Better Result for PGR in April

Zacks

Progressive Corp.’s (PGR) earnings per share (EPS) for Apr 2013 were 23 cents, surging 130% from 10 cents earned in Apr 2012. Net income shot up 128% year over year to $139.5 million in the reported month.

The company recorded net premiums of $1.78 billion in the reported month, up 7% from $1.67 billion in the year-ago period. Net premiums earned were $1.64 billion, up 7% from $1.53 billion in the year-ago period.

Net realized gains on securities in Apr 2013 were $46.2 million, rebounding from a loss of $7.9 million in the year-ago month. Combined ratio − the percentage of premiums paid out as claims and expenses − improved 130 basis points (bps) from the prior-year month to 91.3% in the reported month.

Numbers in April

Progressive publishes monthly financial reports. During April, policies in force remained healthy, with the Personal Auto segment increasing 1% year over year and 0.3% sequentially. Special Lines also increased 2% year over year and 0.9% over the preceding month.

In Personal Auto, Direct Auto reported growth of 2% year over year and 0.5% from the preceding month. Agency Auto inched down 0.2% year over year but improved 0.1% sequentially. Progressive’s Commercial Auto segment reported an increase of 6% both year over year and sequentially.

Progressive’s total expenses for the reported month increased 4.9% to $1.54 billion from $1.47 billion in Apr 2012. The major components contributing to the increase in total expenses were a 3.6% rise in losses and loss adjustment expenses and a 17% hike in other underwriting expenses.

Progressive reported book value per share of $10.85 as of Apr 30, 2013, up from $10.33 as of Apr 30, 2012 and from $10.59 as of Mar 31, 2013.

Return on equity in Apr 2013 was 17.7%, up from 14.2% in Apr 2012 and 16.4% in Mar 2013. The debt-to-total-capital ratio was 24% as of Apr 30, 2013, improving from 24.7% as of Apr 30, 2012 and from 24.4% as of Mar 31, 2013.

Progressive carries a Zacks Rank #3 (Hold). Other property and casualty insurers, AXIS Capital Holdings Ltd. (AXS), Montpelier Re Holdings Ltd. (MRH) and Platinum Underwriters Holdings Ltd. (PTP), carry a Zacks Rank #1 (Strong Buy) and appear impressive.

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