Progressive Corp.’s (PGR) operating earnings for Aug 2014 came in at 14 cents per share, exhibiting an improvement of 55% year over year.
Progressive recorded $1.5 billion net premiums written, up 10% from $1.4 billion in the year-ago month. Net premiums earned of $1.4 billion were up 6% from $1.3 billion in the year-ago month.
Combined ratio − the percentage of premiums paid out as claims and expenses − improved 260 basis points from the prior-year month to 92.8%.
August Numbers
Progressive publishes monthly financial reports. In the month of August, policies in force were healthy, with the Personal Auto segment increasing 3% year over year to 9.2 million. Special Lines increased 1% year over year to 4.1 million.
In Progressive's Personal Auto segment, Direct Auto grew 7% year over year to 4.4 million. Agency Auto declined 1% year over year at 4.8 million. Progressive’s Commercial Auto segment again declined 2% on a year-over-year basis.
Total revenue improved 4% year over year to $1.5 billion, largely driven by higher premiums.
On the other hand, total expense increased 2.7% to $1.3 billion in August. The major components contributing to the rise in total expense were a 3.4% increase in policy acquisition costs, 3.1% ride in losses and loss adjustment expenses, and 1% higher other underwriting expenses.
Progressive reported book value per share of $11.77 on Aug 31, up 6.3% year over year.
Return on equity on a trailing 12-month basis was 17.7%, in line with the year-ago figure. The debt-to-total capital ratio was 24.1% as of Aug 31, 2014, deteriorating from 23.7% as of Aug 31, 2013.
Zacks Rank
Progressive carries a Zacks Rank #3 (Hold). Better-ranked property and casualty insurers worth considering are Endurance Specialty Holdings Ltd. (ENH), AmTrust Financial Services, Inc. (AFSI) and Mercury General Corporation (MCY). All these stocks sport a Zacks Rank #1 (Strong Buy).
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