The Progressive Corporation (PGR - Free Report) reported earnings per share of 40 cents for October 2020, marking a year-over-year decline of 22%. The decline is attributable to higher expenses and net realized loss on securities.
Year to date, Progressive’s shares have gained 22.5% against the industry’s 5.4% decline.
Numbers in October
Progressive recorded net premiums written of $3.8 billion in the month, up 4% from $3.7 billion in the year-ago quarter. Net premiums earned were around $3.9 billion, up 11% from $3.5 billion last May.
Net realized loss on securities in the quarter was $440.3 million against an income of $93.6 million in the prior-year quarter.
Combined ratio — percentage of premiums paid out as claims and expenses — improved 140 basis points (bps) year over year to 92.6.
Total operating revenues were $4.1 billion, improving 10.4% year over year, owing to an 11% increase in premiums, a 24.6% rise in fees and other revenues, and a 13.9% jump in service revenues. However, 22.7% lower investment income was a drag.
Total expenses rose 9.7% to $3.7 billion, primarily because of 9% higher losses and loss adjustment expenses, and a 12.4% jump in policy acquisition costs and 9.4% higher other underwriting expenses in August 2020. The company incurred $3 million in policyholder credit expenses in tandem with the plan to issue a credit to personal auto customers, with a policy in force, in response to the reduction in auto accident frequency resulting from COVID-19 restrictions.
In October, policies in force were impressive in both Vehicle and Property businesses. In its vehicle business, the Personal Auto segment improved 11% year over year to 21.3 million. Special Lines increased 8% from the year-earlier month to 4.9 million policies.
In Progressive’s Personal Auto segment, Agency Auto expanded 9% to 7.6 million, while Direct Auto increased 14% to 8.8 million.
Progressive’s Commercial Auto segment rose 8% year over year to 0.8 million. The Property business had 2.4 million policies in force in the reported month, up 13% year over year.
The company’s book value per share was $30.20 as of Oct 31, 2020, up 26.5% from $23.87 on Oct 31, 2019.
Return on equity in the trailing 12 months was 34.5%, down 100 bps from 35.5% in October 2019. Debt-to-total-capital ratio improved 50 bps year over year to 22.9 as of Oct 31, 2020.
Progressive currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked companies from the same space are Alleghany , The Hanover Insurance Group (THG - Free Report) and American Financial Group (AFG - Free Report) .
Alleghany delivered an earnings surprise of 195.85% in the last reported quarter. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Hanover Insurance Group delivered an earnings surprise of 9.85% in the last reported quarter. It currently sports a Zacks Rank #1.
American Financial delivered an earnings surprise of 58.06% in the last reported quarter. It currently carries a Zacks Rank #2 (Buy).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
The Progressive Corporation (PGR - Free Report) reported earnings per share of 40 cents for October 2020, marking a year-over-year decline of 22%. The decline is attributable to higher expenses and net realized loss on securities.
Year to date, Progressive’s shares have gained 22.5% against the industry’s 5.4% decline.
Numbers in October
Progressive recorded net premiums written of $3.8 billion in the month, up 4% from $3.7 billion in the year-ago quarter. Net premiums earned were around $3.9 billion, up 11% from $3.5 billion last May.
Net realized loss on securities in the quarter was $440.3 million against an income of $93.6 million in the prior-year quarter.
Combined ratio — percentage of premiums paid out as claims and expenses — improved 140 basis points (bps) year over year to 92.6.
Total operating revenues were $4.1 billion, improving 10.4% year over year, owing to an 11% increase in premiums, a 24.6% rise in fees and other revenues, and a 13.9% jump in service revenues. However, 22.7% lower investment income was a drag.
Total expenses rose 9.7% to $3.7 billion, primarily because of 9% higher losses and loss adjustment expenses, and a 12.4% jump in policy acquisition costs and 9.4% higher other underwriting expenses in August 2020. The company incurred $3 million in policyholder credit expenses in tandem with the plan to issue a credit to personal auto customers, with a policy in force, in response to the reduction in auto accident frequency resulting from COVID-19 restrictions.
In October, policies in force were impressive in both Vehicle and Property businesses. In its vehicle business, the Personal Auto segment improved 11% year over year to 21.3 million. Special Lines increased 8% from the year-earlier month to 4.9 million policies.
In Progressive’s Personal Auto segment, Agency Auto expanded 9% to 7.6 million, while Direct Auto increased 14% to 8.8 million.
Progressive’s Commercial Auto segment rose 8% year over year to 0.8 million. The Property business had 2.4 million policies in force in the reported month, up 13% year over year.
The company’s book value per share was $30.20 as of Oct 31, 2020, up 26.5% from $23.87 on Oct 31, 2019.
Return on equity in the trailing 12 months was 34.5%, down 100 bps from 35.5% in October 2019. Debt-to-total-capital ratio improved 50 bps year over year to 22.9 as of Oct 31, 2020.
Progressive currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked companies from the same space are Alleghany , The Hanover Insurance Group (THG - Free Report) and American Financial Group (AFG - Free Report) .
Alleghany delivered an earnings surprise of 195.85% in the last reported quarter. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Hanover Insurance Group delivered an earnings surprise of 9.85% in the last reported quarter. It currently sports a Zacks Rank #1.
American Financial delivered an earnings surprise of 58.06% in the last reported quarter. It currently carries a Zacks Rank #2 (Buy).
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on PGR - FREE
Get the latest research report on AFG - FREE
Get the latest research report on THG - FREE