Progressive's (PGR) August Earnings and Revenues Rise Y/Y
The Progressive Corporation PGR reported earnings per share of 25 cents for August 2023, up 23% year over year. The improvement stemmed from higher revenues, partially offset by higher expenses.
August Numbers in Detail
Progressive recorded net premiums written of $4.7 billion, up 16% from $4.1 billion in the year-ago month. Net premiums earned were about $4.6 billion, up 20% from $3.8 billion reported in the year-ago month.
Net realized loss on securities was $80.6 million compared with the year-ago loss of $175.4 million.
Combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 360 basis points (bps) year over year to 97.2.
PGR’s operating revenues were $4.9 billion, improving 21.1% year over year, owing to a 19.9% increase in premiums, a 66.5% jump in investment income and 27.1% higher fees.
Total expenses increased 24.4% to $3.7 billion, largely due to 30.6% higher losses and loss adjustment expenses, 41.5% higher other underwriting expenses and 11.7% higher policy acquisition costs.
In August, policies in force (PIF) were impressive for both Vehicle and Property businesses. In its Vehicle business, the Personal Auto segment increased 13% year over year to 19.5 million policies. Special Lines increased 7% from the year-earlier month to 5.9 million policies.
In Progressive’s Personal Auto segment, Agency Auto PIF increased 10% to 8.4 million, while Direct Auto improved 15% to 11.2 million.
PGR’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 6% year over year.
The company’s book value per share was $28.93 as of Aug 31, 2023, up 7.4% from $26.94 on Aug 31, 2022.
In the trailing 12 months, the return on equity was 8.4%, having improved 1,720 bps from (8.8%) August 2022. The debt-to-total-capital ratio deteriorated 10 bps year over year to 28.3 as of Aug 31, 2023.
Price Performance
Progressive’s shares have gained 7% year to date (YTD) compared with the industry’s growth of 13.4%.
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Zacks Rank
Progressive currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks from the same space are Arch Capital Group ACGL, Axis Capital Holdings AXS and ProAssurance PRA. Each of these companies presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital’s earnings surpassed estimates in all the last four quarters, the average beat being 26.83%. The stock has gained 28% year to date.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings indicates a year-over-year increase of 38.2% and 10.4%, respectively. The expected long-term earnings growth is 10%. The consensus estimate for 2023 and 2024 earnings has moved up 2.3% and 2.5%, respectively, in the last 30 days.
Axis Capital delivered a trailing four-quarter average earnings surprise of 9.75%. YTD, the stock has gained 5.5%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings indicates a year-over-year increase of 44.8% and 10.7%, respectively. The expected long-term earnings growth is 5%. The consensus estimate for AXS’ 2023 and 2024 earnings has moved up 2.8% and 1.5%, respectively, in the past 30 days.
ProAssurance’s earnings surpassed estimates in two of the last four quarters, while missed in the other two. YTD, the stock has gained 7.6%.
The Zacks Consensus Estimate for PRA’s 2024 earnings implies a year-over-year rise of 143.5%. The consensus estimate for PRA’s 2023 and 2024 earnings has moved up 25.9% and 2.5%, respectively, in the past 30 days.
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