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Progressive Corp.’s (PGR - Analyst Report) earnings per share (EPS) for Jan 2013 were 22 cents, improving 81% from 12 cents in the year-ago period. Net income increased 79% to $134.2 million in the reported month.

The company recorded net premiums of $1.54 billion in the reported month, up 5% from $1.46 billion in the year-ago period. Net premiums earned were $1.59 billion, up 9% from $1.46 billion in the year-ago period.

Net realized gains on securities in Jan 2013 were $42.4 million, improving 256% from $11.9 million in the year-ago month. The combined ratio − the percentage of premiums paid out as claims and expenses − deteriorated 380 basis points (bps) from the prior-year month to 91.1% in the reported month.

Numbers in January

Progressive publishes monthly financial reports. During January, policies in force remained healthy, with the Personal Auto segment increasing 2% year over year but down 0.3% sequentially. Special Lines also increased 4% year over year, though it declined 0.2% from the preceding month.

In Personal Auto, Direct Auto reported growth of 3% year over year but inched down 0.1% from the preceding month. Agency Auto was up 2% year over year but down 0.5% from the last month. Progressive’s Commercial Auto segment reported an increase of 1% year over year but declined 0.5% sequentially.

Total expenses for the reported month increased 4% to $1.49 billion from $1.43 billion in Jan 2012. The major components contributing to the increase in total expenses were a 5% rise in losses and loss adjustment expenses and a 4% hike in other underwriting expenses.

Progressive reported book value per share of $10.21 as of Jan 31, 2013, up from $9.78 as of Jan 31, 2012 and from $9.94 as of Dec 31, 2012.

Return on equity in Jan 2013 was 17.1%, up from 15.9% in Jan 2012 but declining from 17.4% in Dec 2012. The debt-to-total-capital ratio was 25.1% as of Jan 31, 2013, down from 25.9% as of Jan 31, 2012 and from 25.6% as of Dec 31, 2012.

Progressive carries a Zacks Rank #3 (Hold). Other property and casualty insurers, Cincinnati Financial Corp. (CINF - Analyst Report), RLI Corp. (RLI - Analyst Report) and XL Group plc (XL - Analyst Report), carry a Zacks Rank #1 (Strong Buy) and appear impressive.
 

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