Progressive Kicks Off 2013 with Strong Profits

Progressive began this year with a bang, posting January profits that were 79 percent higher than the same month in 2012, according to the insurer’s latest financials.

The direct-to-consumer insurance carrier continued to see increases in premium and policy numbers, but it was also helped by improved performance in securities.

Progressive saw a 9 percent increase in premiums earned, going from $1.46 billion in January 2012 to $1.59 billion this past January.

Progressive also saw the number of its auto policies jump last month compared with the same period in 2012, with total personal vehicle policies sold by agencies and those sold directly increasing by 2 percent and 3 percent, respectively.

Solid Security Gains Continue

For the month of January, Progressive saw $42.4 million in pretax security gains, a colossal 256 percent jump from previous-year figures.

The solid returns on investment securities to start 2013 followed similar improvements seen in the fourth quarter of 2012, when its security gains were 111 percent higher than the same quarter in 2011.

Progressive performed well throughout last year in securities, reporting only one quarterly loss ($4.7 million) in that category, which occurred in its second quarter.

Insurer Sees Small Jump in Loss Figures

The company’s loss and loss adjustment expenses, a measurement of costs for insurance claim payments and handling, rose by $52.7 million, or 4 percent, between January 2012 and January 2013.

According to the insurer, its financial reporting structure is based on the first month of each quarter lasting five weeks, usually meaning that the first months of each quarter—like January—hold higher premium volume and lower expense ratios.

Such a structure reflects the “fixed cost component of the business,” Progressive said in a guide to its financial reports.

Last month, Progressive’s financials included loss estimates from Superstorm Sandy that the insurer said cost more than $100 million total.

That huge chunk of catastrophe-related losses marred an otherwise strong quarter, dragging down fourth-quarter profits 3 percent lower than the fourth-quarter profits of 2011.

According to the National Association of Insurance Commissioners (NAIC), Progressive is one of the nation’s top providers of auto coverage, holding nearly an 8 percent share of the U.S. auto coverage market that makes it the fourth-largest car insurer behind GEICO, Allstate and State Farm.

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

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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