Progressive's quarterly profit rises on strong insurance demand (updated)

The Progressive

29/01/2025 20:11

(Adds analyst comment in paragraph 7)
    By Prakhar Srivastava
       Jan 29 (Reuters) - Property and casualty insurance company Progressive Corp  PGR.N 
reported a 19% rise in its fourth-quarter profit on Wednesday, driven by strong demand for
personal auto insurance policies. 
     
    WHY IT'S IMPORTANT
    Insurance spending has remained resilient, as businesses and individuals prioritize coverage
to protect against risks. This helped insurers attract and retain customers, despite rising
costs for policies.
    However, increased frequency of severe weather events such as hurricanes, wildfires and
other natural calamities are eating into insurers' profit margins, leading to a hike in premium
prices to offset escalating risks.
      
    BY THE NUMBERS
    Net income of the insurer rose to $2.36 billion, or $4.01 per share, in the three months
ended Dec. 31, compared with $1.99 billion, or $3.37 per share, a year ago.
    Its net premiums written jumped 20% to $18.11 billion.
    Combined ratio was at 87.9%, versus 88.7% last year. A ratio below 100% means the insurer
earned more in premiums than it paid out in claims.
    The insurer's personal insurance policies in force rose 18% to 33.8 million in December,
compared with the same month last year. Commercial lines policies in December were also 4%
higher than the same month last year.
    
    KEY QUOTES
    "As competitors continue to restore profitability and reignite growth, Progressive may see
pressure on policy-in-force growth in 2025," said TD Cown analyst Andrew Kligerman. 
     
    CONTEXT
    Mayfield Village, Ohio-based Progressive provides insurance for personal and commercial
autos and trucks, motorcycles, boats, recreational vehicles, and homes.
    Founded in 1937, the company is the second largest personal auto insurer in the U.S.
    
    MARKET REACTION
    Shares of Progressive were up 50.4% in 2024, outperforming peers like Allstate  ALL.N  and
Travelers  TRV.N , which rose 37.7% and 26.5%, respectively.

 (Reporting by Prakhar Srivastava in Bengaluru; Editing by Shailesh Kuber and Alan Barona)
 ((Prakhar.Srivastava2@thomsonreuters.com))