Progressive Pays Out $24 Million for Hurricane Irene Claims

Hurricane Irene and other storms cost Progressive $37 million in catastrophe losses in August, decreasing profits by 66 percent compared with the same month in 2010, the company reported this week.

Net income for August fell to $22.5 million from $66.5 million for the same period the previous year, with the insurer blaming Irene for nearly two-thirds of total catastrophe losses. Catastrophe losses for August 2010 were only $2.2 million.

The insurance industry typically defines a catastrophe as an event that causes $25 million or more in insured property losses and affects a significant number of policyholders and coverage providers, according to the Insurance Information Institute (III).

The states where Progressive incurred the largest losses were Iowa, Nebraska, Virginia, New York, New Jersey and Pennsylvania.

The drop in profits came despite a reported 5 percent increase in total policies compared with the same time last year.

Progressive reported $23 million in catastrophe losses in July, roughly twice the amount reported for the same month in 2010.

The company’s results arrive on the heels of an announcement from Allstate that it suffered $735 million estimated pretax losses last month, including a half-billion dollars from Irene.

Allstate announced earlier this week that its estimated pretax losses from Irene and seven other storms in July and August totaled $865 million.

The insurer reported $2.3 billion in losses from 33 catastrophe loss events in the second quarter of this year that included five tornadoes, three wildfires and 25 wind or hailstorms.

Last week, State Farm announced it had received roughly 63,500 claims for damage caused by Irene, including nearly 7,400 for vehicle losses.

The largest number of auto claims came from Virginia and North Carolina.

The insurer reported 1,500 claims on Virginia auto insurance policies and the same number from North Carolina auto policyholders.

To find out how policyholders rank Progressive on claims, rates and service, readers can research user-submitted Progressive auto insurance reviews online.

About Gregor McGavin
Gregor McGavin is an award-winning journalist who has reported across the country for such publications as The Associated Press, the Arizona Republic, the Pittsburgh Tribune-Review and the Press-Enterprise.

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