Progressive Rises on Higher Premium - Analyst Blog


Progressive Corp. 's ( PGR ) earnings per share for Oct 2013 were 19 cents, surging 46.1% from 13 cents in the year-ago month. Net income also increased 47.2% year over year to $112.3 million.

Progressive Corp. recorded net premiums written of $1.66 billion in the month under review, up 5.6% from $1.57 billion in the year-ago month. Net premiums earned were $1.67 billion, up 5.8% from $1.57 billion in the year-ago month.

Net realized gains on securities in the month were $4.8 million, plummeting from $24.3 million in the year-ago quarter. Combined ratio − the percentage of premiums paid out as claims and expenses − improved 500 basis points from the prior-year month to 91.5% in the reported month.

Numbers in October

Progressive Corp. publishes monthly financial reports. During October, policies in force remained healthy, with the Personal Auto segment increasing 2.2% year over year and almost unchanged sequentially. Special Lines increased 1.2% year over year but decreased 0.5% sequentially.

In Progressive Corp.'s Personal Auto segment, Direct Auto grew 4.5% year over year and 0.5% over the preceding month. Agency Auto increased 0.3% year over year, although remained in line with preceding month level. Progressive's Commercial Auto segment declined 0.4% from the year-ago period as well as sequentially.

Total expenses for the reported month increased 2.2% to $1.56 billion from $1.53 billion in Oct 2012. The increase was mainly attributable to a 27.6% rise in other underwriting expenses and 2.6% increase in policy acquisition costs.

Progressive Corp. reported book value per share of $11.68 on Oct 31, 2013, up from $11.32 as of Sep 30, 2013.

Return on equity on a trailing 12-month basis was 17.9%, compared with 17.5% in Sep 2013. The debt-to-total capital ratio was 21% as of Oct 31, 2013, improving from 22.8% as of Sep 30, 2013.

Progressive Corp. presently carries a Zacks Rank #3 (Hold). Other insurers Alleghany Corp. ( Y ), Allied World Assurance ( AWH ) and The Hanover Insurance Group Inc. ( THG ), each carrying a Zacks Rank #1 (Strong Buy) appear impressive.

ALLIED WORLD AS (AWH): Free Stock Analysis Report

PROGRESSIVE COR (PGR): Free Stock Analysis Report

HANOVER INSURAN (THG): Free Stock Analysis Report

ALLEGHANY CORP (Y): Free Stock Analysis Report

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Zacks Investment Research

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

This article appears in: Investing , Business , Stocks

Referenced Stocks: AWH , PGR , THG , Y

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