Progressive’s quarterly profit surges on strong demand for auto insurance policies
11:22 am Tuesday, July 16th, 2024
(Reuters) – Insurer Progressive Corp posted a more than fourfold jump in its second-quarter profit on Tuesday, driven by strong demand for its personal auto insurance policies, sending its shares up 3.5% in premarket trading.
Rising wages and a strong labor market encouraged customers to revive their spending on auto insurance, one of Progressive’s core businesses.
The company has also benefited from large pricing increases in personal auto insurance premiums.
Mayfield Village, Ohio-based Progressive provides insurance for personal and commercial autos and trucks, motorcycles, boats, recreational vehicles and homes.
The company had 21.5 million personal auto insurance policies in force, up 10% over the year earlier. Property business policies were also up 12% in the quarter.
Net premium written jumped 22% to $17.90 billion.
Progressive’s combined ratio was 91.9%, compared with 100.4% a year earlier. A ratio below 100% means the insurer earned more in premiums than it paid out in claims.
Net income of the insurer rose to $1.46 billion, or $2.48 per share, in the quarter, from $345.4 million, or $0.57 per share, a year earlier.
Progressive’s shares have gained 36.3% so far this year, compared with an 18% gain in the S&P 500 index during the period.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar)
