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Progressive's February Earnings Grow on Higher Revenues

Progressive Corp .'s PGR operating earnings for Feb 2016 came in at 16 cents per share, up 45% year over year. The upside was driven by higher revenues, partially offset by an increase in expenses.

February Numbers

Progressive recorded $1.9 billion net premiums written, up 15% from $1.7 billion in the year-ago month. Net premiums earned of $1.6 billion soared 14% from the year-ago comparable period.

Combined ratio, improved 140 basis points (bps) from prior-year month to 93.4%.

In February, policies in force were healthy, with the Personal Auto segment increasing 6% year over year to 9.9 million. Special Lines rose 2% year over year to 4.1 million.

In Progressive's Personal Auto segment, Direct Auto improved 10% year over year to 5.1 million policies and Agency Auto inched up 2% to 4.8 million. Progressive's Commercial Auto segment showed a 9% improvement to 0.6 million policies on a year-over-year basis. Property business had about 1.1 million policies in force in the reported month.

Total revenue grew 12% year over year to $1.7 billion, largely driven by higher service revenues (up 50% year over year), premiums (up 14%) and investment income (up 18%).

On the other hand, total expense increased 12.2% year over year to $1.6 billion in February. The major factors behind the rise in total expense were a 16% increase in policy acquisition costs, 15% higher other underwriting expenses and an 11% increase in losses and loss adjustment expenses.

Progressive reported book value per share of $12.58 on Feb 29, up 4% year over year.

Return on equity on a trailing 12-month basis was 17.4%, down 90 bps year over year. The debt-to-total capital ratio deteriorated 40 bps from the prior-year level to 26.9% as of Feb 29.

Zacks Rank

Progressive carries a Zacks Rank #3 (Hold). Some better-ranked property and casualty insurers are Hallmark Financial Services Inc. HALL , EMC Insurance Group Inc. EMCI and Markel Corp MKL . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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PROGRESSIVE COR (PGR): Free Stock Analysis Report

EMC INSURANCE (EMCI): Free Stock Analysis Report

MARKEL CORP (MKL): 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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