Palomar Has Carved Out a Fast-Growing Insurance Niche -- Is it a Buy?

Palomar Holdings (NASDAQ: PLMR) is not your typical insurance company. While you may be familiar with home and auto insurance, Palomar provides insurance coverage in what it identifies as underserved markets -- markets that don't have much competition from older, more traditional insurance companies.

Palomar specializes in providing earthquake, wind, and flood insurance to businesses and individuals. It has done a great job of identifying underserved markets and creating insurance products for them while maintaining its profitability. Because of this focus on underserved markets, Palomar is able to serve the needs of customers that might go unfulfilled otherwise. And with strong growth on the top and bottom lines, Palomar has rewarded shareholders since it went public in April 2019.

Investors may have concerns that the stock is expensive today, and they may be worried about the impact from climate change and an active hurricane season in the Atlantic. However, a strong focus on conservative underwriting practices -- including reinsurance coverage to guard against excess liability -- is one way the company protects itself from catastrophe. Given the unique nature of this business and its effectiveness in underwriting policies, Palomar is a company you'll want to consider adding to your portfolio..

Source Fool.com