Share of insurance company Progressive (NYSE: PGR) are moving higher this morning following better-than-expected numbers for its second quarter.Going into this mornings earnings announcement analysts had been looking to see the nation's fourth largest insurer post earnings of 36 cents per share, but the company surprised to the upside with an actual 37 cents a share for its most recent quarter.
During the quarter Progressive saw a 1% increase in its premiums, with $3.53 billion during the quarter. Also helping the company's bottom line was its investment portfolio, which swung from a $44.6 million loss during the second quarter last year to a gain of $15.9 million this year.
A big reason for the swing in its investment portfolio was the decision by the company's CEO, Glenn Renwick, to invest more heavily in U.S. Treasuries and other low return investments. The lower return investments come with lower risk and resulted in less write-downs than the company had been experiencing this time last year.
One thing that you always want to look at with insurance companies are their combined ratios. These ratios are the amount of premiums an insurance company pays out to cover claims, and Progressive's combined ratio dropped to 92.6% from 93.6% during the same period last year.
A big reason why Progressive's combined ratio fell is that people are driving less. The less people drive, the less people are going to be getting in accidents. Last year people really started to drive less as a result of record high gasoline prices, and while they are starting to put more miles on their car, they are still lower than last year and about on par with how much they were driving in 2007.
Following today's better than expected returns, shares of Progressive have moved up 0.2% to $14.45 and traded as high as $14.82 earlier in the session.
A big reason for the swing in its investment portfolio was the decision by the company's CEO, Glenn Renwick, to invest more heavily in U.S. Treasuries and other low return investments. The lower return investments come with lower risk and resulted in less write-downs than the company had been experiencing this time last year.
One thing that you always want to look at with insurance companies are their combined ratios. These ratios are the amount of premiums an insurance company pays out to cover claims, and Progressive's combined ratio dropped to 92.6% from 93.6% during the same period last year.
A big reason why Progressive's combined ratio fell is that people are driving less. The less people drive, the less people are going to be getting in accidents. Last year people really started to drive less as a result of record high gasoline prices, and while they are starting to put more miles on their car, they are still lower than last year and about on par with how much they were driving in 2007.
Following today's better than expected returns, shares of Progressive have moved up 0.2% to $14.45 and traded as high as $14.82 earlier in the session.
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Reader Comments (Page 1 of 1)
7-10-2009 @ 2:31PM
ANGEL LOPEZ said...
because they take from women in business if you are insured be very careful where you take your car to be pairered YOU DON'T HAVE TO TAKE IT TO WHERE THEY THEY TELL TOO! REMEMBER THAT NO INSURANCE CO CAN TELL YOU WHERE TO GO
7-10-2009 @ 2:36PM
ANGEL LOPEZ said...
THEY TRY TO FORCE YOU TO ONE OF THIER SHOPS TEARDOWN SO YOU LEAVE AT THERE SHOP AND IF YOU DO THAT SHOP IS CONTRACTED TO DO IT CHEAP FAST AND HURRRRRRRRRRRY SO THE QUALITY IS NOT THERE GO TO A SHOP THAT DOE'S NOT WORK FOR THEM ONLY
7-11-2009 @ 1:19PM
gerald said...
Progresssive is a bad faith insurer that denies claims and refuses to treat policy holders fairly. They made a big profit all right it was done at your expense. Progressive has not been paying my claim and owes the hospital thousands of dollars. I'm going to sue the hell ouit of them,but in the mean time get rid of this terrible insurer who doesn't pay claims it only denies them. Worst insurer in America!!! hands down. My father also sued them and won a large reward for their bad faith when they refused to pay him. Get ird of them NOW!!