On July 16, 2024, Progressive Corp (PGR, Financial) released its 8-K filing for the second quarter of 2024, showcasing a robust financial performance that surpassed analyst expectations. Progressive Corp, one of the largest auto insurers in the United States, underwrites private and commercial auto insurance and specialty lines, with nearly 20 million personal auto policies in force. The company markets its policies through independent insurance agencies in the US and Canada, as well as directly via the internet and telephone.
Quarterly Financial Highlights
Progressive Corp reported net premiums written of $17.90 billion for Q2 2024, a 22% increase from $14.72 billion in Q2 2023. Net premiums earned also saw a significant rise, reaching $17.21 billion, up 19% from $14.46 billion in the same period last year. The company achieved a net income of $1.46 billion, a remarkable 322% increase from $345.4 million in Q2 2023. Earnings per share (EPS) available to common shareholders were $2.48, compared to $0.57 in the previous year, reflecting a 334% increase.
Performance Analysis
The company's combined ratio, a key metric in the insurance industry, improved significantly to 91.9% from 100.4% in Q2 2023. This indicates better underwriting performance and cost management. The combined ratio measures the percentage of premiums used to pay claims and expenses; a lower ratio signifies higher profitability.
Income Statement Overview
For the month ended June 30, 2024, Progressive Corp reported total revenues of $6.16 billion, with net premiums earned contributing $5.78 billion. Investment income was $235.3 million, while net realized gains on securities were $22.2 million. Total expenses for the month were $5.13 billion, leading to an income before income taxes of $1.03 billion and a net income of $802.7 million.
Balance Sheet and Cash Flow
As of June 30, 2024, Progressive Corp's balance sheet showed strong financial health. The company reported total assets of $76.1 billion and total liabilities of $55.3 billion. Shareholders' equity stood at $20.8 billion, reflecting a solid capital base to support future growth and underwriting activities.
Policies in Force
| Category | June 2024 | June 2023 | % Change |
|---|---|---|---|
| Agency Auto | 8,964.8 | 8,437.8 | 6% |
| Direct Auto | 12,576.8 | 11,220.5 | 12% |
| Total Personal Auto | 21,541.6 | 19,658.3 | 10% |
| Total Special Lines | 6,311.8 | 5,843.1 | 8% |
| Total Personal Lines | 27,853.4 | 25,501.4 | 9% |
| Total Commercial Lines | 1,117.6 | 1,101.1 | 1% |
| Total Property Business | 3,339.1 | 2,974.3 | 12% |
| Companywide Total | 32,310.1 | 29,576.8 | 9% |
Commentary and Future Outlook
“During June, we increased our Personal Lines loss estimates about $115 million, or 2.5 points for the month, and decreased our Property loss estimates a net $12 million, or about 4.7 points, relative to the May storms,” the company noted in its monthly commentary.
Progressive Corp's strong financial performance in Q2 2024, driven by increased premiums and net income, positions the company well for future growth. The improvement in the combined ratio and the significant rise in net income highlight the company's effective underwriting and cost management strategies. As one of the largest auto insurers in the United States, Progressive Corp continues to leverage its extensive distribution network and innovative products to maintain its competitive edge in the insurance industry.
Explore the complete 8-K earnings release (here) from Progressive Corp for further details.
