Progressive’s Damage Estimates from Sandy Rise, Q4 Profits Drop

An increase in premiums and strong investment returns for Progressive mostly blunted the impact of rising damage estimates from Superstorm Sandy, according to the insurer’s report on its fourth-quarter finances.

The insurer saw a 3 percent drop in fourth quarter profits compared with last year, though Progressive’s December profits ($95.1 million) were still 25 percent higher than its year-earlier figures ($76.3 million).

For December 2012, Progressive wrote 12 percent more premiums than the same month in 2011, a strong sign that buoyed the 9 percent quarterly increase in 2012 compared with the previous year.

Fourth-quarter investment gains saw a massive 111 percent jump between 2011 and 2012, up to $62.1 million from $29.5 million, before taxes.

However, gains were hedged by losses from Superstorm Sandy, which are increasing in size and number. Last month, Progressive reported its November financials that showed the disaster had cost the company $90 million; the insurer revised its estimate in its latest report to $103 million, with $15 million in catastrophe losses in December alone.

The latest estimate brings total yearly catastrophe losses to $279 million in 2012. In 2011 those losses amounted to $212 million.

Overall, loss and loss adjustment expenses for the insurer were up 13 percent for both the quarter and month compared with last year.

In December 2012, the number of policies in force for all of Progressive’s lines of insurance coverage increased, with total personal lines jumping 4 percent to 12.7 million compared with the same month in 2011. Of that total, 8.7 million were personal auto policies that also saw a 4 percent increase between those months in 2011 and 2012.

Progressive is one of the leading auto insurers in the U.S., with the National Association of Insurance Commissioners (NAIC) reporting that it has the fourth-largest market share for auto coverage nationwide at almost 8 percent.

To read about the experiences of current and former Progressive policyholders, readers can find user-submitted Progressive auto insurance reviews online.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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