Progressive (PGR) February Earnings and Revenues Increase

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Shares of Progressive Corp .'s PGR gained 0.7% in the last trading session after the company posted improved February results. Operating earnings per share of 23 cents surged nearly 44% year over year on higher revenues. Including net realized gains, net income per share jumped 35% year over year.

Progressive shares gained 13.6% year to date, outperforming the Property and Casualty Insurance industry's increase of 5.47%, year to date. The share price appreciation was driven by the company's sustained strong results.

Numbers in February

Progressive recorded net premiums written of $2.2 billion in Feb 2017, up 14% from $1.9 billion in the year-ago month. Net premiums earned were about $1.9 billion, up 13% year over year from $1.6 billion.

Net realized gains on securities in the quarter were $2.4 million compared with $10.2 million earned in the year-ago month. Combined ratio − the percentage of premiums paid out as claims and expenses − improved 300 basis points (bps) from the prior-year quarter to 90.4%.

Total operating revenue came in at $1.9 billion. The top line improved 13% year over year due to a 13% increase in premiums, 13% higher fees and other revenues, 7% rise in investment income and 15% growth in service revenues.

Total expense increased 9.5% to $1.7 billion. The rise in expenses can be primarily attributed to 9.1% higher losses and loss adjustment expenses, 14.1% rise in policy acquisition costs and 9% higher other underwriting expenses.

In Feb 2017, policies in force were impressive with the Personal Auto segment improving 7% year over year to 10.6 million. Special Lines inched up 3% from the prior-year month to 4.2 million.

In Progressive's Personal Auto segment, both Direct Auto and Agency Auto climbed 7% each to 5.2 million and 5.5 million, respectively.

Progressive's Commercial Auto segment grew 7% year over year to 0.6 million. The Property business had about 1.3 million policies in force in the reported month, up 16% year over year.

Progressive's book value per share was $14.49 as of Feb 28, 2017, up 15.2% from $12.58 as of Feb 29, 2016.

Return on equity on a trailing 12-month basis was 19.3%, up 670 bps from 13.6% in Feb 2016. Debt-to-total capital ratio too deteriorated 10 bps year over year to 27% as of Feb 28, 2017.

Zacks Rank and Other Insurers

Progressive sports a Zacks Rank #1 (Strong Buy). Investors interested in the property and casualty industry can also consider American Financial Group, Inc. AFG , Selective Insurance Group, Inc. SIGI and White Mountains Insurance Group, Ltd. WTM . Each of these stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

American Financial Group engages primarily in property and casualty (P&C) insurance with focus on specialized commercial products for businesses. Shares of the company gained 8.9% year to date.

Selective Insurance provides insurance products and services in the United States. Its shares rallied 12.5% year to date.

White Mountains engages in insurance, reinsurance, and insurance services businesses. Its shares appreciated 8.5% year to date.

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Progressive Corporation (The) (PGR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: PGR , AFG , WTM , SIGI

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