Progressive (PGR) February Earnings & Revenues Increase Y/Y

Zacks Equity Research

16 March 2023 at 7:15 am·3-min read

The Progressive Corporation PGR reported earnings per share of 25 cents for February 2023, which surged more than two-fold year over year. The improvement stemmed from higher premiums and improved revenues.

February Numbers in Detail

Progressive recorded net premiums written of $6.1 billion, up 31% in the year-ago month. Net premiums earned were about $4.2 billion, up 15% from the year-ago month.

Net realized loss on securities was $117.1 million compared with the year-ago loss of $209.4 million.

The combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 140 basis points (bps) year over year to 95.1.

Progressive’s operating revenues were $4.4 billion, up 16.3% year over year. The improvement was driven by a 14.9% increase in premiums, a 71.6% jump in investment income, 31.6% higher fees and other revenues and an 18.3% rise in service revenues.

Total expenses increased 17% to $4.1 billion, largely due to higher losses and loss adjustment expenses, policy acquisition costs, other underwriting expenses, service expenses and interest expense.

In February, policies in force (PIF) were impressive for both Vehicle and Property businesses. In its Vehicle business, the Personal Auto segment PIF increased 8% year over year to 18.8 million. Special Lines PIF increased 5% from the year-earlier month to 5.6 million policies.

In Progressive’s Personal Auto segment, Agency Auto PIF increased 3% to 8 million, while Direct Auto PIF improved 12% to 10.7 million.

Progressive’s Commercial Auto segment PIF rose 7% year over year to about 1 million. The Property business had 2.8 million policies in force in the reported month, up 3% year over year.

Progressive’s book value per share was $27.32 as of Feb 28, 2023, down 6.7% from $29.30 on Feb 28, 2022.

Return on equity in the trailing 12 months was -6% compared with 7.1% in February 2022. The debt-to-total-capital ratio deteriorated 620 bps year over year to 27.9 as of Feb 28, 2023.

Price Performance

Progressive’s shares have rallied 23.4% in the past year against the industry’s decline of 9.6%.

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Zacks Rank

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

Stocks to Consider

Some better-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited AXS, Everest Re Group, Ltd. RE and Kinsale Capital Group, Inc. KNSL, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Axis Capital beat estimates in three of the last four quarters and missed in one, the average being 5.70%. The Zacks Consensus Estimate for 2023 has moved 5.4% north in the past 60 days.

The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $7.53 and $8.42, indicating year-over-year increase of 29.6% and 11.7%, respectively. In the past year, AXS has lost 3%.

The Zacks Consensus Estimate for Everest Re’s 2023 and 2024 earnings per share is pegged at $46.03 and $53.25, indicating year-over-year increase of 69.9% and 15.7%, respectively. In the past year, RE has gained 18.7%.

RE beat estimates in each of the last four quarters, the average being 18.41%.

Kinsale Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.83%. In the past year, KNSL has gained 29.4%.

The Zacks Consensus Estimate for Kinsale Capital’s 2023 and 2024 earnings per share is pegged at $9.86 and $11.85, indicating year-over-year increase of 26.4% and 20.2%, respectively.

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