The progressive society (RPG – Free Report) reported earnings per share of 10 cents for February 2022, down 83% year-over-year. The decrease is due to higher expenses and a net realized loss on securities.
Shares of Progressive have gained 17.5% over the past year, beating the industry’s 16.9% increase.
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February figures in detail
Progressive recorded net premiums written of $4.6 billion, up 20% from $3.8 billion in the month a year earlier. Net premiums earned were $3.6 billion, up 13% from approximately $3.2 billion in the prior year month.
Net realized loss on securities was $209.4 million compared to a gain of $128.4 million in the month of the prior year.
The combined ratio – the percentage of premiums paid as claims and expenses – deteriorated 230 basis points (bps) year-on-year to 93.7.
Progressive operating revenue was $3.8 billion, up 13% year-over-year, due to a 13.2% increase in premiums, 2.2 % fees, a 16.2% increase in service income and a 12.3% increase in investment income.
Total expenses increased 15.6% to $3.4 billion, primarily due to a 19.2% increase in claims and claims adjustment expenses, a 17.8% increase service charges and a 10.5% increase in policy acquisition costs, a 1.1% increase in other underwriting costs and a 10.5% increase in investment.
In February, the policies in place were impressive for the Vehicle and Property businesses. In its Vehicles business, the Personal Auto segment grew 3% year-on-year to 17.4 million. Special lines increased 7% from the previous month to 5.3 million policies.
In Progressive’s Personal Auto segment, Agency Auto increased 1% to 7.8 million while Direct Auto increased 5% to 9.5 million.
Progressive’s Commercial Auto segment grew 17% year-over-year to approximately 0.9 million. The Property business had 2.8 million policies in force in the month under review, up 10% year-over-year.
Progressive’s book value per share was $29.30 as of February 28, 2022, up 0.6% from $29.11 on February 28, 2021.
Return on equity over the past 12 months was 7.1%, after contracting 2,900 basis points from 36.1% in February 2021. The debt-to-total capital ratio fell improved by 180 basis points year-over-year to 21.7 as of February 28, 2022.
Progressive currently carries a Zacks Rank #3 (Hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Actions to consider
Some higher ranked insurers include United Fire Group, Inc. (CFU – free report), WR Berkley Corporation (WRB – free report) and Cincinnati Financial Corporation (CINF – free report). While United Fire and WR Berkley sport a Zacks rank #1, Cincinnati Financial wears a Zacks rank #2 (buy).
United Fire’s earnings have exceeded estimates in each of the past four quarters, with the average earnings surprise being 275.45%. Over the past year, United Fire has declined by 20.5%.
The Zacks consensus estimate for UFCS revenue in 2022 and 2023 has moved 122.2% and 76.9% north, respectively, over the past 30 days.
WR Berkley’s earnings have exceeded estimates in each of the past four quarters, with the average earnings surprise being 27.53%. Over the past year, WRB has grown 23.2%.
The Zacks consensus estimate for 2022 and 2023 revenue has moved 4.7% and 1.7% north, respectively, over the past 60 days. WR Berkley’s expected long-term earnings growth rate is set at 9%.
Cincinnati Financial’s net income has exceeded earnings estimates in each of the past four quarters, averaging 38.48%. Over the past year, the insurer has rebounded 21%.
The Zacks consensus estimate for Cincinnati Financial’s earnings in 2022 and 2023 has moved north 5.7% and 5.5%, respectively, over the past 30 days.