Palomar (PLMR) 10-Q 5 Nov 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 04, 2019
Document and Entity Information
Entity Registrant Name	Palomar Holdings, Inc.
Entity Central Index Key	0001761312
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		23,468,750
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Shell Company	false

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $216,623 in 2019; $122,949 in 2018)	$ 223,986	$ 122,220
Equity securities, at fair value (cost: $21,213 in 2019; $27,188 in 2018)	22,326	25,171
Total investments	246,312	147,391
Cash and cash equivalents	16,477	9,525
Restricted cash	425	399
Accrued investment income	1,363	734
Premium receivable	32,171	18,633
Deferred policy acquisition costs	21,653	14,052
Reinsurance recoverable on unpaid losses and loss adjustment expenses	14,052	11,896
Reinsurance recoverable on paid losses and loss adjustment expenses	3,700	2,666
Prepaid reinsurance premium	24,711	18,284
Prepaid expenses and other assets	10,365	5,863
Property and equipment, net	860	947
Intangible assets	744	744
Total assets	372,833	231,134
Liabilities:
Accounts payable and other accrued liabilities	15,530	9,245
Reserve for losses and loss adjustment expenses	16,966	16,061
Unearned premiums	116,159	79,130
Ceded premium payable	11,970	10,607
Funds held under reinsurance treaty	1,801	720
Income and excise taxes payable	133
Deferred tax liabilities, net	1,812
Long-term notes payable		19,079
Total liabilities	164,371	134,842
Shareholder’s equity:
Preferred stock, $0.0001 par value, 5,000,000 and 0 shares authorized as of September 30, 2019 and December 31, 2018, respectively, 0 shares issued and outstanding as of September 30, 2019 and December 31, 2018
Common stock, $0.0001 par value, 500,000,000 shares authorized, 23,468,750 and 17,000,000 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	2	2
Additional paid in capital	179,587	68,498
Accumulated other comprehensive income (loss)	5,896	(563)
Retained earnings	22,977	28,355
Total shareholder’s equity	208,462	96,292
Total liabilities and shareholder’s equity	$ 372,833	$ 231,134

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Consolidated Balance Sheets
Fixed maturity securities available for sale, amortized cost	$ 216,623	$ 122,949
Equity securities, cost	$ 21,213	$ 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	23,468,750	17,000,000
Common stock, shares outstanding	23,468,750	17,000,000

Consolidated Statements of Inco

Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenues:
Gross written premiums	$ 66,242	$ 39,994	$ 178,619	$ 111,348
Ceded written premiums	(28,060)	(20,764)	(78,797)	(61,200)
Net written premiums	38,182	19,230	99,822	50,148
Change in unearned premiums	(10,520)	(3,194)	(30,602)	2,132
Net earned premiums	27,662	16,036	69,220	52,280
Net investment income	1,729	865	4,172	2,211
Net realized and unrealized gains on investments	361	1,336	3,265	969
Commission and other income	709	679	2,017	1,869
Total revenues	30,461	18,916	78,674	57,329
Expenses:
Losses and loss adjustment expenses	2,439	5,374	3,398	7,043
Acquisition expenses	10,243	6,392	26,189	21,632
Other underwriting expenses (includes stock-based compensation of $410 and $0 for the three months ended September 30, 2019 and 2018, respectively and $23,677 and $0 for the nine months ended September 30, 2019 and 2018, respectively)	8,330	4,976	44,348	13,119
Interest expense		605	1,068	1,444
Total expenses	21,012	17,347	75,003	43,238
Income before income taxes	9,449	1,569	3,671	14,091
Income tax expense (benefit)	1,995	3	3,929	(1)
Net income (loss)	7,454	1,566	(258)	14,092
Other comprehensive income, net:
Net unrealized gains (losses) on securities available for sale for the three and nine months ended September 30, 2019 and 2018, respectively	974	(309)	6,459	(1,299)
Net comprehensive income	$ 8,428	$ 1,257	$ 6,201	$ 12,793
Per Share Data:
Basic earnings per share	$ 0.32	$ 0.09	$ (0.01)	$ 0.83
Diluted earnings per share	$ 0.31	$ 0.09	$ (0.01)	$ 0.83
Weighted-average common shares outstanding:
Weighted-average common shares outstanding, basic	23,468,750	17,000,000	20,838,599	17,000,000
Weighted-average common shares outstanding, diluted	23,885,137	17,000,000	20,838,599	17,000,000

Consolidated Statements of In_2

Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Consolidated Statements of Income and Comprehensive Income
Stock compensation charge	$ 410	$ 0	$ 23,677	$ 0

Consolidated Statements of Shar

Consolidated Statements of Shareholder’s Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	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			(1,299)		(1,299)
Net income (loss)				14,092	14,092
Ending balance at Sep. 30, 2018	$ 2	68,498	(1,521)	24,228	91,207
Ending balance (in shares) at Sep. 30, 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			6,459		$ 6,459
Distribution to stockholder				(5,120)	(5,120)
Stock-based compensation		23,677			23,677
Proceeds from common stock sold in initial public offering, net of offering costs		87,412			87,412
Proceeds from common stock sold in initial public offering, net of offering costs (in shares)	6,468,750
Net income (loss)				(258)	(258)
Ending balance at Sep. 30, 2019	$ 2	$ 179,587	$ 5,896	$ 22,977	$ 208,462
Ending balance (in shares) at Sep. 30, 2019	23,468,750				23,468,750

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating activities
Net cash provided by operating activities	$ 35,659	$ 15,813
Investing activities
Purchases of property and equipment	(72)	(316)
Purchases of fixed maturity securities	(181,446)	(77,953)
Purchases of equity securities	(58,735)	(30,914)
Sales and maturities of fixed maturity securities	87,541	61,871
Sales of equity securities	64,820	28,304
Securities receivable or payable, net	(3,081)	250
Net cash used in investing activities	(90,973)	(18,758)
Financing activities
Proceeds from initial public offering, net of issuance costs	87,412
Repayment of surplus notes		(17,500)
Distribution to stockholder	(5,120)
Proceeds from issuance of Floating Rate Notes, net of issuance costs		19,049
Redemption of Floating Rate Notes	(20,000)
Net cash provided by financing activities	62,292	1,549
Net increase (decrease) in cash, cash equivalents, and restricted cash	6,978	(1,396)
Cash, cash equivalents and restricted cash at beginning of period	9,924	10,932
Cash, cash equivalents and restricted cash at end of period	16,902	9,536
Supplementary cash flow information:
Cash paid for interest	$ 1,162	$ 1,192

Condensed Consolidated Statemen

Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Cash and cash equivalents and restricted cash and cash equivalents
Cash and cash equivalents	$ 16,477	$ 9,525
Restricted cash	425	399
Cash and cash equivalents and restricted cash	$ 16,902	$ 9,924	$ 9,536	$ 10,932

Summary of Operations and Basis

Summary of Operations and Basis of Presentation	9 Months Ended
	Sep. 30, 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. 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 offering expenses, net proceeds from the IPO were approximately $87.4 million. 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 promised goods or services are transferred 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. However, 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 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 currently 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. However, the FASB has recently voted to defer the effective date of this update by one year. 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. In 2019, the FASB issued amendments to this guidance which provide an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost and provide additional clarification and implementation guidance. This update and its amendments will be effective for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years. 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	9 Months Ended
	Sep. 30, 2019
Investments
Investments	2. Investments The Company’s available‑for‑sale investments are summarized as follows: Gross Gross Amortized Unrealized Unrealized Fair September 30, 2019 Cost or Cost Gains Losses Value (in thousands) Fixed maturities: U.S. Governments $ 13,085 $ 461 $ (7) $ 13,539 States, territories, and possessions 2,300 169 — 2,469 Political subdivisions 1,922 33 — 1,955 Special revenue excluding mortgage/asset-backed securities 17,762 614 (3) 18,373 Industrial and miscellaneous 123,835 5,051 (31) 128,855 Mortgage/asset-backed securities 57,719 1,090 (14) 58,795 Total available-for-sale investments $ 216,623 $ 7,418 $ (55) $ 223,986 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 September 30, 2019, the Company held 39 fixed maturity securities in an unrealized loss position with a total estimated fair value of $18.3 million and total gross unrealized losses of $0.1 million. 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. 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 September 30, 2019 and December 31, 2018, are as follows: Less Than 12 Months More Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized September 30, 2019 Value Losses Value Losses Value Losses (in thousands) Fixed maturity securities: U.S. Governments 1,485 — $ 1,824 $ (7) $ 3,309 $ (7) States, territories, and possessions — — — — — — Political subdivisions 546 — — — 546 — Special revenue excluding mortgage/asset-backed securities 569 (1) 997 (2) 1,566 (3) Industrial and miscellaneous 3,936 (22) 3,457 (9) 7,393 (31) Mortgage/asset-backed securities 5,261 (13) 263 (1) 5,524 (14) Total $ 11,797 $ (36) $ 6,541 $ (19) $ 18,338 $ (55) 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 September 30, 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 September 30, 2019, by contractual maturity, are shown below. Amortized Fair Cost Value (in thousands) Due within one year $ 7,098 $ 7,099 Due after one year through five years 68,726 69,853 Due after five years through ten years 55,711 59,609 Due after ten years 27,369 28,630 Mortgage and asset-backed securities 57,719 58,795 $ 216,623 $ 223,986 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 Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (in thousands) (in thousands) Interest income $ 1,678 $ 816 $ 4,140 $ 2,083 Dividend income 132 118 299 365 Investment expense (81) (69) (267) (237) Net investment income $ 1,729 $ 865 $ 4,172 $ 2,211 Net realized and unrealized investment gains and losses The following table presents net realized and unrealized investment gains and losses: Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (in thousands) (in thousands) Realized gains: Gains on sales of fixed maturity securities $ 38 $ 11 $ 135 $ 20 Gains on sales of equity securities — 18 64 421 Total realized gains 38 29 199 441 Realized losses: Losses on sales of fixed maturity securities (1) (102) (70) (257) Losses on sales of equity securities (21) (229) (174) (4,287) Total realized losses (22) (331) (244) (4,544) Net realized investment gains (losses) 16 (302) (45) (4,103) Net unrealized gains on equity securities 345 1,638 3,310 5,072 Net realized and unrealized gains on investments $ 361 $ 1,336 $ 3,265 $ 969 Proceeds from the sale of fixed maturity securities were $28.8 million and $32.4 million for the three months ended September 30, 2019 and September 30, 2018, respectively. Proceeds from the sale of fixed maturity securities were $88.1 million and $62.3 million for the nine months ended September 30, 2019 and September 30, 2018, respectively. The Company places securities on statutory deposit with certain state agencies to retain the right to do business in those states. These securities are included in available‑for‑sale investments on the balance sheet. At September 30, 2019 and December 31, 2018, the carrying value of securities on deposit with state regulatory authorities was $5.1 million.

Fair value measurements

Fair value measurements	9 Months Ended
	Sep. 30, 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 September 30, 2019 and December 31, 2018. September 30, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets: Fixed maturity securities U.S. Governments $ — $ 13,539 $ — $ 13,539 States, territories, and possessions — 2,469 — 2,469 Political subdivisions — 1,955 — 1,955 Special revenue excluding mortgage/asset-backed securities — 18,373 — 18,373 Industrial and miscellaneous — 128,855 — 128,855 Mortgage/asset-backed securities — 58,795 — 58,795 Equity securities 22,326 — — 22,326 Cash, cash equivalents, and restricted cash 16,902 — — 16,902 Total assets $ 39,228 $ 223,986 $ — $ 263,214 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 note payable 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 December 31, 2018. This is a level 3 measurement. The Company repaid its long term-notes payable in May 2019 and did not have any long-term debt at September 30, 2019. Transfers between levels result from changes in the availability of market observable inputs and are recorded at the beginning of the reporting period. There were no transfers between Level 1, Level 2 or Level 3 during the three and nine months ended September 30, 2019 or the three and nine months ended September 30, 2018 .

Reserve for Losses and Loss Adj

Reserve for Losses and Loss Adjustment Expenses	9 Months Ended
	Sep. 30, 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 represents a reconciliation of changes in the ending reserve balances for losses and loss adjustment expenses: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) (in thousands) Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period $ 1,428 $ 3,159 $ 4,165 $ 4,432 Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to: Current year 2,647 5,258 3,660 8,445 Prior years (208) 116 (262) (1,402) Total incurred 2,439 5,374 3,398 7,043 Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to: Current year 641 392 1,044 1,656 Prior years 312 459 3,605 2,137 Total payments 953 851 4,649 3,793 Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period 2,914 7,682 2,914 7,682 Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period 14,052 10,950 14,052 10,950 Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 16,966 $ 18,632 $ 16,966 $ 18,632 Considerable variability is inherent in the estimate of the reserve for losses and LAE. Although management believes the liability recorded for losses and LAE is adequate, the variability inherent in this estimate could result in changes to the ultimate liability, which may be material to stockholders’ equity. The Company experienced favorable development of $0.2 million in the three months ended September 30, 2019 and adverse development of $0.1 million in the three months ended September 30, 2018. Favorable development in the three months ended September 30, 2019 was primarily due to lower than anticipated frequency and severity of claims in the specialty homeowners line. Adverse development in the three months ended September 30, 2018 was primarily due to higher than anticipated frequency and severity of claims in the commercial all risk line related to the 2017 accident year. The Company experienced favorable development of $0.3 million and $1.4 million in the nine months ended September 30, 2019 and 2018, respectively. Favorable development for both periods was primarily due to lower than anticipated frequency and severity of claims in the specialty homeowners line.

Long-term debt

Long-term debt	9 Months Ended
	Sep. 30, 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 (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 September 2018. The Floating Rate Notes were redeemed pursuant to their terms 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 Company recognized a charge of $1.3 million upon redemption with $0.4 million due to the redemption premium and $0.9 million due to the write-off of unamortized debt issuance costs. The $0.4 million redemption premium was recognized as a component of interest expense and the $0.9 million issuance cost write-off was recognized as a component of other underwriting expenses in the Company's Unaudited Condensed Consolidated Statement of Income (Loss) and Comprehensive Income (Loss). The Floating Rate Notes would have matured on September 6, 2028 and bore interest at the three‑month treasury rate plus 6.50% per annum. The Company incurred $0.6 million in interest expense related to the surplus notes for the three months ended September 30, 2018 (inclusive of a $0.1 million prepayment penalty) and paid $0.3 million. The Company incurred $1.1 million in interest expense related to the Floating Rate Notes for the nine months ended September 30, 2019 (inclusive of the $0.4 million redemption premium) and $1.4 million in interest expense related to the surplus notes for the nine months end September 30, 2018. The Company paid $1.2 million of interest for each period.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 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 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, the Domestication, 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 September 30, 2019 was in line with the expected tax computed at the statutory rate of 21%. For the nine months ended September 30, 2019 tax expense 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 first quarter that is not deductible for tax purposes.

Capital Stock

Capital Stock	9 Months Ended
	Sep. 30, 2019
Capital Stock
Capital Stock	7. Capital Stock As of September 30, 2019, the Company has 5,000,000 preferred shares authorized with a par value of $0.0001 and no preferred shares issued and outstanding. There were no preferred shares authorized as of December 31, 2018. As of September 30, 2019 and December 31, 2018, the Company has 500,000,000 common shares authorized and 23,468,750 and 17,000,000 common shares issued and outstanding, respectively, with a par value of $0.0001. Additional paid in capital is $179.6 million as of September 30, 2019 and $68.5 million as of December 31, 2018. Common stock reserved for future issuance consists of the following as of September 30, 2019: Stock options outstanding under 2019 Equity Incentive Plan 985,206 Restricted stock units outstanding under 2019 Equity Incentive Plan 6,066 Shares authorized for future issuance under 2019 Equity Incentive Plan 1,408,728 Shares authorized for future issuance under 2019 Employee Stock Purchase Plan 240,000 Total 2,640,000

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2019
Stock-Based Compensation
Stock-Based Compensation	8. Stock-Based Compensation The below table summarizes the Company’s stock-based compensation expense for each period presented: Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (in thousands) (in thousands) Stock-Based Compensation $ 410 $ — $ 23,677 $ — Stock-based compensation expense is recognized on a straight-line basis over the vesting period of awards. The Company does not apply a forfeiture rate to unvested awards and accounts for forfeitures as they occur. All stock-based compensation is included in other underwriting expenses in the Company’s Unaudited Condensed Consolidated Statement of Income (Loss) and Comprehensive Income. The Company recognized approximately $23.0 million of stock-based compensation expense in March 2019 relating to the modification of its 2014 Management Incentive Plan. The Company began recognizing stock-based compensation expense relating to its 2019 Equity Incentive Plan and the 2019 Employee Stock Purchase Plan upon their inception and initial stock grants in April 2019. All stock based compensation expense recognized during the three months ended September 30, 2019 relates to the 2019 Equity Incentive Plan and 2019 Employee Stock Purchase Plan. Management Incentive Plan prior to IPO 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 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 prior to 2019 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 during 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 Income (Loss) and Comprehensive Income. 2019 Equity Incentive Plan On April 16, 2019, the Company's 2019 Equity Incentive Plan (the 2019 Plan) became effective. The 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (RSUs), performance shares and units, and other cash-based or share-based awards. In addition, the 2019 Plan contains a mechanism through which the Company may adopt a deferred compensation arrangement in the future. A total of 2,400,000 shares of common stock 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, or an amount determined by the board of directors. Stock Options Recipients of stock options can purchase shares of the Company’s common stock at a price equal to the stock's fair market value on the grant date, determined by the closing price of the Company's stock on the grant date. Stock options vest over a two or four year period with 25% or 50% vesting on the first anniversary of the grant date and the remainder vesting monthly over the remaining period, subject to continued employment. Stock options expire ten years after the grant date. The following table summarizes stock option transactions for the 2019 Plan for the nine months ended September 30, 2019: Number of shares Weighted-average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value (in thousands) Outstanding at December 31, 2018 — $ — Options granted 994,966 15.06 Options exercised — — Options canceled (9,760) 15.00 Outstanding at September 30, 2019 985,206 $ $ 24,002 Vested and Exercisable at September 30, 2019 — $ — — $ — As of September 30, 2019, the Company had approximately $2.9 million of total unrecognized stock-based compensation expense related to stock options expected to be recognized over a weighted-average period of 2.43 years. The fair value of each option granted was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: Risk free rate of return (1) 2.28% - 2.45% Expected share price volatility (2) 18.40% - 18.45% Expected life in years (3) 5.64 - 6.08 years Dividend yield (4) (1) Determined based on the U.S. Treasury yield in effect at the time of the grant for zero-coupon U.S. Treasury notes with remaining terms similar to the expected term of the options. (2) Determined based on analysis of the volatility of a peer group of publicly traded companies. (3) Determined using the “simplified method” for estimating the expected option life, which is the average of the weighted-average vesting period and contractual term of the option as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its common stock has been publicly traded. (4) Determined to be zero as the Company has not historically issued dividends. Restricted Stock Units Restricted stock units are valued on their date of grant and will vest on the first anniversary of the grant date. The fair value of restricted stock units is determined by the closing price of the Company's stock on the grant date. The following table summarizes restricted stock unit transactions for the 2019 Plan for the nine months ended September 30, 2019: Number of shares Weighted-average grant date fair value Non vested outstanding at December 31, 2018 — $ — Granted 6,066 $ 16.49 Vested — $ — Forfeited — $ — Non vested outstanding at September 30, 2019 6,066 $ 16.49 As of September 30, 2019, the Company had approximately $0.1 million of total unrecognized stock-based compensation expense related to restricted stock units expected to be recognized over a weighted-average period of 0.56 years. 2019 Employee Stock Purchase Plan On April 16, 2019, the Company's 2019 Employee Stock Purchase Plan (the 2019 ESPP) became effective. A total of 240,000 shares of common stock are initially authorized and reserved for issuance under the 2019 ESPP. In addition, the 2019 ESPP provides for annual increases in the number of shares available for issuance on January 1, 2020 and each subsequent anniversary through 2029, equal to the smaller of 240,000 shares of the Company’s common stock or such other amount as may be determined by the board of directors. Under the 2019 ESPP purchases of common stock occur through employee participation in discrete offering periods. In each discrete offering period, employee funds are withheld and stock purchases occur upon the conclusion of the offering period. The first discrete offering period has not concluded as of September 30, 2019 and the Company did not issue any shares of common stock pursuant to the 2019 ESPP during the nine months ended September 30, 2019.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income	9 Months Ended
	Sep. 30, 2019
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income	9. Accumulated Other Comprehensive Income Changes in accumulated other comprehensive income (AOCI) are as follows: Nine Months Ended September 30, 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 8,090 (1,544) Federal income tax (expense) benefit (1,666) 47 Other comprehensive income (loss) before reclassification, net of tax 6,424 (1,497) Amounts reclassified from AOCI 44 245 Federal income tax expense (9) (47) Amounts reclassified from AOCI, net of tax 35 198 Other comprehensive income (loss) 6,459 (1,299) Balance at end of period $ 5,896 $ (1,521)

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 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 September 30, Nine months ended September 30, 2019 2018 2019 2018 (in thousands, except shares and per share data) (in thousands, except shares and per share data) Net income (loss) $ 7,454 $ 1,566 $ (258) $ 14,092 Weighted average common shares outstanding: Basic 23,468,750 17,000,000 20,838,599 17,000,000 Common Share equivalents 416,387 — — — Diluted 23,885,137 17,000,000 20,838,599 17,000,000 Earnings per share: Basic $ 0.32 $ 0.09 $ (0.01) $ 0.83 Diluted $ 0.31 $ 0.09 $ (0.01) $ 0.83 Common share equivalents relate primarily to outstanding shares under the 2019 Plan and unpurchased shares under the 2019 ESPP. For the nine months ended September 30, 2019, there were 196,741 common share equivalents excluded from the calculation of diluted earnings per share as their effects were anti-dilutive.

Cash Distribution

Cash Distribution	9 Months Ended
	Sep. 30, 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	9 Months Ended
	Sep. 30, 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 September 30, Nine Months Ended September 30, 2019 2018 2019 2018 ($ in thousands) ($ in thousands) % of % of % of % of Amount GWP Amount GWP Amount GWP Amount GWP Product Residential Earthquake $ 35,711 53.9 % $ 21,483 % $ 95,005 53.2 % $ 58,106 % Specialty Homeowners 8,572 12.9 % 7,116 % 24,994 14.0 % 21,331 % Commercial Earthquake 8,402 12.7 % 4,856 % 23,020 12.9 % 14,936 % Commercial All Risk 7,077 10.7 % 3,392 % 21,929 12.3 % 9,442 % Hawaii Hurricane 3,299 5.0 % 2,614 % 8,048 4.5 % 6,130 % Flood 1,450 2.2 % 533 % 3,494 2.0 % 1,403 % Other 1,731 2.6 % — — % 2,129 1.1 % — — % Total Gross Written Premiums $ 66,242 100.0 % $ 39,994 % $ 178,619 100.0 % $ 111,348 % Gross written premiums by state are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 ($ in thousands) ($ in thousands) % of % of % of % of Amount GWP Amount GWP Amount GWP Amount GWP State California $ 36,789 55.5 % $ 20,785 % $ 99,543 55.7 % $ 58,211 % Texas 11,239 17.0 % 8,318 % 32,678 18.3 % 24,164 % Hawaii 3,675 5.5 % 2,614 % 8,688 4.9 % 6,130 % Washington 2,910 4.4 % 1,731 % 6,430 3.6 % 3,798 % Oregon 2,153 3.3 % 1,506 % 5,279 3.0 % 3,901 % Mississippi 1,315 2.0 % 629 % 3,383 1.9 % 1,766 % Illinois 1,269 1.9 % 1,104 % 3,524 2.0 % 3,285 % South Carolina 1,258 1.9 % 690 % 4,614 2.5 % 2,336 % Other 5,634 8.5 % 2,617 % 14,480 8.1 % 7,757 % Total Gross Written Premiums $ 66,242 100.0 % $ 39,994 % $ 178,619 100.0 % $ 111,348 %

Significant Accounting Policies

Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2019
Significant Accounting Policies
Summary of Operations	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	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.
Initial Public Offering (IPO)	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 offering expenses, net proceeds from the IPO were approximately $87.4 million.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein. All revisions to accounting estimates are recognized in the period in which the estimates are revised. Significant estimates reflected in the Company’s condensed consolidated financial statements include, but are not limited to, reserves for losses and loss adjustment expenses, reinsurance recoverables on unpaid losses, and the fair values of investments.
Recent Accounting Pronouncements	Recent Accounting Pronouncements 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 promised goods or services are transferred 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. However, 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 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 currently 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. However, the FASB has recently voted to defer the effective date of this update by one year. 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. In 2019, the FASB issued amendments to this guidance which provide an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost and provide additional clarification and implementation guidance. This update and its amendments will be effective for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years. 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)	9 Months Ended
	Sep. 30, 2019
Investments
Schedule of available-for-sale investments	Gross Gross Amortized Unrealized Unrealized Fair September 30, 2019 Cost or Cost Gains Losses Value (in thousands) Fixed maturities: U.S. Governments $ 13,085 $ 461 $ (7) $ 13,539 States, territories, and possessions 2,300 169 — 2,469 Political subdivisions 1,922 33 — 1,955 Special revenue excluding mortgage/asset-backed securities 17,762 614 (3) 18,373 Industrial and miscellaneous 123,835 5,051 (31) 128,855 Mortgage/asset-backed securities 57,719 1,090 (14) 58,795 Total available-for-sale investments $ 216,623 $ 7,418 $ (55) $ 223,986 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 September 30, 2019 Value Losses Value Losses Value Losses (in thousands) Fixed maturity securities: U.S. Governments 1,485 — $ 1,824 $ (7) $ 3,309 $ (7) States, territories, and possessions — — — — — — Political subdivisions 546 — — — 546 — Special revenue excluding mortgage/asset-backed securities 569 (1) 997 (2) 1,566 (3) Industrial and miscellaneous 3,936 (22) 3,457 (9) 7,393 (31) Mortgage/asset-backed securities 5,261 (13) 263 (1) 5,524 (14) Total $ 11,797 $ (36) $ 6,541 $ (19) $ 18,338 $ (55) 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 $ 7,098 $ 7,099 Due after one year through five years 68,726 69,853 Due after five years through ten years 55,711 59,609 Due after ten years 27,369 28,630 Mortgage and asset-backed securities 57,719 58,795 $ 216,623 $ 223,986
Schedule of net investment income	Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (in thousands) (in thousands) Interest income $ 1,678 $ 816 $ 4,140 $ 2,083 Dividend income 132 118 299 365 Investment expense (81) (69) (267) (237) Net investment income $ 1,729 $ 865 $ 4,172 $ 2,211
Schedule of net realized and unrealized investment gains and losses	Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (in thousands) (in thousands) Realized gains: Gains on sales of fixed maturity securities $ 38 $ 11 $ 135 $ 20 Gains on sales of equity securities — 18 64 421 Total realized gains 38 29 199 441 Realized losses: Losses on sales of fixed maturity securities (1) (102) (70) (257) Losses on sales of equity securities (21) (229) (174) (4,287) Total realized losses (22) (331) (244) (4,544) Net realized investment gains (losses) 16 (302) (45) (4,103) Net unrealized gains on equity securities 345 1,638 3,310 5,072 Net realized and unrealized gains on investments $ 361 $ 1,336 $ 3,265 $ 969

Fair value measurements (Tables

Fair value measurements (Tables)	9 Months Ended
	Sep. 30, 2019
Fair value measurements
Schedule of fair value hierarchy for financial assets and liabilities	September 30, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets: Fixed maturity securities U.S. Governments $ — $ 13,539 $ — $ 13,539 States, territories, and possessions — 2,469 — 2,469 Political subdivisions — 1,955 — 1,955 Special revenue excluding mortgage/asset-backed securities — 18,373 — 18,373 Industrial and miscellaneous — 128,855 — 128,855 Mortgage/asset-backed securities — 58,795 — 58,795 Equity securities 22,326 — — 22,326 Cash, cash equivalents, and restricted cash 16,902 — — 16,902 Total assets $ 39,228 $ 223,986 $ — $ 263,214 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)	9 Months Ended
	Sep. 30, 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 September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) (in thousands) Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period $ 1,428 $ 3,159 $ 4,165 $ 4,432 Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to: Current year 2,647 5,258 3,660 8,445 Prior years (208) 116 (262) (1,402) Total incurred 2,439 5,374 3,398 7,043 Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to: Current year 641 392 1,044 1,656 Prior years 312 459 3,605 2,137 Total payments 953 851 4,649 3,793 Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period 2,914 7,682 2,914 7,682 Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period 14,052 10,950 14,052 10,950 Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 16,966 $ 18,632 $ 16,966 $ 18,632

Capital Stock (Tables)

Capital Stock (Tables)	9 Months Ended
	Sep. 30, 2019
Capital Stock
Schedule of common stock reserved for future issuance	Stock options outstanding under 2019 Equity Incentive Plan 985,206 Restricted stock units outstanding under 2019 Equity Incentive Plan 6,066 Shares authorized for future issuance under 2019 Equity Incentive Plan 1,408,728 Shares authorized for future issuance under 2019 Employee Stock Purchase Plan 240,000 Total 2,640,000

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2019
Stock-Based Compensation
Schedule of Company's stock-based compensation expense	Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (in thousands) (in thousands) Stock-Based Compensation $ 410 $ — $ 23,677 $ —
Schedule of stock option transactions	Number of shares Weighted-average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value (in thousands) Outstanding at December 31, 2018 — $ — Options granted 994,966 15.06 Options exercised — — Options canceled (9,760) 15.00 Outstanding at September 30, 2019 985,206 $ $ 24,002 Vested and Exercisable at September 30, 2019 — $ — — $ —
Schedule of fair value of each option granted was estimated on the grant date using the Black-Scholes option pricing model	Risk free rate of return (1) 2.28% - 2.45% Expected share price volatility (2) 18.40% - 18.45% Expected life in years (3) 5.64 - 6.08 years Dividend yield (4) (1) Determined based on the U.S. Treasury yield in effect at the time of the grant for zero-coupon U.S. Treasury notes with remaining terms similar to the expected term of the options. (2) Determined based on analysis of the volatility of a peer group of publicly traded companies. (3) Determined using the “simplified method” for estimating the expected option life, which is the average of the weighted-average vesting period and contractual term of the option as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its common stock has been publicly traded. (4) Determined to be zero as the Company has not historically issued dividends.
Schedule of restricted stock unit transactions	Number of shares Weighted-average grant date fair value Non vested outstanding at December 31, 2018 — $ — Granted 6,066 $ 16.49 Vested — $ — Forfeited — $ — Non vested outstanding at September 30, 2019 6,066 $ 16.49

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Income (Tables)	9 Months Ended
	Sep. 30, 2019
Accumulated Other Comprehensive Income
Schedule of changes in accumulated other comprehensive income (AOCI)	Nine Months Ended September 30, 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 8,090 (1,544) Federal income tax (expense) benefit (1,666) 47 Other comprehensive income (loss) before reclassification, net of tax 6,424 (1,497) Amounts reclassified from AOCI 44 245 Federal income tax expense (9) (47) Amounts reclassified from AOCI, net of tax 35 198 Other comprehensive income (loss) 6,459 (1,299) Balance at end of period $ 5,896 $ (1,521)

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2019
Earnings Per Share
Schedule of net income per share of common stock	Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 (in thousands, except shares and per share data) (in thousands, except shares and per share data) Net income (loss) $ 7,454 $ 1,566 $ (258) $ 14,092 Weighted average common shares outstanding: Basic 23,468,750 17,000,000 20,838,599 17,000,000 Common Share equivalents 416,387 — — — Diluted 23,885,137 17,000,000 20,838,599 17,000,000 Earnings per share: Basic $ 0.32 $ 0.09 $ (0.01) $ 0.83 Diluted $ 0.31 $ 0.09 $ (0.01) $ 0.83

Underwriting Information (Table

Underwriting Information (Tables)	9 Months Ended
	Sep. 30, 2019
Underwriting Information
Schedule of gross written premiums	Gross written premiums (GWP) by product are presented below: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 ($ in thousands) ($ in thousands) % of % of % of % of Amount GWP Amount GWP Amount GWP Amount GWP Product Residential Earthquake $ 35,711 53.9 % $ 21,483 % $ 95,005 53.2 % $ 58,106 % Specialty Homeowners 8,572 12.9 % 7,116 % 24,994 14.0 % 21,331 % Commercial Earthquake 8,402 12.7 % 4,856 % 23,020 12.9 % 14,936 % Commercial All Risk 7,077 10.7 % 3,392 % 21,929 12.3 % 9,442 % Hawaii Hurricane 3,299 5.0 % 2,614 % 8,048 4.5 % 6,130 % Flood 1,450 2.2 % 533 % 3,494 2.0 % 1,403 % Other 1,731 2.6 % — — % 2,129 1.1 % — — % Total Gross Written Premiums $ 66,242 100.0 % $ 39,994 % $ 178,619 100.0 % $ 111,348 % Gross written premiums by state are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 ($ in thousands) ($ in thousands) % of % of % of % of Amount GWP Amount GWP Amount GWP Amount GWP State California $ 36,789 55.5 % $ 20,785 % $ 99,543 55.7 % $ 58,211 % Texas 11,239 17.0 % 8,318 % 32,678 18.3 % 24,164 % Hawaii 3,675 5.5 % 2,614 % 8,688 4.9 % 6,130 % Washington 2,910 4.4 % 1,731 % 6,430 3.6 % 3,798 % Oregon 2,153 3.3 % 1,506 % 5,279 3.0 % 3,901 % Mississippi 1,315 2.0 % 629 % 3,383 1.9 % 1,766 % Illinois 1,269 1.9 % 1,104 % 3,524 2.0 % 3,285 % South Carolina 1,258 1.9 % 690 % 4,614 2.5 % 2,336 % Other 5,634 8.5 % 2,617 % 14,480 8.1 % 7,757 % Total Gross Written Premiums $ 66,242 100.0 % $ 39,994 % $ 178,619 100.0 % $ 111,348 %

Summary of Operations and Bas_2

Summary of Operations and Basis of Presentation (Details) $ / shares in Units, $ in Thousands	Apr. 22, 2019USD ($)$ / sharesshares	Mar. 15, 2019	Sep. 30, 2019USD ($)
Forward stock split		17,000,000
Proceeds from Issuance Initial Public Offering | $			$ 87,412
IPO
Shares of common issued | shares	6,468,750
Share price (in dollars per share) | $ / shares	$ 15
Proceeds from Issuance Initial Public Offering | $	$ 87,400
Underwriter's option
Shares of common issued | shares	843,750

Investments - Available for Sal

Investments - Available for Sale Investments (Details) $ in Thousands	Sep. 30, 2019USD ($)security	Dec. 31, 2018USD ($)security
Available for sale investments
Number of unrealized loss positions | security	39	173
Available for sale investments
Amortized Cost	$ 216,623	$ 122,949
Gross Unrealized Gains	7,418	536
Gross Unrealized Losses	(55)	(1,265)
Fair Value	223,986	122,220
Amortized Cost	21,213	27,188
Equity securities at fair value	22,326	25,171
U.S. Governments
Available for sale investments
Amortized Cost	13,085	15,299
Gross Unrealized Gains	461	96
Gross Unrealized Losses	(7)	(126)
Fair Value	13,539	15,269
States, territories, and possession
Available for sale investments
Amortized Cost	2,300	1,227
Gross Unrealized Gains	169
Gross Unrealized Losses		(6)
Fair Value	2,469	1,221
Political subdivisions
Available for sale investments
Amortized Cost	1,922	825
Gross Unrealized Gains	33
Gross Unrealized Losses		(10)
Fair Value	1,955	815
Special revenue excluding mortgage/asset-backed securities
Available for sale investments
Amortized Cost	17,762	12,429
Gross Unrealized Gains	614	115
Gross Unrealized Losses	(3)	(91)
Fair Value	18,373	12,453
Industrial and miscellaneous
Available for sale investments
Amortized Cost	123,835	65,885
Gross Unrealized Gains	5,051	192
Gross Unrealized Losses	(31)	(951)
Fair Value	128,855	65,126
Mortgage/asset-backed securities
Available for sale investments
Amortized Cost	57,719	27,284
Gross Unrealized Gains	1,090	133
Gross Unrealized Losses	(14)	(81)
Fair Value	$ 58,795	$ 27,336

Investments - Security Holdings

Investments - Security Holdings in an Unrealized Loss Position - General Information (Details) $ in Thousands	Sep. 30, 2019USD ($)security	Dec. 31, 2018USD ($)security
Number of positions:
Number of unrealized loss positions | security	39	173
Fair Value
Fair Value	$ 18,338	$ 73,763
Unrealized Losses
Unrealized Losses	$ 55	$ 1,265

Investments - Security Holdin_2

Investments - Security Holdings in an Unrealized Loss Position - Tabular Disclosure (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair Value
Fair Value - Less Than 12 Months	$ 11,797	$ 41,856
Fair Value - More Than 12 Months	6,541	31,907
Fair Value - Total	18,338	73,763
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(36)	(640)
Unrealized Losses - More Than 12 Months	(19)	(625)
Unrealized Losses - Total	(55)	(1,265)
U.S. Governments
Fair Value
Fair Value - Less Than 12 Months	1,485	1,970
Fair Value - More Than 12 Months	1,824	6,197
Fair Value - Total	3,309	8,167
Unrealized Losses
Unrealized Losses - Less Than 12 Months		(25)
Unrealized Losses - More Than 12 Months	(7)	(101)
Unrealized Losses - Total	(7)	(126)
States, territories, and possession
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	546	264
Fair Value - More Than 12 Months		550
Fair Value - Total	546	814
Unrealized Losses
Unrealized Losses - Less Than 12 Months		(1)
Unrealized Losses - More Than 12 Months		(9)
Unrealized Losses - Total		(10)
Special revenue excluding mortgage/asset-backed securities
Fair Value
Fair Value - Less Than 12 Months	569	1,706
Fair Value - More Than 12 Months	997	5,916
Fair Value - Total	1,566	7,622
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(1)	(14)
Unrealized Losses - More Than 12 Months	(2)	(77)
Unrealized Losses - Total	(3)	(91)
Industrial and miscellaneous
Fair Value
Fair Value - Less Than 12 Months	3,936	30,544
Fair Value - More Than 12 Months	3,457	14,913
Fair Value - Total	7,393	45,457
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(22)	(556)
Unrealized Losses - More Than 12 Months	(9)	(395)
Unrealized Losses - Total	(31)	(951)
Mortgage/asset-backed securities
Fair Value
Fair Value - Less Than 12 Months	5,261	6,653
Fair Value - More Than 12 Months	263	3,830
Fair Value - Total	5,524	10,483
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(13)	(39)
Unrealized Losses - More Than 12 Months	(1)	(42)
Unrealized Losses - Total	$ (14)	$ (81)

Investments - Other-than-tempor

Investments - Other-than-temporarily Impaired (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 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	Sep. 30, 2019	Dec. 31, 2018
Amortized Cost
Due within one year	$ 7,098
Due after one year through five years	68,726
Due after five years through ten years	55,711
Due after ten years	27,369
Mortgage and asset-backed securities	57,719
Amortized Cost	216,623	$ 122,949
Fair Value
Due within one year	7,099
Due after one year through five years	69,853
Due after five years through ten years	59,609
Due after ten years	28,630
Mortgage and asset-backed securities	58,795
Total	$ 223,986	$ 122,220

Investments - Net Investment In

Investments - Net Investment Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net investment income
Interest income	$ 1,678	$ 816	$ 4,140	$ 2,083
Dividend income	132	118	299	365
Less: investment expense	(81)	(69)	(267)	(237)
Net investment income	$ 1,729	$ 865	$ 4,172	$ 2,211

Investments - Net Realized and

Investments - Net Realized and Unrealized Investment Gains and Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net realized and unrealized investment gains and losses
Gains on sales of fixed maturity securities	$ 38	$ 11	$ 135	$ 20
Gains on sales of equity securities		18	64	421
Total realized gains	38	29	199	441
Losses on sales of fixed maturity securities	(1)	(102)	(70)	(257)
Losses on sales of equity securities	(21)	(229)	(174)	(4,287)
Total realized losses	(22)	(331)	(244)	(4,544)
Net realized investment losses	16	(302)	(45)	(4,103)
Net unrealized gains (losses) on equity securities	345	1,638	3,310	5,072
Net realized and unrealized gains (losses) on investments	361	1,336	3,265	969
Proceeds from sales of fixed maturity securities
Proceeds from the sale of fixed maturity securities	$ 28,800	$ 32,400	$ 87,541	$ 61,871

Investments - Securities on Dep

Investments - Securities on Deposit (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Investments
Fair Value	$ 223,986	$ 122,220
Securities on deposit with state regulatory authorities
Investments
Fair Value	$ 5,100	$ 5,100

Fair value measurements - Finan

Fair value measurements - Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Assets:
Equity securities at fair value	$ 22,326	$ 25,171
Fair Value, Measurements, Recurring
Assets:
Equity securities at fair value	22,326	25,171
Cash, cash equivalents, and restricted cash	16,902	9,924
Total assets	263,214	157,315
Liabilities:
Long-term notes payable		20,000
Total liabilities		20,000
Fair Value, Measurements, Recurring | U.S. Governments
Assets:
Fair Value Assets	13,539	15,269
Fair Value, Measurements, Recurring | States, territories, and possession
Assets:
Fair Value Assets	2,469	1,221
Fair Value, Measurements, Recurring | Political subdivisions
Assets:
Fair Value Assets	1,955	815
Fair Value, Measurements, Recurring | Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value Assets	18,373	12,453
Fair Value, Measurements, Recurring | Industrial and miscellaneous
Assets:
Fair Value Assets	128,855	65,126
Fair Value, Measurements, Recurring | Mortgage/asset-backed securities
Assets:
Fair Value Assets	58,795	27,336
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1
Assets:
Equity securities at fair value	22,326	25,171
Cash, cash equivalents, and restricted cash	16,902	9,924
Total assets	39,228	35,095
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2
Assets:
Total assets	223,986	122,220
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | U.S. Governments
Assets:
Fair Value Assets	13,539	15,269
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | States, territories, and possession
Assets:
Fair Value Assets	2,469	1,221
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Political subdivisions
Assets:
Fair Value Assets	1,955	815
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value Assets	18,373	12,453
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Industrial and miscellaneous
Assets:
Fair Value Assets	128,855	65,126
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Mortgage/asset-backed securities
Assets:
Fair Value Assets	$ 58,795	27,336
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3
Liabilities:
Long-term notes payable		20,000
Total liabilities		$ 20,000

Fair value measurements - Trans

Fair value measurements - Transfers (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair value measurements
Fair value, assets, Level 1 to Level 2	$ 0	$ 0	$ 0	$ 0
Fair value, assets, Level 2 to Level 1	0	0	0	0
Fair value, liabilities, Level 1 to Level 2	0	0	0	0
Fair value, liabilities, Level 2 to Level 1	0	0	0	0
Fair value, assets, transfers into Level 3	0	0	0	0
Fair value, assets, transfers out of Level 3	0	0	0	0
Fair value, liabilities, transfers into Level 3	0	0	0	0
Fair value, liabilities, transfers out of Level 3	$ 0	$ 0	$ 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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Reserve for Losses and Loss Adjustment Expenses
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period	$ 1,428	$ 3,159	$ 4,165	$ 4,432
Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to:
Current year	2,647	5,258	3,660	8,445
Prior years	(208)	116	(262)	(1,402)
Total incurred	2,439	5,374	3,398	7,043
Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to:
Current year	641	392	1,044	1,656
Prior years	312	459	3,605	2,137
Total payments	953	851	4,649	3,793
Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period	$ 2,914	$ 7,682	$ 2,914	$ 7,682

Reserve for Losses and Loss A_4

Reserve for Losses and Loss Adjustment Expenses - Total (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Reserve for Losses and Loss Adjustment Expenses
Total reserve for losses and loss adjustment expenses	$ 2,914	$ 1,428	$ 4,165	$ 7,682	$ 3,159	$ 4,432
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period	14,052		11,896	10,950
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period	$ 16,966		$ 16,061	$ 18,632

Long-term debt - Surplus Notes

Long-term debt - Surplus Notes (Details) - USD ($) $ in Millions	May 23, 2019	Feb. 03, 2015	Sep. 30, 2018	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	$ 0.1
Write-off of 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%
Senior Notes | 2018 Floating Rate Notes
Long-term debt
Debt instrument, face amount			$ 20	$ 20
Write-off of unamortized debt issuance costs	$ 0.9

Long-term debt - Floating Rate

Long-term debt - Floating Rate Notes (Details) - Senior Notes - 2018 Floating Rate Notes - USD ($) $ in Millions	May 23, 2019	Sep. 30, 2018	Sep. 30, 2019
Long-term debt
Debt instrument, redemption price, percentage (as a percent)	102.00%
Redemption price	$ 20.4
Accrued interest and unpaid interest	0.3
Redemption charge	1.3
Redemption Premium	0.4		$ 0.4
Write-off of unamortized debt issuance costs	0.9
Interest Expense.
Long-term debt
Redemption Premium	0.4
Other Underwriting Expense
Long-term debt
Write-off of unamortized debt issuance costs	$ 0.9
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	1 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Senior Notes | 2018 Floating Rate Notes
Long-term debt
Interest expense			$ 1.1
Notes Payable, Other Payables | Surplus Notes
Long-term debt
Interest expense		$ 0.6		$ 1.4
Pre-payment, penalty	$ 0.1	0.1
Interest paid		$ 0.3	$ 1.2	$ 1.2

Income Taxes - Excise Tax (Deta

Income Taxes - Excise Tax (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Income Taxes
Federal excise tax rate (as a percent)		1.00%
Decrease in valuation allowance on federal deferred tax assets	$ (1.7)

Income Taxes - Effective Income

Income Taxes - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Effective Income Tax Rate Reconciliation, Percent
Statutory tax rate (as a percent)	21.00%	21.00%
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount
Reversal of a portion of the 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 - Shares issued a

Capital Stock - Shares issued and outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands	Sep. 30, 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	23,468,750	17,000,000
Common stock, shares outstanding	23,468,750	17,000,000
Common stock, par value	$ 0.0001	$ 0.0001
Additional paid in capital	$ 179,587	$ 68,498

Capital Stock - Reserved for fu

Capital Stock - Reserved for future issuance (Details) - shares	Sep. 30, 2019	Apr. 16, 2019
Common stock reserved for future issuance
Total	2,640,000
2019 Equity Incentive Plan
Common stock reserved for future issuance
Shares authorized for future issuance	1,408,728	2,400,000
2019 Employee Stock Purchase Plan
Common stock reserved for future issuance
Shares authorized for future issuance	240,000	240,000
Stock Options
Common stock reserved for future issuance
Stock options outstanding	985,206
Stock Options | 2019 Equity Incentive Plan
Common stock reserved for future issuance
Stock options outstanding	985,206
Restricted Stock Units | 2019 Equity Incentive Plan
Common stock reserved for future issuance
Restricted stock units outstanding	6,066

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock based compensation expense (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended			9 Months Ended
	Mar. 31, 2019	Sep. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Stock-based compensation expense
Stock compensation charge		$ 410		$ 0	$ 23,677	$ 0
2014 Management Incentive Plan
Stock-based compensation expense
Stock compensation charge	$ 23,000		$ 23,000

Stock-Based Compensation - Mana

Stock-Based Compensation - Management incentive plan prior to IPO (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended			9 Months Ended
	Mar. 31, 2019	Sep. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Mar. 15, 2019
Management Incentive Plan
Stock compensation charge		$ 410		$ 0	$ 23,677	$ 0
Increase in additional paid in capital					$ 23,677
2014 Management Incentive Plan
Management Incentive Plan
Units outstanding							12,552,825
Stock compensation charge	$ 23,000		$ 23,000
Increase in additional paid in capital			$ 23,000

Stock-Based Compensation - 2019

Stock-Based Compensation - 2019 Equity Incentive Plan (Details) - 2019 Equity Incentive Plan - shares	Sep. 30, 2019	Apr. 16, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized (in shares)	1,408,728	2,400,000
Annual automatic increase to the number of shares of common stock reserved for issuance, as a percentage of common stock issued and outstanding as at the immediately preceding fiscal year end		3.00%

Stock-Based Compensation - St_2

Stock-Based Compensation - Stock options activity (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands	Apr. 16, 2019	Sep. 30, 2019
Common stock reserved for future issuance
Expiry period	10 years
Number of shares
Options granted (in shares)		994,966
Options canceled (in shares)		(9,760)
Outstanding at end of period (in shares)		985,206
Weighted-average exercise price
Options granted (per share)		$ 15.06
Options canceled (per share)		15
Outstanding price at ending (per share)		$ 15.06
Additional disclosures
Weighted average remaining contractual term for outstanding options (in years)		9 years 6 months 15 days
Aggregate intrinsic value		$ 24,002
Total unrecognized stock-based compensation expense		$ 2,900
Weighted-average period over which unrecognized stock-based compensation expense is expected to be recognized		2 years 5 months 5 days
Minimum
Common stock reserved for future issuance
Vesting period	2 years
Vesting percentage on the first anniversary of the grant date	25.00%
Maximum
Common stock reserved for future issuance
Vesting period	4 years
Vesting percentage on the first anniversary of the grant date	50.00%
2019 Equity Incentive Plan
Number of shares
Outstanding at end of period (in shares)		985,206

Stock-Based Compensation - Fair

Stock-Based Compensation - Fair value assumptions (Details)	9 Months Ended
	Sep. 30, 2019
Fair value assumptions
Dividend yield	0.00%
Stock Options
Fair value assumptions
Risk free rate of return, Minimum	2.28%
Risk free rate of return, Maximum	2.45%
Expected share price volatility, Minimum	18.40%
Expected share price volatility, Maximum	18.45%
Stock Options | Minimum
Fair value assumptions
Expected life in years	5 years 7 months 21 days
Stock Options | Maximum
Fair value assumptions
Expected life in years	6 years 29 days

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted stock units activity (Details) - Restricted Stock Units $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2019USD ($)$ / sharesshares
Number of shares
Restricted stock units granted (in shares) | shares	6,066
Non vested at end of period | shares	6,066
Weighted-average grant date fair value
Restricted stock units granted (per share) | $ / shares	$ 16.49
Non vested outstanding at end of period (per share) | $ / shares	$ 16.49
Total unrecognized stock-based compensation expense | $	$ 0.1
Weighted-average period over which unrecognized stock-based compensation expense is expected to be recognized	6 months 22 days

Stock-Based Compensation - 20_2

Stock-Based Compensation - 2019 Employee Stock Purchase Plan (Details) - 2019 Employee Stock Purchase Plan - shares	12 Months Ended
	Dec. 31, 2020	Sep. 30, 2019	Apr. 16, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized (in shares)		240,000	240,000
Scenario, Forecast | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual increase (in shares)	240,000

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Income - Roll Forward (Details) - Accumulated Other Comprehensive Income (Loss) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Changes in accumulated other comprehensive income
Beginning balance	$ (563)	$ 2,993
Effect of equity accounting guidance adoption				$ (3,215)
Beginning Balance			$ (563)	$ (222)
Other comprehensive income (loss) before reclassification	8,090	(1,544)
Federal income tax (expense) benefit	(1,666)	47
Other comprehensive income (loss) before reclassification, net of tax	6,424	(1,497)
Amounts reclassified from AOCI	44	245
Federal income (taxes) benefit	(9)	(47)
Amounts reclassified from AOCI, net of tax	35	198
Other comprehensive income (loss)	6,459	(1,299)
Ending balance	$ 5,896	$ (1,521)

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share
Net income (loss)	$ 7,454	$ 1,566	$ (258)	$ 14,092
Weighted-average common shares outstanding, basic	23,468,750	17,000,000	20,838,599	17,000,000
Common Share equivalents	416,387
Diluted	23,885,137	17,000,000	20,838,599	17,000,000
Earnings per share, basic	$ 0.32	$ 0.09	$ (0.01)	$ 0.83
Diluted earnings per share	$ 0.31	$ 0.09	$ (0.01)	$ 0.83
Common share equivalents excluded from calculation of diluted earnings per share as effect was anti-dilutive			196,741

Cash Distribution (Details)

Cash Distribution (Details) $ in Millions	Mar. 15, 2019	Mar. 31, 2019USD ($)
Subsequent Events
One-time cash distribution		$ 5.1
Forward stock split	17,000,000

Underwriting Information - Repo

Underwriting Information - Reportable Segments (Details)	9 Months Ended
	Sep. 30, 2019segment
Reportable segment
Number of reportable segments	1

Underwriting Information - Gros

Underwriting Information - Gross Written Premiums by Product (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Gross written premiums
Amount	$ 66,242	$ 39,994	$ 178,619	$ 111,348
% of GWP	100.00%	100.00%	100.00%	100.00%
Residential Earthquake
Gross written premiums
Amount	$ 35,711	$ 21,483	$ 95,005	$ 58,106
% of GWP	53.90%	53.70%	53.20%	52.20%
Specialty Homeowners
Gross written premiums
Amount	$ 8,572	$ 7,116	$ 24,994	$ 21,331
% of GWP	12.90%	17.80%	14.00%	13.40%
Commercial Earthquake
Gross written premiums
Amount	$ 7,077	$ 3,392	$ 21,929	$ 9,442
% of GWP	10.70%	8.50%	12.30%	8.50%
Commercial All Risk
Gross written premiums
Amount	$ 8,402	$ 4,856	$ 23,020	$ 14,936
% of GWP	12.70%	12.10%	12.90%	19.10%
Hawaii Hurricane
Gross written premiums
Amount	$ 3,299	$ 2,614	$ 8,048	$ 6,130
% of GWP	5.00%	6.50%	4.50%	5.50%
Flood
Gross written premiums
Amount	$ 1,450	$ 533	$ 3,494	$ 1,403
% of GWP	2.20%	1.40%	2.00%	1.30%
Other
Gross written premiums
Amount	$ 1,731		$ 2,129
% of GWP	2.60%		1.10%

Underwriting Information - Gr_2

Underwriting Information - Gross Written Premiums by State (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Gross written premiums
Amount	$ 66,242	$ 39,994	$ 178,619	$ 111,348
% of GWP	100.00%	100.00%	100.00%	100.00%
California
Gross written premiums
Amount	$ 36,789	$ 20,785	$ 99,543	$ 58,211
% of GWP	55.50%	52.00%	55.70%	52.20%
Texas
Gross written premiums
Amount	$ 11,239	$ 8,318	$ 32,678	$ 24,164
% of GWP	17.00%	20.80%	18.30%	21.70%
Hawaii
Gross written premiums
Amount	$ 3,675	$ 2,614	$ 8,688	$ 6,130
% of GWP	5.50%	6.50%	4.90%	5.50%
Washington
Gross written premiums
Amount	$ 2,910	$ 1,731	$ 6,430	$ 3,798
% of GWP	4.40%	4.30%	3.60%	3.40%
Oregon
Gross written premiums
Amount	$ 2,153	$ 1,506	$ 5,279	$ 3,901
% of GWP	3.30%	3.80%	3.00%	3.50%
Mississippi
Gross written premiums
Amount	$ 1,315	$ 629	$ 3,383	$ 1,766
% of GWP	2.00%	1.60%	1.90%	1.60%
Illinois
Gross written premiums
Amount	$ 1,269	$ 1,104	$ 3,524	$ 3,285
% of GWP	1.90%	2.80%	2.00%	3.00%
South Carolina
Gross written premiums
Amount	$ 1,258	$ 690	$ 4,614	$ 2,336
% of GWP	1.90%	1.70%	2.50%	2.10%
Other
Gross written premiums
Amount	$ 5,634	$ 2,617	$ 14,480	$ 7,757
% of GWP	8.50%	6.50%	8.10%	7.00%