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Progressive (PGR) February Earnings Drop Y/Y, Revenues Rise

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The Progressive Corporation (PGR - Free Report) reported earnings per share of 10 cents for February 2022, down 83% year over year. The decline was due to higher expenses and net realized loss on securities.

Progressive’s shares have gained 17.5% in the past year, outperforming the industry’s increase of 16.9%.

Zacks Investment Research
Image Source: Zacks Investment Research

February Numbers in Detail

Progressive recorded net premiums written of $4.6 billion, up 20% from $3.8 billion in the year-ago month. Net premiums earned were $3.6 billion, up 13% from about $3.2 billion reported in the year-ago month.

Net realized loss on securities was $209.4 million versus a gain of $128.4 million in the year-ago month.

Combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 230 basis points (bps) year over year to 93.7.

Progressive’s operating revenues were $3.8 billion, improving 13% year over year, owing to a 13.2% increase in premiums, 2.2% higher fees, a 16.2% jump in service revenues and 12.3% higher investment income.

Total expenses rose 15.6% to $3.4 billion, primarily on account of 19.2% higher losses and loss adjustment expenses, 17.8% increase in service expenses and a 10.5% rise in policy acquisition costs, 1.1% increase in other underwriting expenses and a 10.5% increase in investment expenses.

In February, policies in force were impressive for both Vehicle and Property businesses. In its Vehicle business, the Personal Auto segment improved 3% year over year to 17.4 million. Special Lines increased 7% from the year-earlier month to 5.3 million policies.

In Progressive’s Personal Auto segment, Agency Auto expanded 1% to 7.8 million while Direct Auto increased 5% to 9.5 million.

Progressive’s Commercial Auto segment rose 17% year over year to about 0.9 million. The Property business had 2.8 million policies in force in the reported month, up 10% year over year.

Progressive’s book value per share was $29.30 as of Feb 28, 2022, up 0.6% from $29.11 on Feb 28, 2021.

Return on equity in the trailing 12 months was 7.1%, having contracted 2900 bps from 36.1% in February 2021. The debt-to-total-capital ratio improved 180 bps year over year to 21.7 as of Feb 28, 2022.

Progressive currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

Some better-ranked insurers include United Fire Group, Inc. (UFCS - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . While United Fire and W.R. Berkley sport a Zacks Rank #1, Cincinnati Financial carries a Zacks Rank #2 (Buy).

United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, United Fire has declined 20.5%.

The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 30 days.

W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.53%. In the past year, WRB has rallied 23.2%.

The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 4.7% and 1.7% north, respectively, in the past 60 days. W.R. Berkley’s expected long-term earnings growth rate is pegged at 9%.

The bottom line of Cincinnati Financial surpassed earnings estimates in each of the last four quarters, the average being 38.48%. In the past year, the insurer has rallied 21%.

The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 30 days.