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Progressive's (PGR) Reports Loss in August, Revenues Rise Y/Y

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The Progressive Corporation (PGR - Free Report) reported loss per share of 2 cents for August 2021, comparing unfavorably with earnings of 83 cents in the year-ago comparable period. Increase in expenses offset rise in revenues, inducing loss in the month.

Progressive’s shares have lost 6.3% year to date, compared with the industry’s growth of 15.7%.

Zacks Investment Research
Image Source: Zacks Investment Research

August Numbers in Detail

Progressive recorded net premiums written of $3.9 billion, up 13% from $3.4 billion in the year-ago month. Net premiums earned were $3.5 billion, up 14% from about $3.1 billion reported in the year-ago month.

Net realized gain on securities of $131.5 million declined 60% year over year.

Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 1270 basis points (bps) year over year to 105.3.

Total operating revenues were $3.7 billion, improving 13.1% year over year, owing to a 13.8% increase in premiums, 13.6% higher fee income and a 23.6% jump in service revenues. However, investment income, which was down 15.7%, acted as a drag.

Total expenses rose 28.9% to $3.8 billion, primarily on account of 37.8 higher losses and loss adjustment expenses, and 13.7% rise in other underwriting expenses.

In August, policies in force were impressive for both Vehicle and Property businesses. In its Vehicle business, the Personal Auto segment improved 9% year over year to 22.9 million. Special Lines increased 8% from the year-earlier month to 5.3 million policies.

In Progressive’s Personal Auto segment, Agency Auto expanded 7% to 8 million, while Direct Auto increased 11% to 9.6 million.

Progressive’s Commercial Auto segment rose 18% year over year to 0.9 million. The Property business had 2.7 million policies in force in the reported month, up 13% year over year.

The company’s book value per share was $31.47 as of Aug 31, 2021, up 5.7% from $29.76 on Aug 31, 2020.

Return on equity in the trailing 12 months was 22.3%, down 1510 bps from 37.4% in August 2020. Debt-to-total-capital ratio improved 250 bps year over year to 20.6 as of Aug 31, 2021.

Progressive currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some top-ranked stocks in the same space include American Financial Group (AFG - Free Report) , Cincinnati FinancialCorporation (CINF - Free Report) , and Everest Re Group , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

American Financial Group delivered an earnings surprise of 45.73% in the last reported quarter.

Cincinnati Financial delivered an earnings surprise of 80.81% in the last reported quarter.

Everest Re Group delivered an earnings surprise of 62.56% in the last reported quarter.

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