Unfavorable Reserve Development of $330M in January: Progressive

Progressive Corp. said net income for the month of January was $449.4 million compared with $25.8 million the same month in 2022 as gains on securities were $245.6 million from a loss of $348 million in January 2022.

January net premiums written were up 16% to about $5.3 billion. Net premiums were up 22% to about $4.3 billion in the personal lines business.

The insurer reported a combined ratio for January of 96 compared with 92.9 for the same month the prior year.

Due primarily to December 2022 auto accidents settling for more than reserved, Progressive said it experienced unfavorable prior accident years reserve development of 6.5 points – or about $330 million. About 75% is attributable to personal auto products, primarily related to property damage, collision, and comprehensive coverages. Aging of reserves, inflation factors, and changes by adjusters also contributed.

Commercial auto represented about 20% of the unfavorable development, due mostly to reported claims from prior accident periods. The rest of the development was from its property business.

The insurer is scheduled to hold a conference call on fourth quarter 2022 earnings on February 28. Financial results for February are to be released March 15.