0001558370-21-006350 | 10-Q | XBRL Viewer

Three months ended March 31,

(in thousands)

Stock-Based Compensation

Document and Entity Information - $ / shares	3 Months Ended
Document and Entity Information - $ / shares	Mar. 31, 2021	May 04, 2021
Cover [Abstract]
Entity Central Index Key	0001761312
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
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 Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		25,589,750
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $393,419 in 2021; $381,279 in 2020)	$ 402,281	$ 397,987
Equity securities, at fair value (cost: $10,102 in 2021; $22,291 in 2020)	10,535	24,322
Total investments	412,816	422,309
Cash and cash equivalents	23,577	33,538
Restricted cash	271	248
Accrued investment income	2,501	2,545
Premium receivable	50,205	48,842
Deferred policy acquisition costs	39,465	35,481
Reinsurance recoverable on unpaid losses and loss adjustment expenses	188,448	94,566
Reinsurance recoverable on paid losses and loss adjustment expenses	29,162	10,162
Ceded unearned premiums	34,156	35,031
Prepaid expenses and other assets	33,402	34,119
Property and equipment, net	677	739
Intangible assets, net	11,186	11,512
Total assets	825,866	729,092
Liabilities:
Accounts payable and other accrued liabilities	19,574	20,730
Reserve for losses and loss adjustment expenses	207,464	129,036
Unearned premiums	195,773	183,489
Ceded premium payable	17,740	22,233
Funds held under reinsurance treaty	5,750	4,515
Deferred tax liabilities, net	3,183	5,376
Total liabilities	449,484	365,379
Stockholders' equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding as of March 31, 2021 and December 31, 2020
Common stock, $0.0001 par value, 500,000,000 shares authorized, 25,589,750 and 25,525,796 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	3	3
Additional paid-in capital	312,745	310,507
Accumulated other comprehensive income	7,047	13,246
Retained earnings	56,587	39,957
Total stockholders' equity	376,382	363,713
Total liabilities and stockholders' equity	$ 825,866	$ 729,092

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Condensed Consolidated Balance Sheets
Fixed maturity securities available for sale, amortized cost	$ 393,419	$ 381,279
Equity securities, cost	$ 10,102	$ 22,291
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
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)	25,589,750	25,525,796
Common stock, shares outstanding (in shares)	25,589,750	25,525,796

Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenues:
Gross written premiums	$ 103,577	$ 71,494
Ceded written premiums	(43,364)	(29,495)
Net written premiums	60,213	41,999
Change in unearned premiums	(13,160)	(7,193)
Net earned premiums	47,053	34,806
Net investment income	2,219	2,035
Net realized and unrealized gains (losses) on investments	(739)	440
Commission and other income	711	738
Total revenues	49,244	38,019
Expenses:
Losses and loss adjustment expenses	(4,423)	1,863
Acquisition expenses	19,313	13,046
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)	14,248	7,951
Total expenses	29,138	22,860
Income before income taxes	20,106	15,159
Income tax expense	3,476	3,384
Net income	16,630	11,775
Other comprehensive income, net:
Net unrealized losses on securities available for sale for the three months ended March 31, 2021 and 2020, respectively	(6,199)	(5,833)
Net comprehensive income	$ 10,431	$ 5,942
Per Share Data:
Basic earnings per share	$ 0.65	$ 0.49
Diluted earnings per share	$ 0.63	$ 0.48
Weighted-average common shares outstanding:
Basic	25,552,629	24,119,263
Diluted	26,256,281	24,778,608

Condensed Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Condensed Consolidated Statements of Income and Comprehensive Income
Stock-based compensation expense	$ 938	$ 442

Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Total
Beginning balance at Dec. 31, 2019	$ 2	$ 180,012	$ 4,686	$ 33,856	$ 218,556
Beginning balance (in shares) at Dec. 31, 2019	23,468,750
Changes in Stockholders' Equity
Other comprehensive income, net of tax			(5,833)		(5,833)
Stock-based compensation		442			442
Issuance of common stock in stock offering, net of offering cost		35,464			35,464
Issuance of common stock in stock offering, net of offering cost (in shares)	750,000
Issuance of common stock via employee stock purchase plan		416			416
Issuance of common stock via employee stock purchase plan (in shares)	21,111
Net income				11,775	11,775
Ending balance at Mar. 31, 2020	$ 2	216,334	(1,147)	45,631	260,820
Ending balance (in shares) at Mar. 31, 2020	24,239,861
Beginning balance at Dec. 31, 2020	$ 3	310,507	13,246	39,957	$ 363,713
Beginning balance (in shares) at Dec. 31, 2020	25,525,796				25,525,796
Changes in Stockholders' Equity
Other comprehensive income, net of tax			(6,199)		$ (6,199)
Stock-based compensation		938			938
Issuance of common stock via employee stock purchase plan		333			$ 333
Issuance of common stock via employee stock purchase plan (in shares)	4,596				4,596
Issuance of common stock via equity incentive plan		967			$ 967
Issuance of common stock via equity incentive plan (in shares)	59,358
Net income				16,630	16,630
Ending balance at Mar. 31, 2021	$ 3	$ 312,745	$ 7,047	$ 56,587	$ 376,382
Ending balance (in shares) at Mar. 31, 2021	25,589,750				25,589,750

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating activities
Net cash provided by (used in) operating activities	$ (13,054)	$ 21,804
Investing activities
Purchases of property and equipment		(24)
Purchases of fixed maturity securities	(43,768)	(71,442)
Purchases of equity securities	(96)	(123)
Sales and maturities of fixed maturity securities	31,099	7,740
Sales of equity securities	13,092
Securities receivable or payable, net	1,500	(3,025)
Payment of additional costs associated with purchase of policy renewal rights	(11)
Net cash provided by (used in) investing activities	1,816	(66,874)
Financing activities
Proceeds from stock offering, net of offering costs		35,464
Proceeds from common stock issued via employee stock purchase plan	333	416
Proceeds from common stock issued via stock option exercises	967
Net cash provided by financing activities	1,300	35,880
Net decrease in cash, cash equivalents and restricted cash	(9,938)	(9,190)
Cash, cash equivalents and restricted cash at beginning of period	33,786	33,349
Cash, cash equivalents and restricted cash at end of period	$ 23,848	$ 24,159

Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Cash and cash equivalents and restricted cash and cash equivalents
Cash and cash equivalents	$ 23,577	$ 33,538
Restricted cash	271	248
Cash and cash equivalents and restricted cash	$ 23,848	$ 33,786	$ 24,159	$ 33,349

Summary of Operations and Basis of Presentation

3 Months Ended

Mar. 31, 2021

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”).

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and include the accounts of the Company and its wholly-owned subsidiaries. These condensed consolidated financial statements do not contain all information and footnotes required by U.S. GAAP for complete consolidated financial statements. For a more complete description of the Company’s business and accounting policies, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 9, 2021 (the “2020 Annual Report on Form 10-K”)

In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. All intercompany balances and transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results of operations for the full year.

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 condensed 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 condensed 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.

Recent Accounting Pronouncements

Recently adopted accounting pronouncements

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 adopted this guidance on January 1, 2021 and adoption did not have a material impact on the consolidated financial statements.

Investments

3 Months Ended

Mar. 31, 2021

Investments

Investments

2. Investments

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


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
March 31, 2021	Cost or Cost		Gains		Losses		Value

	(in thousands)
Fixed maturities:
U.S. Governments	$	20,431	$	554	$	(143)	$	20,842
States, territories, and possessions		6,196		321		(93)		6,424
Political subdivisions		2,020		87		(2)		2,105
Special revenue excluding mortgage/asset-backed securities		40,261		902		(103)		41,060
Industrial and miscellaneous		240,458		7,147		(1,838)		245,767
Mortgage/asset-backed securities		84,053		2,153		(123)		86,083
Total available-for-sale investments	$	393,419	$	11,164	$	(2,302)	$	402,281


			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

Security holdings in an unrealized loss position

As of March 31, 2021, the Company held 167 fixed maturity securities in an unrealized loss position with a total estimated fair value of $116.6 million and total gross unrealized losses of $2.3 million. 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.

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 March 31, 2021 and December 31, 2020, are as follows:


	Less Than 12 Months				More Than 12 Months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
March 31, 2021	Value		Losses		Value		Losses		Value		Losses

	(in thousands)
Fixed maturity securities:
U.S. Governments	$	7,462	$	(143)	$	—	$	—	$	7,462	$	(143)
States, territories, and possessions		3,278		(93)		—		—		3,278		(93)
Political subdivisions		398		(2)		—		—		398		(2)
Special revenue excluding mortgage/asset-backed securities		8,964		(103)		—		—		8,964		(103)
Industrial and miscellaneous		77,800		(1,742)		1,120		(96)		78,920		(1,838)
Mortgage/asset-backed securities		14,527		(107)		3,007		(16)		17,534		(123)
Total	$	112,429	$	(2,190)	$	4,127	$	(112)	$	116,556	$	(2,302)


	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)

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. The Company considers numerous factors in its review as described in Footnote 1 of the Notes to the Consolidated Financial Statements in the 2020 Annual Report on Form 10-K.

Based on the Company’s reviews as of March 31, 2021, 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. The Company does not intend to sell the investments and it is not more likely than not 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 during the three months ended March 31, 2021.

Contractual maturities of available-for-sale fixed maturity securities

The amortized cost and fair value of fixed maturity securities at March 31, 2021, by contractual maturity, are shown below.


	Amortized		Fair
	Cost		Value

	(in thousands)
Due within one year	$	20,999	$	21,236
Due after one year through five years		146,845		150,373
Due after five years through ten years		103,649		106,158
Due after ten years		37,873		38,431
Mortgage and asset-backed securities		84,053		86,083
	$	393,419	$	402,281

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

Net investment income summary

Net investment income is summarized as follows:


	Three Months Ended
	March 31,
	2021		2020

	(in thousands)
Interest income	$	2,238	$	2,001
Dividend income		99		125
Investment expense		(118)		(91)
Net investment income	$	2,219	$	2,035

Net realized and unrealized investment gains and losses

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


	Three Months Ended
	March 31,
	2021		2020

		(in thousands)
Realized gains:
Gains on sales of fixed maturity securities	$	52	$	15
Gains on sales of equity securities		809		—
Total realized gains		861		15
Realized losses:
Losses on sales of fixed maturity securities		(2)		—
Losses on sales of equity securities		—		—
Total realized losses		(2)		—
Net realized investment gains		859		15
Net unrealized gains (losses) on equity securities		(1,598)		425
Net realized and unrealized gains (losses) on investments	$	(739)	$	440

Realized gains and losses on disposition of investments are based on specific identification of the investments sold on the settlement date.

Proceeds from the sale of fixed maturity securities were $6.2 million and $2.3 million for the three months ended March 31, 2021 and 2020, 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 balance sheet. At March 31, 2021 and December 31, 2020, the carrying value of securities on deposit with state regulatory authorities was $7.5 million.

Fair Value Measurements

3 Months Ended

Mar. 31, 2021

Fair Value Measurements

Fair value measurements

3. Fair Value Measurements

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 valuations 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 following tables present the hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020.


March 31, 2021	Level 1		Level 2		Level 3		Total

	(in thousands)
Assets:
Fixed maturity securities
U.S. Governments	$	—	$	20,842	$	—	$	20,842
States, territories, and possessions		—		6,424		—		6,424
Political subdivisions		—		2,105		—		2,105
Special revenue excluding mortgage/asset-backed securities		—		41,060		—		41,060
Industrial and miscellaneous		—		245,767		—		245,767
Mortgage/asset-backed securities		—		86,083		—		86,083
Equity securities		10,535		—		—		10,535
Cash, cash equivalents, and restricted cash		23,848		—		—		23,848
Total assets	$	34,383	$	402,281	$	—	$	436,664


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

The carrying amounts of financial assets and liabilities reported in the accompanying condensed consolidated balance sheet 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 March 31, 2021 and December 31, 2020, the Company had no fixed income securities classified as Level 3.

- 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

Reserve for Losses and Loss Adjustment Expenses

3 Months Ended

Mar. 31, 2021

Reserve for Losses and Loss Adjustment Expenses

Reserve for Losses and Loss Adjustment Expenses

4. Reserve for Losses and Loss Adjustment Expenses

The following table represents a reconciliation of changes in the ending reserve balances for losses and loss adjustment expenses (“LAE”):


	Three Months Ended March 31,
	2021		2020

		(in thousands)
Reserve for losses and LAE net of reinsurance recoverables at beginning of period	$	34,470	$	3,869
Add: Incurred losses and LAE, net of reinsurance, related to:
Current year		(1,696)		2,179
Prior years		(2,727)		(316)
Total incurred		(4,423)		1,863
Deduct: Loss and LAE payments, net of reinsurance, related to:
Current year		1,680		351
Prior years		9,351		883
Total payments		11,031		1,234
Reserve for losses and LAE net of reinsurance recoverables at end of period		19,016		4,498
Add: Reinsurance recoverables on unpaid losses and LAE at end of period		188,448		13,854
Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period	$	207,464	$	18,352

Considerable variability is inherent in the estimate of the reserve for losses and LAE. Although management believes the liability recorded for losses and LAE is adequate, the variability inherent in this estimate could result in changes to the ultimate liability, which may be material to stockholders’ equity.

The Company experienced favorable prior year development of $2.7 million and $0.3 million during the three months ended March 31, 2021 and March 31, 2020, respectively.

Favorable prior year development during the three months ended March 31, 2021 was primarily due to lower than anticipated severity of catastrophe losses associated with certain hurricanes which occurred during the second half of 2020 primarily in the Company’s Specialty Homeowners line of business. Favorable prior year development during the three months ended March 31, 2020 was primarily due to lower than anticipated frequency and severity of claims in the Specialty Homeowners and Residential Flood lines of business.

Stockholders' Equity

3 Months Ended

Mar. 31, 2021

Stockholders' Equity

Stockholders' Equity

5. Stockholders’ Equity

Common stock reserved for future issuance

Common stock reserved for future issuance consists of the following as of March 31, 2021:


Stock options outstanding under 2019 Equity Incentive Plan	1,004,643
Restricted stock units outstanding under 2019 Equity Incentive Plan	41,467
Performance stock units outstanding under 2019 Equity Incentive Plan, at target	8,040
Shares authorized for future issuance under 2019 Equity Incentive Plan	2,619,608
Shares authorized for future issuance under 2019 Employee Stock Purchase Plan	687,037
Total	4,360,795

Stock based compensation

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

Stock-based compensation expense is recognized on a straight-line basis over the vesting period of equity-based awards. For performance stock units (“PSUs”), any changes to expense resulting from differences in actual performance versus target are recognized over the remaining vesting period of the 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 unaudited condensed consolidated statement 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 were 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 stock on the grant date. Stock options vest over a two to 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. Stock options expire ten years after the grant date.

The following table summarizes stock option transactions for the three months ended March 31, 2021:


	Number of shares		Weighted-average exercise price	Weighted average remaining contractual term (in years)		Aggregate intrinsic value (in thousands)
Outstanding at January 1, 2021	1,008,648	$	23.92	8.43	$	66,028
Options granted	57,353		99.39
Options exercised	(59,233)		16.32
Options cancelled	(2,125)		45.44
Outstanding at March 31, 2021	1,004,643	$	28.63	8.31	$	42,324
Vested and Exercisable at March 31, 2021	557,384	$	15.90	8.06	$	28,505

As of March 31, 2021, the Company had approximately $4.5 million of total unrecognized stock-based compensation expense related to stock options expected to be recognized over a weighted-average period of 2.39 years.

The fair value of each option granted during the three months ended March 31, 2021 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions:


Risk free rate of return (1)	0.57% - 0.59%
Expected share price volatility (2)	26.06% - 26.08%
Expected life in years (3)	5.89 years
Dividend yield (4)	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 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 has not historically issued dividends.

Restricted Stock Units

RSUs are valued using the closing price of the Company’s common stock 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 thereafter, subject to continued service.

The following table summarizes RSU transactions for the three months ended March 31, 2021:


	Number of shares	Weighted-average grant date fair value
Non vested outstanding at January 1, 2021	14,734	$	95.86
Granted	26,858		97.87
Released	(125)		58.06
Forfeited	—		—
Non vested outstanding at March 31, 2021	41,467	$	97.28

As of March 31, 2021, the Company had approximately $3.5 million of total unrecognized stock-based compensation expense related to RSUs expected to be recognized over a weighted-average period of 2.59 years.

Performance Stock Units

During the three months ended March 31, 2021, the Company began issuing PSUs to certain employees. PSUs are generally valued using the closing price of the Company’s common stock on the grant date with vesting conditions described below.

Vesting of PSUs requires a period of future service and the number of shares which vests depends on performance relative to predetermined targets of the Company’s Gross Written Premiums and Adjusted Return on Equity as set by the Compensation Committee. The PSU’s performance period is the fiscal year of the grant. At the end of the performance period, the actual results will be measured against the predetermined targets to determine the number of PSUs to be earned as compensation. The earned PSUs are then subject to a required service period of approximately three years from the grant date before vesting and being issued as common stock.

The following table summarizes PSU transactions for the three months ended March 31, 2021:


	Number of shares	Weighted-average grant date fair value
Non vested outstanding at January 1, 2021	—	$	—
Granted	8,040		97.87
Vested	—		—
Forfeited	—		—
Non vested outstanding at March 31, 2021	8,040	$	97.87

The PSU grants above represent shares that would vest based on achievement of the predetermined targets and do not reflect potential increases or decreases resulting from the Company’s actual performance relative to the predetermined targets. The actual number of PSUs which vest is subject to adjustment based on the Company’s actual performance relative to the predetermined targets. As of March 31, 2021, the Company had approximately $0.7 million of total unrecognized stock-based compensation expense related to PSUs expected to be recognized over a weighted-average period of 2.75 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 4,596 shares pursuant to the ESPP during the three months ended March 31, 2021.

Share repurchases

On March 29, 2021, the Company’s Board of Directors approved the adoption of a share repurchase program which became effective March 31, 2021. The program authorizes the repurchase by the Company of up to $40 million of its outstanding shares of common stock through the period ending on March 31, 2023. Under the share repurchase program, shares may be repurchased from time to time in the open market or negotiated transactions at prevailing market rates, or by other means in accordance with federal securities laws. The Company did not purchase any shares under this program during the three months ended March 31, 2021.

Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2021

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

6. Accumulated Other Comprehensive Income

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


	Three Months Ended March 31,
	2021		2020

		(in thousands)
Beginning Balance	$	13,246	$	4,686
Other comprehensive income before reclassification		(7,796)		(7,368)
Federal income tax expense		1,637		1,547
Other comprehensive income before reclassification, net of tax		(6,159)		(5,821)
Amounts reclassified from AOCI		(51)		(15)
Federal income tax expense		11		3
Amounts reclassified from AOCI, net of tax		(40)		(12)
Other comprehensive income		(6,199)		(5,833)
Balance at end of period	$	7,047	$	(1,147)

Underwriting Information

3 Months Ended

Mar. 31, 2021

Underwriting Information

Underwriting Information

7. Underwriting Information

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


	Three Months Ended March 31,
	2021				2020

	($ in thousands)
			% of				% of
	Amount		GWP		Amount		GWP
Product
Residential Earthquake	$	35,898	34.7	%	$	28,756	40.2	%
Commercial Earthquake		21,277	20.5	%		10,848	15.2	%
Specialty Homeowners		14,002	13.5	%		9,845	13.8	%
Commercial All Risk		8,190	7.9	%		12,456	17.4	%
Inland Marine		7,834	7.6	%		1,890	2.6	%
Hawaii Hurricane		6,137	5.9	%		2,695	3.8	%
Residential Flood		2,283	2.2	%		1,526	2.1	%
Other		7,956	7.7	%		3,478	4.9	%
Total Gross Written Premiums	$	103,577	100.0	%	$	71,494	100.0	%

Gross written premiums by state are as follows:


	Three Months Ended March 31,
	2021				2020

	($ in thousands)
			% of				% of
	Amount		GWP		Amount		GWP
State
California	$	50,502	48.8	%	$	32,751	45.8	%
Texas		11,054	10.7	%		15,791	22.1	%
Hawaii		6,920	6.7	%		3,052	4.3	%
Florida		6,058	5.8	%		—	0.0	%
Washington		4,088	3.9	%		2,606	3.6	%
North Carolina		3,888	3.8	%		1,684	2.4	%
Oregon		2,904	2.8	%		2,097	2.9	%
Illinois		2,522	2.4	%		1,147	1.6	%
Other		15,641	15.1	%		12,366	17.3	%
Total Gross Written Premiums	$	103,577	100.0	%	$	71,494	100.0	%

During the three months ended March 31, 2021, PSIC accounted for $79.8 million or approximately 77% of our gross written premiums and PESIC accounted for $23.8 million or approximately 23% of our gross written premiums.

- 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

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 21
-Subparagraph (a)
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 280
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Subparagraph (e)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/topic&trid=2134510

+ Details

Income Taxes

3 Months Ended

Mar. 31, 2021

Income Taxes

Income Taxes

8. Income Taxes

The Company calculates its tax provision in interim periods using its best estimate of the effective tax rate expected for the full year. The tax rate for the three months ended March 31, 2021 differs from the statutory rate of 21% due primarily to the tax impact of the permanent component of employee stock option exercises. For the three months ended March 31, 2020 the tax rate differs from the statutory rate of 21% due to miscellaneous differences between taxable income calculated under GAAP and IRS regulations.

- 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

3 Months Ended

Mar. 31, 2021

Earnings Per Share

Earnings Per Share

9. Earnings Per Share

The following table sets out earnings per share of common stock:


	Three months ended March 31,
	2021		2020

	(in thousands, except shares and per share data)
Net income	$	16,630	$	11,775
Weighted average common shares outstanding:
Basic		25,552,629		24,119,263
Common Share equivalents		703,652		659,345
Diluted		26,256,281		24,778,608

Earnings per share:
Basic	$	0.65	$	0.49
Diluted	$	0.63	$	0.48

Common share equivalents relate primarily 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.

Reinsurance

3 Months Ended

Mar. 31, 2021

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.

As of March 31, 2021, 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 March 31, 2021, the Company’s XOL reinsurance structure provides protection up to $1.4 billion for earthquake events and $600 million for hurricane events.

In addition to reinsurance purchased from traditional reinsurers, the Company has historically incorporated collateralized protection from the insurance linked securities market (i.e. catastrophe bonds). During the first quarter of 2021, the Company closed a $400 million 144A catastrophe bond which will be effective June 1, 2021. The catastrophe bond was completed through Torrey Pines Re Pte. Ltd. (“Torrey Pines Re”). Torrey Pines Re. is a special purpose insurer established in Singapore whereby Torrey Pines Re provides Palomar with indemnity-based reinsurance covering earthquake events.

For the period ended March 31, 2021, the Company recorded net expenses of $1.7 million in its Condensed Consolidated Statements of Income related to issuance of the catastrophe bond comprised of $3.2 million in gross expenses, offset by a $1.5 million grant receivable from the Monetary Authority of Singapore. As of March 31, 2021, the $1.5 million grant receivable is presented on the Condensed Consolidated Balance Sheet within Prepaid expenses and other assets. The Company believes it has fulfilled all requisite conditions of the Monetary Authority of Singapore for grant recognition.

Summary of Operations and Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2021
Significant Accounting Policies
Summary of Operations	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”).
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and include the accounts of the Company and its wholly-owned subsidiaries. These condensed consolidated financial statements do not contain all information and footnotes required by U.S. GAAP for complete consolidated financial statements. For a more complete description of the Company’s business and accounting policies, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 9, 2021 (the “2020 Annual Report on Form 10-K”) In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. All intercompany balances and transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results of operations for the full year.
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 condensed 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 condensed 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.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Recently adopted accounting pronouncements 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 adopted this guidance on January 1, 2021 and adoption did not have a material impact on the consolidated financial statements.

Investments (Tables)

3 Months Ended

Mar. 31, 2021

Investments

Schedule of available-for-sale investments


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
March 31, 2021	Cost or Cost		Gains		Losses		Value

	(in thousands)
Fixed maturities:
U.S. Governments	$	20,431	$	554	$	(143)	$	20,842
States, territories, and possessions		6,196		321		(93)		6,424
Political subdivisions		2,020		87		(2)		2,105
Special revenue excluding mortgage/asset-backed securities		40,261		902		(103)		41,060
Industrial and miscellaneous		240,458		7,147		(1,838)		245,767
Mortgage/asset-backed securities		84,053		2,153		(123)		86,083
Total available-for-sale investments	$	393,419	$	11,164	$	(2,302)	$	402,281


			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

Schedule of aggregate fair value and gross unrealized losses


	Less Than 12 Months				More Than 12 Months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
March 31, 2021	Value		Losses		Value		Losses		Value		Losses

	(in thousands)
Fixed maturity securities:
U.S. Governments	$	7,462	$	(143)	$	—	$	—	$	7,462	$	(143)
States, territories, and possessions		3,278		(93)		—		—		3,278		(93)
Political subdivisions		398		(2)		—		—		398		(2)
Special revenue excluding mortgage/asset-backed securities		8,964		(103)		—		—		8,964		(103)
Industrial and miscellaneous		77,800		(1,742)		1,120		(96)		78,920		(1,838)
Mortgage/asset-backed securities		14,527		(107)		3,007		(16)		17,534		(123)
Total	$	112,429	$	(2,190)	$	4,127	$	(112)	$	116,556	$	(2,302)


	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)

Schedule of contractual maturities of available-for-sale securities


	Amortized		Fair
	Cost		Value

	(in thousands)
Due within one year	$	20,999	$	21,236
Due after one year through five years		146,845		150,373
Due after five years through ten years		103,649		106,158
Due after ten years		37,873		38,431
Mortgage and asset-backed securities		84,053		86,083
	$	393,419	$	402,281

Schedule of net investment income


	Three Months Ended
	March 31,
	2021		2020

	(in thousands)
Interest income	$	2,238	$	2,001
Dividend income		99		125
Investment expense		(118)		(91)
Net investment income	$	2,219	$	2,035

Schedule of net realized and unrealized investment gains and losses


	Three Months Ended
	March 31,
	2021		2020

		(in thousands)
Realized gains:
Gains on sales of fixed maturity securities	$	52	$	15
Gains on sales of equity securities		809		—
Total realized gains		861		15
Realized losses:
Losses on sales of fixed maturity securities		(2)		—
Losses on sales of equity securities		—		—
Total realized losses		(2)		—
Net realized investment gains		859		15
Net unrealized gains (losses) on equity securities		(1,598)		425
Net realized and unrealized gains (losses) on investments	$	(739)	$	440

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Measurements

Schedule of hierarchy for financial assets and liabilities measured at fair value


March 31, 2021	Level 1		Level 2		Level 3		Total

	(in thousands)
Assets:
Fixed maturity securities
U.S. Governments	$	—	$	20,842	$	—	$	20,842
States, territories, and possessions		—		6,424		—		6,424
Political subdivisions		—		2,105		—		2,105
Special revenue excluding mortgage/asset-backed securities		—		41,060		—		41,060
Industrial and miscellaneous		—		245,767		—		245,767
Mortgage/asset-backed securities		—		86,083		—		86,083
Equity securities		10,535		—		—		10,535
Cash, cash equivalents, and restricted cash		23,848		—		—		23,848
Total assets	$	34,383	$	402,281	$	—	$	436,664


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

Reserve for Losses and Loss Adjustment Expenses (Tables)

3 Months Ended

Mar. 31, 2021

Reserve for Losses and Loss Adjustment Expenses

Schedule of reconciliation of changes in the ending reserve balances for losses and loss adjustment expenses ("LAE")


	Three Months Ended March 31,
	2021		2020

		(in thousands)
Reserve for losses and LAE net of reinsurance recoverables at beginning of period	$	34,470	$	3,869
Add: Incurred losses and LAE, net of reinsurance, related to:
Current year		(1,696)		2,179
Prior years		(2,727)		(316)
Total incurred		(4,423)		1,863
Deduct: Loss and LAE payments, net of reinsurance, related to:
Current year		1,680		351
Prior years		9,351		883
Total payments		11,031		1,234
Reserve for losses and LAE net of reinsurance recoverables at end of period		19,016		4,498
Add: Reinsurance recoverables on unpaid losses and LAE at end of period		188,448		13,854
Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period	$	207,464	$	18,352

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2021

Stockholders' Equity

Schedule of common stock reserved for future issuance


Stock options outstanding under 2019 Equity Incentive Plan	1,004,643
Restricted stock units outstanding under 2019 Equity Incentive Plan	41,467
Performance stock units outstanding under 2019 Equity Incentive Plan, at target	8,040
Shares authorized for future issuance under 2019 Equity Incentive Plan	2,619,608
Shares authorized for future issuance under 2019 Employee Stock Purchase Plan	687,037
Total	4,360,795

Schedule of stock-based compensation expense

Schedule of stock option transactions


	Number of shares		Weighted-average exercise price	Weighted average remaining contractual term (in years)		Aggregate intrinsic value (in thousands)
Outstanding at January 1, 2021	1,008,648	$	23.92	8.43	$	66,028
Options granted	57,353		99.39
Options exercised	(59,233)		16.32
Options cancelled	(2,125)		45.44
Outstanding at March 31, 2021	1,004,643	$	28.63	8.31	$	42,324
Vested and Exercisable at March 31, 2021	557,384	$	15.90	8.06	$	28,505

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


Risk free rate of return (1)	0.57% - 0.59%
Expected share price volatility (2)	26.06% - 26.08%
Expected life in years (3)	5.89 years
Dividend yield (4)	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 volatility of a peer group of publicly traded companies.

(4) Determined to be zero as the Company has not historically issued dividends.

Schedule of RSU transactions


	Number of shares	Weighted-average grant date fair value
Non vested outstanding at January 1, 2021	14,734	$	95.86
Granted	26,858		97.87
Released	(125)		58.06
Forfeited	—		—
Non vested outstanding at March 31, 2021	41,467	$	97.28

Schedule of Performance stock unit transactions


	Number of shares	Weighted-average grant date fair value
Non vested outstanding at January 1, 2021	—	$	—
Granted	8,040		97.87
Vested	—		—
Forfeited	—		—
Non vested outstanding at March 31, 2021	8,040	$	97.87

Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2021

Accumulated Other Comprehensive Income

Schedule of changes in accumulated other comprehensive income (AOCI)


	Three Months Ended March 31,
	2021		2020

		(in thousands)
Beginning Balance	$	13,246	$	4,686
Other comprehensive income before reclassification		(7,796)		(7,368)
Federal income tax expense		1,637		1,547
Other comprehensive income before reclassification, net of tax		(6,159)		(5,821)
Amounts reclassified from AOCI		(51)		(15)
Federal income tax expense		11		3
Amounts reclassified from AOCI, net of tax		(40)		(12)
Other comprehensive income		(6,199)		(5,833)
Balance at end of period	$	7,047	$	(1,147)

Underwriting Information (Tables)

3 Months Ended

Mar. 31, 2021

Underwriting Information

Schedule of gross written premiums

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


	Three Months Ended March 31,
	2021				2020

	($ in thousands)
			% of				% of
	Amount		GWP		Amount		GWP
Product
Residential Earthquake	$	35,898	34.7	%	$	28,756	40.2	%
Commercial Earthquake		21,277	20.5	%		10,848	15.2	%
Specialty Homeowners		14,002	13.5	%		9,845	13.8	%
Commercial All Risk		8,190	7.9	%		12,456	17.4	%
Inland Marine		7,834	7.6	%		1,890	2.6	%
Hawaii Hurricane		6,137	5.9	%		2,695	3.8	%
Residential Flood		2,283	2.2	%		1,526	2.1	%
Other		7,956	7.7	%		3,478	4.9	%
Total Gross Written Premiums	$	103,577	100.0	%	$	71,494	100.0	%

Gross written premiums by state are as follows:


	Three Months Ended March 31,
	2021				2020

	($ in thousands)
			% of				% of
	Amount		GWP		Amount		GWP
State
California	$	50,502	48.8	%	$	32,751	45.8	%
Texas		11,054	10.7	%		15,791	22.1	%
Hawaii		6,920	6.7	%		3,052	4.3	%
Florida		6,058	5.8	%		—	0.0	%
Washington		4,088	3.9	%		2,606	3.6	%
North Carolina		3,888	3.8	%		1,684	2.4	%
Oregon		2,904	2.8	%		2,097	2.9	%
Illinois		2,522	2.4	%		1,147	1.6	%
Other		15,641	15.1	%		12,366	17.3	%
Total Gross Written Premiums	$	103,577	100.0	%	$	71,494	100.0	%

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2021

Earnings Per Share

Schedule of earnings per share of common stock


	Three months ended March 31,
	2021		2020

	(in thousands, except shares and per share data)
Net income	$	16,630	$	11,775
Weighted average common shares outstanding:
Basic		25,552,629		24,119,263
Common Share equivalents		703,652		659,345
Diluted		26,256,281		24,778,608

Earnings per share:
Basic	$	0.65	$	0.49
Diluted	$	0.63	$	0.48

Investments - Available for Sale Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Available for sale investments
Amortized Cost	$ 393,419	$ 381,279
Gross Unrealized Gains	11,164	17,221
Gross Unrealized Losses	(2,302)	(513)
Fair Value	402,281	397,987
U.S. Governments
Available for sale investments
Amortized Cost	20,431	16,308
Gross Unrealized Gains	554	756
Gross Unrealized Losses	(143)	(5)
Fair Value	20,842	17,059
States, territories, and possession
Available for sale investments
Amortized Cost	6,196	6,208
Gross Unrealized Gains	321	428
Gross Unrealized Losses	(93)
Fair Value	6,424	6,636
Political subdivisions
Available for sale investments
Amortized Cost	2,020	2,027
Gross Unrealized Gains	87	125
Gross Unrealized Losses	(2)
Fair Value	2,105	2,152
Special revenue excluding mortgage/asset-backed securities
Available for sale investments
Amortized Cost	40,261	39,704
Gross Unrealized Gains	902	1,525
Gross Unrealized Losses	(103)	(2)
Fair Value	41,060	41,227
Industrial and miscellaneous
Available for sale investments
Amortized Cost	240,458	234,049
Gross Unrealized Gains	7,147	11,602
Gross Unrealized Losses	(1,838)	(291)
Fair Value	245,767	245,360
Mortgage/asset-backed securities
Available for sale investments
Amortized Cost	84,053	82,983
Gross Unrealized Gains	2,153	2,785
Gross Unrealized Losses	(123)	(215)
Fair Value	$ 86,083	$ 85,553

Investments - Security Holdings in an Unrealized Loss Position - General Information (Details) $ in Thousands	Mar. 31, 2021 USD ($) security	Dec. 31, 2020 USD ($) security
Number of positions:
Number of unrealized loss positions \| security	167	90
Fair Value
Fair Value	$ 116,556	$ 41,525
Unrealized Losses
Unrealized Losses	$ 2,302	$ 513

Investments - Security Holdings in an Unrealized Loss Position - Tabular Disclosure (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Fair Value
Fair Value - Less Than 12 Months	$ 112,429	$ 40,826
Fair Value - More Than 12 Months	4,127	699
Fair Value - Total	116,556	41,525
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(2,190)	(452)
Unrealized Losses - More Than 12 Months	(112)	(61)
Unrealized Losses - Total	(2,302)	(513)
U.S. Governments
Fair Value
Fair Value - Less Than 12 Months	7,462	1,496
Fair Value - Total	7,462	1,496
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(143)	(5)
Unrealized Losses - Total	(143)	(5)
States, territories, and possession
Fair Value
Fair Value - Less Than 12 Months	3,278
Fair Value - Total	3,278
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(93)
Unrealized Losses - Total	(93)
Political subdivisions
Fair Value
Fair Value - Less Than 12 Months	398
Fair Value - Total	398
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(2)
Unrealized Losses - Total	(2)
Special revenue excluding mortgage/asset-backed securities
Fair Value
Fair Value - Less Than 12 Months	8,964	520
Fair Value - Total	8,964	520
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(103)	(2)
Unrealized Losses - Total	(103)	(2)
Industrial and miscellaneous
Fair Value
Fair Value - Less Than 12 Months	77,800	22,718
Fair Value - More Than 12 Months	1,120	203
Fair Value - Total	78,920	22,921
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(1,742)	(234)
Unrealized Losses - More Than 12 Months	(96)	(57)
Unrealized Losses - Total	(1,838)	(291)
Mortgage/asset-backed securities
Fair Value
Fair Value - Less Than 12 Months	14,527	16,092
Fair Value - More Than 12 Months	3,007	496
Fair Value - Total	17,534	16,588
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(107)	(211)
Unrealized Losses - More Than 12 Months	(16)	(4)
Unrealized Losses - Total	$ (123)	$ (215)

Investments - Contractual Maturities of Available for Sale Fixed Maturity Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Amortized Cost
Due within one year	$ 20,999
Due after one year through five years	146,845
Due after five years through ten years	103,649
Due after ten years	37,873
Mortgage and asset-backed securities	84,053
Amortized Cost	393,419	$ 381,279
Fair Value
Due within one year	21,236
Due after one year through five years	150,373
Due after five years through ten years	106,158
Due after ten years	38,431
Mortgage and asset-backed securities	86,083
Total	$ 402,281	$ 397,987

Investments - Net Investment Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net investment income
Interest income	$ 2,238	$ 2,001
Dividend income	99	125
Less: investment expense	(118)	(91)
Net investment income	$ 2,219	$ 2,035

Investments - Net Realized and Unrealized Investment Gains and Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net realized and unrealized investment gains and losses
Gains on sales of fixed maturity securities	$ 52	$ 15
Gains on sales of equity securities	809
Total realized gains	861	15
Losses on sales of fixed maturity securities	(2)
Total realized losses	(2)
Net realized investment gains	859	15
Net unrealized gains (losses) on equity securities	(1,598)	425
Net realized and unrealized gains (losses) on investments	(739)	440
Proceeds from sales of fixed maturity securities
Proceeds from the sale of fixed maturity securities	$ 6,200	$ 2,300

Investments - Securities on Deposit (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Investments
Fair Value	$ 402,281	$ 397,987
Securities on deposit with state regulatory authorities
Investments
Fair Value	$ 7,500	$ 7,500

Fair Value Measurements - Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Assets:
Fair Value	$ 402,281	$ 397,987
Equity securities at fair value	10,535	24,322
U.S. Governments
Assets:
Fair Value	20,842	17,059
States, territories, and possession
Assets:
Fair Value	6,424	6,636
Political subdivisions
Assets:
Fair Value	2,105	2,152
Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value	41,060	41,227
Industrial and miscellaneous
Assets:
Fair Value	245,767	245,360
Mortgage/asset-backed securities
Assets:
Fair Value	86,083	85,553
Fair Value, Measurements, Recurring
Assets:
Equity securities at fair value	10,535	24,322
Cash, cash equivalents, and restricted cash	23,848	33,786
Total assets	436,664	456,095
Fair Value, Measurements, Recurring \| U.S. Governments
Assets:
Fair Value	20,842	17,059
Fair Value, Measurements, Recurring \| States, territories, and possession
Assets:
Fair Value	6,424	6,636
Fair Value, Measurements, Recurring \| Political subdivisions
Assets:
Fair Value	2,105	2,152
Fair Value, Measurements, Recurring \| Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value	41,060	41,227
Fair Value, Measurements, Recurring \| Industrial and miscellaneous
Assets:
Fair Value	245,767	245,360
Fair Value, Measurements, Recurring \| Mortgage/asset-backed securities
Assets:
Fair Value	86,083	85,553
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 1
Assets:
Equity securities at fair value	10,535	24,322
Cash, cash equivalents, and restricted cash	23,848	33,786
Total assets	34,383	58,108
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2
Assets:
Total assets	402,281	397,987
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| U.S. Governments
Assets:
Fair Value	20,842	17,059
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| States, territories, and possession
Assets:
Fair Value	6,424	6,636
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| Political subdivisions
Assets:
Fair Value	2,105	2,152
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value	41,060	41,227
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| Industrial and miscellaneous
Assets:
Fair Value	245,767	245,360
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| Mortgage/asset-backed securities
Assets:
Fair Value	$ 86,083	$ 85,553

Fair Value Measurements - Transfers (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Fair Value Measurements
Fair value, assets, transfers out of Level 3	$ 0	$ 0

Reserve for Losses and Loss Adjustment Expenses - Roll Forward (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Reserve for Losses and Loss Adjustment Expenses
Reserve for losses and LAE net of reinsurance recoverables at beginning of period	$ 34,470	$ 3,869
Add: Incurred losses and LAE, net of reinsurance, related to:
Current year	(1,696)	2,179
Prior years	(2,727)	(316)
Total incurred	(4,423)	1,863
Deduct: Loss and LAE payments, net of reinsurance, related to:
Current year	1,680	351
Prior years	9,351	883
Total payments	11,031	1,234
Reserve for losses and LAE net of reinsurance recoverables at end of period	$ 19,016	$ 4,498

Reserve for Losses and Loss Adjustment Expenses - Total (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Reserve for Losses and Loss Adjustment Expenses
Total reserve for losses and LAE	$ 19,016	$ 34,470	$ 4,498	$ 3,869
Add: Reinsurance recoverables on unpaid losses and LAE at end of period	188,448	94,566	13,854
Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period	$ 207,464	$ 129,036	$ 18,352

Reserve for Losses and Loss Adjustment Expenses - Adverse (Favorable) Development (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Adverse (Favorable) Development
Adverse (favorable) prior year development	$ (2,727)	$ (316)

Stockholders' Equity - Reserved for Future Issuance (Details) - shares	Mar. 31, 2021	Dec. 31, 2020	Apr. 16, 2019
Common stock reserved for future issuance
Stock options outstanding (in shares)	1,004,643	1,008,648
Total (in shares)	4,360,795
2019 Equity Incentive Plan
Common stock reserved for future issuance
Stock options outstanding (in shares)	1,004,643
Shares authorized for future issuance (in shares)	2,619,608		2,400,000
2019 Employee Stock Purchase Plan
Common stock reserved for future issuance
Shares authorized for future issuance (in shares)	687,037
Restricted Stock Units
Common stock reserved for future issuance
Stock units outstanding (in shares)	41,467	14,734
Restricted Stock Units \| 2019 Equity Incentive Plan
Common stock reserved for future issuance
Stock units outstanding (in shares)	41,467
Performance Stock Units
Common stock reserved for future issuance
Stock units outstanding (in shares)	8,040
Performance Stock Units \| 2019 Equity Incentive Plan
Common stock reserved for future issuance
Stock units outstanding (in shares)	8,040

Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Stockholders' Equity
Stock-based compensation expense	$ 938	$ 442

Stockholders' Equity - 2019 Equity Incentive Plan (Details) - 2019 Equity Incentive Plan - shares	Mar. 31, 2021	Apr. 16, 2019
Stock-Based Compensation
Shares authorized (in shares)	2,619,608	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 - Stock Options -Vesting (Details)	3 Months Ended
Stockholders' Equity - Stock Options -Vesting (Details)	Mar. 31, 2021
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 period	1 year
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	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Number of shares
Outstanding at beginning of period (in shares)	1,008,648
Granted (in shares)	57,353
Exercised (in shares)	(59,233)
Canceled (in shares)	(2,125)
Outstanding at end of period (in shares)	1,004,643	1,008,648
Weighted-average exercise price
Outstanding at beginning of period (in dollars per share)	$ 23.92
Granted (in dollars per share)	99.39
Exercised (in dollars per share)	16.32
Canceled (in dollars per share)	45.44
Outstanding at end of period (in dollars per share)	$ 28.63	$ 23.92
Additional disclosures
Weighted average remaining contractual term	8 years 3 months 21 days	8 years 5 months 4 days
Aggregate intrinsic value	$ 42,324	$ 66,028
Vested and Exercisable
Vested and expected to vest, exercisable, number (in shares)	557,384
Vested and expected to vest, exercisable, weighted average exercise price (in dollars per share)	$ 15.90
Vested and expected to vest, exercisable, weighted average remaining contractual term	8 years 21 days
Vested and expected to vest, exercisable, aggregate intrinsic value	$ 28,505

Stockholders' Equity - Stock Options - Fair Value Assumptions (Details) - Stock Options	3 Months Ended
	Mar. 31, 2021
Fair value assumptions
Risk free rate of return, minimum (as a percent)	0.57%
Risk free rate of return, maximum (as a percent)	0.59%
Expected share price volatility, minimum (as a percent)	26.06%
Expected share price volatility, maximum (as a percent)	26.08%
Dividend yield (as a percent)	0.00%
Minimum
Fair value assumptions
Expected life in years	5 years 10 months 20 days

Stockholders' Equity - Unrecognized Compensation Expense (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)
Stock Options
Unrecognized stock-based compensation expense
Total unrecognized stock-based compensation expense, options	$ 4.5
Weighted-average period over which unrecognized stock-based compensation expense is expected to be recognized	2 years 4 months 20 days
Restricted Stock Units
Unrecognized stock-based compensation expense
Total unrecognized stock-based compensation expense, restricted stock units	$ 3.5
Weighted-average period over which unrecognized stock-based compensation expense is expected to be recognized	2 years 7 months 2 days
Performance Stock Units
Unrecognized stock-based compensation expense
Total unrecognized stock-based compensation expense, restricted stock units	$ 0.7
Weighted-average period over which unrecognized stock-based compensation expense is expected to be recognized	2 years 9 months
Award service period	3 years

Stockholders' Equity - Restricted Stock Units (Details) - Restricted Stock Units	3 Months Ended
	Mar. 31, 2021 $ / shares shares
Number of shares
Non vested outstanding at beginning of period (in shares) \| shares	14,734
Granted (in shares) \| shares	26,858
Vested (in shares) \| shares	(125)
Non vested at end of period (in shares) \| shares	41,467
Weighted-average grant date fair value
Non vested outstanding at beginning of period (in dollars per share) \| $ / shares	$ 95.86
Granted (in dollars per share) \| $ / shares	97.87
Vested (in dollars per share) \| $ / shares	58.06
Non vested outstanding at end of period (in dollars per share) \| $ / shares	$ 97.28

Stockholders' Equity - Performance Stock Units (Details) - Performance Stock Units	3 Months Ended
	Mar. 31, 2021 $ / shares shares
Number of shares
Granted (in shares) \| shares	8,040
Non vested at end of period (in shares) \| shares	8,040
Weighted-average grant date fair value
Granted (in dollars per share) \| $ / shares	$ 97.87
Non vested outstanding at end of period (in dollars per share) \| $ / shares	$ 97.87

Stockholders' Equity - 2019 Employee Stock Purchase Plan (Details) - shares	3 Months Ended
	Mar. 31, 2021	Apr. 16, 2019
Stock-Based Compensation
Issuance of common stock via employee stock purchase plan (in shares)	4,596
Employee Stock
Stock-Based Compensation
Shares authorized (in shares)		240,000
Annual increase (in shares)	240,000

Stockholders' Equity - Share Repurchases (Details) $ in Millions	Mar. 29, 2021 USD ($)
Stockholders' Equity
Amount of authorizes repurchase	$ 40

Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Changes in accumulated other comprehensive income
Beginning balance	$ 363,713	$ 218,556
Other comprehensive income	(6,199)	(5,833)
Ending balance	376,382	260,820
Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income
Beginning balance	13,246	4,686
Other comprehensive income before reclassification	(7,796)	(7,368)
Federal income tax expense	1,637	1,547
Other comprehensive income before reclassification, net of tax	(6,159)	(5,821)
Amounts reclassified from AOCI	(51)	(15)
Federal income tax expense	11	3
Amounts reclassified from AOCI, net of tax	(40)	(12)
Other comprehensive income	(6,199)	(5,833)
Ending balance	$ 7,047	$ (1,147)

Underwriting Information - Reportable Segments (Details) - segment	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Reportable segment
Number of reportable segments	1	1

Underwriting Information - Gross Written Premiums by Product (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Gross written premiums
Amount	$ 103,577	$ 71,494
% of GWP	100.00%	100.00%
Residential Earthquake
Gross written premiums
Amount	$ 35,898	$ 28,756
% of GWP	34.70%	40.20%
Commercial Earthquake
Gross written premiums
Amount	$ 21,277	$ 10,848
% of GWP	20.50%	15.20%
Specialty Homeowners
Gross written premiums
Amount	$ 14,002	$ 9,845
% of GWP	13.50%	13.80%
Commercial All Risk
Gross written premiums
Amount	$ 8,190	$ 12,456
% of GWP	7.90%	17.40%
Inland Marine
Gross written premiums
Amount	$ 7,834	$ 1,890
% of GWP	7.60%	2.60%
Hawaii Hurricane
Gross written premiums
Amount	$ 6,137	$ 2,695
% of GWP	5.90%	3.80%
Residential Flood
Gross written premiums
Amount	$ 2,283	$ 1,526
% of GWP	2.20%	2.10%
Other
Gross written premiums
Amount	$ 7,956	$ 3,478
% of GWP	7.70%	4.90%

Underwriting Information - Gross Written Premiums by State (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Gross written premiums
Amount	$ 103,577	$ 71,494
% of GWP	100.00%	100.00%
California
Gross written premiums
Amount	$ 50,502	$ 32,751
% of GWP	48.80%	45.80%
Texas
Gross written premiums
Amount	$ 11,054	$ 15,791
% of GWP	10.70%	22.10%
Hawaii
Gross written premiums
Amount	$ 6,920	$ 3,052
% of GWP	6.70%	4.30%
Florida
Gross written premiums
Amount	$ 6,058
% of GWP	5.80%	0.00%
Washington
Gross written premiums
Amount	$ 4,088	$ 2,606
% of GWP	3.90%	3.60%
North Carolina
Gross written premiums
Amount	$ 3,888	$ 1,684
% of GWP	3.80%	2.40%
Oregon
Gross written premiums
Amount	$ 2,904	$ 2,097
% of GWP	2.80%	2.90%
Illinois
Gross written premiums
Amount	$ 2,522	$ 1,147
% of GWP	2.40%	1.60%
Other
Gross written premiums
Amount	$ 15,641	$ 12,366
% of GWP	15.10%	17.30%

Underwriting Information - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue
Amount	$ 103,577	$ 71,494
% of GWP	100.00%	100.00%
PSIC \| Sales Revenue \| Product Concentration Risk
Disaggregation of Revenue
Amount	$ 79,800
% of GWP	77.00%
PESIC \| Sales Revenue \| Product Concentration Risk
Disaggregation of Revenue
Amount	$ 23,800
% of GWP	23.00%

Income Taxes (Details)	3 Months Ended
Income Taxes (Details)	Mar. 31, 2021	Mar. 31, 2020
Effective Income Tax Rate Reconciliation, Percent
Statutory tax rate (as a percent)	21.00%	21.00%

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Earnings Per Share
Net income	$ 16,630	$ 11,775
Weighted average common shares outstanding:
Basic	25,552,629	24,119,263
Common Share equivalents (in shares)	703,652	659,345
Diluted (in shares)	26,256,281	24,778,608
Earnings per share:
Basic (in dollars per share)	$ 0.65	$ 0.49
Earnings per share:
Diluted earnings per share	$ 0.63	$ 0.48

Reinsurance (Details) - USD ($) $ in Thousands	3 Months Ended
Reinsurance (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Reinsurance Retention Policy
Ceded written premiums	$ 43,364	$ 29,495
Ceded unearned premiums	34,156		$ 35,031
Catastrophe bond, face value	400,000
Catastrophe bond, issuance costs, net	1,700
Catastrophe bond, issuance costs	3,200
Catastrophe bond, grant receivable	1,500
Catastrophe
Reinsurance Retention Policy
Retention amount	10,000
XOL reinsurance, protection	600,000
Earthquake events
Reinsurance Retention Policy
XOL reinsurance, protection	1,400,000
Veritcal Coparticipation of Selected Layer
Reinsurance Retention Policy
Retention amount	$ 1,000