Growing Security Gains Bring Strong Profits for Progressive

Progressive’s latest financial report shows that a gigantically improved performance in security gains helped drive this year’s May profits to nearly triple the size of the insurer’s May 2012 profits.

The insurance company reported $116.7 million in net income for May, which is 166 percent higher than the $43.9 million it saw in profits during the same month last year.

Growth in profits for the direct-to-consumer car insurer continues from last month, when the insurer reported that April profits made a 128 percent year-over-year jump. Progressive’s first-quarter profits, reported in April, were 20 percent higher than the first quarter of 2012.

The gains came despite higher May catastrophe losses this year. Progressive incurred around $32 million in losses in May, with about half generated from claims in Texas, outpacing the $24 million recorded last year. So far, the insurer has recorded about $111 million in losses compared with $86 million in the same period last year.

But those disaster-related losses couldn’t dampen the spark that investments had on profits. Progressive reported $63.2 million in security gains for May that towers above the $2.7 million reported for May 2012; it is a 2,241 percent jump.

However, total expenses for the insurance company rose by $49 million, a 4 percent increase. Also, income from investments was down 10 percent between last month and May 2012, shrinking by $3.9 million.

But revenues for Progressive are strong. The company reported that $7.62 billion in revenues so far this year are up 9 percent compared with the $7.01 billion reported in the same period last year. The insurer’s year-to-date profits are also outpacing 2012, sitting at $564.8 million so far this year, compared with $362.7 million for the same time frame last year.

Last month’s profits were also a product of a turnaround in investment numbers. April numbers showed that Progressive gained $46.2 million on securities, compared with a $7.9 million loss in the same month last year.

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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