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Progressive's (PGR) August Earnings Up as Revenues Rise Y/Y
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The Progressive Corporation (PGR - Free Report) reported earnings per share of 83 cents for August 2020, increasing nearly three-fold year over year on an improved top line.
Year to date, Progressive’s shares have gained 31.9% against the industry’s 7.6% decline. The rise was backed by the company’s consistently strong results.
Numbers in August
Progressive recorded net premiums written of $3.4 billion in the month, up 18% from $2.9 billion in the year-ago quarter. Net premiums earned were about $3.1 billion, up 11% from $2.8 billion last May.
Net realized gain on securities in the quarter was $330.9 million against loss of $33.7 million in the prior-year quarter.
Combined ratio — percentage of premiums paid out as claims and expenses — improved 80 basis points (bps) year over year to 92.3%.
Total operating revenues came in at $3.2 billion, improving 10.3% year over year owing to a 10.9% increase in premiums, 10.5% rise in fees and other revenues and 14.4% ijump in service revenues. However, 10.5% lower investment income was a partial offset.
Total expenses rose 10% to $2.9 billion, primarily because of 8.8% higher losses and loss adjustment expense, and 11.4% jump in policy acquisition costs and 12.4% higher other underwriting expenses in August 2020. The company incurred $11.5 million in policyholder credit expense 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 August, policies in force were impressive in both Vehicle and Property business. In its vehicle business, Personal Auto segment improved 11% year over year to nearly 21.1 million. Special Lines increased 7% from the year-earlier month to 4.9 million policies.
In Progressive’s Personal Auto segment, Agency Auto expanded 7.5% to 9 million while Direct Auto increased 14% to nearly 8.7 million.
Progressive’s Commercial Auto segment rose 7% 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.
Progressive’s book value per share was $29.76 as of Aug 31, 2020, up 29.1% from $21.08 on Aug 31, 2019.
Return on equity in the trailing 12 months was 35%, up 390 bps from 37.4% in August 2019. Debt-to-total-capital ratio improved 90 bps year over year to 23.1 as of Aug 31, 2020.
Progressive currently carries a Zacks Rank #3 (Hold).
Donegal Group delivered a positive earnings surprise of 134.62% in the last reported quarter.
Markel came up with a positive earnings surprise of 57.01% in the last reported quarter.
Fidelity National delivered a positive earnings surprise of 53.52% in the last reported quarter.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Progressive's (PGR) August Earnings Up as Revenues Rise Y/Y
The Progressive Corporation (PGR - Free Report) reported earnings per share of 83 cents for August 2020, increasing nearly three-fold year over year on an improved top line.
Year to date, Progressive’s shares have gained 31.9% against the industry’s 7.6% decline. The rise was backed by the company’s consistently strong results.
Numbers in August
Progressive recorded net premiums written of $3.4 billion in the month, up 18% from $2.9 billion in the year-ago quarter. Net premiums earned were about $3.1 billion, up 11% from $2.8 billion last May.
Net realized gain on securities in the quarter was $330.9 million against loss of $33.7 million in the prior-year quarter.
Combined ratio — percentage of premiums paid out as claims and expenses — improved 80 basis points (bps) year over year to 92.3%.
Total operating revenues came in at $3.2 billion, improving 10.3% year over year owing to a 10.9% increase in premiums, 10.5% rise in fees and other revenues and 14.4% ijump in service revenues. However, 10.5% lower investment income was a partial offset.
Total expenses rose 10% to $2.9 billion, primarily because of 8.8% higher losses and loss adjustment expense, and 11.4% jump in policy acquisition costs and 12.4% higher other underwriting expenses in August 2020. The company incurred $11.5 million in policyholder credit expense 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 August, policies in force were impressive in both Vehicle and Property business. In its vehicle business, Personal Auto segment improved 11% year over year to nearly 21.1 million. Special Lines increased 7% from the year-earlier month to 4.9 million policies.
In Progressive’s Personal Auto segment, Agency Auto expanded 7.5% to 9 million while Direct Auto increased 14% to nearly 8.7 million.
Progressive’s Commercial Auto segment rose 7% 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.
Progressive’s book value per share was $29.76 as of Aug 31, 2020, up 29.1% from $21.08 on Aug 31, 2019.
Return on equity in the trailing 12 months was 35%, up 390 bps from 37.4% in August 2019. Debt-to-total-capital ratio improved 90 bps year over year to 23.1 as of Aug 31, 2020.
Progressive currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked companies in the insurance industry are Donegal Group (DGICA - Free Report) , Markel Corporation (MKL - Free Report) and Fidelity National Financial (FNF - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Donegal Group delivered a positive earnings surprise of 134.62% in the last reported quarter.
Markel came up with a positive earnings surprise of 57.01% in the last reported quarter.
Fidelity National delivered a positive earnings surprise of 53.52% in the last reported quarter.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>