PROGRESSIVE CORP/OH/ Quarterly Report for Q2 Ended Jun 30, 2011

Summary

The Progressive Corporation (PGR) reported solid financial results for the quarter ending June 30, 2011. Total revenues increased by 5% to $3,872.7 million compared to the same period in the prior year, driven by a 4% increase in net premiums earned. Net income saw a significant increase of 16% to $245.2 million, translating to earnings per share of $0.38, up from $0.32 in the prior year. The company's underwriting operations demonstrated strength with a 6.6% profit margin, exceeding its target, despite facing higher catastrophe losses. Investment operations contributed positively, with total net realized gains on securities reaching $26.0 million, a substantial improvement from a net loss in the prior year. The company's investment portfolio remained robust, valued at $16.0 billion, with a balanced allocation strategy. Progressive also continued its commitment to returning capital to shareholders, repurchasing shares during the quarter and maintaining a solid capital position. Management expressed confidence in the company's liquidity and capital resources to support ongoing operations and future growth initiatives.

Key Highlights

• 1Total revenues grew 5% year-over-year to $3,872.7 million.
• 2Net income increased 16% to $245.2 million, with EPS rising to $0.38 from $0.32.
• 3Underwriting profit margin was 6.6%, exceeding the company's 4% target.
• 4Net realized gains on securities were $26.0 million, a significant turnaround from a loss in the prior year.
• 5Policies in force grew by 5% companywide, with Personal Lines up 5% and Commercial Auto down 2%.
• 6The company repurchased 13.3 million common shares for $282.9 million during the quarter.
• 7The investment portfolio value stood at $16.0 billion, with a 23% allocation to Group I securities and 77% to Group II.

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