Progressive Reports Lower Quarterly, Monthly Profits

Progressive logoPoorer returns on investments and higher expenses dragged down profits at Progressive last month and for the third quarter, according to the latest financial report from the direct-to-consumer car insurer.

For September, Progressive’s profits dropped 19 percent, from $76.5 million in 2012 to $61.8 million last month.

For the third quarter, profits dropped 16 percent, from $277 million in 2012 to $232.4 million in the third quarter this year.

The biggest quarterly difference for the insurer was return on investments. Investment performance for the quarter slipped from $171.9 million last year to $27.9 million this year, a steep drop of 84 percent, according to the insurer.

That drop is likely a result of a one-time stock liquidation that happened in the third quarter of 2012. Last month, Progressive reported that its August profits were halved compared to August 2012, when the company reported the liquidation of hundreds of millions of dollars in stocks that boosted its profits for that month.

The company also saw spending increases. Expenses on losses were up $54.1 million for September and almost $96 million for the quarter. Underwriting expenses shot up $50.9 million this September (a 35 percent increase from last September) and $138.5 million for the quarter.

However, Progressive continued in September to write more auto policies with a growing customer base. The number of direct auto policies in force jumped 4 percent from about 4.02 million to 4.2 million for the month. In September, Progressive reported a total of just over 9 million personal auto policies (counting both agency and direct policies), growing 1.6 percent from the 8.86 million personal auto policies reported for September 2012.

And for the third quarter, the car insurer showed a 6 percent increase in premium revenue that boosted its $4.05 billion last year to $4.3 billion this year.

This year’s third-quarter catastrophe losses were $17 million less—$52 million compared to $35 million—than the same period last year, according to Progressive. So far in 2013, the insurer has suffered $165 million in total catastrophe losses, trailing losses of $176 million for the same period in 2012.

The U.S. has seen relatively dormant weather after forecasters predicted months ago that there would be at least a dozen named tropical storms during the Atlantic hurricane season. However, trade groups are asking that policyholders be aware and ready for disasters that could still strike.

“Although this year’s hurricane season has been fairly quiet, late season storms can still pack a punch,” Chris Hackett, director of personal lines for the Property Casualty Insurers Association of America (PCI), said in a statement.

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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