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Progressive's (PGR) Q4 Earnings and Revenues Beat Estimates
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The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year.
Behind the Headlines
Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. Premiums beat our estimate of $14 billion.
Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion.
Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year.
Net realized gain on securities was $303.4 billion against a loss of $72.8 million in the year-ago quarter.
The combined ratio — the percentage of premiums paid out as claims and expenses — improved 520 basis points (bps) from the prior-year quarter’s level to 88.7.
The Progressive Corporation Price, Consensus and EPS Surprise
Policies in force were solid in the Personal Auto segment, increasing 9% from the year-ago month’s figure to 19.5 million. Special Lines improved 5% to 6 million.
In Progressive’s Personal Auto segment, Direct Auto increased 7% year over year to 8.3 million, while Agency Auto increased 10% to 11.2 million.
Progressive’s Commercial Auto segment rose 5% year over year to 1.1 million. The Property business had 3.1 million policies in force, up 9%.
Full-Year Numbers
Operating revenues were about $61.8 billion in 2023, up 19.9% year over year. This improvement was driven by a 19.1% increase in premiums, 23.1% higher fees and other revenues, a 3.6% increase in service revenues and 50.1% higher investment income.
Total expenses increased 17.5% year over year to $57.2 billion due to 19.8% higher losses and loss adjustment expenses, 19.1% higher policy acquisition costs and a 6.5% rise in other underwriting expenses.
Financial Update
Progressive’s book value per share was $33.80 as of Dec 31, 2023, up 28.9% from $26.32 on Dec 31, 2022.
Return on equity in December 2023 was 30% compared with 13.5% a year ago. Total debt-to-total capital ratio improved 330 bps to 25.4.
The Travelers Companies (TRV - Free Report) reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter to $10.9 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. Travelers witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and lower catastrophe losses.
Brown & Brown, Inc.’s (BRO - Free Report) fourth-quarter 2023 adjusted earnings of 58 cents per share beat the Zacks Consensus Estimate by 9.4%. The bottom line increased 16% year over year.
Total revenues of $1.03 billion beat the Zacks Consensus Estimate by 4.6%. The top line improved 13.8% year over year. The upside can be primarily attributed to commission and fees, which grew 12.4% year over year to $1 billion. Our estimate for commission and fees was $943.6 million. Organic revenues improved 7.7% to $922.9 million in the quarter under review.
Adjusted EBITDAC was $317.7 million, up 11.7% year over year. EBITDAC margin however contracted 40 bps year over year to 31%. Our estimate for adjusted EBITDAC was $291.4 million.
Upcoming Release
Axis Capital Holdings (AXS - Free Report) will report fourth-quarter 2023 results on Jan 31, after market close. The Zacks Consensus Estimate for the fourth quarter is pegged at 92 cents, suggesting a decrease of 52.8% from the year-ago quarter’s reported figure.
AXS’s earnings beat estimates in the last four quarters.
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Progressive's (PGR) Q4 Earnings and Revenues Beat Estimates
The Progressive Corporation’s (PGR - Free Report) fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year.
Behind the Headlines
Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. Premiums beat our estimate of $14 billion.
Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion.
Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year.
Net realized gain on securities was $303.4 billion against a loss of $72.8 million in the year-ago quarter.
The combined ratio — the percentage of premiums paid out as claims and expenses — improved 520 basis points (bps) from the prior-year quarter’s level to 88.7.
The Progressive Corporation Price, Consensus and EPS Surprise
The Progressive Corporation price-consensus-eps-surprise-chart | The Progressive Corporation Quote
December Policies in Force
Policies in force were solid in the Personal Auto segment, increasing 9% from the year-ago month’s figure to 19.5 million. Special Lines improved 5% to 6 million.
In Progressive’s Personal Auto segment, Direct Auto increased 7% year over year to 8.3 million, while Agency Auto increased 10% to 11.2 million.
Progressive’s Commercial Auto segment rose 5% year over year to 1.1 million. The Property business had 3.1 million policies in force, up 9%.
Full-Year Numbers
Operating revenues were about $61.8 billion in 2023, up 19.9% year over year. This improvement was driven by a 19.1% increase in premiums, 23.1% higher fees and other revenues, a 3.6% increase in service revenues and 50.1% higher investment income.
Total expenses increased 17.5% year over year to $57.2 billion due to 19.8% higher losses and loss adjustment expenses, 19.1% higher policy acquisition costs and a 6.5% rise in other underwriting expenses.
Financial Update
Progressive’s book value per share was $33.80 as of Dec 31, 2023, up 28.9% from $26.32 on Dec 31, 2022.
Return on equity in December 2023 was 30% compared with 13.5% a year ago. Total debt-to-total capital ratio improved 330 bps to 25.4.
Zacks Rank
Progressive currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Travelers Companies (TRV - Free Report) reported fourth-quarter 2023 core income of $7.01 per share, which beat the Zacks Consensus Estimate of $5.04. The bottom line more than doubled year over year, driven by higher underlying underwriting gain, lower catastrophe losses and higher net investment income. Travelers’ total revenues increased 13.5% from the year-ago quarter to $10.9 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 13% year over year to about $10 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.7 billion. Travelers witnessed an underwriting gain of $1.4 billion, up more than three-fold year over year, driven by higher business volumes. The combined ratio improved 870 bps year over year to 85.8, driven by a lower underlying combined ratio and lower catastrophe losses.
Brown & Brown, Inc.’s (BRO - Free Report) fourth-quarter 2023 adjusted earnings of 58 cents per share beat the Zacks Consensus Estimate by 9.4%. The bottom line increased 16% year over year.
Total revenues of $1.03 billion beat the Zacks Consensus Estimate by 4.6%. The top line improved 13.8% year over year. The upside can be primarily attributed to commission and fees, which grew 12.4% year over year to $1 billion. Our estimate for commission and fees was $943.6 million. Organic revenues improved 7.7% to $922.9 million in the quarter under review.
Adjusted EBITDAC was $317.7 million, up 11.7% year over year. EBITDAC margin however contracted 40 bps year over year to 31%. Our estimate for adjusted EBITDAC was $291.4 million.
Upcoming Release
Axis Capital Holdings (AXS - Free Report) will report fourth-quarter 2023 results on Jan 31, after market close. The Zacks Consensus Estimate for the fourth quarter is pegged at 92 cents, suggesting a decrease of 52.8% from the year-ago quarter’s reported figure.
AXS’s earnings beat estimates in the last four quarters.