintain minimum capitalization levels determined based on formulas incorporating various business risks of the insurance subsidiaries. As of December 31, 2020 and 2019, the company’s capital and surplus exceeds its authorized control level.

Bermuda

Under the Bermuda Insurance Act, 1978 and related regulations, PSRE is required to maintain certain solvency and liquidity levels. The minimum statutory solvency margin required at December 31, 2020 and 2019 was approximately $1.2 million and $1.2 million, respectively. Actual statutory capital and surplus at December 31, 2020 and 2019 was $39.2 million and $38.3 million, respectively. PSRE had statutory net income of $0.9 million, $18.5 million and $17.3 million for 2020, 2019 and 2018, respectively.

PSRE had stockholder’s equity of $41.9 million and $39.7 million on a GAAP basis at December 31, 2020 and 2019, respectively. The principal difference between statutory capital and surplus and stockholder’s equity presented in accordance with GAAP are prepaid expenses, which are non‑admitted assets for Bermuda statutory purposes.

PSRE maintains a Class 3A license and thus must maintain a minimum liquidity ratio in which the value of its relevant assets is not less than 75.0% of the amount of its relevant liabilities for general business. Relevant assets include cash and cash equivalents, fixed maturity securities, accrued interest income, premiums receivable, losses recoverable from reinsurers, and funds withheld. The relevant liabilities include total general business insurance reserves and total other liabilities, less sundry liabilities. As of December 31, 2020 and 2019, the Company met the minimum liquidity ratio requirement.

Dividend Restrictions	12 Months Ended
Dividend Restrictions	Dec. 31, 2020
Dividend Restrictions
Dividend Restrictions	19. Dividend Restrictions U.S. The Company’s U.S. insurance company subsidiaries, PSIC and PESIC are restricted by the statutes as to the amount of dividends that they may pay without prior approval by state insurance commissioners. Under California and Oregon statute which govern PSIC, dividends paid in a consecutive twelve month period cannot exceed the greater of (i) 10% of an insurance company’s statutory policyholders’ surplus as of December 31 of the preceding year or (ii) 100% of its statutory net income for the preceding calendar year. Any dividends or distributions in excess of these amounts would require regulatory approval. In addition, under Oregon statute, PSIC may only declare a dividend from earned surplus, which does not include contributed capital. Surplus arising from unrealized capital gains or revaluation of assets is not considered part of earned surplus. Based on the above restrictions, PSIC may pay a dividend or distribution of no greater than $11.3 million in 2021 without approval by the California and Oregon Insurance Commissioners. Under Arizona statute with governs PESIC, dividends paid in a consecutive twelve month period cannot exceed the lesser of (i) 10% of an insurance company’s statutory policyholders’ surplus as of December 31 of the preceding year or (ii) 100% of its statutory net income for the preceding calendar year. As such, PESIC is unable to pay a dividend or distribution in 2021 without the approval of the Arizona Insurance Commissioner as it had a statutory net loss in 2020. In addition to the above limitations, any dividend or distribution declared is also subject to state regulatory approval prior to payment. In the future, state insurance regulatory authorities may adopt statutory provisions and dividend limitations more restrictive than those currently in effect. Bermuda Bermuda regulations limit the amount of dividends and return of capital paid by a regulated entity. A Class 3A insurer is prohibited from declaring or paying a dividend if it is in breach of its minimum solvency margin, its enhanced capital requirement, or its minimum liquidity ratio, or if the declaration or payment of such dividend would cause such a breach, or if there are reasonable grounds for believing there has been such a breach. Pursuant to Bermuda regulations, the maximum amount of dividends and return of capital available to be paid by a reinsurer is determined pursuant to a formula. Under this formula, the maximum amount of dividends and return of capital available to the Company from PSRE during 2021 is calculated to be approximately $10.5 million. However, this dividend amount is subject to annual enhanced solvency requirement calculations.

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2020
Commitments and Contingencies
Commitments and Contingencies	20. Commitments and Contingencies Litigation The Company is subject to legal proceedings arising from the normal conduct of its business. In the opinion of management, any ultimate liability that may arise from these proceedings will not have a material effect on the Company’s financial position. Letters of Credit As of December 31, 2020, the Company has three irrevocable standby letters of credit for the benefit of ceding insurance companies to secure the unearned premium assumed by PSIC. The bank letters of credit amount to $1.5 million, $0.5 million and $0.4 million. The $1.5 million and $0.4 million letters of credit expire December 31, 2021 with no renewal terms. The $0.4 million letter of credit auto renews each year. The letters of credit are collateralized by $3.2 million of U.S. Treasury bonds which are included in available‑for‑sale investments on the consolidated balance sheets.

Selected Quarterly Financial Data (unaudited)

12 Months Ended

Dec. 31, 2020

Selected Quarterly Financial Data (unaudited)

Selected Quarterly Financial Data (unaudited)

21. Selected Quarterly Financial Data (unaudited)

The following is a summary of the Company’s unaudited quarterly results of operations:


	2020 Quarter								2020
		First		Second		Third		Fourth	Year
	($ in thousands, except per share data)
Gross written premiums	$	71,494	$	83,807	$	102,967	$	96,092	$	354,360
Total revenues (1)		38,019		43,149		44,998		42,295		168,463
Net income (loss)		11,776		12,012		(15,682)		(1,849)		6,257
Comprehensive income (loss)		5,943		22,688		(14,773)		959		14,817
Earnings per share (2):
Basic	$	0.49	$	0.49	$	(0.62)	$	(0.07)	$	0.25
Diluted	$	0.48	$	0.48	$	(0.62)	$	(0.07)	$	0.24


	2019 Quarter								2019
		First		Second		Third		Fourth	Year
	($ in thousands, except per share data)
Gross written premiums	$	54,031	$	58,346	$	66,242	$	73,342	$	251,961
Total revenues		22,307		25,905		30,461		34,623		113,296
Net income (loss)		(14,411)		6,698		7,454		10,880		10,621
Comprehensive income (loss)		(12,224)		9,996		8,428		9,670		15,870
Earnings per share (2):
Basic	$	(0.85)	$	0.30	$	0.32	$	0.46	$	0.49
Diluted	$	(0.85)	$	0.30	$	0.31	$	0.45	$	0.49

(1)

Due to rounding differences, quarterly total revenues does not add up to the yearly total.

(2) Due to differences in weighted-average common shares outstanding between periods, quarterly earnings per share may not add up to the totals reported for the full year.

Schedule II

12 Months Ended

Dec. 31, 2020

Schedule II

Schedule II

Palomar Holdings, Inc. and Subsidiaries

Balance Sheets (Parent Company)

(In Thousands, except shares and par value data)


	December 31,		December 31,
	2020		2019
Assets
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $50,177 in 2020, $28,413 in 2019)	$	51,252	$	29,120
Equity securities, at fair value: (cost: $1,661 in 2020, $1,661 in 2019)		1,727		1,696
Total investments		52,979		30,816
Cash and cash equivalents		7,290		1,654
Accrued investment income		300		126
Prepaid expenses and other assets		7,322		36
Receivables from subsidiaries		1,552		—
Investment in subsidiaries		317,663		189,313
Total assets	$	387,106	$	221,945
Liabilities and Stockholders' equity
Liabilities:
Accounts payable and other liabilities	$	94	$	268
Payables to subsidiaries		17,923		—
Federal income tax payable		—		1,122
Deferred tax liabilities		5,376		1,999
Total liabilities		23,393		3,389
Stockholders' equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of December 31, 2020 and December 31, 2019, respectively, 0 shares issued and outstanding as of December 31, 2020 and December 31, 2019		—		—
Common stock, $0.0001 par value, 500,000,000 shares authorized, 25,525,796 and 23,468,750 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively		3		2
Additional paid‑in capital		310,507		180,012
Accumulated other comprehensive income		13,246		4,686
Retained earnings		39,957		33,856
Total stockholders' equity		363,713		218,556
Total liabilities and stockholders' equity	$	387,106	$	221,945

See accompanying notes.

Schedule II

Palomar Holdings, Inc. and Subsidiaries

Statements of Income (Parent Company)

(In Thousands)


	Year Ended December 31,
	2020		2019		2018
Revenues:
Net investment income	$	939	$	1,039	$	61
Net realized and unrealized losses on investments		63		131		(2)
Total revenues		1,002		1,170		59
Expenses:
Other operating expenses		8,696		8		—
Income (loss) before income taxes		(7,694)		1,162		59
Income tax expense (benefit)		(34)		7,441		—
Income (loss) before equity in net income of subsidiaries		(7,660)		(6,279)		59
Equity in net income of subsidiaries		13,917		16,900		18,160
Net income		6,257		10,621		18,219
Other comprehensive income:
Net unrealized losses on securities available for sale		1,075		708		(87)
Equity in other comprehensive income of subsidiaries, net of taxes		7,485		4,541		(254)
Total comprehensive income	$	14,817	$	15,870	$	17,878

See accompanying notes.

Schedule II

Palomar Holdings, Inc. and Subsidiaries

Statements of Cash Flows (Parent Company)

(In Thousands)


	Year Ended December 31,
	2020		2019		2018
Operating activities
Net income	$	6,257	$	10,621	$	18,219
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries		(13,917)		(16,900)		(18,160)
Net realized and unrealized losses on investments		(63)		(131)		2
Amortization of premium on fixed maturity securities		350		114		—
Deferred income tax expense		1,094		646		—
Other		—		—		546
Changes in operating assets and liabilities:		7,772		4,218		(67)
Net cash provided by (used in) operating activities		1,493		(1,432)		540
Investing activities
Purchases of fixed maturity securities		(71,048)		(73,901)		—
Sales and maturities of fixed maturity securities		6,651		13,930
Cash paid to subsidiaries		(59,789)		—		—
Cash received from subsidiaries		—		226		—
Net cash used in investing activities		(124,186)		(59,745)		—
Financing activities
Proceeds from initial public offering, net of offering costs		—		87,411		—
Distribution to stockholder		—		(5,120)		—
Redemption of Floating Rate Notes		—		(20,000)		—
Proceeds from January 2020 stock offering, net of offering costs		35,464		—		—
Proceeds from June 2020 stock offering, net of offering costs		90,083		—		—
Proceeds from common stock issued via equity incentive plans		2,782		—		—
Net cash provided by financing activities		128,329		62,291		—
Net increase in cash and cash equivalents		5,636		1,114		540
Cash and cash equivalents at beginning of period		1,654		540		—
Cash and cash equivalents at end of period	$	7,290	$	1,654	$	540
Supplementary cash flow information:
Cash paid for income taxes	$	7,182	$	5,645	$	—

See accompanying notes.

Schedule II

1.Accounting Policies

Organization

Palomar Holdings, Inc. (“the Company”), is an insurance holding company that domesticated in Delaware in March 2019. Prior to domestication in Delaware, the Company was known as GC Palomar Holdings (“GCPH”), which was a Cayman Islands incorporated insurance holding company formed on October 4, 2013 when GC Palomar Investor LP (“GCPI”) acquired control of GCPH.

Basis of Presentation

The accompanying condensed financial statements have been prepared using the equity method. Under the equity method, the investment in consolidated subsidiaries is stated at cost plus equity in undistributed earnings of consolidated subsidiaries since the date of acquisition. These condensed financial statements should be read in conjunction with the Company’s consolidated financial statements.

Estimates and Assumptions

Preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates.

Schedule V - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2020

Valuation and Qualifying Accounts

Valuation and Qualifying Accounts

Schedule V

Palomar Holdings, Inc. and Subsidiaries

Valuation and Qualifying Accounts


			Additions		Deductions
	Balance at		Amounts		Amounts		Balance at
	Beginning		Charged to		Written		End of
(in thousands)	of Period		Expense		Off		Period
Year Ended December 31, 2020
Valuation Allowance for deferred tax assets	$	74	$	606	$	—	$	680
Valuation Allowance for premium receivable		150		53		—		203
Year Ended December 31, 2019
Valuation Allowance for deferred tax assets	$	1,677	$	—	$	(1,603)	$	74

Significant Accounting Policies (Policies)	12 Months Ended
Significant Accounting Policies (Policies)	Dec. 31, 2020
Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly‑owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Stock Split	Stock Split On March 15, 2019, the Company effected a 17,000,000 for one forward stock split in conjunction with domestication in the United States. All share and per share information included in the accompanying consolidated financial statements and notes to the consolidated financial statements have been retroactively adjusted to reflect the stock split for the Company’s common stock for all periods presented.
Initial Public Offering (IPO)	Initial Public Offering (“IPO”) On April 22, 2019, the Company completed its IPO with the sale of 6,468,750 shares of common stock at a price to the public of $15.00 per share, including 843,750 shares sold upon the exercise in full of the underwriter’s option to purchase additional shares. After underwriter discounts and commissions and offering expenses, net proceeds from the IPO were approximately $87.4 million.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein. All revisions to accounting estimates are recognized in the period in which the estimates are revised. Significant estimates reflected in the Company’s consolidated financial statements include, but are not limited to, reserves for losses and loss adjustment expenses, reinsurance recoverables on unpaid losses, and the fair values of investments.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents include time deposits and marketable securities with original maturities of three months or less at acquisition and are stated at cost, which approximates fair value. The Company maintains cash balances in federally insured financial institutions.
Restricted Cash	Restricted Cash Restricted cash includes cash on deposit with reinsurance carriers. Restricted cash also includes cash held in a fiduciary capacity for the benefit of third-party insurance carriers.
Investments	Investments All of the Company’s investments in fixed maturity securities are classified as available‑for‑sale and are carried at fair value. Investment income consists primarily of interest and dividends. Interest income is recognized on an accrual basis. Premiums and discounts on mortgage‑backed securities and asset‑backed securities are amortized or accrued using the prospective method which considers anticipated prepayments at the date of purchase. To the extent that the estimated lives of such securities change as a result of changes in estimated prepayment rates, the adjustments are included in net investment income using the prospective method. Dividend income is recognized on the ex‑dividend date. Net investment income represents investment income, net of expenses. Unrealized gains and losses related to fixed maturity securities are included in accumulated other comprehensive income as a separate component of stockholders’ equity. Equity securities are carried at fair value with unrealized gains and losses included as a component of net income on the Company’s consolidated statement of income and comprehensive income. The Company uses the specific‑identification method to determine the cost of fixed maturity securities sold and the first‑in, first‑out method for lots of equity securities sold. The Company reviews all securities with unrealized losses on a quarterly basis to assess whether the decline in the securities fair value necessitates the recognition of an allowance for credit losses. Factors considered in the review include the extent to which the fair value has been less than amortized cost, and current market interest rates and whether the unrealized loss is credit‑driven or a result of changes in market interest rates. The Company also considers factors specific to the issuer including the general financial condition of the issuer, the issuers industry and future business prospects, any past failure of issuer to make scheduled interest or principal payments, and the payment structure of the investment and the issuers ability to make contractual payments on the investment. The Company also considers whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery of its amortized cost. When assessing whether it intends to sell a fixed-maturity security or if it is likely to be required to sell a fixed-maturity security before recovery of its amortized cost, the Company evaluates facts and circumstances including, but not limited to, decisions to reposition the investment portfolio, potential sales of investments to meet cash flow needs, and potential sales of investments to capitalize on favorable pricing. For fixed-maturity securities where a decline in fair value is below the amortized cost basis and the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, a credit-loss charge is recognized in net income based on the fair value of the security at the time of assessment. For fixed-maturity securities that the Company has the intent and ability to hold, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit-related portion of the impairment, which is recognized in net income through an allowance for credit losses. Any remaining decline in fair value represents the noncredit portion of the impairment, which is recognized in other comprehensive income. The Company reports accrued interest receivable as a component of accrued investment income on its consolidated balance sheet which is presented separately from available-for-sale securities. The Company does not measure an allowance for credit losses on accrued interest receivable and instead would write off accrued interest receivable at the time an issuer defaults or is expected to default on payments. Prior to the adoption of ASU 2016-13, the Company evaluated fixed maturity securities for credit losses and any losses were bifurcated into the credit‑related loss and the loss related to all other factors. The credit‑related impairment loss would have been recognized as a realized loss in the statement of income and comprehensive income and the cost basis of the security would have been reduced. The impairment related to other factors would have remained in accumulated other comprehensive income. The Company did not recognize any credit losses during the years ended December 31, 2020 and 2019 related to its available-for-sale securities.
Fair Value	Fair Value Fair value is defined as the price that the Company would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. The three‑tier hierarchy of inputs is summarized in the three broad levels listed below: Level 1—Unadjusted quoted prices are available in active markets for identical investments as of the reporting date. Level 2—Pricing inputs are quoted prices for similar investments in active markets; quoted prices for identical or similar investments in inactive markets; or valuation based on models where the significant inputs are observable or can be corroborated by observable market data. Level 3—Pricing inputs into models are unobservable for the investment. The unobservable inputs require significant management judgment or estimation. To measure fair value, the Company obtains quoted market prices for its investment securities from its outside investment managers. If a quoted market price is not available, the Company uses prices of similar securities. The fair values obtained from the outside investment managers are reviewed for reasonableness and any discrepancies are investigated for final valuation. The fair value of the Company’s investments in fixed maturity securities is estimated using relevant inputs, including available market information, benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. An Option Adjusted Spread model is also used to develop prepayment and interest rate scenarios. Industry standard models are used to analyze and value securities with embedded options or prepayment sensitivities. These fair value measurements are estimated based on observable, objectively verifiable market information rather than market quotes; therefore, these investments are classified and disclosed in Level 2 of the hierarchy. The fair value of the Company’s investments in equity securities is based on quoted prices available in active markets and classified and disclosed in Level 1 of the hierarchy.
Concentration of Credit Risk	Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, fixed maturity securities and reinsurance recoverables. The Company places its cash and cash equivalents with high credit quality financial institutions and its fixed maturity securities in securities of the U.S. government, U.S. government agencies, and high credit quality issuers of debt securities. The Company evaluates the financial condition of its reinsurers and reinsures its business with highly rated reinsurers and sometimes requires letters of credit or retains funds from reinsurers (see Note 10).
Premiums Receivable	Premiums Receivable Premiums receivable represent amounts due from policyholders, insurance agents, or program administrators for policies written. Generally, premiums are collected prior to providing risk coverage, minimizing the Company’s exposure to credit risk. Premiums receivable are short-term in nature and due within a year. The Company has established an allowance for uncollectable premiums related to its credit risk, which it reviews on a quarterly basis and adjusts as appropriate. The company considers the current economic environment, specific regulatory developments, and historic payment and cancelation trends by line of business and location when determining whether to record an allowance for uncollectable premiums. Prior to December 31, 2019, the Company did not have an allowance for uncollectable premiums. An initial allowance for uncollectable premiums of $0.2 million was established upon adoption of ASC 2016-13 on January 1, 2020 and the company recognized an immaterial amount of credit losses relating to uncollectable premiums during the year ended December 31, 2020.
Deferred Policy Acquisition Costs	Deferred Policy Acquisition Costs The costs of successfully acquiring new business, principally commission expense and premium taxes, are deferred and amortized over the terms of the policies in force, net of any ceding commissions.
Premiums Earned	Premiums Earned Gross premiums written are recorded at policy inception and are earned as revenue ratably over the term of the respective policies. Premiums written not yet recognized as revenue are reflected as unearned premiums on the balance sheet, or as advanced premiums if received prior to the policy effective date. Premiums written where cash is not yet received are recognized as premiums receivable. A premium deficiency is recognized if the sum of expected losses and loss adjustment expenses, unamortized acquisition costs, and policy maintenance costs exceeds the remaining unearned premiums. A premium deficiency would first be recognized by charging any unamortized acquisition costs to expense to the extent required to eliminate the deficiency. If the premium deficiency were greater than unamortized acquisition costs, a liability would be accrued for the excess deficiency. The Company does not consider anticipated investment income when determining if a premium deficiency exists. There was no premium deficiency at December 31, 2020 or 2019.
Commission and Other Income	Commission and Other Income Commission and other income is comprised of commissions earned on policies where the Company has no exposure to underlying risk and fees earned in conjunction with underwriting policies. Commission and fee income is earned at the time the policy is written.
Property and Equipment	Property and Equipment Property and equipment are capitalized and carried at cost less accumulated depreciation. Depreciation for property and equipment is calculated on a straight‑line basis using useful lives of 3 to 5 years. Leasehold improvements and other fixed assets are capitalized and depreciated over the useful lives of the properties and equipment. Expenditures for maintenance and repairs are charged to operations as incurred. Upon disposition, the asset cost and related depreciation are removed from the accounts and the resulting gain or loss is included in the Company’s results of operations.
Capitalized Software	Capitalized Software Costs associated with the implementation of certain internal systems are capitalized and carried at capitalized cost less accumulated amortization and are included as a component of prepaid expenses and other assets on the Company’s consolidated balance sheet. Costs capitalized include internal personnel costs, external developer costs, and interest. The implementation costs relate to systems built on software which the Company purchases under a cloud computing arrangement and accounts for as a service contract. As such, capitalized costs are amortized over the term of the service contract, which currently ends in December 2024.
Intangible Assets	Intangible Assets Intangible assets consist of both finite and indefinite lived assets. Finite lived intangible assets consist of customer relationships acquired from another insurer during 2020. Indefinite lived intangible assets consist of state licenses acquired upon formation of the Company. Intangible assets are initially recognized and measured at fair value and are subsequently evaluated for impairment annually or more frequently if circumstances warrant it. No impairments of intangible assets were recognized for the years ended December 31, 2020, 2019 or 2018.
Impairment of Long-Lived Assets	Impairment of Long‑Lived Assets Long‑lived assets with finite lives are tested for impairment whenever recognized events or changes in circumstances indicate the carrying value of these assets may not be recoverable. If indicators of impairment are present, the fair value is calculated using estimated future cash flows expected to be generated from the use of those assets. An impairment loss is recognized only if the carrying amount of a long‑lived asset or asset group is not recoverable and exceeds its fair value. The carrying amount of a long‑lived asset or asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group. This assessment is based on the carrying amount of the asset or asset group at the date it is tested for recoverability. An impairment loss is measured as the amount by which the carrying amount of a long‑lived asset or asset group exceeds its fair value. No impairments of long‑lived assets were recognized for the years ended December 31, 2020, 2019 and 2018.
Reserve for Losses and Loss Adjustment Expenses	Reserve for Losses and Loss Adjustment Expenses The reserve for unpaid losses and loss adjustment expenses includes estimates for unpaid claims and claim adjustment expenses on reported losses and estimates of losses incurred but not reported (“IBNR”), net of salvage and subrogation recoveries. The liability is based on individual claims, case reserves and other estimates reported by policyholders, as well as management estimates of ultimate losses and loss adjustment expenses. Inherent in the estimates of ultimate losses and loss adjustment expenses are expected trends in claims severity and frequency and other factors that could vary significantly as claims are settled. The Company’s estimates of ultimate losses and loss adjustment expenses are based in part upon the estimation of claims resulting from natural disasters such as hurricanes and earthquakes. Estimation by management of the ultimate losses and loss adjustment expenses resulting from catastrophic events is inherently difficult because of the potential severity of property catastrophe claims. Therefore, the Company uses both proprietary and commercially available models, as well as historic claims experience, for purposes of providing an estimate of ultimate losses and loss adjustment expenses. Reserves for IBNR are established in accordance with industry practice to provide for (i) the estimated amount of future loss payments on incurred claims not yet reported, and (ii) potential development on reported claims. IBNR reserves are estimated based on generally accepted actuarial reserving techniques that consider quantitative loss experience data and, where appropriate, qualitative factors. Ultimate losses and loss adjustment expenses may vary materially from the amounts provided in the consolidated financial statements. Estimates of unpaid losses and loss adjustment expenses are reviewed regularly and, as experience develops and new information becomes known, the liabilities are adjusted as necessary. Such adjustments, if any, are reflected in operations in the period in which they become known and are accounted for as changes in estimates. The Company does not discount its liability for unpaid losses and loss adjustment expenses. The Company does not write insurance policies covering toxic clean‑up, asbestos‑related illness or other environmental remediation exposures.
Reinsurance	Reinsurance The Company purchases excess of loss and quota share reinsurance to protect it against the impact of losses. Reinsurance premiums, commissions, ceded unearned premiums are accounted for on bases consistent with the underlying terms of the reinsurance contracts and in proportion to the amount of insurance protection provided. The Company receives ceding commissions in connection with quota share reinsurance. The ceding commissions are capitalized and amortized as a reduction of acquisition expenses. Amounts applicable to ceded unearned premiums are reported as assets in the accompanying consolidated balance sheets. Premiums earned and losses and loss adjustment expenses incurred are stated in the accompanying consolidated statements of income and comprehensive income net of amounts ceded to reinsurers. Reinsurance recoverables represent balances due to the Company from its reinsurers for paid and unpaid losses and loss adjustment expenses. The Company is exposed to credit losses from reinsurers being unable to meet their obligations. The Company evaluates the financial condition of potential reinsurers and reinsures its business only with highly rated reinsurers with a rating of “A-“ (Excellent) (Outlook Stable) or better from A.M. Best. Reinsurers who do not meet the Company’s rating criteria are required to post collateral. The Company reviews credit quality of its reinsurers on a quarterly basis. The Company’s reinsurance contracts also include special termination provisions that allow the Company to cancel and replace any participating reinsurer that is downgraded below a rating of “A−” from A.M. Best, or whose surplus drops by more than 20%. Historically, the Company has not experienced any credit losses from reinsurance recoverables and did not have an allowance for uncollectable reinsurance recoverables as of December 31, 2020 or December 31, 2019.
Stock Based Compensation Expense	Stock Based Compensation Expense Stock-based compensation expense is recognized on a straight-line basis over the vesting period of awards. The Company does not apply a forfeiture rate to unvested awards and accounts for forfeitures as they occur. For stock option grants, the fair value of awards is estimated using the Black Scholes Model. The fair value of restricted stock units is determined using the closing price of the Company's common stock on the grant date. All stock-based compensation is included in other underwriting expenses in the Company’s consolidated statements of income and comprehensive income.
Income Taxes	Income Taxes The Company is taxed as a property/casualty insurer for federal income tax purposes. Deferred income tax assets and liabilities are determined based on the difference between the financial statement and the tax bases of assets and liabilities, using enacted tax rates expected to be in effect during the year in which the basis differences reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes the tax benefit of uncertain tax positions where the position is more likely than not to be sustained assuming examination by taxing authorities. Based on its evaluation for the tax years ended December 31, 2020 and 2019, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The Company recognizes interest and penalties related to uncertain tax positions, if any, as a component of income tax expense. The Company has not been assessed interest or penalties by any major tax jurisdictions for the respective tax years ended December 31, 2020, 2019, and 2018.
Earnings Per Share	Earnings Per Share Basic earnings per share is calculated by dividing net income by the weighted‑average common shares outstanding for the period. Diluted earnings per share reflects the dilution which could occur if equity-based awards are converted into common share equivalents as calculated using the treasury stock method. When inclusion of additional common share equivalents increases the earnings per share or reduces the loss per share, the effect on earnings per share is anti-dilutive, and the diluted net earnings or net loss per share is computed excluding these common share equivalents.
Recent Accounting Pronouncements	Recently adopted accounting pronouncements Clarification on change in filing status and prior quarterly information Prior to December 31, 2020, the Company qualified as an emerging growth company (“EGC”) under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. The Company was previously electing to adopt new or revised accounting guidance within the same time periods as private companies as permitted by its status as an EGC. The Company became a large accelerated filed on December 31, 2020 and must now adopt new accounting guidance within the same time periods as public companies, beginning with this 2020 Annual Report on Form 10-K. Prior to this annual report, the Company’s 2020 quarterly filings did not reflect adoption of the below guidance as the Company was not required to have adopted it. Upon adoption of the below guidance, the Company updated its financials as if the below guidance was adopted on January 1, 2020, however, this adoption had a negligible impact on previously filed quarterly information. Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance for accounting for leases, ASU 2016‑02, Leases (Topic 842) and subsequently issued multiple clarifying updates to the guidance. This updated guidance requires the recognition of a right‑of‑use (“ROU”) asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. Under the previous guidance, leases were only included on the balance sheet if the criteria to classify the agreement as a capital lease were met. The Company adopted this new guidance as of January 1, 2020. The Company adopted this guidance using the modified retrospective transition method, applying the transition provisions on the date of adoption and not restating prior periods. The Company elected to use a number of practical expedients permitted under the transition guidance, but did not elect to use hindsight in determining the lease term. Upon adoption, the Company recognized a ROU asset of $2.9 million and lease liabilities of $3.8 million, with the difference representing the reclassification of deferred rent and lease incentive liabilities (the difference between the straight-line rent expenses and cash paid for rent under the leases) to operating lease ROU assets from other liabilities. The ROU asset and corresponding liability recognized pertained to various operating leases for office space. The Company did not have any cumulative-effect adjustment because of the adoption. Measurement of credit losses In June 2016, the FASB issued ASU 2016‑13, Financial Instruments-Credit Losses (Topic 326) and subsequently issued multiple clarifying updates to the guidance. This updated guidance requires financial assets measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that is included in net income. Credit losses relating to available-for-sale debt securities are also required to be recorded through a reversible allowance for credit losses, but the allowance is limited to the amount by which fair value is less than amortized cost. The previous accounting guidance delayed the recognition of credit losses until it was probable a loss had been incurred. The Company adopted this guidance on January 1, 2020 using the modified retrospective approach and recorded a $0.2 million cumulative effect adjustment to beginning retained earnings upon adoption relating to an allowance for credit losses on the Company’s premium receivables. The adoption of this accounting guidance did not have an impact on value of the Company’s fixed maturity securities or its reinsurance recoverables. Recently issued accounting pronouncements not yet adopted Income Taxes In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. Among other things, ASU 2019-12 eliminates certain exceptions for recognizing deferred taxes for investments, performing intra-period tax allocation and calculating income taxes in interim periods. ASU 2019-12 also clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company will adopt this guidance in the first fiscal quarter of 2021 and does not expect adoption to have a material impact on its consolidated financial statements.

Investments (Tables)

12 Months Ended

Dec. 31, 2020

Investments

Schedule of available-for-sale investments


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2020	Cost or Cost		Gains		Losses		Value
	(in thousands)
Fixed maturities:
U.S. Governments	$	16,308	$	756	$	(5)	$	17,059
States, territories, and possessions		6,208		428		—		6,636
Political subdivisions		2,027		125		—		2,152
Special revenue excluding mortgage/asset-backed securities		39,704		1,525		(2)		41,227
Industrial and miscellaneous		234,049		11,602		(291)		245,360
Mortgage/asset-backed securities		82,983		2,785		(215)		85,553
Total available-for-sale investments	$	381,279	$	17,221	$	(513)	$	397,987


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2019	Cost or Cost		Gains		Losses		Value
	(in thousands)
Fixed maturities:
U.S. Governments	$	13,371	$	321	$	(13)	$	13,679
States, territories, and possessions		2,298		147		—		2,445
Political subdivisions		1,913		29		—		1,942
Special revenue excluding mortgage/asset-backed securities		18,139		343		(46)		18,436
Industrial and miscellaneous		124,726		4,326		(39)		129,013
Mortgage/asset-backed securities		50,831		824		(19)		51,636
Total available-for-sale investments	$	211,278	$	5,990	$	(117)	$	217,151

Schedule of aggregate fair value and gross unrealized losses


	Less Than 12 Months				More Than 12 Months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2020	Value		Losses		Value		Losses		Value		Losses
	(in thousands)
Fixed maturity securities:
U.S. Governments	$	1,496	$	(5)	$	—	$	—	$	1,496	$	(5)
States, territories, and possessions		—		—		—		—		—		—
Political subdivisions		—		—		—		—		—		—
Special revenue excluding mortgage/asset-backed securities		520		(2)		—		—		520		(2)
Industrial and miscellaneous		22,718		(234)		203		(57)		22,921		(291)
Mortgage/asset-backed securities		16,092		(211)		496		(4)		16,588		(215)
Total	$	40,826	$	(452)	$	699	$	(61)	$	41,525	$	(513)


	Less Than 12 Months				More Than 12 Months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2019	Value		Losses		Value		Losses		Value		Losses
	(in thousands)
Fixed maturity securities:
U.S. Governments	$	1,235	$	(11)	$	1,827	$	(2)	$	3,062	$	(13)
States, territories, and possessions		—		—		—		—		—		—
Political subdivisions		—		—		—		—		—		—
Special revenue excluding mortgage/asset-backed securities		3,548		(46)		—		—		3,548		(46)
Industrial and miscellaneous		6,929		(38)		188		(1)		7,117		(39)
Mortgage/asset-backed securities		7,035		(19)		182		—		7,217		(19)
Total	$	18,747	$	(114)	$	2,197	$	(3)	$	20,944	$	(117)

Schedule of contractual maturities of available-for-sale securities


	Amortized		Fair
	Cost		Value
	(in thousands)
Due within one year	$	11,222	$	11,351
Due after one year through five years		146,302		151,123
Due after five years through ten years		99,194		106,600
Due after ten years		41,578		43,360
Mortgage and asset-backed securities		82,983		85,553
	$	381,279	$	397,987

Schedule of change in unrealized gains (losses) of investments


	Year Ended December 31,
	2020		2019		2018
	(in thousands)
Change in net unrealized gains (losses)
Fixed maturities	$	10,835	$	6,602	$	(341)
Net increase (decrease)	$	10,835	$	6,602	$	(341)

Schedule of net investment income


	December 31,
	2020		2019		2018
	(in thousands)
Interest income	$	8,554	$	5,894	$	3,036
Dividend income		489		424		514
Investment management fees and expenses		(431)		(343)		(312)
Net investment income	$	8,612	$	5,975	$	3,238

Schedule of net realized and unrealized investment gains and losses


	Year Ended
	December 31,
	2020		2019		2018
		(in thousands)
Realized gains:
Gains on sales of fixed maturity securities	$	501	$	1,405	$	19
Gains on sales of equity securities		62		177		4,287
Total realized gains		563		1,582		4,306
Realized losses:
Losses on sales of fixed maturity securities		(46)		(84)		(418)
Losses on sales of equity securities		(68)		(64)		(421)
Total realized losses		(114)		(148)		(839)
Net realized investment gains		449		1,434		3,467
Net unrealized gains (losses) on equity securities		1,039		3,009		(6,036)
Net realized and unrealized gains (losses) on investments	$	1,488	$	4,443	$	(2,569)

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Measurements

Schedule of fair value hierarchy for financial assets and liabilities


December 31, 2020	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets:
Fixed maturity securities
U.S. Governments	$	—	$	17,059	$	—	$	17,059
States, territories, and possessions		—		6,636		—		6,636
Political subdivisions		—		2,152		—		2,152
Special revenue excluding mortgage/asset-backed securities		—		41,227		—		41,227
Industrial and miscellaneous		—		245,360		—		245,360
Mortgage/asset-backed securities		—		85,553		—		85,553
Equity securities		24,322		—		—		24,322
Cash, cash equivalents, and restricted cash		33,786		—		—		33,786
Total assets	$	58,108	$	397,987	$	—	$	456,095


December 31, 2019	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets:
Fixed maturity securities
U.S. Governments	$	—	$	13,679	$	—	$	13,679
States, territories, and possessions		—		2,445		—		2,445
Political subdivisions		—		1,942		—		1,942
Special revenue excluding mortgage/asset-backed securities		—		18,436		—		18,436
Industrial and miscellaneous		—		129,013		—		129,013
Mortgage/asset-backed securities		—		50,136		1,500		51,636
Equity securities		22,328		—		—		22,328
Cash, cash equivalents, and restricted cash		28,350		4,999		—		33,349
Total assets	$	50,678	$	220,650	$	1,500	$	272,828

Policy Acquisition Costs (Tables)

12 Months Ended

Dec. 31, 2020

Policy Acquisition Costs

Schedule of policy acquisition costs deferred and amortized


	December 31,
	2020		2019		2018
	(in thousands)
Deferred Policy Acquisition Costs:
Balance, beginning of year	$	25,201	$	14,052	$	15,161
Additions to deferred balance:
Direct commissions		82,786		59,676		36,934
Ceding commissions		(19,371)		(17,257)		(15,218)
Premium taxes		7,024		5,236		3,362
Total net additions		70,439		47,655		25,078
Amortization of net policy acquisition costs		(60,159)		(36,506)		(26,187)
Balance, end of year	$	35,481	$	25,201	$	14,052
Acquisition expenses:
Amortization of net policy acquisition costs	$	60,159	$	36,506	$	26,187
Period costs		3,882		753		2,037
Total Acquisition expenses	$	64,041	$	37,259	$	28,224

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2020

Intangible Assets

Schedule of intangible assets, indefinite-lived


	December 31,
	2020		2019
	(in thousands)
Indefinite-lived intangibles:
State insurance licenses	$	744	$	744
Finite-lived intangibles:
Customer relationships		10,768		—
Accumulated amortization on finite-lived intangibles		—		—
Total intangible assets	$	11,512	$	744

Schedule of intangible assets, finite-lived


	December 31,
	2020		2019
	(in thousands)
Indefinite-lived intangibles:
State insurance licenses	$	744	$	744
Finite-lived intangibles:
Customer relationships		10,768		—
Accumulated amortization on finite-lived intangibles		—		—
Total intangible assets	$	11,512	$	744

Capitalized Assets (Tables)

12 Months Ended

Dec. 31, 2020

Capitalized Assets

Schedule of capitalized assets


			Accumulated		Net
December 31, 2020	Cost		Amortization		Book Value
	(in thousands)
Capitalized Software	$	8,450	$	(1,767)	$	6,683


			Accumulated		Net
December 31, 2019	Cost		Amortization		Book Value
	(in thousands)
Capitalized Software	$	4,567	$	(669)	$	3,898


			Accumulated		Net
December 31, 2020	Cost		Depreciation		Book Value
	(in thousands)
Leasehold improvements	$	879	$	(459)	$	420
Computer hardware		276		(100)		176
Office equipment and furniture		519		(376)		143
Total	$	1,674	$	(935)	$	739


			Accumulated		Net
December 31, 2019	Cost		Depreciation		Book Value
	(in thousands)
Leasehold improvements	$	879	$	(342)	$	537
Computer hardware		144		(64)		80
Office equipment and furniture		519		(291)		228
Total	$	1,542	$	(697)	$	845

Leases (Tables)

12 Months Ended

Dec. 31, 2020

Leases

Schedule of leases


Year ended December 31, 2020	(in thousands)
Operating cash outflows from operating leases	$	842
Right of use assets obtained in exchange for new operating lease liabilities		—


December 31, 2020	($ in thousands)
Operating lease ROU assets	$	2,274
Operating lease liabilities	$	3,012
Weighted-average remaining lease term-operating leases		3.5	years
Weighted-average discount rate-operating leases		2.1	%

Schedule of future minimum lease payments - ASC 842


Years ending December 31,	(in thousands)
2021	$	879
2022		904
2023		862
2024		478
2025		—
Total future minimum lease payments	$	3,123
Less: imputed interest		(111)
Total operating lease liability	$	3,012

Reserve for Losses and Loss Adjustment Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Claims Development

Schedule of reconciliation of the beginning and ending reserve balances for losses and LAE on a net of reinsurance basis to the gross amounts


	Year Ended December 31,
	2020		2019		2018
	(in thousands)
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period	$	3,869	$	4,165	$	4,432
Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to:
Current year		64,179		5,774		8,165
Prior years		(64)		(181)		(1,891)
Total incurred		64,115		5,593		6,274
Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to:
Current year		31,879		2,179		4,409
Prior years		1,635		3,710		2,132
Total payments		33,514		5,889		6,541
Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period		34,470		3,869		4,165
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period		94,566		12,952		11,896
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period	$	129,036	$	16,821	$	16,061

Schedule of reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses


	2020
	(in thousands)
Net outstanding liabilities:
Homeowners’ insurance	$	5,693
Special property		24,619
Reinsurance- Nonproportional assumed property(1)		4,110
Other		48
Reserve for losses and loss adjustment expense, net of reinsurance		34,470
Reinsurance recoverable on unpaid claims:
Homeowners’ insurance	$	14,640
Special property		79,825
Other		101
Total reinsurance recoverable on unpaid claims		94,566
Total reserve for losses and loss adjustment expenses	$	129,036

Homeowners’ Insurance

Claims Development

Schedule of Incurred and Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance

Incurred Losses and Allocated Loss Adjustment Expenses,

Net of Reinsurance Homeowners’ Insurance (in thousands)


													As of December 31, 2020
													Incurred but		Cumulative
	Year Ended December 31,												Not Reported		Number of
Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019		2020		Liabilities		Claims
2015	$	2,048	$	1,785	$	1,658	$	1,636	$	1,642	$	1,636	$	—	381
2016				6,069		5,878		5,721		5,636		5,622		—	1,083
2017						9,354		7,418		6,630		6,388		3	2,973
2018								2,193		2,008		1,930		3	789
2019										914		838		98	1,178
2020												19,100		2,995	3,223
Total											$	35,514	$	3,099	9,627

Cumulative Paid Losses and Allocated Loss Adjustment Expenses,

Net of Reinsurance Homeowners’ Insurance (in thousands)


	Year Ended December 31,
Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019		2020
2015	$	860	$	1,379	$	1,523	$	1,615	$	1,634	$	1,636
2016				4,120		5,356		5,585		5,607		5,619
2017						7,135		7,375		6,628		6,371
2018								1,550		1,853		1,922
2019										546		685
2020												13,588
Total											$	29,821
Reserve for losses and loss adjustment expense, net of reinsurance											$	5,693

(1)

Data presented for these calendar years is required supplementary information, which is unaudited.

Schedule of Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Homeowners’ Insurance


	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6
Payout percentage	75.69	%	17.95	%	1.19	%	0.66	%	0.69	%	0.12	%

Special Property Insurance

Claims Development

Schedule of Incurred and Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance

Incurred Losses and Allocated Loss Adjustment Expenses,

Net of Reinsurance Special Property Insurance (in thousands)


													As of December 31, 2020
													Incurred but		Cumulative
	Year Ended December 31,												Not Reported		Number of
Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019		2020		Liabilities		Claims
2015	$	630	$	719	$	671	$	671	$	678	$	677	$	—	381
2016				1,381		1,249		1,251		1,454		1,453		—	1,103
2017						3,071		3,475		4,014		4,264		—	3,068
2018								5,970		6,095		6,009		—	949
2019										3,661		3,385		332	1,339
2020												42,334		9,554	1,240
Total											$	58,122	$	9,886	8,080

Cumulative Paid Losses and Allocated Loss Adjustment Expenses,

Net of Reinsurance Special Property Insurance (in thousands)


	Year Ended December 31,
Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019		2020
2015	$	265	$	438	$	586	$	626	$	666	$	673
2016				703		1,064		1,216		1,444		1,453
2017						1,967		3,344		4,011		4,269
2018								2,859		6,036		6,009
2019										1,633		2,825
2020												18,274
Total												33,503
Reserve for losses and loss adjustment expense, net of reinsurance												24,619

(1)

Data presented for these calendar years is required supplementary information, which is unaudited.

Schedule of Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Homeowners’ Insurance


	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6
Payout percentage	45.44	%	34.16	%	11.88	%	9.22	%	3.26	%	1.03	%

Reinsurance (Tables)

12 Months Ended

Dec. 31, 2020

Reinsurance

Schedule of effect of reinsurance on premiums written and earned and on losses and LAE incurred


	2020				2019				2018
	Written		Earned		Written		Earned		Written		Earned
	(in thousands)
Premiums Written and Earned:
Direct	$	324,253	$	271,887	$	220,568	$	178,536	$	144,821	$	129,071
Assumed		30,107		29,569		31,393		21,985		10,070		8,688
Ceded		(155,102)		(146,388)		(108,332)		(100,314)		(82,949)		(67,862)
Net	$	199,258	$	155,068	$	143,629	$	100,207	$	71,942	$	69,897


	2020
	Losses		LAE		Total
	(in thousands)
Losses and LAE Incurred:
Direct	$	145,774	$	18,777	$	164,551
Assumed		3,485		159		3,644
Ceded		(91,969)		(12,111)		(104,080)
Net	$	57,290	$	6,825	$	64,115


	2019
	Losses		LAE		Total
	(in thousands)
Losses and LAE Incurred:
Direct	$	20,105	$	2,837	$	22,942
Assumed		1,201		34		1,235
Ceded		(16,564)		(2,020)		(18,584)
Net	$	4,742	$	851	$	5,593


	2018
	Losses		LAE		Total
	(in thousands)
Losses and LAE Incurred:
Direct	$	12,153	$	2,113	$	14,266
Assumed		46		6		52
Ceded		(6,580)		(1,464)		(8,044)
Net	$	5,619	$	655	$	6,274

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2020

Stockholders' Equity

Schedule of common stock reserved for future issuance


Stock options outstanding under 2019 Equity Incentive Plan	1,008,648
Restricted stock units outstanding under 2019 Equity Incentive Plan	14,734
Shares authorized for future issuance under 2019 Equity Incentive Plan	1,952,001
Shares authorized for future issuance under 2019 Employee Stock Purchase Plan	451,633
Total	3,427,016

Schedule of stock-based compensation expense


	Year ended December 31,
	2020		2019		2018
	(in thousands)
Stock-Based Compensation Expense	$	2,167	$	24,103	$	—

Schedule of stock option transactions


				Weighted average
				remaining	Aggregate
	Number of	Weighted-average		contractual term	intrinsic value
	shares	exercise price		(in years)	(in thousands)
Outstanding at January 1, 2020	1,046,373	$	17.05	9.33	$	35,039
Options granted	109,374		80.90
Options exercised	(122,613)		16.65
Options canceled	(24,486)		21.46
Outstanding at December 31, 2020	1,008,648	$	23.92	8.43	$	66,028
Vested and Exercisable at December 31, 2020	522,464	$	15.78	8.29	$	38,170

Schedule of fair value of each option granted was estimated on the grant date using the Black-Scholes option pricing model


	Year ended December 31,
	2020		2019		2018
	(in thousands)
Risk free rate of return (1)		0.32% - 1.52%		1.59% - 2.45%		—
Expected share price volatility (2)		18.13% - 25.67%		18.12% - 18.45%		—
Expected life in years (3)		5.63-6.08		5.64-6.08		—
Dividend yield (4)		0%		0%		—

(1)

Determined based on the U.S. Treasury yield in effect at the time of the grant for zero-coupon U.S. Treasury notes with remaining terms similar to the expected term of the options.

(2)

Determined based on analysis of the historical volatility of a peer group of publicly traded companies.

(3)

(4)

Determined to be zero as the Company does not currently plan to issue dividends.

Schedule of restricted stock unit transactions


		Weighted-average
	Number of	grant date
	shares	fair value
Non vested outstanding at January 1, 2020	6,066	$	16.49
Granted	14,734		95.86
Vested	(6,066)		16.49
Forfeited	—		—
Non vested outstanding at December 31, 2020	14,734	$	95.86

Accumulated Other Comprehensive Income (Tables)

12 Months Ended

Dec. 31, 2020

Accumulated Other Comprehensive Income

Schedule of changes in accumulated other comprehensive income (AOCI)


	Year Ended December 31,
	2020		2019		2018
	(in thousands)
Balance as of January 1	$	4,686	$	(563)	$	2,993
Effect of equity accounting guidance adoption		—		—		(3,215)
Beginning Balance		4,686		(563)		(222)
Other comprehensive income (loss) before reclassification		11,292		6,555		(740)
Federal income tax (expense) benefit		(2,371)		(1,344)		76
Other comprehensive income (loss) before reclassification, net of tax		8,921		5,211		(664)
Amounts reclassified from AOCI		(456)		47		399
Federal income tax expense (benefit)		95		(9)		(76)
Amounts reclassified from AOCI, net of tax		(361)		38		323
Other comprehensive income (loss)		8,560		5,249		(341)
Balance at end of period	$	13,246	$	4,686	$	(563)

Underwriting Information (Tables)

12 Months Ended

Dec. 31, 2020

Underwriting Information

Schedule of gross written premiums

Gross written premiums (“GWP”) by product are presented below:


	Year Ended December 31,
	2020				2019				2018
	($ in thousands)
			% of				% of				% of
	Amount		GWP		Amount		GWP		Amount		GWP
Product
Residential Earthquake	$	140,934	39.8	%	$	130,473	51.8	%	$	81,679	52.7	%
Commercial Earthquake		58,890	16.6	%		38,741	15.4	%		20,946	13.5	%
Commercial All Risk		53,933	15.2	%		30,358	12.0	%		14,338	9.3	%
Specialty Homeowners		49,849	14.1	%		32,788	13.0	%		27,680	17.9	%
Inland Marine		15,423	4.3	%		2,465	1.0	%		—	—	%
Hawaii Hurricane		13,824	3.9	%		10,764	4.3	%		8,128	5.2	%
Residential Flood		8,176	2.3	%		5,216	2.1	%		2,120	1.4	%
Other		13,331	3.8	%		1,156	0.4	%		—	—	%
Total Gross Written Premiums	$	354,360	100.0	%	$	251,961	100.0	%	$	154,891	100.0	%

Gross written premiums by state are as follows:


	Year Ended December 31,
	2020				2019				2018
	($ in thousands)
			% of				% of				% of
	Amount		GWP		Amount		GWP		Amount		GWP
State
California	$	172,765	48.8	%	$	141,743	56.3	%	$	82,119	53.0	%
Texas		67,974	19.2	%		44,087	17.5	%		32,568	21.0	%
Hawaii		16,398	4.6	%		11,851	4.7	%		8,128	5.2	%
Washington		14,328	4.0	%		9,607	3.8	%		5,658	3.7	%
North Carolina		11,143	3.1	%		3,894	1.5	%		1,568	1.0	%
Oregon		10,038	2.8	%		7,396	2.9	%		5,286	3.4	%
South Carolina		9,196	2.6	%		6,185	2.5	%		3,208	2.1	%
Mississippi		7,461	2.1	%		4,769	1.9	%		2,585	1.7	%
Other		45,057	12.8	%		22,429	8.9	%		13,771	8.9	%
Total Gross Written Premiums	$	354,360	100.0	%	$	251,961	100.0	%	$	154,891	100.0	%

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Taxes

Schedule of federal income tax expense (benefit)



	December 31,
	2020		2019		2018
	(in thousands)
Current	$	(1,128)	$	6,810	$	(6)
Deferred		1,094		646		—
Income tax expense (benefit)	$	(34)	$	7,456	$	(6)

Schedule of deferred tax assets and liabilities


	December 31,
	2020		2019
	(in thousands)
Deferred tax assets:
Losses and LAE reserve discount	$	238	$	10
Net operating losses		680		74
Investment amortization		—		85
Unearned premiums		6,272		3,748
Capitalized organizational costs		244		274
Deferred compensation		511		—
Other		652		390
Total deferred tax assets	$	8,597	$	4,581
Deferred tax liabilities:
Deferred acquisition costs	$	(7,454)	$	(4,468)
Unrealized gains on investments		(3,884)		(1,396)
Internally developed software		(1,283)		(640)
Other		(672)		(2)
Total deferred tax liabilities		(13,293)		(6,506)
Net deferred tax liability before valuation allowance		(4,696)		(1,925)
Valuation allowance		(680)		(74)
Total net deferred tax liabilities	$	(5,376)	$	(1,999)

Schedule of effective tax rate


	Years Ended December 31,
	2020				2019				2018
	($ in thousands)
Expense computed at federal tax rate	$	1,321	21.00	%	$	3,802	21.00	%	$	3,825	21.00	%
Non‑U.S. group member income		—	—	%		—	—	%		(4,409)	(24.21)	%
Stock-based compensation		(1,538)	(24.44)	%		4,822	26.63	%		—	—	%
Dividend received deduction and tax‑exempt interest		(67)	(1.06)	%		(36)	(0.20)	%		(144)	(0.79)	%
Valuation allowance		606	9.63	%		(1,677)	(9.27)	%		678	3.72	%
Other		(356)	(5.67)	%		545	3.01	%		44	0.24	%
Income tax expense (benefit)	$	(34)	(0.54)	%	$	7,456	41.17	%	$	(6)	(0.04)	%

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2020

Earnings Per Share

Schedule of net income per share of common stock


	Year ended December 31,
	2020		2019		2018
	(in thousands, except shares and per share data)
Net income	$	6,257	$	10,621	$	18,219
Weighted average common shares outstanding:
Basic		24,872,251		21,501,541		17,000,000
Common Share equivalents		726,396		333,393		—
Diluted		25,598,647		21,834,934		17,000,000

Earnings per share:
Basic	$	0.25	$	0.49	$	1.07
Diluted	$	0.24	$	0.49	$	1.07

Statutory financial information (Tables)

12 Months Ended

Dec. 31, 2020

Statutory financial information

Summary of statutory net income and statutory capital surplus


	December 31,
	2020		2019		2018
	(in thousands)
Statutory net income (loss)	$	1,753	$	(17,911)	$	9,609
Statutory capital and surplus		213,721		116,296		63,731

- Definition

Tabular disclosure of how the entity's reporting under GAAP as of the balance sheet date differs from the results based on prescribed and permitted accounting practices of the state or country of domicile in which a relevant statutory filing is made, or differences in results based on the National Association of Insurance Commissioners (NAIC) prescribed practices, or a combination thereof. Describes the accounting practices used and the related monetary effect on statutory surplus, net income, and risk-based capital. If an insurance enterprise's risk-based capital would have triggered a regulatory event had it not used a permitted practice, that fact is disclosed in the financial statements. Permitted statutory accounting practices include practices not prescribed but allowed by the domiciliary state insurance department regulatory authority.

+ References + Details

Summary of Operations and Basis of Presentation - Summary of Operations (Details)	12 Months Ended
	Dec. 31, 2020 state
Summary of Operations and Basis of Presentation
Number states Company underwrites catastrophe insurance on an admitted basis	32

Summary of Operations and Basis of Presentation - Stock Split (Details)	Mar. 15, 2019
Summary of Operations and Basis of Presentation
Forward stock split	17,000,000

Summary of Operations and Basis of Presentation - Initial Public Offering (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Apr. 22, 2019	Dec. 31, 2019
Sale of Stock
Proceeds from initial public offering, net of offering costs		$ 87,411
IPO
Sale of Stock
Issuance of common stock (in shares)	6,468,750
Share Price	$ 15.00
Proceeds from initial public offering, net of offering costs	$ 87,400

Significant Accounting Policies - Premiums Receivable (Details) $ in Millions	Jan. 01, 2020 USD ($)
Premiums Receivable
Allowance for doubtful accounts	$ 0.2

Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2020
Minimum
Property and Equipment
Useful life	3 years
Maximum
Property and Equipment
Useful life	5 years

Significant Accounting Policies - Intangible Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Intangible Assets
Impairments of intangible assets	$ 0.0	$ 0.0	$ 0.0

Significant Accounting Policies - Impairment of Long-lived Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Impairment of Long-lived Assets
Impairments of long-lived assets	$ 0.0	$ 0.0	$ 0.0

Significant Accounting Policies - Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted (Details)	12 Months Ended
	Dec. 31, 2020
Accounting Standards Update 2016-02
Recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted
Change in Accounting Principle, Accounting Standards Update, Adopted	true
Change in Accounting Principle, Accounting Standards Update, Adoption Date	Jan. 01, 2020
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected	us-gaap:AccountingStandardsUpdate201602CumulativeEffectPeriodOfAdoptionMember
New Accounting Pronouncement or Change in Accounting Principle, Prior Period Not Restated	true
Accounting Standards Update 2016-13
Recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted
Change in Accounting Principle, Accounting Standards Update, Adopted	true
Change in Accounting Principle, Accounting Standards Update, Adoption Date	Jan. 01, 2020
Accounting Standards Update 2019-12
Recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted
Change in Accounting Principle, Accounting Standards Update, Adopted	false

- Definition

Indicates (true false) whether accounting standards update was adopted.

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- Definition

Date accounting standards update was adopted, in CCYY-MM-DD format.

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+ Details

Significant Accounting Policies - Recently Adopted Accounting Pronouncements - Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Jan. 01, 2020
Significant Accounting Policies
Lease, Practical Expedient, Use of Hindsight	false
Leases
Operating lease, right-of-use asset	$ 2,274	$ 2,900
Operating lease, liability
Operating lease liabilities	$ 3,012	$ 3,800

Significant Accounting Policies - Recently Adopted Accounting Pronouncements - Measurement of Credit Losses (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted
Retained earnings	$ 39,957	$ 33,856
Accounting Standards Update 2016-13 \| Cumulative Effect, Period of Adoption, Adjustment
Recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted
Retained earnings		$ (200)

Investments - Available for Sale Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Available for sale investments
Amortized Cost	$ 381,279	$ 211,278
Gross Unrealized Gains	17,221	5,990
Gross Unrealized Losses	(513)	(117)
Fair Value	397,987	217,151
U.S. Governments
Available for sale investments
Amortized Cost	16,308	13,371
Gross Unrealized Gains	756	321
Gross Unrealized Losses	(5)	(13)
Fair Value	17,059	13,679
States, territories, and possession
Available for sale investments
Amortized Cost	6,208	2,298
Gross Unrealized Gains	428	147
Fair Value	6,636	2,445
Political subdivisions
Available for sale investments
Amortized Cost	2,027	1,913
Gross Unrealized Gains	125	29
Fair Value	2,152	1,942
Special revenue excluding mortgage/asset-backed securities
Available for sale investments
Amortized Cost	39,704	18,139
Gross Unrealized Gains	1,525	343
Gross Unrealized Losses	(2)	(46)
Fair Value	41,227	18,436
Industrial and miscellaneous
Available for sale investments
Amortized Cost	234,049	124,726
Gross Unrealized Gains	11,602	4,326
Gross Unrealized Losses	(291)	(39)
Fair Value	245,360	129,013
Mortgage/asset-backed securities
Available for sale investments
Amortized Cost	82,983	50,831
Gross Unrealized Gains	2,785	824
Gross Unrealized Losses	(215)	(19)
Fair Value	$ 85,553	$ 51,636

Investments - Security Holdings in an Unrealized Loss Position - General Information (Details) $ in Thousands	Dec. 31, 2020 USD ($) security	Dec. 31, 2019 USD ($) security
Number of positions:
Number of unrealized loss positions \| security	90	51
Fair Value
Fair Value	$ 41,525	$ 20,944
Unrealized Losses
Unrealized Losses	$ 513	$ 117

Investments - Security Holdings in an Unrealized Loss Position - Tabular Disclosure (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Fair Value
Fair Value - Less Than 12 Months	$ 40,826	$ 18,747
Fair Value - More Than 12 Months	699	2,197
Fair Value - Total	41,525	20,944
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(452)	(114)
Unrealized Losses - More Than 12 Months	(61)	(3)
Unrealized Losses - Total	(513)	(117)
U.S. Governments
Fair Value
Fair Value - Less Than 12 Months	1,496	1,235
Fair Value - More Than 12 Months		1,827
Fair Value - Total	1,496	3,062
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(5)	(11)
Unrealized Losses - More Than 12 Months		(2)
Unrealized Losses - Total	(5)	(13)
Special revenue excluding mortgage/asset-backed securities
Fair Value
Fair Value - Less Than 12 Months	520	3,548
Fair Value - Total	520	3,548
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(2)	(46)
Unrealized Losses - Total	(2)	(46)
Industrial and miscellaneous
Fair Value
Fair Value - Less Than 12 Months	22,718	6,929
Fair Value - More Than 12 Months	203	188
Fair Value - Total	22,921	7,117
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(234)	(38)
Unrealized Losses - More Than 12 Months	(57)	(1)
Unrealized Losses - Total	(291)	(39)
Mortgage/asset-backed securities
Fair Value
Fair Value - Less Than 12 Months	16,092	7,035
Fair Value - More Than 12 Months	496	182
Fair Value - Total	16,588	7,217
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(211)	(19)
Unrealized Losses - More Than 12 Months	(4)
Unrealized Losses - Total	$ (215)	$ (19)

Investments - Contractual Maturities of Available for Sale Fixed Maturity Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Amortized Cost
Due within one year	$ 11,222
Due after one year through five years	146,302
Due after five years through ten years	99,194
Due after ten years	41,578
Mortgage and asset-backed securities	82,983
Amortized Cost	381,279	$ 211,278
Fair Value
Due within one year	11,351
Due after one year through five years	151,123
Due after five years through ten years	106,600
Due after ten years	43,360
Mortgage and asset-backed securities	85,553
Total	$ 397,987	$ 217,151

Investments - Change in Unrealized Gains (Losses) of Investments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Debt and Equity Securities, Unrealized Gain (Loss) [Abstract]
Change in net unrealized gains (losses) on fixed maturities	$ 10,835	$ 6,602	$ (341)
Equity securities	1,039	3,009	(6,036)
Change in net unrealized gains (losses)	$ 10,835	$ 6,602	$ (341)

Investments - Net Investment Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net investment income
Interest income	$ 8,554	$ 5,894	$ 3,036
Dividend income	489	424	514
Less: investment expense	(431)	(343)	(312)
Net investment income	$ 8,612	$ 5,975	$ 3,238

Investments - Net Realized and Unrealized Investment Gains and Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net realized and unrealized investment gains and losses
Gains on sales of fixed maturity securities	$ 501	$ 1,405	$ 19
Gains on sales of equity securities	62	177	4,287
Total realized gains	563	1,582	4,306
Losses on sales of fixed maturity securities	(46)	(84)	(418)
Losses on sales of equity securities	(68)	(64)	(421)
Total realized losses	(114)	(148)	(839)
Net realized investment gains	449	1,434	3,467
Net unrealized gains (losses) on equity securities	1,039	3,009	(6,036)
Net realized and unrealized gains on investments	1,488	4,443	(2,569)
Proceeds from sales of fixed maturity securities
Proceeds from the sale of fixed maturity securities	$ 39,800	$ 46,300	$ 48,500

Investments - Securities on Deposit (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Investments
Fair Value	$ 397,987	$ 217,151
Securities on deposit with state regulatory authorities
Investments
Fair Value	$ 7,500	$ 5,100

Fair Value Measurements - Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Assets:
Fair Value	$ 397,987	$ 217,151
Equity securities at fair value	24,322	22,328
U.S. Governments
Assets:
Fair Value	17,059	13,679
States, territories, and possession
Assets:
Fair Value	6,636	2,445
Political subdivisions
Assets:
Fair Value	2,152	1,942
Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value	41,227	18,436
Industrial and miscellaneous
Assets:
Fair Value	245,360	129,013
Mortgage/asset-backed securities
Assets:
Fair Value	85,553	51,636
Fair Value, Measurements, Recurring
Assets:
Equity securities at fair value	24,322	22,328
Cash, cash equivalents, and restricted cash	33,786	33,349
Total assets	456,095	272,828
Fair Value, Measurements, Recurring \| U.S. Governments
Assets:
Fair Value	17,059	13,679
Fair Value, Measurements, Recurring \| States, territories, and possession
Assets:
Fair Value	6,636	2,445
Fair Value, Measurements, Recurring \| Political subdivisions
Assets:
Fair Value	2,152	1,942
Fair Value, Measurements, Recurring \| Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value	41,227	18,436
Fair Value, Measurements, Recurring \| Industrial and miscellaneous
Assets:
Fair Value	245,360	129,013
Fair Value, Measurements, Recurring \| Mortgage/asset-backed securities
Assets:
Fair Value	85,553	51,636
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 1
Assets:
Equity securities at fair value	24,322	22,328
Cash, cash equivalents, and restricted cash	33,786	28,350
Total assets	58,108	50,678
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2
Assets:
Cash, cash equivalents, and restricted cash		4,999
Total assets	397,987	220,650
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| U.S. Governments
Assets:
Fair Value	17,059	13,679
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| States, territories, and possession
Assets:
Fair Value	6,636	2,445
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| Political subdivisions
Assets:
Fair Value	2,152	1,942
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value	41,227	18,436
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| Industrial and miscellaneous
Assets:
Fair Value	245,360	129,013
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| Mortgage/asset-backed securities
Assets:
Fair Value	$ 85,553	50,136
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 3
Assets:
Total assets		1,500
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 3 \| Mortgage/asset-backed securities
Assets:
Fair Value		$ 1,500

Fair Value Measurements - Transfers (Details) $ in Millions	12 Months Ended
Fair Value Measurements - Transfers (Details) $ in Millions	Dec. 31, 2020 USD ($)
Fair Value Measurements
Fair value, assets, transfers out of Level 3	$ 1.5

Policy Acquisition Costs (Details) - USD ($) $ in Thousands	12 Months Ended
Policy Acquisition Costs (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Deferred Policy Acquisition Costs:
Balance, beginning of year	$ 25,201	$ 14,052	$ 15,161
Direct commissions	82,786	59,676	36,934
Ceding commissions	(19,371)	(17,257)	(15,218)
Premium taxes	7,024	5,236	3,362
Total net additions	70,439	47,655	25,078
Amortization of net policy acquisition costs	(60,159)	(36,506)	(26,187)
Balance, end of year	35,481	25,201	14,052
Acquisition expenses:
Amortization of net policy acquisition costs	60,159	36,506	26,187
Period costs	3,882	753	2,037
Total Acquisition expenses	$ 64,041	$ 37,259	$ 28,224

Intangible Assets - Tabular Disclosure (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Indefinite-lived intangibles:
State insurance licenses	$ 744	$ 744
Finite-lived intangibles:
Customer relationships	10,768
Total intangible assets	$ 11,512	$ 744

Intangible Assets - Useful Lives (Details)	12 Months Ended
Intangible Assets - Useful Lives (Details)	Dec. 31, 2020
Customer Relationships
Finite-lived intangibles:
Finite-lived intangible asset, useful life	8 years

Capitalized Assets - Capitalized Software - Tabular Disclosure (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Capitalized software
Cost	$ 8,450	$ 4,567
Accumulated Amortization	(1,767)	(669)
Net Book Value	$ 6,683	$ 3,898

Capitalized Assets - Capitalized Software - Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Capitalized Assets
Amortization expense relating to capitalized software	$ 1,100	$ 600	$ 30

Capitalized Assets - Property and Equipment - Tabular Disclosure (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Property and Equipment
Cost	$ 1,674	$ 1,542
Accumulated Depreciation	(935)	(697)
Net Book Value	739	845
Leasehold improvements
Property and Equipment
Cost	879	879
Accumulated Depreciation	(459)	(342)
Net Book Value	420	537
Computer hardware
Property and Equipment
Cost	276	144
Accumulated Depreciation	(100)	(64)
Net Book Value	176	80
Office equipment and furniture
Property and Equipment
Cost	519	519
Accumulated Depreciation	(376)	(291)
Net Book Value	$ 143	$ 228

Capitalized Assets - Property and Equipment - Amortization Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property and Equipment
Depreciation	$ 0.2	$ 0.2	$ 0.2

Leases - Lease Cost (Details) - USD ($) $ in Millions	12 Months Ended
Leases - Lease Cost (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Lease, cost
Operating lease costs	$ 0.7	$ 0.6	$ 0.6

Leases - Additional Information (Details) $ in Thousands	12 Months Ended
Leases - Additional Information (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Leases
Operating cash outflows from operating leases	$ 842
Right of use assets obtained in exchange for new operating lease liabilities	$ 0

Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Jan. 01, 2020
Assets and liabilities
Operating lease ROU assets	$ 2,274	$ 2,900
Operating Lease, Right-of-Use Asset, Statement of Financial Position	us-gaap:PrepaidExpenseAndOtherAssets	us-gaap:PrepaidExpenseAndOtherAssets
Operating lease, liability
Operating lease liabilities	$ 3,012	$ 3,800
Operating Lease, Liability, Statement of Financial Position	us-gaap:AccountsPayableAndOtherAccruedLiabilities	us-gaap:AccountsPayableAndOtherAccruedLiabilities

Leases - Weighted-average Disclosures (Details)	Dec. 31, 2020
Leases
Weighted-average remaining lease term-operating leases	3 years 6 months
Weighted-average discount rate-operating leases (as a percent)	2.10%

Leases - Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Future minimum lease payments
2021	$ 879
2022	904
2023	862
2024	478
Total future minimum lease payments	$ 3,123

Leases - Gross Difference (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Jan. 01, 2020
Leases
Total future minimum lease payments	$ 3,123
Less: imputed interest	(111)
Total operating lease liability	$ 3,012	$ 3,800

Reserve for Losses and Loss Adjustment Expenses - Roll Forward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Reserve for Losses and Loss Adjustment Expenses
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period	$ 3,869	$ 4,165	$ 4,432
Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to:
Current year	64,179	5,774	8,165
Prior years	(64)	(181)	(1,891)
Total incurred	64,115	5,593	6,274
Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to:
Current year	31,879	2,179	4,409
Prior years	1,635	3,710	2,132
Total payments	33,514	5,889	6,541
Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period	$ 34,470	$ 3,869	$ 4,165

Reserve for Losses and Loss Adjustment Expenses - Total (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reserve for Losses and Loss Adjustment Expenses
Total reserve for losses and loss adjustment expenses	$ 34,470	$ 3,869	$ 4,165	$ 4,432
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period	94,566	12,952	11,896
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period	$ 129,036	$ 16,821	$ 16,061

Reserve for Losses and Loss Adjustment Expenses - Adverse (Favorable) Development (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Adverse (Favorable) Development
Adverse (favorable) development	$ (64)	$ (181)	$ (1,891)

Reserve for Losses and Loss Adjustment Expenses - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Reserve for Losses and Loss Adjustment Expenses
Loss and loss adjustment expense reserve redundancy	$ 0.1	$ 0.2	$ 1.9

Reserve for Losses and Loss Adjustment Expenses - Incurred and Paid Accident Year Claims Development (Details) $ in Thousands	Dec. 31, 2020 USD ($) claim	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Homeowners’ Insurance
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 35,514
Incurred but Not Reported Liabilities	$ 3,099
Cumulative Number of Claims	9,627
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 29,821
Reserve for losses and loss adjustment expense, net of reinsurance	5,693
Homeowners’ Insurance \| 2015
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 1,636	$ 1,642	$ 1,636	$ 1,658	$ 1,785	$ 2,048
Cumulative Number of Claims \| claim	381
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 1,636	1,634	1,615	1,523	1,379	860
Homeowners’ Insurance \| 2016
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 5,622	5,636	5,721	5,878	6,069
Cumulative Number of Claims	1,083
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 5,619	5,607	5,585	5,356	4,120
Homeowners’ Insurance \| 2017
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	6,388	6,630	7,418	9,354
Incurred but Not Reported Liabilities	$ 3
Cumulative Number of Claims	2,973
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 6,371	6,628	7,375	7,135
Homeowners’ Insurance \| 2018
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	1,930	2,008	2,193
Incurred but Not Reported Liabilities	$ 3
Cumulative Number of Claims	789
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 1,922	1,853	1,550
Homeowners’ Insurance \| 2019
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	838	914
Incurred but Not Reported Liabilities	$ 98
Cumulative Number of Claims	1,178
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 685	546
Homeowners’ Insurance \| 2020
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	19,100
Incurred but Not Reported Liabilities	$ 2,995
Cumulative Number of Claims	3,223
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 13,588
Special Property Insurance
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	58,122
Incurred but Not Reported Liabilities	$ 9,886
Cumulative Number of Claims	8,080
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 33,503
Reserve for losses and loss adjustment expense, net of reinsurance	24,619
Special Property Insurance \| 2015
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 677	678	671	671	719	630
Cumulative Number of Claims \| claim	381
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 673	666	626	586	438	$ 265
Special Property Insurance \| 2016
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 1,453	1,454	1,251	1,249	1,381
Cumulative Number of Claims	1,103
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 1,453	1,444	1,216	1,064	$ 703
Special Property Insurance \| 2017
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 4,264	4,014	3,475	3,071
Cumulative Number of Claims	3,068
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 4,269	4,011	3,344	$ 1,967
Special Property Insurance \| 2018
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 6,009	6,095	5,970
Cumulative Number of Claims	949
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 6,009	6,036	$ 2,859
Special Property Insurance \| 2019
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	3,385	3,661
Incurred but Not Reported Liabilities	$ 332
Cumulative Number of Claims	1,339
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 2,825	$ 1,633
Special Property Insurance \| 2020
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	42,334
Incurred but Not Reported Liabilities	$ 9,554
Cumulative Number of Claims \| claim	1,240
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 18,274

Reserve for Losses and Loss Adjustment Expenses - Average Annual Percentage Payout of Incurred Claims by Age (Details)	Dec. 31, 2020
Homeowners’ Insurance
Short-duration Insurance Contracts, Historical Claims Duration
Year 1	75.69%
Year 2	17.95%
Year 3	1.19%
Year 4	0.66%
Year 5	0.69%
Year 6	0.12%
Special Property Insurance
Short-duration Insurance Contracts, Historical Claims Duration
Year 1	45.44%
Year 2	34.16%
Year 3	11.88%
Year 4	9.22%
Year 5	3.26%
Year 6	1.03%

Reserve for Losses and Loss Adjustment Expenses - Reconciliation of Liability for Claims and Claim Adjustment Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Short-duration Insurance Contracts, Historical Claims Duration
Reserve for losses and loss adjustment expense net of reinsurance	$ 34,470	$ 3,869	$ 4,165	$ 4,432
Reinsurance recoverable on unpaid losses and loss adjustment expenses	94,566	12,952	11,896
Reserve for losses and loss adjustment expenses	129,036	$ 16,821	$ 16,061
Homeowners’ Insurance
Short-duration Insurance Contracts, Historical Claims Duration
Reserve for losses and loss adjustment expense net of reinsurance	5,693
Reinsurance recoverable on unpaid losses and loss adjustment expenses	14,640
Special Property Insurance
Short-duration Insurance Contracts, Historical Claims Duration
Reserve for losses and loss adjustment expense net of reinsurance	24,619
Reinsurance recoverable on unpaid losses and loss adjustment expenses	79,825
Reinsurance- Nonproportional assumed property
Short-duration Insurance Contracts, Historical Claims Duration
Reserve for losses and loss adjustment expense net of reinsurance	4,110
Other
Short-duration Insurance Contracts, Historical Claims Duration
Reserve for losses and loss adjustment expense net of reinsurance	48
Reinsurance recoverable on unpaid losses and loss adjustment expenses	$ 101

Reinsurance - General Information (Details) $ in Thousands	1 Months Ended		12 Months Ended
Reinsurance - General Information (Details) $ in Thousands	Nov. 30, 2020 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2020 USD ($) Counterparty	Dec. 31, 2019 USD ($) Counterparty	Dec. 31, 2018 USD ($) Counterparty
Reinsurance Retention Policy
Retention amount			$ 4,500	$ 1,700
Ceded written premiums			155,102	108,332	$ 82,949
Ceded unearned premiums			$ 35,031	$ 26,105
Number of Company’s largest reinsurers \| Counterparty			3	3	3
Reinsurance premiums ceded			$ 146,388	$ 100,314	$ 67,862
Percentage of reinsurance premiums ceded on total premium			22.40%	31.50%	24.00%
Percentage of reinsurance recoverable on paid and unpaid losses on total balance			42.80%	38.20%
Catastrophe
Reinsurance Retention Policy
Retention amount			$ 10,000
XOL reinsurance, protection			600,000
Hurricane and Earthquake Events [Member] \| Minimum
Reinsurance Retention Policy
Retention amount			5,000
Hurricane and Earthquake Events [Member] \| Maximum
Reinsurance Retention Policy
Retention amount			15,000
Earthquake events
Reinsurance Retention Policy
XOL reinsurance, protection			1,400,000
Veritcal Coparticipation of Selected Layer [Member]
Reinsurance Retention Policy
Retention amount			1,000
Texas Homeowners
Reinsurance Retention Policy
Ceded written premiums			14,600	$ 20,400
Ceded unearned premiums					$ 24,900
Torrey Pines Re Ltd. (“TPRe”) \| Catastrophe
Reinsurance Retention Policy
Notes issued for reinsurance coverage		$ 166,000
Reinsurance premiums ceded				5,000
First largest insurer
Reinsurance Retention Policy
Reinsurance premiums ceded			9,700	21,700	7,500
Reinsurance recoverables on paid and unpaid losses			36,000	2,700
Second largest insurer
Reinsurance Retention Policy
Reinsurance premiums ceded			8,600	7,500	7,200
Reinsurance recoverables on paid and unpaid losses			5,800	1,900
Third largest insurer
Reinsurance Retention Policy
Reinsurance premiums ceded			6,000	4,900	5,200
Reinsurance recoverables on paid and unpaid losses			3,100	1,900
Commercial All Risk
Reinsurance Retention Policy
Ceded written premiums				$ 19,000	$ 7,200
Ceded unearned premiums			$ 19,200
Commercial Earthquake Premiums
Reinsurance Retention Policy
Ceded written premiums	$ 7,100

Reinsurance - Effect of Reinsurance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Premiums Written:
Direct	$ 324,253	$ 220,568	$ 144,821
Assumed	30,107	31,393	10,070
Ceded	(155,102)	(108,332)	(82,949)
Net written premiums	199,258	143,629	71,942
Premiums Earned:
Direct	271,887	178,536	129,071
Assumed	29,569	21,985	8,688
Ceded	(146,388)	(100,314)	(67,862)
Net earned premiums	155,068	100,207	69,897
Losses Incurred:
Direct	145,774	20,105	12,153
Assumed	3,485	1,201	46
Ceded	(91,969)	(16,564)	(6,580)
Net losses incurred	57,290	4,742	5,619
LAE Incurred:
Direct	18,777	2,837	2,113
Assumed	159	34	6
Ceded	(12,111)	(2,020)	(1,464)
Total LAE incurred	6,825	851	655
Total losses and LAE incurred:
Direct	164,551	22,942	14,266
Assumed	3,644	1,235	52
Ceded	(104,080)	(18,584)	(8,044)
Net total	$ 64,115	$ 5,593	$ 6,274

Long-term Debt - Surplus Notes (Details) - USD ($) $ in Millions		1 Months Ended
	Feb. 03, 2015	Sep. 30, 2018	Aug. 31, 2018
Notes Payable, Other Payables \| Surplus Notes
Long-term debt
Outstanding surplus notes			$ 17.5
Term	7 years
Pay down of surplus notes		$ 17.5
Pre-payment, penalty		0.1
Unamortized debt issuance costs		0.4
Notes Payable, Other Payables \| Surplus Notes \| London Interbank Offered Rate (LIBOR)
Long-term debt
Interest rate spread (as a percent)	8.00%
Senior Notes \| 2018 Floating Rate Notes
Long-term debt
Debt instrument, face amount		$ 20.0

Long-term Debt - Floating Rate Notes (Details) - USD ($) $ in Millions		1 Months Ended	12 Months Ended
	May 23, 2019	Sep. 30, 2018	Dec. 31, 2019
Three-month Treasury Rate
Long-term debt
Interest rate spread (as a percent)		6.50%
Senior Notes \| 2018 Floating Rate Notes
Long-term debt
Debt instrument, redemption price, percentage (as a percent)	102.00%
Redemption price	$ 20.4
Accrued interest and unpaid interest	0.3
Redemption charge	1.3
Redemption Premium	0.4		$ 0.4
Write-off of unamortized debt issuance costs	0.9
Senior Notes \| 2018 Floating Rate Notes \| Interest Expense.
Long-term debt
Redemption Premium	0.4
Senior Notes \| 2018 Floating Rate Notes \| Other Underwriting Expense
Long-term debt
Redemption Premium	$ 0.9

Long-term Debt - Interest (Details) - USD ($) $ in Millions		12 Months Ended
Long-term Debt - Interest (Details) - USD ($) $ in Millions	May 23, 2019	Dec. 31, 2019	Dec. 31, 2018
Senior Notes \| 2018 Floating Rate Notes
Long-term debt
Interest expense		$ 1.1	$ 0.6
Redemption Premium	$ 0.4	0.4
Interest paid		$ 1.2	0.5
Notes Payable, Other Payables \| Surplus Notes
Long-term debt
Interest expense			1.2
Interest paid			$ 1.2

Stockholders' Equity - Shares Issued and Outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Preferred stock
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	25,525,796	23,468,750
Common stock, shares outstanding (in shares)	25,525,796	23,468,750
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Additional paid-in capital
Additional paid-in capital	$ 310,507	$ 180,012

Stockholders' Equity - Cash Distribution (Details) $ in Millions	1 Months Ended
	Mar. 31, 2019 USD ($)
Stockholders' Equity
One-time cash distribution	$ 5.1

Stockholders' Equity - Stock Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands				12 Months Ended
	Jun. 26, 2020	Jan. 09, 2020	Apr. 22, 2019	Dec. 31, 2019
Sale of Stock
Proceeds from initial public offering, net of offering costs				$ 87,411
IPO
Sale of Stock
Issuance of common stock (in shares)			6,468,750
Share price (in dollars per share)			$ 15.00
Proceeds from initial public offering, net of offering costs			$ 87,400
Secondary Offering
Sale of Stock
Issuance of common stock (in shares)		750,000
Share price (in dollars per share)		$ 49.00
Net proceeds		$ 35,500
Selling stockholders
Sale of Stock
Issuance of common stock (in shares)		5,000,000
Underwriter Option
Sale of Stock
Issuance of common stock (in shares)	1,150,000		843,750
Share price (in dollars per share)	$ 82.00
Net proceeds	$ 90,100

Stockholders' Equity - Reserved for Future Issuance (Details) - shares	Dec. 31, 2020	Dec. 31, 2019	Apr. 16, 2019
Common stock reserved for future issuance
Stock options outstanding (in shares)	1,008,648	1,046,373
Total (in shares)	3,427,016
2019 Equity Incentive Plan
Common stock reserved for future issuance
Stock options outstanding (in shares)	1,008,648
Shares authorized for future issuance (in shares)	1,952,001		2,400,000
2019 Employee Stock Purchase Plan
Common stock reserved for future issuance
Shares authorized for future issuance (in shares)	451,633
Restricted Stock Units
Common stock reserved for future issuance
Restricted stock units outstanding (in shares)	14,734	6,066
Restricted Stock Units \| 2019 Equity Incentive Plan
Common stock reserved for future issuance
Restricted stock units outstanding (in shares)	14,734

Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock-based compensation expense
Stock-Based Compensation Expense		$ 2,167	$ 24,103	$ 0
2014 Management Incentive Plan
Stock-based compensation expense
Stock-Based Compensation Expense	$ 23,000

Stockholders' Equity - Management Incentive Plan Prior to IPO (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Mar. 15, 2019
Stock-Based Compensation
Stock-based compensation			$ 2,167	$ 24,103	$ 0
Increase in additional paid in capital			$ 2,167	$ 24,103
2014 Management Incentive Plan
Stock-Based Compensation
Units outstanding (in shares)						12,552,825
Stock-based compensation	$ 23,000
Increase in additional paid in capital		$ 23,000

Stockholders' Equity - 2019 Equity Incentive Plan (Details) - 2019 Equity Incentive Plan - shares	Dec. 31, 2020	Apr. 16, 2019
Stock-Based Compensation
Shares authorized (in shares)	1,952,001	2,400,000
Annual automatic increase to the number of shares of common stock reserved for issuance, as a percentage of common stock issued and outstanding as at the immediately preceding fiscal year end (as a percent)		3.00%

Stockholders' Equity - Vesting (Details)	12 Months Ended
Stockholders' Equity - Vesting (Details)	Dec. 31, 2020
Stock Options
Stock-Based Compensation
Expiry period	10 years
Stock Options \| Share-based Payment Arrangement, Tranche One
Stock-Based Compensation
Vesting period	2 years
Stock Options \| Share-based Payment Arrangement, Tranche One, First Anniversary
Stock-Based Compensation
Vesting period	1 year
Stock Options \| Share-based Payment Arrangement, Tranche One, First Anniversary \| Minimum
Stock-Based Compensation
Vesting percentage (as a percent)	25.00%
Stock Options \| Share-based Payment Arrangement, Tranche One, First Anniversary \| Maximum
Stock-Based Compensation
Vesting percentage (as a percent)	50.00%
Stock Options \| Share-based Payment Arrangement, Tranche Two
Stock-Based Compensation
Vesting period	4 years
Stock Options \| Share-based Payment Arrangement, Tranche Two, First Anniversary
Stock-Based Compensation
Vesting period	1 year
Stock Options \| Share-based Payment Arrangement, Tranche Two, First Anniversary \| Minimum
Stock-Based Compensation
Vesting percentage (as a percent)	25.00%
Stock Options \| Share-based Payment Arrangement, Tranche Two, First Anniversary \| Maximum
Stock-Based Compensation
Vesting percentage (as a percent)	50.00%
Restricted Stock Units \| Share-based Payment Arrangement, Tranche One
Stock-Based Compensation
Vesting period	1 year
Vesting percentage (as a percent)	100.00%
Restricted Stock Units \| Share-based Payment Arrangement, Tranche Two
Stock-Based Compensation
Vesting period	3 years
Restricted Stock Units \| Share-based Payment Arrangement, Tranche Two, First Anniversary
Stock-Based Compensation
Vesting percentage (as a percent)	33.33%
Restricted Stock Units \| Share-based Payment Arrangement, Tranche Two, Second Anniversary
Stock-Based Compensation
Vesting period	1 year
Vesting percentage (as a percent)	33.33%
Restricted Stock Units \| Share-based Payment Arrangement, Tranche Two, Third Anniversary
Stock-Based Compensation
Vesting period	1 year
Vesting percentage (as a percent)	33.33%

Stockholders' Equity - Stock Options - Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Number of shares
Outstanding at beginning of period (in shares)	1,046,373
Granted (in shares)	109,374
Exercised (in shares)	(122,613)
Canceled (in shares)	(24,486)
Outstanding at end of period (in shares)	1,008,648	1,046,373
Weighted-average exercise price
Outstanding at beginning of period (in dollars per share)	$ 17.05
Granted (in dollars per share)	80.90
Exercised (in dollars per share)	16.65
Canceled (in dollars per share)	21.46
Outstanding at end of period (in dollars per share)	$ 23.92	$ 17.05
Additional disclosures
Weighted average remaining contractual term	8 years 5 months 5 days	9 years 3 months 29 days
Aggregate intrinsic value	$ 66,028	$ 35,039
Vested and Exercisable
Vested and expected to vest, exercisable, number (in shares)	522,464
Vested and expected to vest, exercisable, weighted average exercise price (in dollars per share)	$ 15.78
Vested and expected to vest, exercisable, weighted average remaining contractual term	8 years 3 months 15 days
Vested and expected to vest, exercisable, aggregate intrinsic value	$ 38,170

Stockholders' Equity - Unrecognized Compensation Expense (Details) $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($)
Unrecognized stock-based compensation expense
Total intrinsic value of stock options exercised	$ 7.7
Total unrecognized stock-based compensation expense, options	$ 3.7
Stock Options
Unrecognized stock-based compensation expense
Weighted-average period over which unrecognized stock-based compensation expense is expected to be recognized	2 years 3 months 7 days
Restricted Stock Units
Unrecognized stock-based compensation expense
Total unrecognized stock-based compensation expense, restricted stock units	$ 1.2
Weighted-average period over which unrecognized stock-based compensation expense is expected to be recognized	2 years 4 months 28 days

Stockholders' Equity - Stock Options - Fair Value Assumptions (Details) - Stock Options	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Fair value assumptions
Risk free rate of return, minimum (as a percent)	0.32%	1.59%
Risk free rate of return, maximum (as a percent)	1.52%	2.45%
Expected share price volatility, minimum (as a percent)	18.13%	18.12%
Expected share price volatility, maximum (as a percent)	25.67%	18.45%
Dividend yield (as a percent)	0.00%	0.00%
Minimum
Fair value assumptions
Expected life in years	5 years 7 months 17 days	5 years 7 months 21 days
Maximum
Fair value assumptions
Expected life in years	6 years 29 days	6 years 29 days

Stockholders' Equity - Restricted Stock Units (Details) - Restricted Stock Units	12 Months Ended
	Dec. 31, 2020 $ / shares shares
Number of shares
Non vested outstanding at beginning of period (in shares) \| shares	6,066
Granted (in shares) \| shares	14,734
Vested (in shares) \| shares	(6,066)
Non vested at end of period (in shares) \| shares	14,734
Weighted-average grant date fair value
Non vested outstanding at beginning of period (in dollars per share) \| $ / shares	$ 16.49
Granted (in dollars per share) \| $ / shares	95.86
Vested (in dollars per share) \| $ / shares	16.49
Non vested outstanding at end of period (in dollars per share) \| $ / shares	$ 95.86

Stockholders' Equity - 2019 Employee Stock Purchase Plan (Details) - shares	12 Months Ended
	Dec. 31, 2020	Apr. 16, 2019
Stock-Based Compensation
Issuance of common stock via employee stock purchase plan (in shares)	28,367
Employee Stock
Stock-Based Compensation
Shares authorized (in shares)		240,000
Annual increase (in shares)	240,000

Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Changes in accumulated other comprehensive income
Beginning balance	$ 218,556	$ 96,292	$ 78,414
Other comprehensive income (loss)	8,560	5,249	(341)
Ending balance	363,713	218,556	96,292
Cumulative Effect, Period of Adoption, Adjustment
Changes in accumulated other comprehensive income
Beginning balance	(156)
Ending balance		(156)
Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income
Beginning balance	4,686	(563)	2,993
Other comprehensive income (loss) before reclassification	11,292	6,555	(740)
Federal income tax (expense) benefit	(2,371)	(1,344)	76
Other comprehensive income (loss) before reclassification, net of tax	8,921	5,211	(664)
Amounts reclassified from AOCI	(456)	47	399
Federal income tax expense	95	(9)	(76)
Amounts reclassified from AOCI, net of tax	(361)	38	323
Other comprehensive income (loss)	8,560	5,249	(341)
Ending balance	$ 13,246	$ 4,686	(563)
Accumulated Other Comprehensive Income (Loss) \| Cumulative Effect, Period of Adoption, Adjustment
Changes in accumulated other comprehensive income
Beginning balance			(3,215)
Accumulated Other Comprehensive Income (Loss) \| Cumulative Effect, Period of Adoption, Adjusted Balance
Changes in accumulated other comprehensive income
Beginning balance			$ (222)

Underwriting Information - Reportable Segments (Details)	12 Months Ended
	Dec. 31, 2020 segment
Reportable segment
Number of reportable segments	1

Underwriting Information - Gross Written Premiums by Product (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Gross written premiums
Amount	$ 96,092	$ 102,967	$ 83,807	$ 71,494	$ 73,342	$ 66,242	$ 58,346	$ 54,031	$ 354,360	$ 251,961	$ 154,891
% of GWP									100.00%	100.00%	100.00%
Residential Earthquake
Gross written premiums
Amount									$ 140,934	$ 130,473	$ 81,679
% of GWP									39.80%	51.80%	52.70%
Commercial Earthquake
Gross written premiums
Amount									$ 58,890	$ 38,741	$ 20,946
% of GWP									16.60%	15.40%	13.50%
Commercial All Risk
Gross written premiums
Amount									$ 49,849	$ 32,788	$ 27,680
% of GWP									14.10%	13.00%	17.90%
Specialty Homeowners
Gross written premiums
Amount									$ 53,933	$ 30,358	$ 14,338
% of GWP									15.20%	12.00%	9.30%
Inland Marine
Gross written premiums
Amount									$ 15,423	$ 2,465
% of GWP									4.30%	1.00%
Hawaii Hurricane
Gross written premiums
Amount									$ 13,824	$ 10,764	$ 8,128
% of GWP									3.90%	4.30%	5.20%
Residential Flood
Gross written premiums
Amount									$ 8,176	$ 5,216	$ 2,120
% of GWP									2.30%	2.10%	1.40%
Other
Gross written premiums
Amount									$ 13,331	$ 1,156
% of GWP									3.80%	0.40%

Underwriting Information - Gross Written Premiums by State (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Gross written premiums
Amount	$ 96,092	$ 102,967	$ 83,807	$ 71,494	$ 73,342	$ 66,242	$ 58,346	$ 54,031	$ 354,360	$ 251,961	$ 154,891
% of GWP									100.00%	100.00%	100.00%
California
Gross written premiums
Amount									$ 172,765	$ 141,743	$ 82,119
% of GWP									48.80%	56.30%	53.00%
Texas
Gross written premiums
Amount									$ 67,974	$ 44,087	$ 32,568
% of GWP									19.20%	17.50%	21.00%
Hawaii
Gross written premiums
Amount									$ 16,398	$ 11,851	$ 8,128
% of GWP									4.60%	4.70%	5.20%
Washington
Gross written premiums
Amount									$ 14,328	$ 9,607	$ 5,658
% of GWP									4.00%	3.80%	3.70%
North Carolina
Gross written premiums
Amount									$ 11,143	$ 3,894	$ 1,568
% of GWP									3.10%	1.50%	1.00%
Oregon
Gross written premiums
Amount									$ 10,038	$ 7,396	$ 5,286
% of GWP									2.80%	2.90%	3.40%
South Carolina
Gross written premiums
Amount									$ 9,196	$ 6,185	$ 3,208
% of GWP									2.60%	2.50%	2.10%
Mississippi
Gross written premiums
Amount									$ 7,461	$ 4,769	$ 2,585
% of GWP									2.10%	1.90%	1.70%
Other
Gross written premiums
Amount									$ 45,057	$ 22,429	$ 13,771
% of GWP									12.80%	8.90%	8.90%

Underwriting Information (Details) $ in Thousands	3 Months Ended								12 Months Ended
Underwriting Information (Details) $ in Thousands	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2020 USD ($) item product	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Disaggregation of Revenue
Number of program administrators \| item									2
Number of products \| product									4
Amount	$ 96,092	$ 102,967	$ 83,807	$ 71,494	$ 73,342	$ 66,242	$ 58,346	$ 54,031	$ 354,360	$ 251,961	$ 154,891
% of GWP									100.00%	100.00%	100.00%
Sales Revenue \| Product Concentration Risk
Disaggregation of Revenue
Amount									$ 191,300	$ 148,600	$ 104,900
% of GWP									54.00%	59.00%	67.70%

Retirement and Post-Employment Retirement Plans (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Retirement and Post-Employment Retirement Plans
Employer matching participants gross wages (as a percent)	3.00%
Contributions to plan	$ 0.3	$ 0.3	$ 0.2

Income Taxes - Excise Tax (Details)	12 Months Ended
Income Taxes - Excise Tax (Details)	Dec. 31, 2020
Income Taxes
Federal excise tax rate (as a percent)	1.00%

Income Taxes - Federal income tax expense (benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Taxes
Current	$ (1,128)	$ 6,810	$ (6)
Deferred	1,094	646
Income tax expense (benefit)	$ (34)	$ 7,456	$ (6)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets:
Losses and LAE reserve discount	$ 238	$ 10
Net operating losses	680	74
Investment amortization		85
Unearned premiums	6,272	3,748
Capitalized organizational costs	244	274
Deferred compensation	511
Other	652	390
Total deferred tax assets	8,597	4,581
Deferred tax liabilities:
Deferred acquisition costs	(7,454)	(4,468)
Unrealized gains on investments	(3,884)	(1,396)
Internally developed software	(1,283)	(640)
Other	(672)	(2)
Total deferred tax liabilities	(13,293)	(6,506)
Net deferred tax liability before valuation allowance	(4,696)	(1,925)
Valuation allowance	(680)	(74)
Total net deferred tax liabilities	$ (5,376)	$ (1,999)

Income Taxes - Effective tax rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Effective Income Tax Rate Reconciliation, Amount
Expense computed at federal tax rate	$ 1,321	$ 3,802	$ 3,825
Non‑U.S. group member income			(4,409)
Stock-based compensation	(1,538)	4,822
Dividend received deduction and tax‑exempt interest	(67)	(36)	(144)
Valuation allowance	606	(1,677)	678
Other	(356)	545	44
Income tax expense (benefit)	$ (34)	$ 7,456	$ (6)
Effective Income Tax Rate Reconciliation, Percent
Expense computed at federal tax rate	21.00%	21.00%	21.00%
Non‑U.S. group member income			(24.21%)
Stock-based compensation	(24.44%)	26.63%
Dividend received deduction and tax‑exempt interest	(1.06%)	(0.20%)	(0.79%)
Valuation allowance	9.63%	(9.27%)	3.72%
Other	(5.67%)	3.01%	0.24%
Income tax expense (benefit)	(0.54%)	41.17%	(0.04%)
Unrecognized tax benefits	$ 0	$ 0
Non-deductible stock compensation charge		$ 23,100

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Earnings Per Share
Net income	$ (1,849)	$ (15,682)	$ 12,012	$ 11,776	$ 10,880	$ 7,454	$ 6,698	$ (14,411)	$ 6,257	$ 10,621	$ 18,219
Net income - basic									6,257	10,621	18,219
Net income - diluted									$ 6,527	$ 10,621	$ 18,219
Weighted average common shares outstanding:
Basic (in shares)									24,872,251	21,501,541	17,000,000
Common Share equivalents (in shares)									726,396	333,393
Diluted (in shares)									25,598,647	21,834,934	17,000,000
Earnings per share:
Basic (in dollars per share)	$ (0.07)	$ (0.62)	$ 0.49	$ 0.49	$ 0.46	$ 0.32	$ 0.30	$ (0.85)	$ 0.25	$ 0.49	$ 1.07
Earnings per share:
Diluted (in dollars per share)	$ (0.07)	$ (0.62)	$ 0.48	$ 0.48	$ 0.45	$ 0.31	$ 0.30	$ (0.85)	$ 0.24	$ 0.49	$ 1.07

Statutory financial information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statutory Accounting Practices
Statutory net income (loss)	$ 1,753	$ (17,911)	$ 9,609
Statutory capital and surplus	213,721	116,296	63,731
Shareholder’s equity	363,713	218,556	96,292	$ 78,414
BERMUDA
Statutory Accounting Practices
Statutory net income (loss)	900	18,500	$ 17,300
Statutory capital and surplus	39,200	38,300
Minimum statutory solvency margin	1,200	1,200
Shareholder’s equity	$ 41,900	$ 39,700
BERMUDA \| Minimum
Statutory Accounting Practices
Liquidity ratio	75.00%

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

Dividend Restrictions (Details) $ in Millions	Dec. 31, 2020 USD ($)
Dividend Restrictions
Threshold dividend or distribution without the prior approval	$ 11.3
Palomar Specialty Reinsurance Company Bermuda Ltd
Dividend Restrictions
Dividends receivable	$ 10.5

Commitments and Contingencies (Details) $ in Millions	Dec. 31, 2020 USD ($) LetterOfCredit
Letters of Credit
Letters of credit, collateralized	$ 3.2
Standby Letters of Credit
Letters of Credit
Letters of credit, number \| LetterOfCredit	3
Standby Letters of Credit \| Irrevocable Bank Standby Letter of Credit, One, Expires 31 December 2021
Letters of Credit
Letters of credit, amount	$ 1.5
Standby Letters of Credit \| Irrevocable Bank Standby Letter of Credit, Two, Expires 31 December 2021
Letters of Credit
Letters of credit, amount	0.5
Standby Letters of Credit \| Irrevocable Bank Standby Letter of Credit, Auto Renews
Letters of Credit
Letters of credit, amount	$ 0.4

Selected Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Selected Quarterly Financial Data (unaudited)
Gross written premiums	$ 96,092	$ 102,967	$ 83,807	$ 71,494	$ 73,342	$ 66,242	$ 58,346	$ 54,031	$ 354,360	$ 251,961	$ 154,891
Total revenues	42,295	44,998	43,149	38,019	34,623	30,461	25,905	22,307	168,463	113,296	72,971
Net income (loss)	(1,849)	(15,682)	12,012	11,776	10,880	7,454	6,698	(14,411)	6,257	10,621	18,219
Comprehensive income (loss)	$ 959	$ (14,773)	$ 22,688	$ 5,943	$ 9,670	$ 8,428	$ 9,996	$ (12,224)	$ 14,817	$ 15,870	$ 17,878
Earnings per share:
Basic (in dollars per share)	$ (0.07)	$ (0.62)	$ 0.49	$ 0.49	$ 0.46	$ 0.32	$ 0.30	$ (0.85)	$ 0.25	$ 0.49	$ 1.07
Diluted (in dollars per share)	$ (0.07)	$ (0.62)	$ 0.48	$ 0.48	$ 0.45	$ 0.31	$ 0.30	$ (0.85)	$ 0.24	$ 0.49	$ 1.07

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
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-Section 50
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
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-Section 45
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-URI http://asc.fasb.org/extlink&oid=121326447&loc=d3e1448-109256

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Section 50
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-Subparagraph (a)
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Schedule II - Balance Sheets (Details) - USD ($) $ / shares in Units, $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $381,279 in 2020; $211,278 in 2019)	$ 397,987	$ 217,151
Equity securities at fair value	24,322	22,328
Total investments	422,309	239,479
Cash and cash equivalents	33,538	33,119
Accrued investment income	2,545	1,386
Prepaid expenses and other assets	34,119	14,861
Total assets	729,092	395,462
Liabilities
Accounts payable and other liabilities	20,730	13,555
Income taxes payable		1,117
Deferred tax liabilities	5,376	1,999
Total liabilities	365,379	176,906
Shareholder’s equity
Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of December 31, 2020 and December 31, 2019, respectively, 0 shares issued and outstanding as of December 31, 2020 and December 31, 2019
Common stock, $0.0001 par value, 500,000,000 shares authorized, 25,525,796 and 23,468,750 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively	3	2
Additional paid-in capital	310,507	180,012
Accumulated other comprehensive income	13,246	4,686
Retained earnings	39,957	33,856
Total stockholders' equity	363,713	218,556	$ 96,292	$ 78,414
Total liabilities and stockholders' equity	729,092	395,462
Fixed maturity securities available for sale, amortized cost	381,279	211,278
Equity securities, cost	$ 22,291	$ 21,336
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	25,525,796	23,468,750
Common stock, shares outstanding (in shares)	25,525,796	23,468,750
Parent Company
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $381,279 in 2020; $211,278 in 2019)	$ 51,252	$ 29,120
Equity securities at fair value	1,727	1,696
Total investments	52,979	30,816
Cash and cash equivalents	7,290	1,654
Accrued investment income	300	126
Prepaid expenses and other assets	7,322	36
Receivables from subsidiaries	1,552
Investment in subsidiaries	317,663	189,313
Total assets	387,106	221,945
Liabilities
Accounts payable and other liabilities	94	268
Payables to subsidiaries	17,923
Income taxes payable		1,122
Deferred tax liabilities	5,376	1,999
Total liabilities	23,393	3,389
Shareholder’s equity
Common stock, $0.0001 par value, 500,000,000 shares authorized, 25,525,796 and 23,468,750 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively	3	2
Additional paid-in capital	310,507	180,012
Accumulated other comprehensive income	13,246	4,686
Retained earnings	39,957	33,856
Total stockholders' equity	363,713	218,556
Total liabilities and stockholders' equity	387,106	221,945
Fixed maturity securities available for sale, amortized cost	50,177	28,413
Equity securities, cost	$ 1,661	$ 1,661
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	25,525,796	23,468,750
Common stock, shares outstanding (in shares)	23,468,750	17,000,000

Schedule II - Balance Sheets - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Fixed maturity securities available for sale, amortized cost	$ 381,279	$ 211,278
Equity securities, cost	$ 22,291	$ 21,336
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	25,525,796	23,468,750
Common stock, shares outstanding (in shares)	25,525,796	23,468,750
Parent Company
Fixed maturity securities available for sale, amortized cost	$ 50,177	$ 28,413
Equity securities, cost	$ 1,661	$ 1,661
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)		0
Preferred stock, shares outstanding (in shares)	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	25,525,796	23,468,750
Common stock, shares outstanding (in shares)	23,468,750	17,000,000

Schedule II - Statements of Income (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net investment income									$ 8,612	$ 5,975	$ 3,238
Net realized and unrealized losses on investments									1,488	4,443	(2,569)
Total revenues	$ 42,295	$ 44,998	$ 43,149	$ 38,019	$ 34,623	$ 30,461	$ 25,905	$ 22,307	168,463	113,296	72,971
Other operating expenses									162,240	95,219	54,758
Income before income taxes									6,223	18,077	18,213
Income tax expense (benefit)									(34)	7,456	(6)
Net income	(1,849)	(15,682)	12,012	11,776	10,880	7,454	6,698	(14,411)	6,257	10,621	18,219
Other comprehensive income:
Net unrealized gains (losses) on securities available for sale, net of taxes									8,560	5,249	(341)
Total comprehensive income	$ 959	$ (14,773)	$ 22,688	$ 5,943	$ 9,670	$ 8,428	$ 9,996	$ (12,224)	14,817	15,870	17,878
Parent Company
Net investment income									939	1,039	61
Net realized and unrealized losses on investments									63	131	(2)
Total revenues									1,002	1,170	59
Other operating expenses									8,696	8
Income before income taxes									(7,694)	1,162	59
Income tax expense (benefit)									(34)	7,441
Income (loss) before equity in net income of subsidiaries									(7,660)	(6,279)	59
Equity in net income of subsidiaries									13,917	16,900	18,160
Net income									6,257	10,621	18,219
Other comprehensive income:
Net unrealized gains (losses) on securities available for sale, net of taxes									1,075	708	(87)
Equity in other comprehensive income of subsidiaries, net of taxes									7,485	4,541	(254)
Total comprehensive income									$ 14,817	$ 15,870	$ 17,878

Schedule II - Statements of Cash Flows (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Operating activities
Net income	$ 6,257	$ 10,621	$ 18,219
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized and unrealized losses on investments	(1,488)	(4,443)	2,569
Amortization of premium on fixed maturity securities	1,214	431	481
Deferred income tax expense	1,094	646
Net cash provided by (used in) operating activities	53,551	41,700	22,808
Investing activities
Purchases of fixed maturity securities	(295,002)	(211,587)	(102,745)
Sales and maturities of fixed maturity securities	124,243	124,151	81,215
Net cash used in investing activities	(181,443)	(80,566)	(25,365)
Financing activities
Proceeds from initial public offering, net of offering costs		87,411
Distribution to stockholder		(5,120)
Repayment of surplus notes		(20,000)	(17,500)
Proceeds from common stock issued via equity incentive plans	741
Net cash provided by financing activities	128,329	62,291	1,549
Net increase (decrease) in cash, cash equivalents and restricted cash	437	23,425	(1,008)
Cash, cash equivalents and restricted cash at beginning of period	33,349	9,924	10,932
Cash, cash equivalents and restricted cash at end of period	33,786	33,349	9,924
Supplementary cash flow information:
Cash paid for income taxes	7,182	5,645	11
Parent Company
Operating activities
Net income	6,257	10,621	18,219
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries	(13,917)	(16,900)	(18,160)
Net realized and unrealized losses on investments	(63)	(131)	2
Amortization of premium on fixed maturity securities	350	114
Deferred income tax expense	1,094	646
Other			546
Changes in operating assets and liabilities:	7,772	4,218	(67)
Net cash provided by (used in) operating activities	1,493	(1,432)	540
Investing activities
Purchases of fixed maturity securities	(71,048)	(73,901)
Sales and maturities of fixed maturity securities	6,651	13,930
Cash paid to subsidiaries	(59,789)
Cash received from subsidiary		226
Net cash used in investing activities	(124,186)	(59,745)
Financing activities
Proceeds from initial public offering, net of offering costs		87,411
Distribution to stockholder		(5,120)
Repayment of surplus notes		(20,000)
Proceeds from common stock issued via equity incentive plans	2,782
Net cash provided by financing activities	128,329	62,291
Net increase (decrease) in cash, cash equivalents and restricted cash	5,636	1,114	540
Cash, cash equivalents and restricted cash at beginning of period	1,654	540
Cash, cash equivalents and restricted cash at end of period	7,290	1,654	$ 540
Supplementary cash flow information:
Cash paid for income taxes	7,182	$ 5,645
Stock Issued in January
Financing activities
Proceeds from stock offering, net of offering costs	35,464
Stock Issued in January \| Parent Company
Financing activities
Proceeds from stock offering, net of offering costs	35,464
Stock Issued in June
Financing activities
Proceeds from stock offering, net of offering costs	90,083
Stock Issued in June \| Parent Company
Financing activities
Proceeds from stock offering, net of offering costs	$ 90,083

Schedule V - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Valuation Allowance for deferred tax assets
Valuation and Qualifying Accounts
Balance at Beginning of Period	$ 74	$ 1,677
Amount Charged to Expense	606
Amount Written Off		(1,603)
Balance at End of Period	680	74
Valuation Allowance for premium receivable
Valuation and Qualifying Accounts
Balance at Beginning of Period	150
Amount Charged to Expense	53
Balance at End of Period	$ 203	$ 150