Summary
Progressive Corporation (PGR) reported a mixed financial performance for the third quarter and nine months ended September 29, 2021. While total revenues increased year-over-year to $11.86 billion for the quarter and $35.21 billion for the nine months, net income saw a significant decline. Net income for the quarter fell to $118.5 million, a sharp decrease from $1.53 billion in the prior year, primarily due to increased losses and loss adjustment expenses, significantly impacted by catastrophe losses like Hurricane Ida and higher auto accident frequency and severity. For the nine months, net income was $2.39 billion, down from $4.02 billion year-over-year. Despite the decline in profitability, the company saw growth in its insurance operations, with net premiums written increasing by 13% to $12.45 billion in the third quarter. Policies in force also grew, indicating an expanding customer base. The company also successfully integrated the acquisition of Protective Insurance Corporation in June 2021. Investments also grew to $52.3 billion, though investment income declined due to lower portfolio yields resulting from reinvesting cash at lower interest rates.
Financial Highlights
37 data points| Revenue | $11.86B |
| Interest Expense | $54.20M |
| Net Income | $118.50M |
| EPS (Basic) | $0.19 |
| EPS (Diluted) | $0.19 |
| Shares Outstanding (Basic) | 584.70M |
| Shares Outstanding (Diluted) | 587.10M |
Key Highlights
- 1Total revenues increased 8% to $11.86 billion for Q3 2021 and 13% to $35.21 billion for the nine months ended Sep 30, 2021.
- 2Net income significantly decreased to $118.5 million for Q3 2021 (down 92% YoY) and $2.39 billion for the nine months (down 41% YoY), primarily due to higher losses and loss adjustment expenses.
- 3Net premiums written grew 13% YoY to $12.45 billion in Q3 2021, and policies in force increased to 26.6 million.
- 4The company incurred substantial catastrophe losses, particularly from Hurricane Ida, which heavily impacted underwriting results.
- 5Investment portfolio grew to $52.3 billion, but recurring investment income declined due to lower yields.
- 6The acquisition of Protective Insurance Corporation was completed in June 2021 and contributed positively to revenues and net income since the acquisition date.
- 7Progressive initiated rate increases in 20 states for personal auto insurance and tightened underwriting criteria to address profitability concerns.