The Progressive Corp. (PGR, Financial) filed Quarterly Report for the period ended 2009-03-31.
Progressive Corp. is an auto insurance company and a writer of auto insurance through independent agents. Progressive is committed to providing independent agents with a financially strong company that offers competitive products designed specifically for the agency business; a strong national brand that drives consumers to independent agent's offices; 24-hour in-person services for them and their customers; and continued innovations in technology. (Company Press Release) The Progressive Corp. has a market cap of $10.92 billion; its shares were traded at around $16.13 with a P/E ratio of 12.6 and P/S ratio of 0.8. The Progressive Corp. had an annual average earning growth of 23.9% over the past 10 years.
The fair value of our investment portfolio was $12.8 billion at March 31, 2009, including $1.2 billion of redeemable and nonredeemable preferred stocks. At the end of the first quarter 2009, our asset allocation strategy was to maintain 0-25% of our portfolio in common equities (i.e., common stocks and alternative investments) with the balance (75%-100%) of our portfolio in fixed-income securities, which included preferred stocks. At March 31, 2009, our allocation was 97% to fixed-income securities and 3% to common equities.
Despite the reduction in value of our investment portfolio and the valuation allowance on our deferred tax asset, our overall capital position (debt and equity) increased $88.4 million during the quarter to $6.5 billion at March 31, 2009. We continue to manage our investing and financing activities in order to maintain sufficient capital to support all the insurance we can profitably underwrite and service.
Progressives insurance operations create liquidity by collecting and investing premiums from new and renewal business in advance of paying claims. For the three months ended March 31, 2009 and 2008, operations generated a positive cash flow of $541.4 million and $461.4 million, respectively. During the first quarter 2009, we repurchased .3 million of our common shares at a total cost of $5.1 million (average cost of $14.60 per share); these shares were repurchased in conjunction with our equity compensation plans.
We also have the ability to borrow up to $125 million under a 364-Day Secured Liquidity Credit Facility with National City Bank (NCB). We entered into this agreement at the end of 2008 to provide liquidity in the event of a disruption in our cash management operations that could affect our ability to transfer or receive funds. We did not borrow under this agreement in the first quarter 2009. In addition, we deposited $125 million into an FDIC-insured deposit account at NCB during the first quarter 2009 to provide us with additional cash availability in the event of such a disruption to our cash management operations.
Read the The complete ReportPGR is in the portfolios of Chris Davis of Davis Selected Advisers, Prem Watsa of Fairfax Financial Holdings, Inc., Brian Rogers of T Rowe Price Equity Income Fund, PRIMECAP Management, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, Tom Gayner of Markel Gayner Asset Management Corp.
Progressive Corp. is an auto insurance company and a writer of auto insurance through independent agents. Progressive is committed to providing independent agents with a financially strong company that offers competitive products designed specifically for the agency business; a strong national brand that drives consumers to independent agent's offices; 24-hour in-person services for them and their customers; and continued innovations in technology. (Company Press Release) The Progressive Corp. has a market cap of $10.92 billion; its shares were traded at around $16.13 with a P/E ratio of 12.6 and P/S ratio of 0.8. The Progressive Corp. had an annual average earning growth of 23.9% over the past 10 years.
Highlight of Business Operations:
In the first quarter 2009, we achieved growth in both premiums and policies in force, and reported net income of $232.5 million, or $.35 per share, for the first quarter 2009, compared to $239.4 million, or $.35 per share, for the same period last year. The Progressive Corporations insurance subsidiaries generated underwriting profitability of 10.5%, or $356.0 million, while our investment operations experienced $73.4 million of net realized losses on securities, reflecting further write-downs of securities determined to be other-than-temporarily impaired. These write-downs were primarily on our preferred stocks and the majority represented further write-downs on securities that were previously written down in the third and/or fourth quarters of 2008. Despite the additional losses generated in the investment portfolio, our total capital position increased $88.4 million during the quarter, to $6.5 billion at March 31, 2009.The fair value of our investment portfolio was $12.8 billion at March 31, 2009, including $1.2 billion of redeemable and nonredeemable preferred stocks. At the end of the first quarter 2009, our asset allocation strategy was to maintain 0-25% of our portfolio in common equities (i.e., common stocks and alternative investments) with the balance (75%-100%) of our portfolio in fixed-income securities, which included preferred stocks. At March 31, 2009, our allocation was 97% to fixed-income securities and 3% to common equities.
Despite the reduction in value of our investment portfolio and the valuation allowance on our deferred tax asset, our overall capital position (debt and equity) increased $88.4 million during the quarter to $6.5 billion at March 31, 2009. We continue to manage our investing and financing activities in order to maintain sufficient capital to support all the insurance we can profitably underwrite and service.
Progressives insurance operations create liquidity by collecting and investing premiums from new and renewal business in advance of paying claims. For the three months ended March 31, 2009 and 2008, operations generated a positive cash flow of $541.4 million and $461.4 million, respectively. During the first quarter 2009, we repurchased .3 million of our common shares at a total cost of $5.1 million (average cost of $14.60 per share); these shares were repurchased in conjunction with our equity compensation plans.
We also have the ability to borrow up to $125 million under a 364-Day Secured Liquidity Credit Facility with National City Bank (NCB). We entered into this agreement at the end of 2008 to provide liquidity in the event of a disruption in our cash management operations that could affect our ability to transfer or receive funds. We did not borrow under this agreement in the first quarter 2009. In addition, we deposited $125 million into an FDIC-insured deposit account at NCB during the first quarter 2009 to provide us with additional cash availability in the event of such a disruption to our cash management operations.
Read the The complete ReportPGR is in the portfolios of Chris Davis of Davis Selected Advisers, Prem Watsa of Fairfax Financial Holdings, Inc., Brian Rogers of T Rowe Price Equity Income Fund, PRIMECAP Management, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, Tom Gayner of Markel Gayner Asset Management Corp.
