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