MAYFIELD VILLAGE, Ohio (AP) — Auto insurer Progressive Corp. on Thursday reported second-quarter results showing improvement over a year ago, boosted by a gain in its investment portfolio, but results missed Wall Street expectations.
Shares slipped 45 cents, or 2.2 percent, to $20.47 in midday trading.
For the quarter ended in June, net income rose 16 percent to $245.2 million, or 38 cents per share, from $211.9 million, or 32 cents per share, a year ago. It was boosted by a gain of $26 million it its investment portfolio, which compares with a loss of $39.5 million a year ago.
Analysts surveyed by FactSet expect 39 cents per share.
Progressive said catastrophe losses are now up to $125 million, or about 3.4 loss ratio points, compared with $47 million or 1.3 points a year ago.
The second-quarter combined ratio was 93.4 percent, compared with 92.7 percent in June 2010. The combined ratio includes both the claims ratio, which compares the money paid out in claims with the company's revenue, and the expenses ratio, which compares the company's operating costs with its revenue.
A combined ratio above 100 means that for every premium dollar taken in, more than a dollar was spent covering claims, expenses and commissions, while a ratio under 100 indicates and underwriting profit.
Progressive will file its full quarterly report with regulators on Aug. 11. Monthly results for July are scheduled to be released Aug. 17.
For June, net income fell 6 percent in part because the company incurred nearly $23 million of catastrophe losses mostly from Texas, Kansas, and Ohio.
Net income for the month was $53.1 million, or 8 cents per share, down from $56.6 million, or 9 cents per share, in June 2010.
Net premiums written in June rose 3 percent to $1.16 billion, up from $1.13 billion. Net premiums earned, or the portion of premiums and insurance company earns when policies expire, rose 3 percent to $1.14 billion from $1.11 billion.
For the month, the company's combined ratio was 96.3 percent, compared with 92.3 percent in June 2010. The company said the catastrophe losses for June reduced its ratio by 2 points.
Progressive said it had 12.2 million personal policies and 512,000 commercial policies in force in June. In the same month last year, it had 11.6 million personal policies and 520,200 commercial policies in force.
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