March Results Dampen Progressive Q1 Net Income Momentum

Progressive Corp. today reported first quarter net income of about $448 million – a 43% increase compared to the same time last year – though the insurer booked a nearly $152 million loss for the month of March.

At the end of February, Progressive recorded net income of about $150.3 million for the month, with nearly $600 million of net income for the year as of Feb. 28.

The downturn in March, Progressive explained, was due to unfavorable prior-year reserve development of $146.5 million during the month – about 55% attributable to its personal auto product and a majority from “recently passed legislation in Florida,” said the insurer.

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A year ago in March, Progressive recorded net income of $226.5 million and a combined ratio of 97.2. The combined ratio for the same month this year was 106.2.

Some of the unfavorable development in March is from higher than anticipated severity on previously closed claims, Progressive said.

In addition, commercial auto products represented about 30% of the unfavorable development for March due mainly to late reported claims and changes in reserve estimates.

Progressive finished Q1 with a combined ratio of 99 compared to 94.5 for Q1 2022.

Net premiums written during the first three months were about $16.1 billion, a 22% increase from the same period in 2022. Progressive personal lines business saw 29% growth in NPW from the direct channel.

Progressive said it reduced the impact to its vehicle business from Hurricane Ian by about $40 million.

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Topics Trends Profit Loss