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Progressive (PGR) Q3 Earnings Miss Estimates, Premiums Rise
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The Progressive Corporation’s (PGR - Free Report) third-quarter 2021 earnings per share of 19 cents missed the Zacks Consensus Estimate by 57.6%. The bottom line plunged 82.4% year over year.
The Progressive Corporation Price, Consensus and EPS Surprise
Net premiums written were $12.4 billion in the quarter, up 13% from $10.1 billion a year ago. Net premiums earned increased 14% to nearly $11.3 billion.
Net realized gains on securities were $36.8 million, down 93% year over year.
Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 1260 basis points (bps) from the prior-year quarter’s level to 100.4.
September Numbers
Operating revenues were $3.7 million, up 13.7% year over year. The improvement can be attributed to a 14.4% increase in premiums, 13.4% higher fees and other revenues and a 32.4% rise in service revenues. This was partially offset by 2.5% lower investment income.
Premium improvement was driven by increase in premiums across all lines of business.
Total expenses increased 28.9% year over year to $2.9billion due to 38.1% higher losses and loss adjustment expenses as well as 12.6% increase in policy acquisition costs. A decline of 2.5% in other underwriting expenses limited the downside.
Policies in force were impressive in the Personal Auto segment, improving 8% from the year-ago month’s levels to 17.6 million. Special Lines climbed 8% to 5.3 million.
In Progressive’s Personal Auto segment, Direct Auto advanced 10% year over year to 9.6 million and Agency Auto improved 9% to 8 million.
Progressive’s Commercial Auto segment rose 19% year over year to 0.9 million. The Property business had about 2.7 million policies in force in September, up 13%.
Financial Update
Progressive’s book value per share was $30.88 as of Sep 30, 2021, up 2.8% from $30.04 on Sep 30, 2020.
Return-on-equity in September 2021 was 19.4%, down 1730 bps year over year. Debt-to-total capital ratio improved 210 bps to 20.9
The Travelers Companies, Inc. (TRV - Free Report) is set to report third-quarter 2021 results on Oct 19. The Zacks Consensus Estimate for third-quarter earnings is pegged at $2.14, down 34.6% from year-ago quarter’s reported figure.
W.R. Berkley Corporation (WRB - Free Report) is set to report third -quarter 2021 results on Oct 21. The Zacks Consensus Estimate for third-quarter earnings is pegged at 99 cents, up 52.3% from year-ago quarter’s reported figure.
First American Financial Corporation (FAF - Free Report) is set to report third -quarter 2021 results on Oct 21. The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.66, suggesting an improvement of 26.7% year over year.
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Progressive (PGR) Q3 Earnings Miss Estimates, Premiums Rise
The Progressive Corporation’s (PGR - Free Report) third-quarter 2021 earnings per share of 19 cents missed the Zacks Consensus Estimate by 57.6%. The bottom line plunged 82.4% year over year.
The Progressive Corporation Price, Consensus and EPS Surprise
The Progressive Corporation price-consensus-eps-surprise-chart | The Progressive Corporation Quote
Behind the Headlines
Net premiums written were $12.4 billion in the quarter, up 13% from $10.1 billion a year ago. Net premiums earned increased 14% to nearly $11.3 billion.
Net realized gains on securities were $36.8 million, down 93% year over year.
Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 1260 basis points (bps) from the prior-year quarter’s level to 100.4.
September Numbers
Operating revenues were $3.7 million, up 13.7% year over year. The improvement can be attributed to a 14.4% increase in premiums, 13.4% higher fees and other revenues and a 32.4% rise in service revenues. This was partially offset by 2.5% lower investment income.
Premium improvement was driven by increase in premiums across all lines of business.
Total expenses increased 28.9% year over year to $2.9billion due to 38.1% higher losses and loss adjustment expenses as well as 12.6% increase in policy acquisition costs. A decline of 2.5% in other underwriting expenses limited the downside.
Policies in force were impressive in the Personal Auto segment, improving 8% from the year-ago month’s levels to 17.6 million. Special Lines climbed 8% to 5.3 million.
In Progressive’s Personal Auto segment, Direct Auto advanced 10% year over year to 9.6 million and Agency Auto improved 9% to 8 million.
Progressive’s Commercial Auto segment rose 19% year over year to 0.9 million. The Property business had about 2.7 million policies in force in September, up 13%.
Financial Update
Progressive’s book value per share was $30.88 as of Sep 30, 2021, up 2.8% from $30.04 on Sep 30, 2020.
Return-on-equity in September 2021 was 19.4%, down 1730 bps year over year. Debt-to-total capital ratio improved 210 bps to 20.9
Zacks Rank
Progressive currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Release
The Travelers Companies, Inc. (TRV - Free Report) is set to report third-quarter 2021 results on Oct 19. The Zacks Consensus Estimate for third-quarter earnings is pegged at $2.14, down 34.6% from year-ago quarter’s reported figure.
W.R. Berkley Corporation (WRB - Free Report) is set to report third -quarter 2021 results on Oct 21. The Zacks Consensus Estimate for third-quarter earnings is pegged at 99 cents, up 52.3% from year-ago quarter’s reported figure.
First American Financial Corporation (FAF - Free Report) is set to report third -quarter 2021 results on Oct 21. The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.66, suggesting an improvement of 26.7% year over year.