Progressive Posts Mixed Feb Results

Progressive Corp.’s ( PGR - Analyst Report ) earnings per share (EPS) for Feb 2013 were 17 cents, flat with the year-ago period. Net income decreased 6% to $100.2 million in the reported month.

The company recorded net premiums of $1.49 billion in the reported month, up 8% from $1.39 billion in the year-ago period. Net premiums earned were $1.29 billion, up 8% from $1.19 billion in the year-ago period.

Net realized gains on securities in Feb 2013 were $19.5 million, declining 34% from $29.4 million in the year-ago month. The combined ratio − the percentage of premiums paid out as claims and expenses − deteriorated 20 basis points (bps) from the prior-year month to 91.4% in the reported month.

Numbers in February

Progressive publishes monthly financial reports. During February, policies in force remained healthy, with the Personal Auto segment increasing 1% year over year and sequentially. Special Lines also increased 4% year over year, but remained flat with the preceding month.

In Personal Auto, Direct Auto reported growth of 2% year over year and 1.2% from the preceding month. Agency Auto was up 1% year over year as well as sequentially. Progressive’s Commercial Auto segment reported an increase of 1% year over year but declined 0.1% sequentially.

Progressive's total expenses for the reported month increased 10.5% to $1.21 billion from $1.10 billion in Feb 2012. The major components contributing to the increase in total expenses were an 11.2% rise in losses and loss adjustment expenses and a 15% hike in other underwriting expenses.

Progressive reported book value per share of $10.39 as of Feb 28, 2013, up from $10.06 as of Feb 29, 2012 and from $10.21 as of Jan 31, 2013.

Return on equity in Feb 2013 was 16.1%, down from 16.4% in Feb 2012 and 17.1% in Jan 2013. The debt-to-total-capital ratio was 24.8% as of Feb 28, 2013, improving from 25.4% as of Feb 29, 2012 and from 25.1% as of Jan 31, 2013.

Progressive carries a Zacks Rank #2 (Buy). Other property and casualty insurers, Cincinnati Financial Corp. ( CINF - Analyst Report ) , Arch Capital Group Limited ( ACGL - Snapshot Report ) and XL Group plc ( XL - Analyst Report ) , carry a Zacks Rank #1 (Strong Buy) and appear impressive.