Yahoo Finance Progressive's November Earnings Increase as Revenues Rise
The Progressive Corporation PGR reported earnings per share of 39 cents for November 2018, which rose 50% year over year. The figure was driven by an improved top line.
Year to date, shares of Progressive have rallied 13.8% against the industry’s decrease of 1.4%. Sustained solid operational results drove the outperformance.
November Numbers
Progressive recorded net premiums written of $2.3 billion in the month, up 15% from $2 billion in the year-earlier period. Net premiums earned were about $2.5 billion, up 20% from $2.1 billion recorded last November.
Net realized income on securities was $18.5 million, substantially up from $0.7 million in the year-ago month.
Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 40 basis points (bps) year over year to 91.3%.
Total operating revenues came in at $2.7 billion. The top line improved 20.9% year over year owing to a 19.7% increase in premiums, a 56.3% surge in investment income, 46.4% growth in fees and other revenues plus a 21.4% rise in service revenues.
Total expenses shot up 20.7% to $2.4 billion. This increase can be primarily attributed to 20.9% higher losses and loss adjustment expenses, 20.5% rise in policy acquisition costs and a 19.7% jump in other underwriting expenses.
In November, policies in force were impressive in both Vehicle and Property businesses. In its vehicle business, Personal Auto segment improved 15% year over year to nearly 13 million. Special Lines inched up 0.5% from the year-earlier month to 4.4 million policies.
In Progressive’s Personal Auto segment, Agency Auto expanded 12% to 6.3 million while Direct Auto increased 17% to nearly 7 million.
Progressive’s Commercial Auto segment rose 8% year over year to 0.7 million. The Property business had about 1.9 million policies in force in the reported month, up 33% year over year.
Progressive’s book value per share was $19.88 as of Nov 30, 2018, up 19.8% from $16.60 as of Nov 30, 2017.
Return on equity in the trailing 12 months was 24.9%, up 390 bps from 21% in November 2017. Debt-to-total-capital ratio improved 120 bps year over year to 26.7% as of Nov 30, 2018.
Zacks Rank and Other Key Insurers
Progressive currently carries a Zacks Rank #2 (Buy). Investors interested in property and casualty insurance space might also consider some other top-ranked stocks like Mercury General Corporation MCY, National General Holdings Corp. NGHC and State Auto Financial Corporation STFC, each sporting Zacks Rank #1 (Strong Buy). YoYou can see the complete list of today’s Zacks #1 Rank stocks here.
Mercury General engages in writing personal automobile insurance in the United States. The company delivered positive surprise of 85.00% in the last reported quarter.
National General provides various insurance products and services in the United States. The company delivered positive surprise of 75.68% in the last reported quarter.
State Auto Financial engages in writing personal, business, and specialty insurance products.. The company pulled off a positive surprise of 62.96% in the last reported quarter
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