01—Abstract
Summary
Summary of the 8-K filed May 15, 2024. Cited figures are marked; the original filing is the authoritative source.
Progressive Corporation (NYSE: PGR) reported April 2024 monthly results, showing solid underwriting performance alongside a loss in investment-driven net income comprehensive income.
April net income was $420.3 milliona ($0.72 per diluted share), with a strong monthly combined ratio of 89.0 versus 97.9 in the prior-year month. Net premiums written were $6,178.0 million and net premiums earned were $5,575.0 million. Year-to-date net income totals $2,751.7 million, with a year-to-date combined ratio of 86.8.
The headline figures are shaped by two offsetting factors. Realized investment losses of $266.1 millionb for the month, driven largely by unrealized holding losses on equities and fixed-income, reduced April earnings. Comprehensive income was negative at $(193.2) million, as unrealized losses on fixed-maturity securities of $613.5 million flowed through other comprehensive income.
Policies in force grew 7%c year over year to roughly 31.3 million companywide, with Property growing 11%, indicating continued top-line expansion. Investors should note that the company converted its monthly accounting calendar to a Gregorian basis in October 2023, which distorts year-over-year monthly comparisons through September 2024. April 2023 included 35 days versus 30 in April 2024 and captured the traditionally large May 1 renewal day, so the monthly premium comparison is not directly comparable.
The company itself points to policies in force as a better growth gauge for this period. The Property business remains the notable underwriting weak spot, with an April combined ratio of 116.7.
02—Key points
Key Highlights
- April 2024 net income of $420.3 million, or $0.72 per diluted share, versus a prior-year month combined ratio of 97.9 and a current combined ratio of 89.0
- Net premiums written of $6,178.0 million and net premiums earned of $5,575.0 million for the month
- Realized investment losses of $266.1 million in April, with comprehensive income of $(193.2) million after $613.5 million in unrealized losses on fixed-maturity securities
- Policies in force reached 31.3 million companywide, up 7% year over year, with Property up 11% and Personal Lines up 7%
- Property business combined ratio of 116.7 in April, driven by severe weather and catastrophe losses, with a catastrophe loss ratio of 35.1 for the segment
- Year-to-date net income of $2,751.7 million and year-to-date combined ratio of 86.8; book value per share of $36.92 at April 30, 2024
- Accounting calendar conversion to Gregorian months limits comparability of monthly results through September 2024
03—Questions
Frequently Asked Questions
Why did Progressive report a comprehensive loss in April 2024 despite strong underwriting results?
Progressive's April underwriting was strong, with a combined ratio of 89.0. However, the company recorded $266.1 million in pretax realized losses on securities and $613.5 million in unrealized losses on fixed-maturity securities, which flow through other comprehensive income. Together these drove comprehensive income to $(193.2) million, even though net income was positive at $420.3 million.
Is Progressive's April 2024 premium growth comparable to the prior year?
Not directly. Progressive converted its monthly accounting calendar to a Gregorian basis in October 2023. April 2023 included 35 days versus 30 in April 2024, and it also captured May 1, 2023, a large renewal day. The company recommends policies in force as a better growth measure for monthly comparisons.
How did the Property business perform in April 2024?
The Property business had a weak month, with a combined ratio of 116.7 and a loss/LAE ratio of 87.6, driven by severe weather throughout the United States. Its net catastrophe loss ratio was 35.1. Policies in force in Property grew 11% year over year to 3.26 million, showing continued expansion despite the underwriting pressure.
What is Progressive's capital and balance sheet position?
At April 30, 2024, total shareholders' equity was $21.6 billion and book value per common share was $36.92. The debt-to-total-capital ratio was 24.2%, with $6.89 billion in debt outstanding. The fixed-income portfolio had a duration of 3.2 and a weighted average credit quality of AA-. Net unrealized pretax losses on fixed-maturity securities were $3.07 billion.
When will Progressive release its May 2024 results?
Progressive plans to release May 2024 results on Friday, June 14, 2024, before the market opens.
04—Continue