0001558370-23-002465 | 10-K | XBRL Viewer

Print Document View Excel Document

Statutory financial information (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statutory Accounting Practices
Statutory net income (loss)			$ 76,222	$ 51,410	$ 1,753
Statutory capital and surplus	$ 271,977		314,508	271,977	213,721
Shareholder's equity	394,169		384,754	394,169
Dividends received from subsidiary	10,000	$ 15,000	0
BERMUDA
Statutory Accounting Practices
Statutory net income (loss)			200	1,400	$ 900
Statutory capital and surplus	15,700		15,600	15,700
Minimum statutory solvency margin	1,200		1,200	1,200
Shareholder's equity	$ 17,000		$ 15,500	$ 17,000
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

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 852
-SubTopic 10
-Section 55
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=84165509&loc=d3e56426-112766

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 4.E)
-URI https://asc.fasb.org/extlink&oid=122038336&loc=d3e74512-122707

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(31))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(29))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(30))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=123596393&loc=d3e14064-108612

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

+ Details

Reserve for Losses and Loss Adjustment Expenses

12 Months Ended

Dec. 31, 2022

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, 2022, 2021, and 2020. 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,
	2022		2021		2020

	(in thousands)
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period	$	45,419	$	34,470	$	3,869
Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to:
Current year		76,289		45,042		64,179
Prior years		2,383		(3,585)		(64)
Total incurred		78,672		41,457		64,115
Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to:
Current year		21,802		12,063		31,879
Prior years		24,769		18,445		1,635
Total payments		46,571		30,508		33,514
Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period		77,520		45,419		34,470
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period		153,895		127,947		94,566
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period	$	231,415	$	173,366	$	129,036

The foregoing reconciliation shows a loss and loss adjustment expense deficiency of $2.4 million developed in 2022 and loss and loss adjustment expense reserve redundancies of $3.6 million and $0.1 million developed in 2021 and 2020, respectively. During 2022, the net unfavorable reserve development was primarily attributable to prior year catastrophe events including certain 2020 Hurricanes, offset by favorable development related to 2021 attritional and catastrophe losses.

During 2021, this net favorable reserve development was primarily due to the effect of ceding gross unfavorable development under our reinsurance program and lower than anticipated severity of catastrophe losses associated with certain hurricanes that occurred during the second half of 2020. 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.

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, 2022 and for previous accident years.

The information provided herein about incurred and paid accident year claims development for the years ended December 31, 2022 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, 2022
																	Incurred but		Cumulative
	Year Ended December 31,																Not Reported		Number of
Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022		Liabilities		Claims
2015	$	2,048	$	1,785	$	1,658	$	1,636	$	1,642	$	1,636	$	1,643	$	1,612	$	—	567
2016				6,069		5,878		5,721		5,636		5,622		5,609		5,604		—	1,357
2017						9,354		7,418		6,630		6,388		5,587		5,681		11	3,516
2018								2,193		2,008		1,930		1,929		1,529		—	1,017
2019										914		838		807		676		36	1,386
2020												19,100		15,088		13,715		106	4,451
2021														8,453		5,765		—	4,081
2022																7,237		1,000	2,149
Total															$	41,819	$	1,153	18,524

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(1)		2020(1)		2021(1)		2022
2015	$	860	$	1,379	$	1,523	$	1,615	$	1,634	$	1,636	$	1,643	$	1,612
2016				4,120		5,356		5,585		5,607		5,619		5,609		5,604
2017						7,135		7,375		6,628		6,371		5,586		5,649
2018								1,550		1,853		1,922		1,922		1,529
2019										546		685		685		704
2020												13,588		13,095		13,161
2021														4,351		5,472
2022																5,310
Total															$	39,041
Reserve for losses and loss adjustment expense, net of reinsurance															$	2,778

(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 (2)		Year 6		Year 7		Year 8 (2)
Payout percentage	85.32	%	16.39	%	0.81	%	0.88	%	(9.53)	%	0.35	%	0.17	%	(1.92)

(2) Negative payout percentages are due to timing of reinsurance payments, allocations of reinsurance between different lines of business based on actual results, and allocation of reinsurance to different periods for reinsurance treaties in effect for multiple periods. These are primarily associated with larger recoveries from catastrophe events in earlier years of operation.

Incurred Losses and Allocated Loss Adjustment Expenses,

Net of Reinsurance Special Property Insurance (in thousands)


																	As of December 31, 2022
																	Incurred but		Cumulative
	Year Ended December 31,																Not Reported		Number of
Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022		Liabilities		Claims
2015	$	630	$	719	$	671	$	671	$	678	$	677	$	673	$	692	$	—	6
2016				1,381		1,249		1,251		1,454		1,453		1,453		1,521		—	26
2017						3,071		3,475		4,014		4,264		4,974		4,987		—	110
2018								5,970		6,095		6,009		6,021		6,412		—	176
2019										3,661		3,385		3,140		3,617		62	294
2020												42,334		42,160		45,850		2,263	960
2021														21,383		19,393		758	1386
2022																35,650		10,515	1,425
Total															$	118,122	$	13,598	4,383

Cumulative Paid Losses and Allocated Loss Adjustment Expenses,

Net of Reinsurance Special Property Insurance (in thousands)


Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022
2015	$	265	$	438	$	586	$	626	$	666	$	673	$	673	$	692
2016				703		1,064		1,216		1,444		1,453		1,453		1,521
2017						1,967		3,344		4,011		4,269		4,974		4,987
2018								2,859		6,036		6,009		6,021		6,414
2019										1,633		2,825		3,072		3,466
2020												18,274		36,127		42,343
2021														7,004		17,028
2022																7,337
Total																83,788
Reserve for losses and loss adjustment expense, net of reinsurance																34,334

(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		Year 7		Year 8
Payout percentage	38.78	%	35.64	%	10.79	%	7.40	%	6.66	%	0.42	%	2.24	%	2.70	%

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:


	2022
	(in thousands)
Net outstanding liabilities:
Homeowners’ insurance	$	2,778
Special property		34,334
Reinsurance- Nonproportional assumed property(1)		8,568
Other		31,840
Reserve for losses and loss adjustment expense, net of reinsurance		77,520
Reinsurance recoverable on unpaid claims:
Homeowners’ insurance	$	11,339
Special property		97,231
Other		45,325
Total reinsurance recoverable on unpaid claims		153,895
Total reserve for losses and loss adjustment expenses	$	231,415

(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.

Statutory financial information

12 Months Ended

Dec. 31, 2022

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, 2022, 2021 and 2020 and for the years then ended are summarized as follows:


	December 31,
	2022		2021		2020

	(in thousands)
Statutory net income (loss)	$	76,222	$	51,410	$	1,753
Statutory capital and surplus		314,508		271,977		213,721

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, 2022 and 2021, 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, 2022 and 2021 was approximately $1.2 million and $1.2 million, respectively. Actual statutory capital and surplus at December 31, 2022 and 2021 was $15.6 million and $15.7 million, respectively. PSRE had statutory net income of $.2 million, $1.4 million and $0.9 million for 2022, 2021 and 2020, respectively.

PSRE had stockholders’ equity of $15.5 million and $17.0 million on a GAAP basis at December 31, 2022 and 2021, respectively. The principal difference between statutory capital and surplus and stockholders’ equity presented in accordance with GAAP are prepaid expenses, which are non-admitted assets for Bermuda statutory purposes. In the third and fourth quarter of 2021, PSRE distributed $15.0 million and $10.0 million in dividends to the Company. No dividends were paid in 2022.

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, 2022 and 2021, the Company met the minimum liquidity ratio requirement.

Leases

12 Months Ended

Dec. 31, 2022

Leases

Leases

8. Leases

The Company has operating leases for office space used to conduct its insurance operations and administration activities. Operating lease right-of-use (“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, 2022, 2021 and 2020 were $0.8 million, $0.7 million and $0.7 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, 2022	(in thousands)
Operating cash outflows from operating leases	$	922


December 31, 2022	($ in thousands)
Operating lease ROU assets	$	1,688
Operating lease liabilities	$	2,066
Weighted-average remaining lease term on operating leases		2.7	years
Weighted-average discount rate on operating leases		1.4	%

Future minimum lease payments as of December 31, 2022 are as follows:


Years ending December 31,	(in thousands)
2023		966
2024		640
2025		168
2026		173
2027		240
2028		—
Total future minimum lease payments	$	2,187
Less: imputed interest		(121)
Total operating lease liability	$	2,066

Stockholders' Equity - 2019 Equity Incentive Plan (Details) - 2019 Equity Incentive Plan - shares	Dec. 31, 2022	Apr. 16, 2019
Stock-Based Compensation
Shares authorized (in shares)	2,594,587	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%

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Earnings Per Share
Net income	$ 52,170	$ 45,847	$ 6,257
Net income - Basic	$ 52,170	$ 45,847	$ 6,257
Weighted average common shares outstanding:
Basic (in shares)	25,243,397	25,459,514	24,872,251
Common Share equivalents (in shares)	552,611	652,390	726,396
Diluted (in shares)	25,796,008	26,111,904	25,598,647
Earnings per share:
Basic (in dollars per share)	$ 2.07	$ 1.80	$ 0.25
Diluted (in dollars per share)	$ 2.02	$ 1.76	$ 0.24

Schedule II - Statements of Cash Flows (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Operating activities
Net income	$ 52,170	$ 45,847	$ 6,257
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense	11,624	5,584	2,167
Net realized and unrealized losses on investments	7,529	(1,277)	(1,488)
Amortization of premium on fixed maturity securities	1,607	2,317	1,214
Deferred income tax expense	(3,461)	641	1,094
Net cash provided by (used in) operating activities	169,583	87,814	57,493
Investing activities
Purchases of fixed maturity securities	(382,114)	(166,894)	(295,002)
Sales and maturities of fixed maturity securities	242,726	120,198	124,243
Net cash used in investing activities	(156,807)	(58,188)	(185,385)
Financing activities
Proceeds from common stock issued via equity incentive plans	760	719	741
Repurchase of common stock	(34,415)	(15,852)
Net cash provided by (used in) financing activities	5,017	(13,041)	128,329
Net increase in cash, cash equivalents and restricted cash	17,793	16,585	437
Cash, cash equivalents and restricted cash at beginning of period	50,371	33,786	33,349
Cash, cash equivalents and restricted cash at end of period	68,164	50,371	33,786
Supplementary cash flow information:
Cash paid for income taxes	18,890	2,104	7,182
Cash paid for interest	704
Parent Company
Operating activities
Net income	52,170	45,847	6,257
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries	(76,270)	(75,594)	(13,917)
Stock-based compensation expense	8,820	4,755
Net realized and unrealized losses on investments	320	(217)	(63)
Amortization of premium on fixed maturity securities	347	443	350
Deferred income tax expense	7,210	634	1,094
Changes in operating assets and liabilities:	36,449	13,596	7,772
Net cash provided by (used in) operating activities	29,046	(10,536)	1,493
Investing activities
Purchases of fixed maturity securities	(9,807)	(2,177)	(71,048)
Sales and maturities of fixed maturity securities	8,488	11,396	6,651
Cash paid to subsidiaries		(15,595)	(59,789)
Cash received from subsidiaries		27,100
Net cash used in investing activities	(1,319)	20,724	(124,186)
Financing activities
Proceeds from common stock issued via equity incentive plans	3,032	2,811	2,782
Repurchase of common stock	(34,415)	(15,852)
Net cash provided by (used in) financing activities	(31,383)	(13,041)	128,329
Net increase in cash, cash equivalents and restricted cash	(3,656)	(2,853)	5,636
Cash, cash equivalents and restricted cash at beginning of period	4,437	7,290	1,654
Cash, cash equivalents and restricted cash at end of period	781	4,437	7,290
Supplementary cash flow information:
Cash paid for income taxes	18,890	$ 2,104	7,182
Cash paid for interest	$ 704
Stock Issued in January
Financing activities
Proceeds from stock offerings, net of offering costs			35,464
Stock Issued in January \| Parent Company
Financing activities
Proceeds from stock offerings, net of offering costs			35,464
Stock Issued in June
Financing activities
Proceeds from stock offerings, net of offering costs			90,083
Stock Issued in June \| Parent Company
Financing activities
Proceeds from stock offerings, net of offering costs			$ 90,083

Stockholders' Equity - Restricted Stock Units (Details) - Restricted Stock Units	12 Months Ended
	Dec. 31, 2022 $ / shares shares
Number of shares
Outstanding at beginning of period (in shares) \| shares	235,696
Granted (in shares) \| shares	100,106
Vested (in shares) \| shares	(57,536)
Forfeited (in shares) \| shares	(6,315)
Non vested at end of period (in shares) \| shares	271,951
Weighted-average grant date fair value
Outstanding at beginning of period (in dollars per share) \| $ / shares	$ 79.33
Granted (in dollars per share) \| $ / shares	51.53
Vested (in dollars per share) \| $ / shares	80.60
Forfeited (in dollars per share) \| $ / shares	76.30
Non vested outstanding at end of period (in dollars per share) \| $ / shares	$ 68.90

Fair Value Measurements

12 Months Ended

Dec. 31, 2022

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, 2022 and 2021:


December 31, 2022	Level 1		Level 2		Level 3		Total

	(in thousands)
Assets:
Fixed maturity securities
U.S. Governments	$	—	$	48,551	$	—	$	48,551
States, territories, and possessions		—		5,354		—		5,354
Political subdivisions		—		4,298		—		4,298
Special revenue excluding mortgage/asset-backed securities		—		32,799		—		32,799
Industrial and miscellaneous		—		254,095		—		254,095
Mortgage/asset-backed securities		—		169,967		—		169,967
Equity securities		38,576		—		—		38,576
Cash, cash equivalents, and restricted cash		68,164		—		—		68,164
Total assets	$	106,740	$	515,064	$	—	$	621,804


December 31, 2021	Level 1		Level 2		Level 3		Total

	(in thousands)
Assets:
Fixed maturity securities
U.S. Governments	$	—	$	16,870	$	—	$	16,870
States, territories, and possessions		—		4,014		—		4,014
Political subdivisions		—		6,380		—		6,380
Special revenue excluding mortgage/asset-backed securities		—		44,498		—		44,498
Industrial and miscellaneous		—		249,046		—		249,046
Mortgage/asset-backed securities		—		110,374		1,500		111,874
Equity securities		33,261		—		—		33,261
Cash, cash equivalents, and restricted cash		50,371		—		—		50,371
Total assets	$	83,632	$	431,182	$	1,500	$	516,314

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. The carrying amount of the Company’s borrowings under the Federal Home Loan Bank (“FHLB”) line of credit approximates fair value as the Company is currently borrowing at the overnight rate, which is adjusted daily.

Transfers between Level 3 and Level 2 securities result from changes in the availability of observable market inputs and are recorded at the beginning of the reporting period. As of December 31, 2022, the Company had no fixed income securities classified as Level 3. As of December 31, 2021, the Company had $1.5 million of fixed income securities classified as Level 3 due to the lack of availability of observable market inputs for recently purchased securities.

- 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

Capitalized Assets - Capitalized Software - Tabular Disclosure (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Capitalized software
Cost	$ 18,622	$ 13,205
Accumulated Amortization	(6,303)	(3,831)
Net Book Value	$ 12,319	$ 9,374

Stockholders' Equity - Stock Options - Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Number of shares
Outstanding at beginning of period (in shares)	933,051
Granted (in shares)	122,539
Exercised (in shares)	(148,427)
Canceled (in shares)	(24,271)
Outstanding at end of period (in shares)	882,892	933,051
Weighted-average exercise price
Outstanding at beginning of period (in dollars per share)	$ 29.41
Granted (in dollars per share)	51.99
Exercised (in dollars per share)	15.31
Canceled (in dollars per share)	68.13
Outstanding at end of period (in dollars per share)	$ 33.85	$ 29.41
Additional disclosures
Weighted average remaining contractual term	6 years 11 months 1 day	7 years 7 months 2 days
Aggregate intrinsic value	$ 16,990	$ 36,679
Vested and Exercisable
Vested and exercisable, number (in shares)	658,858
Vested and exercisable, weighted average exercise price (in dollars per share)	$ 26.33
Vested and exercisable, weighted average remaining contractual term	6 years 5 months 23 days
Vested and exercisable, aggregate intrinsic value	$ 16,001

Stockholders' Equity - Reserved for Future Issuance (Details) - shares	Dec. 31, 2022	Dec. 31, 2021	Apr. 16, 2019
Common stock reserved for future issuance
Stock options outstanding (in shares)	882,892	933,051
Total (in shares)	5,040,383
2019 Equity Incentive Plan
Common stock reserved for future issuance
Stock options outstanding (in shares)	882,892
Shares authorized for future issuance (in shares)	2,594,587		2,400,000
2019 Employee Stock Purchase Plan
Common stock reserved for future issuance
Shares authorized for future issuance (in shares)	907,850
Restricted Stock Units
Common stock reserved for future issuance
Stock units outstanding (in shares)	271,951	235,696
Restricted Stock Units \| 2019 Equity Incentive Plan
Common stock reserved for future issuance
Stock units outstanding (in shares)	271,951
Performance Stock Units
Common stock reserved for future issuance
Stock units outstanding (in shares)	383,103	358,401
Performance Stock Units \| 2019 Equity Incentive Plan
Common stock reserved for future issuance
Stock units outstanding (in shares)	383,103

Intangible Assets

12 Months Ended

Dec. 31, 2022

Intangible Assets

Intangible Assets

6. Intangible Assets

Intangible assets consist of the following:


	December 31,
	2022		2021

	(in thousands)
Indefinite-lived intangibles:
State insurance licenses	$	744	$	744
Finite-lived intangibles:
Customer relationships		10,023		10,008
Accumulated amortization on finite-lived intangibles		(2,506)		(1,251)
Total intangible assets	$	8,261	$	9,501

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

Customer relationships represents the fair value of acquired policy renewal rights. The Company began amortizing this intangible asset on a straight line basis in 2021 and is amortizing it over a period of 8 years. Amortization expense for the years ended December 31, 2022 and 2021 was $1.3 million during each year.

Investments - Net Realized and Unrealized Investment Gains and Losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Net realized and unrealized investment gains and losses
Gains on sales of fixed maturity securities	$ 14	$ 466	$ 501
Gains on sales of equity securities		1,416	62
Total realized gains	14	1,882	563
Losses on sales of fixed maturity securities	(2,340)	(1)	(46)
Losses on sales of equity securities			(68)
Total realized losses	(2,340)	(1)	(114)
Net realized investment gains	(2,326)	1,881	449
Net unrealized gains (losses) on equity securities	(5,203)	(604)	1,039
Net realized and unrealized gains (losses) on investments	(7,529)	1,277	1,488
Proceeds from sales of fixed maturity securities
Proceeds from the sale of fixed maturity securities	$ 19,700	$ 17,400	$ 39,800

Schedule V - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Valuation Allowance for deferred tax assets
Valuation and Qualifying Accounts
Balance at Beginning of Period	$ 2,879	$ 680
Amounts Charged to Expense	191	2,199
Balance at End of Period	3,070	2,879
Valuation Allowance for premium receivable
Valuation and Qualifying Accounts
Balance at Beginning of Period	315	203
Amounts Charged to Expense	188	285
Amounts Written Off	407	173
Balance at End of Period	$ 96	$ 315

Dividend Restrictions

12 Months Ended

Dec. 31, 2022

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 $78.2 million in 2023 without approval by the California and Oregon Insurance Commissioners.

Under Arizona statute which 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. Based on the above restrictions, PESIC may not pay a dividend or distribution in 2023 without approval of the Arizona Insurance Commissioner due to incurring a statutory net loss in 2022.

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 2023 is calculated to be approximately $3.9 million. However, this dividend amount is subject to annual enhanced solvency requirement calculations.

Significant Accounting Policies - Premiums Earned (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Significant Accounting Policies
Premium deficiency	$ 0	$ 0

Underwriting Information

12 Months Ended

Dec. 31, 2022

Underwriting Information

Underwriting Information

14. Underwriting Information

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


	Year Ended December 31,
	2022				2021				2020

	($ in thousands)
			% of				% of				% of
	Amount		GWP		Amount		GWP		Amount		GWP
Product
Fronting	$	223,249	25.3	%	$	11,459	2.2	%	$	-	NM
Residential Earthquake		213,803	24.2	%		171,048	32.0	%		140,934	39.8	%
Commercial Earthquake		131,677	14.9	%		90,552	16.9	%		58,890	16.6	%
Inland Marine		105,068	11.9	%		57,124	10.7	%		15,423	4.3	%
Commercial All Risk		51,671	5.9	%		38,640	7.2	%		53,933	15.2	%
Casualty		35,791	4.1	%		9,584	1.9	%		—	NM
Hawaii Hurricane		32,967	3.7	%		30,298	5.6	%		13,824	3.9	%
Specialty Homeowners		29,959	3.4	%		67,894	12.7	%		49,849	14.1	%
Residential Flood		14,539	1.7	%		11,652	2.2	%		8,176	2.3	%
Other		43,144	4.9	%		46,924	8.6	%		13,331	3.8	%
Total Gross Written Premiums	$	881,868	100.0	%	$	535,175	100.0	%	$	354,360	100.0	%
NM-Not Meaningful

Gross written premiums by state are as follows:


	Year Ended December 31,
	2022				2021				2020

	($ in thousands)
			% of				% of				% of
	Amount		GWP		Amount		GWP		Amount		GWP
State
California	$	418,809	47.5	%	$	244,416	45.6	%	$	172,765	48.8	%
Texas		90,459	10.3	%		62,893	11.8	%		67,974	19.2	%
Washington		41,827	4.7	%		23,608	4.4	%		14,328	4.0	%
Hawaii		40,157	4.5	%		34,993	6.5	%		16,398	4.6	%
Florida		38,715	4.4	%		27,386	5.1	%		5,795	1.7	%
Oregon		24,108	2.7	%		13,677	2.6	%		10,038	2.8	%
Illinois		17,368	2.0	%		12,133	2.3	%		6,133	1.7	%
North Carolina		12,776	1.5	%		15,271	2.9	%		11,143	3.1	%
Other		197,649	22.4	%		100,798	18.8	%		49,786	14.1	%
Total Gross Written Premiums	$	881,868	100.0	%	$	535,175	100.0	%	$	354,360	100.0	%

Gross written premiums by insurance subsidiary are as follows:


	Year Ended December 31,
	2022				2021				2020

	($ in thousands)
			% of				% of				% of
	Amount		GWP		Amount		GWP		Amount		GWP
Subsidiary
PSIC	$	489,720	55.5	%	$	383,064	71.6	%	$	324,870	91.7	%
PESIC		392,148	44.5	%		152,111	28.4	%		29,490	8.3	%
Total Gross Written Premiums	$	881,868	100.0	%	$	535,175	100.0	%	$	354,360	100.0	%

The Company distributes a significant portion of its Fronting, Residential Earthquake, Commercial Earthquake, and Hawaii Hurricane products through two program administrators. Each of the 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 products accounted for $417.5 million or 47.3% of the Company’s gross written premiums for the year ended December 31, 2022, $255.8 million or 48.2% of the Company’s gross written premiums for the year ended December 31, 2021, and $191.3 million or 54.0% of the Company’s gross written premiums for the year ended December 31, 2020.

- 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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI https://asc.fasb.org/topic&trid=2134510

+ Details

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Operating activities
Net income	$ 52,170	$ 45,847	$ 6,257
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense	11,624	5,584	2,167
Depreciation and amortization expense	4,115	3,544	1,336
Allowance for credit loss on fixed maturity securities	236	106
Net realized and unrealized losses (gains) on investments	7,529	(1,277)	(1,488)
Amortization of premium on fixed maturity securities	1,607	2,317	1,214
Deferred income tax expense	(3,519)	641	1,094
Changes in operating assets and liabilities:
Accrued investment income	(1,052)	(180)	(1,159)
Premium receivable	(74,846)	(39,170)	(12,754)
Deferred policy acquisition costs	(787)	(20,472)	(10,280)
Reinsurance recoverables	(36,298)	(52,587)	(87,473)
Ceded unearned premiums	(145,768)	(23,284)	(8,926)
Prepaid expenses and other assets	(4,017)	591	(16,414)
Accounts payable and other accrued liabilities	5,426	(946)	5,998
Reserve for losses and loss adjustment expenses	58,049	44,330	112,215
Unearned premiums	186,649	101,176	53,116
Ceded premiums payable	108,667	15,227	10,850
Funds held under reinsurance treaty	(202)	6,367	2,857
Income taxes payable			(1,117)
Net cash provided by operating activities	169,583	87,814	57,493
Investing activities
Purchases of property and equipment	(313)	(18)	(132)
Capitalized software costs	(5,623)	(4,836)	(3,942)
Purchases of fixed maturity securities	(382,114)	(166,894)	(295,002)
Purchases of equity securities	(10,518)	(49,680)	(46,944)
Sales and maturities of fixed maturity securities	242,726	120,198	124,243
Sales of equity securities		41,553	45,983
Securities receivable or payable, net	(950)	1,500	(2,523)
Purchase of policy renewal rights	(15)	(11)	(7,068)
Net cash used in investing activities	(156,807)	(58,188)	(185,385)
Financing activities
Proceeds from line of credit	36,400
Proceeds from common stock issued via employee stock purchase plan	760	719	741
Proceeds from common stock issued via stock option exercises	2,272	2,092	2,041
Repurchase of common stock	(34,415)	(15,852)
Net cash provided by (used in) financing activities	5,017	(13,041)	128,329
Net increase in cash, cash equivalents and restricted cash	17,793	16,585	437
Cash, cash equivalents and restricted cash at beginning of period	50,371	33,786	33,349
Cash, cash equivalents and restricted cash at end of period	68,164	50,371	33,786
Supplementary cash flow information:
Cash paid for income taxes	18,890	$ 2,104	7,182
Cash paid for interest	$ 704
Stock Issued in January
Financing activities
Proceeds from stock offerings, net of offering costs			35,464
Stock Issued in June
Financing activities
Proceeds from stock offerings, net of offering costs			$ 90,083

Reserve for Losses and Loss Adjustment Expenses - Adverse (Favorable) Development (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Adverse (Favorable) Development
Adverse (favorable) prior year development	$ 2,383	$ (3,585)	$ (64)

Reserve for Losses and Loss Adjustment Expenses - Total (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Reserve for Losses and Loss Adjustment Expenses
Total reserve for losses and LAE	$ 77,520	$ 45,419	$ 34,470	$ 3,869
Add: Reinsurance recoverables on unpaid losses and LAE at end of period	153,895	127,947	94,566
Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period	$ 231,415	$ 173,366	$ 129,036

Income Taxes - Net Operating Loss Carryforwards (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Domestic Tax Authority
Operating Loss Carryforwards [Line Items]
Operating Loss Carryforwards	$ 0

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

16. Income Taxes

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



	December 31,
	2022		2021		2020

	(in thousands)
Current	$	18,842	$	10,650	$	(1,128)
Deferred		(3,461)		641		1,094
Income tax expense (benefit)	$	15,381	$	11,291	$	(34)

As of December 31, 2022 and 2021, significant components of the Company’s deferred tax assets and liabilities were as follows:


	December 31,
	2022		2021

	(in thousands)
Deferred tax assets:
Losses and LAE reserve discount	$	680	$	279
State tax net operating losses		3,070		2,879
Deferred Intercompany		656		—
Unearned premiums		11,258		9,569
Capitalized organizational costs		184		214
Unrealized losses on investments		9,891		—
Deferred compensation		1,585		997
Other		1,544		1,285
Total deferred tax assets	$	28,868	$	15,223
Deferred tax liabilities:
Deferred acquisition costs	$	(11,922)	$	(11,754)
Unrealized gains on investments		—		(1,612)
Internally developed software		(1,520)		(1,969)
Other		(1,734)		(919)
Total deferred tax liabilities		(15,176)		(16,254)
Net deferred tax asset (liability) before valuation allowance		13,692		(1,031)
Valuation allowance		(3,070)		(2,879)
Total net deferred tax assets (liabilities)	$	10,622	$	(3,910)

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 and the Company will continue to maintain a valuation allowance on the associated deferred tax assets as of December 31, 2022. The amount of the deferred tax asset considered realizable, however, 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.

As of December 31, 2022, there are no federal net operating losses or tax credit carryforwards.

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, 2022, 2021 and 2020:


	Years Ended December 31,
	2022				2021				2020

	($ in thousands)
Expense computed at federal tax rate	$	14,186	21.00	%	$	11,999	21.00	%	$	1,321	21.00	%
Stock-based compensation		153	0.23	%		(1,067)	(1.87)	%		(1,538)	(24.44)	%
Dividend received deduction and tax‑exempt interest		(101)	(0.15)	%		(81)	(0.14)	%		(67)	(1.06)	%
Valuation allowance		191	0.28	%		2,199	3.85	%		606	9.63	%
Other		952	1.41	%		(1,759)	(3.08)	%		(356)	(5.67)	%
Income tax expense (benefit)	$	15,381	22.77	%	$	11,291	19.76	%	$	(34)	(0.54)	%

For the year ended December 31, 2022, the difference relates primarily to non-deductible executive compensation expense and state taxes. For the year ended December 31, 2021, the difference relates primarily to a benefit from the permanent component of employee stock option exercises and state taxes. For the year ended December 31, 2020, the difference relates primarily the permanent component of employee stock option exercises. For the years ended December 31, 2021 and Decembers 31, 2020, the Company increased its valuation allowance relating to deferred tax assets associated with state net operating losses.

As of December 31, 2022 and 2021, 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 2019 through 2021 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

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Significant Accounting Policies - Premiums Receivable (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Premiums Receivable
Allowance for doubtful accounts	$ 0.1	$ 0.3

Leases - Lease Cost (Details) - USD ($) $ in Millions	12 Months Ended
Leases - Lease Cost (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Lease, cost
Operating lease costs	$ 0.8	$ 0.7	$ 0.7

Policy Acquisition Costs (Tables)

12 Months Ended

Dec. 31, 2022

Policy Acquisition Costs

Schedule of policy acquisition costs deferred and amortized


	Year ended December 31,
	2022		2021		2020

	(in thousands)
Deferred Policy Acquisition Costs:
Balance, beginning of year	$	55,953	$	35,481	$	25,201
Additions to deferred balance:
Direct commissions		209,061		133,242		82,786
Ceding commissions and fronting fees		(109,302)		(32,249)		(19,371)
Premium taxes		10,166		8,209		7,024
Total net additions		109,925		109,202		70,439
Amortization of net policy acquisition costs		(109,138)		(88,730)		(60,159)
Balance, end of year	$	56,740	$	55,953	$	35,481
Acquisition expenses:
Amortization of net policy acquisition costs	$	109,138	$	88,730	$	60,159
Period costs		1,633		6,703		3,882
Total Acquisition expenses	$	110,771	$	95,433	$	64,041

Income Taxes - Effective Tax Rate - Tabular Disclosure (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Effective Income Tax Rate Reconciliation, Amount
Expense computed at federal tax rate	$ 14,186	$ 11,999	$ 1,321
Stock-based compensation	153	(1,067)	(1,538)
Dividend received deduction and tax-exempt interest	(101)	(81)	(67)
Valuation allowance	191	2,199	606
Other	952	(1,759)	(356)
Income tax expense (benefit)	$ 15,381	$ 11,291	$ (34)
Effective Income Tax Rate Reconciliation, Percent
Expense computed at federal tax rate	21.00%	21.00%	21.00%
Stock-based compensation	0.23%	(1.87%)	(24.44%)
Dividend received deduction and tax-exempt interest	(0.15%)	(0.14%)	(1.06%)
Valuation allowance	0.28%	3.85%	9.63%
Other	1.41%	(3.08%)	(5.67%)
Income tax expense (benefit)	22.77%	19.76%	(0.54%)

Dividend Restrictions (Details) $ in Millions	Dec. 31, 2022 USD ($)
Dividend Restrictions
Threshold dividend or distribution without the prior approval, California and Oregon Insurance Commissioners	$ 78.2
Palomar Specialty Reinsurance Company Bermuda Ltd
Dividend Restrictions
Dividends receivable	$ 3.9

Reserve for Losses and Loss Adjustment Expenses (Tables)

12 Months Ended

Dec. 31, 2022

Claims Development

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


	Year Ended December 31,
	2022		2021		2020

	(in thousands)
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period	$	45,419	$	34,470	$	3,869
Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to:
Current year		76,289		45,042		64,179
Prior years		2,383		(3,585)		(64)
Total incurred		78,672		41,457		64,115
Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to:
Current year		21,802		12,063		31,879
Prior years		24,769		18,445		1,635
Total payments		46,571		30,508		33,514
Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period		77,520		45,419		34,470
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period		153,895		127,947		94,566
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period	$	231,415	$	173,366	$	129,036

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


	2022
	(in thousands)
Net outstanding liabilities:
Homeowners’ insurance	$	2,778
Special property		34,334
Reinsurance- Nonproportional assumed property(1)		8,568
Other		31,840
Reserve for losses and loss adjustment expense, net of reinsurance		77,520
Reinsurance recoverable on unpaid claims:
Homeowners’ insurance	$	11,339
Special property		97,231
Other		45,325
Total reinsurance recoverable on unpaid claims		153,895
Total reserve for losses and loss adjustment expenses	$	231,415

(1)

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, 2022
																	Incurred but		Cumulative
	Year Ended December 31,																Not Reported		Number of
Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022		Liabilities		Claims
2015	$	2,048	$	1,785	$	1,658	$	1,636	$	1,642	$	1,636	$	1,643	$	1,612	$	—	567
2016				6,069		5,878		5,721		5,636		5,622		5,609		5,604		—	1,357
2017						9,354		7,418		6,630		6,388		5,587		5,681		11	3,516
2018								2,193		2,008		1,930		1,929		1,529		—	1,017
2019										914		838		807		676		36	1,386
2020												19,100		15,088		13,715		106	4,451
2021														8,453		5,765		—	4,081
2022																7,237		1,000	2,149
Total															$	41,819	$	1,153	18,524

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(1)		2020(1)		2021(1)		2022
2015	$	860	$	1,379	$	1,523	$	1,615	$	1,634	$	1,636	$	1,643	$	1,612
2016				4,120		5,356		5,585		5,607		5,619		5,609		5,604
2017						7,135		7,375		6,628		6,371		5,586		5,649
2018								1,550		1,853		1,922		1,922		1,529
2019										546		685		685		704
2020												13,588		13,095		13,161
2021														4,351		5,472
2022																5,310
Total															$	39,041
Reserve for losses and loss adjustment expense, net of reinsurance															$	2,778

(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 (2)		Year 6		Year 7		Year 8 (2)
Payout percentage	85.32	%	16.39	%	0.81	%	0.88	%	(9.53)	%	0.35	%	0.17	%	(1.92)

Special Property

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, 2022
																	Incurred but		Cumulative
	Year Ended December 31,																Not Reported		Number of
Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022		Liabilities		Claims
2015	$	630	$	719	$	671	$	671	$	678	$	677	$	673	$	692	$	—	6
2016				1,381		1,249		1,251		1,454		1,453		1,453		1,521		—	26
2017						3,071		3,475		4,014		4,264		4,974		4,987		—	110
2018								5,970		6,095		6,009		6,021		6,412		—	176
2019										3,661		3,385		3,140		3,617		62	294
2020												42,334		42,160		45,850		2,263	960
2021														21,383		19,393		758	1386
2022																35,650		10,515	1,425
Total															$	118,122	$	13,598	4,383

Cumulative Paid Losses and Allocated Loss Adjustment Expenses,

Net of Reinsurance Special Property Insurance (in thousands)


Accident Year	2015(1)		2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022
2015	$	265	$	438	$	586	$	626	$	666	$	673	$	673	$	692
2016				703		1,064		1,216		1,444		1,453		1,453		1,521
2017						1,967		3,344		4,011		4,269		4,974		4,987
2018								2,859		6,036		6,009		6,021		6,414
2019										1,633		2,825		3,072		3,466
2020												18,274		36,127		42,343
2021														7,004		17,028
2022																7,337
Total																83,788
Reserve for losses and loss adjustment expense, net of reinsurance																34,334

(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		Year 7		Year 8
Payout percentage	38.78	%	35.64	%	10.79	%	7.40	%	6.66	%	0.42	%	2.24	%	2.70	%

Credit Agreements - FHLB Line of Credit (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Line of Credit Facility [Line Items]
Federal home loan bank, advances, branch of FHLB bank, interest rate	4.65%
Interest expense on the FHLB Line of Credit	$ 0.5
Federal home loan bank, advances, branch of FHLB bank, amount of advances	$ 36.4	$ 0.0
PSIC
Line of Credit Facility [Line Items]
Percentage of borrowing capacity	10.00%

Income Taxes - Tax Credit Carryforwards (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Domestic Tax Authority
Tax Credit Carryforward [Line Items]
Tax Credit Carryforward, Amount	$ 0

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2022

Stockholders' Equity

Schedule of common stock reserved for future issuance


Stock options outstanding under 2019 Equity Incentive Plan	882,892
Restricted stock units outstanding under 2019 Equity Incentive Plan	271,951
Performance stock units outstanding under 2019 Equity Incentive Plan	383,103
Shares authorized for future issuance under 2019 Equity Incentive Plan	2,594,587
Shares authorized for future issuance under 2019 Employee Stock Purchase Plan	907,850
Total	5,040,383

Schedule of stock-based compensation expense


	Year ended December 31,
	2022		2021		2020

	(in thousands)
Stock-Based Compensation Expense	$	11,624	$	5,584	$	2,167

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, 2022	933,051	$	29.41	7.59	$	36,679
Options granted	122,539		51.99
Options exercised	(148,427)		15.31
Options canceled	(24,271)		68.13
Outstanding at December 31, 2022	882,892	$	33.85	6.92	$	16,990
Vested and Exercisable at December 31, 2022	658,858	$	26.33	6.48	$	16,001

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,
	2022		2021		2020

	(in thousands)
Risk free rate of return (1)		1.69% - 4.23%		0.57% - 1.35%		0.32% - 1.52%
Expected share price volatility (2)		39.73% - 43.03%		26.06% - 39.41%		18.13% - 25.67%
Expected life in years (3)		5.89		5.89		5.63 - 6.08
Dividend yield (4)		0%		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 a blend of the Company’s historic stock price volatility and the historic 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.

Schedule of RSU transactions


		Weighted-average
	Number of	grant date
	shares	fair value
Non vested outstanding at January 1, 2022	235,696	$	79.33
Granted	100,106		51.53
Vested	(57,536)		80.60
Forfeited	(6,315)		76.30
Non vested outstanding at December 31, 2022	271,951	$	68.90

Schedule of Performance stock unit transactions


		Weighted-average
	Number of	grant date
	shares	fair value
Non vested outstanding at January 1, 2022	358,401	$	36.87
Granted	26,165		50.36
Vested	—		—
Forfeited	(1,463)		80.69
Non vested outstanding at December 31, 2022	383,103	$	37.62

Credit Agreements

12 Months Ended

Dec. 31, 2022

Credit Agreements

Credit Agreements

11. Credit Agreements

U.S. Bank Credit Agreement

In December 2021, the Company entered into a Credit Agreement (the “Credit Agreement”) with certain lenders which provides a revolving credit facility of up to $100.0 million (the “Revolving Loan”). The maturity of the facility is December 8, 2026. The Revolving Loan may be either a SOFR rate loan or a base rate loan, at the Company’s discretion. The Revolving Loan may be prepaid in full or in part at any time with no prepayment premium and may be reduced in full or in part at any time upon prior notice. Interest on the Revolving Loan accrues on each SOFR rate loan at the applicable SOFR (as defined in the Credit Agreement) plus 1.75% and on each base rate loan at the applicable Alternate Base Rate (as defined in the Credit Agreement) plus (ii) 0.75%. In addition, the Company paid a commitment fee of $0.3 million upon closing of the Credit Agreement and must pay an unused line fee of 0.25% per annum on any unborrowed amount under the Credit Agreement.

The Company’s obligations under the Credit Agreement are unsecured with a negative pledge against all assets of Palomar and its subsidiaries as described in the Credit Agreement. The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things,

financial covenants, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions.

The financial covenants in the Credit agreement require the Company not to exceed a maximum leverage ratio and maintain a minimum net worth at the end of each quarter. The Company’s insurance subsidiaries are also required to maintain a minimum Risk Based Capital Ratio at the end of each year and must always maintain a minimum AM Best Financial Strength rating. As of December 31, 2022, the Company was in compliance with all covenants.

The Credit Agreement provides for events of default customary for revolving loans of this type, including but not limited to non-payment, breaches, or defaults in the performance of covenants, insolvency, bankruptcy and the occurrence of a material adverse effect on Palomar. During the existence of an event of default, all outstanding amounts of the Revolving Loan shall bear interest at a rate per annum equal to the rate otherwise applicable thereto plus 2.00%.

As of December 31, 2022 and 2021, there were no outstanding borrowings under this Credit Agreement. For the year ended December 31, 2022, the Company incurred $0.4 million of interest related to amortization of the commitment fee and unused line fee paid on the Credit Agreement.

FHLB Line of Credit

The Company’s PSIC subsidiary is a member of the Federal Home Loan Bank of San Francisco (“FHLB”). Membership in the FHLB provides PSIC access to collateralized advances, which can be drawn for general corporate purposes and used to enhance liquidity management. All borrowings are fully secured by a pledge of specific investment securities of PSIC and the borrowing capacity is currently equal to 10% of PSIC’s statutory admitted assets. All advances have a predetermined term and the interest rate varies based on the term of the advance.

As of December 31, 2022, the Company had $36.4 million of borrowings outstanding through the FHLB at the overnight rate of 4.65%. Interest expense on the FHLB Line of Credit was $0.5 million for the year ended December 31, 2022. There were no borrowings outstanding at December 31, 2021.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Investments

12 Months Ended

Dec. 31, 2022

Investments

Investments

3. Investments

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


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2022	Cost or Cost		Gains		Losses		Value

	(in thousands)
Fixed maturities:
U.S. Governments	$	50,802	$	2	$	(2,253)	$	48,551
States, territories, and possessions		5,857		49		(552)		5,354
Political subdivisions		4,919		—		(621)		4,298
Special revenue excluding mortgage/asset-backed securities		37,260		26		(4,487)		32,799
Industrial and miscellaneous		278,164		79		(24,148)		254,095
Mortgage/asset-backed securities		184,578		251		(14,862)		169,967
Total available-for-sale investments	$	561,580	$	407	$	(46,923)	$	515,064


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

	(in thousands)
Fixed maturities:
U.S. Governments	$	16,713	$	347	$	(190)	$	16,870
States, territories, and possessions		3,789		288		(63)		4,014
Political subdivisions		6,295		107		(22)		6,380
Special revenue excluding mortgage/asset-backed securities		43,301		1,273		(76)		44,498
Industrial and miscellaneous		245,064		5,873		(1,891)		249,046
Mortgage/asset-backed securities		110,960		1,377		(463)		111,874
Total available-for-sale investments	$	426,122	$	9,265	$	(2,705)	$	432,682

Security holdings in an unrealized loss position

As of December 31, 2022, the Company held 543 fixed maturity securities in an unrealized loss position with a total estimated fair value of $484.7 million and total gross unrealized losses of $46.9 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, 2021, the Company held 231 fixed maturity securities in an unrealized loss position with a total estimated fair value of $170.1 million and total gross unrealized losses of $2.7 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, 2022 and 2021, are as follows:


	Less Than 12 Months				More Than 12 Months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2022	Value		Losses		Value		Losses		Value		Losses

	(in thousands)
Fixed maturity securities:
U.S. Governments	$	41,077	$	(1,523)	$	6,853	$	(730)	$	47,930	$	(2,253)
States, territories, and possessions		3,227		(552)		—		—		3,227		(552)
Political subdivisions		4,298		(621)		—		—		4,298		(621)
Special revenue excluding mortgage/asset-backed securities		25,091		(3,287)		5,080		(1,200)		30,171		(4,487)
Industrial and miscellaneous		192,185		(15,667)		55,605		(8,481)		247,790		(24,148)
Mortgage/asset-backed securities		118,815		(9,908)		32,448		(4,954)		151,263		(14,862)
Total	$	384,693	$	(31,558)	$	99,986	$	(15,365)	$	484,679	$	(46,923)


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

	(in thousands)
Fixed maturity securities:
U.S. Governments	$	5,968	$	(147)	$	1,457	$	(43)	$	7,425	$	(190)
States, territories, and possessions		1,444		(63)		—		—		1,444		(63)
Political subdivisions		1,815		(22)		—		—		1,815		(22)
Special revenue excluding mortgage/asset-backed securities		6,280		(76)		—		—		6,280		(76)
Industrial and miscellaneous		94,020		(1,468)		5,570		(423)		99,590		(1,891)
Mortgage/asset-backed securities		51,246		(412)		2,319		(51)		53,565		(463)
Total	$	160,773	$	(2,188)	$	9,346	$	(517)	$	170,119	$	(2,705)

The Company reviewed the above securities at each balance sheet date to consider whether it was necessary to recognize a credit loss related to any of these securities. An immaterial allowance for credit losses was recorded pertaining to one investment security as of December 31, 2022 and 2021. For the remaining securities, 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.

Contractual maturities of available-for-sale fixed maturity securities

The amortized cost and fair value of fixed maturity securities at December 31, 2022, by contractual maturity, are shown below.


	Amortized		Fair
	Cost		Value

	(in thousands)
Due within one year	$	41,686	$	41,106
Due after one year through five years		182,785		170,399
Due after five years through ten years		126,990		112,822
Due after ten years		25,541		20,770
Mortgage and asset-backed securities		184,578		169,967
	$	561,580	$	515,064

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,
	2022		2021		2020

	(in thousands)
Change in net unrealized gains (losses)
Fixed maturities	$	(53,076)	$	(10,148)	$	10,835
Net increase (decrease)	$	(53,076)	$	(10,148)	$	10,835

Net investment income summary

Net investment income is summarized as follows:


	Year Ended December 31,
	2022		2021		2020

	(in thousands)
Interest income	$	13,631	$	9,119	$	8,554
Dividend income		739		461		489
Investment management fees and expenses		(493)		(500)		(431)
Net investment income	$	13,877	$	9,080	$	8,612

Net realized and unrealized investment gains and losses

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


	Year Ended
	December 31,
	2022		2021		2020

		(in thousands)
Realized gains:
Gains on sales of fixed maturity securities	$	14	$	466	$	501
Gains on sales of equity securities		—		1,416		62
Total realized gains		14		1,882		563
Realized losses:
Losses on sales of fixed maturity securities		(2,340)		(1)		(46)
Losses on sales of equity securities		—		—		(68)
Total realized losses		(2,340)		(1)		(114)
Net realized investment gains (losses)		(2,326)		1,881		449
Net unrealized gains (losses) on equity securities		(5,203)		(604)		1,039
Net realized and unrealized gains (losses) on investments	$	(7,529)	$	1,277	$	1,488

Proceeds from the sale of fixed maturity securities were $19.7 million, $17.4 million and $39.8 million for the years ended December 31, 2022, 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 consolidated balance sheets. At December 31, 2022 and 2021, the carrying value of securities on deposit with state regulatory authorities was $8.5 million and $7.5 million, respectively.

Stockholders' Equity - Share Repurchases (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Stockholders' Equity
Amount of authorizes repurchase	$ 100.0	$ 40.0
Amount of repurchase of shares	$ 34.4	$ 15.9
Repurchase of shares (in shares)	621,415

Reinsurance

12 Months Ended

Dec. 31, 2022

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 primarily utilizes excess of loss (XOL) and quota share reinsurance to protect against catastrophe and attritional losses. The Company also writes premiums under fronting agreements, whereby the majority of premium and risk is ceded to reinsurers and the Company receives a fronting fee.

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, 2022, the Company’s catastrophe event retention is $12.5 million for all perils. As of December 31, 2022, the Company’s XOL reinsurance structure provides protection up to $2.11 billion for earthquake events, $1.01 billion for Hawaii hurricane events, and $250 million for continental U.S. hurricane events.

In a quota share agreement, the Company transfers, or cedes, a portion of its premiums to reinsurers and, in return, the reinsurer must share an agreed upon portion of losses and pay a ceding commission to the Company. In a fronting agreement, the Company writes premium and then cedes the majority of the premium and risk in exchange for a fronting fee, which is the primary source of profit in the arrangement.

The following table shows ceded written premiums under fronting and quota share arrangements by line of business for the years ended December 31, 2022, 2021 and 2020:

The following table shows ceded written premiums under fronting and quota share arrangements by line of business for the years ended December 31, 2022, 2021 and 2020:
	Year Ended December 31,
	2022		2021		2020

	(in thousands)
Fronting	$	237,285	$	11,001	$	—
Inland Marine		63,627		28,389		5,339
Specialty Homeowners		4,946		27,394		22,295
Commercial Earthquake		20,467		14,447		6,929
Commercial All Risk		6,260		3,948		19,218
Others		32,609		10,822		5,495
Total	$	365,193	$	96,001	$	59,276

The Company recognizes ceded unearned premiums related to quota share agreements as an asset on its consolidated balance sheets. As of December 31, 2022 and 2021, ceded unearned premiums totaled $204.1 million and $58.3 million, respectively. The increase was driven primarily by premium growth in lines subject to fronting agreements or quota shares.

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. During the first quarter of 2021, the Company closed a $400 million 144A catastrophe bond which became effective June 1, 2021. The catastrophe bond was completed through Torrey Pines Re Pte. Ltd. (“Torrey Pines Re”). During the second quarter of 2022, the Company also closed a $275 million 144A catastrophe bond which became effective June 1, 2022. This catastrophe bond was completed through Torrey Pines Re Ltd., a Bermuda-domiciled special purpose insurer that provides indemnity-based reinsurance covering earthquake events through June 1, 2025.

Written premiums ceded under these catastrophe bond agreements were $28.3 million, $11.7 million and $5.0 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The effect of reinsurance on premiums written and earned and on losses and LAE incurred for the years ended December 31, 2022, 2021 and 2020, is as follows:


	2022				2021				2020
	Written		Earned		Written		Earned		Written		Earned

	(in thousands)
Premiums Written and Earned:
Direct	$	816,387	$	628,973	$	467,424	$	384,463	$	324,253	$	271,887
Assumed		65,481		66,299		67,751		49,535		30,107		29,569
Ceded		(524,575)		(378,806)		(223,443)		(200,172)		(155,102)		(146,388)
Net	$	357,293	$	316,466	$	311,732	$	233,826	$	199,258	$	155,068


	2022
	Losses		LAE		Total

	(in thousands)
Losses and LAE Incurred:
Direct	$	133,517	$	38,004	$	171,521
Assumed		23,574		5,998		29,572
Ceded		(91,261)		(31,159)		(122,421)
Net	$	65,829	$	12,843	$	78,672


	2021
	Losses		LAE		Total

	(in thousands)
Losses and LAE Incurred:
Direct	$	168,292	$	13,295	$	181,587
Assumed		17,184		1,926		19,110
Ceded		(148,106)		(11,134)		(159,240)
Net	$	37,370	$	4,087	$	41,457


	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

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, 2022 and 2021, the Company had retained $10.7 million and $10.9 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, 2022, reinsurance premiums ceded to the Company’s three largest reinsurers totaled $24.7 million, $22.9 million and $18.4 million, representing 23.9% of the total balance. For the year ended December 31, 2021, reinsurance premiums ceded to the Company’s three largest reinsurers totaled $24.7 million, $11.7 million and $10.4 million, representing 20.9% of the total balance. 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.

At December 31, 2022 reinsurance recoverable on unpaid losses by the Company’s three largest reinsurers were $60.6 million, $53.9 million and $50.6 million representing 31.5% of the total balance. At December 31, 2021 reinsurance recoverable on unpaid losses by the Company’s three largest reinsurers were $21.9 million, $10.5 million and $9.2 million representing 19.3% of the total balance. All of the Company’s reinsurers are required to have an A.M. best rating of A− (excellent) or better or post collateral.

Stockholders' Equity - Stock Options - Fair Value Assumptions (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Fair value assumptions
Dividend yield (as a percent)			0.00%
Stock Options
Fair value assumptions
Risk free rate of return, minimum (as a percent)	1.69%	0.57%	0.32%
Risk free rate of return, maximum (as a percent)	4.23%	1.35%	1.52%
Expected share price volatility, minimum (as a percent)	39.73%	26.06%	18.13%
Expected share price volatility, maximum (as a percent)	43.03%	39.41%	25.67%
Expected life in years	5 years 10 months 20 days	5 years 10 months 20 days
Dividend yield (as a percent)	0.00%	0.00%
Stock Options \| Minimum
Fair value assumptions
Expected life in years			5 years 7 months 17 days
Stock Options \| Maximum
Fair value assumptions
Expected life in years			6 years 29 days

Underwriting Information - Gross Written Premiums by State (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Gross written premiums
Amount	$ 881,868	$ 535,175	$ 354,360
% of GWP	100.00%	100.00%	100.00%
California
Gross written premiums
Amount	$ 418,809	$ 244,416	$ 172,765
% of GWP	47.50%	45.60%	48.80%
Texas
Gross written premiums
Amount	$ 90,459	$ 62,893	$ 67,974
% of GWP	10.30%	11.80%	19.20%
Washington
Gross written premiums
Amount	$ 41,827	$ 23,608	$ 14,328
% of GWP	4.70%	4.40%	4.00%
Hawaii
Gross written premiums
Amount	$ 40,157	$ 34,993	$ 16,398
% of GWP	4.50%	6.50%	4.60%
Florida
Gross written premiums
Amount	$ 38,715	$ 27,386	$ 5,795
% of GWP	4.40%	5.10%	1.70%
Oregon
Gross written premiums
Amount	$ 24,108	$ 13,677	$ 10,038
% of GWP	2.70%	2.60%	2.80%
Illinois
Gross written premiums
Amount	$ 17,368	$ 12,133	$ 6,133
% of GWP	2.00%	2.30%	1.70%
Other
Gross written premiums
Amount	$ 197,649	$ 100,798	$ 49,786
% of GWP	22.40%	18.80%	14.10%
North Carolina
Gross written premiums
Amount	$ 12,776	$ 15,271	$ 11,143
% of GWP	1.50%	2.90%	3.10%

Fair Value Measurements - Assets Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Fair Value Measurements
Fixed income securities classified as Level 3	$ 0	$ 1,500

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2022

Intangible Assets

Schedule of intangible assets, indefinite-lived


	December 31,
	2022		2021

	(in thousands)
Indefinite-lived intangibles:
State insurance licenses	$	744	$	744
Finite-lived intangibles:
Customer relationships		10,023		10,008
Accumulated amortization on finite-lived intangibles		(2,506)		(1,251)
Total intangible assets	$	8,261	$	9,501

Schedule of intangible assets, finite-lived


	December 31,
	2022		2021

	(in thousands)
Indefinite-lived intangibles:
State insurance licenses	$	744	$	744
Finite-lived intangibles:
Customer relationships		10,023		10,008
Accumulated amortization on finite-lived intangibles		(2,506)		(1,251)
Total intangible assets	$	8,261	$	9,501

Schedule II - Statements of Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Net investment income	$ 13,877	$ 9,080	$ 8,612
Net realized and unrealized (losses) gains on investments	(7,529)	1,277	1,488
Total revenues	327,086	247,791	168,463
Other operating expenses	259,535	190,653	162,240
Income before income taxes	67,551	57,138	6,223
Income tax expense (benefit)	15,381	11,291	(34)
Net income	52,170	45,847	6,257
Other comprehensive income:
Net unrealized (losses) gains on securities available for sale	(41,827)	(7,934)	8,560
Total comprehensive income	10,343	37,913	14,817
Parent Company
Net investment income	1,048	555	939
Net realized and unrealized (losses) gains on investments	(320)	217	63
Total revenues	728	772	1,002
Other operating expenses	33,292	19,480	8,696
Income before income taxes	(32,564)	(18,708)	(7,694)
Income tax expense (benefit)	(8,464)	11,039	(34)
Loss before equity in net income of subsidiaries	(24,100)	(29,747)	(7,660)
Equity in net income of subsidiaries	76,270	75,594	13,917
Net income	52,170	45,847	6,257
Other comprehensive income:
Net unrealized (losses) gains on securities available for sale	(3,997)	580	1,075
Equity in other comprehensive income (loss) of subsidiaries, net of taxes	(37,830)	(8,514)	7,485
Total comprehensive income	$ 10,343	$ 37,913	$ 14,817

Retirement and Post-Employment Retirement Plans (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Retirement and Post-Employment Retirement Plans
Employer matching participants gross wages (as a percent)	3.00%
Contributions to plan	$ 0.7	$ 0.7	$ 0.3

Schedule II - Balance Sheets - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Fixed maturity securities available for sale, amortized cost	$ 561,580	$ 426,122
Equity securities, cost	$ 42,352	$ 31,834
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)	25,027,467	25,428,929
Common stock, shares outstanding (in shares)	25,027,467	25,428,929
Parent Company
Fixed maturity securities available for sale, amortized cost	$ 51,993	$ 50,916
Equity securities, cost	$ 1,725	$ 1,725
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)	25,027,467	25,428,929
Common stock, shares outstanding (in shares)	25,027,467	25,428,929

Reinsurance - General Information (Details) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
Reinsurance - General Information (Details) $ in Thousands	Jun. 30, 2017 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2022 USD ($) Counterparty	Dec. 31, 2021 USD ($) Counterparty	Dec. 31, 2020 USD ($) Counterparty	Jun. 30, 2022 USD ($)
Reinsurance Retention Policy
Retention amount			$ 10,700	$ 10,900
Number of Company's largest reinsurers \| Counterparty			3	3	3
Reinsurance premiums ceded			$ 378,806	$ 200,172	$ 146,388
Percentage of reinsurance premiums ceded on total premium			23.90%	20.90%	22.40%
Percentage of reinsurance recoverable on paid and unpaid losses on total balance			31.50%	19.30%
Ceded unearned premiums			$ 204,084	$ 58,315
Ceded written premiums			524,575	223,443	$ 155,102
Catastrophe bond, face value						$ 275,000
Catastrophe
Reinsurance Retention Policy
Retention amount			12,500
Ceded written premiums			28,300	11,700	5,000
Catastrophe bond, issuance costs		$ 400,000
Earthquake
Reinsurance Retention Policy
XOL reinsurance, protection			2,110,000
Hawaii Hurricane
Reinsurance Retention Policy
XOL reinsurance, protection			1,010,000
U.S. Hurricane
Reinsurance Retention Policy
XOL reinsurance, protection			250,000
Minimum \| Hurricane and earthquake
Reinsurance Retention Policy
Retention amount			5,000
Maximum \| Hurricane and earthquake
Reinsurance Retention Policy
Retention amount			15,000
Torrey Pines Re Ltd. ("TPRe") \| Catastrophe
Reinsurance Retention Policy
Notes issued for reinsurance coverage	$ 166,000
First largest insurer
Reinsurance Retention Policy
Reinsurance premiums ceded			24,700	24,700	9,700
Reinsurance recoverables on paid and unpaid losses			60,600	21,900
Second largest insurer
Reinsurance Retention Policy
Reinsurance premiums ceded			22,900	11,700	8,600
Reinsurance recoverables on paid and unpaid losses			53,900	10,500
Third largest insurer
Reinsurance Retention Policy
Reinsurance premiums ceded			18,400	10,400	$ 6,000
Reinsurance recoverables on paid and unpaid losses			$ 50,600	$ 9,200

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets:
Losses and LAE reserve discount	$ 680	$ 279
State tax net operating losses	3,070	2,879
Deferred Intercompany	656
Unearned premiums	11,258	9,569
Capitalized organizational costs	184	214
Unrealized losses on investments	9,891
Deferred compensation	1,585	997
Other	1,544	1,285
Total deferred tax assets	28,868	15,223
Deferred tax liabilities:
Deferred acquisition costs	(11,922)	(11,754)
Unrealized gains on investments		(1,612)
Internally developed software	(1,520)	(1,969)
Other	(1,734)	(919)
Total deferred tax liabilities	(15,176)	(16,254)
Net deferred tax liability before valuation allowance	13,692	(1,031)
Valuation allowance	(3,070)	(2,879)
Total net deferred tax assets (liabilities)	$ 10,622
Total net deferred tax assets (liabilities)		$ (3,910)

Credit Agreements - Floating Rate Notes (Details) - Revolving credit facility - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Long-term debt
Maximum credit facility borrowing amount	$ 100.0
Interest rate spread (as a percent)	2.00%
Commitment fees	$ 0.3
Percentage of unused line fee payable on unborrowed amount	0.25%
Line of credit facility outstanding	$ 0.0	$ 0.0
Interest expense	$ 0.4
Secured Overnight Financing Rate
Long-term debt
Interest rate spread (as a percent)	1.75%
Alternate Base Rate
Long-term debt
Interest rate spread (as a percent)	0.75%

Reinsurance - Effect of Reinsurance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Premiums Written:
Direct	$ 816,387	$ 467,424	$ 324,253
Assumed	65,481	67,751	30,107
Ceded	(524,575)	(223,443)	(155,102)
Net written premiums	357,293	311,732	199,258
Premiums Earned:
Direct	628,973	384,463	271,887
Assumed	66,299	49,535	29,569
Ceded	(378,806)	(200,172)	(146,388)
Net earned premiums	316,466	233,826	155,068
Losses Incurred:
Direct	133,517	168,292	145,774
Assumed	23,574	17,184	3,485
Ceded	(91,261)	(148,106)	(91,969)
Net losses incurred	65,829	37,370	57,290
LAE Incurred:
Direct	38,004	13,295	18,777
Assumed	5,998	1,926	159
Ceded	(31,159)	(11,134)	(12,111)
Total LAE incurred	12,843	4,087	6,825
Total losses and LAE incurred:
Direct	171,521	181,587	164,551
Assumed	29,572	19,110	3,644
Ceded	(122,421)	(159,240)	(104,080)
Net total	$ 78,672	$ 41,457	$ 64,115

Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases

Schedule of leases


Year ended December 31, 2022	(in thousands)
Operating cash outflows from operating leases	$	922


December 31, 2022	($ in thousands)
Operating lease ROU assets	$	1,688
Operating lease liabilities	$	2,066
Weighted-average remaining lease term on operating leases		2.7	years
Weighted-average discount rate on operating leases		1.4	%

Schedule of future minimum lease payments


Years ending December 31,	(in thousands)
2023		966
2024		640
2025		168
2026		173
2027		240
2028		—
Total future minimum lease payments	$	2,187
Less: imputed interest		(121)
Total operating lease liability	$	2,066

Leases - Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Future minimum lease payments
2023	$ 966
2024	640
2025	168
2026	173
2027	240
Total future minimum lease payments	$ 2,187

Leases - Gross Difference (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Leases
Total future minimum lease payments	$ 2,187
Less: imputed interest	(121)
Total operating lease liability	$ 2,066

Significant Accounting Policies (Policies)	12 Months Ended
Significant Accounting Policies (Policies)	Dec. 31, 2022
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”). 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 Fronting Products, Inland Marine, Hawaii residential hurricane, Specialty Homeowners, Casualty, and Flood products. PSIC is licensed to underwrite insurance on an admitted basis in 37 states in the United States, as of December 31, 2022, 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	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.
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. The Company’s allowance for credit losses related to its available-for-sale securities was immaterial as of December 31, 2022 and December 31, 2021.
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. The Company recorded an allowance for uncollectable premiums of $0.1 million and $0.3 million as of December 31, 2022 and December 31, 2021, respectively, and believes that all other amounts are collectable.
Earned Premiums	Earned Premiums 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, 2022 or 2021.
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 or fronting fees and are shown as acquisition expenses in the accompanying consolidated statements of income and comprehensive income.
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 2028.
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 which the Company is amortizing over a period of 8 years. 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. No impairments of intangible assets were recognized for the years ended December 31, 2022, 2021 or 2020.
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, 2022, 2021 or 2020.
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. The Company also writes premiums under fronting agreements where it cedes the majority of premium and risk to reinsurers in exchange for a fronting fee. Reinsurance premiums, commissions, and 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 and fronting fees in connection with quota share and fronting reinsurance contracts. The ceding commissions and fronting fees 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, 2022 or December 31, 2021.
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. The fair value of performance stock units containing employee service or company financial performance based conditions is determined using the closing price of the Company's common stock on the grant date. The fair value of performance stock units containing conditions based on performance of the Company’s stock is determined using a Monte Carlo simulation. 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, 2022 and 2021, 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, 2022, 2021, or 2020.
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.
Recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted	Recently adopted accounting pronouncements The Company has not adopted any new accounting guidance during the year ended December 31, 2022. Recently issued accounting pronouncements not yet adopted To date, there have been no recent accounting pronouncements not yet effective that have significance, or potential significance, to the Company’s consolidated financial statements.

Reserve for Losses and Loss Adjustment Expenses - Incurred and Paid Accident Year Claims Development (Details) $ in Thousands	Dec. 31, 2022 USD ($) claim	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	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	$ 41,819
Incurred but Not Reported Liabilities	$ 1,153
Cumulative Number of Claims	18,524
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 39,041
Reserve for losses and loss adjustment expense, net of reinsurance	2,778
Homeowners' Insurance \| 2015
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 1,612	$ 1,643	$ 1,636	$ 1,642	$ 1,636	$ 1,658	$ 1,785	$ 2,048
Cumulative Number of Claims	567
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 1,612	1,643	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	$ 5,604	5,609	5,622	5,636	5,721	5,878	6,069
Cumulative Number of Claims	1,357
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 5,604	5,609	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	5,681	5,587	6,388	6,630	7,418	9,354
Incurred but Not Reported Liabilities	$ 11
Cumulative Number of Claims	3,516
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 5,649	5,586	6,371	6,628	7,375	7,135
Homeowners' Insurance \| 2018
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 1,529	1,929	1,930	2,008	2,193
Cumulative Number of Claims	1,017
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 1,529	1,922	1,922	1,853	1,550
Homeowners' Insurance \| 2019
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	676	807	838	914
Incurred but Not Reported Liabilities	$ 36
Cumulative Number of Claims	1,386
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 704	685	685	546
Homeowners' Insurance \| 2020
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	13,715	15,088	19,100
Incurred but Not Reported Liabilities	$ 106
Cumulative Number of Claims	4,451
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 13,161	13,095	13,588
Homeowners' Insurance \| 2021
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 5,765	8,453
Cumulative Number of Claims	4,081
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 5,472	4,351
Homeowners' Insurance \| 2022
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	7,237
Incurred but Not Reported Liabilities	$ 1,000
Cumulative Number of Claims	2,149
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 5,310
Special Property
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	118,122
Incurred but Not Reported Liabilities	$ 13,598
Cumulative Number of Claims	4,383
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 83,788
Reserve for losses and loss adjustment expense, net of reinsurance	34,334
Special Property \| 2015
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 692	673	677	678	671	671	719	630
Cumulative Number of Claims \| claim	6
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 692	673	673	666	626	586	438	$ 265
Special Property \| 2016
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 1,521	1,453	1,453	1,454	1,251	1,249	1,381
Cumulative Number of Claims \| claim	26
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 1,521	1,453	1,453	1,444	1,216	1,064	$ 703
Special Property \| 2017
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 4,987	4,974	4,264	4,014	3,475	3,071
Cumulative Number of Claims \| claim	110
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 4,987	4,974	4,269	4,011	3,344	$ 1,967
Special Property \| 2018
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 6,412	6,021	6,009	6,095	5,970
Cumulative Number of Claims \| claim	176
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 6,414	6,021	6,009	6,036	$ 2,859
Special Property \| 2019
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	3,617	3,140	3,385	3,661
Incurred but Not Reported Liabilities	$ 62
Cumulative Number of Claims \| claim	294
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 3,466	3,072	2,825	$ 1,633
Special Property \| 2020
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	45,850	42,160	42,334
Incurred but Not Reported Liabilities	$ 2,263
Cumulative Number of Claims \| claim	960
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 42,343	36,127	$ 18,274
Special Property \| 2021
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	19,393	21,383
Incurred but Not Reported Liabilities	$ 758
Cumulative Number of Claims \| claim	1,386
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 17,028	$ 7,004
Special Property \| 2022
Claims Development
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	35,650
Incurred but Not Reported Liabilities	$ 10,515
Cumulative Number of Claims	1,425
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance	$ 7,337

Investments - Contractual Maturities of Available for Sale Fixed Maturity Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Amortized Cost
Due within one year	$ 41,686
Due after one year through five years	182,785
Due after five years through ten years	126,990
Due after ten years	25,541
Mortgage and asset-backed securities	184,578
Amortized Cost	561,580	$ 426,122
Fair Value
Due within one year	41,106
Due after one year through five years	170,399
Due after five years through ten years	112,822
Due after ten years	20,770
Mortgage and asset-backed securities	169,967
Fair Value	$ 515,064	$ 432,682

Policy Acquisition Costs

12 Months Ended

Dec. 31, 2022

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:


	Year ended December 31,
	2022		2021		2020

	(in thousands)
Deferred Policy Acquisition Costs:
Balance, beginning of year	$	55,953	$	35,481	$	25,201
Additions to deferred balance:
Direct commissions		209,061		133,242		82,786
Ceding commissions and fronting fees		(109,302)		(32,249)		(19,371)
Premium taxes		10,166		8,209		7,024
Total net additions		109,925		109,202		70,439
Amortization of net policy acquisition costs		(109,138)		(88,730)		(60,159)
Balance, end of year	$	56,740	$	55,953	$	35,481
Acquisition expenses:
Amortization of net policy acquisition costs	$	109,138	$	88,730	$	60,159
Period costs		1,633		6,703		3,882
Total Acquisition expenses	$	110,771	$	95,433	$	64,041

Income Taxes - Tax Returns Subject to Examination (Details)	12 Months Ended
	Dec. 31, 2022
Earliest Tax Year
Income Taxes
Open Tax Year	2019
Latest Tax Year
Income Taxes
Open Tax Year	2021

Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash and cash equivalents and restricted cash and cash equivalents
Cash and cash equivalents	$ 68,108	$ 50,284
Restricted cash	56	87
Cash and cash equivalents and restricted cash	$ 68,164	$ 50,371	$ 33,786	$ 33,349

Reinsurance (Tables)

12 Months Ended

Dec. 31, 2022

Reinsurance

Schedule of ceded written premiums under quota share arrangements by line of business for certain quota shares

The following table shows ceded written premiums under fronting and quota share arrangements by line of business for the years ended December 31, 2022, 2021 and 2020:
	Year Ended December 31,
	2022		2021		2020

	(in thousands)
Fronting	$	237,285	$	11,001	$	—
Inland Marine		63,627		28,389		5,339
Specialty Homeowners		4,946		27,394		22,295
Commercial Earthquake		20,467		14,447		6,929
Commercial All Risk		6,260		3,948		19,218
Others		32,609		10,822		5,495
Total	$	365,193	$	96,001	$	59,276

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


	2022				2021				2020
	Written		Earned		Written		Earned		Written		Earned

	(in thousands)
Premiums Written and Earned:
Direct	$	816,387	$	628,973	$	467,424	$	384,463	$	324,253	$	271,887
Assumed		65,481		66,299		67,751		49,535		30,107		29,569
Ceded		(524,575)		(378,806)		(223,443)		(200,172)		(155,102)		(146,388)
Net	$	357,293	$	316,466	$	311,732	$	233,826	$	199,258	$	155,068


	2022
	Losses		LAE		Total

	(in thousands)
Losses and LAE Incurred:
Direct	$	133,517	$	38,004	$	171,521
Assumed		23,574		5,998		29,572
Ceded		(91,261)		(31,159)		(122,421)
Net	$	65,829	$	12,843	$	78,672


	2021
	Losses		LAE		Total

	(in thousands)
Losses and LAE Incurred:
Direct	$	168,292	$	13,295	$	181,587
Assumed		17,184		1,926		19,110
Ceded		(148,106)		(11,134)		(159,240)
Net	$	37,370	$	4,087	$	41,457


	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

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Fixed maturity securities available for sale, amortized cost
Fixed maturity securities available for sale, amortized cost	$ 561,580	$ 426,122
Equity securities, cost
Equity securities, cost	$ 42,352	$ 31,834
Preferred stock
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
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)	25,027,467	25,428,929
Common stock, shares outstanding (in shares)	25,027,467	25,428,929

Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Changes in accumulated other comprehensive income
Beginning balance	$ 394,169	$ 363,713	$ 218,556
Other comprehensive income (loss)	(41,827)	(7,934)	8,560
Ending balance	384,754	394,169	363,713
Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income
Beginning balance	5,312	13,246	4,686
Other comprehensive income (loss) before reclassification	(55,270)	(9,579)	11,292
Federal income tax (expense) benefit	11,607	2,012	(2,371)
Other comprehensive income (loss) before reclassification, net of tax	(43,663)	(7,567)	8,921
Amounts reclassified from AOCI	2,325	(464)	(456)
Federal income tax expense (benefit)	(489)	97	95
Amounts reclassified from AOCI, net of tax	1,836	(367)	(361)
Other comprehensive income (loss)	(41,827)	(7,934)	8,560
Ending balance	$ (36,515)	$ 5,312	$ 13,246

Income Taxes - Uncertain Tax Positions (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Income Taxes
Unrecognized Tax Benefits	$ 0	$ 0

Retirement and Post-Employment Retirement Plans

12 Months Ended

Dec. 31, 2022

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, 2022, 2021 and 2020 the Company’s contributions to the plan were $0.7 million, $0.7 million and $0.3 million, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 55
-Paragraph 17
-URI https://asc.fasb.org/extlink&oid=123450688&loc=d3e4179-114921

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section S99
-Paragraph 2
-URI https://asc.fasb.org/extlink&oid=21916913&loc=d3e273930-122802

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (o)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (p)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 70
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-URI https://asc.fasb.org/topic&trid=2235017

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 60
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=6414203&loc=d3e39689-114964

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (q)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (l)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-URI https://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

+ Details

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Taxes

Schedule of federal income tax expense (benefit)



	December 31,
	2022		2021		2020

	(in thousands)
Current	$	18,842	$	10,650	$	(1,128)
Deferred		(3,461)		641		1,094
Income tax expense (benefit)	$	15,381	$	11,291	$	(34)

Schedule of deferred tax assets and liabilities


	December 31,
	2022		2021

	(in thousands)
Deferred tax assets:
Losses and LAE reserve discount	$	680	$	279
State tax net operating losses		3,070		2,879
Deferred Intercompany		656		—
Unearned premiums		11,258		9,569
Capitalized organizational costs		184		214
Unrealized losses on investments		9,891		—
Deferred compensation		1,585		997
Other		1,544		1,285
Total deferred tax assets	$	28,868	$	15,223
Deferred tax liabilities:
Deferred acquisition costs	$	(11,922)	$	(11,754)
Unrealized gains on investments		—		(1,612)
Internally developed software		(1,520)		(1,969)
Other		(1,734)		(919)
Total deferred tax liabilities		(15,176)		(16,254)
Net deferred tax asset (liability) before valuation allowance		13,692		(1,031)
Valuation allowance		(3,070)		(2,879)
Total net deferred tax assets (liabilities)	$	10,622	$	(3,910)

Schedule of effective tax rate


	Years Ended December 31,
	2022				2021				2020

	($ in thousands)
Expense computed at federal tax rate	$	14,186	21.00	%	$	11,999	21.00	%	$	1,321	21.00	%
Stock-based compensation		153	0.23	%		(1,067)	(1.87)	%		(1,538)	(24.44)	%
Dividend received deduction and tax‑exempt interest		(101)	(0.15)	%		(81)	(0.14)	%		(67)	(1.06)	%
Valuation allowance		191	0.28	%		2,199	3.85	%		606	9.63	%
Other		952	1.41	%		(1,759)	(3.08)	%		(356)	(5.67)	%
Income tax expense (benefit)	$	15,381	22.77	%	$	11,291	19.76	%	$	(34)	(0.54)	%

Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

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.

The Company’s allowance for credit losses related to its available-for-sale securities was immaterial as of December 31, 2022 and December 31, 2021.

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.

The Company recorded an allowance for uncollectable premiums of $0.1 million and $0.3 million as of December 31, 2022 and December 31, 2021, respectively, and believes that all other amounts are collectable.

Earned Premiums

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, 2022 or 2021.

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 or fronting fees and are shown as acquisition expenses in the accompanying consolidated statements of income and comprehensive 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 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 2028.

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 which the Company is amortizing over a period of 8 years. 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. No impairments of intangible assets were recognized for the years ended December 31, 2022, 2021 or 2020.

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, 2022, 2021 or 2020.

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. The Company also writes premiums under fronting agreements where it cedes the majority of premium and risk to reinsurers in exchange for a fronting fee. Reinsurance premiums, commissions, and 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 and fronting fees in connection with quota share and fronting reinsurance contracts. The ceding commissions and fronting fees 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, 2022 or December 31, 2021.

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. The fair value of performance stock units containing employee service or company financial performance based conditions is determined using the closing price of the Company's common stock on the grant date. The fair value of performance stock units containing conditions based on performance of the Company’s stock is determined using a Monte Carlo simulation. 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, 2022 and 2021, 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, 2022, 2021, or 2020.

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

The Company has not adopted any new accounting guidance during the year ended December 31, 2022.

Recently issued accounting pronouncements not yet adopted

To date, there have been no recent accounting pronouncements not yet effective that have significance, or potential significance, to the Company’s consolidated financial statements.

Investments - Available for Sale Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Available for sale investments
Amortized Cost	$ 561,580	$ 426,122
Gross Unrealized Gains	407	9,265
Gross Unrealized Losses	(46,923)	(2,705)
Fair Value	515,064	432,682
U.S. Governments
Available for sale investments
Amortized Cost	50,802	16,713
Gross Unrealized Gains	2	347
Gross Unrealized Losses	(2,253)	(190)
Fair Value	48,551	16,870
States, territories, and possessions
Available for sale investments
Amortized Cost	5,857	3,789
Gross Unrealized Gains	49	288
Gross Unrealized Losses	(552)	(63)
Fair Value	5,354	4,014
Political subdivisions
Available for sale investments
Amortized Cost	4,919	6,295
Gross Unrealized Gains		107
Gross Unrealized Losses	(621)	(22)
Fair Value	4,298	6,380
Special revenue excluding mortgage/asset-backed securities
Available for sale investments
Amortized Cost	37,260	43,301
Gross Unrealized Gains	26	1,273
Gross Unrealized Losses	(4,487)	(76)
Fair Value	32,799	44,498
Industrial and miscellaneous
Available for sale investments
Amortized Cost	278,164	245,064
Gross Unrealized Gains	79	5,873
Gross Unrealized Losses	(24,148)	(1,891)
Fair Value	254,095	249,046
Mortgage/asset-backed securities
Available for sale investments
Amortized Cost	184,578	110,960
Gross Unrealized Gains	251	1,377
Gross Unrealized Losses	(14,862)	(463)
Fair Value	$ 169,967	$ 111,874

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2022	Feb. 27, 2023	Jun. 30, 2022
Cover [Abstract]
Entity Central Index Key	0001761312
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
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			$ 1,564,110,299
Entity Common Stock, Shares Outstanding		24,983,441
Auditor Name	Ernst & Young LLP
Auditor Firm ID	42
Auditor Location	San Francisco, California
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false

Investments - Net Investment Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Net investment income
Interest income	$ 13,631	$ 9,119	$ 8,554
Dividend income	739	461	489
Investment management fees and expenses	(493)	(500)	(431)
Net investment income	$ 13,877	$ 9,080	$ 8,612

Underwriting Information - Reportable Segments (Details)	12 Months Ended
	Dec. 31, 2022 segment
Reportable segment
Number of reportable segments	1

Consolidated Statements of Stockholder'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)	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, 2019			$ 2			$ 180,012	$ 4,686	$ (156)	$ 33,856			$ (156)	$ 218,556
Beginning balance (in shares) at Dec. 31, 2019			23,468,750
Changes in Stockholders' Equity
Other comprehensive income (loss), net of tax							8,560						8,560
Stock-based compensation						2,167							2,167
Issuance of common stock in stock offerings, net of offering costs		$ 1		$ 35,464	$ 90,082					$ 35,464	$ 90,083
Issuance of common stock in stock offerings, net of offering costs (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
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
Changes in Stockholders' Equity
Other comprehensive income (loss), net of tax							(7,934)						(7,934)
Stock-based compensation						5,584							5,584
Issuance of common stock via employee stock purchase plan						719							$ 719
Issuance of common stock via employee stock purchase plan (in shares)			9,793										9,793
Issuance of common stock via equity incentive plan						2,092							$ 2,092
Issuance of common stock via equity incentive plan (in shares)			132,436
Repurchases of common stock									(15,852)				(15,852)
Repurchases of common stock (in shares)			(239,096)
Net income									45,847				45,847
Ending balance at Dec. 31, 2021			$ 3			318,902	5,312		69,952				$ 394,169
Ending balance (in shares) at Dec. 31, 2021			25,428,929										25,428,929
Changes in Stockholders' Equity
Other comprehensive income (loss), net of tax							(41,827)						$ (41,827)
Stock-based compensation						11,624							11,624
Issuance of common stock via employee stock purchase plan						760							$ 760
Issuance of common stock via employee stock purchase plan (in shares)			13,990										13,990
Issuance of common stock via equity incentive plan						2,272							$ 2,272
Issuance of common stock via equity incentive plan (in shares)			205,963
Repurchases of common stock									(34,414)				(34,414)
Repurchases of common stock (in shares)			(621,415)
Net income									52,170				52,170
Ending balance at Dec. 31, 2022			$ 3			$ 333,558	$ (36,515)		$ 87,708				$ 384,754
Ending balance (in shares) at Dec. 31, 2022			25,027,467										25,027,467

Summary of Operations and Basis of Presentation - Summary of Operations (Details)	12 Months Ended
	Dec. 31, 2022 state
Summary of Operations and Basis of Presentation
Number states Company underwrites catastrophe insurance on an admitted basis	37

Earnings Per Share

12 Months Ended

Dec. 31, 2022

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,
	2022		2021		2020

	(in thousands, except shares and per share data)
Net income	$	52,170	$	45,847	$	6,257
Weighted average common shares outstanding:
Basic		25,243,397		25,459,514		24,872,251
Common Share equivalents		552,611		652,390		726,396
Diluted		25,796,008		26,111,904		25,598,647

Earnings per share:
Basic	$	2.07	$	1.80	$	0.25
Diluted	$	2.02	$	1.76	$	0.24

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

Investments - Change in Unrealized Gains (Losses) of Investments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Debt and Equity Securities, Unrealized Gain (Loss) [Abstract]
Change in net unrealized gains (losses) on fixed maturities	$ (53,076)	$ (10,148)	$ 10,835
Change in net unrealized gains (losses)	$ (53,076)	$ (10,148)	$ 10,835

Leases - Additional Information (Details) $ in Thousands	12 Months Ended
Leases - Additional Information (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Leases
Operating cash outflows from operating leases	$ 922

Stockholders' Equity - 2019 Employee Stock Purchase Plan (Details) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Apr. 16, 2019
Stock-Based Compensation
Issuance of common stock via employee stock purchase plan (in shares)	13,990	9,793
Employee Stock
Stock-Based Compensation
Shares authorized (in shares)			240,000
Annual increase (in shares)	240,000

Fair Value Measurements - Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Assets:
Fair Value	$ 515,064	$ 432,682
Equity securities, at fair value: (cost: $1,724 in 2021, $1,661 in 2020)	38,576	33,261
U.S. Governments
Assets:
Fair Value	48,551	16,870
States, territories, and possessions
Assets:
Fair Value	5,354	4,014
Political subdivisions
Assets:
Fair Value	4,298	6,380
Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value	32,799	44,498
Industrial and miscellaneous
Assets:
Fair Value	254,095	249,046
Mortgage/asset-backed securities
Assets:
Fair Value	169,967	111,874
Fair Value, Measurements, Recurring
Assets:
Equity securities, at fair value: (cost: $1,724 in 2021, $1,661 in 2020)	38,576	33,261
Cash, cash equivalents, and restricted cash	68,164	50,371
Total assets	621,804	516,314
Fair Value, Measurements, Recurring \| U.S. Governments
Assets:
Fair Value	48,551	16,870
Fair Value, Measurements, Recurring \| States, territories, and possessions
Assets:
Fair Value	5,354	4,014
Fair Value, Measurements, Recurring \| Political subdivisions
Assets:
Fair Value	4,298	6,380
Fair Value, Measurements, Recurring \| Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value	32,799	44,498
Fair Value, Measurements, Recurring \| Industrial and miscellaneous
Assets:
Fair Value	254,095	249,046
Fair Value, Measurements, Recurring \| Mortgage/asset-backed securities
Assets:
Fair Value	169,967	111,874
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 1
Assets:
Equity securities, at fair value: (cost: $1,724 in 2021, $1,661 in 2020)	38,576	33,261
Cash, cash equivalents, and restricted cash	68,164	50,371
Total assets	106,740	83,632
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2
Assets:
Total assets	515,064	431,182
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| U.S. Governments
Assets:
Fair Value	48,551	16,870
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| States, territories, and possessions
Assets:
Fair Value	5,354	4,014
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| Political subdivisions
Assets:
Fair Value	4,298	6,380
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value	32,799	44,498
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| Industrial and miscellaneous
Assets:
Fair Value	254,095	249,046
Fair Value, Measurements, Recurring \| Fair Value, Inputs, Level 2 \| Mortgage/asset-backed securities
Assets:
Fair Value	$ 169,967	110,374
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

Stockholders' Equity - Stock Options - Vesting (Details)	12 Months Ended
	Dec. 31, 2022
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
Stock-Based Compensation
Vesting period	5 years
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%

Reserve for Losses and Loss Adjustment Expenses - Reconciliation of Liability for Claims and Claim Adjustment Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Short-duration Insurance Contracts, Historical Claims Duration
Reserve for losses and loss adjustment expense net of reinsurance	$ 77,520	$ 45,419	$ 34,470	$ 3,869
Reinsurance recoverable on unpaid losses and loss adjustment expenses	153,895	127,947	94,566
Reserve for losses and loss adjustment expenses	231,415	$ 173,366	$ 129,036
Homeowners' Insurance
Short-duration Insurance Contracts, Historical Claims Duration
Reserve for losses and loss adjustment expense net of reinsurance	2,778
Reinsurance recoverable on unpaid losses and loss adjustment expenses	11,339
Special Property
Short-duration Insurance Contracts, Historical Claims Duration
Reserve for losses and loss adjustment expense net of reinsurance	34,334
Reinsurance recoverable on unpaid losses and loss adjustment expenses	97,231
Reinsurance- Nonproportional assumed property
Short-duration Insurance Contracts, Historical Claims Duration
Reserve for losses and loss adjustment expense net of reinsurance	8,568
Other
Short-duration Insurance Contracts, Historical Claims Duration
Reserve for losses and loss adjustment expense net of reinsurance	31,840
Reinsurance recoverable on unpaid losses and loss adjustment expenses	$ 45,325

Intangible Assets - Tabular Disclosure (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Indefinite-lived intangibles:
State insurance licenses	$ 744	$ 744
Finite-lived intangibles:
Customer relationships	10,023	10,008
Accumulated amortization on finite-lived intangibles	(2,506)	(1,251)
Total intangible assets	$ 8,261	$ 9,501

Investments - Securities on Deposit (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Investments
Fair Value	$ 515,064	$ 432,682
Securities on deposit with state regulatory authorities
Investments
Fair Value	$ 8,500	$ 7,500

Statutory financial information (Tables)

12 Months Ended

Dec. 31, 2022

Statutory financial information

Summary of statutory net income and statutory capital surplus


	December 31,
	2022		2021		2020

	(in thousands)
Statutory net income (loss)	$	76,222	$	51,410	$	1,753
Statutory capital and surplus		314,508		271,977		213,721

- 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

Capitalized Assets (Tables)

12 Months Ended

Dec. 31, 2022

Capitalized Assets

Schedule of capitalized assets


			Accumulated		Net
December 31, 2022	Cost		Amortization		Book Value

	(in thousands)
Capitalized Software	$	18,622	$	(6,303)	$	12,319


			Accumulated		Net
December 31, 2021	Cost		Amortization		Book Value

	(in thousands)
Capitalized Software	$	13,205	$	(3,831)	$	9,374


			Accumulated		Net
December 31, 2022	Cost		Depreciation		Book Value

	(in thousands)
Leasehold improvements	$	879	$	(694)	$	185
Computer hardware		402		(205)		197
Office equipment and furniture		724		(503)		221
Total	$	2,005	$	(1,402)	$	603


			Accumulated		Net
December 31, 2021	Cost		Depreciation		Book Value

	(in thousands)
Leasehold improvements	$	879	$	(576)	$	303
Computer hardware		294		(148)		146
Office equipment and furniture		519		(441)		78
Total	$	1,692	$	(1,165)	$	527

Capitalized Assets

12 Months Ended

Dec. 31, 2022

Capitalized Assets

Capitalized Assets

7. Capitalized Assets

Capitalized software is included as a component of prepaid expenses and other assets in the Company’s consolidated balance sheet. The balances are as follows:


			Accumulated		Net
December 31, 2022	Cost		Amortization		Book Value

	(in thousands)
Capitalized Software	$	18,622	$	(6,303)	$	12,319


			Accumulated		Net
December 31, 2021	Cost		Amortization		Book Value

	(in thousands)
Capitalized Software	$	13,205	$	(3,831)	$	9,374

Amortization expense relating to capitalized software for the years ended December 31, 2022, 2021 and 2020 was $2.6 million, $2.1 million, and $1.1 million, respectively.

Property and Equipment consists of the following:


			Accumulated		Net
December 31, 2022	Cost		Depreciation		Book Value

	(in thousands)
Leasehold improvements	$	879	$	(694)	$	185
Computer hardware		402		(205)		197
Office equipment and furniture		724		(503)		221
Total	$	2,005	$	(1,402)	$	603


			Accumulated		Net
December 31, 2021	Cost		Depreciation		Book Value

	(in thousands)
Leasehold improvements	$	879	$	(576)	$	303
Computer hardware		294		(148)		146
Office equipment and furniture		519		(441)		78
Total	$	1,692	$	(1,165)	$	527

Depreciation expense for the years ended December 31, 2022, 2021 and 2020 was $0.2 million, $0.2 million, and $0.2 million respectively.

Policy Acquisition Costs (Details) - USD ($) $ in Thousands	12 Months Ended
Policy Acquisition Costs (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Deferred Policy Acquisition Costs:
Balance, beginning of year	$ 55,953	$ 35,481	$ 25,201
Direct commissions	209,061	133,242	82,786
Ceding commissions and fronting fees	(109,302)	(32,249)	(19,371)
Premium taxes	10,166	8,209	7,024
Total net additions	109,925	109,202	70,439
Amortization of net policy acquisition costs	(109,138)	(88,730)	(60,159)
Balance, end of year	56,740	55,953	35,481
Acquisition expenses:
Amortization of net policy acquisition costs	109,138	88,730	60,159
Period costs	1,633	6,703	3,882
Total Acquisition expenses	$ 110,771	$ 95,433	$ 64,041

Reinsurance - Ceded Written Premiums (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Reinsurance Retention [Line Items]
Ceded written premiums	$ 524,575	$ 223,443	$ 155,102
Ceded Written Premiums [Member]
Reinsurance Retention [Line Items]
Ceded written premiums	365,193	96,001	59,276
Fronting premium \| Ceded Written Premiums [Member]
Reinsurance Retention [Line Items]
Ceded written premiums	237,285	11,001
Inland Marine \| Ceded Written Premiums [Member]
Reinsurance Retention [Line Items]
Ceded written premiums	63,627	28,389	5,339
Specialty Homeowners \| Ceded Written Premiums [Member]
Reinsurance Retention [Line Items]
Ceded written premiums	4,946	27,394	22,295
Commercial Earthquake \| Ceded Written Premiums [Member]
Reinsurance Retention [Line Items]
Ceded written premiums	20,467	14,447	6,929
Commercial All Risk \| Ceded Written Premiums [Member]
Reinsurance Retention [Line Items]
Ceded written premiums	6,260	3,948	19,218
Others \| Ceded Written Premiums [Member]
Reinsurance Retention [Line Items]
Ceded written premiums	$ 32,609	$ 10,822	$ 5,495

Stockholders' Equity - Performance Stock Units (Details) - Performance Stock Units	12 Months Ended
	Dec. 31, 2022 $ / shares shares
Number of shares
Outstanding at beginning of period (in shares) \| shares	358,401
Granted (in shares) \| shares	26,165
Forfeited (in shares) \| shares	(1,463)
Non vested at end of period (in shares) \| shares	383,103
Weighted-average grant date fair value
Outstanding at beginning of period (in dollars per share) \| $ / shares	$ 36.87
Granted (in dollars per share) \| $ / shares	50.36
Forfeited (in dollars per share) \| $ / shares	80.69
Non vested outstanding at end of period (in dollars per share) \| $ / shares	$ 37.62

Income Taxes - Federal Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Taxes
Current	$ 18,842	$ 10,650	$ (1,128)
Deferred	(3,461)	641	1,094
Income tax expense (benefit)	$ 15,381	$ 11,291	$ (34)

- Definition

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

+ References + Details

Leases - Weighted-average Disclosures (Details)	Dec. 31, 2022
Leases
Weighted-average remaining lease term on operating leases	2 years 8 months 12 days
Weighted-average discount rate on operating leases (as a percent)	1.40%

Underwriting Information - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) item	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Underwriting Information
Gross written premiums	$ 881,868	$ 535,175	$ 354,360
% of GWP	100.00%	100.00%	100.00%
Number of program administrators \| item	2
Sales Revenue \| Product Concentration Risk
Underwriting Information
Gross written premiums	$ 417,500	$ 255,800	$ 191,300
% of GWP	47.30%	48.20%	54.00%

Stockholders' Equity - Shares Issued and Outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
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)	25,027,467	25,428,929
Common stock, shares outstanding (in shares)	25,027,467	25,428,929
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Additional paid-in capital
Additional paid-in capital	$ 333,558	$ 318,902

Schedule V - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2022

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, 2022
Valuation Allowance for deferred tax assets	$	2,879	$	191	$	—	$	3,070
Valuation Allowance for premium receivable	$	315	$	188		407	$	96
Year Ended December 31, 2021
Valuation Allowance for deferred tax assets	$	680	$	2,199	$	—	$	2879
Valuation Allowance for premium receivable	$	203	$	285		173	$	315

Accumulated Other Comprehensive Income (Tables)

12 Months Ended

Dec. 31, 2022

Accumulated Other Comprehensive Income

Schedule of changes in accumulated other comprehensive income (AOCI)


	Year Ended December 31,
	2022		2021		2020

	(in thousands)
Balance as of January 1	$	5,312	$	13,246	$	4,686
Other comprehensive income (loss) before reclassification		(55,270)		(9,579)		11,292
Federal income tax (expense) benefit		11,607		2,012		(2,371)
Other comprehensive income (loss) before reclassification, net of tax		(43,663)		(7,567)		8,921
Amounts reclassified from AOCI		2,325		(464)		(456)
Federal income tax expense (benefit)		(489)		97		95
Amounts reclassified from AOCI, net of tax		1,836		(367)		(361)
Other comprehensive income (loss)		(41,827)		(7,934)		8,560
Balance at end of period	$	(36,515)	$	5,312	$	13,246

Investments - Security Holdings in an Unrealized Loss Position - Tabular Disclosure (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Fair Value
Fair Value - Less Than 12 Months	$ 384,693	$ 160,773
Fair Value - More Than 12 Months	99,986	9,346
Fair Value - Total	484,679	170,119
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(31,558)	(2,188)
Unrealized Losses - More Than 12 Months	(15,365)	(517)
Unrealized Losses - Total	(46,923)	(2,705)
U.S. Governments
Fair Value
Fair Value - Less Than 12 Months	41,077	5,968
Fair Value - More Than 12 Months	6,853	1,457
Fair Value - Total	47,930	7,425
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(1,523)	(147)
Unrealized Losses - More Than 12 Months	(730)	(43)
Unrealized Losses - Total	(2,253)	(190)
States, territories, and possessions
Fair Value
Fair Value - Less Than 12 Months	3,227	1,444
Fair Value - Total	3,227	1,444
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(552)	(63)
Unrealized Losses - Total	(552)	(63)
Political subdivisions
Fair Value
Fair Value - Less Than 12 Months	4,298	1,815
Fair Value - Total	4,298	1,815
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(621)	(22)
Unrealized Losses - Total	(621)	(22)
Special revenue excluding mortgage/asset-backed securities
Fair Value
Fair Value - Less Than 12 Months	25,091	6,280
Fair Value - More Than 12 Months	5,080
Fair Value - Total	30,171	6,280
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(3,287)	(76)
Unrealized Losses - More Than 12 Months	(1,200)
Unrealized Losses - Total	(4,487)	(76)
Industrial and miscellaneous
Fair Value
Fair Value - Less Than 12 Months	192,185	94,020
Fair Value - More Than 12 Months	55,605	5,570
Fair Value - Total	247,790	99,590
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(15,667)	(1,468)
Unrealized Losses - More Than 12 Months	(8,481)	(423)
Unrealized Losses - Total	(24,148)	(1,891)
Mortgage/asset-backed securities
Fair Value
Fair Value - Less Than 12 Months	118,815	51,246
Fair Value - More Than 12 Months	32,448	2,319
Fair Value - Total	151,263	53,565
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(9,908)	(412)
Unrealized Losses - More Than 12 Months	(4,954)	(51)
Unrealized Losses - Total	$ (14,862)	$ (463)

Summary of Operations and Basis of Presentation

12 Months Ended

Dec. 31, 2022

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 Fronting Products, Inland Marine, Hawaii residential hurricane, Specialty Homeowners, Casualty, and Flood products. PSIC is licensed to underwrite insurance on an admitted basis in 37 states in the United States, as of December 31, 2022, 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.

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.

Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Stockholders' Equity
Stock-based compensation expense	$ 11,624	$ 5,584	$ 2,167

Stockholders' Equity - Unrecognized Compensation Expense (Details) $ in Thousands		12 Months Ended
	Jul. 15, 2021	Dec. 31, 2022 USD ($) D shares	Dec. 31, 2021 USD ($)
Unrecognized stock-based compensation expense
Total intrinsic value of stock options exercised		$ 7,100	$ 8,500
Total unrecognized stock-based compensation expense, options		$ 3,600
Weighted-average period over which unrecognized stock-based compensation expense is expected to be recognized		5 years
Stock Options
Unrecognized stock-based compensation expense
Weighted-average period over which unrecognized stock-based compensation expense is expected to be recognized		1 year 6 months 29 days
Restricted Stock Units
Unrecognized stock-based compensation expense
Total unrecognized stock-based compensation expense, options		$ 14,600
Total unrecognized stock-based compensation expense, restricted stock units and performance stock units		$ 15,400
Granted (in shares) \| shares		100,106
Weighted-average period over which unrecognized stock-based compensation expense is expected to be recognized		2 years 10 months 13 days
Restricted Stock Units \| CEO
Unrecognized stock-based compensation expense
Granted (in shares) \| shares		350,000
Performance Stock Units
Unrecognized stock-based compensation expense
Total unrecognized stock-based compensation expense, options		$ 10,500
Total unrecognized stock-based compensation expense, restricted stock units and performance stock units		$ 12,400
Granted (in shares) \| shares		26,165
Weighted-average period over which unrecognized stock-based compensation expense is expected to be recognized		3 years 6 months 14 days
Number of days, achievement of milestone stock price \| D		30
Stock price milestones		0
Percentage of predetermined performance achievement	100.00%
Award service period		3 years
Performance Stock Units \| CEO
Unrecognized stock-based compensation expense
Granted (in shares) \| shares		192,307

Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Assets and liabilities
Operating lease ROU assets	$ 1,688
Operating Lease, Right-of-Use Asset, Statement of Financial Position	Prepaid expenses and other assets	Prepaid expenses and other assets
Operating lease, liability
Operating lease liabilities	$ 2,066
Operating Lease, Liability, Statement of Financial Position	Accounts payable and other accrued liabilities	Accounts payable and other accrued liabilities

Underwriting Information - Gross Written Premiums by Insurance Subsidiary (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Gross written premiums
Amount	$ 881,868	$ 535,175	$ 354,360
% of GWP	100.00%	100.00%	100.00%
Subsidiaries
Gross written premiums
Amount	$ 881,868	$ 535,175	$ 354,360
% of GWP	100.00%	100.00%	100.00%
PSIC
Gross written premiums
Amount	$ 489,720	$ 383,064	$ 324,870
% of GWP	55.50%	71.60%	91.70%
PESIC
Gross written premiums
Amount	$ 392,148	$ 152,111	$ 29,490
% of GWP	44.50%	28.40%	8.30%

Commitments and Contingencies - Trust Account (Details) $ in Millions	Dec. 31, 2022 USD ($)
Commitments and Contingencies
Trust, par value	$ 37.2

Underwriting Information - Gross Written Premiums by Product (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Gross written premiums
Amount	$ 881,868	$ 535,175	$ 354,360
% of GWP	100.00%	100.00%	100.00%
Fronting premium
Gross written premiums
Amount	$ 223,249	$ 11,459
% of GWP	25.30%	2.20%
Residential Earthquake
Gross written premiums
Amount	$ 213,803	$ 171,048	$ 140,934
% of GWP	24.20%	32.00%	39.80%
Commercial Earthquake
Gross written premiums
Amount	$ 131,677	$ 90,552	$ 58,890
% of GWP	14.90%	16.90%	16.60%
Inland Marine
Gross written premiums
Amount	$ 105,068	$ 57,124	$ 15,423
% of GWP	11.90%	10.70%	4.30%
Commercial All Risk
Gross written premiums
Amount	$ 51,671	$ 38,640	$ 53,933
% of GWP	5.90%	7.20%	15.20%
Casualty
Gross written premiums
Amount	$ 35,791	$ 9,584
% of GWP	4.10%	1.90%
Hawaii Hurricane
Gross written premiums
Amount	$ 32,967	$ 30,298	$ 13,824
% of GWP	3.70%	5.60%	3.90%
Specialty Homeowners
Gross written premiums
Amount	$ 29,959	$ 67,894	$ 49,849
% of GWP	3.40%	12.70%	14.10%
Residential Flood
Gross written premiums
Amount	$ 14,539	$ 11,652	$ 8,176
% of GWP	1.70%	2.20%	2.30%
Others
Gross written premiums
Amount	$ 43,144	$ 46,924	$ 13,331
% of GWP	4.90%	8.60%	3.80%

Schedule II

12 Months Ended

Dec. 31, 2022

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,
	2022		2021
Assets
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $51,993 in 2022, $50,916 in 2021)	$	45,511	$	49,221
Equity securities, at fair value: (cost: $1,725 in 2022, $1,725 in 2021)		1,626		1,839
Total investments		47,136		51,060
Cash and cash equivalents		781		4,437
Accrued investment income		320		313
Prepaid expenses and other assets		2,267		966
Receivables from subsidiaries		3,689		2,322
Investment in subsidiaries		405,524		365,018
Total assets	$	459,718	$	424,116
Liabilities and Stockholders' equity
Liabilities:
Accounts payable and other liabilities	$	7,359	$	4,672
Payables to subsidiaries		57,324		11,102
Federal income tax payable		10,282		10,265
Deferred tax liabilities		—		3,908
Total liabilities		74,965		29,947
Stockholders' equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of December 31, 2022 and December 31, 2021, 0 shares issued and outstanding as of December 31, 2022 and December 31, 2021		—		—
Common stock, $0.0001 par value, 500,000,000 shares authorized, 25,027,467 and 25,428,929 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively		3		3
Additional paid‑in capital		333,557		318,902
Accumulated other comprehensive income (loss)		(36,514)		5,312
Retained earnings		87,708		69,952
Total stockholders' equity		384,753		394,169
Total liabilities and stockholders' equity	$	459,718	$	424,116

See accompanying notes.

Schedule II

Palomar Holdings, Inc. and Subsidiaries

Statements of Income (Parent Company)

(In Thousands)


	Year Ended December 31,
	2022		2021		2020
Revenues:
Net investment income	$	1,048	$	555	$	939
Net realized and unrealized gains (losses) on investments		(320)		217		63
Total revenues		728		772		1,002
Expenses:
Other operating expenses		33,292		19,480		8,696
Income (loss) before income taxes		(32,564)		(18,708)		(7,694)
Income tax expense (benefit)		(8,464)		11,039		(34)
Loss before equity in net income of subsidiaries		(24,100)		(29,747)		(7,660)
Equity in net income of subsidiaries		76,270		75,594		13,917
Net income		52,170		45,847		6,257
Other comprehensive income:
Net unrealized gains (losses) on securities available for sale		(3,997)		580		1,075
Equity in other comprehensive income (loss) of subsidiaries, net of taxes		(37,830)		(8,514)		7,485
Total comprehensive income	$	10,343	$	37,913	$	14,817

See accompanying notes.

Schedule II

Palomar Holdings, Inc. and Subsidiaries

Statements of Cash Flows (Parent Company)

(In Thousands)


	Year Ended December 31,
	2022		2021		2020
Operating activities
Net income	$	52,170	$	45,847	$	6,257
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries		(76,270)		(75,594)		(13,917)
Stock-based compensation expense		8,820		4,755		—
Net realized and unrealized losses on investments		320		(217)		(63)
Amortization of premium on fixed maturity securities		347		443		350
Deferred income tax expense		7,210		634		1,094
Changes in operating assets and liabilities:		36,449		13,596		7,772
Net cash provided by (used in) operating activities		29,046		(10,536)		1,493
Investing activities
Purchases of fixed maturity securities		(9,807)		(2,177)		(71,048)
Sales and maturities of fixed maturity securities		8,488		11,396		6,651
Cash paid to subsidiaries		—		(15,595)		(59,789)
Cash received from subsidiaries		—		27,100		—
Net cash provided by (used in) investing activities		(1,319)		20,724		(124,186)
Financing activities
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		3,032		2,811		2,782
Repurchase of common stock		(34,415)		(15,852)		—
Net cash provided by (used in) financing activities		(31,383)		(13,041)		128,329
Net (decrease) increase in cash and cash equivalents		(3,656)		(2,853)		5,636
Cash and cash equivalents at beginning of period		4,437		7,290		1,654
Cash and cash equivalents at end of period	$	781	$	4,437	$	7,290
Supplementary cash flow information:
Cash paid for income taxes	$	18,890	$	2,104	$	7,182
Cash paid for interest	$	704	$	—	$	—

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.

Reserve for Losses and Loss Adjustment Expenses - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Reserve for Losses and Loss Adjustment Expenses
Loss and loss adjustment expense (deficiency) reserve redundancy	$ (2.4)	$ 3.6	$ 0.1

Significant Accounting Policies - Intangible Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Intangible Assets
Impairments of intangible assets	$ 0.0	$ 0.0	$ 0.0
Customer Relationships
Intangible Assets
Finite-lived intangible asset, useful life	8 years

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2022

Fair Value Measurements

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


December 31, 2022	Level 1		Level 2		Level 3		Total

	(in thousands)
Assets:
Fixed maturity securities
U.S. Governments	$	—	$	48,551	$	—	$	48,551
States, territories, and possessions		—		5,354		—		5,354
Political subdivisions		—		4,298		—		4,298
Special revenue excluding mortgage/asset-backed securities		—		32,799		—		32,799
Industrial and miscellaneous		—		254,095		—		254,095
Mortgage/asset-backed securities		—		169,967		—		169,967
Equity securities		38,576		—		—		38,576
Cash, cash equivalents, and restricted cash		68,164		—		—		68,164
Total assets	$	106,740	$	515,064	$	—	$	621,804


December 31, 2021	Level 1		Level 2		Level 3		Total

	(in thousands)
Assets:
Fixed maturity securities
U.S. Governments	$	—	$	16,870	$	—	$	16,870
States, territories, and possessions		—		4,014		—		4,014
Political subdivisions		—		6,380		—		6,380
Special revenue excluding mortgage/asset-backed securities		—		44,498		—		44,498
Industrial and miscellaneous		—		249,046		—		249,046
Mortgage/asset-backed securities		—		110,374		1,500		111,874
Equity securities		33,261		—		—		33,261
Cash, cash equivalents, and restricted cash		50,371		—		—		50,371
Total assets	$	83,632	$	431,182	$	1,500	$	516,314

Capitalized Assets - Property and Equipment - Amortization Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Property and Equipment
Depreciation	$ 0.2	$ 0.2	$ 0.2

Stockholders' Equity

12 Months Ended

Dec. 31, 2022

Stockholders' Equity

Stockholders' Equity

12. Stockholders’ Equity

As of December 31, 2022 and December 31, 2021, 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, 2022 and December 31, 2021, the Company has 500,000,000 common shares authorized and 25,027,467 and 25,428,929 common shares issued and outstanding, respectively, with a par value of $0.0001. Additional paid in capital is $333.6 million as of December 31, 2022 and $318.9 million as of December 31, 2021.

Common stock reserved for future issuance consists of the following as of December 31, 2022:


Stock options outstanding under 2019 Equity Incentive Plan	882,892
Restricted stock units outstanding under 2019 Equity Incentive Plan	271,951
Performance stock units outstanding under 2019 Equity Incentive Plan	383,103
Shares authorized for future issuance under 2019 Equity Incentive Plan	2,594,587
Shares authorized for future issuance under 2019 Employee Stock Purchase Plan	907,850
Total	5,040,383

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


	Year ended December 31,
	2022		2021		2020

	(in thousands)
Stock-Based Compensation Expense	$	11,624	$	5,584	$	2,167

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.

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 common stock on the grant date. Stock options vest over a period between two and four years with between 25% and 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, 2022:


				Weighted average
				remaining	Aggregate
	Number of	Weighted-average		contractual term	intrinsic value
	shares	exercise price		(in years)	(in thousands)
Outstanding at January 1, 2022	933,051	$	29.41	7.59	$	36,679
Options granted	122,539		51.99
Options exercised	(148,427)		15.31
Options canceled	(24,271)		68.13
Outstanding at December 31, 2022	882,892	$	33.85	6.92	$	16,990
Vested and Exercisable at December 31, 2022	658,858	$	26.33	6.48	$	16,001

The total intrinsic value of stock options exercised during the years ended December 31, 2022 and December 31, 2021 was $7.1 million and $8.5 million, respectively. No options were exercised prior to 2020. As of December 31, 2022, the Company had approximately $3.6 million of total unrecognized stock-based compensation expense related to stock options expected to be recognized over a weighted-average period of 1.58 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,
	2022		2021		2020

	(in thousands)
Risk free rate of return (1)		1.69% - 4.23%		0.57% - 1.35%		0.32% - 1.52%
Expected share price volatility (2)		39.73% - 43.03%		26.06% - 39.41%		18.13% - 25.67%
Expected life in years (3)		5.89		5.89		5.63 - 6.08
Dividend yield (4)		0%		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 a blend of the Company’s historic stock price volatility and the historic 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.

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, 2022:


		Weighted-average
	Number of	grant date
	shares	fair value
Non vested outstanding at January 1, 2022	235,696	$	79.33
Granted	100,106		51.53
Vested	(57,536)		80.60
Forfeited	(6,315)		76.30
Non vested outstanding at December 31, 2022	271,951	$	68.90

As of December 31, 2022, the Company had approximately $15.4 million of total unrecognized stock-based compensation expense related to RSUs expected to be recognized over a weighted-average period of 2.87 years.

Performance Stock Units (“PSUs”)

The Company issues PSUs to employees with a combination of service, performance, and market conditions.

The majority of PSUs were issued pursuant to the 2021 Executive Stock Grants, as described below. For other PSU grants, vesting of PSUs requires a period of future service and the number of shares that vest 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 year ended December 31, 2022:


		Weighted-average
	Number of	grant date
	shares	fair value
Non vested outstanding at January 1, 2022	358,401	$	36.87
Granted	26,165		50.36
Vested	—		—
Forfeited	(1,463)		80.69
Non vested outstanding at December 31, 2022	383,103	$	37.62

The PSU grants above represent the number of shares that would vest based on achievement of all stock price milestones in the executive stock grants and the 100% achievement of the predetermined company performance conditions for the other PSU grants. The actual number of PSUs which will vest is subject to adjustment based on the Company’s actual stock price performance and financial performance relative to the predetermined targets and subject to recipient service requirements. As of December 31, 2022, the Company had approximately $10.5 million of total unrecognized stock-based compensation expense related to PSUs expected to be recognized over a weighted-average period of 3.54 years.

2021 Executive Stock Grants

During the year ended December 31, 2021, the Company granted 192,307 RSUs and 350,000 PSUs to various executives, including the Company’s CEO. The RSUs vest over a period of five years with one fifth vesting upon the first, second and third anniversary of the grants and the remainder vesting monthly thereafter.

The PSUs are earned based on the achievement of stock price milestones. If the Company’s stock price reaches and remains at certain milestones for 30 days, the PSUs shall become earned units and will vest upon completion of a requisite service period. The Company’s CEO must remain as an employee through December 31, 2025, or as an

employee and/or director through the fifth anniversary of the grant date the PSUs to vest. Other executives must remain as employees through December 31, 2026 for the PSUs to vest. As of December 31, 2022, none of the stock price milestones have been achieved.

The RSUs were valued based on the closing price of the Company’s stock on the grant date. The PSUs were valued using a Monte Carlo simulation to account for the market condition within the award. The Company expects to recognize $14.6 million of expense relating to the RSUs and $12.4 million relating to the PSUs. The expense shall be recognized straight-line over the requisite service period of approximately five years. Should these executives leave prior to the requisite service period, any recognized compensation expense related to unvested RSUs and PSUs will be reversed.

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 13,990 and 9,793 shares pursuant to the ESPP during the years ended December 31, 2022 and December 31, 2021, respectively.

Share repurchases

During the year ended December 31, 2021, the Company’s Board of Directors authorized a $40 million share repurchase program and the Company repurchased $15.9 million of shares under this program in 2021. On January 24, 2022, the Board of Directors approved a new share repurchase program, replacing the existing program and authorizing the repurchase by the Company of up to $100 million of its outstanding shares of common stock over the period ending on March 31, 2024.

The Company purchased 621,415 shares for $34.4 million under this program during the year ended December 31, 2022. The Company accounts for share repurchases by charging the excess of repurchase price over the common stock’s par value entirely to retained earnings. All repurchased shares are retired and become authorized but unissued shares.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $561,580 in 2022; $426,122 in 2021)	$ 515,064	$ 432,682
Equity securities, at fair value (cost: $42,352 in 2022; $31,834 in 2021)	38,576	33,261
Total investments	553,640	465,943
Cash and cash equivalents	68,108	50,284
Restricted cash	56	87
Accrued investment income	3,777	2,725
Premium receivable	162,858	88,012
Deferred policy acquisition costs	56,740	55,953
Reinsurance recoverable on paid losses and loss adjustment expenses	39,718	29,368
Reinsurance recoverable on unpaid losses and loss adjustment expenses	153,895	127,947
Ceded unearned premiums	204,084	58,315
Prepaid expenses and other assets	44,088	37,072
Deferred tax assets, net	10,622
Property and equipment, net	603	527
Intangible assets, net	8,261	9,501
Total assets	1,306,450	925,734
Liabilities:
Accounts payable and other accrued liabilities	25,760	21,284
Reserve for losses and loss adjustment expenses	231,415	173,366
Unearned premiums	471,314	284,665
Ceded premium payable	146,127	37,460
Funds held under reinsurance treaty	10,680	10,882
Deferred tax liabilities, net		3,908
Borrowings from credit agreements	36,400
Total liabilities	921,696	531,565
Stockholders' equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of December 31, 2022 and December 31, 2021, 0 shares issued and outstanding as of December 31, 2022 and December 31, 2021
Common stock, $0.0001 par value, 500,000,000 shares authorized, 25,027,467 and 25,428,929 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively	3	3
Additional paid-in capital	333,558	318,902
Accumulated other comprehensive income (loss)	(36,515)	5,312
Retained earnings	87,708	69,952
Total stockholders' equity	384,754	394,169
Total liabilities and stockholders' equity	$ 1,306,450	$ 925,734

Capitalized Assets - Capitalized Software - Amortization Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Capitalized Assets
Amortization expense relating to capitalized software	$ 2.6	$ 2.1	$ 1.1

Reserve for Losses and Loss Adjustment Expenses - Roll Forward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Reserve for Losses and Loss Adjustment Expenses
Reserve for losses and LAE net of reinsurance recoverables at beginning of period	$ 45,419	$ 34,470	$ 3,869
Add: Incurred losses and LAE, net of reinsurance, related to:
Current year	76,289	45,042	64,179
Prior years	2,383	(3,585)	(64)
Total incurred	78,672	41,457	64,115
Deduct: Loss and LAE payments, net of reinsurance, related to:
Current year	21,802	12,063	31,879
Prior years	24,769	18,445	1,635
Total payments	46,571	30,508	33,514
Reserve for losses and LAE net of reinsurance recoverables at end of period	77,520	45,419	34,470
Add: Reinsurance recoverables on unpaid losses and LAE at end of period	153,895	127,947	94,566
Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period	$ 231,415	$ 173,366	$ 129,036

Investments (Tables)

12 Months Ended

Dec. 31, 2022

Investments

Schedule of available-for-sale investments


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2022	Cost or Cost		Gains		Losses		Value

	(in thousands)
Fixed maturities:
U.S. Governments	$	50,802	$	2	$	(2,253)	$	48,551
States, territories, and possessions		5,857		49		(552)		5,354
Political subdivisions		4,919		—		(621)		4,298
Special revenue excluding mortgage/asset-backed securities		37,260		26		(4,487)		32,799
Industrial and miscellaneous		278,164		79		(24,148)		254,095
Mortgage/asset-backed securities		184,578		251		(14,862)		169,967
Total available-for-sale investments	$	561,580	$	407	$	(46,923)	$	515,064


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

	(in thousands)
Fixed maturities:
U.S. Governments	$	16,713	$	347	$	(190)	$	16,870
States, territories, and possessions		3,789		288		(63)		4,014
Political subdivisions		6,295		107		(22)		6,380
Special revenue excluding mortgage/asset-backed securities		43,301		1,273		(76)		44,498
Industrial and miscellaneous		245,064		5,873		(1,891)		249,046
Mortgage/asset-backed securities		110,960		1,377		(463)		111,874
Total available-for-sale investments	$	426,122	$	9,265	$	(2,705)	$	432,682

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, 2022	Value		Losses		Value		Losses		Value		Losses

	(in thousands)
Fixed maturity securities:
U.S. Governments	$	41,077	$	(1,523)	$	6,853	$	(730)	$	47,930	$	(2,253)
States, territories, and possessions		3,227		(552)		—		—		3,227		(552)
Political subdivisions		4,298		(621)		—		—		4,298		(621)
Special revenue excluding mortgage/asset-backed securities		25,091		(3,287)		5,080		(1,200)		30,171		(4,487)
Industrial and miscellaneous		192,185		(15,667)		55,605		(8,481)		247,790		(24,148)
Mortgage/asset-backed securities		118,815		(9,908)		32,448		(4,954)		151,263		(14,862)
Total	$	384,693	$	(31,558)	$	99,986	$	(15,365)	$	484,679	$	(46,923)


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

	(in thousands)
Fixed maturity securities:
U.S. Governments	$	5,968	$	(147)	$	1,457	$	(43)	$	7,425	$	(190)
States, territories, and possessions		1,444		(63)		—		—		1,444		(63)
Political subdivisions		1,815		(22)		—		—		1,815		(22)
Special revenue excluding mortgage/asset-backed securities		6,280		(76)		—		—		6,280		(76)
Industrial and miscellaneous		94,020		(1,468)		5,570		(423)		99,590		(1,891)
Mortgage/asset-backed securities		51,246		(412)		2,319		(51)		53,565		(463)
Total	$	160,773	$	(2,188)	$	9,346	$	(517)	$	170,119	$	(2,705)

Schedule of contractual maturities of available-for-sale securities


	Amortized		Fair
	Cost		Value

	(in thousands)
Due within one year	$	41,686	$	41,106
Due after one year through five years		182,785		170,399
Due after five years through ten years		126,990		112,822
Due after ten years		25,541		20,770
Mortgage and asset-backed securities		184,578		169,967
	$	561,580	$	515,064

Schedule of change in unrealized gains (losses) of investments


	Year Ended December 31,
	2022		2021		2020

	(in thousands)
Change in net unrealized gains (losses)
Fixed maturities	$	(53,076)	$	(10,148)	$	10,835
Net increase (decrease)	$	(53,076)	$	(10,148)	$	10,835

Schedule of net investment income


	Year Ended December 31,
	2022		2021		2020

	(in thousands)
Interest income	$	13,631	$	9,119	$	8,554
Dividend income		739		461		489
Investment management fees and expenses		(493)		(500)		(431)
Net investment income	$	13,877	$	9,080	$	8,612

Schedule of net realized and unrealized investment gains and losses


	Year Ended
	December 31,
	2022		2021		2020

		(in thousands)
Realized gains:
Gains on sales of fixed maturity securities	$	14	$	466	$	501
Gains on sales of equity securities		—		1,416		62
Total realized gains		14		1,882		563
Realized losses:
Losses on sales of fixed maturity securities		(2,340)		(1)		(46)
Losses on sales of equity securities		—		—		(68)
Total realized losses		(2,340)		(1)		(114)
Net realized investment gains (losses)		(2,326)		1,881		449
Net unrealized gains (losses) on equity securities		(5,203)		(604)		1,039
Net realized and unrealized gains (losses) on investments	$	(7,529)	$	1,277	$	1,488

Intangible Assets - Useful Lives (Details) - Customer Relationships $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($)
Finite-lived intangibles:
Finite-lived intangible asset, useful life	8 years
Amortization expense	$ 1.3

Schedule II - Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $561,580 in 2022; $426,122 in 2021)	$ 515,064	$ 432,682
Equity securities, at fair value: (cost: $1,724 in 2021, $1,661 in 2020)	38,576	33,261
Total investments	553,640	465,943
Cash and cash equivalents	68,108	50,284
Accrued investment income	3,777	2,725
Prepaid expenses and other assets	44,088	37,072
Total assets	1,306,450	925,734
Liabilities:
Accounts payable and other liabilities	25,760	21,284
Deferred tax liabilities		3,908
Total liabilities	921,696	531,565
Shareholder's equity
Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of December 31, 2022 and December 31, 2021, 0 shares issued and outstanding as of December 31, 2022 and December 31, 2021
Common stock, $0.0001 par value, 500,000,000 shares authorized, 25,027,467 and 25,428,929 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively	3	3
Additional paid-in capital	333,558	318,902
Accumulated other comprehensive income	(36,515)	5,312
Retained earnings	87,708	69,952
Total stockholders' equity	384,754	394,169
Total liabilities and stockholders' equity	1,306,450	925,734
Parent Company
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $561,580 in 2022; $426,122 in 2021)	45,511	49,221
Equity securities, at fair value: (cost: $1,724 in 2021, $1,661 in 2020)	1,626	1,839
Total investments	47,136	51,060
Cash and cash equivalents	781	4,437
Accrued investment income	320	313
Prepaid expenses and other assets	2,267	966
Receivables from subsidiaries	3,689	2,322
Investment in subsidiaries	405,524	365,018
Total assets	459,718	424,116
Liabilities:
Accounts payable and other liabilities	7,359	4,672
Payables to subsidiaries	57,324	11,102
Federal income tax payable	10,282	10,265
Deferred tax liabilities		3,908
Total liabilities	74,965	29,947
Shareholder's equity
Common stock, $0.0001 par value, 500,000,000 shares authorized, 25,027,467 and 25,428,929 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively	3	3
Additional paid-in capital	333,557	318,902
Accumulated other comprehensive income	(36,514)	5,312
Retained earnings	87,708	69,952
Total stockholders' equity	384,753	394,169
Total liabilities and stockholders' equity	$ 459,718	$ 424,116

Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2022
Minimum
Property and Equipment
Useful life	3 years
Maximum
Property and Equipment
Useful life	5 years

Accumulated Other Comprehensive Income

12 Months Ended

Dec. 31, 2022

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,
	2022		2021		2020

	(in thousands)
Balance as of January 1	$	5,312	$	13,246	$	4,686
Other comprehensive income (loss) before reclassification		(55,270)		(9,579)		11,292
Federal income tax (expense) benefit		11,607		2,012		(2,371)
Other comprehensive income (loss) before reclassification, net of tax		(43,663)		(7,567)		8,921
Amounts reclassified from AOCI		2,325		(464)		(456)
Federal income tax expense (benefit)		(489)		97		95
Amounts reclassified from AOCI, net of tax		1,836		(367)		(361)
Other comprehensive income (loss)		(41,827)		(7,934)		8,560
Balance at end of period	$	(36,515)	$	5,312	$	13,246

Commitments and Contingencies - Letters of Credit (Details) - Standby Letters of Credit $ in Millions	Dec. 31, 2022 USD ($) LetterOfCredit
Letters of Credit
Letters of credit, number \| LetterOfCredit	6
Letters of credit, amount \| $	$ 5.7

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2022

Earnings Per Share

Schedule of earnings per share of common stock


	Year ended December 31,
	2022		2021		2020

	(in thousands, except shares and per share data)
Net income	$	52,170	$	45,847	$	6,257
Weighted average common shares outstanding:
Basic		25,243,397		25,459,514		24,872,251
Common Share equivalents		552,611		652,390		726,396
Diluted		25,796,008		26,111,904		25,598,647

Earnings per share:
Basic	$	2.07	$	1.80	$	0.25
Diluted	$	2.02	$	1.76	$	0.24

Reserve for Losses and Loss Adjustment Expenses - Average Annual Percentage Payout of Incurred Claims by Age (Details)	Dec. 31, 2022
Homeowners' Insurance
Short-duration Insurance Contracts, Historical Claims Duration
Year 1	85.32%
Year 2	16.39%
Year 3	0.81%
Year 4	0.88%
Year 5, net	(9.53%)
Year 6	0.35%
Year 7	0.17%
Year 8, net	(1.92%)
Special Property
Short-duration Insurance Contracts, Historical Claims Duration
Year 1	38.78%
Year 2	35.64%
Year 3	10.79%
Year 4	7.40%
Year 5	6.66%
Year 6	0.42%
Year 7	2.24%
Year 8	2.70%

Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

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, 2022, the Company has six 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 a total of $5.7 million and may renew if the Company continues to assume premium from these insurance companies. The letters of credit are collateralized by either the Company’s available-for-sale investments or the Credit Agreement.

In addition, the Company established a Regulation 114 Trust account for the benefit of ceding insurance companies to secure the unearned premium assumed by PSIC. As of December 31, 2022 the trust had a market value of $37.2 million.

Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenues:
Gross written premiums	$ 881,868	$ 535,175	$ 354,360
Ceded written premiums	(524,575)	(223,443)	(155,102)
Net written premiums	357,293	311,732	199,258
Change in unearned premiums	(40,827)	(77,906)	(44,190)
Net earned premiums	316,466	233,826	155,068
Net investment income	13,877	9,080	8,612
Net realized and unrealized (losses) gains on investments	(7,529)	1,277	1,488
Commission and other income	4,272	3,608	3,295
Total revenues	327,086	247,791	168,463
Expenses:
Losses and loss adjustment expenses	78,672	41,457	64,115
Acquisition expenses	110,771	95,433	64,041
Other underwriting expenses	69,219	53,723	34,084
Interest expense	873	40
Total expenses	259,535	190,653	162,240
Income before income taxes	67,551	57,138	6,223
Income tax expense (benefit)	15,381	11,291	(34)
Net income	52,170	45,847	6,257
Other comprehensive income, net:
Net unrealized (losses) gains on securities available for sale	(41,827)	(7,934)	8,560
Total comprehensive income	$ 10,343	$ 37,913	$ 14,817
Per Share Data:
Basic earnings per share	$ 2.07	$ 1.80	$ 0.25
Diluted earnings per share	$ 2.02	$ 1.76	$ 0.24
Weighted-average common shares outstanding:
Basic (in shares)	25,243,397	25,459,514	24,872,251
Diluted (in shares)	25,796,008	26,111,904	25,598,647

Capitalized Assets - Property and Equipment - Tabular Disclosure (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Property and Equipment
Cost	$ 2,005	$ 1,692
Accumulated Depreciation	(1,402)	(1,165)
Net Book Value	603	527
Leasehold improvements
Property and Equipment
Cost	879	879
Accumulated Depreciation	(694)	(576)
Net Book Value	185	303
Computer hardware
Property and Equipment
Cost	402	294
Accumulated Depreciation	(205)	(148)
Net Book Value	197	146
Office equipment and furniture
Property and Equipment
Cost	724	519
Accumulated Depreciation	(503)	(441)
Net Book Value	$ 221	$ 78

Significant Accounting Policies - Impairment of Long-lived Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Impairment of Long-lived Assets
Impairments of long-lived assets	$ 0.0	$ 0.0	$ 0.0

Underwriting Information (Tables)

12 Months Ended

Dec. 31, 2022

Underwriting Information

Schedule of gross written premiums


	Year Ended December 31,
	2022				2021				2020

	($ in thousands)
			% of				% of				% of
	Amount		GWP		Amount		GWP		Amount		GWP
Product
Fronting	$	223,249	25.3	%	$	11,459	2.2	%	$	-	NM
Residential Earthquake		213,803	24.2	%		171,048	32.0	%		140,934	39.8	%
Commercial Earthquake		131,677	14.9	%		90,552	16.9	%		58,890	16.6	%
Inland Marine		105,068	11.9	%		57,124	10.7	%		15,423	4.3	%
Commercial All Risk		51,671	5.9	%		38,640	7.2	%		53,933	15.2	%
Casualty		35,791	4.1	%		9,584	1.9	%		—	NM
Hawaii Hurricane		32,967	3.7	%		30,298	5.6	%		13,824	3.9	%
Specialty Homeowners		29,959	3.4	%		67,894	12.7	%		49,849	14.1	%
Residential Flood		14,539	1.7	%		11,652	2.2	%		8,176	2.3	%
Other		43,144	4.9	%		46,924	8.6	%		13,331	3.8	%
Total Gross Written Premiums	$	881,868	100.0	%	$	535,175	100.0	%	$	354,360	100.0	%
NM-Not Meaningful

Gross written premiums by state are as follows:


	Year Ended December 31,
	2022				2021				2020

	($ in thousands)
			% of				% of				% of
	Amount		GWP		Amount		GWP		Amount		GWP
State
California	$	418,809	47.5	%	$	244,416	45.6	%	$	172,765	48.8	%
Texas		90,459	10.3	%		62,893	11.8	%		67,974	19.2	%
Washington		41,827	4.7	%		23,608	4.4	%		14,328	4.0	%
Hawaii		40,157	4.5	%		34,993	6.5	%		16,398	4.6	%
Florida		38,715	4.4	%		27,386	5.1	%		5,795	1.7	%
Oregon		24,108	2.7	%		13,677	2.6	%		10,038	2.8	%
Illinois		17,368	2.0	%		12,133	2.3	%		6,133	1.7	%
North Carolina		12,776	1.5	%		15,271	2.9	%		11,143	3.1	%
Other		197,649	22.4	%		100,798	18.8	%		49,786	14.1	%
Total Gross Written Premiums	$	881,868	100.0	%	$	535,175	100.0	%	$	354,360	100.0	%

Gross written premiums by insurance subsidiary are as follows:


	Year Ended December 31,
	2022				2021				2020

	($ in thousands)
			% of				% of				% of
	Amount		GWP		Amount		GWP		Amount		GWP
Subsidiary
PSIC	$	489,720	55.5	%	$	383,064	71.6	%	$	324,870	91.7	%
PESIC		392,148	44.5	%		152,111	28.4	%		29,490	8.3	%
Total Gross Written Premiums	$	881,868	100.0	%	$	535,175	100.0	%	$	354,360	100.0	%

Investments - Security Holdings in an Unrealized Loss Position - General Information (Details) $ in Thousands	Dec. 31, 2022 USD ($) security	Dec. 31, 2021 USD ($) security
Number of positions:
Number of unrealized loss positions \| security	543	231
Fair Value
Fair Value	$ 484,679	$ 170,119
Unrealized Losses
Unrealized Losses	$ 46,923	$ 2,705