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Progressive Poised for Growth Despite High Combined Ratio
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On Jun 10, 2016, we issued an updated research report on Progressive Corp. (PGR - Free Report) .
The property and casualty (P&C) insurer’s first-quarter 2016 earnings missed the Zacks Consensus Estimate and also declined year over year on higher expenses. However, the top line fared well on both counts. Moreover, the company witnessed a rise in net premiums written.
The insurer also saw a substantial growth in its business at Agency and Direct Personal Lines in the first quarter. The Commercial Auto segment too witnessed an improvement in the same period.
Progressive is renowned for its product, service and distribution innovations, especially in personal auto. It is also a market leader in underwriting technology and the application of quantitative analytics in pricing and risk selection. The company displays competitive rates in all markets and continues to gain from its expanded multi-product offering.
The acquisition of the majority stake in ARX Holding in Apr 2015 will help the company to expand its home insurance business. Moreover, the company is on track with its Platinum offering, which is a combined offering of home and auto insurance, in its Agency channel. As of Mar 31, 2016, the Platinum program was available to around 680 agents across 16 states.
The company engages shareholder friendly moves like share buybacks and dividend payments. In the first quarter, the company bought back 2.3 million shares worth $70.3 million and has 10.4 million shares remaining under the current authorization. Given the company’s financial strength, we expect it to repurchase more shares in the future.
However, the P&C insurer experienced deterioration in combined ratio, which suggests underwriting profitability, in the first quarter. The company remains uncertain of any substantial improvement in the future, owing to the sudden occurrences of catastrophic events.
Zacks Rank and Stocks to Consider
Currently, Progressive carries a Zacks Rank #3 (Hold). Some better-ranked stocks are Cincinnati Financial Corp. (CINF - Free Report) , Markel Corp. (MKL - Free Report) and NMI Holdings, Inc. (NMIH - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Progressive Poised for Growth Despite High Combined Ratio
On Jun 10, 2016, we issued an updated research report on Progressive Corp. (PGR - Free Report) .
The property and casualty (P&C) insurer’s first-quarter 2016 earnings missed the Zacks Consensus Estimate and also declined year over year on higher expenses. However, the top line fared well on both counts. Moreover, the company witnessed a rise in net premiums written.
The insurer also saw a substantial growth in its business at Agency and Direct Personal Lines in the first quarter. The Commercial Auto segment too witnessed an improvement in the same period.
Progressive is renowned for its product, service and distribution innovations, especially in personal auto. It is also a market leader in underwriting technology and the application of quantitative analytics in pricing and risk selection. The company displays competitive rates in all markets and continues to gain from its expanded multi-product offering.
The acquisition of the majority stake in ARX Holding in Apr 2015 will help the company to expand its home insurance business. Moreover, the company is on track with its Platinum offering, which is a combined offering of home and auto insurance, in its Agency channel. As of Mar 31, 2016, the Platinum program was available to around 680 agents across 16 states.
The company engages shareholder friendly moves like share buybacks and dividend payments. In the first quarter, the company bought back 2.3 million shares worth $70.3 million and has 10.4 million shares remaining under the current authorization. Given the company’s financial strength, we expect it to repurchase more shares in the future.
However, the P&C insurer experienced deterioration in combined ratio, which suggests underwriting profitability, in the first quarter. The company remains uncertain of any substantial improvement in the future, owing to the sudden occurrences of catastrophic events.
Zacks Rank and Stocks to Consider
Currently, Progressive carries a Zacks Rank #3 (Hold). Some better-ranked stocks are Cincinnati Financial Corp. (CINF - Free Report) , Markel Corp. (MKL - Free Report) and NMI Holdings, Inc. (NMIH - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>