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The Progressive Corp. Reports Operating Results (10-Q)

May 10, 2010 | About:

The Progressive Corp. (NYSE:PGR) filed Quarterly Report for the period ended 2010-03-31.

The Progressive Corp. has a market cap of $13.12 billion; its shares were traded at around $19.55 with a P/E ratio of 12.45 and P/S ratio of 0.9. The dividend yield of The Progressive Corp. stocks is 0.83%.PGR is in the portfolios of Chris Davis of Davis Selected Advisers, Lee Ainslie of Maverick Capital, Manning & Napier Advisors, Inc, Brian Rogers of T Rowe Price Equity Income Fund, Bill Gates of Bill & Melinda Gates Foundation Trust, Wallace Weitz of Weitz Wallace R & Co, Murray Stahl of Horizon Asset Management, Tom Russo of Gardner Russo & Gardner, PRIMECAP Management, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC, George Soros of Soros Fund Management LLC.

Highlight of Business Operations:

In the first quarter 2010, we achieved solid growth in both premiums written and policies in force, and reported net income of $295.6 million, or $.44 per share, for the first quarter 2010, compared to $232.5 million, or $.35 per share, for the same period last year. The Progressive Corporations insurance subsidiaries generated underwriting profitability of 9.1%, or $318.1 million, while our investment operations experienced $30.8 million of net realized gains on securities, compared to $73.4 million of net losses in the first quarter last year. Our total capital position increased $463.4 million during the quarter, to $8.4 billion at March 31, 2010.

Our investment results provided a substantial contribution to the increase in our capital position. At March 31, 2010, we had $8.4 billion of total capital (debt plus equity), an increase of $463.4 million during the first quarter. 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, 2010 and 2009, operations generated positive cash flows of $670.0 million and $541.4 million, respectively. During the first quarter 2010, we repurchased 2.4 million of our common shares at a total cost of $42.6 million (average cost of $17.53 per share) and paid $108.2 million of common share dividends pursuant to our annual variable dividend policy. From time to time, we also may elect to repurchase our outstanding debt securities in the open market or in privately negotiated transactions, when management believes that such securities are attractively priced and capital is available for such purposes; we did not make any such debt repurchases during the first three months of 2010.

At all times during 2009 and the first three months of 2010, our total capital exceeded the sum of our regulatory capital layer plus our self-constructed extreme contingency load. At March 31, 2010, we held total capital (debt plus equity) of $8.4 billion at book value, compared to $7.9 billion at December 31, 2009 and $6.5 billion at March 31, 2009.

Read the The complete Report

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