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Progressive July Earnings Unchanged Y/Y, Revenues Increase

Progressive Corp. 's PGR operating earnings for Jul 2015 came in at 18 cents per share, flat with earnings delivered in the year-ago month.

Top-line growth was offset by an increase in expenses, leading to flat year-over-year earnings.

July Numbers

Progressive recorded $2.0 billion net premiums written, up 11% from $1.8 billion in the year-ago month. Net premiums earned of $1.9 billion were up 11% from $1.7 billion in the year-ago month.

Combined ratio deteriorated 150 basis points from the prior-year month to 93.1%.

Progressive publishes monthly financial reports. In the month of July, policies in force were healthy, with the Personal Auto segment increasing 3% year over year to 9.5 million. Special Lines increased 2% year over year to 4.1 million.

In Progressive's Personal Auto segment, Direct Auto improved 8% year over year to 4.8 million policies. However, Agency Auto declined 3% year over year to 4.7 million. Progressive's Commercial Auto segment showed 5% improvement to 0.5 million policies on a year-over-year basis. Property business had a little more than 1 million policies in force in the reported month.

Total revenue improved 11% year over year to $2 billion, largely driven by higher service revenues (up 65% year over year), premiums (up 11% year over year) and investment income (up 20% year over year).

On the other hand, total expense increased 12.4% year over year to $1.5 billion in July. The major components contributing to the rise in total expense were an 11.6% increase in losses and loss adjustment expenses, 11.2% higher policy acquisition costs and a 17% rise in other underwriting expenses.

Progressive reported book value per share of $12.79 on Jul 31, up 11% year over year.

Return on equity on a trailing 12-month basis was 17.7%, down 120 basis points year over year. The debt-to-total capital ratio deteriorated 210 basis points from the prior-year level to 26.6% as of Jul 31.

Zacks Rank

Progressive carries a Zacks Rank #3 (Hold). Some better-ranked property and casualty insurers are First American Financial Corporation FAF , Hallmark Financial Services Inc. HALL and Selective Insurance Group Inc. SIGI . All these stocks sport a Zacks Rank #1 (Strong Buy).

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PROGRESSIVE COR (PGR): Free Stock Analysis Report

FIRST AMER FINL (FAF): Free Stock Analysis Report

HALLMARK FINL (HALL): Free Stock Analysis Report

SELECT INS GRP (SIGI): 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.


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

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