Progressives (PGR) October Earnings and Revenues Rise Y/Y
The Progressive Corporation PGR reported earnings per share of 68 cents for October 2023, up 6.3% year over year. The improvement stemmed from higher revenues, partially offset by an increase in expenses.
October Numbers in Detail
Progressive recorded net premiums written of $5.5 billion, up 6.6% from $5.2 billion in the year-ago month. Net premiums earned were about $5.4 billion, up 10.5% from $4.9 billion reported in the year-ago month.
Net realized loss on securities was $87.1 million against the year-ago income of $178.6 million.
Combined ratio — the percentage of premiums paid out as claims and expenses — improved 420 basis points (bps) year over year to 91.7.
PGR’s operating revenues were $5.7 billion, improving 11.4% year over year, owing to a 10.5% increase in premiums, a 55.4% jump in investment income and 12.3% higher fees.
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Total expenses increased 5.8% to $5.1 billion, largely due to 7.5% higher losses and loss adjustment expenses and 3.9% higher policy acquisition costs.
In October, policies in force (PIF) were impressive for both Vehicle and Property businesses. In its Vehicle business, the Personal Auto segment’s PIF increased 10% year over year to 19.5 million. Special Lines increased 7% from the year-earlier month to 6 million policies.
In Progressive’s Personal Auto segment, Agency Auto PIF increased 9% to 8.3 million, while Direct Auto improved 11% to 11.1 million.
PGR’s Commercial Auto segment rose 6% 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 $28.19 as of Oct 31, 2023, up 14.2% from $24.68 on Oct 31, 2022.
In the trailing 12 months, the return on equity was 17.3%, having improved 3,360 bps from (16.3%) in October 2022. The debt-to-total-capital ratio improved 180 bps year over year to 28.2 as of Oct 31, 2023.
Price Performance
Progressive’s shares have gained 21.5% year to date (YTD) compared with the industry’s growth of 11.4%.
Zacks Rank
Progressive currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Some better-ranked stocks from the same space are Arch Capital Group (ACGL), Berkshire Hathaway (BRK.B) and Chubb Limited CB.
Arch Capital’s earnings surpassed estimates in all the last four quarters, the average beat being 35.16%. The stock has gained 34.1% year to date and sports Zacks Rank #1.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings indicates a year-over-year increase of 53.4% and 3.8%, respectively. The expected long-term earnings growth is 10%. The consensus estimate for 2023 and 2024 earnings has moved up 7.6% and 2.6%, respectively, in the last 30 days.
Berkshire delivered a trailing four-quarter average earnings surprise of 0.20%. YTD, the stock has gained 16.5%. It carries Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for BRK.B’ 2023 and 2024 earnings indicates a year-over-year increase of 16.2% and 10.8%, respectively. The expected long-term earnings growth is 7%. The consensus estimate for BRK.B’ 2023 and 2024 earnings has moved up 2.6% and 1.9%, respectively, in the past 30 days.
Chubb’s earnings surpassed estimates in three of the last four quarters, while missing in the other one, the average being 6.51%. YTD, the stock has gained 0.8%. It carries a Zacks Rank #2
The Zacks Consensus Estimate for CB’s 2023 and 2024 earnings implies a year-over-year rise of 25.9% and 7.3% 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 3.2%, respectively, in the past 30 days.
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