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Progressive's (PGR) May Earnings Rise on Higher Revenues

The Progressive Corporation PGR reported earnings per share of 72 cents for May 2024, up 122.2% year over year. The improvement stemmed from higher revenues.

May Numbers in Detail

Progressive recorded net premiums written of $6.2 billion, up 38.3% from $6 billion in the year-ago month. Net premiums earned were about $5.9 billion, up 30.8% from $5.5 billion reported in the year-ago month.

Net realized income on securities was $177.6 million against the year-ago loss of $35.3 million.

Combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 140 basis points (bps) year over year to 89.

PGR’s operating revenues were $6.2 billion, improving 30.4% year over year, owing to a 30.8% increase in premiums, a 49.5% jump in investment income and 46.5% higher service revenues.

Total expenses increased 32% to $6 billion, mainly due to 28.7% lower losses and loss adjustment expenses, a 65.1% increase in other underwriting expenses and 26.7% lower policy acquisition costs.

In August 2023, policies in force (PIF) were impressive for both Vehicle and Property businesses. In the Vehicle business, the Personal Auto segment recorded an increase of 8% year over year to 21.3 million policies. Special Lines policies increased 8% from the year-earlier month to 6.2 million.

In Progressive’s Personal Auto segment, Agency Auto PIF increased 5% to 8.9 million, while Direct Auto improved 10% to 12.41 million.

PGR’s Commercial Auto segment policies rose 2% year over year to 1.1 million.

The Property business had 3.3 million policies in force in the reported month, up 12% year over year.

The company’s book value per share was $37.94 as of May 31, 2024, up 34.7% from $28.17 on May 31, 2023.

In the trailing 12 months, the return on equity was 30.2%, having improved 2,880 bps from 33.9% in May 2023. The debt-to-total-capital ratio improved 510 bps year over year to 23.7 as of May 31, 2024.

Price Performance

Progressive’s shares have gained 29.9% year to date, outperforming the industry’s growth of 13.3%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Zacks Rank

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

Stocks to Consider

Some better-ranked stocks from the insurance industry are HCI Group, Inc. HCI, Palomar Holdings PLMR and ProAssurance PRA. Each stock presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

HCI Group’s earnings surpassed estimates in each of the last four quarters, the average beat being 139.15%. In the past year, shares of HCI have rallied 10.5%.

The Zacks Consensus Estimate for HCI’s 2024 and 2025 earnings implies 57.6% and 4.3% year-over-year growth, respectively.

Palomar’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 15.10%. In the past year, PLMR’s stock has surged 54.8%.

The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings indicates 25.8% and 16.1% year-over-year growth, respectively.

ProAssurance earnings surpassed estimates in two of the last four quarters and missed in the other two. In the past year, PRA’s stock has lost 2.5%.

The Zacks Consensus Estimate for PRA’s 2024 and 2025 earnings implies 371.4% and 71.6% year-over-year growth, respectively.

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