PE-backed insurer Palomar files for IPO on the Nasdaq

Fast-growing US specialty insurer Palomar Holdings has filed for an initial public offering (IPO) on the Nasdaq stock exchange. It is looking to raise $50 million from the deal.

The company, which was founded in 2014, specialises in insuring catastrophe risks, especially earthquake risk, and is backed by Genstar Capital. Mac Armstrong and Heath Fisher, its founders, previously held senior positions at Arrowhead General Insurance Agency and Guy Carpenter respectively.

In 2018, its gross written premiums were $155 million compared with $120 million in 2017. It is heavily reliant on reinsurance; its 2019 net written premiums were $72 million. It made a net profile of $18.2 million in 2018 compared with $3.8 million a year earlier.

The company launched a reinsurer on Bermuda last year, Palomar Specialty Reinsurance Company, which was assigned a financial strength rating of A- by AM Best. It has also previously issued a cat bond: a $166 million three-year Torrey Pines Re issued in 2017.

In 2018, the company also raised $20 million via a private placement with Cohen & Company to pay off a surplus note of Palomar Specialty Insurance Company (Palomar) and for general working capital purposes.

Barclays, JP Morgan and Keefe Bruyette Woods are the joint bookrunners on the IPO.