Progressive Picks Up Steam in July Financial Report

Progressive July 2012 ProfitsIn its latest monthly financial report, Progressive showed revenue, profit and policy gains compared with July of last year.

The company’s July profits increased $7.89 million compared with last year, rising from $51.1 million in 2011 to $59 million this past month, a 15 percent bump.

Total revenue rose by about $147 million, for a 10 percent increase.

And as has been the case so far this year, Progressive continued its upward trend in written policies with gains of 6 percent in personal auto policies and 3 percent in commercial auto policies between July 2011 and July 2012.

The insurer’s catastrophe losses this July saw a small $5 million increase compared with July 2011. Last month, disasters in Ohio made up about 40 percent of total catastrophe losses, with the insurer also incurring significant losses in Virginia, Minnesota, Texas, Colorado and Pennsylvania.

Catastrophe losses so far this year are $151 million, almost on pace with last year’s losses of $158 million during the same period.

The latest financials were a bright spot in an otherwise gloomy year for the insurer’s finances. The company reported last month that its second-quarter profits took a 52 percent nosedive compared with the previous year, signifying the lowest quarterly profit in at least three years.

Progressive’s first-quarter profits were down 29 percent compared with the previous year.

Often rated as a top auto insurance company, Progressive has one of the largest shares of the U.S. car insurance market. According to the most recent data from the National Association of Insurance Commissioners (NAIC), Progressive is the fourth-largest car insurer, with almost 8 percent of the market. It trails GEICO’s Berkshire Hathaway Group, which holds about 9 percent of the personal auto insurance market.

Company President: ‘Condition Is Serious’ but ‘Well Within Out Control’

In a letter to shareholders attached to the insurer’s second-quarter report, president and CEO Glenn Renwick said his company’s performance was “disappointing” but urged optimism on several fronts, including the insurer’s continued growth in written premiums.

“While the immediate condition is serious, the diagnosis and treatment plan is well within our control,” Renwick stated in the letter.

The insurer plans to expand its usage-based insurance (UBI) program, called Snapshot, which is currently available in 43 states and is the most widely available UBI program in the U.S.

The company will also be expanding its suite of mobile device features, including several mobile quote programs that will allow users to retrieve quotes and buy policies from their smartphone and tablets, Renwick said.

Such features help Progressive differentiate itself from other insurers, according to Renwick, in a highly competitive marketplace where companies have little flexibility in hiking rates and instead rely on specialized offerings to get a leg up on rivals.

With Snapshot and other features, executives feel “very good” about looking forward to 2013 and 2014, Renwick said in his quarterly conference call with shareholders.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com 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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