Yep, it is afternoon. I'll kick off the session, Adam Klobber, insurance analyst at William Blair. Please look at our website for disclosures. This session is with Palomar. We have the founder and CEO, Matt Armstrong, joining us. I'll just say two words and kick it over to Matt. Palomar is probably, you know, or some of you know, is one of our favorite companies. It is our top pick this year. So we're not just saying that. It is our top pick. But it's relatively unique. There's a lot of, having followed this industry for a while, there's a fair amount of specialty companies. And if you can execute in the specialty business, it's a good business model. Palomar is really a much, much different company. Their specialty, which is great, but it's really how the company is constructed, how they go about the markets, it really is materially different. So I appreciate you here listening to the company. Mac?

Thanks, Adam. Great to be here. I want to thank William Blair for having us. This is one of our favorite events, if not our favorite event of the year, and we appreciate William Blair's support of our business since actually before we went public, but certainly since we went public in 2019. So you can read that disclaimer in your spare time as well. Like Adam said, it's on our website. But just quickly, a summary of our business. And I think to piggyback on what Adam described, this overview is really intended to impress upon you what makes us different. We are a specialty insurer, we are one full stop, but we don't try to be all things to all people. What we want to do is focus on markets where our data analytics, our underwriting acumen, in our risk transfer expertise give us a structural edge. What we call it is really being a one-of-one specialty insurer that can find niches where the standard market or the E&S market isn't equipped to serve and then build leadership positions there. We are an A and best A-rated company, A11, soon to be a 12 with over a billion dollars of gap equity in our sites and i think a prime example of what we do is really been in the earthquake market and we'll talk a bit more about earthquake but we are the third largest rider of earthquake insurance in the us and we write both residential and commercial and we write it both on an admitted and an ens basis but that model has been exported into five other product categories and four other product categories excuse me inland marine and other property casualty crop and now surety and credit and again what we're trying to do is leverage data analytics underwriting technology and existing relationships to build market leadership positions through both an admitted and an ens offering What's critical to our success is a couple other components, and that is, one, our distribution strategy. We say we're distribution agnostic, so depending on the line of business, we could work with a wholesaler, a retailer, and another insurance company to generate business for us. We are flexible. If a risk fits our box, we don't care how it's originated for us. Certain products tend to be loyal to certain channels, but generally speaking, we are going to find the risk and we are somewhat indifferent to how it arrives on our desk. And then lastly, risk transfer, reinsurance. That is one of our true differentiators as well. We are premised around using reinsurance to limit exposure to major events and reduce earnings volatility. And I think what that ultimately does is lead to predictability and consistency in the results, and we will talk more about that as well today. So how we have incorporated this portfolio into an operational or strategic mantra is really what we call Palomar 2x. We launched this in 2022, and it's really our commitment to double adjusted net income in an intermediate time frame, so I think three to five years, while maintaining adjusted an ROE above 20%. The core tenets of this strategy certainly stems from profitable growth. Our growth has been almost entirely organic. We've done one major acquisition and a couple of smaller tuck-ins, but really central to Palomar 2X has been the organic growth that stemmed from initially the earthquake business, which has provided an anchor to us. It's a high margin, low frequency, but high severity line that can generate a combined ratio in the mid-60s. And what that allows us to do is complement, and this is what we've done over the last 12, 13 years, is complement the earthquake with lower volatility specialty lines of business, whether it be crop or surety or inland marine and builders risk. risk and the casualty franchise. But what we ultimately are also doing to ensure there's that low volatility is the comprehensive use of reinsurance to smooth out the earnings base and preserve our strong margin. So that can be protecting us from a severe event like an earthquake or hurricane or managing the casualty book from a shock loss standpoint or not a disproportionate amount of exposure from a gross and net limit standpoint since we've introduced the palomar 2x concept we have achieved the target of growing just or doubling adjusted net income in less than three years and importantly we're not deviating from this philosophy you know we think that this is achievable for the indefinite future. And we have levers that allow us to do that, whether that is indeed managing our gross and net line sizes up. In the case of property, we'll increase our line size. In the case of casualty, we're going to continue to keep it very modest. We also have the ability to use the reinsurance to potentially flex up and down how much limit we have protecting us, how much we're willing to expose to a given large event. But that also provides us leverage. And then And lastly, with the investment portfolio becoming an increasingly meaningful contributor to our bottom line, we have investment leverage. We have been overcapitalized, so to speak, and we think we remain so, but as the complexion of the book has changed, the investment portfolio will drive incremental leverage. So the combination of those will allow us to sustain our strong net income growth objectives. You know, in this year, what we're really looking to do at a strategic level is continue to leverage our scale, whether that be increasing our line sizes in areas like property or potentially managing the risk from a session percentage in our crop book, like leverage the scale the balance sheet affords us. Second, we are curating this portfolio to really navigate any market cycle. You know, the combination or the complexion of the book, whether it's the combination of admitted and ENS, can allow us to endure a soft or a hard market, if you are susceptible to that. And then thirdly, we're going to continue to deepen and unlock existing markets. The gray surety acquisition is a prime example of this. we believe the surety market is a very complimentary one to the other four segments of the book from a margin standpoint as well as from an uncorrelation standpoint it's complimentary in the sense that it has its own market nuance and cycle it's additive so we're going to continue to unlock opportunities there and expand existing footprints in both in existing markets as well as new and then we'll continue to integrate and operate and optimize the business and that's really focused on leveraging investments we've made in people process and systems and so as I look forward, you'll start to see operating leverage kick in from what's already a healthy margin space, but really in 27, 28 and beyond as we monetize the investments made over the last few years. So turning to the next slide, this just gives you a little more color around the portfolio. We feel that the thoughtful and deliberate diversification will drive the successful execution of Palomar 2X4, the intermediate, if not indefinite future. Since our formation, we really have tried to intentionally diversify into what we think are adjacent markets where we see a compelling opportunity to certainly generate attractive risk-adjusted returns, but also leverage existing resources, whether that be people, distribution, reinsurance, data, and technology. The intentional diversification within specialty insurance, again, is premised around us navigating any market cycle. A generationally hard property market like we saw in 2023 or now what has been a softening property cap market in 2026 and current but it's important to point out that we are seeing opportunities across the portfolio we grew 43 percent in the first quarter and it was across earthquake casualty surety crop and in the marine the growth rates are different but the balance in the book is affording us the ability to continue to grow even where there is more pronounced softening. So when you look at the mix in earthquake, we have a strong combination of both residential and commercial earthquake business. Commercial business is under some pressure from a pricing standpoint and particularly in the large segment, whereas our residential earthquake business, which is roughly 60% of the earthquake book, has an average rate increase of around 10% and 90%, plus or minus 90% policy retention. So very sticky. So the complement of the two is allowing us to grow in the earthquake market. In the marine and property, what you have here is around eight different products. It's a combination of commercial and residential business, as well as admitted and ENS. So like Earthquake, you can play through pockets of softness and have good growth drivers and particularly in the residential component like we're seeing in flood as well as Hawaiian Hurricane and then our residential builder's risk business. And builder's risk is the largest component of that Inland Marine and property franchise. The casualty book is niche lines of business like environmental liability, contractors general liability, real estate E&O, and other E&S lines. Majority of this business is written on an ENS basis and you're seeing stable rates, there are pockets where there is some rate pressure, but like in the commercial, excuse me, like in the property segment, we know where to lean in and like healthcare liability or contractors GL and know where to pull back, like in this case right now, cyber and certain classes of professional liability. CROP is our fastest growing line of business. We are one of 12 approved insurance providers, which means we get to access the Federal Crop Insurance Corporation and seed business to the FCIC through the standard reinsurance agreement they put in place with the 12 approved insurance providers, which is important because the crop business is one where the federal government sets the pricing. And so you're differentiating via service, claims handling, and technology. And we have grown rapidly. We expect to grow 35% this year and off of a base of around a quarter billion dollars. And do you think that in the near term, we can get that over half a billion, and long term, that should be a billion dollar line of business. And then lastly, the surety and credit segment is our newest class of business, and that That is one that we think has both attractive margins, and it's also compelling because it is uncorrelated to the traditional P&C market cycle. You can see again just the mix of the business and how much of it is ENS versus admitted, and how much is this commercial versus residential, and I think that balance really affords us the ability to sustain our bottom line growth in any market cycle. This next slide just shows how the book has evolved, but the consistency of the margins remained. I actually give credit to Adam because this is an analysis that piggybacks off of something he pulled together. Concerns that some investors have had is that the diminution of the earthquake book as a percentage of the total would potentially degrade our margin some. And what you can see here is that's not the case because, in fact, as earthquake has shrunk, certainly the bottom line has grown meaningfully. It's grown nearly fourfold from 2021 to 20 to 227 on an LTM basis. The combined ratio hasn't changed. The combined ratio is still in the mid-70s, still what we would consider is best in class. And then furthermore, the ROE has actually improved. The lines of business that we have gone into are not consuming capital away from our high margin lines. In many ways, we are overcapitalized, and that affords us the ability to go into an area like crop that's not capital intensive, but it's certainly uncorrelated with earthquake, and leverage that capital and make it accretive to the ROE. So, this slide just is a simple summation of the continued execution that we've had through the first quarter of this year. You know, I think what I would probably prefer to highlight is just the sustained growth and the sustained profitability in there. You know, gross written premiums were up 40 plus percent in the first quarter. the adjusted net income was up 24 percent and the adjusted ROE was close approaching 27 percent you know this is you know a nice combination a very compelling combination of growth and profitability and in the first quarter was actually our 14th consecutive quarter of beating consensus EPS you know the top line growth was broad-based it wasn't just a one-trick pony so to speak casualty grew 55 percent um the surety and credit obviously the addition of gray does supplement that grew 130 and crop grew 82 and even in the teeth of a softening commercial property market we saw growth in quake and um the in the marine and other property i think the other thing that i would point out too is when you look at the composition of the returns that 27 of return on equity um investment income was called 18 million of a 61 million dollar total so a nice contributor but the predominance of our results and our returns comes from the underwriting side we are an underwriting organization and the returns uh demonstrate as much um i talked about initially just how we use data analytics uh and technology to separate ourselves from our competition and this is something that adam and i have talked about even before we went public like we think that we can use technology and data to ultimately compete out compete in the market and differentiate ourselves to our distribution partners you know we we built a company to scale a lot of our core systems enable straight through processing residential earthquake hawaiian hurricane do not require human interaction you enter in seven or eight attributes you can get a quote on the back end we use technology to enhance the portfolio and optimize the reinsurance spend through data analytics and third-party and proprietary systems additionally we continue you to invest in our systems whether that's leveraging new technologies that are a and i enabled um both a policy administration standpoint uh or a claims management standpoint but also incorporating ai to help us from a productivity whether that be in service or in underwriting or risk selection ultimately we think we can use ai right now to enhance the customer experience to improve our risk selection and drive down costs both operationally as well as from a seeded earned premium standpoint and we want to continue to invest in that to make sure that we don't fall behind, but rather use it as a competitive differentiator. The other true competitive differentiator for Palomar is our comprehensive and sophisticated use of reinsurance. Our leadership team, the good portion of them cut their teeth in the reinsurance space. And when we launched the company, we knew that we could use reinsurance to generate consistent returns and protect our balance sheet in a way that was unique to the market it's been central since we started the company in 2014 and it really has credentialized us we have an reinsurance panel that's over a hundred strong no single reinsure constitutes more than two and half percent of our xol limit and they importantly support us across multiple treaties whether it's property xol or casualty quota share or in the ils market it's not just a risk management tool for us it's a really a competitive differentiator i think it's best illustrated in the fact that we use reinsurance for a single product in many instances four different types of reinsurance will touch a single line and how it supports it. So if you look at earthquake or builder's risk, we will have an excess of loss treaty working for us. We could have a cap-on working for us. We would have facultative reinsurance, so that's individual risk protection, and then a quota share treaty, which is more pro-rata support and risk transfer. um ultimately what we are trying to do is provide consistent earnings we want to protect the balance sheet from a severe event we want to make sure that we're not overextended from a gross and net limit standpoint so a shot loss throws off a quarter and i think our uh recent consistency or our long-standing consistent results demonstrate uh the sophistication and the utilization And just to give a quick update on the recent reinsurance market, we have been active and we are constantly in the market, but it's been across the portfolio. In the first quarter alone, we completed six different treaties, three property and three casualty, all of those renewed at improved economics relative to the expiring terms. In the circumstance of the casualty treaties, we kept our sessions, so how much we seed off to the reinsurers flat, but they paid us more for what we seeded off to them. And I think that's a testament to the solid underwriting, especially for younger lines of business as much as it is the market cycle. As it relates to the property side, similarly had quota shares renew attractive economics where we were getting a higher seed. We were potentially retaining more by getting more third party capacity to support our growth. So for builders risk, we actually took our program up from 30 million to 50 million dollars of support so we can write larger limits. we're getting paid more for the larger limits that we write on behalf of our reinsurers and we're retaining more but not disproportionate to the growth of our balance sheet and then with our core excess of loss program we now buy a nearly four billion dollars of ground up earthquake protection um that is commensurate with the growth in the earthquake and property book as well as um the increase in the exposure base so both premium and exposure growth and we did it uh at rates that were close to 20 down year over year i think the other thing that's important to point out um was that uh we maintained our event retention so what is our exposure from a single hurricane uh or uh earthquake at the expiring level despite the growth in balance sheet so when we went public our earthquake retention was 15 million on a surplus base that was called 200 million in an earnings base that was close to 30 million we sit here today midpoint in the guidance is 273 million and earthquake retention is 20 million so it's gone from a quarter plus of earnings to you know a matter of weeks of earnings is how much we would lose from an earthquake in a matter of days in the circumstance of a hurricane so it was a great outcome for us and it was a further testament to our ability to maintaining consistent earnings uh and raising guidance because on the heels of this reinsurance placement we did raise our guidance another time uh and which boats uh dovetails into the next slide um you know we entered 2026 with the initial net income balance of 260 to 275 million following a strong first quarter we raised that to 262 to 278 million uh and now i've taken it up to 266 to 280 million that midpoint implies 26 percent adjusted net income growth for the year it also includes uh eight to twelve million dollars of catastrophe losses um the midpoint of that guidance and this circles back to this palomar 2x concept that we uh manage our business to uh shows a doubling of the net income from 2024 in two years and this would be the second year in which the palomar 2x cohort is doubled inside of two years so as we think about our long-term growth trajectory we're not deviating from palomar 2x and i think uh the uh sustained profitable growth is something that all investors should hold us accountable to uh and then this slide just is a further uh hammers the point home we have beat guidance 12 times uh excuse me we've raised guidance 12 times since 2023 uh the net income in that same time frame has grown uh 43 percent annually um and the initial guidance has been far exceeded over the course of the year 2025 alone we beat the the initial guidance by 16% and as we sit here in early June, we've already raised guidance by 2% for 2026. I would be remiss if I didn't point out that despite our strong net income growth and profitability, we are certainly under indexed from a valuation perspective compared to specialty peers. we have top tier profitability and net income growth return on equity and combined ratio we think it's best in class in this both growth and capital efficiency but yet we don't think that's fully reflected in our valuation and as a result we have put in place a new stock buyback where we have bought or we bought 25 million back in the first quarter and now we have a new 200 million dollar buyback in place in the first quarter we were trading where we higher than we where we are today so you should assume that we are buying back our stock in a meaningful fashion uh as we sit here in june of 2026. so with that this slide just our management team we've been doing it for a long time but i'll hand it over to adam for uh questions I would say it would be the lines of business that we go into have very strong risk-adjusted return opportunities if you are thoughtful in how you use reinsurance and technology and data. so i think really it comes down to our ability to select risk and select markets that can generate attractive returns while ensuring that you achieve those those attractive returns with thoughtful and comprehensive risk transfer and i think that's really what's allowed us to have the results you know we could buy less reinsurance for earthquake and the margins would be better but we sleep a lot better at night knowing that you know a large event um is really a very modest earnings event and a great marketing opportunity for us.

I think the P&C market, we'll see what happens in 27, but 26 is softer. So how are you maintaining higher levels of growth and still a very terrible marketing gap even though the market is soft?

Yeah, it really comes down to two things. One, we've designed the business to navigate any market cycle. So right now, if market's softening commercial property we have a lot of residential property where the rates are stable if not increasing so leaning in more towards those market segments and knowing when to pull back in others like in the commercial property side um and then having growth vectors in front of us like crop you know we are well on our way but we are still in the early stages of building a billion dollar franchise and we're continuing to make france uh considerable investments in that market so i think our ability to sustain the growth is a function of the composition of the book the vectors that we have and then again how we manage the capital both on the asset and the liability side for that matter yeah the predominance is contract surety bonds we did just get palmar specialties t listed which should open up more treasury bond in federal government opportunity but the strong majority of it is contract surety bonds so thinking performance or completion work it should be yeah it's a high expense ratio low loss ratio business yeah yeah so but it's again ultimately the crops a higher loss ratio line lower expense ratio which should all balance out as the in the complexion and that's why we think we can sustain our margins you know keep the combined ratio under 80 and and certainly keep that ROE well above 20. Sure. Yeah, so I mean, again, the good thing about, an El Nino can impact our business in multiple ways, but the breadth of the portfolio on the property side, you could argue a super El Nino bodes well for a pretty light hurricane season. And it could be active in Hawaii, which we watch, but we have a two and a half million dollar retention in Hawaii and we also run a reciprocal as opposed to have it on our balance sheet. And then I think it could lead to more rain the second part of the year on the crop side, which is never a bad thing. Anything that offsets droughts is good for us there. So on the whole, we built a broad enough property and crop portfolio that any weather cycle we should be, no pun intended, hedged against.

Great. With that, thank you, man.