Insurance Carrier Progressive Reports 48 Percent Profit Drop

In its monthly financial report released yesterday, Progressive reported a 48 percent drop in April profits with securities losses dragging down a boost in written premiums.

April profits fell from $118 million last year to $61.2 million in 2012.

Progressive wrote more premiums this month compared to last year despite the drop in profits. The company wrote about $1.67 billion in premiums in April 2012, compared to $1.54 billion in April 2011, a 9 percent bump. The trend is the same as last month, when the company reported that it wrote about $1.33 billion in premiums in March 2012 compared to $1.22 billion in March 2011.

All policy lines sold by the carrier increased compared to last year, including a 6 percent hike in agency auto policies and 7 percent increase in direct auto policies; all personal auto policies grew by a total of 6 percent.

But this month’s securities amounted to a pre-tax net loss of $7.9 million, when the insurer reported gains of $24.6 million in securities during April last year.

Also, year-to-date net income for 2012 fell from $480.9 million last year to $318.8 million this year, a 34 percent drop. Net income from April 2012 was $61.2 million, down from $76.3 million in March.

April’s total expenses were $1.47 billion while total revenues were $1.56 billion.

The insurer reported lower year-to-year losses from catastrophes, which fell from $55 million in April 2011 to $46 million in April 2012.

Disasters in Texas made up almost half of catastrophe losses this month. Missouri accounted for about 20 percent of such losses, while Illinois and Kentucky accounted for 10 percent each, according to the financial report.

Major U.S. Auto Insurer Progressive Filed Patent Lawsuits Last Month

Progressive Corp. remains one of the biggest auto insurance companies in the U.S., with the National Association of Insurance Commissioners (NAIC) ranking the insurer, based on total premium dollars written, as the fourth-largest underwriter of personal auto policies.

The company is currently a plaintiff in two federal patent lawsuits against The Hartford and State Farm over use of usage-based technology. In the lawsuits, Progressive claims the two insurers violated patented technology used in its Snapshot program, which bases discounts on driving data recorded by an in-car diagnostic device.

According to the lawsuits, Progressive alleges that it is “suffering from the effects” of patent infringement in The Hartford’s TrueLane and State Farm’s Drive Safe & Save, both of which are also usage-based programs.

The cases were submitted to the U.S. District Court for the Northern District of Ohio on April 30 and are filed within the district court’s system as 12cv1070 for the insurer’s lawsuit against The Hartford and and 12cv1068 for its lawsuit against State Farm.

To research how Progressive performs when handling claims and in other areas, consumers can read user-submitted Progressive auto insurance reviews online.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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