Progressive Reports December 2023 Results
- 21% increase in net premiums written for December 2023
- 22% increase in net premiums earned for the fourth quarter of 2023
- 141% increase in net income and per share available to common shareholders
- Total pretax net realized gains on securities of $144.0 million
- The conversion of the monthly accounting closing calendar to align with the Gregorian calendar in October 2023 may impact year-over-year comparisons on monthly results from October 2023 through September 2024.
Insights
The reported financial results by Progressive Corporation exhibit significant growth in net premiums written and earned, as well as a substantial increase in net income. The 21% and 22% year-over-year increases in premiums reflect an expanding customer base or rising premium rates, possibly both. The 141% surge in net income is particularly notable, potentially indicating operational efficiencies, favorable claim trends, or a beneficial investment environment. The combined ratio improvement from 93.9 to 88.7 suggests a more profitable underwriting performance, as a ratio below 100% indicates that the company is making an underwriting profit.
However, the change in accounting closing calendar could impact the comparability of these results. Investors should consider this when evaluating year-over-year performance. The growth in policies in force across different lines of business is a positive indicator of market penetration and customer retention. The company's strategy and competitive positioning would be further illuminated by analyzing industry growth rates and competitors' performance.
The expansion in Progressive's policies in force, with personal auto policies seeing a 9% increase, suggests effective marketing strategies and possibly a strong consumer value proposition. The 10% increase in direct auto policies could indicate a successful digital engagement strategy, as more consumers are likely to purchase insurance online. The growth in the total property business by 9% aligns with broader industry trends towards bundling auto and property insurance, which can enhance customer loyalty and lifetime value.
Furthermore, the company's performance must be contextualized within the broader economic environment, including factors such as interest rates, which affect investment income and consumer behavior. Understanding the external factors that influence insurance purchasing patterns, such as regulatory changes or economic shifts, is crucial for assessing the sustainability of Progressive's growth.
The robust increase in Progressive's financial metrics during a period of potential economic uncertainty may reflect broader economic conditions. For instance, if the economy is in a growth phase, consumers and businesses are more likely to purchase new vehicles and expand operations, leading to higher demand for insurance products. Conversely, during economic downturns, insurance companies may face challenges in maintaining growth rates.
The combined ratio improvement suggests that Progressive has managed its expenses and claims effectively relative to its premium income. This is an important measure of efficiency and profitability in the insurance industry. The company's ability to sustain such performance will depend on factors such as inflationary pressures on claim costs, competition affecting premium rates and investment performance linked to economic cycles.
MAYFIELD VILLAGE, OHIO, Jan. 24, 2024 (GLOBE NEWSWIRE) -- The Progressive Corporation (NYSE:PGR) today reported the following results for December 2023 and the fourth quarter of 2023:
| December | Quarter | |||||||||||
| (millions, except per share amounts and ratios; unaudited) | 2023 | 2023 | 2022 | Change | ||||||||
| Net premiums written | $ | 4,875.9 | $ | 15,129.8 | $ | 12,460.2 | 21 | % | ||||
| Net premiums earned | $ | 5,310.4 | $ | 15,772.6 | $ | 12,891.5 | 22 | % | ||||
| Net income | $ | 901.2 | $ | 1,987.8 | $ | 826.4 | 141 | % | ||||
| Per share available to common shareholders | $ | 1.53 | $ | 3.37 | $ | 1.40 | 141 | % | ||||
| Total pretax net realized gains (losses) on securities | $ | 144.0 | $ | 303.4 | $ | (72.8 | ) | NM | ||||
| Combined ratio | 83.4 | 88.7 | 93.9 | (5.2) | pts. | |||||||
| Combined ratio – prior year month | 93.3 | |||||||||||
| Average diluted equivalent common shares | 587.4 | 587.5 | 587.1 | 0 | % | |||||||
NM = Not Meaningful
In October 2023, we converted our monthly accounting closing calendar to align with the Gregorian calendar. We do not expect that this change will have a material impact on our reported quarterly and annual underwriting results but it may impact our year-over-year comparisons on monthly results from October 2023 through September 2024. Therefore, during this time period, we have modified and limited the content of the earnings release, compared to our historical reporting. Click here for further discussion on the closing calendar conversion in the October 2023 release, issued November 17, 2023.
| December | ||||||||
| (thousands; unaudited) | 2023 | 2022 | Change | |||||
| Policies in Force | ||||||||
| Personal Lines | ||||||||
| Agency – auto | 8,335.5 | 7,766.3 | 7 | % | ||||
| Direct – auto | 11,190.4 | 10,131.0 | 10 | % | ||||
| Total personal auto | 19,525.9 | 17,897.3 | 9 | % | ||||
| Total special lines | 5,968.6 | 5,558.1 | 7 | % | ||||
| Total Personal Lines | 25,494.5 | 23,455.4 | 9 | % | ||||
| Total Commercial Lines | 1,098.5 | 1,046.4 | 5 | % | ||||
| Total Property business | 3,096.5 | 2,851.3 | 9 | % | ||||
| Companywide Total | 29,689.5 | 27,353.1 | 9 | % | ||||
See Progressive’s complete monthly earnings release, including the “Monthly Commentary,” for additional information.
About Progressive
Progressive Insurance® makes it easy to understand, buy and use car insurance, home insurance, and other protection needs. Progressive offers choices so consumers can reach us however it's most convenient for them — online at progressive.com, by phone at 1-800-PROGRESSIVE, via the Progressive mobile app, or in-person with a local agent.
Progressive provides insurance for personal and commercial autos and trucks, motorcycles, boats, recreational vehicles, and homes; it is the second largest auto insurer in the country, a leading seller of commercial auto, motorcycle, and boat insurance, and one of the top 15 homeowners insurance carriers.
Founded in 1937, Progressive continues its long history of offering shopping tools and services that save customers time and money, like Name Your Price®, Snapshot®, and HomeQuote Explorer®.
The Common Shares of The Progressive Corporation, the Mayfield Village, Ohio-based holding company, trade publicly at NYSE: PGR.
Company Contact:
Douglas S. Constantine
(440) 395-3707
investor_relations@progressive.com
The Progressive Corporation
6300 Wilson Mills Road
Mayfield Village, Ohio 44143
http://www.progressive.com
Download PDF: Progressive December 2023 Complete Earnings Release
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