Progressive (PGR) May Earnings Rise Y/Y on Higher Revenues
The Progressive Corporation PGR reported earnings per share of 18 cents for May 2023, up 17% year over year. The improvement stemmed from higher revenues, partially offset by higher expenses.
May Numbers in Detail
Progressive recorded net premiums written of $4.3 billion, up 16% from $3.7 billion in the year-ago month. Net premiums earned were about $4.5 billion, up 19% from $3.8 billion reported in the year-ago month.
Net realized loss on securities was $35.3 million compared with the year-ago loss of $89 million.
Combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 250 basis points (bps) year over year to 99.
Progressive’s operating revenues were $4.7 billion, improving 20.4% year over year, owing to a 19.3% increase in premiums, a 66.4% jump in investment income and 29.1% higher fees.
Total expenses increased 22.4% to $4.6 billion, largely due to 27% higher losses and loss adjustment expenses and 18.6% higher policy acquisition costs.
In May, policies in force (PIF) were impressive for both Vehicle and Property businesses. In its Vehicle business, the Personal Auto segment increased 14% year over year to 19.7 million policies. Special Lines increased 6% from the year-earlier month to 5.8 million policies.
In Progressive’s Personal Auto segment, Agency Auto PIF increased 10% to 8.4 million, while Direct Auto improved 18% to 11.2 million.
Progressive’s Commercial Auto segment rose 7% year over year to 1.1 million policies. The Property business had 3 million policies in force in the reported month, up 5% year over year.
Progressive’s book value per share was $28.17 as of May 31, 2023, up 3.6% from $27.18 on May 31, 2022.
In the trailing 12 months, the return on equity was 5.1%, having improved 1090 bps from (5.8%) April 2022. The debt-to-total-capital ratio improved 80 bps year over year to 28.8 as of May 31, 2023.
Price Performance
Progressive’s shares have gained 0.2% year to date compared with the industry’s growth of 5.1%.
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Zacks Rank
Progressive currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Kinsale Capital Group, Inc. KNSL, RLI Corp. RLI and Root, Inc. ROOT. While RLI sports a Zacks Rank #1 (Strong Buy), Kinsale Capital and Root carry a Zacks Rank #2 (Buy) each at present.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 14.77%. In the past year, KNSL has gained 71.7%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $10.37 and $12.41, indicating a year-over-year increase of 32.9% and 19.6%, respectively.
RLI beat estimates in each of the last four quarters, the average being 43.50%. In the past year, RLI has gained 20.6%.
The Zacks Consensus Estimate for RLI’s 2023 and 2024 earnings has moved 10.1% and 3.7% north, respectively, in the past 60 days.
Root beat estimates in each of the last four quarters, the average being 18.24%. In the past year, the insurer has lost 71.9%.
The Zacks Consensus Estimate for ROOT’s 2023 and 2024 earnings per share indicates a year-over-year increase of 43.8% and 42.5%, respectively.
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RLI Corp. (RLI) : Free Stock Analysis Report
The Progressive Corporation (PGR) : Free Stock Analysis Report
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Root, Inc. (ROOT) : Free Stock Analysis Report
