Progressive's February Earnings Improve as Premiums Rise - Analyst Blog

Shutterstock photo

Progressive Corp. 's PGR operating earnings for Feb 2015 came in at 11 cents per share, exhibiting a 57% year-over-year improvement.

Including net realized gains, the company reported net income of 14 cents per share, which skyrocketed 75% year over year.

A higher top line offset the increase in expenses, and thereby drove the earnings improvement.

Progressive recorded $1.7 billion net premiums written, up 10% from $1.5 billion in the year-ago month. Net premiums earned of $1.4 billion were up 6% from $1.3 billion in the year-ago month.

Combined ratio improved 240 basis points from the prior-year month to 94.8%.

February Numbers

Progressive publishes monthly financial reports. In the month of February, policies in force were healthy, with the Personal Auto segment increasing 3% year over year to 9.4 million. Special Lines increased 1% year over year to 4.0 million.

In Progressive's Personal Auto segment, Direct Auto improved 8% year over year to 4.6 million. However, Agency Auto declined 2% year over year at 4.8 million. Progressive's Commercial Auto segment showed 2% improvement to 0.5 million on a year-over-year basis.

Total revenue improved 8% year over year to $1.5 billion, largely driven by higher premiums (up 6.4% over Feb 2014).

On the other hand, total expense increased 4% to $1.4 billion in February. The major components contributing to the rise in total expense were a 4.9% increase in losses and loss adjustment expenses and 3.1% higher policy acquisition costs.

Progressive reported book value per share of $12.10 on Feb 28, up 12.9% year over year.

Return on equity on a trailing 12-month basis was 19.6%, up 170 basis points year over year. The debt-to-total capital ratio deteriorated 390 basis points from the prior-year level to 26.5% as of Feb 28, 2015.

Zacks Rank

Progressive carries a Zacks Rank #3 (Hold). Some better-ranked property and casualty insurers are Arch Capital Group Ltd. ACGL , AmTrust Financial Services, Inc. AFSI and Allied World Assurance Company Holdings, AG AWH . All these stocks sport a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

PROGRESSIVE COR (PGR): Free Stock Analysis Report

AMTRUST FIN SVC (AFSI): Free Stock Analysis Report

ARCH CAP GP LTD (ACGL): Free Stock Analysis Report

ALLIED WORLD AS (AWH): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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 , ACGL ,

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?