Progressive Corp: Direct Auto Insurance Prices Up 1% In 2009
By Lavonne Kuykendall, Of DOW JONES NEWSWIRES
-(Dow Jones)- Auto insurer Progressive Corp. (PGR) has raised its auto
insurance rates slightly for policies sold through agents and directly to
consumers, but drivers are still paying a bit less overall, mostly by cutting
their coverage or by driving older cars.
Progressive said Wednesday that it is seeing signs of the continued recession
as drivers buy auto insurance, and possibly in an increase in the number of
claims made for personal injury protection after an auto accident.
Personal injury protection (PIP) "is the one we are worried about," said Glenn
M. Renwick, Progressive's president and chief executive officer during a call
Wednesday that coincided with the filing of the company's quarterly earnings
report. "One issue that could creep in is fraud, you could maybe relate that to
unemployment, but that would be speculative."
Progressive, one of the largest auto insurers, said that overall, it had
increased its auto insurance rates by about 2% to 3% so far this year for
policies sold by agents, and by about 1% or so for policies sold directly to
consumers through the internet or via phone.
But overall, consumers still ended up paying slightly less for insurance by
raising deductibles or because of a trend towards driving older cars, which he
said is another sign of the weak economy.
Progressive, which is a savvy marketer, has taken customers away from other
auto insurers that have raised rates more, he said.
Last month, Progressive reported third-quarter profit of 40 cents a share, on
premiums that grew 1%, to $3.55 billion, from the year-ago quarter.
For the month of October, Progressive reported a net profit of 16 cents per
share and a 3% increase in premiums, to $1.3 billion, from October 2008.
Progressive reports its earnings monthly.
Progressive's premium increases come as many other insurers have reported
falling overall premiums.
-By Lavonne Kuykendall, Dow Jones Newswires; (312) 750 4141;
lavonne.kuykendall@dowjones.com
(END) Dow Jones Newswires
11-11-091008ET
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