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Progressive's (PGR) February Earnings Up as Revenues Rise Y/Y

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The Progressive Corporation (PGR - Free Report) reported earnings per share of 60 cents for February 2021, which increased more than five-fold year over year. The upside is attributable to an improved top line as well as net realized gains on securities.

Progressive’s shares lost 7.9% year to date, against the industry’s 8.9% increase.

February Numbers in Detail

Progressive recorded net premiums written of $3.9 billion, up 13% from $3.4 billion in the year-ago month. Net premiums earned were $3.2 billion, up 10% from $2.9 billion reported last February.

Net realized gains on securities of $128.4 million rebounded from a loss of $257 million in the year-ago month.

Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 110 basis points (bps) year over year to 91.4.

Total operating revenues were $3.3 billion, improving 9.2% year over year, owing to a 9.9% increase in premiums, 6.6% higher fee income and a 9.1% jump in service revenues. However, investment income, which was 14% lower, was a drag.

Total expenses rose 11.2% to $3.1 billion, primarily because of 11.6% higher losses and loss adjustment expenses, and a 10.6% jump in policy acquisition costs, 3% higher other underwriting and 9% higher other underwriting expenses in February 2021.

In February, policies in force were impressive for both Vehicle and Property businesses. In its Vehicle business, the Personal Auto segment improved 11% year over year to 16.9 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 7.8 million, while Direct Auto increased 13% to 9.1 million.

Progressive’s Commercial Auto segment rose 10% year over year to 0.8 million. The Property business had 2.5 million policies in force in the reported month, up 13% year over year.

The company’s book value per share was $29.11 as of Feb 28, 2021, up 22.1% from $23.85 on Feb 29, 2020.

Return on equity in the trailing 12 months was 36.1%, up 330 bps from 32.8% in February 2020. Debt-to-total-capital ratio deteriorated 10 bps year over year to 23.5 as of Feb 28, 2021.

Progressive currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks from the same industry are Markel (MKL - Free Report) , CNA Financial (CNA - Free Report) and Alleghany (Y - Free Report) .

Markel delivered an earnings surprise of 75.11% in the last-reported quarter. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CNA Financial delivered an earnings surprise of 16.04% in the last-reported quarter. It carries a Zacks Rank #2 (Buy).

Alleghany delivered an earnings surprise of 48.79% in the last-reported quarter. It carries a Zacks Rank #2.

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