The Progressive Corporation (PGR - Free Report) reported earnings per share of 13 cents for May 2019, which plunged 71% year over year. Improvement in revenues was offset by an increase in expenses.
May Results in Details
Progressive’s net premiums written were $2.66 billion, up 10% from $2.4 billion in the year-ago month. Net premiums earned were $2.73 billion, up 16% from $2.4 billion reported in the year-ago period.
Net realized loss on securities was $204.3 million against gain of $55.7 million in the year-ago month.
Catastrophe losses amounted to $95.8 million, wider than $52.3 million in the year-ago period, largely stemming from tornadoes and severe storms across the United States in May. Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 130 basis points (bps) year over year to 91.6%.
Total operating revenues came in at $2.9 billion. The top line improved 16.3% year over year owing to a 15.8% increase in premiums, a 33.4% surge in investment income, 20.6% growth in fees and other revenues plus 18.6% rise in service revenues.
Total expenses shot up 17.5% to $1.9 billion. This increase can be primarily attributed to 17.7% higher losses and loss adjustment expenses and 16% increase in policy acquisition costs. However, a 12.9% decline in other underwriting expenses was a partial offset.
In May, policies in force were impressive in both Vehicle and Property businesses. In its vehicle business, Personal Auto segment improved 13% year over year to nearly 14.2 million. Special Lines inched increased 3% from the year-earlier month to 4.5 million policies.
In Progressive’s Personal Auto segment, Agency Auto policies in force increased 11% to 6.7 million while Direct Auto increased 14% to nearly 7.5 million.
Progressive’s Commercial Auto segment rose 8% year over year to 0.7 million. The Property business had about nearly 2 million policies in force in the reported month, up 19% year over year.
Progressive’s book value per share was $21.08 as of May 31, 2019, up nearly 18.8% from $17.75 as of May 31, 2018.
Return on equity in the trailing 12 months was 31.7%, up 1000 bps from 21.7% in May 2018. Debt-to-total-capital ratio improved 70 bps year over year to 25.6% as of May 31, 2019.
Share Price Performance
Year to date, shares of Progressive have rallied 34.5%, outperforming the industry’s increase of 4.8%. Sustained solid operational results drove the outperformance.
Zacks Rank and Other Stocks to Consider
Progressive currently carries a Zacks Rank #2 (Buy). Other top-ranked property and casualty insurance stocks include Alleghany Corporation , Argo Group International Holdings, Ltd. and CNA Financial Corporation (CNA - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alleghany provides property and casualty reinsurance and insurance products in the United States and internationally. The company delivered positive surprise of 32.51% in the last reported quarter.
Argo Group underwrites specialty insurance and reinsurance products in the property and casualty markets. The company delivered positive surprise of 34.09% in the last reported quarter.
CNA Financial provides commercial property and casualty insurance products primarily in the United States. The company delivered positive surprise of 12.50% in the last reported quarter.
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The Progressive Corporation (PGR - Free Report) reported earnings per share of 13 cents for May 2019, which plunged 71% year over year. Improvement in revenues was offset by an increase in expenses.
May Results in Details
Progressive’s net premiums written were $2.66 billion, up 10% from $2.4 billion in the year-ago month. Net premiums earned were $2.73 billion, up 16% from $2.4 billion reported in the year-ago period.
Net realized loss on securities was $204.3 million against gain of $55.7 million in the year-ago month.
Catastrophe losses amounted to $95.8 million, wider than $52.3 million in the year-ago period, largely stemming from tornadoes and severe storms across the United States in May. Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 130 basis points (bps) year over year to 91.6%.
Total operating revenues came in at $2.9 billion. The top line improved 16.3% year over year owing to a 15.8% increase in premiums, a 33.4% surge in investment income, 20.6% growth in fees and other revenues plus 18.6% rise in service revenues.
Total expenses shot up 17.5% to $1.9 billion. This increase can be primarily attributed to 17.7% higher losses and loss adjustment expenses and 16% increase in policy acquisition costs. However, a 12.9% decline in other underwriting expenses was a partial offset.
In May, policies in force were impressive in both Vehicle and Property businesses. In its vehicle business, Personal Auto segment improved 13% year over year to nearly 14.2 million. Special Lines inched increased 3% from the year-earlier month to 4.5 million policies.
In Progressive’s Personal Auto segment, Agency Auto policies in force increased 11% to 6.7 million while Direct Auto increased 14% to nearly 7.5 million.
Progressive’s Commercial Auto segment rose 8% year over year to 0.7 million. The Property business had about nearly 2 million policies in force in the reported month, up 19% year over year.
Progressive’s book value per share was $21.08 as of May 31, 2019, up nearly 18.8% from $17.75 as of May 31, 2018.
Return on equity in the trailing 12 months was 31.7%, up 1000 bps from 21.7% in May 2018. Debt-to-total-capital ratio improved 70 bps year over year to 25.6% as of May 31, 2019.
Share Price Performance
Year to date, shares of Progressive have rallied 34.5%, outperforming the industry’s increase of 4.8%. Sustained solid operational results drove the outperformance.
Zacks Rank and Other Stocks to Consider
Progressive currently carries a Zacks Rank #2 (Buy). Other top-ranked property and casualty insurance stocks include Alleghany Corporation , Argo Group International Holdings, Ltd. and CNA Financial Corporation (CNA - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alleghany provides property and casualty reinsurance and insurance products in the United States and internationally. The company delivered positive surprise of 32.51% in the last reported quarter.
Argo Group underwrites specialty insurance and reinsurance products in the property and casualty markets. The company delivered positive surprise of 34.09% in the last reported quarter.
CNA Financial provides commercial property and casualty insurance products primarily in the United States. The company delivered positive surprise of 12.50% in the last reported quarter.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
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 >>
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