Progressive Insurance Co. reported net income continued to drop on a month-to-month basis, but the results were better than expected, according to one analyst.

The Mayfield Village, Ohio-based insurer said net income for the month of March dropped 46 percent, or $60 million, to $71 million over the comparative period. Earnings per share were off 7 cents to 11 cents a share.

The company also reported net premiums written were down 2 percent, or $20 million, to $1.12 billion.

For this year's first quarter, the company reported net income dropped 34 percent, or $124 million, to $239 million compared to the same period last year. That translates into earnings per share of 35 cents, down 14 cents. Total revenues are off only 3 percent, or $101 million, to $3.6 billion.

The results were affected by a $2.7 million reduction in recurring investment income from lower interest rates on the company's variable rate residential mortgage-backed securities, the company said.

Progressive also reported $50.2 million of write-downs on securities “determined to have had 'other-than-temporary'” declines in market value on March 31.

David Small, an analyst with Bear Stearns, said the results on the earnings per share were better than expected, but this should not be considered a trend. He said the company's combined ratio, which stands at 94.6, will continue to rise, as Progressive's pricing strategy will negatively impact results.

He said prices have reached an inflection point and will begin to stabilize for the rest of the year.

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Progressive Continues To See Net Income Decline

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