Progressive Corporation (NYSE:PGR), the Ohio-based property and casualty insurer, reported a year-over-year (YoY) increase of 233% in Q3 earnings per share on Friday, reaching $1.64, although missing the forecasted $1.72. This comes as the first earnings gain for the company following three unprofitable quarters.
The insurer also reported a significant 20% YoY growth in net premiums written for September and Q3, totaling $15.594 billion. Concurrently, Progressive's stock price experienced a 7.2% spike to $153.55, surpassing the handle buy point of $144.31 as indicated by MarketSmith chart analysis.
In contrast to previous reports, Progressive's Q3 2023 earnings stood at $2.09 per share, beating the Zacks Consensus Estimate of $1.71 and marking a fourfold YoY bottom line improvement which triggered a 3.9% pre-market share price rise.
Net losses on securities also decreased to $149 million from $216.4 million YoY, while the combined ratio improved by 680 basis points to 92.4%. Operating revenues in September reached around $4.9 billion, a YoY increase of 20.4%, driven by higher premiums (20.2%), fees and other revenues (19.3%), and investment income (33.3%).
In addition, total expenses dropped by 6.7% YoY to $4.3 billion due to lower losses and underwriting expenses. Policies in force saw significant growth across segments: Personal Auto by 12% to 19.5 million, Special Lines by 7% to 6 million, Property business by 7% to 3 million, Direct Auto policies by 14% YoY to 11.2 million, Agency Auto policies by 10% to 8.4 million, and Commercial Auto segment by 7% YoY to 1.1 million.
The book value per share was $28.29 as of September 30, 2023, up from $24.41 on September 30, 2022. September's return on equity was positive at 17.4%, compared to (15.9%) last year, with the total debt-to-total capital ratio improving by 180 basis points to 28.4%.
Progressive operates in a competitive landscape with industry leaders such as Berkshire Hathaway (NYSE:BRKa) and Allstate (NYSE:ALL). Other firms like The Travelers Companies Inc (NYSE:TRV)., W.R Berkley Corporation, and RLI (NYSE:RLI) Corporation are due to report Q3 results soon.
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