Summary
The Progressive Corporation (PGR) reported its third-quarter and nine-month results for the period ending September 30, 2011. For the quarter, net income was $150.7 million, or $0.24 per share, a decrease of 42% compared to the prior year's quarter, primarily due to higher catastrophe losses and less favorable prior accident year reserve development. For the nine months, net income was $758.8 million, a slight decrease of 1% year-over-year. Despite a challenging quarter, the company demonstrated resilience with solid growth in net premiums written across its Personal Lines and Commercial Auto segments. Investment operations faced headwinds, with a negative total return for the quarter, but the company maintained a strong capital position.
Financial Highlights
35 data pointsBeta
Financial Statements
Beta
| Revenue | $3.81B |
| Interest Expense | $33.40M |
| Net Income | $150.70M |
| EPS (Basic) | $0.24 |
| EPS (Diluted) | $0.24 |
| Shares Outstanding (Basic) | 626.90M |
| Shares Outstanding (Diluted) | 631.40M |
Key Highlights
- 1Net income for the third quarter of 2011 was $150.7 million, a decrease of 42% compared to the same period in 2010, largely impacted by higher catastrophe losses.
- 2Net premiums written grew 4% year-over-year for both the third quarter and the first nine months of 2011, driven by positive trends in Personal Lines and Commercial Auto segments.
- 3The company experienced a negative total investment portfolio return of (2.2)% for the third quarter, primarily due to losses in both fixed-income and common stock portfolios.
- 4Progressive maintained a robust capital position with total capital (debt plus equity) of $8.3 billion at September 30, 2011, and a debt-to-total capital ratio of 29.6%.
- 5The Personal Lines segment, representing the majority of the company's business, showed stable underwriting margins, while the Commercial Auto segment saw a decrease in its underwriting profit margin.
- 6Initiatives such as the Snapshot usage-based insurance product and mobile capabilities continue to be rolled out, indicating a focus on innovation and customer engagement.
Frequently Asked Questions
The primary driver for the 42% decrease in net income for the third quarter of 2011 was higher catastrophe losses and less favorable prior accident year reserve development compared to the same period in the prior year. These factors negatively impacted the company's underwriting profitability.
The investment portfolio experienced a negative total return of (2.2)% for the third quarter of 2011. This was a result of losses in both the fixed-income securities (return of (0.6)%) and common stock portfolios (return of (14.4)%), influenced by overall economic uncertainty and spread widening in fixed-income sectors.
Growth is driven by net premiums written, which increased by 4% in the third quarter. This growth stems from increases in policies in force (up 5%), with strong performance in Personal Lines (up 5%) and Commercial Auto (up 10% in written premium). Key initiatives like the Snapshot usage-based insurance product and enhanced mobile capabilities are also designed to stimulate growth and customer acquisition.
Progressive maintained a strong capital position with total capital (debt plus equity) of $8.3 billion at September 30, 2011. The company issued $500 million in Senior Notes due 2021 and continued its share repurchase program. The debt-to-total capital ratio was 29.6%, indicating a balanced approach to leverage.