Send me real-time posts from this site at my email

Progressive (PGR) Q4 Earnings Beat, Premiums Improve Y/Y

The Progressive Corporation’s PGR fourth-quarter 2021 earnings per share of $1.05 beat the Zacks Consensus Estimate of 99 cents. However, the bottom line declined 43.2% from the year-ago quarter.

The Progressive Corporation Price, Consensus and EPS Surprise

The Progressive Corporation price-consensus-eps-surprise-chart | The Progressive Corporation Quote

Shares of Progressive gained 0.7% in the pre-market trading session, reflecting the outperformance.

Behind the Headlines

Net premiums written were $10.7 billion in the quarter, up 13% from $9.5 billion a year ago. Net premiums earned grew 14% to nearly $11.6 billion.

Net realized gains on securities were $425.3 million, which slumped 44% year over year.

Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 630 basis points (bps) from the prior-year quarter to 94.7.

Revenues and Expenses Rise in December

Operating revenues in December were $3.8 million, up 14.1% year over year. The improvement was driven by a 14.2% increase in premiums, 8.8% higher fees and other revenues, 12.2% increase in service revenues and 14% higher investment income.

Total expenses increased 26.2% year over year to $3.5 billion in December due to 35.9% higher losses and loss adjustment expenses and 12.3% increase in policy acquisition costs.

In December, policies in force were impressive at the Personal Auto segment, having improved 6% from the year-ago month to 17.4 million. Special Lines improved 8% to 5.3 million.

In Progressive’s Personal Auto segment, Direct Auto grew 3% year over year to 7.9 million while Agency Auto improved 8% to 9.6 million.

Progressive’s Commercial Auto segment rose 18% year over year to about 1 million. The Property business had about 2.8 million policies in force in December, up 12%.

Full Year Highlights

Net premiums written increased 14% year over year to $46.4 billion.

Combined ratio of 95.3 improved 760 bps over 2020.

Financial Update

Progressive’s book value per share was $30.35 as of Dec 31, 2021, up 7.4% from $28.27 on Dec 31, 2020.

Return-on-equity in December 2021 was 13.6%, down 2570 bps year over year. Debt-to-total capital ratio improved 290 bps to 21.2%.

Zacks Rank

Progressive currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Some Other Insurers

Of the insurance industry players that have reported fourth-quarter results so far, The Travelers Companies Inc. TRV, RenaissanceRe Holdings Ltd. (RNR) and Brown & Brown Inc. BRO beat the Zacks Consensus Estimate for earnings.

Travelers’ core income of $5.20 per share surpassed the Zacks Consensus Estimate of $3.86 and increased 6% year over year. Total revenues rose 7% to about $9 billion and beat the Zacks Consensus Estimate of $8.7 billion. Net written premiums increased 10% year over year to a record $8 billion. The combined ratio deteriorated 130 basis points (bps) year over year to 88.

RenaissanceRe’s operating earnings per share of $4.71 surpassed the Zacks Consensus Estimate by 27% and rebounded from a year-ago loss of $1.59 per share. Total revenues of $1.39 billion dipped 0.1% year over year. Gross premiums written surged 40.4% year over year to $1.3 billion. Combined ratio improved 3530 basis points (bps) year over year to 79.4.

Brown & Brown’s reported an adjusted earnings of 42 cents per share, which outpaced the Zacks Consensus Estimate by 10.5% and the year-ago figure by 31.2%. Adjusted revenues of $739 million beat the Zacks Consensus Estimate by 1.5% and improved 15.1% year over year. Commissions and fees grew 15.3% year over year to $737.9 million.

Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

As one investor put it, “curing and preventing hundreds of diseases…what should that market be worth?” This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Travelers Companies, Inc. (TRV): Free Stock Analysis Report
RenaissanceRe Holdings Ltd. (RNR): Free Stock Analysis Report
The Progressive Corporation (PGR): Free Stock Analysis Report
Brown & Brown, Inc. (BRO): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue