The Progressive Corporation (PGR - Free Report) reported earnings per share of 30 cents for August 2019, down 36% year over year. Improvement in the top line was offset by higher expenses.
Year to date, shares of Progressive have rallied 20.5%, outperforming the industry’s 7.8% increase.
Numbers in August
Progressive recorded net premiums written of $2.9 billion in the month, up 13% from $2.6 billion in the year-earlier period. Net premiums earned were about $2.8 billion, up 14% from $2.5 billion recorded last August.
Net realized losses on securities were $33.7 million against the prior-year income of $76.4 million.
Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 110 basis points (bps) year over year to 93.4%.
Total operating revenues came in at $2.9 billion. The top line improved 13.7% year over year owing to a 13.5% increase in premiums, a 17.5% surge in investment income, 16.3% growth in fees and other revenues plus a 22.8% rise in service revenues.
Total expenses shot up 15% to $2.7 billion. This increase can be primarily attributed to 15.9% higher losses and loss adjustment expenses, 13.4% rise in policy acquisition costs and an 11.1% jump in other underwriting expenses.
In August, policies in force were impressive in both Vehicle and Property businesses. In its vehicle business, Personal Auto segment improved 11% year over year to nearly 14.5 million. Special Lines increased 3% from the year-earlier month to 4.6 million policies.
In Progressive’s Personal Auto segment, Agency Auto expanded 11% to 6.7 million while Direct Auto increased 12% to nearly 7.6 million.
Progressive’s Commercial Auto segment rose 8% year over year to 0.8 million. The Property business had about 2.1 million policies in force in the reported month, up 16% year over year.
Progressive’s book value per share was $23.05 as of Aug 31, 2019, up 20.2% from $19.17 as of Aug 31, 2018.
Return on equity in the trailing 12 months was 33.5%, up 740 bps from 26.1% in August 2018. Debt-to-total-capital ratio improved 90 bps year over year to 24% as of Aug 31, 2019.
Zacks Rank and Stocks to Consider
Progressive currently carries a Zacks Rank #3 (Hold).
Some better-ranked property and casualty insurers include Alleghany , Hallmark Financial Services (HALL - Free Report) and Donegal Group (DGICA - Free Report) , each sporting 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 30.80% positive surprise in the last reported quarter.
Hallmark Financial underwrites, markets, distributes, and services property/casualty insurance products to businesses and individuals in the United States. The company delivered 20.22% positive surprise in the last reported quarter.
Donegal Group provides personal and commercial lines of property and casualty insurance to businesses and individuals in the Mid-Atlantic, Midwestern, New England, and southern states. The company delivered 160.00% positive surprise in the last reported quarter.
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The Progressive Corporation (PGR - Free Report) reported earnings per share of 30 cents for August 2019, down 36% year over year. Improvement in the top line was offset by higher expenses.
Year to date, shares of Progressive have rallied 20.5%, outperforming the industry’s 7.8% increase.
Numbers in August
Progressive recorded net premiums written of $2.9 billion in the month, up 13% from $2.6 billion in the year-earlier period. Net premiums earned were about $2.8 billion, up 14% from $2.5 billion recorded last August.
Net realized losses on securities were $33.7 million against the prior-year income of $76.4 million.
Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 110 basis points (bps) year over year to 93.4%.
Total operating revenues came in at $2.9 billion. The top line improved 13.7% year over year owing to a 13.5% increase in premiums, a 17.5% surge in investment income, 16.3% growth in fees and other revenues plus a 22.8% rise in service revenues.
Total expenses shot up 15% to $2.7 billion. This increase can be primarily attributed to 15.9% higher losses and loss adjustment expenses, 13.4% rise in policy acquisition costs and an 11.1% jump in other underwriting expenses.
In August, policies in force were impressive in both Vehicle and Property businesses. In its vehicle business, Personal Auto segment improved 11% year over year to nearly 14.5 million. Special Lines increased 3% from the year-earlier month to 4.6 million policies.
In Progressive’s Personal Auto segment, Agency Auto expanded 11% to 6.7 million while Direct Auto increased 12% to nearly 7.6 million.
Progressive’s Commercial Auto segment rose 8% year over year to 0.8 million. The Property business had about 2.1 million policies in force in the reported month, up 16% year over year.
Progressive’s book value per share was $23.05 as of Aug 31, 2019, up 20.2% from $19.17 as of Aug 31, 2018.
Return on equity in the trailing 12 months was 33.5%, up 740 bps from 26.1% in August 2018. Debt-to-total-capital ratio improved 90 bps year over year to 24% as of Aug 31, 2019.
Zacks Rank and Stocks to Consider
Progressive currently carries a Zacks Rank #3 (Hold).
Some better-ranked property and casualty insurers include Alleghany , Hallmark Financial Services (HALL - Free Report) and Donegal Group (DGICA - Free Report) , each sporting 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 30.80% positive surprise in the last reported quarter.
Hallmark Financial underwrites, markets, distributes, and services property/casualty insurance products to businesses and individuals in the United States. The company delivered 20.22% positive surprise in the last reported quarter.
Donegal Group provides personal and commercial lines of property and casualty insurance to businesses and individuals in the Mid-Atlantic, Midwestern, New England, and southern states. The company delivered 160.00% positive surprise in the last reported quarter.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.6% per year. So be sure to give these hand-picked 7 your immediate attention.
See them now >>
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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