Progressive Posts Higher Profit
NU Online News Service, Oct. 23, 12:15 p.m. EDT?The Progressive Corporation reported third-quarter net income of $319.8 million?a 79 percent increase from the $178.5 million profit posted one year ago?thanks to increased premium rates from last year, management said.
The Mayfield Village, Ohio-based insurer's net premiums written improved in its latest quarter to reach $3.10 billion, up 25 percent from the year-ago period. Net premiums earned also rose to $2.93 billion, a 36 percent jump from the 2002 third quarter.
The company's recurring investment income for the quarter was $86.3 million after taxes, slightly higher than $83 million after taxes reported for the 2002 third quarter.
The insurer's combined ratio also improved to reach 87.9, down from 91.9 posted during the same period last year.
"We are pleased to report a very good quarter," said Glenn Renwick, chief executive officer at Progressive, the fourth-largest U.S. auto insurer, during this morning's conference call. "Our agent personal lines business, direct personal lines business and commercial auto business have all produced sub-90 combined ratios for the third quarter," Mr. Renwick said.
But he also noted that his company had catastrophe losses of $13.3 million for the quarter, including $5.7 million attributable to Hurricane Isabel, which struck the U.S. East Coast last month, compared to $5.6 million in overall CAT losses reported during the same period last year.
And commenting on the current market and his company's premium growth, he said, "in general, we continue to see modest cooling of growth. Cooling is obviously a relative term, and we remain pleased with the level of continuing growth in both earned and written premiums. However, the pace of growth varies on different parts of business. Our auto business new applications, while healthy, continue to slow."
Mr. Renwick said he attributes this development to an increase in competition in the auto marketplace and "other carriers achieving rate adequacy sufficient for their needs and becoming more aggressive in the marketplace."
"Several of our auto competitors have taken rate and marketing actions that should allow them to grow," he commented.
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