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Progressive's (PGR) July Earnings Decline, Premiums Rise Y/Y
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The Progressive Corporation (PGR - Free Report) reported earnings per share of $1.02 for July 2023, which dropped 13% year over year. The decline was due to higher expenses and lower net realized gains on securities.
July Numbers in Detail
Progressive recorded net premiums written of $5.9 billion, up 21% from $4.9 billion in the year-ago month. Net premiums earned were about $5.6 billion, up 20% from $4.6 billion reported in the year-ago month.
Net realized gains on securities of $90.7 million plunged 71% year over year.
Combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 80 basis points (bps) year over year to 90.6.
Progressive’s operating revenues were $6 billion, improving 15.6% year over year, owing to a 20.2% increase in premiums, a 65.2% jump in investment income and 23.7% higher fees.
Total expenses increased 21.2% to $5.2 billion, largely due to 25.3% higher losses and loss adjustment expenses, a 31.3% rise in policy acquisition costs, a 13.4% surge in service expenses and 10.4% higher interest expense.
In July, policies in force (PIF) were impressive for both Vehicle and Property businesses. In its Vehicle business, the Personal Auto segment increased 14% year over year to 19.6 million policies. Special Lines increased 7% from the year-earlier month to 5.9 million policies.
In Progressive’s Personal Auto segment, Agency Auto PIF increased 11% to 8.4 million, while Direct Auto improved 16% to 11.2 million.
PGR’s Commercial Auto segment rose 7% year over year to 1.1 million policies. The Property business had 2.9 million policies in force in the reported month, up 6% year over year.
The company’s book value per share was $28.82 as of Jul 31, 2023, up 3.5% from $27.84 as of Jul 30, 2022.
In the trailing 12 months, the return on equity was 5%, having improved 1,160 bps from (6.6%) in July 2022. The debt-to-total-capital ratio deteriorated 80 bps year over year to 28.4 as of Jul 31, 2023.
Price Performance
Progressive’s shares have gained 6.2% in the past year compared with the industry’s growth of 12.3%.
Image Source: Zacks Investment Research
Zacks Rank
Progressive currently carries a Zacks Rank #4 (Sell).
Arch Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 26.83%. In the past year, ACGL has gained 60.9%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings per share is pegged at $6.58 and $7.25, indicating a year-over-year increase of 35.1% and 10.2%, respectively.
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 9.75%. In the past year, AXS has gained 0.3%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.18 and $9.17, indicating a year-over-year increase of 40.7% and 12.1%, respectively.
Kinsale Capital beat estimates in each of the last four quarters, the average being 14.88%. In the past year, KNSL has gained 37.3%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 3.3% and 3.1% north, respectively, in the past seven days, reflecting analysts’ optimism.
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Progressive's (PGR) July Earnings Decline, Premiums Rise Y/Y
The Progressive Corporation (PGR - Free Report) reported earnings per share of $1.02 for July 2023, which dropped 13% year over year. The decline was due to higher expenses and lower net realized gains on securities.
July Numbers in Detail
Progressive recorded net premiums written of $5.9 billion, up 21% from $4.9 billion in the year-ago month. Net premiums earned were about $5.6 billion, up 20% from $4.6 billion reported in the year-ago month.
Net realized gains on securities of $90.7 million plunged 71% year over year.
Combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 80 basis points (bps) year over year to 90.6.
Progressive’s operating revenues were $6 billion, improving 15.6% year over year, owing to a 20.2% increase in premiums, a 65.2% jump in investment income and 23.7% higher fees.
Total expenses increased 21.2% to $5.2 billion, largely due to 25.3% higher losses and loss adjustment expenses, a 31.3% rise in policy acquisition costs, a 13.4% surge in service expenses and 10.4% higher interest expense.
In July, policies in force (PIF) were impressive for both Vehicle and Property businesses. In its Vehicle business, the Personal Auto segment increased 14% year over year to 19.6 million policies. Special Lines increased 7% from the year-earlier month to 5.9 million policies.
In Progressive’s Personal Auto segment, Agency Auto PIF increased 11% to 8.4 million, while Direct Auto improved 16% to 11.2 million.
PGR’s Commercial Auto segment rose 7% year over year to 1.1 million policies. The Property business had 2.9 million policies in force in the reported month, up 6% year over year.
The company’s book value per share was $28.82 as of Jul 31, 2023, up 3.5% from $27.84 as of Jul 30, 2022.
In the trailing 12 months, the return on equity was 5%, having improved 1,160 bps from (6.6%) in July 2022. The debt-to-total-capital ratio deteriorated 80 bps year over year to 28.4 as of Jul 31, 2023.
Price Performance
Progressive’s shares have gained 6.2% in the past year compared with the industry’s growth of 12.3%.
Image Source: Zacks Investment Research
Zacks Rank
Progressive currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Arch Capital Group Ltd. (ACGL - Free Report) , Axis Capital Holdings Limited (AXS - Free Report) and Kinsale Capital Group, Inc. (KNSL - Free Report) , each sporting Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 26.83%. In the past year, ACGL has gained 60.9%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings per share is pegged at $6.58 and $7.25, indicating a year-over-year increase of 35.1% and 10.2%, respectively.
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 9.75%. In the past year, AXS has gained 0.3%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.18 and $9.17, indicating a year-over-year increase of 40.7% and 12.1%, respectively.
Kinsale Capital beat estimates in each of the last four quarters, the average being 14.88%. In the past year, KNSL has gained 37.3%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 3.3% and 3.1% north, respectively, in the past seven days, reflecting analysts’ optimism.