Document and Entity Information
Document and Entity Information - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | May 15, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Palomar Holdings, Inc. | |
Entity Central Index Key | 0001761312 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Trading Symbol | PLMR | |
Entity Current Reporting Status | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Listing, Par Value Per Share | $ 0.0001 | |
Entity Common Stock, Shares Outstanding | 23,468,750 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Investments: | ||
Fixed maturity securities available for sale, at fair value (amortized cost: $125,051 in 2019; $122,949 in 2018) | $ 126,946 | $ 122,220 |
Equity securities, at fair value: (cost: $21,429 in 2019; $27,188 in 2018) | 21,778 | 25,171 |
Total investments | 148,724 | 147,391 |
Cash and cash equivalents | 10,494 | 9,525 |
Restricted cash | 397 | 399 |
Accrued investment income | 856 | 734 |
Premium receivable | 24,348 | 18,633 |
Deferred policy acquisition costs | 16,741 | 14,052 |
Reinsurance recoverable on unpaid losses and loss adjustment expenses | 10,296 | 11,896 |
Reinsurance recoverable on paid losses and loss adjustment expenses | 2,094 | 2,666 |
Prepaid reinsurance premium | 21,838 | 18,284 |
Prepaid expenses and other assets | 8,264 | 5,863 |
Property and equipment, net | 921 | 947 |
Intangible assets | 744 | 744 |
Deferred tax assets, net | 523 | |
Total assets | 246,240 | 231,134 |
Liabilities: | ||
Accounts payable and other accrued liabilities | 8,361 | 9,245 |
Reserve for losses and loss adjustment expenses | 12,628 | 16,061 |
Unearned premiums | 92,259 | 79,130 |
Ceded premium payable | 9,664 | 10,607 |
Funds held under reinsurance treaty | 750 | 720 |
Income and excise taxes payable | 1,566 | |
Long‑term notes payable | 19,103 | 19,079 |
Total liabilities | 144,331 | 134,842 |
Stockholders' equity: | ||
Preferred stock, $0.0001 par value, 5,000,000 and 0 shares authorized as of March 31, 2019 and December 31, 2018, respectively, 0 shares issued and outstanding as of March 31, 2019 and December 31, 2018 | ||
Common stock, $0.0001 par value, 500,000,000 shares authorized, 17,000,000 shares issued and outstanding as of March 31, 2019 and December 31, 2018 | 2 | 2 |
Additional paid in capital | 91,459 | 68,498 |
Accumulated other comprehensive income (loss) | 1,624 | (563) |
Retained earnings | 8,824 | 28,355 |
Total stockholders' equity | 101,909 | 96,292 |
Total liabilities and stockholders' equity | $ 246,240 | $ 231,134 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Condensed Consolidated Balance Sheets | ||
Fixed maturity securities available for sale, amortized cost | $ 125,051 | $ 122,949 |
Equity securities, cost | $ 21,429 | $ 27,188 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 17,000,000 | 17,000,000 |
Common stock, shares outstanding | 17,000,000 | 17,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues: | ||
Gross written premiums | $ 54,031 | $ 34,033 |
Ceded written premiums | (26,106) | (13,762) |
Net written premiums | 27,925 | 20,271 |
Change in unearned premiums | (9,575) | (2,284) |
Net earned premiums | 18,350 | 17,987 |
Net investment income | 960 | 617 |
Net realized and unrealized gains (losses) on investments | 2,411 | (621) |
Commission and other income | 586 | 540 |
Total revenues | 22,307 | 18,523 |
Expenses: | ||
Losses and loss adjustment expenses | 316 | 938 |
Acquisition expenses | 6,975 | 7,790 |
Other underwriting expenses (includes stock-based compensation of $22,961 and $0, respectively) | 28,853 | 3,805 |
Interest expense | 429 | 404 |
Total expenses | 36,573 | 12,937 |
(Loss) Income before income taxes | (14,266) | 5,586 |
Income tax expense (benefit) | 145 | (6) |
Net (loss) income | (14,411) | 5,592 |
Other comprehensive income, net: | ||
Net unrealized gains (losses) on securities available for sale for the three months ended March 31, 2019 and 2018 respectively | 2,187 | (899) |
Net comprehensive (loss) income | $ (12,224) | $ 4,693 |
Per Share Data: | ||
Earnings per share, basic and diluted | $ (0.85) | $ 0.33 |
Weighted average common shares outstanding: | 17,000,000 | 17,000,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income (Unaudited) | ||
Stock-based compensation expense | $ 22,961 | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders’ Equity (unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total |
Beginning balance at Dec. 31, 2017 | $ 2 | $ 68,498 | $ 2,993 | $ 6,921 | $ 78,414 |
Beginning balance (in shares) at Dec. 31, 2017 | 17,000,000 | ||||
Changes in Stockholders’ Equity | |||||
Impact of equity accounting guidance adoption | (3,215) | 3,215 | |||
Change in net unrealized loss (gain) on investments | (899) | (899) | |||
Net income (loss) | 5,592 | 5,592 | |||
Ending balance at Mar. 31, 2018 | $ 2 | 68,498 | (1,121) | 15,728 | 83,107 |
Ending balance (in shares) at Mar. 31, 2018 | 17,000,000 | ||||
Beginning balance at Dec. 31, 2018 | $ 2 | 68,498 | (563) | 28,355 | $ 96,292 |
Beginning balance (in shares) at Dec. 31, 2018 | 17,000,000 | 17,000,000 | |||
Changes in Stockholders’ Equity | |||||
Change in net unrealized loss (gain) on investments | 2,187 | $ 2,187 | |||
Net income (loss) | (14,411) | (14,411) | |||
Distribution to stockholder | (5,120) | (5,120) | |||
Stock-based compensation | 22,961 | 22,961 | |||
Ending balance at Mar. 31, 2019 | $ 2 | $ 91,459 | $ 1,624 | $ 8,824 | $ 101,909 |
Ending balance (in shares) at Mar. 31, 2019 | 17,000,000 | 17,000,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities | ||
Net cash provided by operating activities | $ 2,457 | $ 8,410 |
Investing activities | ||
Purchases of property and equipment | (27) | (249) |
Purchases of fixed maturity securities | (14,738) | (24,469) |
Purchases of equity securities | (21,430) | (1,495) |
Sales and maturities of fixed maturity securities | 12,547 | 13,225 |
Sales of equity securities | 27,278 | 1,430 |
Receivable for securities | 250 | |
Net cash provided by (used in) investing activities | 3,630 | (11,308) |
Financing activities | ||
Distribution to stockholder | (5,120) | |
Net cash used in financing activities | (5,120) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 967 | (2,898) |
Cash, cash equivalents and restricted cash at beginning of period | 9,924 | 10,932 |
Cash, cash equivalents and restricted cash at end of period | 10,891 | 8,034 |
Supplementary cash flow information: | ||
Cash paid for interest | $ 444 | $ 424 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Cash and cash equivalents and restricted cash and cash equivalents | ||||
Cash and cash equivalents | $ 10,494 | $ 9,525 | ||
Restricted cash | 397 | 399 | ||
Cash and cash equivalents and restricted cash | $ 10,891 | $ 9,924 | $ 8,034 | $ 10,932 |
Summary of Operations and Basis
Summary of Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
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 an insurance holding company that was incorporated in Delaware on March 14, 2019. Prior to incorporation 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. The Company and its wholly owned subsidiaries include Palomar Specialty Reinsurance Company (PSRE) and Palomar Insurance Holdings, Inc. (PIH), which wholly owns Palomar Specialty Insurance Company (PSIC) and Prospect General Insurance Agency, Inc. (PGIA). Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and include the accounts of the Company and its wholly‑owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Stock Split On March 15, 2019, the Company effected a 17,000,000 for one forward stock split in conjunction with domestication in the United States. All share and per share information included in the accompanying condensed consolidated financial statements and notes to the condensed consolidated financial statements have been retroactively adjusted to reflect the stock split for the Company’s common stock for all periods presented. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein. All revisions to accounting estimates are recognized in the period in which the estimates are revised. Significant estimates reflected in the Company’s condensed consolidated financial statements include, but are not limited to, reserves for losses and loss adjustment expenses, reinsurance recoverables on unpaid losses, and the fair values of investments. Recent Accounting Pronouncements The Company currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Accordingly, the Company is provided the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non‑emerging growth companies or (ii) within the same time periods as private companies. The Company has elected to adopt new or revised accounting guidance within the same time period as private companies, unless, as indicated below, management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance. Recently issued accounting pronouncements not yet adopted In May 2014, the FASB issued new accounting guidance related to revenue recognition, “ASU 2014‑09, Revenue from Contracts with Customers (Topic 606) .” The guidance applies to all companies that either enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards, such as insurance contracts. Under this guidance, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under the current guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligations. According to the superseding standard ASU 2015-14 that deferred the effective dates of the preceding, and because the Company is filing as an emerging growth company, the standard became effective for the Company January 1, 2019, but the Company is not required to present the impacts of the standard until it files its annual report on Form 10-K for the fiscal year ended December 31, 2019. The Company expects to adopt this standard using the modified retrospective method. The Company does not expect adoption to have a material impact on its consolidated financial statements, but will continue to assess the potential impact of adoption throughout 2019. In February 2016, the FASB issued new guidance for accounting for leases, “ASU 2016‑02, Leases (Topic 842) .” Under current guidance, leases are only included on the balance sheet if the criteria to classify the agreement as a capital lease are met. This update will require the recognition of a right‑of‑use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. This guidance was subsequently amended multiple times and offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. This new guidance requires a modified retrospective adoption, applying the new standard to all leases existing at the date of initial application, with early adoption permitted. An entity may choose to use the standard’s effective date, rather than the beginning of the earliest comparative period presented, as the date of initial application. An entity would record the effects of initially applying the new guidance as a cumulative‑effect adjustment to retained earnings. Consequently, an entity’s reporting for the comparative periods presented in the year of adoption would continue to be in accordance with the current guidance, including the current disclosure requirements. To facilitate transition, the new guidance includes a package of practical expedients that entities may elect to apply on adoption. The package of practical expedients relates to the identification and classification of leases that commenced before the effective date and initial direct costs for leases that commenced before the effective date. The new guidance also includes a practical expedient permitting the use of hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. This update is effective for annual reporting periods beginning after December 15, 2019, and interim reporting periods within fiscal years beginning after December 31, 2020 with early adoption permitted. The Company is currently evaluating the impact that this new guidance will have on its condensed consolidated financial statements. In June 2016, the FASB issued “ASU 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments .” Current guidance delays the recognition of credit losses until it is probable a loss has been incurred. This updated guidance will require financial assets measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Credit losses relating to available‑for‑sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which fair value is below amortized cost. This update will be effective for annual reporting periods beginning after December 15, 2020 and interim reporting periods within fiscal years beginning after December 15, 2021. Early adoption is permitted, but not before annual reporting periods beginning on or after December 15, 2018. The Company is currently evaluating the impact that this new guidance will have on its condensed consolidated financial statements. In August 2018, the FASB issued “ASU 2018‑13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement . Among other things, this new guidance eliminates the need to disclose transfers between Level 1 and Level 2 of the fair value hierarchy, changes the policy for timing of transfers and the valuation processes for Level 3 fair value measurements and includes requirements to disclose quantitative information about Level 3 measurements. This new guidance will be effective for annual and interim reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact that this new guidance will have on its condensed consolidated financial statements. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2019 | |
Investments | |
Investments | 2. Investments The Company’s available‑for‑sale investments are summarized as follows: Gross Gross Amortized Unrealized Unrealized Fair March 31, 2019 Cost or Cost Gains Losses Value (in thousands) Fixed maturities: U.S. Governments $ 12,326 $ 195 $ (59) $ 12,462 States, territories, and possessions 2,304 59 — 2,363 Political subdivisions 818 — (5) 813 Special revenue excluding mortgage/asset-backed securities 11,388 220 (27) 11,581 Industrial and miscellaneous 70,626 1,368 (199) 71,795 Mortgage/asset-backed securities 27,589 359 (16) 27,932 Total available-for-sale investments $ 125,051 $ 2,201 $ (306) $ 126,946 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2018 Cost or Cost Gains Losses Value (in thousands) Fixed maturities: U.S. Governments $ 15,299 $ 96 $ (126) $ 15,269 States, territories, and possessions 1,227 — (6) 1,221 Political subdivisions 825 — (10) 815 Special revenue excluding mortgage/asset-backed securities 12,429 115 (91) 12,453 Industrial and miscellaneous 65,885 192 (951) 65,126 Mortgage/asset-backed securities 27,284 133 (81) 27,336 Total available-for-sale investments $ 122,949 $ 536 $ (1,265) $ 122,220 Security holdings in an unrealized loss position As of March 31, 2019, the Company held 91 fixed maturity securities in an unrealized loss position with a total estimated fair value of $36.8 million and total gross unrealized losses of $0.3 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, 2018, the Company held 173 fixed maturity securities in an unrealized loss position with a total estimated fair value of $73.8 million and total gross unrealized losses of $1.3 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 March 31, 2019 and December 31, 2018, are as follows: Less Than 12 Months More Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized March 31, 2019 Value Losses Value Losses Value Losses (in thousands) Fixed maturity securities: U.S. Governments — — $ 5,742 $ (59) $ 5,742 $ (59) States, territories, and possessions — — — — — — Political subdivisions — — 549 (5) 549 (5) Special revenue excluding mortgage/asset-backed securities — — 5,237 (27) 5,237 (27) Industrial and miscellaneous 2,723 (22) 20,029 (177) 22,752 (199) Mortgage/asset-backed securities 867 (5) 1,696 (11) 2,563 (16) $ 3,590 $ (27) $ 33,253 $ (279) $ 36,843 $ (306) Less Than 12 Months More Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2018 Value Losses Value Losses Value Losses (in thousands) Fixed maturity securities: U.S. Governments $ 1,970 $ (25) $ 6,197 $ (101) $ 8,167 $ (126) States, territories, and possessions 719 (5) 501 (1) 1,220 (6) Political subdivisions 264 (1) 550 (9) 814 (10) Special revenue excluding mortgage/asset-backed securities 1,706 (14) 5,916 (77) 7,622 (91) Industrial and miscellaneous 30,544 (556) 14,913 (395) 45,457 (951) Mortgage/asset-backed securities 6,653 (39) 3,830 (42) 10,483 (81) Total $ 41,856 $ (640) $ 31,907 $ (625) $ 73,763 $ (1,265) The Company considers the following factors in determining whether declines in the fair value of investments are other‑than‑temporary: · The significance of the decline in fair value compared to the cost basis, · The time period during which there has been a significant decline in fair value, · Whether the unrealized loss is credit‑driven or a result of changes in market interest rates, · A fundamental analysis of the business prospects and financial condition of the issuer, · The Company’s intent to sell the securities as of each reporting date, and · If the Company does not expect to recover the entire amortized cost basis or cost of the investment. Based on the Company’s reviews as of March 31, 2019 and December 31, 2018, 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. None of the fixed maturity securities were determined to be other‑than‑temporarily impaired. The company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before the recovery of their amortized cost basis. Therefore, none of the fixed maturity securities were written down during the respective periods. Contractual maturities of available‑for‑sale fixed maturity securities The amortized cost and fair value of fixed maturity securities at March 31, 2019, by contractual maturity, are shown below. Amortized Fair Cost Value (in thousands) Due within one year $ 2,968 $ 2,959 Due after one year through five years 46,692 46,600 Due after five years through ten years 35,745 37,053 Due after ten years 12,057 12,402 Mortgage and asset-backed securities 27,589 27,932 $ 125,051 $ 126,946 Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations. Net investment income summary Net investment income is summarized as follows: Three Months Ended March 31, 2019 2018 (in thousands) Interest income $ 1,010 $ 578 Dividend income 30 122 Less: investment expense (80) (83) Net investment income $ 960 $ 617 Net realized and unrealized investment gains and losses The following table presents net realized and unrealized investment gains and losses: Three Months Ended March 31, 2019 2018 (in thousands) Realized gains: Gains on sales of fixed maturity securities $ 44 $ 9 Gains on sales of equity securities 66 26 Total realized gains 110 35 Realized losses: Losses on sales of fixed maturity securities (66) (42) Losses on sales of equity securities (156) (446) Total realized losses (222) (488) Net realized investment losses (112) (453) Net unrealized gains (losses) on equity securities 2,523 (168) Net realized and unrealized gains (losses) on investments $ 2,411 $ (621) The Company places securities on statutory deposit with certain state agencies to retain the right to do business in those states. These securities are included in available‑for‑sale investments on the balance sheet. At March 31, 2019 and December 31, 2018, the carrying value of securities on deposit with state regulatory authorities was $5.0 million. |
Fair value measurements
Fair value measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair value measurements | |
Fair value measurements | 3. Fair value measurements Fair value is defined as the price that the Company would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. The three‑tier hierarchy of inputs is summarized in the three broad levels listed below: Level 1—Unadjusted quoted prices are available in active markets for identical investments as of the reporting date. Level 2—Pricing inputs are quoted prices for similar investments in active markets; quoted prices for identical or similar investments in inactive markets; or valuations based on models where the significant inputs are observable or can be corroborated by observable market data. Level 3—Pricing inputs into models are unobservable for the investment. The unobservable inputs require significant management judgment or estimation. To measure fair value, the Company obtains quoted market prices for its investment securities from its outside investment managers. If a quoted market price is not available, the Company uses prices of similar securities. The fair values obtained from the outside investment managers are reviewed for reasonableness and any discrepancies are investigated for final valuation. The fair value of the Company’s investments in fixed maturity securities is estimated using relevant inputs, including available market information, benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing. An Option Adjusted Spread model is also used to develop prepayment and interest rate scenarios. Industry standard models are used to analyze and value securities with embedded options or prepayment sensitivities. These fair value measurements are estimated based on observable, objectively verifiable market information rather than market quotes; therefore, these investments are classified and disclosed in Level 2 of the hierarchy. The following tables present the Company’s fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018. March 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets: Fixed maturity securities U.S. Governments $ — $ 12,462 $ — $ 12,462 States, territories, and possessions — 2,363 — 2,363 Political subdivisions — 813 — 813 Special revenue excluding mortgage/asset-backed securities — 11,581 — 11,581 Industrial and miscellaneous — 71,795 — 71,795 Mortgage/asset-backed securities — 27,932 — 27,932 Equity securities 21,778 — — 21,778 Cash, cash equivalents, and restricted cash 10,891 — — 10,891 Total assets $ 32,669 $ 126,946 $ — $ 159,615 Liabilities: Long-term notes payable $ — $ — $ 20,000 $ 20,000 Total liabilities $ — $ — $ 20,000 $ 20,000 December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Assets: Fixed maturity securities U.S. Governments $ — $ 15,269 $ — $ 15,269 States, territories, and possessions — 1,221 — 1,221 Political subdivisions — 815 — 815 Special revenue excluding mortgage/asset-backed securities — 12,453 — 12,453 Industrial and miscellaneous — 65,126 — 65,126 Mortgage/asset-backed securities — 27,336 — 27,336 Equity securities 25,171 — — 25,171 Cash, cash equivalents, and restricted cash 9,924 — — 9,924 Total assets $ 35,095 $ 122,220 $ — $ 157,315 Liabilities: Long-term notes payable $ — $ — $ 20,000 $ 20,000 Total liabilities $ — $ — $ 20,000 $ 20,000 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 fair value of the Company’s long‑term debt was determined by calculating the present value of expected future cash flows under the terms of the note agreements discounted at an estimated market rate of interest at March 31, 2019 and December 31, 2018, respectively. This is a level 3 measurement. |
Reserve for Losses and Loss Adj
Reserve for Losses and Loss Adjustment Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Reserve for Losses and Loss Adjustment Expenses | |
Reserve for Losses and Loss Adjustment Expenses | 4. Reserve for Losses and Loss Adjustment Expenses The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses on a net of reinsurance basis to the gross amounts reported in the accompanying balance sheet: Three Months Ended March 31, 2019 2018 (in thousands) Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period $ 4,165 $ 4,432 Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to: Current year 278 2,436 Prior year 38 (1,498) Total incurred 316 938 Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to: Current year 106 558 Prior year 2,043 1,057 Total payments 2,149 1,615 Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period 2,332 3,755 Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period 10,296 10,692 Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 12,628 $ 14,447 Considerable variability is inherent in the estimate of the reserve for losses and LAE. Although management believes the liability recorded for losses and LAE is adequate, the variability inherent in this estimate could result in changes to the ultimate liability, which may be material to shareholder’s equity. The foregoing reconciliation shows a loss and loss adjustment expense reserve shortfall of $0.04 million and reserve redundancy of $1.5 million developed in the three months ended March 31, 2019 and 2018, respectively. Unfavorable development for the three months ended March 31, 2019 was primarily due to development of a Hurricane Michael claim offset by favorable development in the Texas homeowners line of business due to lower than originally anticipated frequency and severity of claims. Favorable loss development for the three months ended March 31, 2018 was primarily due to favorable development in the Texas homeowners and All Risk lines of business due to lower than originally anticipated frequency and severity of claims. |
Long-term debt
Long-term debt | 3 Months Ended |
Mar. 31, 2019 | |
Long-term debt | |
Long-term debt | 5. Long-term debt Prior to September 2018, the Company had $17.5 million in outstanding surplus notes which had been issued by PSIC on February 3, 2015 for a term of seven years. The surplus notes bore interest at the rate of LIBOR plus 8.00% and had restrictions as to payments of interest and principal and any such payment required the prior approval of the Oregon Insurance Commissioners before such payment could be made. Such payments could only be made from surplus. In September 2018, the Company completed a private placement financing of $20.0 million floating rate senior secured notes (the “Floating Rate Notes”). As part of the financing agreement, the Company immediately used surplus funds to pay down the existing $17.5 million in surplus notes. As part of this pre‑payment, the Company incurred a penalty of $0.1 million which, along with unamortized debt issuance costs of $0.4 million, was charged to income in 2018. The Floating Rate Notes mature on September 6, 2028 and bear interest at the three‑month treasury rate plus 6.50% per annum. This rate resets quarterly and interest is payable quarterly in arrears on March 20, June 20, September 20 and December 20 of each year, commencing on December 20, 2018. Prior to September 6, 2019, Palomar Insurance Holdings, Inc. may redeem the Floating Rate Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Floating Rate Notes redeemed, plus a “make‑whole” premium and accrued and unpaid interest and additional interest, if any. After September 6, 2019, Palomar Insurance Holdings, Inc. may redeem the Floating Rate Notes at its option, in whole or in part, at certain redemption prices. If a change of control occurs, Palomar Insurance Holdings, Inc. must offer to purchase the Floating Rate Notes at 100% of their principal amount, plus accrued and unpaid interest. The Floating Rate Notes are fully and unconditionally guaranteed on a senior secured basis by a pledge of the capital stock owned by Palomar Holdings, Inc. of its equity interests in Palomar Insurance Holdings, Inc. Such security interest consists of a first‑priority lien with respect to the collateral. The Floating Rate Notes contain certain customary affirmative and negative covenants and events of default. The negative covenants limit Palomar Insurance Holdings, Inc.’s ability to, among other things, incur additional indebtedness, create liens on certain assets, pay dividends or prepay junior debt or make other restricted payments, make certain loans, acquisitions or investments, engage in transactions with affiliates, conduct asset sales, restrict dividends from subsidiaries or restrict liens, or merge, consolidate, sell or otherwise dispose of all or substantially all of Palomar Insurance Holdings, Inc.’s assets. The Company was in compliance with all debt covenants as of March 31, 2019 and December 31, 2018. The Company incurred $0.4 million in interest expense related to the Floating Rate Notes for the three months ended March 31, 2019 and $0.4 million in interest expense related to the surplus notes for the three months end March 31, 2018 and paid $0.4 million in interest for each period. The Company had $0.4 million and $0.1 million of interest accrued at March 31, 2019 and December 31, 2018, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes | |
Income Taxes | 6. Income Taxes Prior to March 2019, the Company was a Cayman Islands incorporated holding company with U.K. tax residency. On March 14, 2019, the Company implemented a domestication (the Domestication) pursuant to Section 388 of the Delaware General Corporation Law and Section 206 of the Companies Law (2018 Revision), as amended, of the Cayman Islands pursuant to which it became a Delaware corporation and no longer subject to the laws of the Cayman Islands. Historically, the Company’s Bermuda based subsidiary, PSRE, was not required to pay any taxes on its income or capital gains but was subject to a 1% U.S. federal excise tax on reinsurance premiums assumed. As a result of the Domestication, PSRE’s income is subject to U.S. federal income tax in 2019. Prior to the three months ended March 31, 2019, the Company maintained a valuation allowance on the U.S. tax attributes due to significant negative evidence, including cumulative U.S. losses in the most recent three-year period and our assessment that the realization of the net deferred tax assets did not meet the "more likely than not" criteria under ASC 740, Income Taxes . Management assessed available positive and negative evidence to estimate whether sufficient future taxable income would be generated to permit use of the existing deferred tax assets. The projected reversal of temporary differences, recent domestication in March of 2019, and projected future operating income in the U.S. represents significant positive evidence, which outweighed the historical negative evidence. Based on this evidence, management determined it was more likely than not that the federal deferred tax assets are recoverable and therefore the associated valuation allowance was released as of March 31, 2019. State NOL carryforwards, due to the limited carryforward period, do not meet the “more likely than not” criteria and the Company will continue to maintain a valuation allowance on the associated deferred tax assets. The Company decreased the valuation allowance on the federal deferred tax assets by $1.7 million as a result of this analysis. 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. The tax expense for the three months ended March 31, 2019 differs from the expected tax computed at the statutory tax rate of 21% primarily due to a U.S. tax benefit of $1.7 million for the reversal of a significant portion of our U.S. deferred tax valuation allowance offset by tax expense of $4.8 million from the addback related to the stock compensation charge recognized during the quarter that is not deductible for tax purposes. |
Capital Stock
Capital Stock | 3 Months Ended |
Mar. 31, 2019 | |
Capital Stock | |
Capital Stock | 7. Capital Stock As of March 31, 2019, the Company has 5,000,000 preferred shares authorized with a par value of $0.0001 and 0 preferred shares issued and outstanding. There were no preferred shares authorized as of December 31, 2018. As of March 31, 2019 and December 31, 2018, the Company has 500,000,000 common shares authorized and 17,000,000 common shares issued and outstanding with a par value of $0.0001. Additional paid in capital is $91.5 million as of March 31, 2019 and $68.5 million as of December 31, 2018. As of March 31, 2019, the Company does not have any additional securities outstanding which could convert to preferred or common stock. |
Management Incentive Plan
Management Incentive Plan | 3 Months Ended |
Mar. 31, 2019 | |
Management Incentive Plan | |
Management Incentive Plan | 8. Management Incentive Plan The Company’s former parent, GC Palomar Investor LP, adopted a 2014 Management Incentive Plan (in the form of profits interests) on February 12, 2014 under which certain officers and employees of PSIC and its affiliates were entitled to Class P Units in GC Palomar Investor LP. Class P unit holders were expected to realize value only upon the occurrence of liquidity events meeting requisite financial thresholds after the Class A unit holders have recovered their investment. The Class P unit holders had no voting rights. The Company did not record stock based compensation expense related to this plan for the period ended March 31, 2018 because no liquidity events were probable of occurring. On March 15, 2019, the Company modified its 2014 Management Incentive Plan by eliminating the requirement of a liquidity event to occur for the holders of its Class P units to realize value. The 12,552,825 Class P units outstanding were modified such that the vesting of each Class P unit holder’s awards was accelerated and their Class P distribution percentages were determined and distributed based on these percentages. This modification resulted in a stock compensation charge and corresponding increase to additional paid‑in capital of $23.0 million for the quarter ending March 31, 2019. The stock compensation charge is included in other underwriting expenses in the Company’s Unaudited Condensed Consolidated Statement of (Loss) Income and Comprehensive (Loss) Income. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2019 | |
Accumulated Other Comprehensive Income | |
Accumulated Other Comprehensive Income | 9. Accumulated Other Comprehensive Income Changes in accumulated other comprehensive income (AOCI) are as follows: Three Months Ended March 31, 2019 2018 (in thousands) Balance as of January 1 $ (563) $ 2,993 Effect of equity accounting guidance adoption — (3,215) Beginning Balance (563) (222) Other comprehensive income (loss) before reclassification 2,632 (932) Federal income taxes (459) 6 Other comprehensive income (loss) before reclassification, net of tax 2,173 (926) Amounts reclassified from AOCI 18 33 Federal income taxes (4) (6) Amounts reclassified from AOCI, net of tax 14 27 Other comprehensive income (loss) 2,187 (899) Balance at end of period $ 1,624 $ (1,121) |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share | |
Earnings Per Share | 10. Earnings Per Share The following table sets out earnings per share of common stock: Three months ended March 31, 2019 2018 (in thousands, except shares and per share data) Net (Loss) Income $ (14,411) $ 5,592 Weighted average shares used in computing net income per share 17,000,000 17,000,000 Net (Loss) Income per share, basic and diluted $ (0.85) $ 0.33 |
Cash Distribution
Cash Distribution | 3 Months Ended |
Mar. 31, 2019 | |
Cash Distribution | |
Cash Distribution | 11. Cash Distribution In March 2019, the Company made a one‑time cash distribution totaling approximately $5.1 million to its then‑sole stockholder, GC Palomar Investor LP, enabling it to distribute funds to its partners, including Genstar Capital, in order to allow such partners to satisfy tax obligations incurred as a result of the domestication transactions. |
Underwriting information
Underwriting information | 3 Months Ended |
Mar. 31, 2019 | |
Underwriting information | |
Underwriting information | 12. Underwriting information The Company has a single reportable segment and offers primarily earthquake, wind, and flood insurance products. Gross written premiums (GWP) by product are presented below: Three Months Ended March 31, 2019 2018 ($ in thousands) % of % of Amount GWP Amount GWP Product Residential Earthquake $ 29,308 54.3 % $ 16,751 % Specialty Homeowners 7,780 14.4 % 6,636 % Commercial All Risk 7,565 14.0 % 2,936 % Commercial Earthquake 6,532 12.1 % 5,830 % Hawaii Hurricane 2,074 3.8 % 1,504 % Flood 772 1.4 % 376 % Total Gross Written Premium $ 54,031 100 % $ 34,033 % Gross written premiums by state are as follows: Three Months Ended March 31, 2019 2018 ($ in thousands) % of % of Amount GWP Amount GWP State California $ 30,449 56.4 % $ 17,726 % Texas 10,439 19.3 % 7,687 % Hawaii 2,091 3.9 % 1,504 % South Carolina 1,669 3.1 % 843 % Washington 1,594 3.0 % 1,012 % Oregon 1,456 2.7 % 1,052 % Illinois 1,050 1.9 % 1,045 % Other 5,283 9.7 % 3,164 % Total Gross Written Premium $ 54,031 100 % $ 34,033 % |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events Initial Public Offering (IPO) On April 22, 2019, the Company completed its IPO with the sale of 6,468,750 shares of common stock at a price to the public of $15.00 per share, including 843,750 shares sold upon the exercise in full of the underwriter’s option to purchase additional shares. After underwriter discounts and commissions and estimated offering expenses, net proceeds from the IPO were approximately $86.7 million. 2019 Equity Incentive Plan On April 16, 2019 , the Company’s 2019 Equity Incentive Plan (“the 2019 Plan”) became effective immediately prior to the effectiveness of the registration statement filed in connection with the IPO. The 2019 Plan will provide for the grant of stock options, stock appreciation rights, restricted stock, 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. The 2019 Plan will be administered by the compensation committee of the Company’s board of directors. Subject to the provisions of the 2019 Plan, the compensation committee will determine at its discretion the persons to whom and the times at which awards are granted, the sizes of such awards and all of their terms and conditions. A total of 2,400,000 shares of common stock are initially authorized and reserved for issuance under the 2019 Plan. This reserve will automatically increase on January 1, 2020 and each subsequent anniversary 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; and · an amount determined by the board of directors. In connection with the adoption of the 2019 Plan, the Company’s Compensation Committee granted 990,393 stock options and restricted stock unit awards. Stock options were issued with an exercise price equal to the IPO price of $15.00 per share. The options will vest monthly over a two to four year period with a one year cliff and the restricted stock unit awards will vest annually. All stock options expire after ten years. 2019 Employee Stock Purchase Plan On April 16, 2019 , the Company’s 2019 Employee Stock Purchase Plan (“the 2019 ESPP”) became effective immediately prior to the effectiveness of the registration statement filed in connection with the IPO. 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 under the 2019 ESPP on January 1, 2020 and each subsequent anniversary through 2029, equal to the smaller of: · 240,000 shares of our common stock; or · such other amount as may be determined by the board of directors. The compensation committee of the board of directors will administer the 2019 ESPP and have full authority to interpret the terms of the 2019 ESPP. Redemption of the Floating Rate Notes On April 23, 2019, the Company issued a notice of redemption to redeem all of the outstanding principal amount of Palomar Insurance Holdings, Inc.’s $20.0 million Floating Rate Senior Secured Notes due 2028. The Floating Rate Notes will be redeemed on May 23, 2019, at a redemption price equal to 102% of the principal amount of the Floating Rate Notes, or $20.4 million (plus $0.3 million of accrued and unpaid interest thereon). The total redemption price of $20.7 million will be paid on May 23, 2019. The Company will recognize a charge of $1.3 million upon payment of the debt with $0.4 million due to the redemption premium and $0.9 due to the write-off of unamortized debt issuance costs. |
Summary of Operations and Bas_2
Summary of Operations and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Operations and Basis of Presentation | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and include the accounts of the Company and its wholly‑owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Stock Split | Stock Split On March 15, 2019, the Company effected a 17,000,000 for one forward stock split in conjunction with domestication in the United States. All share and per share information included in the accompanying condensed consolidated financial statements and notes to the condensed consolidated financial statements have been retroactively adjusted to reflect the stock split for the Company’s common stock for all periods presented. |
Use of Estimate | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein. All revisions to accounting estimates are recognized in the period in which the estimates are revised. Significant estimates reflected in the Company’s condensed consolidated financial statements include, but are not limited to, reserves for losses and loss adjustment expenses, reinsurance recoverables on unpaid losses, and the fair values of investments. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Accordingly, the Company is provided the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non‑emerging growth companies or (ii) within the same time periods as private companies. The Company has elected to adopt new or revised accounting guidance within the same time period as private companies, unless, as indicated below, management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance. Recently issued accounting pronouncements not yet adopted In May 2014, the FASB issued new accounting guidance related to revenue recognition, “ASU 2014‑09, Revenue from Contracts with Customers (Topic 606) .” The guidance applies to all companies that either enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards, such as insurance contracts. Under this guidance, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under the current guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligations. According to the superseding standard ASU 2015-14 that deferred the effective dates of the preceding, and because the Company is filing as an emerging growth company, the standard became effective for the Company January 1, 2019, but the Company is not required to present the impacts of the standard until it files its annual report on Form 10-K for the fiscal year ended December 31, 2019. The Company expects to adopt this standard using the modified retrospective method. The Company does not expect adoption to have a material impact on its consolidated financial statements, but will continue to assess the potential impact of adoption throughout 2019. In February 2016, the FASB issued new guidance for accounting for leases, “ASU 2016‑02, Leases (Topic 842) .” Under current guidance, leases are only included on the balance sheet if the criteria to classify the agreement as a capital lease are met. This update will require the recognition of a right‑of‑use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. This guidance was subsequently amended multiple times and offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. This new guidance requires a modified retrospective adoption, applying the new standard to all leases existing at the date of initial application, with early adoption permitted. An entity may choose to use the standard’s effective date, rather than the beginning of the earliest comparative period presented, as the date of initial application. An entity would record the effects of initially applying the new guidance as a cumulative‑effect adjustment to retained earnings. Consequently, an entity’s reporting for the comparative periods presented in the year of adoption would continue to be in accordance with the current guidance, including the current disclosure requirements. To facilitate transition, the new guidance includes a package of practical expedients that entities may elect to apply on adoption. The package of practical expedients relates to the identification and classification of leases that commenced before the effective date and initial direct costs for leases that commenced before the effective date. The new guidance also includes a practical expedient permitting the use of hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. This update is effective for annual reporting periods beginning after December 15, 2019, and interim reporting periods within fiscal years beginning after December 31, 2020 with early adoption permitted. The Company is currently evaluating the impact that this new guidance will have on its condensed consolidated financial statements. In June 2016, the FASB issued “ASU 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments .” Current guidance delays the recognition of credit losses until it is probable a loss has been incurred. This updated guidance will require financial assets measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. Credit losses relating to available‑for‑sale debt securities will also be recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which fair value is below amortized cost. This update will be effective for annual reporting periods beginning after December 15, 2020 and interim reporting periods within fiscal years beginning after December 15, 2021. Early adoption is permitted, but not before annual reporting periods beginning on or after December 15, 2018. The Company is currently evaluating the impact that this new guidance will have on its condensed consolidated financial statements. In August 2018, the FASB issued “ASU 2018‑13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement . Among other things, this new guidance eliminates the need to disclose transfers between Level 1 and Level 2 of the fair value hierarchy, changes the policy for timing of transfers and the valuation processes for Level 3 fair value measurements and includes requirements to disclose quantitative information about Level 3 measurements. This new guidance will be effective for annual and interim reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact that this new guidance will have on its condensed consolidated financial statements. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments | |
Schedule of available-for-sale investments | Gross Gross Amortized Unrealized Unrealized Fair March 31, 2019 Cost or Cost Gains Losses Value (in thousands) Fixed maturities: U.S. Governments $ 12,326 $ 195 $ (59) $ 12,462 States, territories, and possessions 2,304 59 — 2,363 Political subdivisions 818 — (5) 813 Special revenue excluding mortgage/asset-backed securities 11,388 220 (27) 11,581 Industrial and miscellaneous 70,626 1,368 (199) 71,795 Mortgage/asset-backed securities 27,589 359 (16) 27,932 Total available-for-sale investments $ 125,051 $ 2,201 $ (306) $ 126,946 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2018 Cost or Cost Gains Losses Value (in thousands) Fixed maturities: U.S. Governments $ 15,299 $ 96 $ (126) $ 15,269 States, territories, and possessions 1,227 — (6) 1,221 Political subdivisions 825 — (10) 815 Special revenue excluding mortgage/asset-backed securities 12,429 115 (91) 12,453 Industrial and miscellaneous 65,885 192 (951) 65,126 Mortgage/asset-backed securities 27,284 133 (81) 27,336 Total available-for-sale investments $ 122,949 $ 536 $ (1,265) $ 122,220 |
Schedule of aggregate fair value and gross unrealized losses | Less Than 12 Months More Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized March 31, 2019 Value Losses Value Losses Value Losses (in thousands) Fixed maturity securities: U.S. Governments — — $ 5,742 $ (59) $ 5,742 $ (59) States, territories, and possessions — — — — — — Political subdivisions — — 549 (5) 549 (5) Special revenue excluding mortgage/asset-backed securities — — 5,237 (27) 5,237 (27) Industrial and miscellaneous 2,723 (22) 20,029 (177) 22,752 (199) Mortgage/asset-backed securities 867 (5) 1,696 (11) 2,563 (16) $ 3,590 $ (27) $ 33,253 $ (279) $ 36,843 $ (306) Less Than 12 Months More Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2018 Value Losses Value Losses Value Losses (in thousands) Fixed maturity securities: U.S. Governments $ 1,970 $ (25) $ 6,197 $ (101) $ 8,167 $ (126) States, territories, and possessions 719 (5) 501 (1) 1,220 (6) Political subdivisions 264 (1) 550 (9) 814 (10) Special revenue excluding mortgage/asset-backed securities 1,706 (14) 5,916 (77) 7,622 (91) Industrial and miscellaneous 30,544 (556) 14,913 (395) 45,457 (951) Mortgage/asset-backed securities 6,653 (39) 3,830 (42) 10,483 (81) Total $ 41,856 $ (640) $ 31,907 $ (625) $ 73,763 $ (1,265) |
Schedule of contractual maturities of available-for-sale securities | Amortized Fair Cost Value (in thousands) Due within one year $ 2,968 $ 2,959 Due after one year through five years 46,692 46,600 Due after five years through ten years 35,745 37,053 Due after ten years 12,057 12,402 Mortgage and asset-backed securities 27,589 27,932 $ 125,051 $ 126,946 |
Schedule of net investment income | Three Months Ended March 31, 2019 2018 (in thousands) Interest income $ 1,010 $ 578 Dividend income 30 122 Less: investment expense (80) (83) Net investment income $ 960 $ 617 |
Schedule of net realized and unrealized investment gains and losses | Three Months Ended March 31, 2019 2018 (in thousands) Realized gains: Gains on sales of fixed maturity securities $ 44 $ 9 Gains on sales of equity securities 66 26 Total realized gains 110 35 Realized losses: Losses on sales of fixed maturity securities (66) (42) Losses on sales of equity securities (156) (446) Total realized losses (222) (488) Net realized investment losses (112) (453) Net unrealized gains (losses) on equity securities 2,523 (168) Net realized and unrealized gains (losses) on investments $ 2,411 $ (621) |
Fair value measurements (Tables
Fair value measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair value measurements | |
Schedule of fair value hierarchy for financial assets and liabilities | March 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets: Fixed maturity securities U.S. Governments $ — $ 12,462 $ — $ 12,462 States, territories, and possessions — 2,363 — 2,363 Political subdivisions — 813 — 813 Special revenue excluding mortgage/asset-backed securities — 11,581 — 11,581 Industrial and miscellaneous — 71,795 — 71,795 Mortgage/asset-backed securities — 27,932 — 27,932 Equity securities 21,778 — — 21,778 Cash, cash equivalents, and restricted cash 10,891 — — 10,891 Total assets $ 32,669 $ 126,946 $ — $ 159,615 Liabilities: Long-term notes payable $ — $ — $ 20,000 $ 20,000 Total liabilities $ — $ — $ 20,000 $ 20,000 December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Assets: Fixed maturity securities U.S. Governments $ — $ 15,269 $ — $ 15,269 States, territories, and possessions — 1,221 — 1,221 Political subdivisions — 815 — 815 Special revenue excluding mortgage/asset-backed securities — 12,453 — 12,453 Industrial and miscellaneous — 65,126 — 65,126 Mortgage/asset-backed securities — 27,336 — 27,336 Equity securities 25,171 — — 25,171 Cash, cash equivalents, and restricted cash 9,924 — — 9,924 Total assets $ 35,095 $ 122,220 $ — $ 157,315 Liabilities: Long-term notes payable $ — $ — $ 20,000 $ 20,000 Total liabilities $ — $ — $ 20,000 $ 20,000 |
Reserve for Losses and Loss A_2
Reserve for Losses and Loss Adjustment Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Reserve for Losses and Loss Adjustment Expenses | |
Schedule of reconciliation of the beginning and ending reserve balances for losses and LAE on a net of reinsurance basis to the gross amounts | Three Months Ended March 31, 2019 2018 (in thousands) Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period $ 4,165 $ 4,432 Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to: Current year 278 2,436 Prior year 38 (1,498) Total incurred 316 938 Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to: Current year 106 558 Prior year 2,043 1,057 Total payments 2,149 1,615 Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period 2,332 3,755 Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period 10,296 10,692 Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 12,628 $ 14,447 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accumulated Other Comprehensive Income | |
Schedule of changes in accumulated other comprehensive income (AOCI) | Three Months Ended March 31, 2019 2018 (in thousands) Balance as of January 1 $ (563) $ 2,993 Effect of equity accounting guidance adoption — (3,215) Beginning Balance (563) (222) Other comprehensive income (loss) before reclassification 2,632 (932) Federal income taxes (459) 6 Other comprehensive income (loss) before reclassification, net of tax 2,173 (926) Amounts reclassified from AOCI 18 33 Federal income taxes (4) (6) Amounts reclassified from AOCI, net of tax 14 27 Other comprehensive income (loss) 2,187 (899) Balance at end of period $ 1,624 $ (1,121) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share | |
Schedule of net income per share of common stock | : Three months ended March 31, 2019 2018 (in thousands, except shares and per share data) Net (Loss) Income $ (14,411) $ 5,592 Weighted average shares used in computing net income per share 17,000,000 17,000,000 Net (Loss) Income per share, basic and diluted $ (0.85) $ 0.33 |
Underwriting information (Table
Underwriting information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Underwriting information | |
Schedule of gross written premiums | Gross written premiums (GWP) by product are presented below: Three Months Ended March 31, 2019 2018 ($ in thousands) % of % of Amount GWP Amount GWP Product Residential Earthquake $ 29,308 54.3 % $ 16,751 % Specialty Homeowners 7,780 14.4 % 6,636 % Commercial All Risk 7,565 14.0 % 2,936 % Commercial Earthquake 6,532 12.1 % 5,830 % Hawaii Hurricane 2,074 3.8 % 1,504 % Flood 772 1.4 % 376 % Total Gross Written Premium $ 54,031 100 % $ 34,033 % Gross written premiums by state are as follows: Three Months Ended March 31, 2019 2018 ($ in thousands) % of % of Amount GWP Amount GWP State California $ 30,449 56.4 % $ 17,726 % Texas 10,439 19.3 % 7,687 % Hawaii 2,091 3.9 % 1,504 % South Carolina 1,669 3.1 % 843 % Washington 1,594 3.0 % 1,012 % Oregon 1,456 2.7 % 1,052 % Illinois 1,050 1.9 % 1,045 % Other 5,283 9.7 % 3,164 % Total Gross Written Premium $ 54,031 100 % $ 34,033 % |
Summary of Operations and Bas_3
Summary of Operations and Basis of Presentation (Details) | Mar. 15, 2019 |
Summary of Operations and Basis of Presentation | |
Forward stock split | 17,000,000 |
Investments - Available for Sal
Investments - Available for Sale Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Available for sale investments | ||
Amortized Cost | $ 125,051 | $ 122,949 |
Gross Unrealized Gains | 2,201 | 536 |
Gross Unrealized Losses | (306) | (1,265) |
Fair Value | 126,946 | 122,220 |
U.S. Governments | ||
Available for sale investments | ||
Amortized Cost | 12,326 | 15,299 |
Gross Unrealized Gains | 195 | 96 |
Gross Unrealized Losses | (59) | (126) |
Fair Value | 12,462 | 15,269 |
States, territories, and possessions | ||
Available for sale investments | ||
Amortized Cost | 2,304 | 1,227 |
Gross Unrealized Gains | 59 | |
Gross Unrealized Losses | (6) | |
Fair Value | 2,363 | 1,221 |
Political subdivisions | ||
Available for sale investments | ||
Amortized Cost | 818 | 825 |
Gross Unrealized Losses | (5) | (10) |
Fair Value | 813 | 815 |
Special revenue excluding mortgage/asset-backed securities | ||
Available for sale investments | ||
Amortized Cost | 11,388 | 12,429 |
Gross Unrealized Gains | 220 | 115 |
Gross Unrealized Losses | (27) | (91) |
Fair Value | 11,581 | 12,453 |
Industrial and miscellaneous | ||
Available for sale investments | ||
Amortized Cost | 70,626 | 65,885 |
Gross Unrealized Gains | 1,368 | 192 |
Gross Unrealized Losses | (199) | (951) |
Fair Value | 71,795 | 65,126 |
Mortgage/asset-backed securities | ||
Available for sale investments | ||
Amortized Cost | 27,589 | 27,284 |
Gross Unrealized Gains | 359 | 133 |
Gross Unrealized Losses | (16) | (81) |
Fair Value | $ 27,932 | $ 27,336 |
Investments - Security Holdings
Investments - Security Holdings in an Unrealized Loss Position - General Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019USD ($)security | Dec. 31, 2018USD ($)security | |
Number of positions: | ||
Number of unrealized loss positions | security | 91 | 173 |
Other | ||
Payment missed (as a percent) | 0.00% | 0.00% |
Payment delinquent (as a percent) | 0.00% | 0.00% |
Fair Value | ||
Fair Value | $ 36,843 | $ 73,763 |
Unrealized Losses | ||
Unrealized Losses | $ 306 | $ 1,265 |
Investments - Security Holdin_2
Investments - Security Holdings in an Unrealized Loss Position - Tabular Disclosure (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value | ||
Fair Value - Less Than 12 Months | $ 3,590 | $ 41,856 |
Fair Value - More Than 12 Months | 33,253 | 31,907 |
Fair Value - Total | 36,843 | 73,763 |
Unrealized Losses | ||
Unrealized Losses - Less Than 12 Months | (27) | (640) |
Unrealized Losses - More Than 12 Months | (279) | (625) |
Unrealized Losses - Total | (306) | (1,265) |
U.S. Governments | ||
Fair Value | ||
Fair Value - Less Than 12 Months | 1,970 | |
Fair Value - More Than 12 Months | 5,742 | 6,197 |
Fair Value - Total | 5,742 | 8,167 |
Unrealized Losses | ||
Unrealized Losses - Less Than 12 Months | (25) | |
Unrealized Losses - More Than 12 Months | (59) | (101) |
Unrealized Losses - Total | (59) | (126) |
States, territories, and possessions | ||
Fair Value | ||
Fair Value - Less Than 12 Months | 719 | |
Fair Value - More Than 12 Months | 501 | |
Fair Value - Total | 1,220 | |
Unrealized Losses | ||
Unrealized Losses - Less Than 12 Months | (5) | |
Unrealized Losses - More Than 12 Months | (1) | |
Unrealized Losses - Total | (6) | |
Political subdivisions | ||
Fair Value | ||
Fair Value - Less Than 12 Months | 264 | |
Fair Value - More Than 12 Months | 549 | 550 |
Fair Value - Total | 549 | 814 |
Unrealized Losses | ||
Unrealized Losses - Less Than 12 Months | (1) | |
Unrealized Losses - More Than 12 Months | (5) | (9) |
Unrealized Losses - Total | (5) | (10) |
Special revenue excluding mortgage/asset-backed securities | ||
Fair Value | ||
Fair Value - Less Than 12 Months | 1,706 | |
Fair Value - More Than 12 Months | 5,237 | 5,916 |
Fair Value - Total | 5,237 | 7,622 |
Unrealized Losses | ||
Unrealized Losses - Less Than 12 Months | (14) | |
Unrealized Losses - More Than 12 Months | (27) | (77) |
Unrealized Losses - Total | (27) | (91) |
Industrial and miscellaneous | ||
Fair Value | ||
Fair Value - Less Than 12 Months | 2,723 | 30,544 |
Fair Value - More Than 12 Months | 20,029 | 14,913 |
Fair Value - Total | 22,752 | 45,457 |
Unrealized Losses | ||
Unrealized Losses - Less Than 12 Months | (22) | (556) |
Unrealized Losses - More Than 12 Months | (177) | (395) |
Unrealized Losses - Total | (199) | (951) |
Mortgage/asset-backed securities | ||
Fair Value | ||
Fair Value - Less Than 12 Months | 867 | 6,653 |
Fair Value - More Than 12 Months | 1,696 | 3,830 |
Fair Value - Total | 2,563 | 10,483 |
Unrealized Losses | ||
Unrealized Losses - Less Than 12 Months | (5) | (39) |
Unrealized Losses - More Than 12 Months | (11) | (42) |
Unrealized Losses - Total | $ (16) | $ (81) |
Investments - Other-than-tempor
Investments - Other-than-temporarily Impaired (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Investments | ||
Other-than-temporarily impaired | $ 0 | $ 0 |
Investments - Contractual Matur
Investments - Contractual Maturities of Available for Sale Fixed Maturity Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due within one year | $ 2,968 | |
Due after one year through five years | 46,692 | |
Due after five years through ten years | 35,745 | |
Due after ten years | 12,057 | |
Mortgage and asset-backed securities | 27,589 | |
Amortized Cost | 125,051 | $ 122,949 |
Fair Value | ||
Due within one year | 2,959 | |
Due after one year through five years | 46,600 | |
Due after five years through ten years | 37,053 | |
Due after ten years | 12,402 | |
Mortgage and asset-backed securities | 27,932 | |
Total | $ 126,946 | $ 122,220 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net investment income | ||
Interest income | $ 1,010 | $ 578 |
Dividend income | 30 | 122 |
Less: investment expense | (80) | (83) |
Net investment income | $ 960 | $ 617 |
Investments - Net Realized and
Investments - Net Realized and Unrealized Investment Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net realized and unrealized investment gains and losses | ||
Gains on sales of fixed maturity securities | $ 44 | $ 9 |
Gains on sales of equity securities | 66 | 26 |
Total realized gains | 110 | 35 |
Losses on sales of fixed maturity securities | (66) | (42) |
Losses on sales of equity securities | (156) | (446) |
Total realized losses | (222) | (488) |
Net realized investment losses | (112) | (453) |
Net unrealized gains (losses) on equity securities | 2,523 | (168) |
Net realized and unrealized gains (losses) on investments | $ 2,411 | $ (621) |
Investments - Securities on Dep
Investments - Securities on Deposit (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Investments | ||
Fair Value | $ 126,946 | $ 122,220 |
Securities on deposit with state regulatory authorities | ||
Investments | ||
Fair Value | $ 5,000 | $ 5,000 |
Fair value measurements - Finan
Fair value measurements - Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Equity securities | $ 21,778 | $ 25,171 |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Equity securities | 21,778 | 25,171 |
Cash, cash equivalents, and restricted cash | 10,891 | 9,924 |
Total assets | 159,615 | 157,315 |
Liabilities: | ||
Long-term notes payable | 20,000 | 20,000 |
Total liabilities | 20,000 | 20,000 |
Fair Value, Measurements, Recurring | U.S. Governments | ||
Assets: | ||
Fair Value Assets | 12,462 | 15,269 |
Fair Value, Measurements, Recurring | States, territories, and possessions | ||
Assets: | ||
Fair Value Assets | 2,363 | 1,221 |
Fair Value, Measurements, Recurring | Political subdivisions | ||
Assets: | ||
Fair Value Assets | 813 | 815 |
Fair Value, Measurements, Recurring | Special revenue excluding mortgage/asset-backed securities | ||
Assets: | ||
Fair Value Assets | 11,581 | 12,453 |
Fair Value, Measurements, Recurring | Industrial and miscellaneous | ||
Assets: | ||
Fair Value Assets | 71,795 | 65,126 |
Fair Value, Measurements, Recurring | Mortgage/asset-backed securities | ||
Assets: | ||
Fair Value Assets | 27,932 | 27,336 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Assets: | ||
Equity securities | 21,778 | 25,171 |
Cash, cash equivalents, and restricted cash | 10,891 | 9,924 |
Total assets | 32,669 | 35,095 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Assets: | ||
Total assets | 126,946 | 122,220 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | U.S. Governments | ||
Assets: | ||
Fair Value Assets | 12,462 | 15,269 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | States, territories, and possessions | ||
Assets: | ||
Fair Value Assets | 2,363 | 1,221 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Political subdivisions | ||
Assets: | ||
Fair Value Assets | 813 | 815 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Special revenue excluding mortgage/asset-backed securities | ||
Assets: | ||
Fair Value Assets | 11,581 | 12,453 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Industrial and miscellaneous | ||
Assets: | ||
Fair Value Assets | 71,795 | 65,126 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Mortgage/asset-backed securities | ||
Assets: | ||
Fair Value Assets | 27,932 | 27,336 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||
Liabilities: | ||
Long-term notes payable | 20,000 | 20,000 |
Total liabilities | $ 20,000 | $ 20,000 |
Fair value measurements - Trans
Fair value measurements - Transfers (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Fair value measurements | ||
Fair value, assets, Level 1 to Level 2 | $ 0 | $ 0 |
Fair value, assets, Level 2 to Level 1 | 0 | 0 |
Fair value, liabilities, Level 1 to Level 2 | 0 | 0 |
Fair value, liabilities, Level 2 to Level 1 | 0 | 0 |
Fair value, assets, transfers into Level 3 | 0 | 0 |
Fair value, assets, transfers out of Level 3 | 0 | 0 |
Fair value, liabilities, transfers into Level 3 | 0 | 0 |
Fair value, liabilities, transfers out of Level 3 | $ 0 | $ 0 |
Reserve for Losses and Loss A_3
Reserve for Losses and Loss Adjustment Expenses - Roll Forward (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Reserve for Losses and Loss Adjustment Expenses | ||
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period | $ 4,165 | $ 4,432 |
Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to: | ||
Current year | 278 | 2,436 |
Prior year | 38 | (1,498) |
Total incurred | 316 | 938 |
Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to: | ||
Current year | 106 | 558 |
Prior year | 2,043 | 1,057 |
Total payments | 2,149 | 1,615 |
Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period | $ 2,332 | $ 3,755 |
Reserve for Losses and Loss A_4
Reserve for Losses and Loss Adjustment Expenses - Total (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Reserve for Losses and Loss Adjustment Expenses | ||||
Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period | $ 2,332 | $ 4,165 | $ 3,755 | $ 4,432 |
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period | 10,296 | 11,896 | 10,692 | |
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period | $ 12,628 | $ 16,061 | $ 14,447 |
Reserve for Losses and Loss A_5
Reserve for Losses and Loss Adjustment Expenses - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Reserve for Losses and Loss Adjustment Expenses | ||
Loss and loss adjustment expense reserve shortfall | $ 40 | $ 40 |
Loss and loss adjustment expense reserve redundancy | $ 1,500 | $ 1,500 |
Long-term debt - Surplus Notes
Long-term debt - Surplus Notes (Details) - USD ($) $ in Millions | Feb. 03, 2015 | Sep. 30, 2018 | Aug. 31, 2018 |
Long-term debt | |||
Outstanding surplus notes | $ 17.5 | ||
Notes Payable, Other Payables | Surplus Notes | |||
Long-term debt | |||
Term | 7 years | ||
Pay down of surplus notes | $ 17.5 | ||
Pre-payment, penalty | 0.1 | ||
Unamortized debt issuance costs | $ 0.4 | ||
Notes Payable, Other Payables | Surplus Notes | London Interbank Offered Rate (LIBOR) | |||
Long-term debt | |||
Interest rate spread (as a percent) | 8.00% |
Long-term debt - Floating Rate
Long-term debt - Floating Rate Notes (Details) - Senior Notes - 2018 Floating Rate Notes $ in Millions | 1 Months Ended |
Sep. 30, 2018USD ($) | |
Long-term debt | |
Debt instrument, face amount | $ 20 |
Debt instrument, redemption price, percentage (as a percent) | 100.00% |
Three-month Treasury Rate | |
Long-term debt | |
Interest rate spread (as a percent) | 6.50% |
Long-term debt - Interest (Deta
Long-term debt - Interest (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Long-term debt | |||
Interest accrued | $ 0.4 | $ 0.1 | |
Senior Notes | 2018 Floating Rate Notes | |||
Long-term debt | |||
Interest expense | 0.4 | ||
Interest paid | $ 0.4 | ||
Notes Payable, Other Payables | Surplus Notes | |||
Long-term debt | |||
Interest expense | $ 0.4 | ||
Interest paid | $ 0.4 |
Income Taxes - Excise Tax (Deta
Income Taxes - Excise Tax (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Federal excise tax rate (as a percent) | 1.00% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | |||
Deferred tax assets, valuation allowance | $ 0 | $ 0 | |
Valuation allowance, deferred tax asset, increase (decrease), amount | $ (1.7) |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Effective Income Tax Rate Reconciliation, Percent | |
Statutory tax rate (as a percent) | 21.00% |
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount | |
Reversal of U.S. deferred tax valuation allowance | $ 1.7 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Amount | |
Addback related to stock compensation not deductible for tax purposes | $ 4.8 |
Capital Stock (Details)
Capital Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Capital Stock | ||
Preferred stock, shares authorized | 5,000,000 | 0 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 17,000,000 | 17,000,000 |
Common stock, shares outstanding | 17,000,000 | 17,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Additional paid in capital | $ 91,459 | $ 68,498 |
Management Incentive Plan (Deta
Management Incentive Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 15, 2019 | |
Management Incentive Plan | ||
Increase in additional paid in capital | $ 22,961 | |
2014 Management Incentive Plan | ||
Management Incentive Plan | ||
Units outstanding | 12,552,825 | |
Stock compensation charge | 23,000 | |
Increase in additional paid in capital | $ 23,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Effect of Equity Accounting Guidance Adoption (Details) - Accumulated Other Comprehensive (Loss) Income - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Accumulated Other Comprehensive Income | ||||
Beginning balance | $ 1,624 | $ (563) | $ (1,121) | $ 2,993 |
Effect of equity accounting guidance adoption | (3,215) | |||
Adjusted beginning balance | $ (563) | $ (222) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Roll Forward (Details) - Accumulated Other Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Changes in accumulated other comprehensive income | ||
Beginning balance | $ (563) | $ 2,993 |
Effect of equity accounting guidance adoption | (3,215) | |
Adjusted beginning balance | (563) | (222) |
Other comprehensive income (loss) before reclassification | 2,632 | (932) |
Federal income (taxes) benefit | (459) | 6 |
Other comprehensive income (loss) before reclassification, net of tax | 2,173 | (926) |
Amounts reclassified from AOCI | 18 | 33 |
Federal income taxes | (4) | (6) |
Amounts reclassified from AOCI, net of tax | 14 | 27 |
Other comprehensive income (loss) | 2,187 | (899) |
Ending balance | $ 1,624 | $ (1,121) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share | ||
Net income (loss) | $ (14,411) | $ 5,592 |
Weighted average shares used in computing net income per share | 17,000,000 | 17,000,000 |
Net (Loss) Income per share, basic and diluted | $ (0.85) | $ 0.33 |
Cash Distribution (Details)
Cash Distribution (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended |
Mar. 31, 2019 | Mar. 31, 2019 | |
Cash Distribution | ||
One-time cash distribution | $ 5,100 | $ 5,120 |
Underwriting information - Gros
Underwriting information - Gross Written Premiums by Product (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Gross written premiums | ||
Amount | $ 54,031 | $ 34,033 |
% of GWP | 100.00% | 100.00% |
Residential Earthquake | ||
Gross written premiums | ||
Amount | $ 29,308 | $ 16,751 |
% of GWP | 54.30% | 49.30% |
Specialty Homeowners | ||
Gross written premiums | ||
Amount | $ 7,780 | $ 6,636 |
% of GWP | 14.40% | 19.50% |
Commercial Earthquake | ||
Gross written premiums | ||
Amount | $ 6,532 | $ 5,830 |
% of GWP | 12.10% | 17.10% |
Commercial All Risk | ||
Gross written premiums | ||
Amount | $ 7,565 | $ 2,936 |
% of GWP | 14.00% | 8.60% |
Hawaii Hurricane | ||
Gross written premiums | ||
Amount | $ 2,074 | $ 1,504 |
% of GWP | 3.80% | 4.40% |
Flood | ||
Gross written premiums | ||
Amount | $ 772 | $ 376 |
% of GWP | 1.40% | 1.10% |
Underwriting information - Gr_2
Underwriting information - Gross Written Premiums by State (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Gross written premiums | ||
Amount | $ 54,031 | $ 34,033 |
% of GWP | 100.00% | 100.00% |
California | ||
Gross written premiums | ||
Amount | $ 30,449 | $ 17,726 |
% of GWP | 56.40% | 52.10% |
Texas | ||
Gross written premiums | ||
Amount | $ 10,439 | $ 7,687 |
% of GWP | 19.30% | 22.60% |
Hawaii | ||
Gross written premiums | ||
Amount | $ 2,091 | $ 1,504 |
% of GWP | 3.90% | 4.40% |
South Carolina | ||
Gross written premiums | ||
Amount | $ 1,669 | $ 843 |
% of GWP | 3.10% | 2.50% |
Washington | ||
Gross written premiums | ||
Amount | $ 1,594 | $ 1,012 |
% of GWP | 3.00% | 3.00% |
Oregon | ||
Gross written premiums | ||
Amount | $ 1,456 | $ 1,052 |
% of GWP | 2.70% | 3.10% |
Illinois | ||
Gross written premiums | ||
Amount | $ 1,050 | $ 1,045 |
% of GWP | 1.90% | 3.10% |
Other | ||
Gross written premiums | ||
Amount | $ 5,283 | $ 3,164 |
% of GWP | 9.70% | 9.20% |
Subsequent Events - Initial Pub
Subsequent Events - Initial Public Offering (Details) - Subsequent Event $ / shares in Units, $ in Millions | Apr. 22, 2019USD ($)$ / sharesshares |
IPO | |
Subsequent Events | |
Shares issued (in shares) | 6,468,750 |
Share price (in dollars per share) | $ / shares | $ 15 |
Net proceeds | $ | $ 86.7 |
Underwriter's option | |
Subsequent Events | |
Shares issued (in shares) | 843,750 |
Subsequent Events - 2019 Equity
Subsequent Events - 2019 Equity Incentive Plan (Details) - 2019 Equity Incentive Plan | Apr. 16, 2019$ / sharesshares |
Stock Options | Minimum | |
Subsequent Events | |
Vesting period | 2 years |
Stock Options | Maximum | |
Subsequent Events | |
Vesting period | 4 years |
Subsequent Event | |
Subsequent Events | |
Shares authorized (in shares) | 2,400,000 |
Percentage of number of shares of common stock issued and outstanding (as a percent) | 3.00% |
Stock options and restricted stock units granted (in shares) | 990,393 |
Exercise price (in dollars per share) | $ / shares | $ 15 |
Subsequent Event | Stock Options | |
Subsequent Events | |
Expiry period | 10 years |
Subsequent Event | Restricted Stock Units | |
Subsequent Events | |
Vesting period | 1 year |
Cliff period | 1 year |
Subsequent Events - 2019 Employ
Subsequent Events - 2019 Employee Stock Purchase Plan (Details) - Subsequent Event - 2019 Employee Stock Purchase Plan - shares | 12 Months Ended | |
Dec. 31, 2020 | Apr. 16, 2019 | |
Subsequent Events | ||
Shares authorized (in shares) | 240,000 | |
Scenario, Forecast | Maximum | ||
Subsequent Events | ||
Annual increase (in shares) | 240,000 |
Subsequent Events - Floating Ra
Subsequent Events - Floating Rate Notes (Details) - Subsequent Event - Senior Notes - 2018 Floating Rate Notes - Scenario, Forecast $ in Millions | May 23, 2019USD ($) |
Long-term debt | |
Debt instrument, repurchased face amount | $ 20 |
Redemption price, percentage (as a percent) | 102.00% |
Redemption price | $ 20.4 |
Accrued interest and unpaid interest | 0.3 |
Total redemption price | $ 20.7 |