Actionable insights straight to your inbox

Equities logo

Progressive Corp’s November Financials Show 15% Rise in Net Premiums Written

Progressive's income has soared 56% year-over-year.
Alex Hamilton is a regular contributor to numerous news sites.
Alex Hamilton is a regular contributor to numerous news sites.

Progressive Corp. (PGR), an insurance company, released their November 2018 results as well as their dividend meeting and annual meeting date for 2019. Net premiums written rose from $2.022 billion to $2.33 billion, up 15% compared to the same period a year prior.

Premiums earned rose 20%, climbing from $2.11 billion to $2.53 billion. Net income soared 56% from $242.2 million to $154.9 million.

Earnings per share for November also rose 50% year-over-year to $0.39. An improved top line helped the company achieve growth of 20.9% year-over-year. The company’s Personal Auto segment remained strong, as distracted driving has caused 6 in every 10 teens and 1 in 5 accidents. The segment has enjoyed a 15% improvement to nearly 13 million policies in force.

The Agency Auto segment reached 6.4 million, up 12%, while the Direct Auto segment hit nearly 7 million, an increase of 17%. Commercial Auto insurance rose to 0.7 million, up 8% from the same period a year prior, while the Property business exploded 33% to 1.9 million policies.

Year-to-date, Progressive has performed well, with the stock rising 15.72% during this time. Stock prices remain at $63.15 below their $73.69 highs hit on November 8.

Progressive also posted a very strong August, rising 13% in the month, outpacing the S&P 500, which rose at just a 3% rate. The rally helped boost confidence in long-term investors, which have experienced hefty gains over the past five years.

Competitive advantages have allowed the company to outperform the market, and as Progressive continues to grow, they’re in a better position to absorb the impact of natural disasters.

Progressive has routinely outperformed the industry, making it one of the leaders in the insurance business. Return on equity remains strong, often over 300% stronger than the industry average, with return on equity around 22% in October.

Revenue increases over the past few years have improved the company’s top line, and growth initiatives continue to drive growth. Personal auto insurance growth has been attributed to focusing on the company’s online offerings, as more consumers opt to secure auto insurance online.

Product bundles, specifically auto and property insurance, have also helped the company boost growth.

Five-year CAGR for the company’s regular dividend is 41%, while its dividend yield is 1.6%. Stock buyback programs are also in place, with the company purchasing 25 million of its own shares. Long-term earnings per share growth is expected to be 7.3%, while the company is likely to reach $32 billion in revenue this year.

Why distillate crack spreads will likely experience more volatility.