Progressive Income Up 35% For Quarter
NU Online News Service, July 15, 2:24 p.m. EDT?Progressive Corp. reported a 35 percent increase in second-quarter net income yesterday, a 3.4 point improvement in combined ratio, and an 11 percent increase in net written premium.[@@]
The Mayfield Village, Ohio-based insurer of mostly personal auto insurance business posted $386.3 million in net income in the second quarter of 2004, or $1.76 per share.
Net premiums written jumped to $3.4 billion from $3 billion in last year's second quarter, while the overall combined ratio fell to 85.4 from 88.8.
The 11 percent increase in net written premiums compares to a 27 percent jump last year (comparing second-quarter 2003 net premiums to second-quarter 2002).
The company reported the quarter's results with its regular release of monthly earnings.
While the company will not hold a conference call to discuss results until Aug. 10, yesterday's announcement accompanying the filing of its 10-Q report with the Securities and Exchange Commission did include the following comments about the company's experience and the market:
? The company continued to experience strong profitability. All personal lines profits were profitable for the quarter.
? Industry auto rates for 2004 are expected to increase an average of 3.5 percent, the lowest increase in the past four years (as reported by the Insurance Information Institute), contributing to the company's slowing premium growth.
? A dozen personal lines markets (states) have year-to-date net premium growth of 20 percent or more, while 14 states grew less than 10 percent. The 12 fast-growing states represent 22 percent of Progressive's personal lines volume, while the 14 laggards represent 38 percent.
In a research note released today, New York-based Morgan Stanley said that operating earnings per share, at $1.77, came in a penny ahead of consensus estimates. "Overall, we would characterize the results as decent, though investors are unlikely to find any hidden, positive surprises in the [Progressive earnings] release."
In a financial supplement, Progressive reported that its personal lines new written premiums rose 13 percent, to $5.8 billion for the first half, with premiums written directly ($1.9 billion) growing at a 17 percent clip.
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