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Progressive November Earnings Increase on Higher Revenues

Progressive Corp. 's PGR operating earnings for Nov 2015 came in at 15 cents per share, a cent above the year-ago earnings month driven by higher revenues. However, increase in expense limited the upside.

November Numbers

Progressive recorded $1.5 billion net premiums written, up 15% from $1.3 billion in the year-ago month. Net premiums earned of $1.6 billion were up 13% from $1.4 billion in the year-ago month.

Combined ratio deteriorated 20 basis points from the prior-year month to 93.1%.

In the month of November, policies in force were healthy, with the Personal Auto segment increasing 4% year over year to 9.6 million. Special Lines increased 2% year over year to 4.1 million.

In Progressive's Personal Auto segment, Direct Auto improved 9% year over year to 4.9 million policies. However, Agency Auto remained flat with the year-ago level at 4.7 million. Progressive's Commercial Auto segment showed 7% improvement to 0.5 million policies on a year-over-year basis. Property business had about 1.1 million policies in force in the reported month.

Total revenue improved 14% year over year to $1.7 billion, largely driven by higher service revenues (up 29% year over year), premiums (up 13% year over year) and investment income (up 14% year over year).

On the other hand, total expense increased 13% year over year to $1.5 billion in November. The major components contributing to the rise in total expense were a 16% increase in policy acquisition costs, 14% higher other underwriting expenses and a 12% increase in losses and loss adjustment expenses.

Progressive reported book value per share of $13.28 on Nov 30, up 8.8% year over year.

Return on equity on a trailing 12-month basis was 15.4%, down 370 basis points year over year. The debt-to-total capital ratio deteriorated 270 basis points from the prior-year level to 25.9% as of Nov 30.

Zacks Rank

Progressive carries a Zacks Rank #3 (Hold). Some better-ranked property and casualty insurers are RLI Corp. RLI , Hallmark Financial Services Inc. HALL and Cincinnati Financial Corp. CINF . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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RLI CORP (RLI): Free Stock Analysis Report

CINCINNATI FINL (CINF): Free Stock Analysis Report

PROGRESSIVE COR (PGR): Free Stock Analysis Report

HALLMARK FINL (HALL): 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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