Progressive (PGR) Q4 Earnings Improve Year Over Year
The Progressive Corporation’s PGR reported net income of $1070.8 million or earning per share of $1.81 which reflects year over year growth of 305% in the fourth quarter.
The Zacks Consencus Estimate for the quarter is $1.14 per share.
The Progressive Corporation Price, Consensus and EPS Surprise
The Progressive Corporation price-consensus-eps-surprise-chart | The Progressive Corporation Quote
Behind the Headlines
Net premiums written were $9.6 billion in the quarter under review, up 21% from $7.9 billion in the year-ago period. Net premiums earned grew 21% year over year to $9.9 billion from $8.2 billion a year ago.
Net realized gains on securities were $369.4 million.
Combined ratio — percentage of premiums paid out as claims and expenses — improved 10 basis points (bps) from the prior-year quarter’s level to 92.4%.
Full Year Highlights
Operating revenues rose 16.9% year over year to $37.9 billion driven by 27% higher investment income, 17% rise in premiums earned, 23% rise in service revenues and 19% higher fees as well as other revenues.
Total expense increased 18% to $33.8 billion. This increase can be primarily attributed to 17% rise in loss and loss adjustment expenses, 17% increase in policy acquisition costs, 33% increase in service expense and 19% increase in other underwriting expenses.
Policies in Force Solid in December
In December, "policies in force" were impressive at the Personal Auto segment, up 11% from the year-ago month to 14.9 million. Special Lines inched up 4% from the prior-year month’s figure to 4.5 million.
In Progressive’s Personal Auto segment, Direct Auto grew 12% year over year to 7.9 million while Agency Auto improved 10% year over year to 7 million.
Progressive’s Commercial Auto segment rose 8% year over year to 0.7 million. The Property business had about 2.2 million policies in force in the reported month, up 14% year over year.
Financial Update
Progressive’s book value per share was $22.54 as of Dec 31, 2019, up 27.3% from $17.71 as of Dec 31, 2018.
Return-on-equity on a trailing 12-month basis was 35%, up 1120 bps year over year. Debt-to-total capital ratio deteriorated 450 bps year over year to 24.4% as of Dec 31, 2018.
Zacks Rank
Progressive currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Investment Managers
Of the insurance industry players that have reported fourth-quarter results so far, RLI Corp. RLI, Brown & Brown, Inc. BRO and The Travelers Companies, Inc. TRV beat the respective Zacks Consensus Estimate for earnings.
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