The following excerpt is from the company's SEC filing.
Mayfield Village, Ohio 44143
MAYFIELD VILLAGE, OHIO --
April 14, 2016
-- The Progressive Corporation (NYSE:PGR) today reported the following results for March and the first quarter of 2016:
(millions, except per share amounts and ratios; unaudited)
Net premiums written
Net premiums earned
Net income attributable to Progre ssive
Total pretax net realized gains (losses) on securities
(including net impairment losses)
Average diluted equivalent shares
We acquired a controlling interest in ARX Holding Corp. (ARX), parent company of American Strategic Insurance Corp. and other subsidiaries (ASI), on April 1, 2015. Beginning in April 2015, our companywide results include the results of ARX and its subsidiaries, which are included in the "Property business" throughout the release. Periods prior to April 1, 2015, do not include ARX's results.
Policies in Force
Agency – auto
Direct – auto
Total personal auto
Total special lines
Total Personal Lines
Total Commercial Lines
NM = Not meaningful; Property business written by Progressive prior to April 2015 was negligible.
Progressive offers insurance to personal and commercial auto drivers throughout the United States. Our Personal Lines business writes insurance for personal autos and recreational vehicles. Our Commercial Lines business writes primary liability, physical damage, and other auto-related insurance for autos and trucks owned and/or operated predominantly by small businesses. Our Property business writes personal and commercial property insurance for homeowners, other property owners, and renters.
See the “Comprehensive Income Statements” and “Supplemental Information” for further month and year-to-date information and
the "Monthly Commentary" at the end of this release for additional discussion.
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
COMPREHENSIVE INCOME STATEMENT
Comments on Monthly Results
Net realized gains (losses) on securities:
Net impairment losses recognized in earnings
Total net realized gains (losses) on securities
Fees and other revenues
Losses and loss adjustment expenses
Policy acquisition costs
Other underwriting expenses
Income before income taxes
Provision for income taxes
Net income (loss) attributable to noncontrolling interest (NCI), net of tax
Other comprehensive income, net of tax
Total net unrealized gains (losses) on securities
Net unrealized gains (losses) on forecasted transactions
Foreign currency translation adjustment
Other comprehensive income (loss)
Other comprehensive (income) loss attributable to NCI
Total comprehensive income (loss) attributable to Progressive
For a description of our financial reporting and accounting policies, see Note 1 to our 2015 audited consolidated financial statements included in our 2015 Shareholders’ Report, which can be found at
COMPREHENSIVE INCOME STATEMENTS
Net income attributable to noncontrolling interest (NCI), net of tax
Other comprehensive income (loss), net of tax
Total comprehensive income attributable to Progressive
NM = Not Meaningful
COMPUTATION OF NET INCOME AND COMPREHENSIVE INCOME PER SHARE
(millions – except per share amounts)
The following table sets forth the computation of per share results:
Comprehensive income attributable to Progressive
Average shares outstanding - Basic
Net effect of dilutive stock-based compensation
Total equivalent shares - Diluted
The following table sets forth the investment results for the period:
Fully taxable equivalent (FTE) total return:
Pretax annualized investment income book yield
($ in millions)
Personal Lines Business
Net Premiums Written
% Growth in NPW
Net Premiums Earned
% Growth in NPE
Prior accident years
Current accident year
Calendar year actuarial adjustment
Prior Accident Years Development
All other development
Calendar year loss/LAE ratio
Accident year loss/LAE ratio
NM=Not meaningful; Property business written by Progressive prior to April 2015 was negligible.
Includes results for all of our run-off businesses, including our professional liability group. For the month, our run-off businesses generated a $0.3 million underwriting profit.
Included in both the expense ratio and combined ratio is $5.0 million, or 7.4 points, of amortization/depreciation expense associated with the acquisition of a controlling interest in ARX Holding Corp. Excluding this additional expense, the Property business would have reported an expense ratio of 26.7 and a combined ratio of 138.0 for March 2016.
Represents adjustments solely based on our actuarial reviews.
Includes results for all of our run-off businesses, including our professional liability group. On a year-to-date basis, our run-off businesses generated a $0.7 million underwriting loss.
Included in both the expense ratio and combined ratio is $15.1 million, or 7.6 points, of amortization/depreciation expense associated with the acquisition of a controlling interest in ARX Holding Corp. Excluding this additional expense, the Property business would have reported a year-to-date expense ratio of 26.7 and combined ratio of 104.6.
BALANCE SHEET AND OTHER INFORMATION
(millions - except per share amounts)
CONDENSED GAAP BALANCE SHEET:
Available-for-sale, at fair value:
(amortized cost: $13,892.3)
Common equities (cost: $1,524.0)
Short-term investments (amortized cost: $3,826.9)
Net premiums receivable
Deferred acquisition costs
Goodwill and intangible assets
Loss and loss adjustment expense reserves
Redeemable noncontrolling interest (NCI)
Total liabilities, NCI, and shareholders' equity
Common shares outstanding
Shares repurchased - March
Average cost per share
Book value per share
Trailing 12-month return on average shareholders' equity
Net unrealized pretax gains (losses) on investments
Increase (decrease) from February 2016
Increase (decrease) from December 2015
Debt-to-total capital ratio
Fixed-income portfolio duration
Weighted average credit quality
Year-to-date Gainshare factor
March 31, 2016
, we held certain hybrid securities and recognized a change in fair value of $0.3 million as a realized gain during the periods we held these securities.
, we had $47.3 million of net unsettled security transactions, including collateral on open derivative positions.
Includes $0.7 billion, net of unsettled security transactions, of investments in a consolidated, non-insurance subsidiary of the holding company.
Loss and loss adjustment expense reserves are stated gross of reinsurance recoverables on unpaid losses of $1,508.7 million, which are included in "other assets."
Ratio reflects debt as a percent of debt plus shareholders' equity; redeemable noncontrolling interest is not part of this calculation.
The Gainshare factor excludes the results of our Property business.
During March, we incurred about $82 million, or about 4.9 loss ratio points, of catastrophe losses, compared to about $6 million, or about 0.4 loss ratio points, last year. Wind and hail storms in Texas and Louisiana accounted for nearly all of the catastrophe losses during the month of which $46 million, or 2.9 points, was in our vehicle businesses and $36 million, or 53 points, was in our Property business. Year-to-date total catastrophe losses were $102 million, or 1.9 points, compared to $9 million, or 0.2 points, last year. Catastrophe losses for the Property business are included in company results beginning April 2015.
We are currently scheduled to hold a one-hour conference call to address questions on Friday, May 6, 2016 at 9:00 a.m. eastern time, and plan to post our Shareholders’ Report online and file our Quarterly Report on Form 10-Q with the SEC on Thursday, May 5, 2016. Registration for the teleconference and webcast will be available at
We plan to release April results on Wednesday, May 18, 2016, before the market opens.
The Progressive Group of Insurance Companies makes it easy to understand, buy and use auto insurance. Progressive offers choices so consumers can reach us whenever, wherever and however it's most convenient-online at progressive.com, by phone at 1-800-PROGRESSIVE, on a mobile device or in-person with a local agent.
Progressive provides insurance for personal and commercial autos and trucks, motorcycles, boats, recreational vehicles, and homes. Home insurance is underwritten by select carriers, including American Strategic Insurance Corp. and subsidiaries (ASI), our majority owned subsidiaries.
Progressive is the fourth largest auto insurer in the country; a leading seller of motorcycle and commercial auto insurance; and through ASI, one of the top 20 homeowners carriers. Progressive also offers car insurance online in Australia at
Founded in 1937, Progressive continues its long history of offering shopping tools and services that save customers time and money, like Name Your Price
and Service Centers.
The Common Shares of The Progressive Corporation, the Mayfield Village, Ohio-based holding company, trade publicly at NYSE:PGR.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:
Statements in this release that are not historical fact are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. These risks and uncertainties include, without limitation, uncertainties related to estimates, assumptions, and projections generally; inflation and changes in general economic conditions (including changes in interest rates and financial markets); the possible failure of one or more governmental, corporate, or other entities to make scheduled debt payments or satisfy other obligations; the potential or actual downgrading by one or more rating agencies of our securities or governmental, corporate, or other securities we hold; the financial condition of, and other issues relating to the strength of and liquidity available to, issuers of securities held in our investment portfolios and other companies with which we have ongoing business relationships, including reinsurers and other counterparties to certain financial transactions; the accuracy and adequacy of our pricing, loss reserving, and claims methodologies; the competitiveness of our pricing and the effectiveness of our initiatives to attract and retain more customers; initiatives by competitors and the effectiveness of our response; our ability to obtain regulatory approval for the introduction of products to new jurisdictions, for requested rate changes and the timing thereof and for any proposed acquisitions; the effectiveness of our brand strategy and advertising campaigns relative to those of competitors; legislative and regulatory developments at the state and federal levels, including, but not limited to, matters relating to vehicle and homeowners insurance, health care reform and tax law changes; the outcome of disputes relating to intellectual property rights; the outcome of litigation or governmental investigations that may be pending or filed against us; severe weather conditions and other catastrophe events; the effectiveness of our reinsurance programs; changes in driving and residential occupancy patterns; our ability to accurately recognize and appropriately respond in a timely manner to changes in loss frequency and severity trends; technological advances; acts of war and terrorist activities; our ability to maintain the uninterrupted operation of our facilities, systems (including information technology systems), and business functions, and safeguard personal and sensitive information in our possession; our continued access to and functionality of third-party systems that are critical to our business; restrictions on our subsidiaries' ability to pay dividends to The Progressive Corporation; possible impairment of our goodwill or intangible assets if future results do not adequately support either, or both, of these items; court decisions, new theories of insurer liability or interpretations of insurance policy provisions and other trends in litigation; changes in health care and auto and property repair costs; and other matters described from time to time in our releases and publications, and in our periodic reports and other documents filed with the United States Securities and Exchange Commission. In addition, investors should be aware that generally accepted accounting principles prescribe when a company may reserve for particular risks, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for one or more contingencies. Also, our regular reserve reviews may result in adjustments of varying magnitude as additional information regarding claims activity becomes known. Reported results, therefore, may be volatile in certain accounting periods.
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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