Progressive (PGR) November Earnings Rise Y/Y on Higher Premiums
The Progressive Corporation PGR reported earnings per share of $1.15 for November 2023, up 53.3% year over year. The improvement stemmed from higher revenues, partially offset by an increase in expenses.
November Numbers in Detail
Progressive recorded net premiums written of $4.7 billion, up 27.7% from $3.7 billion in the year-ago month. Net premiums earned were about $5.1 billion, up 27.3% from $4 billion reported in the year-ago month.
Net realized gain on securities was $246.5 million, up 24.4% year over year.
Combined ratio — the percentage of premiums paid out as claims and expenses — improved 110 basis points (bps) year over year to 91.1.
PGR’s operating revenues were $5.4 billion, improving 27.9% year over year, owing to a 27.3% increase in premiums, a 51% jump in investment income, 18.2% increase in service fees and 25.3% higher fees.
Total expenses increased 25.6% to $4.8 billion, largely due to 28.9% higher losses and loss adjustment expenses, 7.4% higher other underwriting expenses and 22.9% higher policy acquisition costs.
In November, policies in force (PIF) were impressive for both Vehicle and Property businesses. In its Vehicle business, the Personal Auto segment’s PIF increased 9% year over year to 19.4 million. Special Lines increased 7% from the year-earlier month to 6 million policies.
In Progressive’s Personal Auto segment, Agency Auto PIF increased 10% to 11.1 million, while Direct Auto improved 8% to 8.3 million.
PGR’s Commercial Auto segment rose 5% year over year to 1.1 million policies. The Property business had 3 million policies in force in the reported month, up 8% year over year.
The company’s book value per share was $31.69 as of Nov 30, 2023, up 20.1% from $26.39 on Nov 30, 2022.
In the trailing 12 months, the return on equity was 20.3%, having contracted 830 bps from 28.6% in November 2022. The debt-to-total-capital ratio improved 220 bps year over year to 26.6 as of Nov 30, 2023.
Price Performance
Progressive’s shares have gained 20.7% year to date (YTD) compared with the industry’s growth of 14.3%.
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Zacks Rank
Progressive currently has a Zacks Rank #2 (Buy).
Other Stocks to Consider
Some other top-ranked stocks from the same space are CNA Financial Corporation CNA, Berkshire Hathaway (BRK.B) and Chubb Limited CB.
CNA Financial delivered a trailing four-quarter average earnings surprise of 9.24%. The stock has gained 2.1% year to date. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CNA’s 2023 and 2024 earnings indicates a year-over-year increase of 14.8% and 7.4%, respectively. The expected long-term earnings growth is 5%. The consensus estimate for 2023 and 2024 earnings has moved up 2.6% and 6.5%, respectively, in the past 60 days.
Berkshire delivered a trailing four-quarter average earnings surprise of 0.20%. YTD, the stock has gained 18.8%. It carries a Zacks Rank #2.
The Zacks Consensus Estimate for BRK.B’s 2023 and 2024 earnings indicates a year-over-year increase of 17.1% and 11.1%, respectively. The expected long-term earnings growth rate is 7%. The consensus estimate for BRK.B’s 2023 and 2024 earnings has moved up 0.8% and 0.9%, respectively, in the past 30 days.
Chubb’s earnings surpassed estimates in three of the last four quarters while missing in one, the average being 6.51%. YTD, the stock has gained 3.8%. It currently carries Zacks Rank #2
The Zacks Consensus Estimate for CB’s 2023 and 2024 earnings implies a year-over-year rise of 25.9% and 7.4%, respectively. The expected long-term earnings growth rate is 10%. The consensus estimate for CB’s 2023 and 2024 earnings has moved up 4.4% and 3.3%, respectively, in the past 60 days.
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