Palomar (PLMR) 10-Q 5 Aug 20 2020 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - $ / shares	6 Months Ended
	Jun. 30, 2020	Aug. 03, 2020
Cover [Abstract]
Entity Central Index Key	0001761312
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	001-38873
Entity Registrant Name	Palomar Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	83-3972551
Entity Address, Address Line One	7979 Ivanhoe Avenue
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	La Jolla
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92037
City Area Code	619
Local Phone Number	567-5290
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Entity Listing, Par Value Per Share	$ 0.0001
Trading Symbol	PLMR
Security Exchange Name	NASDAQ
Entity 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 Shell Company	false
Entity Common Stock, Shares Outstanding		25,468,321
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $270,852 in 2020; $211,278 in 2019)	$ 282,855	$ 217,151
Equity securities, at fair value (cost: $35,577 in 2020; $21,336 in 2019)	37,649	22,328
Total investments	320,504	239,479
Cash and cash equivalents	109,323	33,119
Restricted cash	619	230
Accrued investment income	2,014	1,386
Premium receivable	44,626	36,237
Deferred policy acquisition costs	30,135	25,201
Reinsurance recoverable on unpaid losses and loss adjustment expenses	17,129	12,952
Reinsurance recoverable on paid losses and loss adjustment expenses	7,549	4,303
Ceded unearned premiums	24,298	26,105
Prepaid expenses and other assets	26,318	14,861
Property and equipment, net	791	845
Intangible assets	744	744
Total assets	584,050	395,462
Liabilities:
Accounts payable and other accrued liabilities	10,469	13,555
Reserve for losses and loss adjustment expenses	24,216	16,821
Unearned premiums	150,048	130,373
Ceded premium payable	10,575	11,383
Funds held under reinsurance treaty	2,420	1,658
Income and excise taxes payable	6,620	1,117
Deferred tax liabilities, net	4,459	1,999
Total liabilities	208,807	176,906
Stockholders' equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of June 30, 2020 and December 31, 2019, respectively, 0 shares issued and outstanding as of June 30, 2020 and December 31, 2019
Common stock, $0.0001 par value, 500,000,000 shares authorized, 25,468,321 and 23,468,750 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively	2	2
Additional paid-in capital	308,071	180,012
Accumulated other comprehensive income	9,529	4,686
Retained earnings	57,641	33,856
Total stockholders' equity	375,243	218,556
Total liabilities and stockholders' equity	$ 584,050	$ 395,462

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Condensed Consolidated Balance Sheets
Fixed maturity securities available for sale, amortized cost	$ 270,852	$ 211,278
Equity securities, cost	$ 35,577	$ 21,336
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	25,468,321	23,468,750
Common stock, shares outstanding (in shares)	25,468,321	23,468,750

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues:
Gross written premiums	$ 83,807	$ 58,346	$ 155,301	$ 112,377
Ceded written premiums	(30,198)	(24,632)	(59,693)	(50,737)
Net written premiums	53,609	33,714	95,608	61,640
Change in unearned premiums	(14,289)	(10,506)	(21,482)	(20,081)
Net earned premiums	39,320	23,208	74,126	41,559
Net investment income	2,114	1,483	4,148	2,443
Net realized and unrealized gains on investments	778	493	1,219	2,904
Commission and other income	937	721	1,675	1,306
Total revenues	43,149	25,905	81,168	48,212
Expenses:
Losses and loss adjustment expenses	3,978	643	5,841	959
Acquisition expenses	14,886	8,971	27,933	15,946
Other underwriting expenses (includes stock-based compensation of $464 and $306 for the three months ended June 30, 2020 and 2019, respectively and $907 and $23,267 for the six months ended June 30, 2020 and 2019, respectively)	8,976	7,165	16,928	36,017
Interest expense		639		1,068
Total expenses	27,840	17,418	50,702	53,990
Income (loss) before income taxes	15,309	8,487	30,466	(5,778)
Income tax expense	3,297	1,789	6,681	1,934
Net income (loss)	12,012	6,698	23,785	(7,712)
Other comprehensive income, net:
Net unrealized gains on securities available for sale for the three and six months ended June 30, 2020 and 2019, respectively	10,676	3,298	4,843	5,485
Net comprehensive income (loss)	$ 22,688	$ 9,996	$ 28,628	$ (2,227)
Per Share Data:
Basic earnings per share	$ 0.49	$ 0.30	$ 0.98	$ (0.40)
Diluted earnings per share	$ 0.48	$ 0.30	$ 0.95	$ (0.40)
Weighted-average common shares outstanding:
Weighted-average common shares outstanding, basic	24,343,425	21,975,962	24,231,344	19,501,727
Weighted-average common shares outstanding, diluted	25,057,029	22,105,009	24,922,630	19,501,727

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
Other underwriting expenses including stock-based compensation	$ 464	$ 306	$ 907	$ 23,267

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Shareholder’s Equity - USD ($) $ in Thousands	Common StockStock Issued in January	Common StockStock Issued in June	Common Stock	Additional Paid-In CapitalStock Issued in January	Additional Paid-In CapitalStock Issued in June	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Stock Issued in January	Stock Issued in June	Total
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
Changes in Stockholders’ Equity
Other comprehensive income, net of tax							5,485				5,485
Distribution to stockholder								(5,120)			(5,120)
Stock-based compensation						23,267					23,267
Issuance of common stock in stock offering, net of offering cost						87,424					87,424
Issuance of common stock in stock offering, net of offering costs (in shares)			6,468,750
Net income (loss)								(7,712)			(7,712)
Ending balance at Jun. 30, 2019			$ 2			179,189	4,922	15,523			199,636
Ending balance (in shares) at Jun. 30, 2019			23,468,750
Beginning balance at Dec. 31, 2019			$ 2			180,012	4,686	33,856			$ 218,556
Beginning balance (in shares) at Dec. 31, 2019			23,468,750								23,468,750
Changes in Stockholders’ Equity
Other comprehensive income, net of tax							4,843				$ 4,843
Stock-based compensation						907					907
Issuance of common stock in stock offering, net of offering cost				$ 35,464	$ 90,224				$ 35,464	$ 90,224
Issuance of common stock in stock offering, net of offering costs (in shares)	750,000	1,150,000
Issuance of common stock via employee stock purchase plan						416					416
Issuance of common stock via employee stock purchase plan (in shares)			21,111
Issuance of common stock via equity incentive plan						1,048					1,048
Issuance of common stock via equity incentive plan (in shares)			78,460
Net income (loss)								23,785			23,785
Ending balance at Jun. 30, 2020			$ 2			$ 308,071	$ 9,529	$ 57,641			$ 375,243
Ending balance (in shares) at Jun. 30, 2020			25,468,321								25,468,321

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating activities
Net cash provided by operating activities	$ 24,499	$ 16,893
Investing activities
Purchases of property and equipment	(63)	(44)
Purchases of fixed maturity securities	(130,755)	(138,528)
Purchases of equity securities	(27,736)	(21,563)
Sales and maturities of fixed maturity securities	71,027	58,901
Sales of equity securities	13,492	27,278
Securities receivable or payable, net	(1,023)	(284)
Net cash used in investing activities	(75,058)	(74,240)
Financing activities
Proceeds from initial public offering, net of costs		87,424
Redemption of Floating Rate Notes		(20,000)
Distribution to stockholder		(5,120)
Proceeds from common stock issued via employee stock purchase plan	416
Proceeds from common stock issued via stock option exercises	1,048
Net cash provided by financing activities	127,152	62,304
Net increase in cash, cash equivalents and restricted cash	76,593	4,957
Cash, cash equivalents and restricted cash at beginning of period	33,349	9,924
Cash, cash equivalents and restricted cash at end of period	109,942	14,881
Supplementary cash flow information:
Cash paid for interest		$ 1,162
Stock Issued in January
Financing activities
Proceeds from stock offering, net of offering costs	35,464
Stock Issued in June
Financing activities
Proceeds from stock offering, net of offering costs	$ 90,224

Condensed Consolidated Statem_5

Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Cash and cash equivalents and restricted cash and cash equivalents
Cash and cash equivalents	$ 109,323	$ 33,119
Restricted cash	619	230
Cash and cash equivalents and restricted cash	$ 109,942	$ 33,349	$ 14,881	$ 9,924

Summary of Operations and Basis

Summary of Operations and Basis of Presentation	6 Months Ended
	Jun. 30, 2020
Summary of Operations and Basis of Presentation
Summary of Operations and Basis of Presentation	1. Summary of Operations and Basis of Presentation Summary of Operations Palomar Holdings, Inc. (“the Company”) is a Delaware incorporated insurance holding company that was founded in 2014. The Company has several wholly owned subsidiaries including an Oregon domiciled insurance company, Palomar Specialty Insurance Company (“PSIC”), a Bermuda based reinsurance company, Palomar Specialty Reinsurance Company Bermuda Ltd. (“PSRE”), an Arizona domiciled surplus lines insurance company, Palomar Excess and Surplus Insurance Company (“PESIC”), and a California domiciled property and casualty insurance agency, Palomar Insurance Agency, DBA Palomar General Insurance Agency (“PGIA”). Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and include the accounts of the Company and its wholly‑owned subsidiaries. These condensed consolidated financial statements do not contain all information and footnotes required by U.S. GAAP for complete consolidated financial statements. For a more complete description of the Company’s business and accounting policies, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. All intercompany balances and transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results of operations for the full year. 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 (“EGC”) under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. The Company is currently electing to adopt new or revised accounting guidance within the same time periods as private companies as permitted by its status as an EGC. Based on the market value of the Company’s common stock held by non-affiliates as of the last business day of its second fiscal quarter, the Company expects it will become a large accelerated filer on December 31, 2020 and will no longer be permitted to adopt guidance within the same time periods as private companies at that time. Recently adopted accounting pronouncements 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. The Company adopted this guidance on January 1, 2020 and adoption did not have an impact on the Company’s consolidated financial statements. The Company will continue to monitor the composition of its investment portfolio and will make appropriate disclosures based on this guidance. Recently issued accounting pronouncements not yet adopted 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. The Company will adopt this guidance for annual reporting on December 31, 2020 and will account for leases under this guidance beginning with its 2020 Annual Report on Form 10-K. The Company will adopt this guidance for quarterly reporting beginning the first quarter of fiscal year 2021. The Company is currently evaluating the impact that this guidance will have on its 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. The Company will adopt this guidance for annual reporting on December 31, 2020 and will account for potential credit losses under this guidance beginning with its 2020 Annual Report on Form 10-K. The Company will adopt this guidance for quarterly reporting beginning the first quarter of fiscal year 2021. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements.

Investments

Investments	6 Months Ended
	Jun. 30, 2020
Investments
Investments	2. Investments The Company’s available‑for‑sale investments are summarized as follows: Gross Gross Amortized Unrealized Unrealized Fair June 30, 2020 Cost or Cost Gains Losses Value (in thousands) Fixed maturities: U.S. Governments $ 15,299 $ 896 $ — $ 16,195 States, territories, and possessions 2,833 353 — 3,186 Political subdivisions 2,295 102 — 2,397 Special revenue excluding mortgage/asset-backed securities 28,093 986 (181) 28,898 Industrial and miscellaneous 151,122 8,828 (1,183) 158,767 Mortgage/asset-backed securities 71,210 2,808 (606) 73,412 Total available-for-sale investments $ 270,852 $ 13,973 $ (1,970) $ 282,855 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2019 Cost or Cost Gains Losses Value (in thousands) Fixed maturities: U.S. Governments $ 13,371 $ 321 $ (13) $ 13,679 States, territories, and possessions 2,298 147 — 2,445 Political subdivisions 1,913 29 — 1,942 Special revenue excluding mortgage/asset-backed securities 18,139 343 (46) 18,436 Industrial and miscellaneous 124,726 4,326 (39) 129,013 Mortgage/asset-backed securities 50,831 824 (19) 51,636 Total available-for-sale investments $ 211,278 $ 5,990 $ (117) $ 217,151 Security holdings in an unrealized loss position As of June 30, 2020, the Company held 85 fixed maturity securities in an unrealized loss position with a total estimated fair value of $40.0 million and total gross unrealized losses of $2.0 million. As of December 31, 2019, the Company held 51 fixed maturity securities in an unrealized loss position with a total estimated fair value of $20.9 million and total gross unrealized losses of $0.1 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 June 30, 2020 and December 31, 2019, are as follows: Less Than 12 Months More Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized June 30, 2020 Value Losses Value Losses Value Losses (in thousands) Fixed maturity securities: U.S. Governments $ — $ — $ — $ — $ — $ — States, territories, and possessions — — — — — — Political subdivisions — — — — — — Special revenue excluding mortgage/asset-backed securities 5,592 (181) — — 5,592 (181) Industrial and miscellaneous 17,169 (1,183) — — 17,169 (1,183) Mortgage/asset-backed securities 17,232 (606) — — 17,232 (606) Total $ 39,993 $ (1,970) $ — $ — $ 39,993 $ (1,970) Less Than 12 Months More Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2019 Value Losses Value Losses Value Losses (in thousands) Fixed maturity securities: U.S. Governments $ 1,235 $ (11) $ 1,827 $ (2) $ 3,062 $ (13) States, territories, and possessions — — — — — — Political subdivisions — — — — — — Special revenue excluding mortgage/asset-backed securities 3,548 (46) — — 3,548 (46) Industrial and miscellaneous 6,929 (38) 188 (1) 7,117 (39) Mortgage/asset-backed securities 7,035 (19) 182 — 7,217 (19) Total $ 18,747 $ (114) $ 2,197 $ (3) $ 20,944 $ (117) 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 June 30, 2020, the Company determined that the fixed maturity securities’ unrealized losses were primarily the result of the widening credit spreads during the six months ended June 30, 2020 which more than offset declines in interest rates during that period. Contractual maturities of available‑for‑sale fixed maturity securities The amortized cost and fair value of fixed maturity securities at June 30, 2020, by contractual maturity, are shown below. Amortized Fair Cost Value (in thousands) Due within one year $ 9,794 $ 9,882 Due after one year through five years 87,904 91,674 Due after five years through ten years 76,683 81,891 Due after ten years 25,261 25,996 Mortgage and asset-backed securities 71,210 73,412 $ 270,852 $ 282,855 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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 (in thousands) (in thousands) Interest income $ 2,092 $ 1,452 $ 4,093 $ 2,462 Dividend income 120 137 245 166 Investment expense (98) (106) (190) (185) Net investment income $ 2,114 $ 1,483 $ 4,148 $ 2,443 Net realized and unrealized investment gains and losses The following table presents net realized and unrealized investment gains and losses: Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 (in thousands) (in thousands) Realized gains: Gains on sales of fixed maturity securities $ 175 $ 53 $ 185 $ 97 Gains on sales of equity securities — — — 67 Total realized gains 175 53 185 164 Realized losses: Losses on sales of fixed maturity securities (44) (3) (44) (69) Losses on sales of equity securities (2) — (2) (156) Total realized losses (46) (3) (46) (225) Net realized investment gains (losses) 129 50 139 (61) Net unrealized gains on equity securities 649 443 1,080 2,965 Net realized and unrealized gains on investments $ 778 $ 493 $ 1,219 $ 2,904 Realized gains and losses on disposition of investments are based on specific identification of the investments sold on the settlement date. Proceeds from the sale of fixed maturity securities were $10.5 million and $4.4 million for the three months ended June 30, 2020 and 2019, respectively and $12.9 million and $14.3 million for the six months ended June 30, 2020 and 2019, 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 June 30, 2020 and December 31, 2019, the carrying value of securities on deposit with state regulatory authorities was $5.9 million and $5.1 million, respectively.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2020
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 June 30, 2020 and December 31, 2019. June 30, 2020 Level 1 Level 2 Level 3 Total (in thousands) Assets: Fixed maturity securities U.S. Governments $ — $ 16,195 $ — $ 16,195 States, territories, and possessions — 3,186 — 3,186 Political subdivisions — 2,397 — 2,397 Special revenue excluding mortgage/asset-backed securities — 28,898 — 28,898 Industrial and miscellaneous — 158,767 — 158,767 Mortgage/asset-backed securities — 73,412 — 73,412 Equity securities 37,649 — — 37,649 Cash, cash equivalents, and restricted cash 109,942 — — 109,942 Total assets $ 147,591 $ 282,855 $ — $ 430,446 December 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets: Fixed maturity securities U.S. Governments $ — $ 13,679 $ — $ 13,679 States, territories, and possessions — 2,445 — 2,445 Political subdivisions — 1,942 — 1,942 Special revenue excluding mortgage/asset-backed securities — 18,436 — 18,436 Industrial and miscellaneous — 129,013 — 129,013 Mortgage/asset-backed securities — 50,136 1,500 51,636 Equity securities — 22,328 — 22,328 Cash, cash equivalents, and restricted cash 28,350 4,999 — 33,349 Total assets $ 28,350 $ 242,978 $ 1,500 $ 272,828 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. Transfers between Level 3 and Level 2 securities result from changes in the availability of market observable inputs and are recorded at the beginning of the reporting period. As of June 30, 2020, the Company had no fixed income securities classified as Level 3. As of December 31, 2019, the Company had $1.5 million of fixed income securities classified as Level 3 due to the availability of market observable inputs which were transferred to Level 2 during the six months ended June 30, 2020.

Reserve for Losses and Loss Adj

Reserve for Losses and Loss Adjustment Expenses	6 Months Ended
	Jun. 30, 2020
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 June 30, Six Months Ended June 30, 2020 2019 2020 2019 (in thousands) (in thousands) Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period $ 4,499 $ 2,332 $ 3,869 $ 4,165 Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to: Current year 3,885 735 6,064 1,013 Prior years 93 (92) (223) (54) Total incurred 3,978 643 5,841 959 Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to: Current year 1,171 298 1,522 404 Prior years 219 1,249 1,101 3,292 Total payments 1,390 1,547 2,623 3,696 Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period 7,087 1,428 7,087 1,428 Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period 17,129 13,202 17,129 13,202 Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 24,216 $ 14,630 $ 24,216 $ 14,630 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 adverse development of $0.09 million in the three months ended June 30, 2020 and favorable development of $0.22 million in the six months ended June 30, 2020 and favorable development of $0.09 million and $0.05 million in the three and six months ended June 30, 2019. Adverse development in the three months ended June 30, 2020 was primarily due to reported activity in the Assumed Reinsurance line of business. Favorable development in the six months ended June 30, 2020 was primarily due to lower than anticipated frequency and severity of claims in the specialty homeowners and residential flood lines of business. Favorable development during for the three and six months ended June 30, 2019 was primarily due to lower than originally anticipated frequency and severity of claims in the Texas homeowners line of business.

Long-term debt

Long-term debt	6 Months Ended
	Jun. 30, 2020
Long-term debt
Long-term debt	5. Long-term debt In September 2018, the Company completed a private placement financing of $20.0 million floating rate senior secured notes (“Floating Rate Notes”). These Floating Rate Notes were redeemed in May 2019 pursuant to their terms and the Company did not have any debt subsequent to May 2019. 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 Company incurred and paid $0.7 million and $1.1 million in interest expense related to the Floating Rate Notes for the three and six months ended June 30, 2019.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2020
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. The Company has filed an irrevocable election for PSRE to be taxed as a U.S. domestic corporation under Section 953(d) of the Code effective January 1, 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 and six months ended June 30, 2020 and for the three months ended June 30, 2019 differs from the statutory rate of 21% due to miscellaneous differences between taxable income calculated under GAAP and IRS regulations. The tax expense for the six months ended June 30, 2019 differs significantly the statutory rate of 21% primarily due to a U.S. tax benefit of $1.7 million for the reversal of a significant portion of the Company’s U.S. deferred tax valuation allowance offset by tax expense of $4.8 million from an addback related to a nondeductible stock compensation charge incurred upon modification of the Company’s management incentive plan in March 2019.

Capital Stock

Capital Stock	6 Months Ended
	Jun. 30, 2020
Capital Stock
Capital Stock	7. Capital Stock As of June 30, 2020 and December 31, 2019, the Company has 5,000,000 preferred shares authorized with a par value of $0.0001 and no preferred shares issued and outstanding. As of June 30, 2020 and December 31, 2019, the Company has 500,000,000 common shares authorized and 25,468,321 and 23,468,750 common shares issued and outstanding, respectively, with a par value of $0.0001. Additional paid in capital is $308.1 million as of June 30, 2020 and $180.0 million as of December 31, 2019. 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 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. 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. The Company received net proceeds of approximately $87.4 million , after deducting underwriting discounts and commissions and offering costs. On January 9, 2020, the Company completed a secondary offering in which the Company sold 750,000 shares of common stock to the public at a price of $49.00 per share (along with 5,000,000 shares sold by existing shareholders). The Company received net proceeds of approximately $35.5 million, after deducting underwriting discounts and commissions and offering costs. On June 26, 2020, the Company sold 1,150,000 shares of common stock to the public at a price of $82.00 per share in an underwritten public offering. The Company received net proceeds of approximately $90.2 million, after deducting underwriting discounts and commissions and offering costs. Common stock reserved for future issuance consists of the following as of June 30, 2020: Stock options outstanding under 2019 Equity Incentive Plan 1,008,907 Restricted stock units outstanding under 2019 Equity Incentive Plan 1,795 Shares authorized for future issuance under 2019 Equity Incentive Plan 2,014,900 Shares authorized for future issuance under 2019 Employee Stock Purchase Plan 458,889 Total 3,484,491

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2020
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 June 30, Six months ended June 30, 2020 2019 2020 2019 (in thousands) (in thousands) Stock-Based Compensation $ 464 $ 306 $ 907 $ 23,267 Stock-based compensation expense is recognized on a straight-line basis over the vesting period of equity-based 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 (loss). 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 and all stock based compensation expense recognized subsequent to April 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. 2019 Equity Incentive Plan On April 16, 2019, the Company's 2019 Equity Incentive Plan (“the 2019 Plan”) became effective. The 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares and units, and other cash-based or share-based awards. In addition, the 2019 Plan contains a mechanism through which the Company may adopt a deferred compensation arrangement in the future. A total of 2,400,000 shares of common stock were initially authorized and reserved for issuance under the 2019 Plan. This reserve increases on January 1 of each year through 2029 by an amount equal to the smaller of: 3% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or an amount determined by the board of directors. Stock Options Recipients of stock options can purchase shares of the Company’s common stock at a price equal to the stock's fair market value on the grant date, determined by the closing price of the Company's 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 six months ended June 30, 2020: Number of shares Weighted-average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value (in thousands) Outstanding at December 31, 2019 1,046,373 $ 17.05 $ 35,039 Options granted 40,993 58.79 Options exercised (72,394) 15.04 Options canceled (6,065) 41.07 Outstanding at June 30, 2020 1,008,907 $ 18.75 8.86 $ 67,610 Vested and Exercisable at June 30, 2020 374,127 $ 15.06 8.77 $ 26,450 As of June 30, 2020, 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 2.18 years. The fair value of each option granted during the six months ended June 30 , 2020 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: Risk free rate of return (1) 0.45% - 1.52% Expected share price volatility (2) 18.13% - 25.08% Expected life in years (3) 5.63 - 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 grant date and generally vest on the first anniversary of the grant date. The fair value of RSUs is determined using the closing price of the Company's common stock on the grant date. The following table summarizes RSU transactions for the 2019 Plan for the six months ended June 30, 2020: Number of shares Weighted-average grant date fair value Non vested outstanding at December 31, 2019 6,066 $ 16.49 Granted 1,795 73.60 Vested (6,066) 16.49 Forfeited — — Non vested outstanding at June 30, 2020 1,795 $ 73.60 As of June 30, 2020, the Company had approximately $0.1 million of total unrecognized stock-based compensation expense related to RSUs expected to be recognized over a weighted-average period of 0.89 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 of each year through 2029, equal to the smaller of 240,000 shares of the Company’s common stock or such other amount as may be determined by the board of directors. Under the 2019 ESPP, employees can purchase Company stock at a discount via payroll withholdings. The 2019 ESPP is administered through employee participation in discrete offering periods. During each discrete offering period employee funds are withheld, and the stock purchase occurs upon the conclusion of the offering period. The Company issued 21,111 shares pursuant to the ESPP during the six months ended June 30, 2020.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income	6 Months Ended
	Jun. 30, 2020
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income	9. Accumulated Other Comprehensive Income Changes in accumulated other comprehensive income (“AOCI”) are as follows: Six Months Ended June 30, 2020 2019 (in thousands) Beginning Balance $ 4,686 $ (563) Other comprehensive income before reclassification 6,277 6,444 Federal income tax (expense) benefit (1,318) (917) Other comprehensive income (loss) before reclassification, net of tax 4,959 5,527 Amounts reclassified from AOCI (147) (53) Federal income tax expense 31 11 Amounts reclassified from AOCI, net of tax (116) (42) Other comprehensive income 4,843 5,485 Balance at end of period $ 9,529 $ 4,922

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 2020
Earnings Per Share
Earnings Per Share	10. Earnings Per Share The following table sets out earnings per share of common stock: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (in thousands, except shares and per share data) (in thousands, except shares and per share data) Net income (loss) $ 12,012 $ 6,698 $ 23,785 $ (7,712) Weighted average common shares outstanding: Basic 24,343,425 21,975,962 24,231,344 19,501,727 Common Share equivalents 713,604 129,047 691,286 — Diluted 25,057,029 22,105,009 24,922,630 19,501,727 Earnings per share: Basic $ 0.49 $ 0.30 $ 0.98 $ (0.40) Diluted $ 0.48 $ 0.30 $ 0.95 $ (0.40) Common share equivalents relate primarily to outstanding stock options and RSUs under the 2019 Plan and unpurchased shares under the 2019 ESPP. For the six months ended June 30, 2019, there were 64,880 common share equivalents excluded from the calculation of diluted earnings per share as their effects were anti-dilutive.

Cash Distribution

Cash Distribution	6 Months Ended
	Jun. 30, 2020
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	6 Months Ended
	Jun. 30, 2020
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 June 30, Six Months Ended June 30, 2020 2019 2020 2019 ($ in thousands) ($ in thousands) % of % of % of % of Amount GWP Amount GWP Amount GWP Amount GWP Product Residential Earthquake $ 34,240 40.9 % $ 29,987 % $ 62,996 40.6 % $ 59,294 % Commercial All Risk 14,841 17.7 % 7,288 % 27,297 17.6 % 14,852 % Commercial Earthquake 11,818 14.1 % 8,085 % 22,666 14.6 % 14,618 % Specialty Homeowners 11,568 13.8 % 8,646 % 21,413 13.8 % 16,426 % Inland Marine 3,451 4.1 % 229 % 5,341 3.4 % 229 % Hawaii Hurricane 3,242 3.9 % 2,675 % 5,937 3.8 % 4,750 % Residential Flood 2,032 2.4 % 1,271 % 3,558 2.3 % 2,043 % Other 2,615 3.1 % 165 0.3 % 6,093 3.9 % 165 0.2 % Total Gross Written Premiums $ 83,807 100.0 % $ 58,346 % $ 155,301 100.0 % $ 112,377 % Gross written premiums by state are as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 ($ in thousands) ($ in thousands) % of % of % of % of Amount GWP Amount GWP Amount GWP Amount GWP State California $ 38,420 45.9 % $ 32,306 % $ 71,172 45.8 % $ 62,754 % Texas 18,796 22.4 % 11,000 % 34,587 22.3 % 21,439 % Hawaii 3,840 4.6 % 2,921 % 6,892 4.5 % 5,013 % Washington 3,055 3.7 % 1,926 % 5,661 3.6 % 3,520 % South Carolina 2,704 3.2 % 1,686 % 5,114 3.3 % 3,355 % North Carolina 2,609 3.1 % 947 % 4,293 2.8 % 1,687 % Oregon 2,289 2.7 % 1,671 % 4,386 2.8 % 3,126 % Mississippi 2,034 2.4 % 1,222 % 3,455 2.2 % 2,068 % Other 10,060 12.0 % 4,667 % 19,741 12.7 % 9,415 % Total Gross Written Premiums $ 83,807 100.0 % $ 58,346 % $ 155,301 100.0 % $ 112,377 %

Summary of Operations and Bas_2

Summary of Operations and Basis of Presentation (Policies)	6 Months Ended
	Jun. 30, 2020
Summary of Operation and Basis of Presentation
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and include the accounts of the Company and its wholly‑owned subsidiaries. These condensed consolidated financial statements do not contain all information and footnotes required by U.S. GAAP for complete consolidated financial statements. For a more complete description of the Company’s business and accounting policies, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. All intercompany balances and transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results of operations for the full year.
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 condensed consolidated financial statements and notes to the condensed consolidated financial statements have been retroactively adjusted to reflect the stock split for the Company’s common stock for all periods presented.
Use of Estimates	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 (“EGC”) under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. The Company is currently electing to adopt new or revised accounting guidance within the same time periods as private companies as permitted by its status as an EGC. Based on the market value of the Company’s common stock held by non-affiliates as of the last business day of its second fiscal quarter, the Company expects it will become a large accelerated filer on December 31, 2020 and will no longer be permitted to adopt guidance within the same time periods as private companies at that time. Recently adopted accounting pronouncements 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. The Company adopted this guidance on January 1, 2020 and adoption did not have an impact on the Company’s consolidated financial statements. The Company will continue to monitor the composition of its investment portfolio and will make appropriate disclosures based on this guidance. Recently issued accounting pronouncements not yet adopted 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. The Company will adopt this guidance for annual reporting on December 31, 2020 and will account for leases under this guidance beginning with its 2020 Annual Report on Form 10-K. The Company will adopt this guidance for quarterly reporting beginning the first quarter of fiscal year 2021. The Company is currently evaluating the impact that this guidance will have on its 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. The Company will adopt this guidance for annual reporting on December 31, 2020 and will account for potential credit losses under this guidance beginning with its 2020 Annual Report on Form 10-K. The Company will adopt this guidance for quarterly reporting beginning the first quarter of fiscal year 2021. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements.

Investments (Tables)

Investments (Tables)	6 Months Ended
	Jun. 30, 2020
Investments
Schedule of available-for-sale investments	Gross Gross Amortized Unrealized Unrealized Fair June 30, 2020 Cost or Cost Gains Losses Value (in thousands) Fixed maturities: U.S. Governments $ 15,299 $ 896 $ — $ 16,195 States, territories, and possessions 2,833 353 — 3,186 Political subdivisions 2,295 102 — 2,397 Special revenue excluding mortgage/asset-backed securities 28,093 986 (181) 28,898 Industrial and miscellaneous 151,122 8,828 (1,183) 158,767 Mortgage/asset-backed securities 71,210 2,808 (606) 73,412 Total available-for-sale investments $ 270,852 $ 13,973 $ (1,970) $ 282,855 Gross Gross Amortized Unrealized Unrealized Fair December 31, 2019 Cost or Cost Gains Losses Value (in thousands) Fixed maturities: U.S. Governments $ 13,371 $ 321 $ (13) $ 13,679 States, territories, and possessions 2,298 147 — 2,445 Political subdivisions 1,913 29 — 1,942 Special revenue excluding mortgage/asset-backed securities 18,139 343 (46) 18,436 Industrial and miscellaneous 124,726 4,326 (39) 129,013 Mortgage/asset-backed securities 50,831 824 (19) 51,636 Total available-for-sale investments $ 211,278 $ 5,990 $ (117) $ 217,151
Schedule of aggregate fair value and gross unrealized losses	Less Than 12 Months More Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized June 30, 2020 Value Losses Value Losses Value Losses (in thousands) Fixed maturity securities: U.S. Governments $ — $ — $ — $ — $ — $ — States, territories, and possessions — — — — — — Political subdivisions — — — — — — Special revenue excluding mortgage/asset-backed securities 5,592 (181) — — 5,592 (181) Industrial and miscellaneous 17,169 (1,183) — — 17,169 (1,183) Mortgage/asset-backed securities 17,232 (606) — — 17,232 (606) Total $ 39,993 $ (1,970) $ — $ — $ 39,993 $ (1,970) Less Than 12 Months More Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2019 Value Losses Value Losses Value Losses (in thousands) Fixed maturity securities: U.S. Governments $ 1,235 $ (11) $ 1,827 $ (2) $ 3,062 $ (13) States, territories, and possessions — — — — — — Political subdivisions — — — — — — Special revenue excluding mortgage/asset-backed securities 3,548 (46) — — 3,548 (46) Industrial and miscellaneous 6,929 (38) 188 (1) 7,117 (39) Mortgage/asset-backed securities 7,035 (19) 182 — 7,217 (19) Total $ 18,747 $ (114) $ 2,197 $ (3) $ 20,944 $ (117)
Schedule of contractual maturities of available-for-sale securities	Amortized Fair Cost Value (in thousands) Due within one year $ 9,794 $ 9,882 Due after one year through five years 87,904 91,674 Due after five years through ten years 76,683 81,891 Due after ten years 25,261 25,996 Mortgage and asset-backed securities 71,210 73,412 $ 270,852 $ 282,855
Schedule of net investment income	Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 (in thousands) (in thousands) Interest income $ 2,092 $ 1,452 $ 4,093 $ 2,462 Dividend income 120 137 245 166 Investment expense (98) (106) (190) (185) Net investment income $ 2,114 $ 1,483 $ 4,148 $ 2,443
Schedule of net realized and unrealized investment gains and losses	Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 (in thousands) (in thousands) Realized gains: Gains on sales of fixed maturity securities $ 175 $ 53 $ 185 $ 97 Gains on sales of equity securities — — — 67 Total realized gains 175 53 185 164 Realized losses: Losses on sales of fixed maturity securities (44) (3) (44) (69) Losses on sales of equity securities (2) — (2) (156) Total realized losses (46) (3) (46) (225) Net realized investment gains (losses) 129 50 139 (61) Net unrealized gains on equity securities 649 443 1,080 2,965 Net realized and unrealized gains on investments $ 778 $ 493 $ 1,219 $ 2,904

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2020
Fair Value Measurements
Schedule of fair value hierarchy for financial assets and liabilities	June 30, 2020 Level 1 Level 2 Level 3 Total (in thousands) Assets: Fixed maturity securities U.S. Governments $ — $ 16,195 $ — $ 16,195 States, territories, and possessions — 3,186 — 3,186 Political subdivisions — 2,397 — 2,397 Special revenue excluding mortgage/asset-backed securities — 28,898 — 28,898 Industrial and miscellaneous — 158,767 — 158,767 Mortgage/asset-backed securities — 73,412 — 73,412 Equity securities 37,649 — — 37,649 Cash, cash equivalents, and restricted cash 109,942 — — 109,942 Total assets $ 147,591 $ 282,855 $ — $ 430,446 December 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets: Fixed maturity securities U.S. Governments $ — $ 13,679 $ — $ 13,679 States, territories, and possessions — 2,445 — 2,445 Political subdivisions — 1,942 — 1,942 Special revenue excluding mortgage/asset-backed securities — 18,436 — 18,436 Industrial and miscellaneous — 129,013 — 129,013 Mortgage/asset-backed securities — 50,136 1,500 51,636 Equity securities — 22,328 — 22,328 Cash, cash equivalents, and restricted cash 28,350 4,999 — 33,349 Total assets $ 28,350 $ 242,978 $ 1,500 $ 272,828

Reserve for Losses and Loss A_2

Reserve for Losses and Loss Adjustment Expenses (Tables)	6 Months Ended
	Jun. 30, 2020
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 June 30, Six Months Ended June 30, 2020 2019 2020 2019 (in thousands) (in thousands) Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period $ 4,499 $ 2,332 $ 3,869 $ 4,165 Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to: Current year 3,885 735 6,064 1,013 Prior years 93 (92) (223) (54) Total incurred 3,978 643 5,841 959 Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to: Current year 1,171 298 1,522 404 Prior years 219 1,249 1,101 3,292 Total payments 1,390 1,547 2,623 3,696 Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period 7,087 1,428 7,087 1,428 Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period 17,129 13,202 17,129 13,202 Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 24,216 $ 14,630 $ 24,216 $ 14,630

Capital Stock (Tables)

Capital Stock (Tables)	6 Months Ended
	Jun. 30, 2020
Capital Stock
Schedule of common stock reserved for future issuance	Stock options outstanding under 2019 Equity Incentive Plan 1,008,907 Restricted stock units outstanding under 2019 Equity Incentive Plan 1,795 Shares authorized for future issuance under 2019 Equity Incentive Plan 2,014,900 Shares authorized for future issuance under 2019 Employee Stock Purchase Plan 458,889 Total 3,484,491

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2020
Stock-Based Compensation
Schedule of Company's stock-based compensation expense	Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (in thousands) (in thousands) Stock-Based Compensation $ 464 $ 306 $ 907 $ 23,267
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, 2019 1,046,373 $ 17.05 $ 35,039 Options granted 40,993 58.79 Options exercised (72,394) 15.04 Options canceled (6,065) 41.07 Outstanding at June 30, 2020 1,008,907 $ 18.75 8.86 $ 67,610 Vested and Exercisable at June 30, 2020 374,127 $ 15.06 8.77 $ 26,450
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) 0.45% - 1.52% Expected share price volatility (2) 18.13% - 25.08% Expected life in years (3) 5.63 - 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, 2019 6,066 $ 16.49 Granted 1,795 73.60 Vested (6,066) 16.49 Forfeited — — Non vested outstanding at June 30, 2020 1,795 $ 73.60

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Income (Tables)	6 Months Ended
	Jun. 30, 2020
Accumulated Other Comprehensive Income
Schedule of changes in accumulated other comprehensive income (AOCI)	Six Months Ended June 30, 2020 2019 (in thousands) Beginning Balance $ 4,686 $ (563) Other comprehensive income before reclassification 6,277 6,444 Federal income tax (expense) benefit (1,318) (917) Other comprehensive income (loss) before reclassification, net of tax 4,959 5,527 Amounts reclassified from AOCI (147) (53) Federal income tax expense 31 11 Amounts reclassified from AOCI, net of tax (116) (42) Other comprehensive income 4,843 5,485 Balance at end of period $ 9,529 $ 4,922

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2020
Earnings Per Share
Schedule of net income per share of common stock	Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (in thousands, except shares and per share data) (in thousands, except shares and per share data) Net income (loss) $ 12,012 $ 6,698 $ 23,785 $ (7,712) Weighted average common shares outstanding: Basic 24,343,425 21,975,962 24,231,344 19,501,727 Common Share equivalents 713,604 129,047 691,286 — Diluted 25,057,029 22,105,009 24,922,630 19,501,727 Earnings per share: Basic $ 0.49 $ 0.30 $ 0.98 $ (0.40) Diluted $ 0.48 $ 0.30 $ 0.95 $ (0.40)

Underwriting Information (Table

Underwriting Information (Tables)	6 Months Ended
	Jun. 30, 2020
Underwriting Information
Schedule of gross written premiums	Gross written premiums (“GWP”) by product are presented below: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 ($ in thousands) ($ in thousands) % of % of % of % of Amount GWP Amount GWP Amount GWP Amount GWP Product Residential Earthquake $ 34,240 40.9 % $ 29,987 % $ 62,996 40.6 % $ 59,294 % Commercial All Risk 14,841 17.7 % 7,288 % 27,297 17.6 % 14,852 % Commercial Earthquake 11,818 14.1 % 8,085 % 22,666 14.6 % 14,618 % Specialty Homeowners 11,568 13.8 % 8,646 % 21,413 13.8 % 16,426 % Inland Marine 3,451 4.1 % 229 % 5,341 3.4 % 229 % Hawaii Hurricane 3,242 3.9 % 2,675 % 5,937 3.8 % 4,750 % Residential Flood 2,032 2.4 % 1,271 % 3,558 2.3 % 2,043 % Other 2,615 3.1 % 165 0.3 % 6,093 3.9 % 165 0.2 % Total Gross Written Premiums $ 83,807 100.0 % $ 58,346 % $ 155,301 100.0 % $ 112,377 % Gross written premiums by state are as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 ($ in thousands) ($ in thousands) % of % of % of % of Amount GWP Amount GWP Amount GWP Amount GWP State California $ 38,420 45.9 % $ 32,306 % $ 71,172 45.8 % $ 62,754 % Texas 18,796 22.4 % 11,000 % 34,587 22.3 % 21,439 % Hawaii 3,840 4.6 % 2,921 % 6,892 4.5 % 5,013 % Washington 3,055 3.7 % 1,926 % 5,661 3.6 % 3,520 % South Carolina 2,704 3.2 % 1,686 % 5,114 3.3 % 3,355 % North Carolina 2,609 3.1 % 947 % 4,293 2.8 % 1,687 % Oregon 2,289 2.7 % 1,671 % 4,386 2.8 % 3,126 % Mississippi 2,034 2.4 % 1,222 % 3,455 2.2 % 2,068 % Other 10,060 12.0 % 4,667 % 19,741 12.7 % 9,415 % Total Gross Written Premiums $ 83,807 100.0 % $ 58,346 % $ 155,301 100.0 % $ 112,377 %

Investments - Available for Sal

Investments - Available for Sale Investments (Details) $ in Thousands	Jun. 30, 2020USD ($)security	Dec. 31, 2019USD ($)security
Available for sale investments
Number of unrealized loss positions | security	85	51
Available for sale investments
Amortized Cost	$ 270,852	$ 211,278
Gross Unrealized Gains	13,973	5,990
Gross Unrealized Losses	(1,970)	(117)
Fair Value	282,855	217,151
Amortized Cost	35,577	21,336
Equity securities at fair value	37,649	22,328
U.S. Governments
Available for sale investments
Amortized Cost	15,299	13,371
Gross Unrealized Gains	896	321
Gross Unrealized Losses		(13)
Fair Value	16,195	13,679
States, territories, and possession
Available for sale investments
Amortized Cost	2,833	2,298
Gross Unrealized Gains	353	147
Fair Value	3,186	2,445
Political subdivisions
Available for sale investments
Amortized Cost	2,295	1,913
Gross Unrealized Gains	102	29
Fair Value	2,397	1,942
Special revenue excluding mortgage/asset-backed securities
Available for sale investments
Amortized Cost	28,093	18,139
Gross Unrealized Gains	986	343
Gross Unrealized Losses	(181)	(46)
Fair Value	28,898	18,436
Industrial and miscellaneous
Available for sale investments
Amortized Cost	151,122	124,726
Gross Unrealized Gains	8,828	4,326
Gross Unrealized Losses	(1,183)	(39)
Fair Value	158,767	129,013
Mortgage/asset-backed securities
Available for sale investments
Amortized Cost	71,210	50,831
Gross Unrealized Gains	2,808	824
Gross Unrealized Losses	(606)	(19)
Fair Value	$ 73,412	$ 51,636

Investments - Security Holdings

Investments - Security Holdings in an Unrealized Loss Position - General Information (Details) $ in Thousands	Jun. 30, 2020USD ($)security	Dec. 31, 2019USD ($)security
Number of positions:
Number of unrealized loss positions | security	85	51
Fair Value
Fair Value	$ 39,993	$ 20,944
Unrealized Losses
Unrealized Losses	$ 1,970	$ 117

Investments - Security Holdin_2

Investments - Security Holdings in an Unrealized Loss Position - Tabular Disclosure (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Fair Value
Fair Value - Less Than 12 Months	$ 39,993	$ 18,747
Fair Value - More Than 12 Months		2,197
Fair Value - Total	39,993	20,944
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(1,970)	(114)
Unrealized Losses - More Than 12 Months		(3)
Unrealized Losses - Total	(1,970)	(117)
U.S. Governments
Fair Value
Fair Value - Less Than 12 Months		1,235
Fair Value - More Than 12 Months		1,827
Fair Value - Total		3,062
Unrealized Losses
Unrealized Losses - Less Than 12 Months		(11)
Unrealized Losses - More Than 12 Months		(2)
Unrealized Losses - Total		(13)
Special revenue excluding mortgage/asset-backed securities
Fair Value
Fair Value - Less Than 12 Months	5,592	3,548
Fair Value - Total	5,592	3,548
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(181)	(46)
Unrealized Losses - Total	(181)	(46)
Industrial and miscellaneous
Fair Value
Fair Value - Less Than 12 Months	17,169	6,929
Fair Value - More Than 12 Months		188
Fair Value - Total	17,169	7,117
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(1,183)	(38)
Unrealized Losses - More Than 12 Months		(1)
Unrealized Losses - Total	(1,183)	(39)
Mortgage/asset-backed securities
Fair Value
Fair Value - Less Than 12 Months	17,232	7,035
Fair Value - More Than 12 Months		182
Fair Value - Total	17,232	7,217
Unrealized Losses
Unrealized Losses - Less Than 12 Months	(606)	(19)
Unrealized Losses - Total	$ (606)	$ (19)

Investments - Contractual Matur

Investments - Contractual Maturities of Available for Sale Fixed Maturity Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Amortized Cost
Due within one year (remaining six months)	$ 9,794
Due within one year	0
Due after one year through five years	87,904
Due after five years through ten years	76,683
Due after ten years	25,261
Mortgage and asset-backed securities	71,210
Amortized Cost	270,852	$ 211,278
Fair Value
Due within one year (remaining six months)	9,882
Due within one year	0
Due after one year through five years	91,674
Due after five years through ten years	81,891
Due after ten years	25,996
Mortgage and asset-backed securities	73,412
Total	$ 282,855	$ 217,151

Investments - Net Investment In

Investments - Net Investment Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Net investment income
Interest income	$ 2,092	$ 1,452	$ 4,093	$ 2,462
Dividend income	120	137	245	166
Less: investment expense	(98)	(106)	(190)	(185)
Net investment income	$ 2,114	$ 1,483	$ 4,148	$ 2,443

Investments - Net Realized and

Investments - Net Realized and Unrealized Investment Gains and Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Net realized and unrealized investment gains and losses
Gains on sales of fixed maturity securities	$ 175	$ 53	$ 185	$ 97
Gains on sales of equity securities				67
Total realized gains	175	53	185	164
Losses on sales of fixed maturity securities	(44)	(3)	(44)	(69)
Losses on sales of equity securities	(2)		(2)	(156)
Total realized losses	(46)	(3)	(46)	(225)
Net realized investment gains (losses)	129	50	139	(61)
Net unrealized gains on equity securities	649	443	1,080	2,965
Net realized and unrealized gains on investments	778	493	1,219	2,904
Proceeds from sales of fixed maturity securities
Proceeds from the sale of fixed maturity securities	$ 10,500	$ 4,400	$ 12,900	$ 14,300

Investments - Securities on Dep

Investments - Securities on Deposit (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Investments
Fair Value	$ 282,855	$ 217,151
Securities on deposit with state regulatory authorities
Investments
Fair Value	$ 5,900	$ 5,100

Fair Value Measurements - Finan

Fair Value Measurements - Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Assets:
Fair Value	$ 282,855	$ 217,151
Equity securities at fair value	37,649	22,328
U.S. Governments
Assets:
Fair Value	16,195	13,679
States, territories, and possession
Assets:
Fair Value	3,186	2,445
Political subdivisions
Assets:
Fair Value	2,397	1,942
Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value	28,898	18,436
Industrial and miscellaneous
Assets:
Fair Value	158,767	129,013
Mortgage/asset-backed securities
Assets:
Fair Value	73,412	51,636
Fair Value, Measurements, Recurring
Assets:
Equity securities at fair value	37,649	22,328
Cash, cash equivalents, and restricted cash	109,942	33,349
Total assets	430,446	272,828
Fair Value, Measurements, Recurring | U.S. Governments
Assets:
Fair Value	16,195	13,679
Fair Value, Measurements, Recurring | States, territories, and possession
Assets:
Fair Value	3,186	2,445
Fair Value, Measurements, Recurring | Political subdivisions
Assets:
Fair Value	2,397	1,942
Fair Value, Measurements, Recurring | Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value	28,898	18,436
Fair Value, Measurements, Recurring | Industrial and miscellaneous
Assets:
Fair Value	158,767	129,013
Fair Value, Measurements, Recurring | Mortgage/asset-backed securities
Assets:
Fair Value	73,412	51,636
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1
Assets:
Equity securities at fair value	37,649
Cash, cash equivalents, and restricted cash	109,942	28,350
Total assets	147,591	28,350
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2
Assets:
Equity securities at fair value		22,328
Cash, cash equivalents, and restricted cash		4,999
Total assets	282,855	242,978
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | U.S. Governments
Assets:
Fair Value	16,195	13,679
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | States, territories, and possession
Assets:
Fair Value	3,186	2,445
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Political subdivisions
Assets:
Fair Value	2,397	1,942
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Special revenue excluding mortgage/asset-backed securities
Assets:
Fair Value	28,898	18,436
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Industrial and miscellaneous
Assets:
Fair Value	158,767	129,013
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Mortgage/asset-backed securities
Assets:
Fair Value	73,412	50,136
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3
Assets:
Total assets		1,500
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Mortgage/asset-backed securities
Assets:
Fair Value	$ 0	$ 1,500

Fair Value Measurements - Trans

Fair Value Measurements - Transfers (Details) $ in Millions	6 Months Ended
	Jun. 30, 2020USD ($)
Fair Value Measurements
Fair value, assets, transfers out of Level 3	$ 1.5

Reserve for Losses and Loss A_3

Reserve for Losses and Loss Adjustment Expenses - Roll Forward (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Reserve for Losses and Loss Adjustment Expenses
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period	$ 4,499	$ 2,332	$ 3,869	$ 4,165
Add: Incurred losses and loss adjustment expenses, net of reinsurance, related to:
Current year	3,885	735	6,064	1,013
Prior years	93	(92)	(223)	(54)
Total incurred	3,978	643	5,841	959
Deduct: Loss and loss adjustment expense payments, net of reinsurance, related to:
Current year	1,171	298	1,522	404
Prior years	219	1,249	1,101	3,292
Total payments	1,390	1,547	2,623	3,696
Reserve for losses and loss adjustment expense net of reinsurance recoverables at end of period	$ 7,087	$ 1,428	$ 7,087	$ 1,428

Reserve for Losses and Loss A_4

Reserve for Losses and Loss Adjustment Expenses - Total (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Reserve for Losses and Loss Adjustment Expenses
Total reserve for losses and loss adjustment expenses	$ 7,087	$ 4,499	$ 3,869	$ 1,428	$ 2,332	$ 4,165
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period	17,129		12,952	13,202
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period	$ 24,216		$ 16,821	$ 14,630

Reserve for Losses and Loss A_5

Reserve for Losses and Loss Adjustment Expenses - Adverse (Favorable) Development (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Adverse (Favorable) Development
Adverse (favorable) development	$ 93	$ (92)	$ (223)	$ (54)

Long-term Debt - Surplus Notes

Long-term Debt - Surplus Notes (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Sep. 30, 2018
Long-term debt
Debt instrument, face amount	$ 1.3
Unamortized redemption premium	0.4
Unamortized debt issuance costs	0.9
Interest Expense.
Long-term debt
Redemption of debt premium	0.4
Other Underwriting Expense
Long-term debt
Write-off of unamortized debt issuance costs	$ 0.9
Senior Notes | 2018 Floating Rate Notes
Long-term debt
Debt instrument, face amount		$ 20

Long-term Debt - Interest (Deta

Long-term Debt - Interest (Details) - Senior Notes - 2018 Floating Rate Notes - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Long-term debt
Interest expense	$ 0.7	$ 1.1
Interest paid	$ 0.7	$ 1.1

Income Taxes - Excise Tax (Deta

Income Taxes - Excise Tax (Details) $ in Millions	6 Months Ended
	Jun. 30, 2020USD ($)
Income Taxes
Federal excise tax rate (as a percent)	1.00%
Change in valuation allowance	$ 1.7

Income Taxes - Effective Income

Income Taxes - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Effective Income Tax Rate Reconciliation, Percent
Statutory tax rate (as a percent)	21.00%	21.00%	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		$ 1.7
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Amount
Addback related to stock compensation not deductible for tax purposes		$ 4.8		$ 4.8

Capital Stock - Shares Issued a

Capital Stock - Shares Issued and Outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Preferred stock
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	25,468,321	23,468,750
Common stock, shares outstanding (in shares)	25,468,321	23,468,750
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Additional paid-in capital
Additional paid-in capital	$ 308,071	$ 180,012

Capital Stock - Stock Split (De

Capital Stock - Stock Split (Details)	Mar. 15, 2019
Capital Stock
Forward stock split	17,000,000

Capital Stock - Stock Offerings

Capital Stock - Stock Offerings (Details) - USD ($) $ / shares in Units, $ in Millions	Jun. 26, 2020	Jan. 09, 2020	Apr. 22, 2019
Capital Stock
Net proceeds	$ 90.2
IPO
Capital Stock
Issuance of common stock in stock offering, net of offering costs (in shares)			6,468,750
Share price (in dollars per share)			$ 15
Net proceeds			$ 87.4
Secondary Offering
Capital Stock
Issuance of common stock in stock offering, net of offering costs (in shares)	1,150,000
Share price (in dollars per share)	$ 82	$ 49
Net proceeds		$ 35.5
Selling stockholders
Capital Stock
Issuance of common stock in stock offering, net of offering costs (in shares)		5,000,000
Underwriter option
Capital Stock
Issuance of common stock in stock offering, net of offering costs (in shares)		750,000

Capital Stock - Reserved for Fu

Capital Stock - Reserved for Future Issuance (Details) - shares	Jun. 30, 2020	Dec. 31, 2019	Apr. 16, 2019
Common stock reserved for future issuance
Total	3,484,491
2019 Equity Incentive Plan
Common stock reserved for future issuance
Shares authorized for future issuance	2,014,900		2,400,000
2019 Employee Stock Purchase Plan
Common stock reserved for future issuance
Shares authorized for future issuance	458,889		240,000
Stock Options
Common stock reserved for future issuance
Stock options outstanding	1,008,907	1,046,373
Stock Options | 2019 Equity Incentive Plan
Common stock reserved for future issuance
Stock options outstanding	1,008,907
Restricted Stock Units | 2019 Equity Incentive Plan
Common stock reserved for future issuance
Restricted stock units outstanding	1,795

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock based compensation expense (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended			6 Months Ended
	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Stock-based compensation expense
Stock compensation charge		$ 464	$ 306		$ 907	$ 23,267
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			6 Months Ended
	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019	Mar. 15, 2019
Management Incentive Plan
Stock compensation charge		$ 464	$ 306		$ 907	$ 23,267
Increase in additional paid in capital					$ 907	$ 23,267
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	Jun. 30, 2020	Apr. 16, 2019
Management Incentive Plan
Shares authorized (in shares)	2,014,900	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	Jun. 30, 2020	Dec. 31, 2019
Common stock reserved for future issuance
Expiry period	10 years
Number of shares
Outstanding at beginning of period (in shares)		1,046,373
Options granted (in shares)		40,993
Options exercised (in shares)		(72,394)
Options canceled (in shares)		(6,065)
Outstanding at end of period (in shares)		1,008,907	1,046,373
Vested and Exercisable (in shares)		374,127
Weighted-average exercise price
Outstanding price at beginning (per share)		$ 17.05
Options granted (per share)		58.79
Options exercised (per share)		15.04
Options canceled (per share)		41.07
Outstanding price at ending (per share)		18.75	$ 17.05
Vested and Exercisable (per share)		$ 15.06
Additional disclosures
Weighted average remaining contractual term for outstanding options (in years)		8 years 10 months 10 days	9 years 3 months 29 days
Weighted average remaining contractual term for Vested and Exercisable options (in years)		8 years 9 months 7 days
Aggregate intrinsic value		$ 67,610	$ 35,039
Aggregate intrinsic value		26,450
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 2 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)		1,008,907

Stock-Based Compensation - Fair

Stock-Based Compensation - Fair value assumptions (Details)	6 Months Ended
	Jun. 30, 2020
Fair value assumptions
Dividend yield	0.00%
Stock Options
Fair value assumptions
Risk free rate of return, Minimum	0.45%
Risk free rate of return, Maximum	1.52%
Expected share price volatility, Minimum	18.13%
Expected share price volatility, Maximum	25.08%
Stock Options | Minimum
Fair value assumptions
Expected life in years	5 years 7 months 17 days
Stock Options | Maximum
Fair value assumptions
Expected life in years	6 years 29 days

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted stock units activity (Details) - Restricted Stock Units $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2020USD ($)$ / sharesshares
Number of shares
Non vested outstanding at beginning of period | shares	6,066
Restricted stock units granted (in shares) | shares	1,795
Restricted stock units vested (in shares) | shares	(6,066)
Non vested at end of period | shares	1,795
Weighted-average grant date fair value
Non vested outstanding at beginning of period (per share) | $ / shares	$ 16.49
Restricted stock units granted (per share) | $ / shares	73.60
Restricted stock units vested (per share) | $ / shares	16.49
Non vested outstanding at end of period (per share) | $ / shares	$ 73.60
Total unrecognized stock-based compensation expense | $	$ 0.1
Weighted-average period over which unrecognized stock-based compensation expense is expected to be recognized	10 months 21 days

Stock-Based Compensation - 20_2

Stock-Based Compensation - 2019 Employee Stock Purchase Plan (Details) - 2019 Employee Stock Purchase Plan - shares	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2020	Apr. 16, 2019
Management Incentive Plan
Shares authorized (in shares)	458,889		240,000
Issuance of common stock via employee stock purchase plan (in shares)	21,111
Scenario, Forecast | Maximum
Management Incentive Plan
Annual increase (in shares)		240,000

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Changes in accumulated other comprehensive income
Beginning balance	$ 218,556	$ 96,292
Ending balance	375,243	199,636
Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income
Beginning balance	4,686	(563)
Other comprehensive income (loss) before reclassification	6,277	6,444
Federal income tax (expense) benefit	(1,318)	(917)
Other comprehensive income (loss) before reclassification, net of tax	4,959	5,527
Amounts reclassified from AOCI	(147)	(53)
Federal income tax expense	31	11
Amounts reclassified from AOCI, net of tax	(116)	(42)
Other comprehensive income	4,843	5,485
Ending balance	$ 9,529	$ 4,922

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share
Net income (loss)	$ 12,012	$ 6,698	$ 23,785	$ (7,712)
Weighted-average common shares outstanding, basic	24,343,425	21,975,962	24,231,344	19,501,727
Common Share equivalents	713,604	129,047	691,286
Diluted	25,057,029	22,105,009	24,922,630	19,501,727
Basic earnings per share	$ 0.49	$ 0.30	$ 0.98	$ (0.40)
Diluted earnings per share	$ 0.48	$ 0.30	$ 0.95	$ (0.40)
Common share equivalents excluded from calculation of diluted earnings per share as effect was anti-dilutive				64,880

Cash Distribution (Details)

Cash Distribution (Details) $ in Millions	1 Months Ended
	Mar. 31, 2019USD ($)
Cash Distribution
One-time cash distribution	$ 5.1

Underwriting Information - Repo

Underwriting Information - Reportable Segments (Details) - segment	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Reportable segment
Number of reportable segments	1	1	1	1

Underwriting Information - Gros

Underwriting Information - Gross Written Premiums by Product (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Gross written premiums
Amount	$ 83,807	$ 58,346	$ 155,301	$ 112,377
% of GWP	100.00%	100.00%	100.00%	100.00%
Residential Earthquake
Gross written premiums
Amount	$ 34,240	$ 29,987	$ 62,996	$ 59,294
% of GWP	40.90%	51.40%	40.60%	52.80%
Commercial All Risk
Gross written premiums
Amount	$ 14,841	$ 7,288	$ 27,297	$ 14,852
% of GWP	17.70%	12.50%	17.60%	13.20%
Commercial Earthquake
Gross written premiums
Amount	$ 11,818	$ 8,085	$ 22,666	$ 14,618
% of GWP	14.10%	13.80%	14.60%	13.00%
Specialty Homeowners
Gross written premiums
Amount	$ 11,568	$ 8,646	$ 21,413	$ 16,426
% of GWP	13.80%	14.80%	13.80%	14.60%
Inland Marine
Gross written premiums
Amount	$ 3,451	$ 229	$ 5,341	$ 229
% of GWP	4.10%	0.40%	3.40%	0.20%
Hawaii Hurricane
Gross written premiums
Amount	$ 3,242	$ 2,675	$ 5,937	$ 4,750
% of GWP	3.90%	4.60%	3.80%	4.20%
Residential Flood
Gross written premiums
Amount	$ 2,032	$ 1,271	$ 3,558	$ 2,043
% of GWP	2.40%	2.20%	2.30%	1.80%
Other
Gross written premiums
Amount	$ 2,615	$ 165	$ 6,093	$ 165
% of GWP	3.10%	0.30%	3.90%	0.20%

Underwriting Information - Gr_2

Underwriting Information - Gross Written Premiums by State (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Gross written premiums
Amount	$ 83,807	$ 58,346	$ 155,301	$ 112,377
% of GWP	100.00%	100.00%	100.00%	100.00%
California
Gross written premiums
Amount	$ 38,420	$ 32,306	$ 71,172	$ 62,754
% of GWP	45.90%	55.40%	45.80%	55.80%
Texas
Gross written premiums
Amount	$ 18,796	$ 11,000	$ 34,587	$ 21,439
% of GWP	22.40%	18.80%	22.30%	19.10%
Hawaii
Gross written premiums
Amount	$ 3,840	$ 2,921	$ 6,892	$ 5,013
% of GWP	4.60%	5.00%	4.50%	4.50%
Washington
Gross written premiums
Amount	$ 3,055	$ 1,926	$ 5,661	$ 3,520
% of GWP	3.70%	3.30%	3.60%	3.10%
South Carolina
Gross written premiums
Amount	$ 2,704	$ 1,686	$ 5,114	$ 3,355
% of GWP	3.20%	2.90%	3.30%	3.00%
North Carolina
Gross written premiums
Amount	$ 2,609	$ 947	$ 4,293	$ 1,687
% of GWP	3.10%	1.60%	2.80%	1.50%
Oregon
Gross written premiums
Amount	$ 2,289	$ 1,671	$ 4,386	$ 3,126
% of GWP	2.70%	2.90%	2.80%	2.80%
Mississippi
Gross written premiums
Amount	$ 2,034	$ 1,222	$ 3,455	$ 2,068
% of GWP	2.40%	2.10%	2.20%	1.80%
Other
Gross written premiums
Amount	$ 10,060	$ 4,667	$ 19,741	$ 9,415
% of GWP	12.00%	8.00%	12.70%	8.40%